HomeMy WebLinkAbout18- Grant Agreement - Human Resource Development Council (HRDC) - Down Payment Assistance for Qualified Buyers GRANT AGREEMENT DOWN PAYMENT ASSISTANCE FOR QUALIFIED BUYERS PURSUANT TO
BOZEMAN'S AFFORDABLE HOUSING ORDINANCE &AGREEMENT FOR CASH AND NON-CASH
SUBSIDY RECAPTURE
HUMAN RESOURCES DEVELOPMENT COUNCIL—CITY OF BOZEMAN
THIS AGREEMENT is made and entered into this day of ��' �C , 2018 by and between
the City of Bozeman, Montana, a self-governing municipal corporation located at 121 N. Rouse
Ave., Bozeman MT 59771 ("City") as grantor and the Human Resources Development Council of
District IX, Inc. ("HRDC"), a non-profit corporation located at 32 South Tracy Ave., Bozeman MT
59715 as grantee. Together HRDC and the City may be referred to as the "Parties."
WHEREAS, on October 17, 2005 the Bozeman City Commission adopted Resolution No. 3866
establishing policies for the City's granting of funds; and
WHEREAS, the City approved a 2012-2016 Affordable Housing Action Plan on May 21, 2012
which identified home purchase assistance funding of up to $10,000 per qualified homebuyer
as an activity eligible for City funding; and
WHEREAS, the City adopted Ordinance 1922 (the Affordable Housing Ordinance or AHO) on
December 7, 2015, and Ordinance 1922 became effective on February 5, 2016; and
WHEREAS, in accordance with the AHO the City adopted the AHO Administrative Manual by
Resolution 4659 (as amended by Resolution 4808) (the "Manual"); and
WHEREAS the AHO provides for incentives for the creation of affordable housing in the form of
down payment assistance on a first-come first-served basis, subject to availability of funds, not
to exceed $10,000.00 per home; and
WHEREAS, down payment assistance is to be secured with a lien instrument due upon sale,
transfer, or non-rate/term refinance of the home; and
WHEREAS, HRDC, as the City's agent under a professional services agreement dated March 7,
2016, must include in its lien documents evidencing down payment assistance the requirement
to also recapture the non-cash subsidy lien as provided for in the AHO (38.43.160.13, BMC); and
WHEREAS, the Bozeman City Commission may, from time to time, annually appropriate funds
to be used by the City for down payment assistance pursuant to the AHO and the Manual; and
WHEREAS, HRDC is a certified Community Housing Development Organization (CHDO) that
works with the Montana Department of Commerce to allocate HOME and CDBG funds for the
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development of affordable housing, including programs that provide down payment assistance
which are secured by liens; and
WHEREAS, HRDC entered into the March 7, 2016 professional services agreement with the City
to provide buyer education and qualification, subsidy recapture, compliance verification and
other program services to the City pursuant to the AHO and the Manual where City funds for
down payment assistance may be used.
NOW,THEREFORE,THE PARTIES AGREE:
1. The Grant. The City may grant and release to HRDC the sum of up to ten thousand
dollars ($10,000) from its Community Housing Fund (the "Grant") per affordable home
designated by the City's Representative to receive such Grant, subject to the
requirements of this Agreement, the AHO, and the Manual. Each property wherein
Grant Funds may be used requires a separate authorization from the City's
Representative.
2. Availability of Funds. Each fiscal year, the City Commission may budget for funds to be
allocated to the Community Housing Fund and if so, the Commission may identify the
amount of funds within the Community Housing Fund to be allocated toward the Grant
for down payment assistance (the "Grant Funds"). The number of Grants available in a
fiscal year, if any, is dependent on such budget allocation. The determination of
availability of Grant Funds for any particular home is made solely by the City
Representative. The City reserves the right to determine how funds are appropriated to
HRDC and then on to a potential purchaser of a Lower-Priced Affordable Home—
whether on an income basis, need basis, or a first-come first-served basis.
3. Use of Grant Funds. Grant funds appropriated by the City for use by HRDC for down
payment assistance will be administered by HRDC and used by HRDC for the sole
purpose of providing down payment assistance of up to $10,000 per household to
qualified buyers seeking to purchase Lower-Priced Homes (as defined in the AHO).
