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HomeMy WebLinkAboutApprove City Manager's signature on Memorandum of Agreement for Admin. of Bozeman Blast Clean-up Loan Fund Commission Memorandum REPORT TO: Honorable Mayor and Commission Members FROM: Anna Rosenberry, Finance Director Chris Kukulski, City Manager SUBJECT: Memorandum of Agreement for Administration of Bozeman Blast Clean- Up Fund with Prospera Business Network MEETING DATE: May, 26, 2009 RECOMMENDATION: Approve City Manager’s Signature on Memorandum of Agreement for Administration of Bozeman Blast Clean-Up Fund with Prospera Business Network. BACKGROUND: On May 18, 2009 the Commission adopted Resolution No. 4168 creating the Bozeman Blast Clean-Up Fund. Prospera Business Network has agreed to administer the Clean-Up Fund, under an agreement similar to their administration of the City’s Economic Development Revolving Loan Fund. Prospera will perform the following: [segments taken from the Agreement, Sections C & D] · Hold the Fund dollars in an interest-bearing account at an insured depository institution fully covered by FDIC insurance. · Upon written certification by the Borrowers and the presentation of detailed itemized invoices indicating the work completed, disburse eligible loan amounts 27 commensurate with the invoice amounts to Borrowers for eligible activities. Borrowers may receive only those amounts for which certification and invoices have been presented and in no case shall receive more than the allocation listed in Section 4. of Commission Resolution No. 4168 establishing the Fund. · Issue account statements to Borrowers for payments according to the terms of each Borrower’s Memorandum of Agreement and Promissory Note(s) on a quarterly basis. · Determine when eligible activities are complete and no more loan funds will be available to Borrowers and recommend to the City when “unused portions” of the Fund capital may be returned to their sources. · Report in writing to the City the balance of the Fund and all outstanding loan balances on June 30, 2009, and each quarter thereafter. · Upon payment by a Borrower to Prospera for any principal amount owed, Prospera will return any funds, other than those that are to return to the City’s Economic Development Revolving Loan Fund, to the City on a quarterly basis. Prospera will transfer directly to the City’s Economic Development Revolving Loan Fund any monies owed to that fund. · As payment for the services rendered by Prospera under this Agreement, the Prospera will retain a 2% (two percent) loan closing and administration fee at the time each loan disbursement is made to the eligible borrowers from the Fund. · Prospera will not be responsible for any costs incurred in connection with the collection of delinquent or defaulted loans, including but not limited to any filing fees or legal fees and costs. · Prospera will contract with an independent accounting firm to conduct an annual audit sufficient to obtain an unqualified opinion of the Bozeman Blast Clean-Up Loan Fund as conducted by Administrator 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. Prospera Board of Directors: The Board of Directors met on May 20th and approved signing this agreement. 28 FISCAL EFFECTS: Under the agreement, the City will transfer the approved funding sources to Prospera Business Network. Prospera will hold the assets, and disburse and collect the loans according to the agreement. This arrangement will be subject to annual audit and will be disclosed in the City’s Comprehensive Annual Finance Report (CAFR.) ALTERNATIVES: As suggested by the City Commission. 29 1 MEMORANDUM OF AGREEMENT FOR ADMINISTRATION OF THE BOZEMAN BLAST CLEAN-UP LOAN FUND THIS MEMORANDUM OF AGREEMENT (“Agreement”) is entered into this 26th day of May, 2009, by the CITY OF BOZEMAN, MONTANA, a self-governing political subdivision of the state of Montana, with principal offices at 121 North Rouse Ave., Bozeman, Montana, 59715 (hereinafter referred to as the “City”), and the GALLATIN DEVELOPMENT CORPORATION, doing business as PROSPERA BUSINESS NETWORK, a nonprofit economic development corporation, with principal offices at 222 East Main Street, Suite 102, Bozeman MT 59715 (herein referred to as “Prospera” or the “Administrator”). WITNESSETH THAT: WHEREAS, downtown Bozeman is a hub of the Bozeman community and quality of life and as such is critical to the City’s economic vitality as it provides immeasurable social and economic benefits to residents and guests of the City of Bozeman; and WHEREAS, an explosion occurred on March 5, 2009, effectively destroying several buildings on the north side of the 200 block of East Main St. in downtown Bozeman; and WHEREAS, the debris of the destroyed buildings continues to exist on several properties at the site; and WHEREAS, several property and business owners whose property and businesses were destroyed in the explosion and resulting fire seek to clean up debris located on the site as quickly as