Loading...
HomeMy WebLinkAbout08- Sub-Recipient Agreement for Community Development Block Grant Revolving Loan FundSUB-RECIPIENT AGREEMENT FOR COMMUNITY DEVELOPMENT BLOCK GRANT REVOLVING LOAN FUND TIIIS AGREEMENT is entered into this 26th day of May, 2008, by the CITY OF BOZEMAN, MONTANA, whose address is P.O. Box 1230, Bozeman, MT 59771, herein referred to as the "City", and the GALLATIN DEVELOPMENT CORPORATION, doing business as PROSPERA BUSINESS NETWORK, whose address is 222 East Main Street, Suite 102, Bozeman MT 59715, 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 lean fund revenue to further develop the "CDBG Kevolving Loan Fund" (REF) 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; and WHEREAS, the (;ity has entered into an Agreement with the Sub-Recipient dated May 26, 2006 to sub-grant the CDBG funds to the Sub-Recipient and engage the Sub-Recipient to administer the City of Bozeman Revolving Loan Fund (RLF) on the City's behalf for a period of twent~T four months; and WHEREAS, in order to maintain accountability, professional management and program performance, it is deemed to he in the best interests of the Ciry to extend the Agreement with the Sub-Recipient until May 26, 2010, 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 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. 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 PROV1SlONS. The City agrees, under the terms and conditions of this Agreement, to sub- grant to the Sub-Recipient the CDBC71oan 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 the: May 26, 2006 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, c.~r social security (FICA) withholding. It is further understcx:~d that pursuant to section ,39-71-401, MCA, the Sub-Recipient has obtained, and will maintain at its expense for the duration of this (~ontract, 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- Recipientprior to execution of this Agreement. The Sub-Recipient will also be responsible for all aspects of the Bozeman Revolving Loan Fund program, including the following: (a) Develop, apply and enforce written Policies and Procedures as they relate to the 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 h. Conduct U(~C lien searches, if applicable and pertinent to the proposed loan collateral c. Provide a project analyses to the RLI' 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 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 L oan Accounting software d. Collection and retention, for Sub-Recipient's use, of loan fees and charges, as provided in Sub-Recipient's 17olicies and Procedures (d) Loan Servicing Oversight a. Gather and analyze monthly or quarterly f=anancial 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 b. Track ]ate 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 $ub-recipient's RLI^ 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- Rccipientwill provide the City (or its authorized representatives) access t.o 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 RLI' 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. 4. As payment for the services 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 le:~ans granted under the RLF program. The Sub-Recipient may retain and pay such cc.~mpensation 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 under this Agreement. At no time. will the RLIj 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 adjust Sub-Recipient's compensation annually upon authorization by the (;ity Commission and the Sub-Recipient's Board of Directors. 5. Sub-Kecipient is responsible for any costs incurred by Sub-Recipient in connection with the collection of delinquent or defaulted loans, including but not limited to any Kling fees or legal fees and costs. In addition to the compensation set forth in the immediately preceding paragraph, Sub-Recipient shall he entitled to use RT,F revenue derived solely frorra 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 Bozeman RL)~' program. The term of this Ag-t-eement shall he twenty four months, commencing on the date of execution by the parties. This A~n-eement. 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 Agreement or if an Event of Default occurs, after notice and opportunity to cure as provided in Section N below. E. CC7N1~'LICT 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. h. CIVIL RI(THT5 ACT OF 1964. The Sub-Recipient will abide by the provisions of the Civil Rights Act of 1964, which states that under Title Vl, no person may, on the grounds of race, color, or national origin, he excluded from participation in, be denied the benefits of, or he subjected to discrimination under any program or activity receiving federal financial assistance. G. SF,CTION 109 OF THE HOUSING AND COMMU I E ELOI7MENT 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 ro 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. 3 H. NONDISCRIMINATIC)N. 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, sexual orientation, 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 maybe 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. P BLIC MEETINGS AND PUBLIC ACC ~ O REC'O ~. Subject to those meetings or portions ~f 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 R1,F Loan Committee will comply with the "open meeting" requirements of Montana law, including those set forth in MCA Title 7, Chapter 1, Part 41, and Title 2, Chapter .3. Tn accordance with MCA Section 7-1-4144 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 will 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 Suh-Kecipient hereby adopts for such purposes. K. ADMINISTRATION 1. For purposes of implementing this Agreement, the Ciry wiU 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-Kecipient 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 RT.F funds after the effective date of this Agreement, comply with the State: of Montana Department of Commerce's Community L)evelopment Block Grant-F,conomic 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. T.. TF,RMIN.ATlON - L)1SP0 1TION OF REAL PROPERTY UR E IPMENT AC( UIRED 4 tlpon the expiration or termination of this Agreement, tlae 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 ofSub-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 Suh-Recipient's performance of this Agreement, except claims arising from. the concurrent or sole negligence of the City or its officers, agents or employees. The Sub-Recipient will indemnify, hold harmless, and defend the City against any and all claims, demands, damages, costs, expenses, or liability arising out. of the Suh- Recipient'sper. formance ofthis Ag-reementexcept 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"): 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-Kecipient 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 Suh-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. X15 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 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 a~ntrary to this Agreement is not binding upon either party unless it is in writing and signed by br>th parties. (). (:ONSTRi.1( TI()N_111~ID 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 (.;ourt of the ~udicial District in and for the City of Bozeman, Montana. This Agreement klas 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. 5 P. .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 partT 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. (~. ELIC7IBILITY The Sub-Recipient certifies that the Sub-Kecipient and the Sub-recipient's principals are not debarred, suspended, voluntarily excluded, or otherwise ineligible for participation in federally assisted contracts under Executive <:)rder 12549, "Debarment and Suspension". (24 C):~R 24.505) IN WITNESS WI IEREOF, the parties hereto have executed this Sub-Recipient Agreement nn the 26th day of May, 2008. SUB-RF.CIPIF,NT: CITY: ~/ 4 ~ Kathleen Tonkovich Date Chris Iiukulski Date President, Board of Directors City Manager Gallatin Development Corporation, City of Bozeman DBA "Prospera Business Network" st: Attest: Rod R'deno Date Date Secretar}~/Trc. urer, Board of Directors City Clerk Gallatin Development Corporation, City of Bozeman DBA. "Prospera Business Network 6