Grant Funds include the initial funds provided to a homebuyer and includes funds
recaptured by HRDC as described in Section 7 of this Agreement.
4. Payment of Grant Funds
a. Prior to an individual entering into a purchase and sale agreement for a Lower-
Priced Home wherein the purchaser desires to request Grant Funds, HRDC must
certify to the City's Representative in writing that the purchaser has met the
eligibility requirements of the AHO and the Manual. Once the City's
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Representative indicates Grant Funds are available for the purchaser,the HRDC
must provide the City Representative a copy of the executed purchase and sale
agreement. If the City's Representative determines Grant Funds are available,
the City Representative will present to the HRDC for its execution an addendum
to this Agreement authorizing the transfer of Grant Funds to the HRDC for use
for the specific property.
b. After the City confirms the availability of Grant Funds and enters into an
addendum to this Agreement,the City will transfer the Grant Funds to the HRDC
pursuant to a process agreed to by the City and HRDC representatives.
c. Upon closing of the purchase and the transfer of the Grant Funds to the seller,
HRDC must provide documentation to the City evidencing: (i) the closing of the
sale of the property that Grant Funds were used and the required liens secured
in compliance with the AHO, the Manual and this Agreement; and (ii)the
recapture requirements of this Agreement, the AHO and the Manual have been
included in all necessary documents between the seller, buyer, and HRDC.
5. Grantee Representations
a. HRDC has familiarized itself with this Agreement, the AHO, the Manual, and all
local conditions and applicable federal, state and local laws, ordinances, rules,
and regulations that in any manner may affect HRDC's performance under this
Agreement.
b. HRDC represents and warrants to City that it is a certified CHDO; that it has the
experience, expertise, and ability to perform its obligations under this
Agreement; that it will perform said obligations in a professional, competent and
timely manner and with diligence and skill; that it has the power to enter into
and perform this Agreement and grant the rights granted in it; and that its
performance of this Agreement shall not infringe upon or violate the rights of
any third party, whether rights of copyright, trademark, privacy, publicity, libel,
slander or any other rights of any nature whatsoever, or violate any federal,
state or municipal laws. The City will not determine or exercise control as to
general procedures or formats necessary for HRDC to meet this warranty.
6. HRDC Responsibilities
a. In the performance of duties and obligations under this Agreement, HRDC will
perform the services described in the professional services agreement dated
March 7, 2016 in accordance with the requirements of the AHO and the Manual.
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b. HRDC will perform all services described as responsibilities of the "City's Agent"
in the Manual, unless otherwise agreed in writing by the City's Representative.
c. In case of a conflict between the terms of the AHO and this Agreement, the
Manual, or the professional services agreement, the AHO will control.
d. HRDC must provide the City's Representative all reasonable access to its records
and documents to enable the City to ensure HRDC uses the Grant Funds for the
sole purpose described herein and in compliance with the requirements of this
Agreement, the AHO, and the Manual. For each property where Grant Funds are
used, HRDC must provide the City a copy of all records requested by the City
related to the transaction including but not limited to the executed purchase and
sale agreements (including AHO Property Disclosure Addendum to Purchase
Contract for Lower-Priced Home), lien agreement(s), promissory note(s),
subordinate deed(s) of trust, documents evidencing recapture requirements
have been complied with, and property use restriction agreement.
7. Recapture'and Return of Grant Funds
a. HRDC must execute documents evidencing the subsidy recapture lien(s) with
each qualifying homebuyer to be recorded with the Gallatin County Clerk and
Recorder which provide for the recapture of Grant Funds by HRDC if the home is
sold, refinanced, is no longer owner-occupied, or is rented (in whole or in part)
for a period of at least 30 days during the affordability period specified in the lien
documents. The position of the City's lien will be secondary to the primary
mortgage, unless otherwise agreed by the City in writing.
b. If net proceeds from a sale of the home at the time recapture requirements are
triggered are insufficient to recapture the full subsidy amount, HRDC may accept
the available net proceeds as full payment. In such a case, HRDC must inform the
City's Representative prior to agreeing to accept only the available net proceeds.
c. The recapture provisions of documents prepared by HRDC will not expire or be
forgiven during the affordability period.
d. Funds recaptured by HRDC must be promptly returned to the City quarterly.
e. If HRDC determines a property that received Grant funds is no longer owner
occupied triggering the recapture provision of the AHO and the Manual, HRDC
must immediately notify the City and provide documentation that Grant Funds
are not immediately available for recapture for a specific property and provide
the City a plan for enforcing the recapture provisions and obtaining the Grant
Funds.
