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CITY OF MUSKEGON
CITY COMMISSION MEETING
JANUARY 24, 2017
CITY COMMISSION CHAMBERS @ 5:30 P.M.
AGENDA
□ CALL TO ORDER:
□ PRAYER:
□ PLEDGE OF ALLEGIANCE:
□ ROLL CALL:
□ HONORS AND AWARDS:
□ INTRODUCTIONS/PRESENTATION:
A. Mike Overly - MERS
□ CITY MANAGER’S REPORT:
□ CONSENT AGENDA:
A. Approval of Minutes City Clerk
B. Food Truck Registration Fees City Clerk
C. MEDC Grant for Kitchen 242 Assistant Finance Director and City Clerk
D. Western Market Lease Agreement City Clerk
E. Everstream GLC Holding Company LLC – METRO Act Permit Engineering
F. Professional Service Agreement (SAFEbuilt) Public Safety
G. SEIU Collective Bargaining Agreement City Manager
H. POLC Collective Bargaining Agreement City Manager
I. Defined Benefit Plan Adoption Agreement – Div 12 (DPW) Finance
J. Corrections to 2017 Fee Schedule Department Comments Finance
□ PUBLIC HEARINGS:
A. Public Hearing – Establishment of a Commercial Redevelopment
District – 878 Jefferson St., Suite 1 Planning & Economic Development
B. Public Hearing – Issuance of a Commercial Facilities Exemption
Certificate – 878 Jefferson St., Suite 1 Planning & Economic Development
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C. Public Hearing – Establishment of a Commercial Redevelopment
District – 275 W. Clay Avenue Planning & Economic Development
D. Public Hearing – Issuance of a Commercial Facilities Exemption
Certificate – 275 W. Clay Avenue Planning & Economic Development
E. Public Hearing – Request to Create a New Neighborhood Enterprise
Zone District at 275 W. Clay Ave. Planning & Economic Development
□ COMMUNICATIONS:
□ UNFINISHED BUSINESS:
□ NEW BUSINESS:
A. Community Relations Committee Recommendations for Various City
Boards and Committees City Clerk
□ ANY OTHER BUSINESS:
□ PUBLIC PARTICIPATION:
► Reminder: Individuals who would like to address the City Commission shall do the following:
► Fill out a request to speak form attached to the agenda or located in the back of the room.
► Submit the form to the City Clerk.
► Be recognized by the Chair.
► Step forward to the microphone.
► State name and address.
► Limit of 3 minutes to address the Commission.
► (Speaker representing a group may be allowed 10 minutes if previously registered with City Clerk.)
□ CLOSED SESSION:
□ ADJOURNMENT:
ADA POLICY: THE CITY OF MUSKEGON WILL PROVIDE NECESSARY AUXILIARY AIDS AND SERVICES TO INDIVIDUALS
WHO WANT TO ATTEND THE MEETING UPON TWENTY-FOUR HOUR NOTICE TO THE CITY OF MUSKEGON. PLEASE
CONTACT ANN MARIE MEISCH, CITY CLERK, 933 TERRACE STREET, MUSKEGON, MI 49440 OR BY CALLING (231) 724-
6705 OR TTY/TDD DIAL 7-1-1- TO REQUEST A REPRESENTATIVE TO DIAL (231) 724-6705.
Page 2 of 2
Memorandum
To: Mayor and Commissioners
From: Frank Peterson
Re: City Commission Meeting
Date: January 19, 2017
Here is a quick outline of the items on our agenda:
1. We are starting with a short presentation from Mike Overly from MERS. Mike will be
here to discuss the proposed changes to the SEIU Contract as it related to pension
benefits. Later in the consent agenda, we will be adopting a DEFINED BENEFIIT PLAN
AGREEMENT that reduces the pension multiplier for that group. Subsequent
agreements will be before the commission at the February meeting for the POLC and
Non-Represented divisions. A copy of the presentation is included in your packet.
2. Under the consent agenda, we are asking the Commission to for approval of the
following:
a. Last meeting’s minutes.
b. A change to food truck registration fees to allow for a reduced fee for the vendors
that participate in the Taste of Muskegon Event. We have not had much
participation in the food truck program, and expect that this will help, as all Taste of
Muskegon participants will now be required to register (at the lower fee).
c. Approval of a grant award from the MEDC in the amount of $200,000 in support of
Kitchen 242. There is a list of accepted expenditures for the grant – most of which
is equipment for the kitchen.
d. Approval of an application and agreement to be used for the new “Western
Market.” These are the pop up shops on Western Avenue. We will have three sizes
for vendors to choose from. The rental fees will help cover the costs of marketing
and managing the site, as well as providing utilities to the spaces.
e. Approval of a METRO Act Permit for Everstream GLC Holding Company, LLC.
f. Final approval of the SAFEbuilt contract, as previously presented at the December
Commission Work Session. We have come to an agreement on all outstanding
items and staff is recommending approval.
g. Approval of the SEIU Collective Bargaining Agreement. There are a number of
changes, as outlined in the tentative agreement that is attached. The most
significant is the reduced pension multiplier. As per the attached MERS report, this
move will reduce pension cost significantly over the long-term and greatly improve
our funding level from 88.2% to 95.1%. Over the term of the agreement, the
average pay raise is about 3.4%. Normally, we would have pushed for an amount
between 2% and 2.5%, but negotiated a higher increase in exchange for the long-
term pension savings.
h. Approval of the POLC Collective Bargaining Agreement. As with the SEIU
agreement, we have negotiated a significant pension benefit reduction. The final
calculations are pending from MERS, but initial reports indicate that the change will
reduce our annual costs by more than $300,000 and improve our funding level from
90.9% to more than 105.0%. As with the SEIU contract, we are proposing larger
average wage increases over the 5 year term (2.9%) in exchange for the pension
reduction. Additional proposed changes include the addition of Martin Luther King
Jr.’s Birthday as a celebrated holiday, increases to the defined contribution plan (for
non-pensioners), changes to the part-time officer allowed duties, changes to
vacation selection process, changes to compensation for field training officers, and
changes to sick time requirements. Overall, this is a great contract that flowed
from a great process, and we are excited to see it implemented, as we expect it will
help with recruitment and retention of officers.
i. Approval of the Defined Benefit Plan Agreement with MERS related to the SEIU
benefit change. As discussed above, this will authorize the change from a 2.25 to a
2.0 multiplier. The new agreements for POLC and Non-Represented will follow at
the first meeting in February.
j. Approval of corrections to the notes included in the 2017 Fee Schedule. WE need
to clarify that there is no re-inspection included in the rental registration fee.
3. Under Public Hearings:
a. We will consider establishing a commercial rehab district for 878 Jefferson to
accommodate about $100,000 in upgrades.
b. We will issue the certificate related to the rehab at 878 Jefferson
c. We will consider establishing a commercial rehab district for 275 West Clay for
the commercial component of the Berkshire development
d. We will issue the certificate for the commercial rehab at 275 West Clay.
e. We will create a Neighborhood Enterprise Zone for the market-rate portion of
the Berkshire development at 275 West Clay.
4. Under new business, we will be asking the Commission to approve the following:
a. Approval of CRC Recommendations for various city boards.
Date: January 17, 2017
To: Honorable Mayor and City Commissioners
From: Ann Marie Meisch, City Clerk
RE: Approval of Minutes
SUMMARY OF REQUEST: To approve minutes of the January 9, 2017
Worksession Meeting and the January 10, 2017 Regular City Commission
Meeting.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval of the minutes.
CITY OF MUSKEGON
CITY COMMISSION WORKSESSION
Monday, January 9, 2017
City Commission Chambers
933 Terrace Street, Muskegon, MI 49440
5:30 PM
MINUTES
2017-01
Present: Commissioners Hood, Gawron, German, Turnquist, Johnson, Rinsema-
Sybenga, and Warren
Absent: None
Tree Grant from Consumer’s Energy
A representative from Consumer’s Energy presented the City with a $2500 check for the
replacement of trees.
Red Project
Stephen Alsum, Executive Director of the Grand Rapids Red Project, presented
information to the City Commission regarding the Red Project. The item is to be added
to the consent agenda for the Regular City Commission meeting on January 10, 2017.
Brownfield Plan Amendment – Watermark
Cathy Brubaker-Clarke, Planning & Economic Development Director, presented the
request that will be considered at the regular meeting of the City Commission on
January 10, 2017. City Commissioners questions were answered by staff.
Amendment to the Zoning Ordinance – Waterfront Industrial Planned Unit
Development (WI-PUD)
Brownfield Amendment to the Zoning Ordinance – there was discussion about the
change to the zoning ordinance
Highpoint Flats Update
Discussion of this project is happening on a regular basis and a meeting with the city
attorney for an update will take place.
Adjournment
Moved by German, second by Rinsema-Sybenga, to adjourn the meeting at 7:35 p.m.
Respectfully Submitted,
Ann Marie Meisch, MMC – City Clerk
CITY OF MUSKEGON
CITY COMMISSION MEETING
JANUARY 10, 2017
CITY COMMISSION CHAMBERS @ 5:30 P.M.
MINUTES
The Regular Commission Meeting of the City of Muskegon was held at City Hall,
933 Terrace Street, Muskegon, MI at 5:30 p.m., Tuesday, January 10, 2017. Pastor
Matt Sharpe, Evanston Avenue Baptist Church, opened the meeting with
prayer, after which the Commission and public recited the Pledge of Allegiance
to the Flag.
ROLL CALL FOR THE REGULAR COMMISSION MEETING:
Present: Mayor Stephen J. Gawron, Vice Mayor Hood, Commissioners Ken
Johnson, Debra Warren, Willie German, Jr., Dan Rinsema-Sybenga, and Byron
Turnquist, City Manager Franklin Peterson, City Attorney John Schrier, and City
Clerk Ann Meisch.
2017-02 CONSENT AGENDA:
A. Approval of Minutes City Clerk
SUMMARY OF REQUEST: To approve minutes of the December 12, 2016
Worksession Meeting and the December 13, 2016 Regular City Commission
Meeting.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval of the minutes.
B. Gaming License Request from Harbor Hospice Foundation City Clerk
SUMMARY OF REQUEST: The Muskegon Harbor Hospice Foundation is requesting
a resolution recognizing them as a non-profit organization operating in the City
for the purpose of obtaining a Gaming License.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval.
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C. Gaming License Request from Flyin’ Heroes City Clerk
SUMMARY OF REQUEST: The Flyin’ Heroes is requesting a resolution recognizing
them as a non-profit organization operating in the City for the purpose of
obtaining a Gaming License.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval.
D. Special Event Liquor License – Farmers Market City Clerk
SUMMARY OF REQUEST: The Muskegon Farmers Market will be hosting a Dining
in the Dark event on Thursday, February 16th at the Farmers Market and we are
requesting a liquor license including spirits. Proceeds will benefit the Farmers
Market.
FINANCIAL IMPACT: $50 permit from the State for every date requested and
$75 bond.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To approve the request.
E. MDOT Performance Resolution Department of Public Works
SUMMARY OF REQUEST: Adopt the MDOT Performance Resolution authorizing
the director of public works and/or administrative supervisor to sign off on
permits to perform work on state highways within the city. The form has been
updated and previous resolution is no longer valid
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To approve and adopt the Performance
Resolution by authorizing the City Clerk to sign.
F. Agreement for Engineering Services with Charles Wiggins Engineering
SUMMARY OF REQUEST: Authorize staff to enter into an employment agreement
with Charles Wiggins to provide assistance to the engineering department in the
capacity of a Civil Engineer I.
As you may recall, Mr. Wiggins worked for the City for over 27 years and since
retiring in August of 2015 he had been employed by Elwood Services to provide
engineering services to the City.
Furthermore, it is respectfully requested that staff be authorized to retro this
agreement to the beginning of this year (2017) and the ability to extend and/or
terminate said agreement to best serve the City.
FINANCIAL IMPACT: Approximately $60,000 based on estimated 1700 hours
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of work.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Authorize staff to enter into an agreement with
Mr. Wiggins.
G. Amendment to the Zoning Ordinance – Waterfront Industrial Planned
Unit Development (WI-PUD) Planning & Economic Development
REMOVED PER STAFF REQUEST
H. Termination of “The Watermark” Project Brownfield Redevelopment
Authority Plan (May, 25, 2004) Planning & Economic Development
SUMMARY OF REQUEST: The Brownfield Plan Amendment for “The Watermark”
Project (“Plan”) was approved by the Brownfield Redevelopment Authority
(BRA) and the City Commission in May 2004. The redevelopment projects
outlined in the Plan have been completed (54 residential units). There was no TIF
capture included in this Plan. As a new Brownfield Plan Amendment is being
requested by the owners of the property, it is necessary to terminate the existing
Plan which has been completed, using the language recommended in the
“Staff Recommendation”.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: That the City Commission herby terminates “The
Watermark” Project Brownfield Plan adopted on May 25, 2004. The Plan is being
terminated pursuant to MCL 125.2666(8)(a) as it relates to the eligible property
located at 930 Washington Avenue and pursuant to MCL 125.2666(8)(b) as it
relates to the eligible property located at 920 Washington Avenue, 965 West
Western Avenue and 1330 Division Street.
COMMITTEE RECOMMENDATION: The Brownfield Redevelopment Authority
approved termination of the Brownfield Plan Amendment for “The Watermark”
Project (May 25, 2004) at their December 6, 2016 meeting.
I. Adopt a Resolution to Approve the Operation of the Red Project in the
City of Muskegon City Manager
SUMMARY OF REQUEST: Adopt a resolution to approve the operation of the Red
Project in the City of Muskegon.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Adopt the resolution.
Motion by Vice Mayor Hood, second by Commissioner German, to approve the
consent agenda as presented.
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ROLL VOTE: Ayes: Turnquist, Johnson, Gawron, Hood, Warren, German, and
Rinsema-Sybenga
Nays: None
MOTION PASSES
2017-03 PUBLIC HEARINGS:
A. Public Hearing for Brownfield Plan Amendment and Development and
Reimbursement Agreement for P&G Holdings NY, LLC Redevelopment
Project (Watermark) Planning & Economic Development
SUMMARY OF REQUEST: To hold a public hearing and approve the resolution
approving and adopting the amendment to the Brownfield Plan and to
approve the Development and Reimbursement Agreement. The amendments
are for property owned by P&G Holdings NY, LLC.
FINANCIAL IMPACT: Brownfield Tax Increment Financing will be used to
reimburse the developer for “eligible expenses” incurred in association with
development of the Watermark project. P&G Holdings NY, LLC cost for the
development of the property is approximately $30 million in private investment,
resulting in a substantial increase in the local and school taxes generated by the
property.
“Eligible Expenses” would be reimbursed starting in 2018. The estimated tax
capture and payment schedule is included as Attachment U-3 in the proposed
Brownfield Plan Amendment.
After all eligible cost incurred by the various parties are reimbursed (estimated to
be in 2047), the BRA is authorized to continue to capture local taxes for five
more years for deposit into a Local Site Remediation Revolving Fund.
The Development and Reimbursement Agreement provides the structure for the
capture of taxes and the reimbursement to P&G Holdings and the City of
Muskegon for eligible expenses.
STAFF RECOMMENDATION: To hold a public hearing for approval of the
Brownfield Plan Amendment for the P&G Holdings NY, LLC Redevelopment
Project and approve the resolution and authorize the Mayor and Clerk to sign
the resolution, and to approve the Development and Reimbursement
Agreement between P&G Holdings NY, LLC, the City of Muskegon, and the City
of Muskegon Brownfield Redevelopment Authority.
COMMITTEE RECOMMENDATION: The Muskegon City Commission set the
public hearing for January 10, 2017 at their December 13, 2016 meeting. Since
that time, a notice of the public hearing has been sent to taxing jurisdictions. In
addition, the Brownfield Redevelopment Authority approved the Plan
amendment and the Development and Reimbursement Agreement on
December 6, 2016 and recommends that the Muskegon City Commission
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approve the Plan amendment and Development and Reimbursement
Agreement.
PUBLIC HEARING COMMENCED:
Comments were received by the public as follows:
Lawrence Spataro 1567 Sixth Street In Favor
Pat Camp 930 Washington Against
Jen Sanocki 1417 Lakeshore Drive Against
Pete Amrine 1431 Glen Would like to see it fixed
Donna Pennington 1418 Lakeshore Drive Against
Lea Markowski 1055 Horton Wants to see it
Motion by Commissioner Rinsema-Sybenga, second by Vice Mayor Hood to
close the public hearing and approve the resolution and authorize the Mayor
and Clerk to sign the resolution, and to approve the Development and
Reimbursement Agreement between P& G Holdings NY, LLC, the City of
Muskegon and the City of Muskegon Brownfield Redevelopment Authority.
Motion by Commissioner Johnson, second by Commissioner Warren, to table the
item until the February 14, 2017 Regular Commission Meeting.
ROLL VOTE: Ayes: Turnquist and Johnson
Nays: Gawron, Hood, Warren, German, and Rinsema-Sybenga
MOTION FAILS
~ VOTE ON ORIGINAL MOTION ~
ROLL VOTE: Ayes: Gawron, Hood, Warren, German, Rinsema-Sybenga, and `
Turnquist
Nays: Johnson
MOTION PASSES
2017-04 NEW BUSINESS:
A. Approval of a Neighborhood Enterprise Zone Certificate – 920
Washington Avenue & 965 W. Western Avenue Planning &
Economic Development
SUMMARY OF REQUEST: An application for a Neighborhood Enterprise Zone
Certificate has been received from P&G Holdings NY, LLC for the conversion of
vacant industrial space to apartments at 920 Washington Avenue and 965 West
Western Avenue. The estimated project cost is $9,417,175 and will include 126
market rate apartments. The property was approved as a Neighborhood
Enterprise Zone District on September 13, 2016. The applicant has met local and
Page 5 of 7
state requirements for the issuance of the NEZ certificate. They have requested
the maximum 15 years for the exemption.
FINANCIAL IMPACT: The taxes on the apartment portion of the project will
be frozen at the pre-rehabilitated rate for 15 years, with a three-year phase out
(they will receive 75% of the abatement in year 13, 50% in year 14, and 25% in
year 15).
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval of the NEZ certificate.
Motion by Commissioner Rinsema-Sybenga, second by Commissioner Warren,
to approve the NEZ certificate for 920 Washington Avenue and 965 W. Western
Avenue.
ROLL VOTE: Ayes: Hood, Warren, German, Rinsema-Sybenga, Turnquist, and
Gawron
Nays: Johnson
MOTION PASSES
B. Approval of a Neighborhood Enterprise Zone Certificate – 285 W.
Western Avenue Planning & Economic Development
REMOVED PER STAFF REQUEST
C. Concurrence with the Housing Board of Appeals Notice and Order to
Demolish Public Safety
1456 Park Street
1290 Wood Street
768 Marcoux
SUMMARY OF REQUEST: This is to request that the City Commission concur with
the findings of the Housing Board of Appeals that the structures are unsafe,
substandard, a public nuisance and that they be demolished within thirty (30)
days or infraction tickets may be issued. It is further requested that administration
be directed to obtain bids for the demolition of the structures and that the
Mayor and City Clerk be authorized and directed to execute a contract for
demolition with the lowest responsible bidder or staff my issue infraction tickets
to the owner, agent, or responsible party if they do not demolish the structure.
FINANCIAL IMPACT: General Funds
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To concur with the Housing Board of Appeals
decision to demolish.
Motion by Commissioner German, second by Vice Mayor Hood, to concur with
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the Housing Board of Appeals decision to demolish 1456 Park Street and 768
Marcoux.
ROLL VOTE: Ayes: Warren, German, Rinsema-Sybenga, Turnquist, Johnson,
Gawron, and Hood
Nays: None
MOTION PASSES
Motion by Commissioner Rinsema-Sybenga, second by Commissioner Johnson,
to concur with the Housing Board of Appeals decision to demolish 1290 Wood
Street.
