Item 11- Agreement with RSG, Inc. for Contract Staffing to Support the Rent Stabilization

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•CPI Rent Increase Calculations-RSG will prepare and distribute allowable rent increase amounts to affected property owners pursuant to the procedures detailed in the RSO. CPI calculations determine the allowable percentage a property owner/landlord is allowed to increase a tenant's rent by. The RSO states that this shall be the lesser of 3% per annum or 80% of the change in CPI. •Fair Return Petition Review -If a property owner/landlord believes the annual RSO rent increase does not allow for a sufficient fair return on investment, they may file a petition for a fair return increase that may allow for an adjustment above the 3% or CPI calculation. This process requires reviewing income and expense information and performing a maintenance of net operating income analysis. •Petition Review -Based on the need for the City, RSG is available to review or provide support to City staff as needed for reviewing the Petition to ensure that it is complete and adheres with the RSO requirements, that all claimed expenses are eligible operating expenses, and that property revenues are verified. Petition Review also includes preparing correspondence to the applicant informing them if their Petition has been deemed complete or insufficient. If the Petition is incomplete, RSG will support City staff as needed with informing the applicant of any deficiencies with sufficient detail and provide them an opportunity to submit additional information. RSG anticipates that the City will be responsible for all mailings. •Net Operating Income ("NOi") Analysis -RSG will support City staff as needed with using a Maintenance of Net Operating Income ("MNOI") methodology for determining fair and reasonable rent. The MNOI method is a recognized and accepted practice used in other jurisdictions for evaluating fair return increases under rent stabilization. RSG will support City staff with calculating a base year NOi for a property prior to adoption of the RSO, using actual historical revenue and expenses for that property, collected through the Petition process. City staff will provide the analysis to the City for review so the City Manager or designee can decide on the allowable rent increase amount. RSG will also support City staff with evaluating all the other factors that may be considered by the City Manager as part of the rent increase as detailed in the RSO Section 8-1998.3(c). •Written Evaluation -Based on the need for the City, City staff or RSG will prepare a written evaluation of the materials submitted by the applicant and residents. The written evaluation will include a description of the various rent increase factors and the proposed allowable rents under each method. •Capital Improvement Petition -Based on the need for the City, RSG is available or will provide support to City staff as needed for ensuring that all capital improvements meet the definitions detailed in the Ordinance. Determination of allowable capital improvement increases are based on amortization schedules and any relevant factors affecting amortization, such as the quality of the improvement and external factors that affect its longevity. The calculation of the allowable rent increase is based on the total improvement costs plus interest divided by amortization period (number of years) and then divided by 12 to reflect the monthly payment. •Petition Review -RSG will support City staff as needed with reviewing the Application to ensure that it is complete and adheres to the Ordinance requirements. City staff or RSG will also confirm that all claimed expenses are eligible capital expenses. Review also includes preparing correspondence to the applicant informing them if their petition has been deemed complete or insufficient. If the Application is incomplete, RSG will support City staff as needed with informing the applicant of any deficiencies with sufficient detail and provide them an opportunity to submit additional information. RSG anticipates that the City will be responsible for all mailings. EXHIBIT 1