Local Development Finance Authority

CITY OF STERLING HEIGHTS Special Meeting of the LOCAL DEVELOPMENT FINANCE AUTHORITY December 17, 2020 8:00 AM The LDFA is conducting its meeting on December 17, 2020 by telephone conference in accordance with Gov. Gretchen Whitmer’s Executive Order No. 2020-75. This notice is required by Executive Order No. 2020-15 to ensure that those wishing to participate in this meeting have the opportunity to do so. This meeting will take place at 8:00 a.m., on December 17, 2020 by Zoom videoconference and teleconference. To access the meeting, members of the public must dial in using the following telephone conference number: Dial In: _1-929-205-6099________ . When prompted, enter the following Meeting ID Number: __565 364 1180___________ and passcode 421860. All pubic participants wishing to participate by telephone will be placed on hold in a virtual “waiting room” until the meeting starts (8:00 a.m.). All members of the public will be muted during the business portion of the meeting. Those wishing to participate in Public Comment will then be recognized by the Chair and asked whether that person has a comment at that time. When prompted, you should indicate your desire to address the LDFA Board and be recognized by the Chair. Please be advised that there could be delays based on the number of calls received. Members of the public will be afforded three (3) minutes each to address the LDFA Board under Public Comment. The Chair, with LDFA Board approval, may shorten this time in order to provide all members of the public a reasonable opportunity to speak. As always, residents are encouraged to email any questions they may have on any agenda item to the LDFA at cityhall@sterling-heights.net. MEETING CALLED TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL APPROVAL OF AGENDA CONSENT AGENDA A. October 12, 2020 Special Meeting Minutes  B. To accept the proposal by ISCG (612 North Main Street, Royal Oak, MI 48067) for the development and implementation of design for Velocity in the amount of $3,150.00 under the Michigan MIDEAL contract. C. To accept the proposal by ISCG (612 North Main Street, Royal Oak, MI 48067) to paint Velocity in the amount of $28,208.72 under the Michigan MIDEAL contract. D. To accept the proposal by Weber Security (95 South Rose Street, Suite A, Mt. Clemens, Mi 48043) for Service/Maintenance Contract including network configurations, troubleshooting and support. Remote monitoring and onsite services 24/7 in the amount of $36,000.00 for 12-month period. 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 Non Stop Creatives, LLC and the Local Development Finance Authority (LDFA). 3. Update – Alchemist Ventures OLD BUSINESS PUBLIC COMMENT ADJOURNMENT The LDFA will provide necessary reasonable auxiliary aids and services to individuals with disabilities at the meeting upon 7 days notice to Community Relations Department at 446-CITY.  CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY Draft MINUTES OF THE SPECIAL MEETING October 12, 2020 – 8:00 a.m. 6633 18 Mile Road, Sterling Heights, MI 48314 586-884-9322 VideoConference and TeleConference Phil Hunsberger called the meeting to order at 8:02 a.m. Pledge of Allegiance Members present at roll call: Bill Holbrook, Phil Hunsberger, Elise Johnson, Laurel Johnson, Dominic Patrus, Steve Pomaville, Jeanne Schabath-Lewis, Howard Sizemore Members absent: Ellanore Evans, Josh Hundt, John Lettang, Robert Ljucovic, Camille Silda, Jill Tomyn Also in attendance: Luke Bonner, CEO Bonner Advisory Group, Senior Economic Development Advisor – City of Sterling Heights; Marc Kaszubski, City Attorney – O’Reilly Rancilio PC; Kathryn Quell, Management Services Specialist – City of Sterling Heights; Alchemist Ventures – Patrick Wearn, Patty Lopez, Tyler Swift Motion to Approve the Agenda Moved by L. Johnson, supported by Pomaville, to approve the agenda as presented. Ayes: All Nays: None Motion carried. Motion to Approve the CONSENT AGENDA as presented Moved by Patrus, supported by Holbrook, to approve the Consent Agenda as presented. Ayes: All Nays: None Motion carried. New Business To consider contract for Entrepreneurial Services Programming with Alchemist Ventures. Mr. Bonner stated that a contract for Entrepreneurial