ROLL VOTE: Ayes: German, Rinsema-Sybenga, Turnquist, Johnson, Gawron,
Hood, and German
Nays: None
MOTION PASSES
PUBLIC PARTICIPATION: Public comments were received.
ADJOURNMENT: The City Commission Meeting adjourned at 7:00 p.m.
Respectfully Submitted,
Ann Marie Meisch, MMC, City Clerk
Page 7 of 7
Date: January 24, 2017
To: Honorable Mayor and City Commissioners
From: Ann Meisch, City Clerk
RE: Food Truck Registration Fees
SUMMARY OF REQUEST: This is a request to adjust the mobile food vending fee
to $50 for those food truck vendors who will participate in Taste of Muskegon. Taste
of Muskegon has contacted staff with the suggestion and would make it a
requirement that their participants register. Currently food vendors participating in a
special event are not required to register.
This registration will be good through April 30th of the following year. Currently mobile
food vendors outside the City limits are required to pay $300 annually, those having
restaurants in the City of Muskegon have a fee of $150, and those with a brick and
mortar business in the downtown development district pay $50 annually.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval.
Date: January 24, 2017
To: Honorable Mayor and City Commissioners
From: Ann Meisch, City Clerk
RE: Western Market Lease Agreement
SUMMARY OF REQUEST: The City has created chalets to be placed on Western
Avenue to create affordable retail outlets. Staff will evaluate applications on a first-
come-first-serve basis. The intent will be to offer a variety of retail products. The
agreement will be from May 1st through October 30th. Chalets will be required to be
open on most days from 11 am – 6 pm. Fees shall be for the entire season and shall
be set as follows:
90 sq. ft. Chalet $1125
120 sq. ft. Chalet $1500
150 sq. ft. Chalet $1875
A pro-rated rate may be offered for agreements beginning after May 1st.
FINANCIAL IMPACT: Fees collected from the lease agreements.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To authorize staff to sign the agreements with future
tenants.
Western Market
Lease Agreement
This AGREEMENT made and entered into the ______ day of _________________, 2017 by and between
the City of Muskegon “City”, 933 Terrace Street, Muskegon, MI 49440 and
______________________________ “Tenant” of a certain chalet located on Western Avenue between
1st Street and 2nd Street, Muskegon, MI 49440.
A. The City of Muskegon has agreed to grant a revocable, non-transferable, and non-exclusive use of
____________________chalet, on Western Avenue between 1st Street and 2nd Street adjacent to the
U.S. Post Office.
B. Tenant has agreed to rent the __________________chalet from the City. Therefore, the parties agree
as follows:
1) Use. Retail purposes only.
2) Rent. Rental amount______________ for the season.
3) Length of Agreement. The agreement will take effect on _______________________ through
October 30, 2017. Penalty for vacating premises before term expires is $50 per day.
4) Security Deposit____________.
5) Trash. The Tenant is responsible for moving any trash from the public rights of way connected to
Tenant’s business. If Tenant does not remove trash, the City of Muskegon may remove the trash and bill
the Tenant.
6) Sublease. The Tenant may not sublease its space in whole or part to any other individual or
business. All Tenants must be listed on the original lease unless authorization is given from staff.
7) Repair & Maintenance. The City shall be responsible for all repairs unless damage is deliberate by
tenant. In this case, the Tenant shall be responsible to pay for any repairs the City shall make.
8) Damage. Any damage or permanent changes to the structure shall be repaired and restored by
the Tenant or the tenant will be charged any fees incurred by the City of Muskegon.
9) City Inspections. City allowed to conduct inspections upon reasonable notice.
10) Insurance. The Tenant shall provide a Commercial General Liability Insurance of not less than
$1,000,000 naming the City of Muskegon as the certificate holder. The following language must be listed
on the insurance, “ADDITIONAL Insured: City of Muskegon, all elected and appointed officials, all
employees and volunteers, all boards, commissions, and/or authorities and board members, including
employees and volunteers thereof.” The insurance policy must be in place and on file in the City Clerk’s
Office before tenant may commence business.
11) Operating Covenant.
a. The Tenant shall not abandon or leave vacant the chalet and shall not allow anyone other than
Tenant, its employees, or agents to occupy it. Tenant shall not conduct an auction, going-out-of-
business, bankruptcy sales, or similar practice.
b. Tenant may not display merchandise outside of the chalet or obstruct the public rights of way
without prior written consent from the City of Muskegon.
c. Tenant must keep their chalet and surrounding area clean, neat, and safe.
d. Tenant will refrain from using the chalet in any way that is disruptive, a nuisance, annoyance, or
an inconvenience.
e. Tenant must keep the chalet continuously and uninterruptedly open for business and
adequately staffed during the following hours:
Low Season - May 1st through June 30th and August 15th through October 30th, open
Thursday through Saturday from 11 a.m. to 6 p.m.
High Season - July 1st through August 14th (as well as all cruise ship and festival days)
- Open seven days a week from 11 a.m. to 6 p.m.
Noting that emergencies do arise from time-to-time, a grace period of three absences
will be given (unless Tenant has contacted staff and received written authorization for
more absences under extenuating circumstances). After three such absences, the
Tenant will be fined $50 for each day they remain closed for the season.
f. Tenant will maintain a stock of merchandise throughout the season.
g. Tenant will comply with all laws, ordinances, orders, rules, regulations, and
requirements of federal, state, county, and city government regulating the use and
occupancy of the chalet.
h. Tenant will not install any signs on the chalet.
i. No changes should be made to the structure or the outside of the chalet in such a
manner as to detract from the character and standards of the chalet.
j. Tenant shall not add a generator for electricity unless approved by the City of
Muskegon. Only “quiet” generators will be considered.
l. Tenant shall provide a copy of their sales tax license and any other licenses required by
City, State, or Federal government.
12) Default. Tenant agrees should tenant breach any provisions in the agreement, the City
of Muskegon may at any time declare the Tenant in default and terminate the agreement
immediately.
13) Indemnification. Tenant shall indemnify City, its officials, etc. against any and all acts
arising out of Tenants use of the chalet, and all claims, liability, liens, etc.
14) Reimbursement. Tenant agrees that it shall reimburse City of Muskegon for any and all
costs and expenses, including reasonable attorneys’ fees that City of Muskegon incurs in
connection with the enforcement of its rights under this Agreement.
15) Remedies. Failure to pay rent; failure to perform any covenant will give the City the
right to terminate the Agreement.
16) Governing Law. This Agreement shall be governed by the laws of the State of
Michigan.
17) Entire Agreement. This Agreement shall constitute the entire agreement and
supersede any other written or oral agreements between the parties.
18) Severability. Should any one or more of the provisions of this Agreement be
determined to be unlawful, invalid, or unenforceable, the remaining provisions of this
Agreement shall not be impaired.
IN WITNESS WHEREOF, the City of Muskegon and tenant have caused this agreement to be
executed on the ______ day of ______________.
WITNESSES: City of Muskegon
___________________________ By_____________________________
___________________________
Tenant
___________________________ By_____________________________
___________________________
Date: January 17, 2017
To: Honorable Mayor and City Commissioners
From: Engineering
RE: Everstream GLC Holding Company, LLC – METRO
Act Permit
SUMMARY OF REQUEST: Approve the request for a permit from Everstream GLC
Holding Company, LLC and authorize the Mayor to sign the permit
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approve the permit and sign the documents.
COMMISSION MEETING DATE: January 24th, 2017
Date: January 17th, 2017
To: Honorable Mayor and City Commissioners
From: Director of Public Safety Jeffrey Lewis
RE: Professional Service Agreement (SAFEbuilt)
_______________________________________________________
SUMMARY OF REQUEST:
The Director of Public Safety requests that the Commission review and authorize this
Professional Service Agreement between the City of Muskegon and SAFEbuilt LLC.
SAFEbuilt has performed satisfactorily since the fall of 2012; said contract expired in
December of 2016. The new service contract has expanded SAFEbuilt’s responsibilities to
include, but not be limited to, “Dangerous Abandoned Buildings”. The contract reflects
adjusted shared percentages and other financial adjustments to effectively perform and
enhance the quality of service SAFEbuilt is to provide the City of Muskegon. The proposed
agreement is to commence this month, January 2017, and concludes on December 31st,
2024.
Included in the attached service agreement are the following exhibits;
Scope of Service, Fee Schedule, Performance Standard(s), and Lease Agreement.
FINANCIAL IMPACT:
Budgeted – the goal is to be cost neutral
BUDGET ACTION REQUIRED:
Adjust 2017 Fee Schedule
STAFF RECOMMENDATION:
Staff recommends approval of proposed new Professional Service Agreement between the
City of Muskegon & SAFEbuilt of Troy, Michigan.
CITY OF MUSKEGON, MICHIGAN
PROFESSIONAL SERVICES AGREEMENT
This Agreement for Professional Services ("Agreement") is entered into by and between the City of
Muskegon, a Michigan municipal corporation, 933 Terrance Street, Muskegon, MI 49440, ("City") and
SAFEbuilt Michigan, LLC, ("SAFEbuilt"), licensed to do business in the State of Michigan, whose address is
200 East Big Beaver Road, Troy, Michigan 48083. City and SAFEbuilt are individually referred to as a "Party"
and may be collectively referenced as the "Parties."
RECITALS AND REPRESENTATIONS
WHEREAS, the City has the responsibility under State laws and City Ordinance to adopt and enforce certain
building codes and other ordinances, conduct inspections, review building plans, and conduct other
professional services as described in this Agreement; and
WHEREAS, SAFEbuilt has represented to the City that it has substantial knowledge and experience in the
interpretation and application of the City's adopted Code of Ordinances with regard to various building
construction, including but not limited to, the inspection of buildings to determine compliance with State laws
and City ordinances, which include building codes, the review of building plans and other building code
services.
WHEREAS, SAFEbuilt represents that SAFEbuilt has the skill, ability, and expertise to perform the services
described in this Agreement; and
WHEREAS, the City desires to engage SAFEbuilt to provide the services described in this Agreement subject
to the terms and conditions of the Agreement.
NOW, THEREFORE, in consideration of the benefits and obligations of this Agreement, the Parties mutually
agree as follows:
1.0 AGREEMENT
1.1 References to "SAFEbuilt" shall include any employees of SAFEbuilt, its contractors, subcontractors,
independent contractors.
2.0 SERVICES
2.1 Services. As directed by and under the supervision of the Director of Public Safety, or his/her designee,
SAFEbuilt shall provide the City with the services described in Exhibit A (“Scope of Services").
2.2 Building Official. City and SAFEbuilt agree to jointly hire the City’s Building Official. Although jointly
employed, City and SAFEbuilt agree City has no obligation to compensate the Building official in any
way and that all compensation, fringe benefits, including retirement programs and insurance, shall be
provided by SAFEbuilt. The Building Official shall report to the Director of Public Safety, but SAFEbuilt
shall be fully responsible for training, overseeing, and managing the Building Official.
2.3 Changes to Services. The City may request a change or changes in the Services. Any changes to
Services that are mutually agreed upon between the City and SAFEbuilt shall be made in writing which
shall specifically designate any changes in compensation for the Services and be made an amendment
to the Agreement after approval by City Commission. To be effective, any changes must be approved
by City Commission, and signed by SAFEbuilt and the Mayor and City Clerk.
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3.0 COMPENSATION
3.1 Commencement of Services. Following execution of this Agreement by both Parties and on the Effective
Date of December 01, 2016, SAFEbuilt shall be authorized to commence performance of the Services
subject to the requirements and limitations on compensation as provided by this Section 3.0 and its
subsections.
3.2 Building Department Compensation. Unless otherwise provided, SAFEbuilt shall receive 82% of all
adopted building department fees that are collected by the City each month except the following: rental
property and associated fees; and certificate of occupancy fees. The City shall retain the remaining
18% of the fees.
3.3 Rental Program/Code Enforcement Compensation. SAFEbuilt shall receive payment as specified in
Exhibit B.
3.4 Dangerous Building Compensation. SAFEbuilt shall receive payment as specified in Exhibit B.
3.5 Municipal Civil Infractions (MCI) Compensation. SAFEbuilt and the City shall receive a 50/50 split of
recovered fees (after sent to collections).
3.6 Hourly Fees. Where a permit fee is not collected for the service performed or if SAFEbuilt is required by
the City to perform any service not included as part of its Scope of Services outlined in Exhibit A, the
City shall be responsible for the hourly rate listed in Exhibit B. That hourly rate includes pay rate,
overhead, profit, travel necessary to perform the task and all other costs to SAFEbuilt. This hourly rate
would also apply to any services for which a fee has been collected but the City has requested that
services be performed by SAFEbuilt, when SAFEbuilt is required to perform any service not included as
part of its Scope of Services outlined in Exhibit A.
3.7 Misc. Compensation. The City will discontinue the practice of charging SAFEbuilt for postage, copy
machine rent, phone rent, and information technology service. The City will begin to supply paper and
envelopes. SAFEbuilt postage allowance shall be capped at $10,000 annually; envelope supply will be
capped at 18,000 envelopes and paper supply will be capped at 18 cases..
3.8 Responsibility for Outstanding Permits. SAFEbuilt will report on the number of open permits quarterly,
providing assurance that the City is covered for open permits and shall receive payment as specified in
Exhibit B.
3.9 Collection of Fees. The Building Department, through SAFEbuilt, shall collect Building Department fees
on behalf of the City.
3.9.1 No Reimbursable Expenses. No "reimbursable expenses" or other fee, cost, charge, or
fee for the value or expense of any materials, goods, travel, mileage, depreciation, or
other item related to the performance of the Services shall be paid by the City. Any
cost, charge, fee, or expense incurred by SAFEbuilt in the performance of the Services
shall be deemed a non-reimbursable cost and shall be borne by SAFEbuilt and shall
not be billed or invoiced to the City and shall not be paid by the City.
3.9.2 Free or Reduced Cost Services. The Parties recognize and understand that the City is
or may be required by law to waive inspection fees on a limited number of projects
during a calendar year or may, at its discretion, waive or reduce inspection fees for
certain projects that provide a substantial and direct public benefit (e.g., City owned
buildings, inspection related to court cases or following up services directed by a court
of law). The City shall notify SAFEbuilt of such circumstance(s) at the earliest
opportunity and the City may request SAFEbuilt to perform building and inspection
services at no cost or at a reduced cost.
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3.9.3 Increases in Compensation or Addition of Reimbursable Expenses. Any increases or
modification of compensation or the addition of a reimbursable expense(s) shall be
subject to written amendment of this Agreement approved by City Commission and
executed by both Parties.
3.10 Payment Processing. SAFEbuilt shall submit invoices and requests for payment in a form acceptable
to the City. Invoices shall be submitted by the 15th of each month unless otherwise approved by this
Agreement or in writing by the City. All invoices shall contain sufficient information to account for all
SAFEbuilt time (or other appropriate measure(s) of work effort for the Services during the stated period
of the invoice. Invoices shall be given to the Director of Public Safety with a computation of the fees
received and a total amount on which the 82% payment request is based (Building Department Only).
The City shall have thirty (30) days from receipt of the invoice to issue payment to SAFEbuilt’s corporate
offices at: SAFEbuilt; 3755 Precision Drive, Suite 140; Loveland, CO 80538 unless there is a dispute as
to the amount due and owning. If there is a dispute, the parties shall use the procedures set out in
paragraph 3.7.
3.11 City's Dispute of Amount of Payment. The City may request additional information from SAFEbuilt
substantiating any and all compensation sought by SAFEbuilt before accepting the invoice. When
additional information is requested by the City, the City shall advise SAFEbuilt in writing, identifying the
specific item(s) that are in dispute and giving specific reasons for any request for information. The City
shall pay SAFEbuilt within thirty (30) days of the receipt of an invoice for any undisputed charges or, if
the City disputes an item or invoice and additional information is requested, within thirty (30) days of
acceptance of the item or invoice by the City following receipt of the information requested and
resolution of the dispute. To the extent possible, undisputed charges within the same invoice as
disputed charges shall be timely paid in accordance with this Agreement. Payment by the City shall be
deemed made and completed upon hand delivery to SAFEbuilt or designee of SAFEbuilt or upon
deposit of such payment in the U.S. Mail, postage pre-paid, addressed to SAFEbuilt.
4.0 SAFEBUILT'S GENERAL RESPONSIBILITIES
4.1 Reference to "SAFEbuilt" under this Section shall include SAFEbuilt employees, contractors,
subcontractors, independent contractors, or anyone performing services under this Agreement for
SAFEbuilt.
4.2 The City shall supply SAFEbuilt with individual identification badges ("ID badges") for each SAFEbuilt
employee. The City shall have the discretion to determine the type, size and design for those ID badges.
SAFEbuilt shall require that all employees have their ID badges visible to the public at all times while
performing services under this Agreement. Lost ID badges shall be immediately reported to the Director
of Public Safety.
4.3 SAFEbuilt shall provide to the City the work telephone numbers of all employees, including any mobile
telephones that will be used while performing services under this Agreement.
4.4 The City shall provide copies and amendments of the City Code of Ordinances, Michigan State Building
Codes, street maps or other relevant code books or materials to SAFEbuilt. These Code of Ordinances,
Michigan State Codes, street maps and all other materials shall remain the property of the City and shall
be turned into the City at the termination of this Agreement. SAFEbuilt shall become familiar with those
codes and any unusual applications of those codes to City issues. SAFEbuilt is obligated to affirmatively
request from the City such information that SAFEbuilt, based on SAFEbuilt's professional experience,
should reasonably expect is available and which would be relevant to the performance of the Services.
4.5 SAFEbuilt shall perform the Services in accordance with this Agreement and shall promptly inform the
City concerning ambiguities and uncertainties related to SAFEbuilt's performance that are not
addressed by the Agreement.
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4.6 SAFEbuilt shall employ a sufficient number of employees sufficiently experienced and knowledgeable to
perform the Services in a timely and prompt manner and such employees shall at all times act in a
professional, polite, and courteous manner to all persons regardless of the circumstances.
4.7 SAFEbuilt shall not allow employees, contractors, or subcontractors that are convicted of specific crimes
to do work in the City. Those crimes include, but are not limited to, fraud, theft, criminal sexual conduct,
assaultive or violent behavior, serious moral turpitude, gambling, prostitution, weapons violations, tax
evasion, or controlled substances.
4.8 SAFEbuilt shall promptly comply with any written City request for the City or any of its duly authorized
representatives to reasonably access and review any books, documents, and papers, other than
SAFEbuilt’s financial records, that are pertinent to SAFEbuilt’s performance under this Agreement for
the purpose of the City performing an audit, examination, or other review of the Services.
4.9 SAFEbuilt shall comply with all applicable federal, state and local laws, ordinances, regulations, and
resolutions.
4.10 SAFEbuilt shall be responsible at SAFEbuilt's expense for obtaining, and maintaining in a valid and
effective status, all licenses and permits necessary to perform the Services unless specifically stated
otherwise in this Agreement. SAFEbuilt shall supply copies to the City of appropriate licenses and
permits for any individual performing services under this Agreement.
4.11 If requested by the City, SAFEbuilt shall make the appropriate employees, contractors,
subcontractors, agents and independent contractors available for court proceeding, as witnesses, expert
witnesses or otherwise, instituted by or involving the City in either criminal or civil matters which involve
services performed under this Agreement, including but not limited to, appearances at pre-trials,
hearings, bench trials, jury trial and at all other times requested by the City.
4.12 SAFEbuilt shall make the appropriate employee, contractor, subcontractor, and independent
contractor available for consultation with the Director of Public Safety and the City Attorney, or their
designees, to discuss issues regarding litigation and/or matters of interest to City Commission or the
public.
5.0 PERFORMANCE STANDARDS
5.1 In performing the Services, SAFEbuilt shall use that degree of care, skill, and professionalism ordinarily
exercised under similar circumstances by members of the same profession practicing or performing the
substantially same or similar services in the State of Michigan. SAFEbuilt represents to the City that
SAFEbuilt is, and its employees performing such Services are, properly licensed and/or registered
within the State of Michigan for the performance of the Services (if licensure and/or registration is
required by applicable law) and that SAFEbuilt and employees possess the skills, knowledge, and
abilities to competently, timely, and professionally perform the Services in accordance with this
Agreement. In addition, more specific standards of SAFEbuilt performance are included within Exhibit
C.
