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HomeMy WebLinkAbout06- Sub-Recipient Agreement for Community Development Block Grant , . SUB-RECIPIENT AGREEMENT FOR COMMUNITY DEVELOPMENT BLOCK GRANT THIS AGREEMENT is entered into this 26th day of May, 2006, by the CITY OF BOZEMAN, MONTANA, whose address is PO Box 1230, Bozeman, MT 59771, herein referred to as the "City", and GALLATIN DEVELOPMENT CORPORATION, whose address is 222 East Main, Suite 102, Bozeman MT 59715, a nonprofit local 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 (MDOC), 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 corporate city limits of the City. WHEREAS, in orderto maintain accountability, professional management and program performance, it is deemed to be in the best interests of the City to enter into an Agreement with the Sub-recipient as hereinafter provided; WHEREAS, the City desires to sub-grant the CDBG funds to the Sub-recipient and engage the Sub- recipient to administer the RLF on the City's behalf, and WHEREAS, the parties to this Agreement understand that neither ofthem 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. 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, consisting of those loans and loan records identified in Exhibit "A" attached to and by this reference made a part of this Agreement, together with its existing RLF loan fund balance as of the date of execution of this Agreement in the amount of $302,751.15. 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 1 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 ofthe CDBG financing program as described in the Management Plan forthe CDBG project, a copy of which the City has delivered or will deliverto Sub-recipient prior to execution of this Agreement. The Sub-recipient will also be responsible for all aspects of the local RLF program, including the following: (a) Develop, apply and enforce written Policies and Procedures as they relate to the loan 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 e. Present proposed projects to RLF Loan Committee for loan approval or denial (c) Loan Closing and Documentation a. Completion of loan documentation using Banker's Systems ARTA 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 softwa re 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. b. Track and monitor status of borrower insurance policies c. Track and monitor UCC financing statement filings and renewals 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 2 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 Sub-recipient's RLF Loan Committee. (f) 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 2. 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 allow 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. 3. 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 corporate city limits of the City As payment for the services to be rendered by Sub-recipient under this Agreement, the City will initially pay the Sub- recipient the sum of $19,000 per year, payable by the Sub-recipient retaining and paying such compensation to itself from RLF revenue derived solely from interest paid by borrowers on loans granted under the RLF program. The Sub-recipient may retain and pay such compensation to itself in installments, not more frequently monthly, so long as the total of such installments does not exceed the total annual compensation to be paid to Sub-recipient underthisAgreement. At notime will the RLF loan fund principal be used to pay Sub-recipient for the services to be performed under this Agreement, without the prior written consent of the City. The parties may adjustSub-recipient's compensation annually upon authorization by the City Commission and the Sub-recipient's Board of Directors. 4. Sub-recipient is responsible for any costs incurred by Sub-recipient in connection with the collection of delinquent or defaulted loans, including but not limited to anyfilingfees or legal fees and costs. In addition to the compensation set forth in the immediately preceding paragraph, Sub-recipient shall be entitled to use RLF revenue derived solely from interest paid by borrowers and from income earned on the RLF fund to reimburse itself for such costs incurred in the collection of delinquent or defaulted loans. 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 RLF program. The term of this Agreement shall be 24 months, commencing on the the date of execution by the parties. This Agreement will terminate upon expiration 3 . of its initial term, unless extended in writing by mutual agreement of the parties, or if either partyfails to meet the conditions of this 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. 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, physical or mental handicap, or national origin. 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 offinal paymentfor the services rendered under this Agreement unless permission to destroy them is granted by the City. J. PUBLIC MEETINGS AND PUBLIC ACCESS TO RECORDS. Subjecttothose meetings or portions of those meetings at which an individual's right to privacy outweighs the public's right to know as determined by the chairperson of such meeting, the Sub-recipient's RLF Loan Committee will comply with the "open meeting" requirements of Montana law, includingthose set forth in MCA Title 7, Chapter 1, Part 41, and Title 2, Chapter 3. In accordance with MCASection 7-1-4144 and subjectto 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 will make such RLF loan documents and records 4 . 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. K. 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 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. 3. 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. 4. 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. 5. 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. A copy of the audit report will be delivered to the City project representative no later than 30 days after completion of the audit report. L. 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. M. INDEMNIFICATION The Sub-recipient waives any and all claims and recourse against the City, 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 Sub-recipient's performance of this Agreement, except claims arisingfrom the concurrent or sole negligence ofthe City or its officers, agents or employees. TheSub- recipient will indemnify, hold harmless, and defend the City against any and all claims, demands, 5 . , damages, costs, expenses, or liability arising out of the Sub-recipient's performance of this Agreement except for liability arising out of the concurrent or sole negligence of the City or its officers, agents, or employees. N. 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 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 Labove. 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. O. 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. 6 . . P. ATTORN EY'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. 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 26th day of May, 2006. CITY: Ofa CQw,l ~\ ~- 2.6-oG S andowski Chris Kukulski Date resident Manager Gallatin Development Corporation City of Bozeman Attest: Attest: .s -2 {) /Jill 5/2 l;,/o b , . Ro Rid Date Devin M. Harbour Date Secreta Acting City Clerk Gallatin Development Corporation City of Bozeman 7