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�RI�-�-� March 4, 2009 City of Roseville, Minnesota Roseville City Hall 2660 Civic Center Drive Roseville, MN 55113-1815 Attn: Patrick Trudgeon W22p0 FirsT National Bank $uilding 332 MinnesoTa 5treeT 5t, Paul MN 55101-1396 Yel 651.808.fi600 fax fi51.808.fi45a Re: Centennial Gardens Project FMR Compliance Dear Pat: Attachment F Mary L. Ippel 651.808.6620 mippel @briggs.com Minnesota Statutes, Section 474A.047, Subdivision 3 requires the City to monitor the Centennial Gardens Project's compliance with the statutory rental rate and income level requirements set forth in Minnesota Statutes, Section 474A.047, Subdivision 1. In particular, the City is required to monitor the requirement that the maximum rent for at least 20 percent of the units in the Centennial Gardens Project does not exceed the area fair market rent or exception fair market rents for existing housing. If the City determines that the Centennial Gardens Project is not in compliance it must either assess a penalty or determine that the violation is insubstantial. Gardens East Partnership (the "Developer") acknowledges that the Centennial Gardens Project was not in compliance with the rent restriction which leaves the City Council in the position of determining whether or not the noncompliance was insubstantial. However, there remains a question over the correct method of quantifying the noncompliance. Minnesota Statutes, Section 474A.02, Subdivision 23b defines rent as the "total monthly cost of occupancy payable directl�y the tenant and the cost of any utilities". The question that has been raised is whether amounts paid under the Section 8 voucher program on behalf of tenants are included in determining whether the rental payment rates are within the statutory limitations. Those amounts are not literally paid directly by the tenant. Therefore, a literal reading of the statute would exclude those amounts and the noncompliance by Gardens East Partnership would be even smaller than the approximately $1,700 originally determined. That is the interpretation set forth in Norm Jones's February 26, 2009 letter, which is not an unreasonable interpretation of the statute. However, there may be a policy reason for including Section 8 voucher payments in quantifying rent. Prospective tenants without Section 8 vouchers may not have rented units in the Centennial Gardens Project because they couldn't afford the rents being advertised and 8riggs and AM1organ, Professional Association M�nneapoiis 1 St. Pavi i www.i�riggs.cnm 2307151v2 �yAPR1E]Pf' Ll'k MU�1CIi� a G[nhal Asso�iatian pf Independent Law Firms