5.2 In a timely manner, SAFEbuilt shall inform the Director of Public Safety of all oral complaints and submit
a copy of all written complaints it receives from third parties against any employee, contractor,
subcontractor or independent contractor of SAFEbuilt to the Director of Public Safety. The Director of
Public Safety shall determine the disposition of all written complaints.
5.3 The Parties mutually agree that SAFEbuilt's actions reflect on the reputation of the City. It is imperative
to the City that SAFEbuilt treats the City and the public with the utmost fairness and respect. SAFEbuilt
shall strictly comply with all the terms and conditions set out in this Agreement.
6.0 LEASING OF CITY PROPERTY - OFFICE SPACE
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6.1 The City of Muskegon and SAFEbuilt shall execute and adhere to the obligations of a rental lease as
outlined in Exhibit D.
7.0 USE OF CITY SOFTWARE
7.1 The City is licensed to use BS&A software for its Building Department permit programs. The City has
obtained permission from BS&A to allow SAFEbuilt to have access to the City's BS&A software as long
as that software is only used by SAFEbuilt to perform the services under this Agreement for the City.
SAFEbuilt acknowledges that the license to use the BS&A software terminates with the termination of
this Agreement.
7.1.1 All Code Enforcement Case identification numbers; Rental Program Identification numbers;
will incorporate a prefix that signifies case or registration was generated under this
Agreement.
7.2 SAFEbuilt shall provide an original signed statement from each of its employees acknowledging that
he/she understands that the BS&A software is the sole property of BS&A and at no time may he/she
download, copy, alter, or take other prohibited actions regarding that software. SAFEbuilt is permitted to
use standard City software loaded on the City's computers leased under Section 7, for example,
Microsoft Office and Outlook email. SAFEbuilt's right to use the software applies only to work performed
for the City and any rights to the use of that software ceased upon their termination by SAFEbuilt and/or
the termination of the Agreement.
7.3 SAFEbuilt agrees to defend, pay on behalf of, indemnify, and hold harmless the City, its elected and
appointed officials, employees, and volunteers against any claims, demands, suits or loss, and for any
damages which may be asserted, claimed or recovered against or from the City, its elected and
appointed officials, employees or volunteers by reason of any allegation of illegal use or misuse of
BS&A software or a violation of the licensing agreement by SAFEbuilt.
8.0 TERM AND TERMINATION
8.1 Term. This Agreement shall be effective on the December 01, 2016, (the "Effective Date") and shall
terminate on December 31, 2024. At the end of this period, and upon mutual agreement of the parties
as approved by City Commission, this Agreement may be renewed for up to a two (2) year period. This
Agreement may also be terminated as provided in paragraph 9.3.
8.2 Continuing Services Required. SAFEbuilt shall perform the Services in accordance with this Agreement
commencing on the Effective Date until such Services are terminated or suspended in accordance with
this Agreement. SAFEbuilt shall not temporarily delay, postpone, or suspend the performance of the
Services without the written consent of the City Commission, City Manager, or a person expressly
authorized in writing to direct SAFEbuilt's services.
8.3 City Unilateral Termination. Notwithstanding paragraph 13, this Agreement may be terminated by the
City for any or no reason upon written notice delivered to SAFEbuilt at least ninety (90) days prior to
termination. In the event of the City's exercise of the right of unilateral termination as provided by this
paragraph:
8.3.1 Unless directed to continue performing work during the ninety (90) day period prior to
termination or unless otherwise provided in any notice of termination, SAFEbuilt shall
provide no further services in connection with this Agreement after receipt of a notice of
termination; and
8.3.2 All finished or unfinished documents, data, studies and reports prepared by SAFEbuilt
pursuant to this Agreement shall be delivered by SAFEbuilt to the City and shall become the
property of the City; and
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8.3.3 SAFEbuilt shall retain any building fees collected, regardless of service performed, through
last day worked based on termination notice. SAFEbuilt will provide a final accounting within
thirty (30) days of the date of termination unless directed otherwise.
8.4 Termination for Non-Performance. Should a Party to this Agreement fail to materially perform in
accordance with the terms and conditions of this Agreement, this Agreement may be terminated by the
performing Party if the performing Party first provides written notice to the non-performing Party which
notice shall specify the non-performance, provide both a demand to cure the non-performance and
reasonable time to cure the non-performance, and state a date upon which the Agreement shall be
terminated if there is a failure to timely cure the non-performance. For purpose of this Section 8.4,
"reasonable time" shall be not less than five (5) business days. In the event of a failure to timely cure a
non-performance and upon the date of the resulting termination for nonperformance, SAFEbuilt shall
prepare a final accounting and final invoice of charges for all performed but unpaid Services and
authorized reimbursable expenses. Such final accounting and final invoice shall be delivered to the City
within fifteen (15) days of the date of termination; thereafter, no other invoice, bill, or other form of
statement of charges owing to SAFEbuilt shall be submitted to or accepted by the City. Provided that
notice of non-performance is provided in accordance with this Section 8.4, nothing in this Section 8 shall
prevent, preclude, or limit any claim or action for default or breach of contract resulting from non-
performance by a Party.
8.5 Unilateral Suspension of Services. The City may suspend SAFEbuilt's performance of the Services at
the City's discretion and for any reason by delivery of written notice of suspension to SAFEbuilt which
notice shall state a specific date of suspension. Upon receipt of such notice of suspension, Safe Built
shall immediately cease performance of the Services on the date of suspension except: (1) as may be
specifically authorized by the notice of suspension (e.g., to secure the work area from damage due to
weather or to complete a specific report or study); or (2) for the submission of an invoice for Services
performed prior to the date of suspension in accordance with this Agreement.
8.6 Reinstatement of Services Following City's Unilateral Suspension. The City may at its discretion direct
SAFEbuilt to continue performance of the Services following suspension. If such direction by the City is
made within (30) days of the date of suspension, SAFEbuilt shall recommence performance of the
Services in accordance with this Agreement. If such direction to recommence suspended Services is
made more than thirty-one (31) days following the date of suspension, SAFEbuilt may elect to: (1)
provide written notice to the City that such suspension is considered a unilateral termination of this
Agreement pursuant to Section 9.3; or (2) recommence performance in accordance with this
Agreement; or (3) if suspension exceeded sixty (60) consecutive days, request from the City an
equitable adjustment in compensation or a reasonable re-start fee and, if such request is rejected by the
City, to provide written notice to the City that such suspension and rejection of additional compensation
is considered a unilateral termination of this Agreement pursuant to Section 9.3. Nothing in this
Agreement shall preclude the Parties from executing a written amendment or agreement to suspend the
Services upon terms and conditions mutually acceptable to the Parties for any period.
8.7 Delivery of Notice of Termination. Any notice of termination permitted by this Section 8 and its
subsections shall be deemed given as set out in Section 14.13 of this Agreement titled "Notices".
9.0 INSURANCE
9.1 Insurance Generally. SAFEbuilt shall obtain and shall continuously maintain during the term of this
Agreement insurance of the kind and in the amounts specified as follows:
The Contactor shall secure and maintain the following ("Required Insurance"):
Worker's compensation insurance to cover obligations imposed by applicable law for any employee
engaged in the performance of work under this Agreement, and Employer's Liability insurance with
minimum limits of one hundred thousand dollars ($100,000) each accident, five hundred thousand
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dollar ($500,000) disease - policy limit, and one hundred thousand dollars ($100,000) disease - each
employee. Evidence of qualified self-insured status may be substituted for the worker's compensation
requirements of this paragraph.
Commercial general liability insurance with minimum combined single limits of one million dollars
($1,000,000) each occurrence and two million dollars ($2,000,000) general aggregate. The policy shall
be applicable to all premises and operations. The policy shall include coverage for bodily injury, broad
form property damage (including completed operations), personal injury (including coverage for
contractual and employee acts), blanket contractual, independent Corporations, an Annual Contract
Aggregate Limit endorsement, and products and completed operations. The policy shall contain a
severability of interest provision, and shall be endorsed to include the Municipality including Architects
and Engineers, all elected and appointed officials, all employees and volunteers, boards, commissions
and/or authorities and their board members, employees, and volunteers as additional insured. No
additional insured endorsement shall contain any exclusion for bodily injury or property damage
arising from completed operations.
Comprehensive Automobile Liability insurance with minimum combined single limits for bodily
injury and property damage of not less than of One Million Dollars ($1,000,000.00) each occurrence
with respect to each of SAFEbuilt's owned, hired and non-owned vehicles assigned to or used in
performance of the Services. The policy shall contain a severability of interest’s provision. Such
insurance coverage must extend to all levels of subcontractors. Such coverage must include all
automotive equipment used in the performance of the Agreement, both on the work site and off the
work site, and such coverage shall include non-ownership and hired cars coverage. Such insurance
shall be endorsed to name the City as Certificate Holder and name the City, and its elected officials,
officers, employees and agents as additional insured parties.
Professional Liability (errors and omissions) Insurance with a minimum limit of coverage of One
Million Dollars ($1,000,000) per claim and annual aggregate. Such policy of insurance shall be
obtained and maintained for one (1) year following completion of all Services under this Agreement.
Such policy of insurance shall be endorsed to include the City as a Certificate Holder.
The Required Insurance shall be procured and maintained with insurers licensed and admitted in
Michigan with an A- or better rating as determined by Best's Key Rating Guide. All Required Insurance
shall be continuously maintained to cover all liability, claims, demands, and other obligations assumed
by SAFEbuilt.
9.2 Additional Requirements for All Policies. In addition to specific requirements imposed on insurance by
this Section 9 and its subsections, insurance shall conform to all of the following:
9.2.1 Insurance carried or obtained by the City, its officers, or its employees shall be in excess of
and not contributory insurance to that provided by SAFEbuilt; provided, however, that the
City shall not be obligated to obtain or maintain any insurance whatsoever for any claim,
damage, or purpose arising from or related to this Agreement and the Services. SAFEbuilt
shall not be an insured party for any City-obtained insurance policy or coverage.
9.2.2 SAFEbuilt shall be solely responsible for any deductible losses for Required Insurance.
9.2.3 No policy of insurance shall contain any exclusion for bodily injury or property damage
arising from completed operations.
9.2.4 Every policy of insurance shall provide that the City will receive notice no less than thirty (30)
days prior to any cancellation, termination, or a material change in such policy.
9.3 Failure to Obtain or Maintain Insurance. SAFEbuilt's failure to obtain and continuously maintain policies
of insurance in accordance with this Section 9 and its subsections shall not limit, prevent, preclude,
excuse, or modify any liability, claims, demands, or other obligations of SAFEbuilt arising from
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performance or non-performance of this Agreement. Failure on the part of SAFEbuilt to obtain and to
continuously maintain policies providing the required coverage, conditions, restrictions, notices, and
minimum limits shall constitute a material breach of this Agreement upon which the City may
immediately terminate this Agreement, or, at its discretion, the City may procure or renew any such
policy or any extended reporting period thereto and may pay any and all premiums in connection
therewith, and all monies so paid by the City shall be repaid by SAFEbuilt to the City immediately upon
demand by the City, or at the City's sole discretion, the City may offset the cost of the premiums against
any monies due to SAFEbuilt from the City pursuant to this Agreement.
9.4 Insurance Certificates. Prior to commencement of the Services, SAFEbuilt shall submit to the City
certificates of insurance for all Required Insurance. Insurance limits, term of insurance, insured parties,
and other information sufficient to demonstrate conformance with this Section 10 and its subsections
shall be indicated on each certificate of insurance. Certificates of insurance shall reference SAFEbuilt /
Building Inspection Services. The City may request and SAFEbuilt shall provide within ten (10) business
days of such request a current certified copy of any policy of Required Insurance and any endorsement
of such policy. The City may, at its election, withhold payment for Services until the requested insurance
policies are received and found to be in accordance with the Agreement.
10.0 OWNERSHIP OF DOCUMENTS
10.1 Any work product, materials, and documents produced by SAFEbuilt pursuant to this Agreement shall
be and remains property of the City and shall not be made subject to any copyright unless authorized by
the City. SAFEbuilt hereby assigns to the City the copyright to all works prepared, developed, or created
pursuant to the Services outlined in this Agreement, including the rights to: (1) reproduce the work; (2)
prepare derivative works; (3) distribute copies to the public by sale, rental, lease, or lending; (4) perform
the works publicly; and (5) to display the work publicly. SAFEbuilt waives its rights to claim authorship of
the works, to prevent its name from being used in connection with the works, and to prevent distortion of
the works.
Other materials, methodology and proprietary work used or provided by SAFEbuilt to the City not
specifically created and delivered pursuant to the Services outlined in this Agreement may be protected
by a copyright held by SAFEbuilt and SAFEbuilt reserves all rights granted to it by any copyright. The
City shall not reproduce, sell, or otherwise make copies of any copyrighted material, subject to the
following exceptions: (1) for exclusive use internally by City staff and/or employees; or (2) pursuant to a
request under the Michigan Freedom of Information Act, MCl 15.231 et. seq., or any Federal open
records act, to the extent that such statutes apply; or (3) pursuant to law, regulation, or court order.
SAFEbuilt waives any right to prevent its name from being used in connection with the Services.
10.2 SAFEbuilt will be provided with a copy of the City's Freedom of Information Act ("FOIA") policy. The
City is responsible for responses to FOIA requests and SAFEbuilt shall not directly respond to any third
parties regarding any received FOIA requests. Upon receipt of a FOIA request, SAFEbuilt shall
immediately give that request to the City Clerk. SAFEbuilt shall provide specific information requested
by the City for response to the FOIA request by the date and time requested by the City Clerk and in a
specific format if so requested by the City Clerk, excluding those documents prepared by or on behalf of
the City.
10.3 If SAFEbuilt receives a claim for damages, a Summons or Complaint, a subpoena or other document
concerning a request for money damages, a threat of a law suit, or any court action proceeding,
SAFEbuilt shall immediately hand deliver these documents to the City Clerk.
11.0 INDEPENDENT CONTRACTOR.
11.1 SAFEbuilt shall perform the Services as an independent contractor and shall not be deemed by virtue
of this Agreement to have entered into any partnership, joint venture, employer/employee or other
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relationship with the City other than as a contracting party and independent contractor. City and
SAFEbuilt agree to jointly hire the City’s Building Official. Although jointly employed, City and SAFEbuilt
agree City has no obligation to compensate the Building official in any way and that all compensation,
fringe benefits, including retirement programs and insurance, shall be provided by SAFEbuilt. The
Building Official shall report to the Director of Public Safety, but SAFEbuilt shall be fully responsible for
training, overseeing, and managing the Building Official. The City shall not be obligated to secure, and
shall not provide, any insurance coverage or employment benefits of any kind or type to or for SAFEbuilt
or SAFEbuilt's employees, sub-consultants, contractors, agents, or representatives, including coverage
or benefits related but not limited to: local, state, or federal income or other tax contributions; insurance
contributions (e.g., FICA); workers' compensation; disability, injury, or health; professional liability
insurance, errors and omissions insurance; or retirement account contributions.
12.0 CONFLICT OF INTEREST
12.1 SAFEbuilt shall refrain from providing services to other persons, firms, or entities that would create a
conflict of interest for SAFEbuilt with regard to providing the Services pursuant to this Agreement.
SAFEbuilt shall not offer or provide anything of benefit to any City official or employee that would place
the official or employee in a position of violating the public trust as provided under the City Charter, City
Code of Ordinance, state or federal statute, case law or ethical principles.
13.0 REMEDIES
13.1 In addition to any other remedies provided for in this Agreement, and without limiting its remedies
available at law, the City may exercise the following remedial actions if SAFEbuilt substantially fails to
perform the duties and obligations of this Agreement. Substantial failure to perform the duties and
obligations of this Agreement shall mean a significant, insufficient, incorrect, or improper performance,
activities or inactions by SAFEbuilt. The remedial actions include:
13.1.1 Suspend SAFEbuilt's performance pending necessary corrective action as specified by the
City without SAFEbuilt's entitlement to an adjustment in any charge, fee, rate, price, cost, or
schedule; and/or
13.1.2 Withhold payment to SAFEbuilt until the necessary services or corrections in performance
are satisfactorily completed; and/or
13.1.3 Deny payment for those services which have not been satisfactorily performed, and which,
due to circumstances caused by SAFEbuilt, cannot be performed, or if performed would be
of no value to the City; and/or
13.1.4 Terminate this Agreement in accordance with this Agreement.
The foregoing remedies are cumulative and the City, in its sole discretion, may exercise any or
all of the remedies individually or simultaneously.
14.0 MISCELLANEOUS PROVISIONS
14.1 No Waiver of Rights. A waiver by any Party to this Agreement of the breach of any term or provision of
this Agreement shall not operate or be construed as a waiver of any subsequent breach or continued
breach by either Party or continued breach by either Party. The City's approval or acceptance of, or
payment for, services shall not be construed to operate as a waiver of any rights or benefits to be
provided under this Agreement. No covenant or term of this Agreement shall be deemed to be waived
by the City except in writing signed by the City Commission or by a person expressly authorized to sign
such waiver by resolution of the City Commission of the City and any written waiver of a right shall not
be construed to be a waiver of any other right or to be a continuing waiver unless specifically stated.
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14.2 No Waiver of Governmental Immunity. Nothing in this Agreement shall be construed to waive, limit, or
otherwise modify any governmental immunity that may be available by law to the City, its officials,
employees, contractors, or agents, volunteers or any other person acting on behalf of the City and, in
particular, governmental immunity afforded or available pursuant to the Michigan Governmental
Immunity Act, MCL 691.1401, et. seq.
14.3 Affirmative Action. SAFEbuilt will not discriminate against any employee or applicant for employment
because of race, color, religion, sex or national origin. SAFEbuilt will take affirmative action to ensure
applicants are employed, and employees are treated during employment, without regard to their race,
color, religion, sex or national origin. Such action shall include, but not be limited to the following:
employment, upgrading, promotion, demotion or transfer; recruitment or recruitment advertising; layoff
or termination; rates of pay or other forms of compensation; and selection for training, including
apprenticeship.
14.4 Binding Effect. The Parties agree that this Agreement, by its terms, shall be binding upon the
successors, heirs, legal representatives, and assigns.
14.5 No Third Party Beneficiaries. Nothing contained in this Agreement is intended to or shall create a
contractual relationship with, cause of action in favor of, or claim for relief for, any third party, including
any agent, Sub-consultant or subcontractor of SAFEbuilt. Absolutely no third party beneficiaries are
intended by this Agreement. Any third-party receiving a benefit from this Agreement is an incidental and
unintended beneficiary only.
14.6 Governing Law, Venue, and Enforcement. This Agreement shall be governed by and interpreted
according to the law of the State of Michigan. Venue for any action arising under this Agreement shall
be in the County of Muskegon. If there is any conflict between the language of this Agreement and any
exhibit or attachment, the language of this Agreement shall govern.
14.7 Survival of Terms and Conditions. The Parties understand and agree that all terms and conditions of
the Agreement that require continued performance, compliance, or effect beyond the termination date of
the Agreement shall survive such termination date and shall be enforceable in the event of a failure to
perform or comply.
14.8 No Assignment. Neither Party shall assign all or part of the rights, duties, obligations, responsibilities,
or benefits set forth in this Agreement to another party or entity.
14.9 Paragraph Captions. The captions of the paragraphs are set forth only for the convenience and
reference of the Parties and are not intended in any way to define, limit or describe the scope or intent
of this Agreement.
14.10 Integration and Amendment. This Agreement represents the entire and integrated agreement between
the City and SAFEbuilt and supersedes all prior negotiations, representations, or agreements, either
written or oral, unless specified herein. Any amendments to this must be in writing and be signed by
both the City and SAFEbuilt.
