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HomeMy WebLinkAboutMemorandum of Understanding with F & h LLC for HUD funded downtown reconstruction.pdf Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Josset Gauley, Grants Coordinator Anna Rosenberry, Finance Director Chris Kukulski, City Manager SUBJECT: Memorandum of Understanding with F&H LLC for Department of Housing and Urban Development (HUD) funded downtown reconstruction. MEETING DATE: May 17, 2010 AGENDA ITEM TYPE: Consent RECOMMENDATION: Authorize the City Manager to sign the Memorandum of Understanding (MOU) between the City of Bozeman and F&H LLC for HUD-funded 3rd floor construction of the new F&H building located at the site of the downtown explosion. BACKGROUND: Upon completion of Environmental Assessment (EA) and HUD clearance, the City of Bozeman will receive a HUD-EDI-SP grant in the amount of $974,000 for reconstruction at the main street explosion site. Of this funding, $768,654 has been designated to support the costs of constructing the 3rd floor of the F&H building. As a designated beneficiary of HUD funding, F&H LLC is responsible for completing construction and compliance with HUD regulations as outlined in the Memorandum of Understanding. FISCAL EFFECTS: Signing the MOU will allow for the City to begin releasing designated HUD grant funds to F&H LLC on a reimbursement basis for eligible expenses. ALTERNATIVES: As suggested by the City Commission. Attachments: Memorandum of Understanding Report compiled on: May 10, 2010 21 Memorandum of Understanding between the City of Bozeman and F&H LLC Page 1 of 6 Memorandum of Understanding between the City of Bozeman and F&H LLC THIS IS AN AGREEMENT made as of _________________, between THE CITY OF BOZEMAN, a Municipal Corporation, Bozeman, Montana 59715 (the “CITY”) and F&H LLC, 2215 Arrowleaf Hills Drive, Bozeman, Montana 59715 (the “BENEFICIARY”). WHEREAS, it is the intent of this Memorandum to recognize accountability to the public and transparency in the use of federal appropriations is critical to ensuring the public maintains a high level of trust in governmental operations; and WHEREAS, the specific purpose of this Memorandum is to designate the roles and responsibilities of the CITY and the BENEFICIARY in the use of $768,654.00 of federal Housing and Urban Development (HUD) appropriations for construction of a third floor on the F&H building in downtown Bozeman. NOW THEREFORE, in consideration of BENEFICIARY receiving funding under this Memorandum and pursuant to the federal appropriations the parties agree as follows: ARTICLE 1: DESIGNATED BENEFICIARY/START OF CONSTRUCTION 1.1 Although the CITY is the designated recipient of the federal appropriation, the BENEFICIARY shall also be obligated in meeting all requirements of local, state, and federal law regarding the use of this appropriation. If both the CITY and the BENEFICIARY cooperate fully in fulfilling the CITY’s reporting requirements accountability to the public and transparency in the use of this federal appropriation will be enhanced. 1.2 The CITY designated the BENEFICIARY as a sub-recipient / beneficiary of the Department of Housing and Urban Development Economic Development Initiative Special Project funding (HUD EDI-SP) (hereinafter referred to as the “FUNDING”). The BENEFICIARY’s FUNDING is designated to provide funds for construction of the F&H Building at 209-219 East Main Street, Bozeman, MT and is specifically appropriated for costs associated with the construction of a third story on the building. The BENEFICIARY shall receive FUNDING up to $768,654.00 as outlined in the attached project budget (Attachment 2). 22 Memorandum of Understanding between the City of Bozeman and F&H LLC Page 2 of 6 1.3 Construction using the FUNDING shall commence no sooner than the CITY receives final environmental clearance from HUD. ARTICLE 2: BENEFICIARY RESPONSIBILITIES 2.1 The BENEFICIARY agrees that as a condition of continuing to receive the FUNDING the BENEFICIARY shall be responsible for participating with the CITY in complying with all reporting requirements of the FUNDING, including but not limited to the applicable requirements of 24 CFR Part 85 (except as indicated in this Memorandum) and the federal Office of Management and Budget’s Circulars A-87 (revised 5/4/95, as further amended 8/29/97) and A-133 (revised June 27, 2003). As such, the BENEFICIARY agrees to be bound by the federal HUD requirements in the same capacity as the CITY regarding this appropriation and specifically agrees the HUD requirements are included herein by reference and shall be applicable as if fully contained herein. (See Attachment 3 for a partial description of the HUD legal requirements.) In doing so, the BENEFICIARY shall fully assist the CITY in meeting its reporting requirements by providing all information and documentation requested by the CITY regarding the use of FUNDING for, but not limited to, the following: 1. The procurement of all materials, including identification of source, prices, and any competitive bidding process employed; 2. All subcontracts entered into and amounts paid and any competitive bidding process used to enter into subcontracts; 3. All wages paid to employees of the contractor and any subcontractors; and 4. Any other aspects of construction wherein the FUNDING is applied. 