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HomeMy WebLinkAbout17- Sub-Recipient Agreement - Gallatin Development Corporation dba Prospera Business Network - Community Development Block Grant Revolving Loan Fund, June 2017 - June 2019 SUB-RECIPIENT AGREEMENT FOR COMMUNITY DEVELOPMENT BLOCK GRANT REVOLVING LOAN FUND June 2017—June 2019 s� THIS AGREEMENT is entered into this Z day of June, 2017 by the CITY OF BOZEMAN, MONTANA,whose address is 121 N Rouse,Bozeman MT 59715,herein referred to as the "City",and the GALLATIN DEVELOPMENT CORPORATION, doing business as PROSPERA BUSINESS NETWORK, whose address is 2015 Charlotte Street, Suite 1, Bozeman MT 59718, a nonprofit economic development corporation,herein referred to as the "Sub-Recipient." WITNESSETH THAT: WHEREAS, the City has applied to and has been approved by the Montana Department of Commerce (MTDOC) for the receipt of grant funds under the Montana Community Development Block Grant Economic Development(CDBG) Program;and WHEREAS, the City wishes to use present and future CDBG grants and loan fund revenue to further develop the "CDBG Revolving Loan Fund" (RLF) which is designed to leverage private investment in new business for the purpose of generating new jobs within the City of Bozeman; and WHEREAS, the City has previously entered into an Agreement with the Sub-Recipient to sub-grant the CDBG funds to the Sub-Recipient and engage the Sub-Recipient to administer the City of Bozeman (RLF) jointly on their behalf for a period of twenty-four months; and WHEREAS, to maintain accountability, professional management and program performance, it is deemed to be in the best interests of the City to extend the Agreement with the Sub-Recipient for two additional years, as hereinafter provided;and WHEREAS, the City desires to continue to sub-grant the CDBG funds to the Sub-Recipient and engage the Sub-Recipient to administer the RLF on the City behalf;and WHEREAS, there exists City of Bozeman Economic Development Revolving Loan Fund Guidelines, established pursuant to Commission Resolution 3488 which are hereby included in this agreement;and WHEREAS,pursuant to Resolution 3488 there exists a City of Bozeman Revolving Loan Fund Committee (the "RLF Committee"); to evaluate the feasibility and investment potential of proposed economic development projects;and WHEREAS, the parties to this Agreement understand that neither of them has in any way, expressly or impliedly, abrogated any of its individual powers, and further agree that this Agreement does not create any new organization or legal entity. Page 1 of 7 NOW, THEREFORE, in consideration of the mutual covenants and conditions set out in this Agreement, the parties agree that the foregoing statements of fact are true and correct and further agree as follows: A. SPECIAL PROVISIONS. The City agrees,under the terms and conditions of this Agreement, to sub- grant to the Sub-Recipient the CDBG loan funds as a grant for gap financing and technical assistance to eligible borrowers and does hereby transfer, assign and convey to Sub-Recipient all of the City's interest in and to its existing RLF loan portfolio. B. INDEPENDENT CONTRACTOR. It is understood by the parties hereto that the Sub-Recipient is an independent contractor and that neither its principals nor its employees, if any, are employees of the City for purposes of tax, retirement system, or social security (FICA) withholding. It is further understood that pursuant to section 39-71-401, MCA, the Sub-Recipient has obtained, and will maintain at its expense for the duration of this Contract, coverage in a workers' compensation plan for its principals and employees for the services to be performed hereunder. C. SCOPE OF SERVICES. The Sub-Recipient will perform the following services: 1. The Sub-Recipient will be responsible for all facets of the CDBG financing program as described in the Management Plan for the CDBG project, a copy of which the City has delivered or will deliver to Sub- Recipient prior to execution of this Agreement. The Sub-Recipient will also be responsible for all aspects of the Revolving Loan Fund program,including the following: (a) Develop,apply and enforce written Policies and Procedures as they relate to the City of Bozeman RLF program and/or administering the RLF program under the local CDBG grant program,including the creation and operation of an RLF Loan Committee to review and act upon loan requests. (b) Application process through approval: a. Assist prospective borrowers in completing loan application materials; b. Conduct UCC lien searches,if applicable and pertinent to the proposed loan collateral c. Provide a project analyses to the RLF Loan Committee; d. Coordinate monthly RLF Loan Committee meetings;and e. Present proposed projects to RLF Loan Committee for loan approval or denial. Decisions as to loan approval or denial are the sole responsibility of the RLF Loan Committee,and the City shall have no authority or ability to intervene in the loan approval or denial process. (c) Loan Closing and Documentation: a. Completion of loan documentation using loan documentation software; b. Loan closing,to be