14.11 Severability. Invalidation of any of the provisions of this Agreement or any paragraph sentence,
clause, phrase, or word herein or the application thereof in any given circumstance shall not affect the
validity of any other provision of this Agreement.
14.12 Incorporation of Exhibits. Unless otherwise stated in this Agreement, exhibits, applications, or
documents referenced in this Agreement shall be incorporated into this Agreement for all purposes. In
the event of a conflict between any incorporated exhibit and this Agreement, the provisions of this
Agreement shall govern and control.
Page 10 of 32
14.13 Notices. Unless otherwise specifically required by a provision of this Agreement any notice required or
permitted by this Agreement shall be in writing and shall be deemed to have been sufficiently given for
all purposes if sent by certified mail or registered mail, postage and fees prepaid, addressed to the Party
to whom such notice is to be given at the address set forth below or at such other address as has been
previously furnished in writing, to the other Party. Such notice shall be deemed to have been given
when deposited in the United States Mail properly addressed to the intended recipient.
If to the City: If to SAFEbuilt:
Director of Public Safety Gregory Toth, President
City of Muskegon SAFEbuilt Corporate Offices
PO Box 536 / 933 Terrance Street 3755 Precision Drive, Suite 140
Muskegon, MI 49440 Loveland, CO 80538
With Copy to: With Copy to:
John C. Schrier
Parmenter O’Toole Attorneys at Law Rick Kessler
601 Terrace Street SAFEbuilt Michigan, LLC
Muskegon, MI 49440 426 East Lincoln Avenue
Royal Oak, MI 48067
15.0 SPECIAL PROVISIONS
15.1 Indemnification and Hold Harmless. To the fullest extent permitted by law, SAFEbuilt agrees to
defend, pay on behalf of, indemnify, and hold harmless the City its elected and appointed officials,
employees and volunteers and others working on behalf of the City against any and all claims,
demands, suits, or loss, including all costs connected therewith, and for any damages which may be
asserted, claimed or recovered against or from the City, its elected and appointed officials, employees,
volunteers or others working on behalf of the City, by reason of personal injury, including bodily injury or
death and/or property damage, including loss of use thereof which arises out of or is in any way
connected or associated with this Agreement. At no time does the City waive its right to governmental
immunity.
15.2 Force Majeure. Neither SAFEbuilt nor the City shall be liable for any delay in, or failure of performance
of, any covenant or promise contained in this Agreement, nor shall any delay or failure constitute default
or give rise to any liability for damages if, and only to extent that, such delay or failure is caused by
"force majeure." As used in this Agreement, "force majeure" means acts of God, acts of the public
enemy, unusually severe weather, fires, floods, epidemics, quarantines, strikes, labor disputes and
freight embargoes, to the extent such events were not the result of, or were not aggravated by, the acts
or omissions of the non-performing or delayed party.
15.3 Authority. The individuals executing this Agreement represent that they are expressly authorized to
enter into this Agreement on behalf of City and SAFEbuilt and bind their respective entities.
THIS AGREEMENT is executed and made effective as provided above.
City of Muskegon, MI SAFEbuilt Michigan, LLC
_________________________________ _________________________________
Signature Signature
Name: ___________________________ Name: ___________________________
Page 11 of 32
Title: ____________________________ Title: ____________________________
Date: _________/_________/_________ Date: _________/_________/_________
_________________________________
ATTEST Signature
_________________________________
Name / Title
Date: _________/_________/_________
Page 12 of 32
EXHIBIT A: Scope of Services
Customer Service Complaint Mitigation Plan
SAFEbuilt will develop a plan to deal with customer service complaints and will provide that plan to the City by
the end of 2016. Plan will likely include comment cards, office complaint form and customer service training.
SAFEbuilt will provide updates to the City on a quarterly basis.
Administrative Services
Provide onsite administrative staff
Provide permit counter intake during City Hall business hours of 8:30 a.m. to 5:00 p.m.
Inform applicant when submitting plans of what the maximum amount of time it will be to first comments
and also the estimated time to first comments and/or completion
Answer all questions at the counter or over the phone and provide ongoing communication as needed
Review and provide handouts at the counter
Administer the City of Muskegon contractor registration program
Provide input, tracking, and reporting using the City’s current system (BS&A)
All Code Enforcement case identification numbers; Rental Program identification numbers will
incorporate a prefix that signifies case or registration was generated under this Agreement.
Implement performance measurements to ensure agreed upon service levels
Provide scheduling support to inspection staff
Prepare reports within mutually agreed upon timeframes and frequencies
Follow up on complaints and provide resolution
Provide emergency disaster response as it relates to building code – available via cell phone after hours
Attend required staff level meeting with City staff, public officials, community leaders, and the public
Submit monthly activity and compliance reports to the Director of Public Safety
Building Department Services
Monitor and enforce adopted building codes, related codes, and amendments
Demonstrate experience and applied knowledge in the aspects of plan review and building and
construction inspections related to historic structures
Document areas of non-compliance using written records, electronic communications, photographs or
other appropriate means
Provide training for our inspectors on City of Muskegon ordinances and amendments
Manage and pay for CEU training required to maintain Act 54 compliance
Be available for meetings as requested – including representing the City at HBA meetings as needed
Work in partnership with the City of Muskegon staff to pursue the City providing building code
compliance and consulting services to the local school districts, local community colleges and local
colleges as allowed by all applicable regulations
Work with the City Clerk to facilitate Freedom of Information Act (FOIA) requests
Report directly to the position of Director of Public Safety
Existing Open Permits
SAFEbuilt will report on the number of open permits quarterly, providing assurance that the City is covered for
open permits.
Plan Review Services
Accept and perform plan review
Work with the applicant on submittal requirements in order to ensure the process is not held up for
minor issues
Examine all commercial and residential projects including drawings, specifications, computations, and
additional data
Determine if plans conform to the required strengths, stresses, strains, loads, and stability of adopted
building codes, local amendments, and all other pertinent laws and ordinances
Perform the following reviews: building code, accessibility, mechanical, electrical, plumbing, use and
occupancy classification, general building heights and areas, construction type, means of egress,
accessibility, energy code, and foundation
Page 13 of 32
Be available for pre-submittal meetings in order to help facilitate the timeliness of reviews and the
completeness of submittals
Coordinate plan review tracking, reporting, and interaction with applicable departments
Add resources as needed to keep reviews on schedule and provide needed expertise
Review all revisions and be available for consultation after review is completed
Inspection Services
Coordinate all inspection requests
Offer the option of having the inspection performed in the morning or the afternoon – am/pm inspections
Perform inspections of residential and nonresidential buildings to determine that construction activity
complies with approved plans, applicable codes and ordinances
Perform all inspections as per adopted building codes and local amendments including liquor license
inspections and coordination with Fire Marshall as warranted
Provide onsite inspection consultations to citizens and contractors at an hourly rate, if determined by
Building Official
Observe safety and security procedures and report potentially unsafe conditions
Identify and document any areas of non-compliance and suggest alternate means
Notify appropriate jurisdiction staff when we observe code violations
Perform work associated with abatement of dangerous buildings as allowed by adopted ordinance and
state law
Process and deliver stop-work notices for non-conforming building activities – as approved by the
Building Official
Leave a copy of the inspection notice with appropriate site personnel – as approved by the Bldg. Official
Administrative Support/Permit Technician Services
Provide a qualified team member to facilitate the permitting process from initial permit intake to final
issuance of permit
Provide a qualified team member to facilitate administration of the City’s dangerous building, rental and
code enforcement programs
Determine and collect fees if desired by the City of Muskegon
Provide inspection scheduling and tracking to ensure code compliance
Provide customer service
Process permits that require minimal or no plan review at time of submittal as approved by the Building
Official
Respond to citizen complaints and communicate effectively with citizens to minimize impact of building
activities on the public and neighborhoods
Dangerous Building Program
City will adopt the International Property Maintenance Code by January 31, 2017
SAFEbuilt shall provide notices to property owners in compliance with the International Property
Maintenance Code
SAFEbuilt is responsible to follow through with all steps in the declaring and the demolition of
dangerous buildings, including coordination with demolition contractors
SAFEbuilt will facilitate and prepare for Housing Board of Appeals (HBA) meetings
SAFEbuilt will prepare all City Commission agenda items and attend City Commission meetings
SAFEbuilt will provide any reporting data required to obtain grants related to demolitions. The City is
responsible for obtaining and managing any grants from the State or County.
SAFEbuilt will attempt to issue and collect on all tickets (Ex B #8) and demolition fees (Ex B #5) from
the property owner(s) per the method outlined in Exhibit B
Rental Program Services
Monitor and enforce applicable City adopted ordinances
International Property Maintenance Code will be enforced
Act as an educator of ordinances and regulations as adopted or amended, so that citizens and
businesses understand requirements and time frames for becoming compliant
Document areas of non-compliance using written records, electronic communications, photographs or
other appropriate means
Page 14 of 32
Prepare and maintain all materials for any court action in a form approved by the court, City ordinance,
and State statute
Attend court sessions – as required
Prepare and maintain all reports, issue citations and other documents for action
Prepare and distribute invoicing with regards to rental to citizens and/or owners
Provide training for our inspectors on City of Muskegon ordinances and amendments
Observe safety and security procedures and report potentially unsafe conditions
Provide rental inspections as mutually scheduled with tenant and/or owner and provide follow-up as
required
Contact and inform owners of identified violations and compliance deadlines
A new Rental Registration Program will be implemented to inspect properties on a two, four or six year
program based on the condition of the property. The City reserves the right to approve the final plan prior to
formal implementation.
Code Enforcement Services
Code enforcement focus will be “grass, trash, and leaves”
Patrol to identify violations of City code, especially focused on violations such as overgrown vegetation;
trash and debris; grass and terrace violations
Act as an educator of ordinances and regulations as adopted or amended, so that citizens and
businesses understand requirements and time frames for becoming compliant
Monitor and enforce applicable City adopted ordinances and International Property Maintenance Code.
Responds to and investigate code violation complaints promptly and provide follow-up as required
Respond to and investigate terrace violations promptly and provide next day follow-up
Contact and inform owners of identified violations and compliance deadlines
Document areas of non-compliance using written records, electronic communications, photographs or
other appropriate means
Prepare and maintain all materials for any court action in a form approved by the court, City ordinance
and State statute
Attend required court cases
Issue citations, violation notices, and follow-up letters on violations of applicable City ordinances and
International Property Maintenance Code
Observe safety and security procedures and report potentially unsafe conditions
Notify appropriate staff when we observe vacant/dangerous buildings
Administer code violations like tall grass and weeds
Cleanup of lots on privately owned property
Issue work order to contractors
Search for and find violations
Invoice property owners
Oversee appeals and issue citations as needed
Review photographic evidence
Submit unpaid bills for collection
Manage cutting and cleanup of City, County or State owned lots
Manage collections for unpaid fees paid by the City for cutting and cleanup of private property; unpaid
fees will be submitted for collection and facilitated by SAFEbuilt (no split, City retains all CE fees after
submittal for collections)
Municipal Civil Infractions (MCI) Collection Services
Administer the MCI collections program for citations issued by SAFEbuilt on behalf of the City
SAFEbuilt issues citations for Building, Rental and Code Enforcement Departments only
Collect and document unpaid MCI’s for submittal to a collection agency designated by the City
Citation documentation will be submitted electronically to the collection agency
Collection agency will submit payment payable to the City and to be sent to SAFEbuilt office,
documented and split 50/50 on monthly invoicing
Citation documentation will be submitted for collection a minimum of once per quarter and a
maximum of once per month
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SAFEbuilt Provides
SAFEbuilt would propose leasing office space from the City of Muskegon and will provide:
Vehicles, vehicle maintenance, and insurance
All hiring expenses
Ongoing training and certification of employees
Office computer hardware
Cell phones and usage
City Provided Location & Equipment
City of Muskegon will:
Provide Room 201 (currently be occupied by CNS) for lease to SAFEbuilt (to be available for renovation
by Jan. 30, 2017) at the rate of $1200 per month, subject to a 3% increase January 01, 2018 and
annually thereafter. This lease rate includes all utilities.
SAFEbuilt may deduct up to $40,000 in building improvements for Room 201 only from their monthly
rent, which could result in 2 – 3 years rent free. Improvements may include new carpet, floor tile, paint,
reception desk, office partitions and wall modifications.
Allow SAFEbuilt to service other W. Michigan communities from the leased space within City Hall
Absorb costs associated with the electronic storage of department permit and inspection records –
SAFEbuilt will facilitate the conversion and storage process with City Clerk
City Obligations/Provisions
City shall discontinue the practice of charging SAFEbuilt for postage, copy machine rent, phone rent,
and information technology services.
City shall permit SAFEbuilt to use its telephone and internet service through the City’s service
provider. City retains the rights to continue with current telephone/internet provider or switch provider
with thirty (30) day notice to SAFEbuilt.
City shall maintain and staff its vacant building program; including board-ups
City shall update and increase City fee schedule for building permit, plan review, and rental fees per
mutual agreement of both Parties.
City shall implement a “Certificate of Occupancy” charge on all building permits requiring a Certificate
of Occupancy. The City shall keep 100% of the funds collected.
City shall adopt the International Property Maintenance Code by January 31, 2017.
City is responsible for obtaining and managing any grants from the State or County,
City shall provide SAFEbuilt access to water billing records and assessors data in order to help find
unregistered rental properties
City shall supply property map on CD that can be installed on any computer or laptop.
City shall continue to supply property map in the printed book format for those without a laptop
City shall pay for newspaper advertising for code enforcement related issues or seek an alternate
program for advertising like Facebook or the City website.
City shall supply paper and envelopes as needed.
City shall pay all code enforcement contractor invoices, including the current contractor of SAFEbuilt’s
choice, Muskegon County Landfill and current tire disposal contractor of SAFEbuilt’s choice.
Page 16 of 32
EXHIBIT B: Fee Schedule
SAFEbuilt does not utilize a company-wide fee schedule. A majority of our fees are based on an appropriate
percentage of the jurisdictions adopted fee schedule for services being provided by SAFEbuilt. SAFEbuilt
proposes services to be performed at the following rates. SAFEbuilt’s fees are all inclusive with no separate
billing for:
• Wages/Benefits
• Mileage/Vehicle Expense
• Materials
• Disbursement (copying, telephone rates, courier services)
Fee Schedule
1. Building Department Related Fees – 82% of all adopted building department fees
Except the following:
• Rental property and associated fees
• Certificate of Occupancy Fees
2. Liquor License Inspection & Re-Inspection Fees – 82% of fee
3. Hourly Rate Fee - $70.00 (see Section 3.3)
4. Postage Fee - $10,000 maximum annual allowance
5. Dangerous Building Fees
SAFEbuilt will attempt to issue and collect on all tickets and demolition fees from the property owner(s) as
follows:
• When the City pays for a demolition a 20% Administrative Fee shall be applied to the demolition costs
charged to the property owner(s) – Administrative Fee shall be returned to the City after recovery
• SAFEbuilt shall keep 30% of any demolition cost recovered prior to sending items to collections
excluding the Administrative Fee
• City and SAFEbuilt will share the net after collections 50/50 unless otherwise provided
• Title Search fees shall be paid by the City – if required
• City shall be responsible for collecting any escrow funds
6. Rental Program Fee Schedule – City shall pay SAFEbuilt $25,000 per month for the administration of the
Rental Program beginning December 01, 2016.
• A 3% inflator will be implemented January 01, 2018 and every January 1st thereafter through December
31, 2020
• A rate-opener will be held to determine the rate for years beginning January 01, 2021 and thereafter
• Rental Program Revenue Sharing shall be a 50/50 split for all revenue in excess of $300,000 annually,
City shall keep first $300,000 in revenue
7. Code Enforcement Program Fee Schedule – City shall pay SAFEbuilt $13,150 per month for the
administration of the code enforcement program beginning December 01, 2016.
• A 3% inflator will be implemented January 01, 2018 and every January 1st thereafter through December
31, 2020
• A rate-opener will be held to determine the rate for years beginning January 01, 2021 and thereafter
• Manage cutting and cleanup of City, County or State owned parcels for a $10 fee per work order
Page 17 of 32
• Code Administrative Fees for private lot cleanup that are paid without being submitted to collections will
be retained by SAFEbuilt; fees that are submitted for collection will become part of the collections for the
City
8. Municipal Civil Infractions (MCI) Fee – SAFEbuilt and the City shall receive a 50/50 split of recovered fees
(after going to collection)
Page 18 of 32
EXHIBIT C: Performance Standards
We use a number of performance measures to gauge the effectiveness of our systems and the efficiency of
our staff. The most visible of quantitative measures are the following:
Area Performance Measurement Goal Comments
Overall Customer Service Ratings 100% SAFEbuilt will utilize customer service surveys to
Department satisfaction determine if department activity is satisfactory for
the end user and to identify areas of strengths and
areas that need improvement.
Administrative Percentage of walk-ins 100% A front counter log will be reviewed each month to
Support experiencing counter wait times ensure that any customer requests or issues are
of less than 10 minutes handled quickly and effectively so as not to be an
inconvenience. The data will be compiled into a
report.
Administrative Percentage of phone 100% Inquiries and complaints from walk-in traffic, emails
Support inquiries/information and phone calls will be tracked and compiled into a
requests/complaints handled report.
within 24 hours
Plan Review Residential (IRC) plan reviews – 100% City of Muskegon permit software should capture
maximum time to first comment this information. If not, SAFEbuilt will utilize its
is 5 business days. proprietary software to provide reporting. The 5
business day’s time frame is a maximum time to
comments. All plans will be reviewed on an As Soon
As Possible (ASAP) basis. Estimated time to
completion will be communicated to applicant.
Plan Review Multi-family plan reviews 100% City of Muskegon permit software should capture
maximum time to first this information. If not, SAFEbuilt will utilize its
comments is 10 business days. proprietary software to provide reporting. The 10
Maximum time to second and 5 business day’s time frames are a maximum
comments is 5 business days time to comments. All plans will be reviewed on an
As Soon As Possible (ASAP) basis. Estimated time to
completion will be communicated to applicant.
Plan Review Small Commercial (<$5M in 100% City of Muskegon permit software should capture
valuation) plan reviews first this information. If not, SAFEbuilt will utilize its
comments within 10 business proprietary software to provide reporting. The 10
days/second comments 5 and 5 business day’s time frames are a maximum
business days time to comments. All plans will be reviewed on an
As Soon As Possible (ASAP) basis. Estimated time to
completion will be communicated to applicant.
Plan Review Large Commercial (>$5M in 100% City of Muskegon permit software should capture
valuation) plan reviews first this information. If not, SAFEbuilt will utilize its
comments within 15 business proprietary software to provide reporting. The 15
days/second comments 10 and 10 business day’s time frames are a maximum
business days time to comments. All plans will be reviewed on an
As Soon As Possible (ASAP) basis. Estimated time to
completion will be communicated to applicant.
Building and All inspections performed 100% City of Muskegon permit software should capture
Trade within 24 hours of request this information. If not, SAFEbuilt will utilize its
Inspections unless otherwise requested by proprietary software to provide reporting. The
applicant maximum time to complete a scheduled inspection is
24 hours – this does not include non business days or
City holidays.
Page 19 of 32
EXHIBIT D: Lease Agreement
CITY OF MUSKEGON
Landlord
TO
SAFEbuilt Michigan, LLC
Tenant
LEASE
Dated: December 01, 2016
Premises in the City Hall Building
City of Muskegon
County of Muskegon
State of Michigan
Room 201
LEASE
Page 20 of 32
THIS LEASE, made November 01, 2012, between the City of Muskegon, a Michigan
municipality (“Landlord” or “the City”) of 933 Terrace Street, Muskegon, Michigan, 49440, and
SAFEbuilt Michigan, LLC, (“Tenant”);
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS: As used herein the following terms and phrases shall have the
meanings indicated:
A. Commencement Date: December 01, 2016
B. Term: The period of December 01, 2016 through December 31, 2024
ending at midnight of the last day. At the end of this period, and upon
mutual agreement of the parties as approved by City Commission, this
Lease may be renewed for up to a two (2) year period.