2.2 The BENEFICIARY shall ensure all wages paid under the FUNDING shall comply with the CITY’s living wage ordinance (Chpt. 2.96, Bozeman Municipal Code.). If state or federal wage requirements apply, the BENEFICIARY shall ensure all wages paid using the FUNDING shall comply with any applicable federal or state wage laws. 2.3 The BENEFICIARY recognizes and agrees that failure to comply with these requirements or failure to complete construction may result in the CITY suspending or revoking the expenditure of FUNDING. Failure to comply with these requirements or complete construction may also result in the CITY requiring the BENEFICIARY to repay any amount previously paid to the BENEFICIARY if the CITY is so obligated by HUD. ARTICLE 3: CITY OF BOZEMAN RIGHTS/RESPONSIBILITIES 3.1 Pursuant to the HUD requirements listed in Article 2, above, the CITY is responsible for ensuring the use of the FUNDING complies with all federal legal requirements. The CITY 23 Memorandum of Understanding between the City of Bozeman and F&H LLC Page 3 of 6 agrees to cooperate fully with the BENEFICIARY in expending funds authorized under the federal appropriation. To do so, The CITY shall name a Project Coordinator who shall be the liaison between the BENEFICIARY and the CITY. The Project Coordinator shall be Josset Gauley. 3.2 The CITY shall have the right of review and examination of the BENEFICIARY’s project regarding construction and expenditures at all times. 3.3 The City may suspend or terminate the provision of FUNDING if the BENEFICIARY fails to comply with the requirements of Article 2 and may also require the BENEFICARY repay any amount previously paid to the BENEFICIARY if the CITY is so obligated by HUD. ARTICLE 4: FUNDINGAND REIMBURSEMENT PROVISIONS 4.1 The BENEFICIARY submitted a project budget with the original FUNDING application, stating a total budget of $768,654.00. Reimbursable expenses are limited to items presented in this budget (Attachment 2). Any project budget revisions should be submitted to the City of Bozeman. Total FUNDING to the BENEFICIARY is limited to a total of $768,654.00. No funds shall be used for any purpose except those for 3rd story construction as outlined in Attachment 1 and Attachment 3. 4.2 HUD requires that no more than 20% of the grant award ($193,650) on non-construction expenses (environmental review, engineering, architecture, etc.) The BENEFICIARY submitted a project budget stating a total non-construction budget of $54,687.00. Any revisions should be submitted to the City of Bozeman for review and approval. 4.3 Prior to invoicing, the City will need a timeline of quarterly budget expenses in order to book expenses under the appropriate fiscal year. 4.4 Eligible reimbursement requests are limited to the budget line items in Attachment 2 and should be submitted to the Grants Coordinator, Josset Gauley in the Finance Department. 4.5 Reimbursement requests shall include an invoice from the BENEFICAIRY and shall be supported with receipts and purchase orders, where applicable, from contractors, subcontractors, and/or material providers. The CITY may request additional documentation or require site inspection to ensure the work and/or materials have been completed or installed pursuant to the local and state building codes. 4.6 The CITY shall use best efforts to ensure the timely payment of all submitted invoices. 4.7 The BENEFICIARY will be considered a grant “beneficiary” and will not be subject to HUD’s regular procurement requirements. 24 Memorandum of Understanding between the City of Bozeman and F&H LLC Page 4 of 6 4.8 The BENEFICIARY shall invoice the City of Bozeman for eligible expenses. 4.9 The City of Bozeman will be subject to HUD procurement requirements when invoiced directly by the contractor. ARTICLE 5: GENERAL CONSIDERATIONS 5.1 I Inspection and Audit. All books, papers, records, payrolls, vouchers and invoices relating to project costs by the BENEFICIARY shall be made available to the CITY, or its authorized representatives, for audit and review, at the BENEFICIARY’s respective offices at all reasonable times during the contract period and for three years from the date of final payment. 5.2 Federal Disposition Rules Not Applicable. As a beneficiary of HUD funding, property disposition requirements to not apply. (The BENEFICIARY may sell the property without reimbursement to HUD). 5.3 Nondiscrimination. The BENEFICIARY agrees not to discriminate in the fulfillment of this Memorandum and in the expenditure of any FUNDING under the appropriation on the basis of race, color, religion, creed, sex, age, marital status, national origin, or actual or perceived sexual orientation, gender identity or disability. Furthermore, the BENEFICIARY agrees this requirement shall apply to the hiring and treatment of its contractors and to all subcontracts. The above shall apply except when the reasonable demands of a position require an age, physical or mental disability, marital status or sex distinction. The BENEFICIARY shall be subject to and comply with Title VI of the Civil Rights Act of 1964; Section 140, Title 2, United States Code, and all regulations promulgated thereunder. 