Local Development Finance Authority

CITY OF STERLING HEIGHTS Regular Meeting of the LOCAL DEVELOPMENT FINANCE AUTHORITY 6633 18 Mile Road, Sterling Heights 586-884-9322 VELOCITY BUILDING December 18, 2018 8:00 AM MEETING CALLED TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL APPROVAL OF AGENDA APPROVAL OF MINUTES OF November 15, 2018 Special Meeting NEW BUSINESS 1. To approve the renewal insurance premium between the Michigan Municipal Risk Management Authority and the Local Development Finance Authority (LDFA). 2. To approve the Lease Agreement between STEAMBOX and the Local Development Finance Authority (LDFA). OLD BUSINESS PUBLIC COMMENT ADJOURNMENT  CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY Draft MINUTES OF THE SPECIAL MEETING November 15, 2018 – 8:00 a.m. 6633 18 Mile Road, Sterling Heights, MI 48314 586-884-9322 Velocity Building Phil Hunsberger called the meeting to order at 8:00 a.m. Pledge of Allegiance Members present at roll call: Stephanie Eagen, Ellanore Evans, Phil Hunsberger, Laurel Johnson, John Lettang, Steve Pomaville, Camille Silda, Jill Tomyn, Corey Venetis David Corba joined the meeting in progress Members absent: Robert Ljucovic, Fred Molnar, Jim Ruma, Orest Zachary Also in attendance: Luke Bonner, CEO Bonner Advisory Group, Senior Economic Development Advisor – City of Sterling Heights; Kathryn Quell, Management Services Specialist – City of Sterling Heights; Jason Castor, City Development Director – City of Sterling Heights, Larry Herriman, Executive Director – Macomb OU Incubator; Dr. David Stone, Associate Vice President-Research – Oakland University; Marc Kaszubski, City Attorney – O’Reilly Rancilio P.C.; Paul Licari, President – Network Connections Motion to Approve the Agenda Moved by Lettang, supported by Silda, to approve the agenda as presented. Ayes: All Nays: None Motion carried. Motion to Approve the Minutes of July 17, 2018 Regular Meeting Moved by Silda, supported by Lettang, to approve the minutes as presented. Ayes: All Nays: None Motion carried. New Business To approve the contracts of Comcast and BCN as network providers for Velocity. Ms. Quell stated that the 3-year lease agreements between the LDFA and Comcast and the LDFA and Everstream, respectively, had expired. Ms. Quell introduced Mr. Paul Licari, President of Network Connections, the internet and IT support company utilized by Velocity. Mr. Licari stated that the transition would be seamless to implement the new proposed contracts between the LDFA and BCN and the LDFA and Comcast. He stated that there would be no effect on the Merit Network and no new equipment would need to be aquired. Mr. Hunsberger asked if the tenants expressed any complaints with the current providers. Ms. Quell answered no and stated that Oakland University had installed a battery backup system, should the building experience any interruption in network service. Mr. Licari stated that BCN would be the primary provider and Comcast the secondary. Mr. Lettang inquired if other providers were considered. Mr. Licari stated that a comparison was performed for all the carriers in the area and BCN had the best pricing and significantly increased bandwidth. Moved by Venetis, supported by Lettang to approve the 3-year contracts of Comcast and BCN as network providers for Velocity. Ayes: All Nays: None Motion carried. To approve the Lease Agreement between Utica Community Schools and the Local Development Finance Authority (LDFA). Ms. Quell stated that Utica Community Schools was seeking a location for the Robotics team from Shelby Jr. High and Bemis Jr. High. The lease is for approximately six months at $0.00. Mr. Bonner stated that the County received a grant through the University of Michigan to establish a Robotics Collaboration Center. This lease would provide support to the First Robotics Team and give them a place to land. Mr. Bonner stated that the city is requesting the LDFA donate the space to support the program. The robotics coaches are volunteers, the materials for the program are donated and the mentors donate their time. The City, along with the County, is trying to create a better network, more teams, more interest. Moved by Silda, supported by Johnson to approve the Lease Agreement between Utica Community Schools and the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried. To approve Program Servicing Agreement dated November 15, 2018, between the City of Sterling Heights Local Development