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HomeMy WebLinkAbout08- Funding Agreement Between City and Northern Rocky Mountain Resource Conservation & Development AreaCommission Memorandum REPORT TO: 'Honorable Mayor and City Commission FROM: Anna Rosenberry, Finance Director Chris Kukulski, Ciiy Manager ~, SUBJECT: Consent Item Approve and Authorize the Mayor to Siam the Funding Agreement Between The City of Bozeman and Northern Rocky Mountain Resource Conservation & Development Area. MEETING DATE: October 20, 2008 RECOMMENDATION: Approve the attached Funding Agreement. BACKGROUND: On August 11, 2008 the Commission approved $60,000 for funding of the Northern Rocky Mountain (NRM) RC&D's Big Sky Energy Revolving Loan Fund. The attached document fully outlines our agreement with NRM RC&D for adnnistration of this loan fund. The agreement was based on the proposal documents that were submitted to the Commission by the NRM RC&D in August, at the time of their request. Loan Awards: Loans will be awarded to small businesses, as defined by the US Small Business Administration, within the city limits of Bozeman. The RC&D will be responsible for all facets of the RLF, including the following: a) Developing of any Policies and Procedures as they relate to the RLF and its administration. b) Conducting the loan application process, including but not limited to: (1) Application documentation; (2) Application review; (3) Credit analysis; (4) Loan package development; and (5) Collaboration with other funding sources as may be necessary to provide complete financing Annual Financial Reporting: The RC&D will submit an annual written report, within 60 days of the close of the fiscal year. The report will contain a description of the loans made and projects funded with City dollars, the payment status of outstanding loans, the balance of the loan loss reserve fund, and any other information the RC&D wishes to communicate to the City. The Loan Fund will be included in the RC&D's annual independent financial review conducted in accordance with Generally Accepted Accounting Principles (GAAP). At the time the RC&D is required to perform an annual independent audit, the Big Sky Energy Revolving Loan Fund will be covered in that audit. Copies of the financial review, report or audit report will be sent to the City Clerk within 30 days of completion each year. Administration Costs & Fund Growth: The RC&D will retain all money including principal and interest as a result of the grant award. The interest portion of the loan repayments and earned interest will be divided: 50% to the RC&D for administration, management and recording of fund income and expenses. 25°io to a loan loss resen•e account, established in order to replenish the RLF when losses occur, and 25°.o to increases to the loan fund. FISCAL EFFECTS: Upon approval, the City will disburse $60,000 in Development Impacts (Big Box} Fund -Economic Development money to the Northern Rocky Mountain RC&D for the Big Sky Lnergy Fund. ALTERNATIVES: As suggested by the City Comtnission. Respectfully submitted. Anna Rosenberry, Finance Director Chris Kukulski, City Manager Report compiled on: October 15, 2008 Attached Documents: Funding Agreement FUNDING AGREEMENT The City of Bozeman and Northern Rocky Mountain Resource Conservation ~ Development Area THIS AGREEMENT is entered into this ~D~day of G bel~, 2008, by the City of Bozeman, herein referred to as the "City" and Northern Rocky Mountain Resource Conservation ~ Development Area, a nonprofit regional development corporation (herein rGIGITed to as the "RC$cD"}. WITNESSETH THAT: WHEREAS, the City maintains a fund to mitigate the impacts of large-scale retail developments, called the "Development Impacts Fund°; and ~, WHEREAS, the City of Bozeman received a request from RC&D for an allocation from the Development impacts Fund to capitalize a Revolving Loan Fund ("RLF"} for the purpose of financing energy efficiency, energy conservation and green energy production measures by small businesses within the Gity limits of Bozeman; and WHEREAS, a report has been prepared in accordance with the Commission's policies for Development Impacts Fund expenditures and was presented to the Commission on July 14, 2008; and WHEREAS, a public hearing on the request for funding was duly noticed and held on July 14, 2008 and August 11, 2008; and WHEREAS, on August 11, 2008, the Commission approved the allocation of $60,000.00 to RC&D for the purposes stated, and authorized and directed staff, upon satisfaction by the applicant of the conditions of approval, to prepare the necessary documents to proceed with the disbursement of funds; and NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth in this Agreement, the parties agree as follows: A. PURPOSE. The City agrees, under the terms and conditions of this Agreement, to provide $60,000.00 of Development Impacts funds as a grant to the RCB~D for the purpose of providing financing, and to cover costs of administering and maintaining the RLF. The City agrees that cone-time startup fee of $5,000.00 will be utilized from the $60,000.00 granted to develop and carry out a marketing Funding Agreement with the City of Bozeman, MT and the Northern Rodcy Mountain Resource Conservation ~ Development Area Page 1 of 5 campaign for the fund and for administrative and accounting evs#s associated with setting the fund. B. SEPARATE LEGAL ENTITYlADMINSITRATION. There shall be no separate legal entity created as a consequence of this Agreement. C. INDEPENDENT CONTRACTOR. It is understood by the parties hereto that the RC&D is an independent con#~actor and that neither its principals nor its employees, if ~il~rar~" employee3_~~f. 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 RC&D has obtained, and will maintain at its expense for the duration of this Agreement, coverage in a workers' compensation plan for its principals and employees for the services to be performed hereunder. D. SCOPE OF SERVICES. The RC&D will perform the following services: It is understood and agreed by the parties tha~'the services of the RC&0 do not inc de any of the following: legal advice, fiscal audits or assistance with activities not related #o this grant. 