conducted by a title company or by Sub-Recipient; c. Funds disbursement and payment processing,utilizing the GMS Loan Accounting software;and d. Collection and retention, for Sub-Recipient's use, of loan fees and charges,as provided in Sub-Recipient's Policies and Procedures. (d) Loan Servicing Oversight: a. Gather and analyze monthly or quarterly financial reports from borrowers as required by the applicable loan agreement; Page 2 of 7 b. Track and monitor status of borrower insurance policies; c. Track and monitor UCC financing statement filings and renewals;and d. Provide monthly loan updates to RLF Loan Committee. (e) Process monthly loan payments a. Track,receive,process and account for all monthly loan payments b. Track late payments—mailing late notices and calling delinquent borrowers,as needed c. Work with delinquent borrowers to cure defaults and,where appropriate,develop a work-out plan,subject to approval of the RLF Loan Committee. (� Monitor and process all forfeitures of loan collateral and use commercially reasonable efforts to collect delinquent and defaulted loans,including the filing of creditor's claims in bankruptcy, where applicable, subject to the approval of the RLF Loan Committee. 2. The Sub-Recipient shall maintain eligibility as a Community-Based Development Organization pursuant to Title 24, Part 504, CFR, and shall ensure all activities conducted pursuant to this Agreement comply with all federal and state regulations regarding community development block grants. 3. During the term of this Agreement, the Sub-Recipient will maintain reasonable records of its performance under this Agreement in a manner consistent with generally accepted accounting principles. The Sub-Recipient will provide the City (or its authorized representatives) access to these records at any time during normal business hours. Upon written request of the City, the Sub-Recipient will submit to the City, in the format prescribed by the City, semi-annual status reports on its performance under this Agreement. 4. Except as set forth in Section (4) below, the Sub-Recipient will retain, administer, manage, record, and account to the City for all RLF loan fund revenue received subsequent to the date of this Agreement, including principal and interest received from borrowers. Sub-Recipient will use such revenue to enhance the RLF program for the benefit of all eligible borrowers located within the City of Bozeman. 5. As payment for the services rendered by Sub-Recipient, the Sub-Recipient shall retain either $34,000 or eighteen percent (189/6) of the total of payments on interest and principal from loan repayments and interest earned on the principal balance, whichever is greater. The Sub-Recipient may retain and pay such compensation to itself in installments, not more frequently than monthly. In no case, except for the Sub-Recipient's expenses for attorney fees and attorney costs related to collection efforts as described in subsection 6 of this section, shall the payment for services to the Sub-Recipient result in a decrease in the base principal amount of the fund as determined on a yearly basis. 6. Sub-Recipient is entitled to use RLF funds for any costs incurred by Sub-Recipient in connection with the collection of delinquent or defaulted loans, including but not limited to any filing fees or legal fees and costs. It is specifically agreed and understood that any such use of RLF funds in this manner by the Sub-Recipient is separate and distinct from the payment Sub-Recipient will be receiving for its services; that is to say, costs and fees incurred in connection with the collection of delinquent or defaulted loans will be paid by RLF Funds and not by the Sub-Recipient. D. EFFECTIVE DATE AND TIME OF PERFORMANCE. This Agreement supersedes all previous agreements, whether written or oral, between the City and the Sub-Recipient dealing with the City of Bozeman RLF program. The term of this Agreement shall be twenty four (24) months, commencing on the date of execution by the parties. This Agreement will terminate upon expiration of its initial term, unless extended in writing by mutual agreement of the parties, or if either party fails to meet the conditions of this Page 3of7 Agreement or if an Event of Default occurs, after notice and opportunity to cure as provided in Section N below. E. CONFLICT OF INTEREST. The Sub-Recipient covenants that it presently has no interest and will not acquire any interest, direct or indirect, in the CDBG project that would conflict in any manner or degree with the performance of its services hereunder. The Sub-Recipient further covenants that, in performing this Agreement,it will employ no person who has any such interest. F. CIVIL RIGHTS ACT OF 1964. The Sub-Recipient will abide by the provisions of the Civil Rights Act of 1964, which states that under Title VI, no person may, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance. G. SECTION 109 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974. The Sub-Recipient will comply with the following provision: No person in the United States may on the grounds of race, color, national origin, or sex