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Octaber 24. 2008 Mayor Craig Ktausing Ci�y oi Rose��ille 2660 Civic Center Drive Roseville, MN 55313 Attachment B :�. � Hausing Preservaiion Praject A Puhlic Inter�st La�v �'i.rtn Re: Centennial Cnn�rnons — non-carnp[iance witl� Minn. Stat. y� 474A_a47 Dear Mayor Klausing; We recently recei�red, pUrsuanf io a Data Practices Act request, communications from the o�3mers of Centennial Conlmons to t�.e City puiporti�ig ta demonstrale compliance ��ith Minn. Stat § 474A:Q47. In fact, t��se cammunicatiorts demanstrate that the prnj�ct is not in cornpliar�ce with ihe statute's require�nents and that the rents charged exceed #he t-naximum �er�r�issible rents by �mounts ra�lging from $34 to $39/month on 3l u��its for 2008. The owner's rents meet the statutory standard. on anly 7 units — 3.7% of the �otal, not tlie required 20%. Minn. Stat. § 47GA.047 Stabd. l(a){2) reguires that reni on 20% af the units in projects financed with ta.� exempt debt "not exceed tt�� area fair market rent or exceptio�-� fair market rents far existing housing, if applicable, as established by the federal Departr��ent nf Housing and Urban Developnient. The statute requires ihe issuer (here, the �ity oi Roseville) to monitor campliance. Minn. Stat. � 474A.047 5ubd. 3. The statute provides a pe�aIty of .5% of the ba�d amount for nan-cornpliance. Attached as Exhibit 1 are excerpts fram the owner's October 29, 200$ eomtnunicatio�i to the. City demonstrating non-con�pliance. Exhibit 1 was submitted ta the City by the owner purporting to demanstrate coinpliance with § 474A.047. It indicates that the contract rent for 4� units (21.5% of the 1�0 units) is set at or below the 2008 �'air Market Rent (FMR} set by HUD for the meiropolitan area. Ho��lever, FMRs are gross rents, including utilities paid by t�e tenant, not contract rents: "Fair market rent means �he rent, including the cc�st of uti2ities (except teleph��e}" 24 C.F.R �$$$.l 1 l(b}; see alsa Fair Market Rents: Overview; NUD website, http://wvvw.huduser.org/datasets/in�r.l7#.rnl ("FMRs are gross rent estin�ates. Ti�ey include the shel.ter r�nt �lus the cost oFall tenant-paid uti�ities, e�:cept telephones, cable or satellite tele��ision service, and internet service.") Also included in E�;hibit 1 is a uti]ity schedule which the owner also inc[uded in its 9129I08 co�n��unication to t.hE City, indicating tenant paid utilities estin�ated at $34/mantli %r l-bedroom units and $39/rno��fli for 2-�edroom units. Beca�se �he rents for 31 units were set at the �'MRs. rather than at the FiVIRs less the utilit}j esEimate, the re�its on these units exceed the statutoiy maximuttl �y the amount. of the t�ti�ities estirnaied ta be paid 6y the ter3ants, The table atta�l��d as Exhibit 2 shows the an�ounts by which the owner�s rents exceed tile statutory t3ia�Tnium, for 2008 as �rell as �or FY 2Q09 (ti��hicf� began October ], 570 Asbury Street, Suite 105 a St. Paul, �N SS104 • tel: 6a`1.6�2,0107. • Fax: 551,642.0051 Derlrcated !o �.rparrdrszg a�td pre.sen�ing llze suppl�� of crffordrible housirrg iya R�Ir��neso�n arrd �ralronsi�icle �� n��