C. Rent Commencement Date: December 01, 2016
D. Demised Premises: Room 201, which is approx. 2736 square feet of office
space, located on the second floor within the building containing the City of
Muskegon’s City Hall at 933 Terrace Street, Muskegon, Michigan, 49440.
E. Common Areas: All areas, spaces and improvements which Landlord
makes available from time to time for the common use and benefit of Tenant, including, without
limitation, customer parking spaces, roads, walkways, promenades, sidewalks, landscaped and
planted areas, public rest rooms, and those portions of utility and sewer lines and systems and
fire protection and sprinkler alarm systems serving the common use and benefit of Tenant.
F. Landlord: The City of Muskegon, the owner of the fee of the Demised
Premises.
G. Requirements: All laws, statutes, ordinances (including, but not limited to,
building codes and zoning regulations and ordinances), orders, rules, regulations and
requirements of all federal, state, county and municipal governments, and the appropriate
agencies, officers, departments, boards and commissions thereof, and the board of fire
underwriters and/or the fire insurance rating organization or similar organization performing the
same or similar functions, whether now or hereafter in force, applicable to the Building or any
part thereof and/or the Demised Premises or the use or manner of use of the Building or any
part thereof and/or the Demised Premises or the sidewalks and curbs adjacent thereto.
H. The Building: The structure located at 933 Terrace Street, in which the
Demised Premises are located and in which City of Muskegon City Hall is located.
ARTICLE II
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DEMISE AND CONSTRUCTION
2.01 DEMISE. Upon and subject to the terms and conditions of this Lease, Landlord
hereby leases to Tenant, and Tenant hereby hires from Landlord, the Demised Premises, for
the Term. Tenant acknowledges that the dimensions, shape and location of the Demised
Premises as described herein are approximate. Notwithstanding the foregoing, Landlord
reserves exclusively to itself and Tenant shall have no right in and to (a) the use of the exterior
faces of all perimeter walls, (b) the use of the roof, (c) the use of the land, improvements and
space below the bottom of the lower floor slabs of the Demised Premises and above the
interior surface of the ceiling of the Demised Premises, and (d) the use of the improvements
and space above the highest ceiling of the Demised Premises. Landlord also reserves and
Tenant shall have no right in and to the air rights above Tenant's office space.
2.03 FURNITURE. Landlord shall provide any cubicle dividers, desks, file cabinets,
shelves, tables, floor mates, and/or wall document holders that are existing in the Demised
Premises on the Commencement Date. The use of the existing property shall be included in the
Fixed Rent and be included as part of the Demised Premises.
2.04 ACCEPTANCE OF DEMISED PREMISES. Tenant’s occupancy of Room 201
shall be conclusive evidence against Tenant as an admission that every part of the Demised
Premises is accepted "as is". Room 201 shall be cleared of all City belongings including books,
old office equipment and 4-drawer file cabinets (with the exception of all desks and wall panels)
by January 30, 2017. This is to include the current supply/print storage room, all prints and
related material should be removed and properly archived by the City Clerk. Landlord shall have
no responsibility in any respect for damages to property of Tenant caused by water, flooding,
waves or fluids of any nature or origin whatsoever. Tenant hereby waives any and all benefits
or rights to which Tenant might become entitled by reason of any and all provisions of law that
permit a tenant to make repairs at the expense of a landlord or to terminate a lease by reason of
the condition of the Demised Premises.
ARTICLE III
FIXED RENT AND SECURITY
3.01 PAYMENT OF FIXED RENT. Commencing upon the Rent Commencement Date,
Tenant shall pay rent at the monthly rate of $1200.00, in advance of the first day of each month
during the Term, except that if the Rent Commencement Date is not the first day of a month,
Fixed Rent for the period commencing on the Rent Commencement Date and ending on the last
day of the month in which the Rent Commencement Date occurs shall be apportioned on the
basis of the number of days in said month as compared to 365 days and paid on the Rent
Commencement Date. The Fixed Rent shall be paid promptly when due, in lawful money of the
United States, without notice or demand and without deduction, abatement, counterclaim or
setoff of any amount or for any reason whatsoever, to Landlord at the address of Landlord set
forth at the head of this Lease or such other address as Landlord may designate or to such
other person as Landlord may designate. Tenant rent shall be subject to a 3% increase January
01, 2018 and annually thereafter.
Page 22 of 32
SAFEbuilt will occupy Room 201. SAFEbuilt may deduct up to $40,000 in building
improvements from their monthly rent which is approx. 2 – 3 years rent free.
3.02 LATE CHARGES AND RETURN CHECK CHARGES. If payment of any Fixed
Rent shall not have been paid by the date on which such amount was due and payable a late
charge equal to the greater of (i) FIFTY DOLLARS ($50.00) and (ii) one and one-half percent
(1-1/2%) per calendar month or any part thereof (or the then maximum lawful interest rate, if
less), from the date on which such amount was due, on the amount overdue shall, at the
Landlord's option, be payable as damages for Tenant's failure to make prompt payment. In
addition to any other penalties or remedies available to Landlord in the event of any late
payment by Tenant, if any check in payment of any Fixed Rent is returned to Landlord by
Tenant's bank by reason of insufficient funds, uncollected funds or otherwise, a return check
administrative charge of FIFTY DOLLARS ($50.00) shall be payable to Landlord by Tenant.
The late charges and return check administrative charges for any month shall be payable the
first day of the following month, and in default of payment of any such charges, Landlord shall
have (in addition to all other remedies) the same rights as provided in this Lease for
nonpayment of Rent. Landlord and Tenant agree that the foregoing late charges and return
check administrative charges represent a reasonable estimate of the costs which Landlord will
incur by reason of late payment by Tenant and returned checks, and are fair compensation to
Landlord for its loss suffered by such late payment or returned check. Nothing in this Section
contained and no acceptance of late charges by Landlord shall be deemed to extend or change
the time for payment of Fixed Rent.
3.03 ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of
any lesser amount than the amount stipulated to be paid hereunder shall be deemed other than
on account of the earliest stipulated Fixed Rent nor shall any endorsement or statement on any
check or letter be deemed an accord and satisfaction, and Landlord may accept any check or
payment without prejudice to Landlord's right to recover the balance due or to pursue any other
remedy available to Landlord.
3.04 SECURITY DEPOSIT: None required
ARTICLE IV
COMMON AREAS AND PARKING
4.01 MAINTENANCE OF AND CHANGES IN COMMON AREAS. Subject to the
provisions of Section 7.04, Landlord will operate, manage, equip, light, repair and maintain, or
cause to be operated, managed, equipped, lighted, repaired and maintained, the Common
Areas for their intended purposes. Landlord reserves the right, at any time and from time to
time to make changes, additions, alterations or improvements in and to such Common Areas
provided same shall not unreasonably block or interfere with Tenant's means of ingress or
egress to and from the Demised Premises.
4.02 USE OF COMMON AREAS. Tenant and its licensees and their respective
officers, employees, agents, customers and invitees, shall have the non-exclusive right, in
common with Landlord and all others to whom Landlord has granted or may hereafter grant
such rights. Landlord reserves the right, at any time and from time to time, to close temporarily
all or any portions of the Common Areas for any of the following purposes when in Landlord's
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reasonable judgment any such closing is necessary or desirable: to make repairs or changes
therein or to effect construction, repairs or changes, to prevent the acquisition of public rights in
such areas, to protect or preserve persons or property and Landlord may do such other acts in
and to the Common Areas as in its judgment may be desirable. While conducting business after
regular business hours on weeknights or weekends, Tenant may access the public restrooms.
Tenant’s clients may be permitted to use the public restrooms but are not permitted to enter any
other part of the City Hall building closed to the public after regular business hours on
weeknights and weekends.
4.03 PARKING. Tenant and its officers, agents, and employees shall park their
vehicles only in areas from time to time designated by Landlord as the areas for such parking.
Tenant shall, upon written notice from Landlord, within five (5) days, furnish Landlord, or its
authorized agent, the State automobile license tag number assigned to its vehicle or vehicles
and the vehicles of all of its officers, agents and employees employed in the Demised Premises.
Landlord, after notice to Tenant that Tenant or any of its officers, agents or employees are not
parking in said designated parking areas or off-premises, as applicable, may, at its option, in
addition to any other remedies it may have, tow away such vehicles at Tenant's expense.
ARTICLE V
UTILITIES AND SERVICES
5.01 UTILITIES AND MECHANICAL MAINTENANCE. Landlord shall furnish heat,
electricity and water/sewer utilities serving Tenant and charges for said utilities shall be included
in the Fixed Rent. Tenant shall make all necessary arrangements for internet services and shall
be responsible for all associated charges for said utilities. The City of Muskegon will provide
phone land lines and bill SAFEbuilt Michigan, LLC at actual cost with no markup. Separate
telephone and internet lines are required for Tenant that shall not be connected to the telephone
or internet systems used by City employees in the building.
ARTICLE VI
USE AND ENJOYMENT OF DEMISED PREMISES
6.01 PERMITTED USES. Tenant shall use the Demised Premises solely for the
purpose of conducting the business of SAFEbuilt Michigan, LLC and Tenant shall not use or
permit or suffer the use of the Demised Premises for any other purpose whatsoever. The City of
Muskegon will allow SAFEbuilt Michigan, LLC to service other W. Michigan communities form
the leased space within City Hall. Tenant shall not advertise its services by stating it conducts
business in Muskegon City Hall or in any way suggest the City endorses Tenant’s services
because of this Lease agreement. Marketing brochures, business cards and all forms of
advertising may state the address of the building of the Demised Premises but may not refer to
“City Hall” so as to suggest a connection between SAFEbuilt Michigan, LLC and the City beyond
that of Tenant and Landlord. Tenant acknowledges that Muskegon City Hall is open to the public
between the hours of 8:30 a.m. to 5:00 p.m. and for morning and evening meetings before or
after those hours on certain days. Tenant waives any claim or cause of action regarding the
nonavailability of the office space during emergency periods when, due to electrical power
outages, police or fire situations or acts of nature that City Hall remains closed to Tenant.
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6.02 SIGNS. Tenant shall provide a suitable identification sign or signs of such size,
design and character as Landlord shall designate and/or approve, and Tenant shall install same
on the door to Suite – (Former Leisure Services Space). All costs of fabricating, constructing,
installing, operating, maintaining and removing any and all such identification signs shall be
borne by Tenant. Other than such permitted signs, Tenant shall not place or install, or permit or
suffer to be placed or installed, or maintain, any sign upon or outside of the Demised Premises
or in any part of the building unless approved by Landlord. Tenant shall not place, install or
maintain, or permit or suffer to be placed, installed or maintained, on the exterior of the Demised
Premises, any awning, canopy, banner, flag, pennant, aerial, antenna or the like, nor place or
maintain on the interior or exterior of the glass of the windows or the doors of the Demised
Premises any sign.
6.03 COMPLIANCE WITH LAWS. Tenant shall comply with the certificate of
occupancy relating to the Demised Premises and with all Requirements. Without limiting the
generality of the foregoing, Tenant shall not engage in any activity on or about the Demised
Premises that violates any Requirement(s) pertaining to environmental laws or hazardous
substances and shall take all investigatory and/or remedial action required by any governmental
agency or applicable Requirements for cleanup and removal of any contamination involving any
hazardous substance created or caused, directly or indirectly, by Tenant.
6.04 ACCESS TO PREMISES AND EXCAVATION. Landlord shall have the right to
enter upon and in the Demised Premises at all reasonable times to examine the same and to
make such repairs, alterations, improvements and additions in the Demised Premises as
Landlord may deem necessary, and Landlord shall be allowed to take all materials into and
upon the Demised Premises that may be required therefor without the same constituting an
eviction of Tenant, in whole or in part, and the Fixed Rent shall in no way abate while such
repairs, alterations, improvements or additions are being made by reason of loss or interruption
of the business of Tenant due to the prosecution of any such work; provided, however, Landlord
shall use reasonable efforts not to unreasonably interfere with or interrupt Tenant's business in
the Demised Premises, but in no event shall Landlord be required to incur any additional
expense for work to be done during hours or days other than regular business hours and days.
6.05 MECHANICS' LIENS. Nothing contained in this Lease shall be deemed,
construed or interpreted to imply any consent or agreement on the part of Landlord to subject
Landlord's interest or estate to any liability under any mechanic's or other lien law. If any
mechanic's or other lien or any notice of intention to file a lien is filed against the City, or the
Demised Premises, or any part thereof, for any work, labor, services or materials claimed to
have been performed or furnished for or on behalf of Tenant or anyone holding any part of the
Demised Premises through or under Tenant, Tenant shall cause the same to be canceled and
discharged of record by payment, bond or order of a court of competent jurisdiction within 20
days after the earlier to occur of (i) such lien or notice becoming of record or (ii) the giving of
notice by Landlord to Tenant. Landlord shall have the right to post any notices of non-
responsibility which Landlord may deem necessary for the protection of Landlord and Landlord's
interest in the Demised Premises from mechanics' liens or liens of a similar nature; and Tenant
shall, before the commencement of any work which might result in any such lien, give written
notice to Landlord of its intention to do so in sufficient time to enable the posting of such notices.
ARTICLE VII
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ALTERATIONS, REPAIRS AND CHANGES
7.01 ALTERATIONS BY TENANT. Tenant shall not make or cause to be made any
improvements, alterations, additions, changes, replacements or installations to the Demised
Premises, or make any holes or cuts in the walls, ceilings, roofs, or floors thereof, or
architectural treatment of the Demised Premises, without on each occasion first obtaining the
consent of Landlord, and if such consent is granted, Tenant shall carry such worker's
compensation and general liability insurance and such other insurance as Landlord may require,
naming Landlord as an additional insured. In no event whatsoever shall Tenant make any
penetrations into the roof deck or the concrete slab or any fire wall without having obtained
Landlord's prior written consent, which consent, it is expressly understood and agreed by
Tenant may be given or withheld by Landlord in Landlord's sole and absolute discretion, and
which consent may be expressly conditioned upon Landlord, at Tenant's sole cost and expense,
performing such work on Tenant's behalf and/or overseeing the performance of such work by
Tenant to Landlord's satisfaction. Tenant shall submit to Landlord plans and specifications for
such work at the time Landlord's consent is sought. Any such improvements, alterations,
additions, changes, replacements or installations will be performed in a good and workmanlike
manner in accordance with the approved plans and specifications and in compliance with all
Requirements and shall be performed and completed by Tenant in an expeditious manner. The
cost of such improvements, alterations, additions, changes, replacements or installations shall
be paid in cash or its equivalent so that the Demised Premises shall at all times be free of liens
for work, labor, services or materials claimed to have been performed or furnished for or on
behalf of Tenant or anyone holding any part of the Demised Premises through or under Tenant.
All contractors and subcontractors performing work in or to the Demised Premises shall be
approved by Landlord prior to the performance of any such work.
7.02 REPAIRS BY LANDLORD. Landlord shall make necessary structural repairs to
the Demised Premises (but excluding windows and window frames, doors, plate glass, store
fronts, showcases and signs) and shall keep in good condition and repair the foundations and
roof of the Demised Premises and those portions of the utility systems that are for common use.
Landlord shall not be required to make any such repairs where same were caused or
occasioned by any act, omission or negligence of Tenant, or licensees of Tenant, or any of their
respective officers, employees, agents, customers, invitees or contractors. Landlord shall not
be required to commence any such repair until notice shall be received from Tenant specifying
the nature of the repair. The provisions of this Section shall not apply in the case of damage by
fire or other casualty or by eminent domain, in which event the obligations of the parties shall be
as provided in other Sections of this Lease. All costs and expenses incurred by Landlord
pursuant to the provisions of this Section shall be deemed to constitute Common Area costs.
7.03 REPAIRS AND MAINTENANCE BY TENANT. Except for repairs required to be
performed by Landlord under Section 7.02, Tenant shall make all repairs and replacements to,
and shall keep clean, neat, safe, sanitary, in good order, repair and condition (including all
painting and decorating necessary to maintain at all times a clean and sightly appearance) and
free of vermin, the Demised Premises, including both inside and the outside, and any
equipment, facilities, fixtures and systems therein. In making repairs, Tenant shall use materials
equal in kind and quality to the original work. Tenant shall repaint and refurbish the Demised
Premises at reasonable periodic intervals to assure that the Demised Premises is kept in a first-
class and attractive condition through the Term. All alterations and repairs hereunder shall be
subject to the requirements and conditions set forth in Section 7.01 hereinbefore and shall be
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performed by contractors approved by Landlord, and all such work shall conform to existing
structures and quality of the building.
7.04 CHANGES BY LANDLORD. Landlord reserves the right, at any time and from
time to time, to increase, reduce or change the number, type, size, location, elevation, nature
and use of any of the Common Areas including, without limitation, the right to move and/or
remove same and to add additional stories thereon, provided same shall not unreasonably block
or interfere with Tenant's means of ingress or egress to and from the Demised Premises.
7.05 LANDLORD'S CONSENT. In no event shall Landlord be required to consent to
any improvements, alterations, additions, changes, replacements or installations which, when
completed, will, in Landlord's judgment, be of such a character which will reduce the value,
rentability or usefulness of the Demised Premises or which will affect the facade, mechanical,
electrical or structural components of either the Demised Premises or the building or which
would reduce the Floor Space of the Demised Premises.
7.06 FIRE OR CASUALTY; CONDEMNATION. In the event the Demised Premises are
totally destroyed by fire, wind, or other causes beyond the control of the Landlord, or are
condemned or otherwise taken by authority of local, state or federal government, then in any of
these events the lease Term shall cease and terminate as of the date of such destruction,
condemnation or taking. In the event of any loss or damage by fire or other casualty for which
the building or improvements on the Demised Premises may be insured, all amounts payable
upon any policy or policies of insurance shall be paid to Landlord. If the Demised Premises are
damaged by fire, rain, wind or other such causes, so as to render the same partially untenable
or partially unfit for use, but are repairable within a reasonable time, then this Lease shall remain
in full force and effect, but Tenant’s rent shall be proportionately reduced until the Demised
Premises are repaired.
ARTICLE VIII
INSURANCE AND INDEMNITY
8.01 INSURANCE BY TENANT. A. Tenant shall maintain the following insurance at
Tenant's sole cost and expense: (a) commercial general public liability insurance covering the
Demised Premises and the conduct or operation of business therein, naming Landlord as
additional insured, with limits of not less than $1,000,000 combined single limit for bodily injury
or death and for property damage, including water damage and sprinkler leakage liability, (b) fire
and extended coverage insurance covering Tenant's stock in trade, fixtures, furniture,
furnishings, removable floor coverings, equipment, signs and all other property of Tenant in the
Demised Premises to the extent of one hundred (100%) percent of the full insurable value of the
property covered and not less than the amount sufficient to avoid the effect of the co-insurance
provisions of the applicable policy or policies, (c) comprehensive automobile liability insurance
including owned, non-owned and hired car coverage in an amount not less than $3,000,000
combined single limit per occurrence for bodily injury or death and for property damage, and (d)
any other insurance required for compliance with any Requirements. Tenant shall deliver to
Landlord and any additional insured specified by Landlord to Tenant such fully paid-for-policies
or certificates evidencing such coverage before the Commencement Date. Tenant shall procure
and pay for renewals of such insurance from time to time before the expiration thereof, and
Tenant shall deliver to Landlord and any additional insured such renewal policy or certificates
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evidencing such renewal at least 30 days before the expiration of any existing policy. All such
policies shall be issued by companies of recognized responsibility licensed to do business in the
state in which the Demised Premises is located and having a general policy holder's rating of
not less than A, and financial ratings of not less than Class VIII as rated in the most current
"Best's" Insurance Reports, and all such policies shall contain a provision whereby the same
cannot be canceled or modified unless Landlord and any additional insured are given at least 30
days prior written notice by certified or registered mail of such cancellation or modification.