possible to ensure plans for rebuilding are moved forward in as expeditious a manner as possible; and WHEREAS, the City Commission desires to assist the various business and property owners whose property was destroyed in the March 5, 2009 explosion in expediting the cleanup of the affected sites by providing a loan of money to the affected property owners to be used exclusively for cleanup of existing debris and as such has created the Bozeman Blast Clean-Up Loan Fund (the “Fund”); and WHEREAS, the monies for the Fund will consist of $90,000 of revolved funds from the City’s Economic Development Revolving Loan Fund; $110,000 of revolved funds from the City’s Housing Revolving Loan Program; $50,000 from the City of Bozeman general fund, and $50,000 from Northwestern Energy pursuant to the Bozeman Downtown Recovery Fund Participation Agreement, dated the 18th day of May, 2009; and WHEREAS, the City Commission specifically finds loaning money to the affected property owners constitutes a valid public purpose because the existing condition of the properties destroyed in the explosion is having a negative effect on the economic vitality of downtown Bozeman and expediting the cleanup will benefit the entire City of Bozeman; and 30 2 WHEREAS, the City Commission specifically finds that while the loans may be granted to private individuals to expedite the cleanup of the affected properties, the loans benefit the inhabitants of the City of Bozeman as a community, not just as individual property owners; and although private property and business owners may benefit from the loans, the loans provide a public benefit as they show the community’s commitment to the social and economic vitality of downtown Bozeman. WHEREAS, the City desires to engage Prospera Business Network to administer the Bozeman Blast Clean-Up Loan Fund on the City’s behalf, and WHEREAS, Prospera Business Network, as a gesture of good will to the citizens of Bozeman, agrees to act on the City’s behalf as the Administrator of this Fund and distribute the monies allocated under this Fund to the Borrowers and receive payments from the Borrowers, but in no way assumes any liability or responsibility for the repayment of the loan proceeds or assumes any liability whatsoever stemming from the cleanup of the site; 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 PROVISIONS. The City agrees, under the terms and conditions of this Agreement, to transfer to the Administrator the funds allocated to establish the Bozeman Blast Clean-Up Loan Fund. As compensation for Fund administration services, the Administrator will retain a 2% (two percent) loan closing and administrative fee at the time each loan disbursement is made to the eligible borrowers from the Fund. B. INDEPENDENT CONTRACTOR. It is understood by the parties hereto that the Administrator 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 Administrator 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 Administrator will perform the following duties: (a) Hold the Fund dollars in an interest-bearing account at an insured depository institution fully covered by FDIC insurance. (b) Upon written certification by the Borrowers and the presentation of detailed itemized invoices indicating the work completed, disburse eligible loan amounts commensurate with the invoice amounts to Borrowers for eligible activities. Borrowers may receive only those amounts for which certification and invoices have been presented and in no case shall receive more than the allocation listed in Section 4. of Commission Resolution No. 4168 establishing the Fund. 31 3 (c) Issue account statements to Borrowers for payments according to the terms of each Borrower’s Memorandum of Agreement and Promissory Note(s) on a quarterly basis. (d) Determine when eligible activities are complete and no more loan funds will be available to Borrowers and recommend to the City when “unused portions” of the Fund capital may be returned to their sources. (e) Report in writing to the City the balance of the Fund and all outstanding loan balances on June 30, 2009, and each quarter thereafter. (f) Upon payment by a Borrower to Prospera for any principal amount owed, Prospera will return any funds, other than those that are to return to the City’s Economic Development Revolving Loan Fund, to the City on a quarterly basis. Prospera will transfer directly to the City’s Economic Development Revolving Loan Fund any monies owed to that fund. D. ADMINISTRATION 1. As payment for the services rendered by Administrator under this Agreement, the Administrator will retain a 2% (two percent) loan closing and administration fee at the time each loan disbursement is made to the eligible borrowers from the Fund. 2. During the term of this Agreement, the Administrator will maintain reasonable records of its performance under this Agreement in a manner consistent with generally accepted accounting principles. The Administrator will provide the City (or its authorized representatives) access to these records at any time during normal business hours. 