be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity funded in whole or in part with the funds made available under this title. Any prohibition against discrimination on the basis of age under the Age Discrimination Act of 1975 or with respect to an otherwise qualified handicapped individual as provided in Section 504 of the Rehabilitation Act of 1973 will also apply to any such program or activity. H. NONDISCRIMINATION. In addition to the requirements of subseciton G, above, the Sub- Recipient will not discriminate against any employee or applicant for employment on the basis of race, color, religion, creed, political ideas, sex, age, marital status, or national origin, or because of actual or perceived gender sexual orientation or gender identity or disability.,The Sub-Recipient agrees this provision will apply to the hiring and treatment of the Sub-Recipient's employees and shall be included in all loan agreements with borrowers and apply to the use and expenditure of RLF funds. I. REPORTS AND INFORMATION. The Sub-Recipient will maintain accounts and records, including personnel, property and financial records, adequate to identify and account for all costs pertaining to this Agreement and such other records as may be deemed necessary by the City to assure proper accounting for all project funds. These records will be made available for audit purposes to the City or its authorized representative, and will be retained for three years after receipt of final payment for the services rendered under this Agreement unless permission to destroy them is granted by the City. J. ADMINISTRATION 1. For purposes of implementing this Agreement, the City will appoint a local government project representative that will work with the Sub-Recipient. The parties will meet as necessary to provide for the efficient and smooth implementation of this Agreement and the activities contained herein. 2. The parties agree the RLF Committee shall have final decision making authority regarding the loaning of RLF funds and shall follow guidelines set forth in Commission Resolution No. 3488 except that this Agreement supersedes the requirements of Commission Resolution 3488 only in so far as it relates to any provision in Resolution 3488 in conflict with this Agreement. Page 4 of 7 3. To ensure the composition of the RLF Committee complies with applicable federal regulations, the Committee shall consist of seven members, two of which shall be appointed by the City Commission,with the remaining five to be appointed by the Sub-Recipient. 4. The Sub-Recipient will comply with the "Certifications for Application" signed by the City and submitted with the application for economic development assistance to the Montana Department of Commerce. 5. The Sub-Recipient shall ensure that all borrowers,to whom Sub-Recipient lends RLF funds after the effective date of this Agreement, comply with the State of Montana Department of Commerce's Community Development Block Grant-Economic Development Program Application Guidelines pertaining to low and moderate income persons. 6. The Sub-Recipient will comply with Procurement Standards as outlined in Chapter 3 and Chapter 8 of the CDBG Administration Manual before entering into any agreements to remodel, to purchase equipment or material,or to retain the services of a consultant or Sub-Recipient. 7. The Sub-Recipient will contract with an independent accounting firm to conduct an annual audit sufficient to obtain an unqualified opinion of the RLF loan fund and program as conducted by Sub- Recipient under this Agreement. K. TERMINATION - DISPOSITION OF REAL PROPERTY OR EQUIPMENT ACQUIRED. Upon the expiration or termination of this Agreement, the Sub-Recipient will transfer to the City the then- existing RLF loan portfolio and all related loan records, together with the then-existing balance in the Sub- Recipient's RLF loan fund, less any unpaid portion of Sub-Recipient's compensation under this Agreement to the date of expiration or termination. L. INDEMNIFICATION. The parties agree to waive any and all claims and recourse against one another, including the right of contribution of loss or damage to person or property arising from, growing out of, or in any way connected with or incidental to the parties' performance of this Agreement. Each party shall indemnify, defend and hold harmless the other party (including such other party's affiliates, partners, officers, directors, employees, agents and representatives) against any claims and/or liabilities of any nature,including reasonable attorneys' fees,arising out of the performance of this Agreement. The City specifically agrees that RLF loan decisions are the prerogative of the RLF Loan Committee, and that the Sub-Recipient has no liability of any kind for decisions and actions related thereto, including loan decisions that were made prior to this Agreement. M. TERMINATION OF AGREEMENT. If any of the following events occur, the City may, in its sole discretion, declare such event a default under this Agreement("Event of Default"): 1. Any representation or warranty made by the Sub-Recipient in this Agreement, or in any request or certificate or other