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f. If for any reason HRDC ceases to manage the Grant Funds, including termination
under Section 12 of this Agreement,any remaining Grant Funds in HRDC's
account will be promptly refunded to the City and HRDC must take all necessary
steps to transfer its interest in Grant Funds subject to recapture requirements in
all outstanding deeds of trust, promissory notes, etc.
8. Non-Cash Subsidy Recapture. HRDC must include in all necessary documents provisions
evidencing the requirement that at the time the buyer of a Lower-Priced Home
(regardless of whether the buyer is using Grant Funds) sells the property or no longer
abides by the terms of the AHO a non-cash subsidy must be recaptured by the HRDC as
required by the AHO (Sect. 38.43.160.6, BMC) and the Manual. Recapture of non-cash
subsidy by HRDC must comply with the procedures of Section 7, above.
9. Reports/Accountability/Public Information. By the end of January of each year after
the effective date of this Agreement, HRDC will provide to the City's Representative a
written financial report regarding the previous calendar year activities that includes, for
the Grant Funds and non-cash subsidy, at a minimum,the following:
a. Total number of transactions for the purchase of Lower-Priced Homes during the
previous calendar year;
b. The total dollar amount of Grant Funds granted to date
c. The date, amount, and address for which Grant Funds were used;
d. Information regarding the non-cash subsidy for each home sold as a Lower-
Priced Home;
e. Information regarding each qualifying homebuyer sufficient to show the
homebuyer met the qualifying requirements set out in the AHO,the Manual and
this Agreement;
f. Information regarding Grant Funds repaid to HRDC pursuant to the recapture
provisions in the homebuyer agreements;
g. Such other information as reasonably requested by the City's Representative.
HRDC agrees to develop and/or provide such other documentation as requested by the
City's Representative demonstrating HRDC's compliance with the requirements of this
Agreement. HRDC shall allow the City, its auditors, and other persons authorized by the
City to inspect and copy its books and records for the purpose of verifying that monies
provided to HRDC pursuant to this Agreement were used in compliance with this
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Agreement and all applicable provisions of federal, state, and local law. HRDC will retain
all records related to the use of Grant Funds for the time specified in the most recent
Local Government Record Retention Schedule as adopted by the Montana Secretary of
State. HRDC shall not issue any statements, releases or information for public
dissemination regarding the Grant Funds without prior approval of the City's
Representative.
10. Repayment of Grant Funds to City. HRDC agrees to repay to the City any Grant Funds
expended by HRDC in violation of the terms of the AHO, the Manual or this Agreement.
11. Independent Contractor Status. The parties agree that HRDC, its agents, employees,
contractors, or subcontractors, are independent contractors for purposes of this
Agreement and are not to be considered employees or agents of the City for any
purpose. HRDC and its agents, employees, contractors, or subcontractors, are not
subject to the terms and provisions of the City's personnel policies and may not be
considered a City employee for workers' compensation or any other purpose. HRDC, its
agents, employees, contractors, or subcontractors, are not authorized to represent the
City or otherwise bind the City in any way.
12. Termination.
a. If HRDC fails to comply with any condition of this Agreement at the time or in the
manner provided for, the City may terminate this Agreement if the default is not
cured within fifteen (15) days after written notice is provided to HRDC. The
notice will set forth the items to be cured. If this Agreement is terminated
pursuant to this Section, any Grant Funds in HRDC's account (i.e., Grant Funds
that have been transferred to HRDC by the City and not yet provided to a
qualifying homebuyer, or that have been recaptured by HRDC and not yet
returned to the City) will be returned to the City within fifteen (15) days after
termination of this Agreement.
b. Either Party may terminate this Agreement for convenience with 120 days
written notice to the other Party.
13. Limitation on HRDC's Damages;Time for Asserting Claim
a. In the event of a claim for damages by HRDC under this Agreement, HRDC's
damages shall be limited to contract damages and HRDC hereby expressly waives
any right to claim or recover consequential, special, punitive, lost opportunity,
lost productivity, field office overhead, or general conditions costs.