3. The Administrator will retain, administer, manage, record, and account to the City for all Fund revenue received subsequent to the date of this Agreement, including principal received from borrowers. 4. The Administrator will not be responsible for any costs incurred in connection with the collection of delinquent or defaulted loans, including but not limited to any filing fees or legal fees and costs. 5. The Administrator will contract with an independent accounting firm to conduct an annual audit sufficient to obtain an unqualified opinion of the Bozeman Blast Clean-Up Loan Fund as conducted by Administrator 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. E. EFFECTIVE DATE AND TIME OF PERFORMANCE. The term of this Agreement shall be five years, commencing on the date of the final disbursement of loan funds to the eligible borrowers from the Fund. 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 Agreement or if an Event of Default occurs, after notice and opportunity to cure as provided in Section M below. 32 4 F. CONFLICT OF INTEREST. The Administrator covenants that it presently has no interest and will not acquire any interest, direct or indirect, in the properties eligible to receive funds from the Bozeman Blast Clean- Up Loan Fund that would conflict in any manner or degree with the performance of its services hereunder. The Administrator further covenants that, in performing this Agreement, it will employ no person who has any such interest. G. CIVIL RIGHTS ACT OF 1964. The Administrator 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. H. SECTION 109 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974. The Administrator 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. I. NONDISCRIMINATION. The Administrator 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. J. REPORTS AND INFORMATION. The Administrator 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 funds from the Bozeman Blast Clean-Up Loan Fund. 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. K. TERMINATION - DISPOSITION OF REAL PROPERTY OR EQUIPMENT ACQUIRED Upon the expiration or termination of this Agreement, the Administrator will transfer to the City all related Bozeman Blast Clean-Up Loan Fund records. L. INDEMNIFICATION The Administrator assumes no liability whatsoever or responsibility for the repayment of any loans from the Fund. The Administrator assumes no liability whatsoever stemming from the cleanup of the site of the affected properties for which this Fund was established (mentioned in Commission Resolution No. 4168). The Administrator 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 33 5 the Administrator’s performance of this Agreement, except claims arising from the concurrent or sole negligence of the City or its officers, agents or employees. The Administrator will indemnify, hold harmless, and defend the City against any and all claims, demands, damages, costs, expenses, or liability arising out of the performance of this Agreement except for liability arising out of the concurrent or sole negligence of the City or its officers, agents, or employees. 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 Administrator 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 Administrator 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 Administrator fails to perform any of its duties under this Agreement or if any Event of Default occurs, the City may declare the Administrator to be in default and thereafter give the Administrator written notice setting forth the action or inaction that constitutes the default and giving the Administrator 45 days in which to correct the default. If the Administrator 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 K above. The parties agree that this Agreement provides for reasonable and sufficient notice to be given to the Administrator in case of the Administrator’s failure to comply with any of its covenants and that this notice is sufficient for the Administrator to rectify its actions or inactions of default. The waiver by the City of any default by the Administrator 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 Administrator 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 Administrator’s Board of Directors, each of which has authorized the undersigned persons to execute this Agreement on its behalf. 34 6 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. ELIGIBILITY The Administrator certifies that it or any of its 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 Agreement on the xxth day of May, 2009. ADMINISTRATOR: CITY: Robert Hietala Date Chris Kukulski Date Chief Executive Officer City Manager Gallatin Development Corporation, City of Bozeman DBA “Prospera Business Network” Attest: Attest: Jeff Burgard Date Stacy Ulmen Date President, Board of Directors City Clerk Gallatin Development Corporation, City of Bozeman DBA “Prospera Business Network 35