B. Tenant shall require any contractor of Tenant performing work in, on or about
the Demised Premises to take out and keep in full force and effect, at no expense to Landlord
(a) commercial general public liability insurance in respect of the Demised Premises, and the
conduct of its work therein, naming Landlord as additional insured, with limits of not less than
$3,000,000 combined single limit for bodily injury or death and for property damage, including
water damage and sprinkler leakage legal liability; (b) workers' compensation or similar
insurance in form and amounts required by law (but in no event less than a combined single
limit of $1,000,000 per occurrence); and (c) comprehensive automobile liability insurance
including owned, non-owned and hired car coverage in an amount not less than $3,000,000
combined single limit per occurrence for bodily injury or death and for property damage.
C. It is understood and agreed by naming Landlord as an additional insured,
coverage afforded is considered to be primary and any other insurance Landlord may have in
effect shall be considered secondary and/or excess. It is further understood and agreed that
thirty (30) days advance written notice shall be given to Landlord of cancellation, non-renewal,
reduction and/or material change of any required insurance policy.
8.02 INCREASE IN PREMIUMS. Tenant shall not do, permit or suffer to be done any
act, matter, thing or failure to act in respect of the Demised Premises or use or occupy the
Demised Premises or conduct or operate Tenant's business in any manner objectionable to
insurance companies whereby the fire insurance or any other insurance now in force or
hereafter to be placed on the Demised Premises or the building or any part thereof shall
become void or suspended or bring or keep anything upon the Demised Premises which shall
increase the rate of premiums of insurance on the Demised Premises or the building or any part
thereof or on the property located therein. If by reason of failure of Tenant to comply with the
foregoing provisions of this Section, any premiums in respect of insurance maintained by
Landlord shall be higher than those which would normally have been in effect, then Tenant shall
be liable to Landlord as hereinafter set forth. In case of a breach of this covenant, in addition to
all other rights and remedies of Landlord hereunder, Tenant shall (a) indemnify Landlord and
hold Landlord harmless from and against any loss which would have been covered by insurance
which shall have become void or suspended because of such breach by Tenant and (b) pay to
Landlord any and all increases of premiums on any insurance, including, without limitation, rent
insurance, resulting from any such breach. In addition to the foregoing, Tenant will, if Landlord
so requests, cease any action and/or remove any objects or improvements which have resulted
in increases in Landlord's insurance premiums.
8.03 INDEMNIFICATION AND RELEASE. In the event legal proceedings are
threatened or filed against either party involving in any manner the performance of this Lease,
notification shall be given to the other party, including any knowledge or information which may
result in a claim against either of them, and cooperation shall take place between the parties
whenever any claim is filed against either party, involving in any manner the performance of this
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Lease. Tenant shall defend and indemnify Landlord and shall hold Landlord harmless from and
against any and all injuries, losses, claims, actions, damages, liabilities and expenses (including
attorneys' fees and expenses) to persons or property arising from, related to or in connection
with the use or occupancy of the Demised Premises or the conduct or operation of business
therein or any default in the performance of any obligation of Tenant under this Lease. Landlord
shall not be liable or responsible for, and Tenant hereby releases Landlord from, all liability or
responsibility to Tenant or any person claiming by, through or under Tenant, by way of
subrogation or otherwise, for any loss or damage to any property in or around the Demised
Premises or to Tenant's business irrespective of the cause of such loss or damage, and Tenant
shall require its insurer(s) to include in all of Tenant's casualty insurance policies which could
give rise to a right of subrogation against Landlord a clause or endorsement whereby the
insurer(s) shall waive any rights of subrogation against Landlord. If Landlord shall, without fault
on its part, be made a party to any litigation commenced by or against Tenant, Tenant shall
indemnify and hold Landlord harmless from and against all costs, expenses and reasonable
attorneys' fees incurred or paid by Landlord in connection with such litigation.
ARTICLE IX
MISCELLANEOUS
9.01 ASSIGNMENT OR SUBLETTING. Tenant shall not assign or sublet its rights under
this Lease.
9.02 RENEWAL. This Lease may be renegotiated for additional terms following the
completion of the current Term.
9.03 DEFAULT AND REPOSSESSION. If the Demised Premises shall be deserted or
vacated, or if there shall be a default in the payment of rent or any part thereof for more than
seven days after written notice of such default by the Landlord, or if there shall be default in the
performance of any other covenant, agreement, condition, rule or regulation herein contained or
incorporated herein by reference for more than seven days after written notice of such default by
the Landlord, this Lease (if the Landlord so elects) shall thereupon become null and void, and
the Landlord shall have the right to reenter or repossess the Demised Premises, either by
summary proceedings, surrender, or otherwise, and dispossess and remove therefrom the
Tenant, or other occupants thereof, and their effects, without being liable to any prosecution
therefor. Tenant agrees to pay all expenses and damages incurred by Landlord as a result of
Tenant’s default, including Landlord’s reasonable attorney fees. If Tenant shall fail to perform
any of its obligations hereunder, Landlord may, if it so elects, and after five days' prior notice to
Tenant, cure such default at Tenant’s expense, and Tenant agrees to reimburse Landlord (as
additional rent) for all costs and expenses incurred as a result thereof upon demand.
9.04 NULL AND VOID. This Lease runs with an Agreement for Professional Services,
entered into by and between the City of Muskegon and SAFEbuilt Michigan, LLC, and (if the
Landlord so elects) shall become null and void at the expiration or termination of the Agreement
for Professional Services. The Agreement for Professional Services runs with this Lease and (if
the Landlord so elects) shall become null and void at the expiration or termination of this Lease.
9.05 OWNERSHIP OF IMPROVEMENTS AND PERSONAL PROPERTY. All
installations, alterations, additions, betterments and improvements upon the Demised Premises,
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made by any party, shall become the property of Landlord when installed and shall remain upon
and be surrendered with the Demised Premises as a part thereof at the expiration or sooner
termination of the Term. Movable trade fixtures and other personal property which Tenant
installs at its own expense shall remain Tenant's property and may be removed at any time
provided Tenant promptly repairs any damage caused by such removal and provided further
that Tenant shall not then be in default under this Lease.
9.06 END OF TERM. At the expiration or sooner termination of the Term, Tenant shall
quit and surrender to Landlord the Demised Premises, broom clean and in good order and
condition, ordinary wear and tear and damage by fire and any other insured casualty excepted.
At such expiration or sooner termination Tenant shall remove all property of Tenant and its
signage and at the option of Landlord, shall remove any or all alterations and other
improvements made by Tenant to the Demised Premises as designated by Landlord and Tenant
shall repair all damage to the Demised Premises caused by such removal and restore the
Demised Premises to the condition in which they were at the Commencement Date. Such
removal, repair and restoration shall be effected in accordance with the rules and regulations,
including construction rules and guidelines, of Landlord. It is agreed that any holding over by the
Tenant upon expiration of the Term of this Lease or any renewal or extension hereof, shall
operate as an extension of this Lease from month to month only.
9.07 WAIVER OF JURY TRIAL AND RIGHT TO COUNTERCLAIM. Landlord and
Tenant shall and they hereby do waive trial by jury in any action, proceeding or counterclaim
brought by either of the parties hereto against the other on any matters arising out of or in any
way connected with this Lease, the relationship of Landlord and Tenant, Tenant's use or
occupancy of the Demised Premises, and any emergency or other statutory remedy. Tenant
further agrees that it shall not interpose any counterclaim(s) in a summary proceeding or in any
action based on holdover or non-payment of Fixed Rent.
9.08 NO WAIVER. The failure of Landlord to insist in any one or more cases upon the
strict performance or observation of any obligation of Tenant hereunder or to exercise any right
or option contained herein shall not be construed as a waiver or relinquishment for the future of
any such obligation of Tenant or any right or option of Landlord. Landlord's receipt and
acceptance of Fixed Rent, or Landlord's acceptance of performance of any other obligation by
Tenant, with knowledge of Tenant's breach of any provision of this Lease, shall not be deemed
a waiver of such breach. No consent, approval or waiver, express or implied, by Landlord or
Tenant to or of any breach of any covenant, agreement or obligation, of Landlord or Tenant shall
be construed as a consent or waiver to or of any other breach of the same or any other
covenant, agreement or obligation unless in each case in writing signed by Landlord or Tenant,
whichever the case may be. Landlord's failure during the Term to prepare and deliver to Tenant
any bill, statement or notice with respect to any item of Fixed Rent or any increases thereto by
operation of any provision of this Lease, shall not in any way cause Landlord to forfeit or
surrender its right to collect any item of Fixed Rent which may become due during the Term nor
shall such failure extend the date(s) on which any such items of Fixed Rent is due. In no event
shall Landlord be deemed to have any obligation to bill any item of Fixed Rent or any increases
thereto. IN NO EVENT SHALL LANDLORD BE LIABLE FOR THE ACTS OF ANY TENANT OR
OCCUPANT. IN ADDITION, IN NO EVENT SHALL LANDLORD BE LIABLE FOR SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING, WITHOUT
LIMITATION, TENANT'S LOST PROFITS OR GOOD WILL.
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9.09 QUIET ENJOYMENT. Landlord covenants that Tenant, on paying the Fixed Rent
and performing all of Tenant's obligations under this Lease, shall peacefully and quietly have,
hold and enjoy the Demised Premises, the Common Areas and the appurtenances throughout
the Term without hindrance, ejection or molestation by any person lawfully claiming under
Landlord, subject to the terms and provisions of this Lease and to all mortgages and ground and
underlying leases of record to which this Lease may be or become subject and subordinate.
The parties acknowledge that as of the date of signing this Lease, the City is one of Tenant’s
clients and uses Tenant’s business services. Leasing space within the City Hall building is in no
way to be construed as entering into an employer-employee relationship.
9.10 NOTICES. Any notice, demand, waiver, approval or consent hereunder shall be in
writing and shall be deemed duly served if mailed by registered or certified mail, postage
prepaid, in any post office station or letter box in the continental United States, return receipt
requested, or sent by reputable overnight carrier with delivery charges prepaid and proof of
delivery service to be provided, addressed:
If to Tenant, to it at the address Tenant shall have last designated by notice to Landlord.
If to Landlord, to it at 933 Terrace St., Muskegon, MI 49440; Attention: City Manager or
such other address as Landlord shall have last designated by notice to Tenant. With a copy to,
Parmenter O’Toole at 601 Terrace Street, Muskegon MI 49440; Attention: John Schrier.
Such notice, demand, waiver, approval or consent shall be deemed served two (2) days after
mailing, or the next business day if sent by reputable overnight carrier.
9.11 LEGAL EXPENSES. If a suit be brought for recovery of possession of the
Demised Premises, for the recovery of Fixed Rent, or because of the breach of any other
covenant, agreement or condition on the part of Tenant to be kept or performed, or a violation of
any rules and regulations promulgated pursuant to this Lease and a breach shall be established,
Tenant shall pay Landlord all expenses incurred in connection therewith, including appeals of
the above, including reasonable attorneys' fees and expenses. In case any such suit is settled
before judgment is entered therein, such costs, expenses and fees, including reasonable actual
attorney fees, shall nevertheless be recoverable by Landlord as part of said settlement.
9.12 INTERPRETATION. Irrespective of the place of execution or performance, this
Lease shall be governed by and construed in accordance with the laws of the state of Michigan.
9.13 LANDLORD'S RIGHTS. The taking of any action permitted hereunder by Landlord
shall not be construed or deemed to be a forcible or unlawful entry into or a detainer of the
Demised Premises, or an eviction, partial eviction or constructive eviction of Tenant from the
Demised Premises or any portion thereof and shall not relieve Tenant of its obligations under
this Lease.
9.14 COMPLETE AGREEMENT. There are no representations, agreements,
arrangements or understandings, oral or written, between the parties relating to the subject
matter of this Lease that are not fully expressed in this Lease. This Lease cannot be changed
or terminated orally or in any manner other than by a written agreement executed by both
parties. In making and executing this Lease, Tenant has relied solely on such investigations,
examinations and inspections as Tenant has chosen to make or has made and Tenant
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acknowledges that Landlord has afforded Tenant the opportunity for full and complete
investigations, examinations and inspections.
9.15 SEVERABILITY. Should any one or more of the provisions of this Lease be
determined to be invalid, unlawful, or unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions of this Lease shall not in any way be impaired or
affected.
9.16 COUNTERPARTS. This Lease may be executed in any number of counterparts,
each of which shall be an original, but all of which shall together constitute but one Lease.
9.17 TIME OF THE ESSENCE. Time is of the essence of each term, covenant,
condition and obligation of this Lease.
9.18 INDEPENDENT CONTRACTOR STATUS. Nothing in this Lease shall be deemed
to alter Tenant’s independent contractor status in relationship to Landlord. This Lease shall not
create an employee-employer relationship between Tenant and Landlord. At no time during the
Term of this Lease shall the City be the source of the majority of SAFEbuilt Michigan’s work.
IN WITNESS WHEREOF, Landlord and Tenant have hereunto executed this Lease as of the
day and year first above written.
LANDLORD:
City of Muskegon, a Michigan municipal corporation
By: _____________________________________
Stephen Gawron, Mayor
By: _____________________________________
Ann Meisch, City Clerk
TENANT:
SAFEbuilt Michigan, LLC
By:__________________________________
Name:_______________________________
Title:________________________________
(Tenant's Federal Taxpayer Identification
Number is - 27-1314735 )
Page 32 of 32
AGENDA ITEM NO. _______________
CITY COMMISSION MEETING __________________________
TO: Honorable Mayor and City Commissioners
FROM: Frank Peterson, City Manager
DATE: January 19, 2017
RE: SEIU Collective Bargaining Agreement
SUMMARY OF REQUEST:
City Staff and Service Employees International Union representatives have worked over the past four
months to develop a new five-year contract for the City’s Department of Public Works personnel. As
part of the agreement, a number of issues were addressed, including pension costs, wages, and
benefits. The new agreement is beneficial to both parties.
FINANCIAL IMPACT:
None.
BUDGET ACTION REQUIRED:
None.
STAFF RECOMMENDATION:
To approve the Collective Bargaining Agreement with the Service Employees International Union
as presented.
COMMITTEE RECOMMENDATION:
TENTATIVE AGREEMENT
Between
City of Muskegon
And
SEIU Local 517M
(representing DPW)
1. Section 13
Seasonal Employees – Delete entire section
2. Section 51 – Commercial Drivers License
51.1 – Delete “Beach Maintenance”
51.2 – Delete (a) – which refers to Dennis Pintoski
3. Section 36 – Longevity Pay Plan
36.2 – Add a “me too” clause to this section which addresses if “any other city
employee” receives more, than bargaining unit members will receive the same.
4. Appendix C – Water License
Increase the “S” licenses to the following amounts:
S-1 $750.00
S-2 $500.00
S-3 $300.00
5. Section 24 – Vacations
Effective Jan. 1, 2020, an employee will receive an addition week of vacation upon the
completion of their 24th year.
6. Section 53 – Defined Contribution Retirement Plan
53.2 – Contributions. – Add to existing language.
Effective January 1, 2019, the City shall contribute six percent (6%) of compensation. The
member in this plan may make a one-time election to either not to contribute or to contribute
two percent (2%) of compensation. If the member elects to contribute, then the City shall
match contribution, dollar-for-dollar. “Compensation” shall be Medicare-taxable wages as
reported on the employee’s W-2 Form.
7. Section 52 – Defined Benefit Retirement Plan
52.4 – Retirement Benefit
Effective January 1, 2017, a bridged benefit will be implemented as follows:
2.25% multiplier for service prior to Jan. 1, 2017 and a 2.0% multiplier for service after Jan. 1,
2017; maximum benefit: 80% FAC at termination of employment.
The changes to Section 52 only apply of the City Commission affirmatively votes to bridge the
non-represented employee to a 2.0 multiplier.
8. Section 25.12 – Sick Leave
Upon termination of employment under honorable conditions, the employee will be
compensated at the rate of one-half three quarters (3/4) of the value of the accumulated
unused sick leave, providing the employee has worked a minimum of twelve (12) consecutive
months.
9. Wages
2017 10%
2018 1%
2019 1%
2020 2.5%
2021 2.5%
AGENDA ITEM NO. _______________
CITY COMMISSION MEETING __________________________
TO: Honorable Mayor and City Commissioners
FROM: Frank Peterson, City Manager
DATE: January 19, 2017
RE: POLC Collective Bargaining Agreement
SUMMARY OF REQUEST:
City Staff and Police Officers Labor Council representatives have worked over the past nine months
to develop a new five-year contract for the City’s patrol officers. As part of the agreement, a
number of issues were addressed, including pension costs, wages, and benefits. The new agreement
is beneficial to both parties and is expected to help with police officer recruiting and retention.
FINANCIAL IMPACT:
None.
BUDGET ACTION REQUIRED:
None.
STAFF RECOMMENDATION:
To approve the Collective Bargaining Agreement with the Police Officers Labor Council as
presented.
COMMITTEE RECOMMENDATION:
Commission Meeting Date: January 24, 2017
Date: January 17, 2017
To: Honorable Mayor and City Commissioners
From: Finance
RE: Defined Benefit Plan Adoption Agreement – Div 12 (DPW)
SUMMARY OF REQUEST: To approve the attached Defined Benefit Plan
Adoption Agreement to bridge the pension benefit for current DPW employees from a
2.25% multiplier to a 2.0% multiplier with a frozen final average compensation.
FINANCIAL IMPACT: It is estimated that the City’s contribution rate would
decrease by about $163,584 for fiscal year 2017.
BUDGET ACTION REQUIRED: Future budgets will be reflective of this
change.
STAFF RECOMMENDATION: To approve the attached Defined Benefit Plan
Adoption Agreement and authorize the Mayor to sign the agreement.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
Municipal Employees' Retirement System of Michigan
Muskegon, City of (6116)
Division 12
Retirement Plan Options
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
January 6, 2017
In care of:
Municipal Employees' Retirement
System of Michigan
1134 Municipal Way
Lansing, Michigan 48917
The purpose of this report is to show the financial implications to the employer of different
retirement plan design options for Muskegon, City of (6116) – Division 12. The report consists
of separate sections that correspond to the different plan options under consideration. In
addition, there is an executive summary at the beginning of the report that summarizes all the
options under consideration and shows the results for each option in graphical form, if multiple
options are requested. Each section contains the following additional detail:
An executive summary that describes the plan provisions and provides a brief
explanation of the results.
An exhibit showing the short-term impact of the proposed benefit change – that is, the
impact on next year’s contribution (this exhibit is only shown for supplemental valuations
and supplemental valuations with bridge benefits).
An exhibit showing the long term contribution impact of the proposed benefit change (i.e.
a projection of the Actuarial Accrued Liabilities, Valuation Assets, funded ratio, and
employer contributions under both the current and proposed plans).
A graph showing the projected funded ratio and employer contribution under both the
current and proposed plans.
This report should not be relied upon for any other purpose. Reliance on information contained
in this report by anyone for anything other than the intended purpose could be misleading.
The information in this report is purely actuarial in nature. It is not intended to serve as a
substitute for legal, accounting, and investment advice.
This report was prepared at the request of MERS and the municipality and may be
provided only in its entirety by the municipality to other interested parties. CBIZ
Retirement Plan Services is not responsible for the consequences of any unauthorized
use.
Please see the Comments on Asset Smoothing in the annual valuation report.
Please refer to the following sections of this report for additional information:
Risk Characteristics of Defined Benefit Plans
Important Comments
Miscellaneous and Technical Assumptions
Page 2 of 13
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
The undersigned are members of the American Academy of Actuaries (MAAA) and meet the
Qualification Standards of the American Academy of Actuaries to render the actuarial opinion
contained herein.
If you need further information to make an informed decision, please contact MERS at (800)
767-6377 for assistance.