Financing Authority and Oakland University to provide business incubator services pursuant to Public Act 281 of 1986 as amended. Mr. Bonner stated that the City of Sterling Heights and Oakland University have come to an agreement with a Program Servicing Agreement outlining the programming, incubator operations, budget and core document. The Agreement adds more flexibility to reevaluate and expand and contract the programs based on the budget. Mr. Bonner stated the Agreement gives more certainty to Oakland University’s budget. This year the Agreement will give Oakland University $350,000 for the fiscal year and an additional $35,000 to fund the study. With anticipated additional TIF revenue, each year programs can be expanded for potential funding of future projects. Mr. Herriman stated that Appendix A outlines OU expanded services including access to MCERN, engaging with businesses regarding state sponsored internships. Mr. Herriman discussed OU Mobilization with the I2B program of working with every stage and small companies to bring them to a higher stage and build a pipeline to the incubator. Mr. Herriman also discussed the OU Engagement Center and corporate R&D Accelerator. Oakland University will also conduct a Corporate Needs Assessment involving the study of businesses. The study will determine the innovation needs of the businesses and allow them to develop innovation for 4.0 industry and take the technology forward to a new company or back to the existing company and expand. Moved by Silda, supported by Johnson to approve Program Servicing Agreement dated November 15, 2018, between the City of Sterling Heights Local Development Finance Authority and Oakland University to provide business incubator services pursuant to Public Act 281 of 1986 as amended. Ayes: All Nays: None Motion carried. Old Business Board Members Report Public Comment None Adjournment Moved by Lettang, supported by Eagen to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 8:52 am. Kq  LDFA Business Sterling Heights, Michigan 12/18/18 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the renewal insurance premium between the Michigan Municipal Risk Management Authority and the Local Development Finance Authority (LDFA). Submitted By: Kathryn Quell, Building Services Specialist, Velocity Executive Summary Attached for LDFA review is a December 15, 2018 thru December 15, 2019 renewal insurance premium. Note the cost is $15,181, however the LDFA is recovering $2512 back in Net Asset Distributions and Loss Fund Distributions, for a net cost of $12,669.00. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the renewal insurance premium between the Michigan Municipal Risk Management Authority and the Local Development Finance Authority (LDFA).  Community: Sterling Heights LDFA Renewal period: Dec 15, 2018 to Dec 15, 2019 Reasons for Premium Change 2017 2018 % Change Ratable Expenditures: FT employees 0 0 0.0% PT employees 0 0 0.0% Seasonal PT 0 0 0.0% Property Values: $6,797,268 $7,035,046 3.5% EDP $1,000,000 $1,000,000 0.0% SOTB/PIO 136,725 $136,725 0.0% Coverages Does not Include: Sewer, Auto Liability/Physical Damange $5M, Pool w/ $1,000 Property deductible Other: 2017-18: 2.3% 2016-17: 2.2% 2015-16: 16.9% 2014-15: 7.5% 2013-14: -2.3% 2012-13: 29.0% 2011-12: -0.1% 2010-11 initial year Total Contribution Property Totals Last Year $14,578 $6,797,268 This Year $15,181 $7,035,046 Total Change $603 $237,778 % Change (+ -) 4.1% 3.5% Note: MMRMA Liability Adjuster chgd from Louise Duchesneau to Chris Flechsig July, 2018 No RAP Grants Net Asset Distribution Loss Fund Distribution Total 2012 MMRMA Distribution: $889 $889 KD 2013 MMRMA Distribution: $518 $518 KD 2014 MMRMA Distribution: $2,384 $2,384 KD 2015 MMRMA Distribution: $3,065 $347 $3,412 KE 2016 MMRMA Distribution: $1,771 $170 $1,941 KE 2017 MMRMA Distribution: $1,610 $222 $1,832 KE 2018 MMRMA Distribution: $2,176 $336 $2,512 MR $12,413 $1,075 $13,488  MICHIGAN MUNICIPAL RISK MANAGEMENT AUTHORITY COVERAGE PROPOSAL Member: Sterling Heights LDFA Proposal No: Q000011805 Date of Original Membership: December 15, 2010 Proposal Effective Dates: December 15, 2018 To December 15, 2019 Member Representative: Jeff Bahorski Telephone #: (586) 446-2313 Regional Risk Manager: Ibex Insurance Agency Telephone #: (248) 538-0470 A. Introduction The Michigan Municipal Risk Management Authority (hereinafter "MMRMA") is created by authority granted by the laws of the State of