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b. In the event HRDC wants to assert a claim for damages of any kind or nature,
HRDC shall provide City with written notice of its claim, the facts and
circumstances surrounding and giving rise to the claim, and the total amount of
damages sought by the claim, within ten (10) days of the facts and circumstances
giving rise to the claim. In the event HRDC fails to provide such notice, HRDC
shall waive all rights to assert such claim.
14. Representatives
a. City's Representative. The City's Representative for the purpose of this
Agreement shall be Matthew Madsen (Affordable Housing Program Manager) or
such other individual as City shall designate in writing. Whenever approval or
authorization from or communication or submission to City is required by this
Agreement, such communication or submission shall be directed to Matthew
Madsen as City's Representative and approvals or authorizations shall be issued
only by such Representative; provided, however,that in exigent circumstances
when City's Representative is not available, HRDC may direct its communication
or submission to other designated City personnel or agents and may receive
approvals or authorization from such persons.
b. HRDC's Representative. HRDC's Representative for the purpose of this
Agreement shall be Tracy Menuez or such other individual as HRDC shall
designate in writing. Whenever direction to or communication with HRDC is
required by this Agreement, such direction or communication shall be directed
to HRDC's Representative; provided, however,that in exigent circumstances
when HRDC's Representative is not available, City may direct its direction or
communication to other designated HRDC personnel or agents.
15. Indemnity/Waiver of Claims/Insurance. To the fullest extent permitted by law, HRDC
agrees to defend, indemnify and hold the City and its agents, representatives,
employees, and officers (collectively referred to for purposes of this Section as the City)
harmless against all third party claims, demands, suits, damages, losses, and expenses,
including reasonable defense attorney fees, which arise out of, relate to or result from
HRDC's (i) negligence, (ii) willful or reckless misconduct, or(iii) providing or refusing to
provide Grant Funds to a qualifying buyer.
Such obligations shall not be construed to negate, abridge, or reduce other rights or
obligations of indemnity that would otherwise exist. The indemnification obligations of
this Section must not be construed to negate, abridge, or reduce any common-law or
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statutory rights of the indemnitee(s) which would otherwise exist as to such
indemnitee(s). HRDC's indemnification obligations under this Section shall be without
regard to and without any right to contribution from any insurance maintained by City.
Should any indemnitee described herein be required to bring an action against HRDC to
assert its right to defense or indemnification under this Agreement or under HRDC's
applicable insurance policies required below the indemnitee shall be entitled to recover
reasonable costs and attorney fees incurred in asserting its right to indemnification or
defense but only if a court of competent jurisdiction determines HRDC was obligated to
defend the claim(s) or was obligated to indemnify the indemnitee for a claim(s) or any
portion(s) thereof.
In the event of an action filed against City resulting from the City's performance under
this Agreement, the City may elect to represent itself and incur all costs and expenses of
suit.
HRDC also waives any and all claims and recourse against the City or its officers, agents
or employees, including the right of contribution for loss or damage to person or
property arising from, growing out of, or in any way connected with or incident to the
performance of this Agreement except for acts by the City which constitute its "own
fraud, for willful injury to the person or property of another, or for violation of law,
whether willful or negligent" as per 28-2-702, MCA or except for the City's failure to
perform hereunder.
These obligations shall survive termination of this Agreement and the services
performed hereunder.
In addition to and independent from the above, HRDC shall at HRDC's expense secure
insurance coverage through an insurance company or companies duly licensed and
authorized to conduct insurance business in Montana which insures the liabilities and
obligations specifically assumed by HRDC in this Section. The insurance coverage shall
not contain any exclusion for liabilities specifically assumed by HRDC in this Section.
The insurance shall cover and apply to all claims, demands, suits, damages, losses, and
expenses that may be asserted or claimed against, recovered from, or suffered by the
City without limit and without regard to the cause therefore and which is acceptable to
the City and HRDC shall furnish to the City an accompanying certificate of insurance and
accompanying endorsements in amounts not less than as follows:
• Workers' Compensation—statutory;
• Employers' Liability-$1,000,000 per occurrence; $2,000,000 annual aggregate;
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• Commercial General Liability-$1,000,000 per occurrence; $2,000,000 annual
aggregate;
• Professional Liability-$1,000,000 per claim; $2,000,000 annual aggregate.