Services Programming is being presented to the LDFA Board. The contract is in the amount of $450,000. Metrics will be measured in ten areas: Velocity Support Services, Start-up Ecosystem, Commercialization & Start-Up Success Path, Technology Development, Community Partnership, Marketing, Public Relations, Event Programming (Tech scouting initiatives), Data Reporting & Analytics, and Talent Development. Each of these metrics is described in Appendix A: Expanded Services. Appendix B measures the activity to support the overall program. There is an opportunity to terminate the contract with a 60-day notice. Mr. Hunsberger inquired how this contract amount compares to OU’s contract. Mr. Bonner stated that OU was paid $385,000 last fiscal year and the increase in price is based on programming. Mr. Pomaville inquired how will performance be reviewed and evaluated. Mr. Bonner stated that Alchemist Ventures will be giving regular updates to the LDFA Board as well as regular meetings with city administration. Mr. Hunsberger inquired if the MEDC has any thoughts or endorsement of Alchemist Ventures. Mr. Bonner responded that Alchemist Ventures has maintained communication with MEDC leadership in regards to programming. An onboarding meeting was held last Wednesday between the MEDC and Alchemist Ventures to discuss programming and expectations and so Alchemist Ventures understands reporting and available funding. Moved by L. Johnson, supported by Pomaville, to approve the contract for Entrepreneurial Services Programming with Alchemist Venutures. Ayes: All Nays: None Motion carried. To consider Higher Education Agreement between the LDFA and Oakland University. Mr. Bonner presented that Oakland University, MEDC and Alchemist Ventures met. The last Amended and Restated LDFA Plan acknowledges Oakland University as partner. Oakland University still wants to be a partner. The affiliated agreement was sent to Oakland University and changes in the agreement have been accepted by both sides. The agreement offers Oakland Unviersity opportunity based on how the program develops. Oakland University has requested an outreach office at Velocity. Mr. Hunsberger inquired about the Cyber Range. Mr. Bonner stated that Oakland University outfitted the Cyber Range and has removed all of the hardware. The Cyber Range is technology capable, just needs to be restarted. Mr. Hunsberger inquired if there will be any monetary payments to Oakland University. Mr. Bonner stated no. Moved by Pomaville, supported by Patrus, to approve the Higher Education Agreement between the LDFA and Oakland University. Ayes: All Nays: None Motion carried. To consider Higher Education Agreement between the LDFA and Macomb Community College contingent upon approval from the Michigan Economic Development Corporation. Mr. Bonner stated that the agreement between the LDFA and Macomb Community College is fundamentally the same as the one with Oakland University. The MEDC is checking if this agreement would require an additional amendment to the current Plan. Mr. Bonner stated that having an agreement with both, Oakland University and Macomb Community College allows a wide range of assets for the greater benefit of the region. Both, Oakland University and Macomb Community College, are aware of each other as a partner. Mr. Bonner stated that you can have multiple higher education partners. Moved by Pomaville, supported by Holbrook, to approve the Higher Education Agreement between the LDFA and Macomb Community College contingent upon approval from the Michiga Economic Development Corporation. Ayes: All Nays: None Motion carried. To consider the purchase of equipment and services necessary to support programming requirements for Velocity. Costs include the purchase of furniture, flooring, repair and painting of the building due to the transition of a new service provider. Costs not to exceed $400,000. Ms. Quell stated that due to the transition of a new service provider, the building requires repair and replacement of furniture and equipment as well as structurally – painting, flooring. The current budget did not allocate funds from the tax capture. Ms. Quell is requesting that the Board approve an amount not to exceed $400,000 for the support of new programming