1. The RC&D will be responsible for all facets of the RLF, including the fallowing: a) Developing of any Polices and Procedures as they relate to the RLF and its administration. b) Conducting the loan application process,.including but not limited to: (1) Application documentation; (2) Application review; (3) Credit analysis; (4) Loan package development; and (5) Collaboration with other funding sources as may be necessary to provide complete financing 2. The RC&D will maintain reasonable records of its performance in a manner consistent with generally accepted accounting principles. The RC8~D will allow the City or their authorized representatives' access to these records at any time during normal business hours. At the request of the City, with reasonable frequency, the RC8~D will submit•to them, in the format Funding Agreement with the City of Bozeman, MT and the Northam Rodcy Mountain Resource Conservatlon & Development Aron Page 2 of 5 prescribed by them, status reports on its performance under this agreement The RC8~D will also submit an annual written report, within 60 days of the close of the fiscal year, to the City Commission. The report must contain a description of the loans made and projects funded with City dollars, payment status of outstanding loans, balance of the loan loss reserve fund, and any other information the RC&D deems necessary. 3. The RC&D will retain all money including principal and interest as a result of the grant award. The interest portion of the loan repayments and earned interest will be divided: 50°h to the RC&D for administration, management and recording of fund income and expenses, 25% to a loan loss reserve account, established in order to replenish the RLF when losses occur, and 25% to increases to the loan fund. . 4. The RC&D may opt to subcontract services in this agreement, providing the subcontractor meets the same standards and requirements as the RC&D. ~, E. ADMINISTRATION. The Big Sky Energy Revolving Loan Fund will be included in the RC&D's annual independent financial review conducted in accordance with Generally Accepted Accounting Principles {GAAP). At the time the RC&D is required to perform an annual independent audit, the Big Sky Energy Revolving Loan Fund will be covered in that audit. Copies of the financial review report or audit report will be sent to the City Clerk within 30 days of completion each year. F. CONFLICT OF INTEREST. The RC&D covenants that it presently has no interest, direct or indirect, in the projects financed by the RLF which would conflict in any manner or degree with the performance of its services hereunder. The RC&D further covenants that, in performing this Agreement, it will employ no person who has any such interest. G. DISP©S!TIOt~ OF REAL PROPERTY ORE UIP[L'IENT AC UIREQ. !n the event that this agreement is terminated by either party, the RC&D will transfer to the City of Bozeman any funds on hand at the time of expiration including the assets of the loan loss reserve account. The RC&D will also transfer to the City all financial documentation of asset balances, payment status, and loan agreements, and will assign any accounts receivable of Big Sky Energy RLF funds to the City. H. CIViL RIGHTS ACT OF 1964. The RC&D 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 partiapation in; be Funding Agreement with the Clty of Bozeman, MT and the Northern Rocky Mountain Resource Conservation & Development Aroa Pape 3 of 5 denied the benefits of, or be subjected to discrimination under any. program or activity receiving federal financial assistance. i, NON-DISCRIMINATION. The RC8~D 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. J. ACCESS TO RECORDS. It is expressly understood that the RC&D's records relating to this Agreement will be available during normal business hours for inspection by the City, and, when required by law, the Montana Legislative Auditor and Legislative Fiscal Analyst. K. INDEMNIFICATION. The RC&D waives any and all claims and recourse against fhe 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 RC&D's performance of this Agreement, except claims arising from the concurrent or sole negligence of the City or their officers, agents or employees. The RCB~D will indemnify, hold harmless, and defend the City against any and all claims, demands, damages, costs, expenses, ar liability arising out of the RC&D's performance of this Agreement except for liability arising out of the concurrent or sole negligence of the City's or its officers, agents, or employees. L. TERMINATION OF AGREEMENT. tf any of the following events occur, the City may, in their sole discretion, declare such event a default under this Agreement: 9 . Any representation or warranty made by the RCS~D in this Agreement or in any request or certificate or other information furnished to fhe City under this Agreement proves to have been incorrect in any material respect; or 2. The RC&D faits in any material respect to carry out its obligations as provided under this Agreement. If the RC&D fails to pertorm any of its duties under this Agreement or if any even# of default occurs, the City may declare the RC&D to be in default and thereafter give the RCB~D written notice setting forth the action or inaction which constitutes the default and giving the RC&D 45 days in which to correct the default. If the RC&D fails to correct the default within 45 days of receipt of this notice, the City may notify the RC8~D in writing that any amount that is payable under this Agreement is due and payable in full within 45 days and this Agreement is terminated. It is agreed by the parties that the provisions of this Agreement provide for reasonable and sufficient notice to be given to the RC~D in case of the RCBD's failure to comply with any of its covenants and that this notice is sufficient for the RC&D to rectify its actions ar inactions of default. Funding Agreement with the City of Bozeman, MT and the Northam Rocky Mountain Resource Conservation & Development Area Page 4 of 5 The waiver by the City of any default by the RC&D does not constitute a waiver of a con#inuing breach or a waiver of a subsequent breach. Any agreement contrary #o this Agreement is not binding upon either party unless it is in writing and signed by both parties. The RC&D may terminate this agreement at its sole discretion by giving the City Cierk of the City of Bozeman a written notice of intent 90 calendar days prior to termination. Upon notice, RC&D will arrange with the City for disposition of assets, described in Section G of this agreement. M. CONSTRUCTION AND VENUE. This Agreement will be construed under and governed by the laws of the State of Montana. 1"he City and the RC&D 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 18th Judicial District in and for the County of Gallatin, Montana. This RC&D Agreement has been approved by the City of Bozeman Commission and the RC&D's, Board of Directors. ~, !N WITNESS THEREOF, the parties hereto have caused this Agreement to be executed. City of Bozeman Northern Rocky Mounta~ RC&D Area ~~~ Kaaren Jacobso ,Mayor Date: ~~'` :-F-=--~, Bernie Lid s, Chairman Date: ~/~.~-- /y ~~ Funding Agreement with the City of Bozeman, MT and the Northam Rocky Mountain Resource Conservation ~ Devebpment Area Page 5 of 5