Sincerely,
Page 3 of 13
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
TABLE OF CONTENTS Page Number
Option 1 - Supplemental Valuation Results – Bridged 5–9
Benefits
Risk Characteristics of Defined Benefit Plans 10
Important Comments 11-12
Miscellaneous and Technical Assumptions 13
Page 4 of 13
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
Option 1
Supplemental Valuation Results
Bridged Benefits
Page 5 of 13
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
Executive Summary
The purpose of this report is to show the impact on the liabilities and contributions of the
proposed benefit changes for Muskegon, City of (6116), Division 12. The following proposed
benefit changes have been considered:
Division Proposed Change in Benefit
DPW 517M (12) Bridged Benefit: 2.25% - for service prior to January 1 2017, Frozen FAC
2.00% - for service after January 1, 2017
Maximum Benefit: 80% FAC at Termination of Employment
Employee Contribution: 5.00%
The results of our calculations are shown as follows:
Baseline: This is the current DB plan.
Option 1: Bridged benefit with frozen FAC.
The exhibit immediately following this page shows the short term impact of the proposed
benefit change (ie the change in the Actuarial Accrued Liability [AAL] as of December
31, 2015 and the change in the employer contribution for the fiscal year beginning July
1, 2017).
In order to illustrate the long-term impact of the proposed benefit change, we are also
showing projections under both the current and the proposed benefits. The projection
results are illustrated both in tabular and graphical form.
Please note the following regarding these calculations:
The option would change both the AAL and the Normal Cost. The change in AAL will be
recognized over 7 years. The employer Normal Cost is the cost to provide benefits
accrued each year. In the long run, the employer is expected to pay the Normal Cost, if
all the actuarial assumptions are met in the future.
Under Option 1 (bridged benefit with frozen FAC) there is an immediate impact on the
unfunded accrued liability (UAL) because the Final Average Compensation (FAC) for
current active members is frozen. This results in the largest part of the decrease in the
employer contribution.
Because the proposed benefit change results in a reduction in employer contributions,
under the MERS funding policy, the impact of the change is recognized over a period of
time (i.e. the change in the AAL is amortized over a fixed period).
Page 6 of 13
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
Page 7 of 13
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
Municipal Employees Retirement System of Michigan
Muskegon, City of (6116) - DPW 517M (Division 12)
10 Year Projections of Employer Contributions and Funded Ratios
Baseline Option 1 - Bridged to a 2.00% Multiplier (Frozen FAC)
Total Total
Valuation Employer Employer
Year Ending Fiscal Year Actuarial Contribution Total Employer Actuarial Contribution Total Employer
December Beginning Accrued Valuation Funded Inflated Contribution Accrued Valuation Funded Inflated Contribution
31, July 1, Liability Assets Ratio Dollars Current Dollars Liability Assets Ratio Dollars Current Dollars
2015 2017 13,530,000 11,930,000 88% 286,000 286,000 12,551,000 11,930,000 95% 122,000 122,000
2016 2018 13,920,000 11,919,000 86% 372,000 359,000 12,850,000 11,919,000 93% 184,000 177,000
2017 2019 14,307,000 11,937,000 83% 481,000 447,000 13,140,000 11,847,000 90% 256,000 238,000
2018 2020 14,665,000 11,977,000 82% 548,000 491,000 13,396,000 11,695,000 87% 318,000 285,000
2019 2021 15,010,000 12,078,000 80% 619,000 534,000 13,634,000 11,571,000 85% 380,000 328,000
2020 2022 15,345,000 12,590,000 82% 645,000 537,000 13,857,000 11,818,000 85% 398,000 331,000
2021 2023 15,657,000 13,148,000 84% 675,000 541,000 14,060,000 12,095,000 86% 420,000 337,000
2022 2024 15,941,000 13,832,000 87% 329,000 254,000 14,238,000 12,474,000 88% 320,000 247,000
2023 2025 16,200,000 14,555,000 90% 335,000 250,000 14,393,000 12,870,000 89% 328,000 244,000
2024 2026 16,433,000 15,127,000 92% 342,000 246,000 14,525,000 13,222,000 91% 336,000 241,000
2025 2027 16,627,000 15,513,000 93% 348,000 241,000 14,621,000 13,511,000 92% 343,000 237,000
Notes:
(1) The Actuarial Accrued Liability, Valuation Assets, and Funded Ratio are calculated as of December 31.
(2) Contributions are calculated for the applicable fiscal year.
(3) The impact of the assumptions change will be phased-in over a 5 year period. This phase-in has not been reflected in the Baseline or Option 1.
Page 8 of 13
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
Municipal Employees' Retirement System of Michigan
Muskegon, City of (6116) - DPW 517M (Division 12)
Projected Funded Ratio Projected $ Contribution
120.0% 800000
700000
100.0%
600000
$ Contribution
Funded Ratio
80.0%
500000
60.0% 400000
300000
40.0%
200000
20.0%
100000
0.0% 0
Baseline Baseline
Valuation Year Ending December 31, Fiscal Year Beginning July 1,
Option 1 Option 1
Baseline - Current plan
Option 1 - Bridged to a 2.00% Multiplier (Frozen FAC)
Comments:
·In the long run, the employer contribution will trend towards the long term cost of the different benefit structures. The long term
cost of the various benefit structures expressed as a percent of pay is shown In the table below:
Baseline Option 1
Total long term cost 10.96% 9.78%
Employee contribution 5.00% 5.00%
Employer long term cost 5.96% 4.78%
·Under Option 1 there is a decrease in the employer contribution as a result of the lower multiplier.
·Under Option 1 there is an immediate impact on the UAL (unfunded accued liability) because the FAC for the current active members
is frozen.
Page 9 of 13
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
Risk Characteristics of Defined Benefit Plans
It is important to understand that retirement plans, by their nature, are exposed to certain
risks. While risks cannot be eliminated entirely, they can be mitigated through various
strategies. Below are a few examples of risk (this is not an all-inclusive list):
• Economic - investment return, wage inflation, etc.
• Demographic - longevity, disability, retirement, etc.
• Plan Sponsor and Employees - contribution volatility, attract/retain employees, etc.
The MERS Retirement Board adopts certain assumptions and methods to mitigate the economic
and demographic risks, and the contribution volatility risks. For example, the investment risk is
the largest economic risk and is mitigated by having a balanced portfolio and a clearly defined
investment strategy. Demographic risks vary based on the age of the workforce and are
mitigated by preparing special studies called experience studies on a regular basis to determine
if the assumptions used are reasonable compared to the experience. Risk may be mitigated
through a plan design that provides benefits that are sustainable in the long run. An Experience
Study is completed every five years to review the assumptions and methods. The next
Experience Study will be completed in 2020.
Page 10 of 13
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
Important Comments
1. The results are based on information provided by the municipality and MERS. The
actuary is unaware of any additional information that would impact these results.
2. This report describes the financial effect of the proposed benefit plan. No statement
contained within is a recommendation in favor of or in opposition to the proposed benefit
plan.
3. The reader of this report should keep in mind that actuarial calculation are mathematical
estimates based on current data and assumptions of future events (which may or may
not materialize). As a result, actuarial calculations can and do vary from one valuation
year to the next, sometimes significantly if the group valued is very small (less than 30
lives). The cost impact of a benefit change may fluctuate over time, as the
demographics of the group changes.
4. The calculations in this report were prepared based on December 31, 2015,
demographic and financial information unless noted elsewhere in the report.
5. The valuation date is December 31, 2015.
6. Please note, the assumptions and methods used in these calculations are consistent
with those used in the December 31 2015, Annual Actuarial Valuation (except where
noted otherwise) and are summarized in an Appendix. This Appendix is located on the
MERS website at www.mersofmich.com.
7. In the event that more than one plan change is being considered, the user of this report
should remember that the results of separate actuarial valuations cannot be added
together. The total can be considerably greater than the sum of the parts due to the
interaction of various plan provisions with each other and with the assumptions used.
8. Retirement benefits and employer contributions are based on a percentage of members'
reported pay for open divisions. If actual reported payroll differs substantially from payroll
used in this report, the dollar contribution should be adjusted proportionately.
9. For retiree only divisions or divisions whose new hires go into Defined Contribution, the
Retirement Board has adopted the “Amortization Policy for Closed Divisions within Open
Municipalities.” This policy accelerates the payment of the unfunded accrued liability.
Page 11 of 13
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
10. The following information, assumptions and funding methods were used in the
projections under the various options:
a. Demographic, financial information and benefit provisions provided by MERS for
the December 31, 2015 annual valuation.
b. The assumptions and methods used in the December 31, 2015 annual valuation,
except where noted otherwise.
c. All demographic assumptions will be met during the projection period.
d. The active population is assumed to remain stable during the projection period.
e. Demographic assumptions under the DC plan are unchanged from those of the
DB plan.
f. The Market Value of Assets will earn the assumed investment return each year
during the projection period.
g. There will be no benefit changes during the projection period.
h. The employer contributions through June 30, 2017 are not affected, and are
based on previous annual actuarial valuations.
11. The results do not show the potential impact on other post-employment benefits (such
as retiree health care insurance) or ancillary benefits (such as life insurance).
12. If the user of this report is not sure how to interpret certain results in the report or how to
read the report, they should contact MERS at (800) 767-6377 before relying on the
results of this report.
13. Additional disclosures required by Actuarial Standard of Practice:
All actuarial calculations have been prepared in conformity with generally
accepted actuarial principles and practices and with the Actuarial Standards of
Practice issued by the Actuarial Standards Board.
The valuation was based upon information furnished by the municipality and
MERS staff. We checked for internal and year to year consistency, but did not
otherwise audit the data. CBIZ Retirement Plan Services is not responsible for
the accuracy or completeness of the information provided for the preparation of
these calculations.
Page 12 of 13
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
CBIZ Retirement Plan Services
CBIZ Benefits & Insurance Services, Inc.
17199 Laurel Park North, Ste. 405
Livonia, MI 48152
http://retirement.cbiz.com
Miscellaneous and Technical Assumptions
1. The results in this report are based on the assumptions used in the December 31, 2015
annual valuation.
2. FAC Load – 2%
3. Withdrawal Scaling Factor – 92%
Page 13 of 13
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. market
investment advisory, third party administration, actuarial and other corporate retirement plan services.
Commission Meeting Date: January 24, 2017
Date: January 17, 2017
To: Honorable Mayor and City Commissioners
From: Finance
RE: Corrections to 2017 Fee Schedule Department Comments
SUMMARY OF REQUEST: To approve the changes noted (highlighted in
yellow) on the attached page 9 of the 2017 Master Fee Schedule to correct or clarify
Department Comments related to the Rental Department.
FINANCIAL IMPACT: None as this request is to change or correct the
comments only.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To approve the attached Department
Comments changes noted for the Rental Department for the 2017 Master Fee
Schedule.
CITY OF MUSKEGON
Master Fee Resolution - Schedule of Fees
(Effective 1/1/2017)
2015 2015 2016 2017 DEPARTMENT
DEPT DESCRIPTION UNIT FEE eff 1/1 FEE eff 7/1 FEE FEE COMMENTS
CITY-CODE
185 VACANT BUILDING ADMINISTRATIVE APPEAL FEE (31-60 DAYS LATE) OCCURRENCE 25.00 25.00 25.00 25.00 NON-REFUNDABLE FEE
COMPLIANCE
CITY-CODE
186 VACANT BUILDING ADMINISTRATIVE APPEAL FEE (61-90 DAYS LATE) OCCURRENCE 35.00 35.00 35.00 35.00 NON-REFUNDABLE FEE
COMPLIANCE
CITY-CODE
187 VACANT BUILDING REGISTRATION - FORMAL APPEAL FEE OCCURRENCE 50.00 50.00 50.00 50.00 NON-REFUNDABLE FEE
COMPLIANCE
PUBLIC SAFETY -
188 RENTAL PROPERTY REGISTRATION PER PARCEL (ANNUAL) SINGLE UNIT 25.00 35.00 35.00 70.00 INCLUDES ONE INSPECTION EVERY 4 YEARS FOR COMPLIANCE
RENTAL
PUBLIC SAFETY -
189 RENTAL PROPERTY REGISTRATION PER PARCEL (ANNUAL) DUPLEX 30.00 40.00 40.00 80.00 INCLUDES ONE INSPECTION EVERY 4 YEARS FOR COMPLIANCE
RENTAL
PUBLIC SAFETY -
190 RENTAL PROPERTY REGISTRATION (ANNUAL - BASE) 3 UNITS 40.00 50.00 50.00 100.00 INCLUDES ONE INSPECTION EVERY 4 YEARS FOR COMPLIANCE
RENTAL
PUBLIC SAFETY -
191 RENTAL PROPERTY REGISTRATION (ANNUAL - PER PARCEL OVER 3) PER UNIT OVER 3 5.00 5.00 5.00 10.00 INCLUDES ONE INSPECTION EVERY 4 YEARS FOR COMPLIANCE
RENTAL
PUBLIC SAFETY - RENTAL PROPERTY INSPECTION (INSPECTION NO-SHOW FIRST TIME OR LATE
192 PER UNIT 60.00 60.00 60.00 65.00 FEE ASSESSED FOR NO-SHOW/LOCK OUT OR LATE CANCELLATION
RENTAL CANCELLATION)
PUBLIC SAFETY - FEE ASSESSED WHEN A 3RD CANCELLATION IS RECEIVED BY
193 RENTAL PROPERTY INSPECTION CANCELLATION FEE OCCURRENCE 50.00 50.00 50.00 65.00
RENTAL CUSTOMER OR AGENT
PUBLIC SAFETY - RENTAL PROPERTY INSPECTION CANCELLATION FEE (STARTING WITH 4TH ADDED TO BASE CANCELLATION FEE; EACH CANCELLATION
194 OCCURRENCE 10.00 10.00 10.00 15.00
RENTAL CANCELLATION) INSTANCE WILL CAUSE FEE TO INCREASE BY AN ADDITIONAL $15.00
PUBLIC SAFETY - RENTAL PROPERTY INSPECTION (INSPECTION NO-SHOW EACH ADDT'L TIME OR ADDED TO BASE NO SHOW FEE; EACH NO SHOW INSTANCE WILL
195 PER UNIT 15.00 15.00 15.00 20.00
RENTAL LATE CANCELLATION) CAUSE INSPECTION FEE TO INCREASE BY AN ADDITIONAL $20.00
PUBLIC SAFETY - FEE TO BE ASSESSED TO PROPERTIES NOT BROUGHT INTO
196 RENTAL PROPERTY INSPECTION NON-COMPLIANCE FEE (2ND REINSPECTION) PER UNIT 35.00 35.00 35.00 40.00
RENTAL COMPLIANCE AFTER THE FIRST INSPECTION
ADDED TO BASE NON-COMPLIANCE FEE; EACH REINSPECTION
PUBLIC SAFETY - RENTAL PROPERTY INSPECTION NON-COMPLIANCE FEE (STARTING WITH 3RD
197 PER UNIT 10.00 10.00 10.00 15.00 INSTANCE WILL CAUSE NON-COMPLIANCE FEE TO INCREASE BY AN
RENTAL COMPLIANCE REINSPECTION) ADDITIONAL $15.00
FEE ASSESSED TO PROPERTIES IN COMPLIANCE INTERIOR
PUBLIC SAFETY - RENTAL PROPERTY EXTERIOR ONLY REINSPECTION FEE (1ST EXTERIOR ONLY
198 PER UNIT 30.00 30.00 30.00 35.00 REQUIREMENTS BUT NOT IN COMPLIANCE WITH EXTERIOR
RENTAL REINSPECTION) REQUIREMENTS BY FIRST INSPECTION
ADDED TO BASE EXTERIOR NON-COMPLIANCE FEE; EACH
PUBLIC SAFETY - RENTAL PROPERTY EXTERIOR ONLY REINSPECTION FEE (STARTING WITH 2ND
199 PER UNIT 10.00 10.00 10.00 15.00 REINSPECTION INSTANCE WILL CAUSE EXTERIOR NON-COMPLIANCE
RENTAL EXTERIOR ONLY REINSPECTION) FEE TO INCREASE BY AN ADDITIONAL $15.00
PUBLIC SAFETY -
200 LATE FEE FOR NON-PAYMENT OF RENTAL REGISTRATION ANNUAL FEE EACH PROPERTY VIOLATION 75.00 75.00 75.00 10.00 FEE CHARGED AFTER 30 DAYS
RENTAL
PUBLIC SAFETY -
201 HOUSING-WARRANT INSPECTION FEE EACH 150.00 150.00 150.00 150.00
RENTAL
202 ENV SERVICES BOARD UP'S - FIRST 5 BOARDS PER INSTANCE 40.00 40.00 40.00 40.00 PLUS THE COST OF THE CONTRACTOR TO DO THE BOARD UP
203 ENV SERVICES BOARD UP'S - 6 OR MORE BOARDS PER INSTANCE 0.00 0.00 60.00 60.00 PLUS THE COST OF THE CONTRACTOR TO DO THE BOARD UP
204 ENV SERVICES ADMINISTRATIVE OVERHEAD ON DEMOLITIONS PER UNIT 10.0% 10.0% 15.0% 15.0% BASED ON THE CONTRACTORS PRICE TO DEMOLISH
Page 9
Commission Meeting Date: January 24, 2017
Date: January 19, 2017
To: Honorable Mayor and City Commissioners
From: Planning & Economic Development
RE: Public Hearing – Establishment of a Commercial Redevelopment
District – 878 Jefferson St, Suite 1
SUMMARY OF REQUEST:
Pursuant to Public Act 255 of 1978, as amended, Gunter Properties, LLC has requested the
establishment of a Commercial Redevelopment District. The creation of the district will allow
the building owner to apply for a Commercial Facilities Exemption Certificate, which will
freeze the taxable value of the building and exempt the new real property investment
from local taxes. The district would only cover one suite in the building.
FINANCIAL IMPACT:
None
BUDGET ACTION REQUIRED:
None
STAFF RECOMMENDATION:
Establishment of the Commercial Redevelopment District.
COMMITTEE RECOMMENDATION:
None
1/19/2017
Resolution No. _______
MUSKEGON CITY COMMISSION
RESOLUTION APPROVING THE CREATION OF A COMMERCIAL REDEVELOPMENT DISTRICT
878 Jefferson St, Suite 1
WHEREAS, pursuant to PA 255 of 1978, the City of Muskegon has the authority to establish “Commercial
Redevelopment Districts” within the City of Muskegon at request of a commercial business enterprise or
on its own initiative; and
WHEREAS, Gunter Properties, LLC has filed a written request with the clerk of the City of Muskegon
requesting the establishment of the Commercial Redevelopment District for an area in the vicinity of 878
Jefferson St, Suite 1 located in the City of Muskegon hereinafter described; and
WHEREAS, the City Commission of the City of Muskegon determined that the district meets the
requirements set forth in section 5 of PA 255 of 1978; and
WHEREAS, written notice has been given by certified mail to all owners of real property located within the
proposed district as required by section 5(3) of PA 255 of 1978; and
WHEREAS, on January 24, 2017 a public hearing was held and all residents and taxpayers of the City of
Muskegon were afforded an opportunity to be heard thereon; and
WHEREAS, the City of Muskegon deems it to be in the public interest of the City of Muskegon to
establish the Commercial Redevelopment District as proposed;
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Muskegon that the
following described parcel(s) of land situated in the City of Muskegon, County of Muskegon, and State of
Michigan, to wit:
CITY OF MUSKEGON JEFFERSON PROFESSIONAL CONDOMINIUM UNIT 1 SBJT TO OVERHEAD
ELECTRIC LN ESMNT L3815 P882
Adopted this 24 Day of January 2017
Ayes:
Nays:
Absent:
BY: __________________________________
Stephen J. Gawron
Mayor
ATTEST: __________________________________
Ann Meisch
Clerk
1/19/17
CERTIFICATION
I hereby certify that the foregoing constitutes a true and complete copy of a resolution adopted by the Muskegon
City Commission, County of Muskegon, Michigan, at a regular meeting held on January 24, 2017.