and the repair of the building. Moved by Patrus, supported by Schabath-Lewis, to approve the purchase of equipment and services necessary to support programming requirements for Velocity. Costs include the purchase of furniture, flooring, repair and painting of the building due to the transition of a new service provider. Costs not to exceed $400,000. Ayes: All Nays: None Motion carried. Old Business Public Comment None Adjournment Moved by L. Johnson, supported by Patrus to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 8:41 am. Kq  LDFA Business Sterling Heights, Michigan 12/17/20 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 Fiannce Authority (LDFA). Submitted By: Kathryn Quell, Building Services Specialist Executive Summary Attached for LDFA review is a December 15, 2020 thru December 15, 2021 renewal insurance premium. Note the cost is $12,611, however the LDFA is recovering $4361 back in Net Asset Distributions and Loss Fund Distributions, for a net cost of $8250. 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, 2020 to Dec 15, 2021 Reasons for Premium Change 2019 2020 % Change Ratable Expenditures: FT employees 0 0 0.0% PT employees 0 0 0.0% Seasonal PT 0 0 0.0% Property Values: $7,288,000 $7,314,410 0.4% EDP $1,000,000 $1,000,000 0.0% SOTB/PIO 151,900 $151,900 0.0% UAV/Drone: N/A N/A Coverages Does not Include: Sewer, Auto Liability/Physical Damange $5M, Pool w/ $1,000 Property deductible Other: 2019-20: -17.3% 2018-19: 4.1% 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 $12,561 $7,288,000 This Year $12,611 $7,314,410 Total Change $50 $26,410 % Change (+ -) 0.4% 0.4% 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 2019 MMRMA Distribution: $2,489 $387 $2,876 MR 2020 MMRMA Distribution: $4,063 $298 $4,361 MR $18,965 $1,760 $20,725  MICHIGAN MUNICIPAL RISK MANAGEMENT AUTHORITY Member: Sterling Heights LDFA QUOTE NUMBER Q000012774 QUOTE PROPERTY LIST REPORT EFFECTIVE DATES 12/15/2020 To 12/15/2021 Location Address Location Description 1. 6633 18 Mile, Sterling Heights, MI 48311 Incubator/Office Building Description Building Value Contents Value Total Value Office Building $7,287,140 $27,270 $7,314,410 Location Totals $7,287,140 $27,270 $7,314,410 Grand Totals Building Value Contents Value Total Value $7,287,140 $27,270 $7,314,410 Page 1 of 1  MICHIGAN MUNICIPAL RISK MANAGEMENT AUTHORITY COVERAGE PROPOSAL Member: Sterling Heights LDFA Proposal No: Q000012774 Date of Original Membership: December 15, 2010 Proposal Effective Dates: December 15, 2020 To December 15, 2021 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: 12/15/20 To 12/15/21 Page 1 of 7 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. 12/15/20 To 12/15/21 Page 2 of 7 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 8,314,410 350,000,000 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 12/15/20 To 12/15/21 Page 3 of 7 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 12/15/20 To 12/15/21 Page 4 of 7 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. 12/15/20 To 12/15/21 Page 5 of 7 Sterling Heights LDFA  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 12/15/20 To 12/15/21 Page 6 of 7 Sterling Heights LDFA D. Contribution for MMRMA Participation Sterling Heights LDFA Period: December 15, To December 15, 2021 2020 Coverages per Member Coverage Overview: $12,611 TOTAL ANNUAL CONTRIBUTIONS: $12,611 E. List of Addenda This document is for the purpose of quotation only and does not bind coverage in the Michigan Municipal Risk Management Authority, unless accepted and signed by both the authorized Member Representative and MMRMA Representative below. Accepted By: Proposal No: Sterling Heights LDFA Q000012774 MMRMA Member Representative MMRMA Representative 10-5-2020 Date Date 12/15/20 To 12/15/21 Page 7 of 7 Sterling Heights LDFA  LDFA Business Sterling Heights, Michigan 12/17/20 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Lease Agreement between Non Stop Creatives, LLC 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, 2020 for space #2-A consisting of 830.5 square feet at a rental rate of $725.00/month. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the Lease Agreement between Non Stop Creatives, LLC and the Local Development Finance Authority (LDFA).