Michigan to provide risk financing and risk management services to eligible Michigan local governments. MMRMA is a separate legal and administrative entity as permitted by Michigan laws. Sterling Heights LDFA (hereinafter "Member") is eligible to be a Member of MMRMA. Sterling Heights LDFA agrees to be a Member of MMRMA and to avail itself of the benefits of membership. Sterling Heights LDFA is aware of and agrees that it will be bound by all of the provisions of the Joint Powers Agreement, Coverage Documents, MMRMA rules, regulations, and administrative procedures. This Coverage Proposal summarizes certain obligations of MMRMA and the Member. Except for specific coverage limits, attached addenda, and the Member's Self Insured Retention (SIR) and deductibles contained in this Coverage Proposal, the provisions of the Joint Powers Agreement, Coverage Documents, reinsurance agreements, MMRMA rules, regulations, and administrative procedures shall prevail in any dispute. The Member agrees that any dispute between the Member and MMRMA will be resolved in the manner stated in the Joint Powers Agreement and MMRMA rules. B. Member Obligation - Deductibles and Self Insured Retentions Sterling Heights LDFA is responsible to pay all costs, including damages, indemnification, and allocated loss adjustment expenses for each occurrence that is within the Member's Self Insured Retention (hereinafter the "SIR"). Sterling Heights LDFA's SIR and deductibles are as follows: 12/15/18 To 12/15/19 Page 1 of 6 Sterling Heights LDFA  Table I Member Deductibles and Self Insured Retentions COVERAGE DEDUCTIBLE SELF INSURED RETENTION Liability N/A State Pool Member N/A Vehicle Physical Damage N/A Fire/EMS Replacement Cost N/A N/A Property and Crime $1,000 Per Occurrence N/A Sewage System Overflow N/A N/A The member must satisfy all deductibles before any payments are made from the Member's SIR or by MMRMA. The Sterling Heights LDFA is afforded all coverages provided by MMRMA, except as listed below: 1. Liability for Owned or Leased Motor Vehicles 2. Motor Vehicle Physical Damage 3. Sewage System Overflow 4. Specialized Emergency Response Expense Recovery Coverage All costs including damages and allocated loss adjustment expenses are on an occurrence basis and must be paid first from the Member's SIR. The Member's SIR and deductibles must be satisfied fully before MMRMA will be responsible for any payments. The most MMRMA will pay is the difference between the Member's SIR and the Limits of Coverage stated in the Coverage Overview. Sterling Heights LDFA agrees to maintain the Required Minimum Balance as defined in the Member Financial Responsibilities section of the MMRMA Governance Manual. The Member agrees to abide by all MMRMA rules, regulations, and administrative procedures pertaining to the Member's SIR. C. MMRMA Obligations - Payments and Limits of Coverage After the Member's SIR and deductibles have been satisfied, MMRMA will be responsible for paying all remaining costs, including damages, indemnification, and allocated loss adjustment expenses to the Limits of Coverage stated in Table II. The Limits of Coverage include the Member's SIR payments. The most MMRMA will pay, under any circumstances, which includes payments from the Member's SIR, per occurrence, is shown in the Limits of Coverage column in Table II. The Limits of Coverage includes allocated loss adjustment expenses. 12/15/18 To 12/15/19 Page 2 of 6 Sterling Heights LDFA  Table II Limits of Coverage Limits of Coverage Per Occurrence Annual Aggregate Liability and Motor Vehicle Physical Damage Member All Members Member All Members 1 Liability 5,000,000 N/A N/A N/A 2 Judicial Tenure N/A N/A N/A N/A 3 Sewage System Overflows 0 N/A 0 N/A 4 Volunteer Medical Payments 25,000 N/A N/A N/A 5 First Aid 2,000 N/A N/A N/A 6 Vehicle Physical Damage 0 N/A N/A N/A 7 Uninsured/Underinsured Motorist Coverage 0 N/A N/A N/A (per person) Uninsured/Underinsured Motorist Coverage 0 N/A N/A N/A (per occurrence) 8 Michigan No-Fault 0 N/A N/A N/A 9 Terrorism 5,000,000 N/A N/A 5,000,000 Limits of Coverage Per Occurrence Annual Aggregate Property and Crime Member All Members Member All Members 1 Buildings and Personal Property 8,035,046 350,000,000 N/A N/A 2 Personal Property in Transit 2,000,000 N/A N/A N/A 3 Unreported Property 5,000,000 N/A N/A N/A 4 Member's Newly Acquired or Constructed Property 10,000,000 N/A N/A N/A 5 Fine Arts 2,000,000 N/A N/A N/A 6 Debris Removal (25% of Insured direct loss plus) 25,000 N/A N/A N/A 7 Money and Securities 1,000,000 N/A N/A N/A 8 Accounts Receivable 2,000,000 N/A N/A N/A 9 Fire Protection Vehicles, Emergency Vehicles, and 10,000,000 5,000,000 N/A N/A Mobile Equipment (Per Unit) 10 Fire and Emergency Vehicle Rental (12 week limit) 1,000 per week N/A N/A N/A 11 Structures Other Than a Building 15,000,000 N/A N/A N/A 12 Storm or Sanitary Sewer Back-Up 1,000,000 N/A N/A N/A 13 Marine Property 1,000,000 N/A N/A N/A 14 Other Covered Property 10,000 N/A N/A N/A 15 Income and Extra Expense 5,000,000 N/A N/A N/A 16 Blanket Employee Fidelity 1,000,000 N/A N/A N/A 17 Faithful Performance Per Statute N/A N/A N/A 18 Earthquake 5,000,000 N/A 5,000,000 100,000,000 19 Flood 5,000,000 N/A 5,000,000 100,000,000 20 Terrorism 50,000,000 50,000,000 N/A N/A 12/15/18 To 12/15/19 Page 3 of 6 Sterling Heights LDFA  Table III Network and Information Security Liability, Media Injury Liability, Network Security Loss, Breach Mitigation Expense, PCI Assessments, Social Engineering Loss, Reward Coverage, Telecommunications Fraud Reimbursement. Limits of Coverage Per Deductible Per Occurrence/Claim Occurrence/Claim Retroactive Date $5,000,000 Coverage A Each Claim Nework and Included in limit above Information Security $25,000 Each Claim 7/1/2013 Liability: Each Claim Regulatory Fines: Included in limit above Coverage B Each Claim $25,000 Each Claim 7/1/2013 Media Injury Liability Included in limit above Coverage C Each Unauthorized Access $25,000 Each Unauthorized Network Security Loss Included in limit above Access Occurrence Network Security Each Business Interruption Retention Period of Business Interruption Loss 72 hours of Business Loss: Included in limit above Interruptoin Loss Coverage D Each Unintentional Data Each Unintentional Breach Mitigation Compromise $25,000 Occurrence Data Compromise Expense: Included in limit above Coverage E Each Payment Card Breach $1,000,000 Occ./$1,000,000 Each Payment Card $25,000 Occurrence Agg. Breach PCI Assessments: Included in limit above Coverage F Each Social Engineering Each Social Incident $25,000 Engineering Incident Occurrence Social Engineering $100,000 Occ./$100,000 Agg Loss: Included in limit above Coverage G Maximum of 50% of the Covered Claim or Loss; up Not Applicable Occurrence Reward Coverage to $25,000 Included in Limit above Coverage H $25,000 Included in limit above Not Applicable Occurrence Telecommunications Fraud Reimbursement Annual Aggregate Limit of Liability Member Aggregate All Members Aggregate $5,000,000 $25,000,000 12/15/18 To 12/15/19 Page 4 of 6 Sterling Heights LDFA  The total liability of MMRMA shall not exceed $5,000,000 per Member Aggregate Limit of Liability for coverages A, B, C, D, E, F, G, and H, in any Coverage Period. The total Liability of MMRMA and MCCRMA shall not exceed $25,000,000 for All Members Combined Aggregate Limit of Liability for coverages A, B, C, D, E, F, G, and H, in any Coverage Period. It is the intent of MMRMA that the coverage afforded under the Subjects of Coverage be mutually exclusive. If however, it is determined that more than one Subject of Coverage applies to one coverage event ensuing from a common nexus of fact, circumstance, situation, event, transaction, or cause, then the largest of the applicable Deductibles for the Subjects of Coverage will apply. Table IV Specialized Emergency Response Expense Recovery Coverage Limits of Coverage Specialized Emergency Response Limits of Coverage per Occurrence Annual Aggregate Expense Recovery Member All Members Member All Members N/A N/A N/A N/A Table V Specialized Emergency Response Expense Recovery Coverage Deductibles Specialized Emergency Response Deductible per Occurrence Expense Recovery Member N/A 12/15/18 To 12/15/19 Page 5 of 6 Sterling Heights LDFA  LDFA Business Sterling Heights, Michigan 12/18/18 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Lease Agreement between STEAMBOX and the Local Development Finance Authority (LDFA). Submitted By: Kathryn Quell, Building Services Specialist, Velocity Executive Summary Attached for LDFA review is a Month-to-Month Lease Agreement commencing on December 1, 2018 for space #2-D consisting of 868 square feet at a rental rate of $500.00/month. Additionally, STEAMBOX will provide 25% of net revenue from classes. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the Lease Agreement between STEAMBOX and the Local Development Finance Authority (LDFA).