information furnished to the City under this Agreement, proves to have been incorrect in any material respect;or 2. The Sub-Recipient fails in any material respect to carry out its obligations under its proposal to the City for the assistance provided under this Agreement. If the Sub-Recipient fails to perform any of its duties under this Agreement or if any Event of Default occurs, the City may declare the Sub-Recipient to be in default and thereafter give the Sub-Recipient written notice setting forth the action or inaction that constitutes the default and giving the Sub-Recipient 45 days in Page 5 of 7 which to correct the default. If the Sub-Recipient fails to correct the default within 45 days of receipt of such notice, the City may terminate this Agreement without further notice, subject to the terms of Section L above. The parties agree that this Agreement provides for reasonable and sufficient notice to be given to the Sub- Recipient in case of the Sub-recipient's failure to comply with any of its covenants and that this notice is sufficient for the Sub-Recipient to rectify its actions or inactions of default. The waiver by the City of any default by the Sub-Recipient does not constitute a waiver of a continuing breach or a waiver of a subsequent breach. Any agreement contrary to this Agreement is not binding upon either party unless it is in writing and signed by both parties. N. CONSTRUCTION AND VENUE This Agreement will be construed under and governed by the laws of the State of Montana. The City and the Sub-Recipient agree that performance of this Agreement is in the County of Gallatin,State of Montana, and that in the event of litigation concerning it,venue is in the District Court of the Judicial District in and for the City of Bozeman,Montana. This Agreement has been approved by City Commission and by Sub-recipient's Board of Directors, each of which has authorized the undersigned persons to execute this Agreement on its behalf. O. ATTORNEY'S FEES. In the event that either party incurs legal expenses,including the costs, expenses, salary and fees of the in-house counsel, to include City Attorney, to enforce the terms and conditions of this Agreement, the prevailing party is entitled to recover reasonable attorney's fees and other costs and expenses,whether the same are incurred with or without suit,including fees on appeal. P. PUBLIC MEETINGS AND ACCESS TO PUBLIC RECORDS. The Sub-Recipient's RLF Loan Committee shall comply with the open meeting requirements of Montana law, including those set forth in Title 7, Chapter 1, Part 41, MCA and Title 2, Chapter 3, MCA. To help ensure compliance, the Sub- Recipient shall provide RLF Committee meeting agendas to the City Clerk's office no later than 72 working hours prior to meeting for notice on the City's official posting board and any other sites deemed reasonable by the Clerk's office. In addition, meeting minutes will be kept by the Sub-Recipient and provided to the City Clerk's office no later than 45 days after the meeting.These minutes shall be posted and made available to the public by the City Clerk's office except for those minutes taken during a closed meeting in accordance with 7-1-4144, MCA. Minutes taken during a closed meeting shall also be provided to the City Clerk's office but shall be handled in accordance with the City Clerk's regular executive session protocol and kept private in a secured cabinet. In accordance with 7-1-4144, MCA and subject to any applicable legal obligation to protect and preserve individual confidential or private information, upon reasonable request and at reasonable times during normal business hours, Sub-Recipient shall make such RLF loan documents and records available for inspection and copying by members of the public. Sub-Recipient may charge for such copying in accordance with the policies of the city,which Sub-Recipient hereby adopts for such purposes. To determine whether a meeting or part of a meeting may be closed to the public and to determine whether information contained in RLF loan documents is protected by law from disclosure, the Sub-Recipient may consult with and seek the advice of the City Attorney at no cost to Sub-Recipient. The advice and consultation shall be on behalf of the RLF Committee and not Gallatin Development Corporation. Page 6 of 7 Q. ELIGIBILITY. The Sub-Recipient certifies that the Sub-Recipient and the Sub-recipient's principals are not debarred, suspended, voluntarily excluded, or otherwise ineligible for participation in federally assisted contracts under Executive Order 12549, "Debarment and Suspension". (24 CFR 24.505) IN WITNESS WHEREOF, the parties hereto have executed this Sub-Recipient Agreement on the r� day of June,2017. SUB-RECIPIENT: CITY: Paul Reichert Date Dale Dennis Taylor Executive Director Interim City Manager Gallatin Development Corporation, City of Bozeman DBA Prospera Business Network ,jog Attest: Attest: ` �s 1. wr� ■ is • �S l ate L , �1 as ,o ate City Clerk Tr1V co.�1 Lilia Tyrrell,Board of Directors City of Bozeman Gallatin Development Corporation, DBA "Prospera Business Network AApproaasm: Date Bozem City Attorney Page 7 of 7