______________________________
Ann Meisch
Clerk
1/19/17
Commission Meeting Date: January 24, 2017
Date: January 19, 2017
To: Honorable Mayor and City Commissioners
From: Planning & Economic Development
RE: Public Hearing – Issuance of a Commercial Facilities Exemption
Certificate – 878 Jefferson St, Suite 1
SUMMARY OF REQUEST:
Pursuant to Public Act 255 of 1978, as amended, Gunter Properties, LLC has requested the
issuance of a Commercial Facilities Exemption Certificate. The certificate will freeze the
taxable value of the building and exempt the new real property investment from local
and state taxes. The company will be investing $100,000 and creating five job, which
qualifies them for an abatement of 9 years.
FINANCIAL IMPACT:
The real property taxes would be frozen at their pre-rehabilitated rate for the duration of the
certificate
BUDGET ACTION REQUIRED:
None
STAFF RECOMMENDATION:
Issuance of the Commercial Facilities Exemption Certificate
COMMITTEE RECOMMENDATION:
None
1/19/2017
Resolution No. _______
MUSKEGON CITY COMMISSION
RESOLUTION APPROVING APPLICATION FOR ISSUANCE
OF A COMMERCIAL FACILITIES EXEMPTION CERTIFICATE
Gunter Properties, LLC
WHEREAS, the City of Muskegon legally established the Commercial Redevelopment District, 878
Jefferson, Suite 1 District, after a public hearing held on January 24, 2017; and
WHEREAS, the state equalized value of the property proposed to be exempt plus the aggregate state
equalized value of property previously exempt and currently in force under Public Act 255 of 1978 and
under Public Act 198 of 1974 (IFT's) does not exceed 5% of the total state equalized value of the City of
Muskegon; and
WHEREAS, the application was approved at a public hearing as provided by section 6(2) of Public Act
255 of 1978 on January 24, 2017; and
WHEREAS, Gunter Properties, LLC is not delinquent in any taxes related to the facility; and
WHEREAS, the application is for commercial property as defined in section 3(3) of Public Act 255 of
1978; and
WHEREAS, Gunter Properties, LLC had provided answers to all required questions under Section 6(1) of
PA 255 of 1978 to the City of Muskegon; and
WHEREAS, the City of Muskegon requires that the construction, restoration or replacement of the facility
shall be completed by January 24, 2019; and
WHEREAS, the Commercial Facilities Exemption Certificate is granted for a period of nine (9) years and
no extensions will be allowed; and
WHEREAS, the commencement of the construction, restoration or replacement of the facility did not
occur more than 45 days prior to the filing of the application for exemption; and
WHEREAS, the commencement of the construction, restoration or replacement of the facility did not
occur prior to the establishment of the Commercial Redevelopment District; and
WHEREAS, the application relates to a construction, restoration or replacement program which when
completed constitutes a new, replacement or restored facility within the meaning of Public Act 255 of
1978 and that is situated within a Commercial Redevelopment District established under Public Act 255 of
1978; and
WHEREAS, completion of the facility is calculated to, and will at the time of issuance of the certificate,
have the reasonable likelihood to increase commercial activity, create employment, retain employment
and prevent a loss of employment in the community in which the facility is situated; and
WHEREAS, the restoration includes improvements aggregating 10% or more of the true cash value of the
property at commencement of the restoration as provided by section 4(6) of Public Act 255 of 1978.
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City Commission
Be and hereby is granted a Commercial Facilities Exemption for the real property, excluding land, located
in Commercial Redevelopment District, 878 Jefferson. Suite 1 District at 878 Jefferson St, Suite 1 for a
1/19/17
period of nine (9) years, beginning December 31, 2017, and ending December 30, 2026, pursuant to the
provisions of PA 255 of 1978, as amended.
Adopted this 24th Day of January, 2017.
Ayes:
Nays:
Absent:
BY: __________________________________
Stephen J. Gawron
Mayor
ATTEST: __________________________________
Ann Meisch
Clerk
CERTIFICATION
I hereby certify that the foregoing constitutes a true and complete copy of a resolution adopted by the Muskegon
City Commission, County of Muskegon, Michigan, at a regular meeting held on January 24, 2017.
______________________________
Ann Meisch
Clerk
1/19/17
Commission Meeting Date: January 24, 2017
Date: January 25, 2017
To: Honorable Mayor and City Commissioners
From: Planning & Economic Development
RE: Public Hearing – Establishment of a Commercial Redevelopment
District – 275 W Clay Ave
SUMMARY OF REQUEST:
Pursuant to Public Act 255 of 1978, as amended, Berkshire Muskegon LDHA, LLC has
requested the establishment of a Commercial Redevelopment District. The creation of the
district will allow the building owner to apply for a Commercial Facilities Exemption
Certificate, which will provide a 50% reduction in the number of mills levied as ad
valorem taxes, excluding the State Education Tax.
FINANCIAL IMPACT:
None
BUDGET ACTION REQUIRED:
None
STAFF RECOMMENDATION:
Establishment of the Commercial Redevelopment District.
COMMITTEE RECOMMENDATION:
None
1/25/2017
Resolution No. _______
MUSKEGON CITY COMMISSION
RESOLUTION APPROVING THE CREATION OF A COMMERCIAL REDEVELOPMENT DISTRICT
275 W Clay Ave
WHEREAS, pursuant to PA 255 of 1978, the City of Muskegon has the authority to establish “Commercial
Redevelopment Districts” within the City of Muskegon at request of a commercial business enterprise or
on its own initiative; and
WHEREAS, Berkshire Muskegon LDHA, LLC has filed a written request with the clerk of the City of
Muskegon requesting the establishment of the Commercial Redevelopment District for an area in the
vicinity of 275 W Clay Ave located in the City of Muskegon hereinafter described; and
WHEREAS, the City Commission of the City of Muskegon determined that the district meets the
requirements set forth in section 5 of PA 255 of 1978; and
WHEREAS, written notice has been given by certified mail to all owners of real property located within the
proposed district as required by section 5(3) of PA 255 of 1978; and
WHEREAS, on January 24, 2017 a public hearing was held and all residents and taxpayers of the City of
Muskegon were afforded an opportunity to be heard thereon; and
WHEREAS, the City of Muskegon deems it to be in the public interest of the City of Muskegon to
establish the Commercial Redevelopment District as proposed;
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Muskegon that the
following described parcel(s) of land situated in the City of Muskegon, County of Muskegon, and State of
Michigan, to wit:
CITY OF MUSKEGON REVISED PLAT 1903 LOTS 1-3 & LOTS 10-12 INCL BLK 328 ELY 198 FT
VAC ALLEY
Adopted this 24 Day of January 2017
Ayes:
Nays:
Absent:
BY: __________________________________
Stephen J. Gawron
Mayor
ATTEST: __________________________________
Ann Meisch
Clerk
1/25/17
CERTIFICATION
I hereby certify that the foregoing constitutes a true and complete copy of a resolution adopted by the Muskegon
City Commission, County of Muskegon, Michigan, at a regular meeting held on January 24, 2017.
______________________________
Ann Meisch
Clerk
1/25/17
Berkshire – Muskegon Senior Apartment Community
275 West Clay Avenue
Muskegon, MI 49440
Project Overview
General Capital is proposing to construct a mixed use senior housing facility at the corner of 1st
and Clay Avenue in Downtown Muskegon. The three-story facility will include approximately
4,000 square feet of commercial space fronting Clay Street with 84 units of senior housing above.
A total of 72 parking spaces will be provided, including 54 underground and 18 surface parking
spaces. In addition, approximately 23 on-street parking spaces will serve the project. The leasing
center and management office will be located in ground floor commercial space facing Webster
Avenue.
Description of Berkshire – Muskegon Commercial Space Inclding Fixed Building Equipment
The commercial portion of the building is 4,150 SF and is located at the northeast corner of the
buildng. The commercial space will be delivered in a “white box” state to the future tenant. The
space will include the following base improvements: interior vestibule with interior glass doors,
a mens restroom consisting of one bathroom stall, one urinal and a sink, a womens restroom
consisting of two bathroom stalls and a sink, demising of a main dining area for future cafe,
demising for a kitchen area with commercial hood (all equipment will be FFE by tenant) and
demising of a meeting space that will be retained by the Berkshire project. The space will include
all mechanicals and basic distribution to heat and cool the space, a 400 amp electrical panel and
basic outlets to meet code, basic 2x4 drop in light fixtures in an accoustical ceiling. Plumbing will
include all fixtures in the restrooms and rough-ins for a 3-basin commercial sink and handwashing
station (fixtures to be provided by tenant). The space will be fully sprinklered.
Economic Impact
The Berkshire – Muskegon will have direct and tangible positive impacts on the City of Muskegon
on several levels. First, there are the direct and indirect economic benefits produced through job
creation and retention. The development of affordable housing creates both immediate and long-
term employment opportunities and spending in the local economy. Research consistently shows
that developing affordable housing creates jobs – both during construction and through new
consumer spending after the units have been occupied. The impacts of building affordable housing
are on par with the impacts of constructing comparable market-rate units.
Using the same model that hundreds of local jurisdictions have used to quantify the local economic
impact of affordable housing (a model produced and published in 2010 and updated in 2015 by
the National Association of Home Builders i), we expect the Berkshire – Muskegon to generate
approximately 126 jobs through direct and indirect construction spending as well as “ripple effect”
jobs produced by the project. Beyond the initial construction period, the annually recurring
economic impacts produced by the project include approximately $5.8 million in direct local
income, $290,000 in taxes and local revenue for local governments and 35 local jobs ii. The NAHB
estimates these impacts as the ongoing, annual local economic impacts that result from the new
apartments being occupied and the occupants participating in the local economy year after year (in
other words, residents spend money locally, pay sales tax and the like).
The second significant economic impact produced by the project is the catalytic effect on the
immediate neighborhood and Downtown Muskegon as a whole. The community has spent
millions of dollars promoting downtown revitalization and has produced numerous plans
documenting the community’s vision for the area. The Berkshire – Muskegon is a clear and
specific implementation of the community’s plan and recently adopted Form Based Code. The
City anticipates a positive impact on neighboring property values (including rental rates for
commercial space) and an impetus for additional investment in the surrounding area.
Finally, the project will have the intangible economic benefit of providing safe, affordable housing
for Muskegon’s aging population. The City of Muskegon recognizes the need for additional
affordable senior housing and fully endorses our application. Translated as an economic benefit,
the project will have a stabilizing effect on Downtown by allowing residents to stay in their
community after they sell their homes and on a long term basis, promoting community growth.
Project Sponsor
Berkshire -- Muskegon will benefit from the experience of General Capital, the project’s sponsor.
For more than fifteen years, General Capital has focused its housing development efforts on
producing high quality affordable apartment communities. In 2003, General Capital was the proud
recipient of the national Charles Edson Tax Credit Excellence Award for the Berkshire -- Grafton.
This award serves as testimony to a commitment to providing high quality affordable housing.
The group has successfully placed in service LIHTC deals in Wisconsin, Illinois and Pennsylvania.
Since 2000, the group has closed 17 LIHTC transactions as a General Partner or turn-key fee
developer (mostly for non-profit clients). General Capital is currently completing construction on
two 9% LIHTC transactions. This year the group received two 9% LIHTC awards. One for the
acquisition and rehabilitation of a multifamily project based Section 8 complex in Fond Du Lac,
Wisconsin. The other is the group’s first award of 9% LIHTC in Michigan for the construction of
a Berkshire independent senior building in Paw Paw. The group’s projects have included the
construction of senior and workforce housing as well as the preservation of Rural Development,
Section 8 subsidized projects and bringing market rate complexes into the LIHTC program. The
downtown location of the Berkshire – Muskegon is an excellent match for General Capital’s team.
We have developed a good relationship with the municipality and look forward to working with
MSHDA to implement our proposed project.
Legal Description
Lots 1 through 3, inclusive, and Lots 10 through 12, including the Easterly 198 feet of vacated
alley, Block 328, Revised Plat of 1903 in the City of Muskegon, as recorded in Liber 3 of Plats,
Page 71, Muskegon County Records.
Timeline
3/1/17 - Construction Commences
2/28/18 - CO Issued
4/1/18 - Commercial Tenant Occupancy
Economic Advantages of Exemption
A property tax exemption will allow the property owner to attract a wider array of commercial
tenants by reducing the expense burden on the project. Property taxes are built into the commercial
rent structure and are paid (either directly or indirectly) by the tenant. By limiting the tax burden
on the commercial space, the property owner can pass the savings directly to the commercial
tenant. This increases the affordability of the space, which ultimately lowers the business owner’s
cost of doing business.
A property tax exemption will allow the property owner to increase investment in physical
improvements in the property. By decreasing the property tax payment, the portion of the
property’s income required to cover expenses can be shifted to paying for additional improvements
in the property (by allowing the property’s income to cover a larger mortgage payment). This has
a direct impact on the quality of the building.
A property tax exemption will increase the amount of money available to a commercial tenant for
Tenant Improvements or “TI’s”. While the property owner will be able to spend more on the
building “core and shell” as a result of the reduced tax burden, the individual commercial tenant
will be able to spend more on interior improvements as a result of a lower rent payment.
A reduced property tax payment has a very direct pass-through benefit to Downtown customers
and the community as a whole by increasing the commercial viabililty of the individual business.
Lower operating costs will help any business improve the liklihood of their long-term success.
i“The Local Economic Impact of Typical Housing Tax Credit Developments,” National Association of Home Builders, March 2010 issue
“The Economic Impact of Home Building in a Typical Local Area: Income, Jobs and Taxes Generated,” National Association of Home Builders,
ii
April 2015 issue
Commission Meeting Date: January 24, 2017
Date: January 25, 2017
To: Honorable Mayor and City Commissioners
From: Planning & Economic Development
RE: Public Hearing – Issuance of a Commercial Facilities Exemption
Certificate – 275 W Clay Ave
SUMMARY OF REQUEST:
Pursuant to Public Act 255 of 1978, as amended, Berkshire Muskegon LDHA, LLC has
requested the issuance of a Commercial Facilities Exemption Certificate. The certificate
provides a 50% reduction in the number of mills levied as ad valorem taxes, excluding the
State Education Tax, for the commercial portion of the development. The company will be
investing $587,000 in the commercial space, which qualifies them for an abatement of
seven (7) years. The total project costs, including the residential portion, are estimated
at $16,296,000.
FINANCIAL IMPACT:
The certificate provides a 50% reduction in the number of mills levied as ad valorem taxes,
excluding the State Education Tax.
BUDGET ACTION REQUIRED:
None
STAFF RECOMMENDATION:
Issuance of the Commercial Facilities Exemption Certificate
COMMITTEE RECOMMENDATION:
None
1/25/2017
Resolution No. _______
MUSKEGON CITY COMMISSION
RESOLUTION APPROVING APPLICATION FOR ISSUANCE
OF A COMMERCIAL FACILITIES EXEMPTION CERTIFICATE
Berkshire Muskegon LDHA, LLC
WHEREAS, the City of Muskegon legally established the Commercial Redevelopment District, 275 W
Clay District, after a public hearing held on January 24, 2017; and
WHEREAS, the state equalized value of the property proposed to be exempt plus the aggregate state
equalized value of property previously exempt and currently in force under Public Act 255 of 1978 and
under Public Act 198 of 1974 (IFT's) does not exceed 5% of the total state equalized value of the City of
Muskegon; and
WHEREAS, the application was approved at a public hearing as provided by section 6(2) of Public Act
255 of 1978 on January 24, 2017; and
WHEREAS, Berkshire Muskegon LDHA, LLC is not delinquent in any taxes related to the facility; and
WHEREAS, the application is for commercial property as defined in section 3(3) of Public Act 255 of
1978; and
WHEREAS, Berkshire Muskegon LDHA, LLC had provided answers to all required questions under
Section 6(1) of PA 255 of 1978 to the City of Muskegon; and
WHEREAS, the City of Muskegon requires that the construction, restoration or replacement of the facility
shall be completed by January 24, 2019; and
WHEREAS, the Commercial Facilities Exemption Certificate is granted for a period of seven (7) years and
no extensions will be allowed; and
WHEREAS, the commencement of the construction, restoration or replacement of the facility did not
occur more than 45 days prior to the filing of the application for exemption; and
WHEREAS, the commencement of the construction, restoration or replacement of the facility did not
occur prior to the establishment of the Commercial Redevelopment District; and
WHEREAS, the application relates to a construction, restoration or replacement program which when
completed constitutes a new, replacement or restored facility within the meaning of Public Act 255 of
1978 and that is situated within a Commercial Redevelopment District established under Public Act 255 of
1978; and
WHEREAS, completion of the facility is calculated to, and will at the time of issuance of the certificate,
have the reasonable likelihood to increase commercial activity, create employment, retain employment
and prevent a loss of employment in the community in which the facility is situated; and
WHEREAS, the restoration includes improvements aggregating 10% or more of the true cash value of the
property at commencement of the restoration as provided by section 4(6) of Public Act 255 of 1978.
1/25/17
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City Commission
Be and hereby is granted a Commercial Facilities Exemption for the real property, excluding land, located
in Commercial Redevelopment District, 275 W Clay District at 275 W Clay Ave for a period of seven (7)
years, beginning December 31, 2017, and ending December 30, 2024, pursuant to the provisions of PA
255 of 1978, as amended.
Adopted this 24th Day of January, 2017.
Ayes:
Nays:
Absent:
BY: __________________________________
Stephen J. Gawron
Mayor
ATTEST: __________________________________
Ann Meisch
Clerk
CERTIFICATION
I hereby certify that the foregoing constitutes a true and complete copy of a resolution adopted by the Muskegon
City Commission, County of Muskegon, Michigan, at a regular meeting held on January 24, 2017.
______________________________
Ann Meisch
Clerk
1/25/17
Commission Meeting Date: January 24, 2017
Date: January 17, 2017
To: Honorable Mayor and City Commissioners
From: Planning & Economic Development
RE: Public Hearing - Request to Create a New Neighborhood
Enterprise Zone District at 275 W Clay Ave.
SUMMARY OF REQUEST:
Pursuant to Public Act 147 of the Michigan Public Acts of 1992, Berkshire Muskegon
LDHA, LLC has requested to create a new Neighborhood Enterprise Zone (NEZ) district
for the parcel at 275 W Clay Ave for a mixed-use development.
FINANCIAL IMPACT:
For those properties that are approved for a NEZ Certificate, taxation will be levied using
half of the State average of millages of local entities.
BUDGET ACTION REQUIRED:
None
STAFF RECOMMENDATION:
To hold the public hearing.
COMMITTEE RECOMMENDATION:
None
Background
Properties located in NEZ districts are eligible to apply for NEZ certificates, which will lower
the residential property taxes on new or rehab construction. The State requires that
notices are to be sent to the local taxing jurisdictions regarding the request and that the
resolution may not be passed until after 60 days of the notice letters being sent. Also, a
public hearing must be held no more than 45 days after the notice is sent. Notices were
mailed on December 13, 2016. The resolution is planned to come back in front of the City
Commission on February 14, 2017. The NEZ will only affect the market-rate residential
component of the project.
The City is allowed to designate up to 15% of its total area as NEZ designations, which
calculates out to 2.802 square miles. The City currently has under 2.1 square miles
designated as NEZ districts.
This project will include 84 units of senior housing. Sixty-Eight (68) of the units will be
restricted by LIHTC and 16 units will be market-rate. The NEZ certificate would only affect
the market-rate apartments. The project also includes 4,000 sf of commercial space on
the first-floor fronting Clay Ave.
Date: January 24, 2017
To: Honorable Mayor and City Commissioners
From: City Clerk
RE: Community Relations Committee recommendations for
Various City Boards and Committees
SUMMARY OF REQUEST: Accept the recommendations from the Community
Relations Committee.
Add the Business Improvement District to the Community Relations Index.
FINANCIAL IMPACT: None.
STAFF RECOMMENDATION: Approval
COMMITTEE RECOMMENDATION: As presented
O:Clerk/Common/2017 CRC Agenda Cover Sheet
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