The City of Bozeman, its officers, agents, and employees, shall be endorsed as an
additional or named insured on a primary non-contributory basis on the Commercial
General policy. The insurance and required endorsements must be in a form suitable to
City and shall include no less than a sixty (60) day notice of cancellation or non-renewal.
The City must approve all insurance coverage and endorsements prior to
commencement of activities by HRDC. HRDC shall notify City within two (2) business
days of HRDC's receipt of notice that any required insurance coverage will be
terminated or HRDC's decision to terminate any required insurance coverage for any
reason.
16. Nondiscrimination. HRDC will have a policy to provide equal employment opportunity
in accordance with all applicable state and federal anti-discrimination laws, regulations,
and contracts. HRDC will not refuse employment to a person, bar a person from
employment, or discriminate against a person in compensation or in a term, condition,
or privilege of employment because of race, color, religion, creed, political ideas, sex,
age, marital status, national origin, actual or perceived sexual orientation, gender
identity, physical or mental disability, except when the reasonable demands of the
position require an age, physical or mental disability, marital status or sex distinction.
HRDC must comply with these terms in the performance of this Agreement and must
require these nondiscrimination terms of any subcontractor it hires to provide services
(including legal services) under this Agreement.
17. Public Meetings and Access to Public Records
a. Meetings of HRDC that pertain to the receipt or expenditure of Grant Funds are
subject to 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 ensure
compliance, HRDC will provide agendas for meetings that pertain to Grant Funds 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 HRDC 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
Grant Agreement with HRDC for AHO Down Payment Assistance and Subsidy Recapture
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shall be handled in accordance with the City Clerk's regular executive session
protocol and kept private in a secured cabinet.
b. 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, HRDC shall make
such documents and records available for inspection and copying by members of the
public. HRDC may charge for such copying in accordance with the policies of the City,
which HRDC hereby adopts for such purposes.
c. To determine whether a meeting or part of a meeting may be closed to the public
and to determine whether information contained in HRDC documents is protected
by law from disclosure, HRDC may seek a determination of the City Attorney at no
cost to HRDC. Such request and determination shall not create an attorney-client
relationship between HRDC and the City.
18. Attorney's Fees and Costs. In the event it becomes necessary for a party to this
Agreement to retain an attorney to enforce any of the terms or conditions of this
Agreement or to give any notice required herein, then the prevailing party shall be
entitled to reasonable attorney's fees and costs, including fees, salary, and costs of in-
house counsel to include City Attorney.
19. Integration and Modification. This document contains the entire agreement between
the parties and no statements, promises or inducements made by either party or agents
of either party not contained in this written Agreement may be considered valid or
binding.This Agreement may not be modified except by written agreement signed by
both parties.
20. Dispute Resolution
a. Any claim, controversy, or dispute between the parties, their agents, employees,
or representatives shall be resolved first by negotiation between senior-level
personnel from each party duly authorized to execute settlement agreements.
Upon mutual agreement of the parties, the parties may invite an independent,
disinterested mediator to assist in the negotiated settlement discussions.
b. If the parties are unable to resolve the dispute within thirty (30) days from the
date the dispute was first raised, then such dispute may only be resolved in a
court of competent jurisdiction in compliance with the Applicable Law provisions
of this Agreement.
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21. No Assignment. HRDC may not subcontract or assign HRDC's rights or obligations under
this Agreement without the prior written consent of City's Representative.
22. No Third Party Beneficiary. The terms and provisions of this Agreement are intended
solely for the benefit of each party and their respective successors and assigns. It is not
the parties' intent to confer third party beneficiary rights upon any other person or
entity.
23. Choice of Law. This Agreement shall be governed and construed in accordance with the
laws of the State of Montana.
24. Non-Waiver. A waiver by either party of any default or breach by the other party of any
terms or conditions of this Agreement does not limit the other party's right to enforce
such term or conditions or to pursue any available legal or equitable rights in the event
of any subsequent default or breach.
25. Severability. If any portion of this Agreement is held to be void or unenforceable, the
balance of the Agreement shall continue in effect.
26. Counterparts. This Agreement may be executed in counterparts, which together
constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year
indicated below.
CITY:
l
Date: L� -9
HRDC: / (
Date:
Heather Grenier, P esident and CEO
APPR VED AST RM:
i
Date: I f)
reg SL(L4 an, City Attorney
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