5.4 Defend, Indemnify, and Hold Harmless. The BENEFICIARY agrees to: 1. Waive any and all claims and recourse against the CITY and 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 provision of funds under the HUD appropriation for the improvements to the BENEFICIARY’S real property; and 2. To indemnify, hold harmless, and defend the CITY and its agents, principals, and employees from and against any and all liability (including liability where activity is inherently or intrinsically dangerous), damages, losses or costs, including but not limited to reasonable attorney’s fees (including fees of the Bozeman City Attorney or 25 Memorandum of Understanding between the City of Bozeman and F&H LLC Page 5 of 6 retained outside counsel) arising out of or resulting from the BENEFICIARY’s use of funds under this Agreement or a third party’s negligence, recklessness, or intentional misconduct resulting from the BENEFICIARY’s use of funds under this Agreement, or compliance with all federal, state and local law resulting from the BENEFICIARY’s use of funds under this Agreement. In the event of an action filed against the CITY resulting from BENEFICIARY’s performance under this agreement, the CITY may elect to represent itself and incur all costs and expenses of suit. The obligations of the BENEFICIARY’s to defend, indemnify and hold harmless the CITY will apply to any suit, cause of action, claim, cost or obligation including, without limitation, those alleged under the common law or pursuant to a federal or state statute or regulation including those arising in tort, trespass, nuisance, and strict liability. These obligations shall survive the completion of construction and the expenditure of all funds allocated under the federal appropriation and shall continue in effect for the life of the improvements. 5.5 Insurance. The BENEFICIARY shall maintain adequate liability and property insurance on the F&H building from the date of commencement of construction until two (2) years after the building is legally occupied and such declaration shall name the CITY as an additional insured and shall contain coverage for no less than $750,000 per claim and $1,500,000 per occurrence. The BENEFICIARY shall provide a copy of the insurance declaration to the CITY prior to the commencement of construction and annually thereafter until the two-year period has run. 5.6 Public Records. The PARTIES recognize all documents created pursuant to the FUNDING of the PROJECT and reporting are public documents available for inspection through the CITY and the BENEFICIARY specifically agrees that no trade secrets exist in any document. The CITY will protect proprietary information of the BENEFICIARY, limited to bank account numbers or related matters, to the greatest extent permissible by law. 5.7. Severability: If any provision of this Memorandum is held to be void or unenforceable by a court, the validity of the remaining provisions shall not be affected and the rights and obligations of the Parties shall be construed and enforced as if the Agreement did not contain the particular provision held to be void or unenforceable. 5.8 Venue and Choice of Law: This Memorandum shall be construed under the laws of the State of Montana and the Parties agree venue shall be the Eighteenth Judicial District, Gallatin County, Montana. 26 Memorandum of Understanding between the City of Bozeman and F&H LLC Page 6 of 6 5.9 Attorney Fees: That in the event it becomes necessary for either Party of 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 or the Party giving notice shall be entitled to reasonable attorney's fees and costs, including fees, salary, and costs of in-house counsel to include the Bozeman City Attorney or retained outside counsel. 5.10 Amendment/Modification: That any amendment or modification of this Contract or any provisions herein shall be made in writing or executed in the same manner as this original document and shall after execution become a part of this Contract. 5.11 Interpretation and Construction. This Agreement has been jointly drafted and/or reviewed by the Parties hereto following negotiations between them. It shall be construed according to the fair intent of the language as a whole, and not for or against either of the Parties. 5.12 Independent Review/Authority to Sign: The Parties acknowledge that they have been advised by independent legal counsel, not retained or paid by the other, regarding this Agreement, and have entered it freely, without duress or coercion. Each Party represents to the other that the person signing below on its behalf has authority to bind their respective entities to this Agreement. In witness whereof, the Parties hereto do make and execute this agreement. City of Bozeman, Montana F&H, LLC (BENEFICIARY) By: ______________________ By: __________________________ Chris A. Kukulski, City Manager Mike Hope, Member Date:____________________ Date:________________________ Approved as to Form: __________________________ Greg Sullivan, City Attorney 27 Attachment 1: F&H Project Proposal 1 28 Attachment 1: F&H Project Proposal 2 29 Attachment 2: F&H Building Project Budget 30 Attachment 3: HUD Legal Requirements – HUD-EDI-SP Grants. Source – HUD-EDI-SP 2010 grant application pages 4-7 1 31 Attachment 3: HUD Legal Requirements – HUD-EDI-SP Grants. Source – HUD-EDI-SP 2010 grant application pages 4-7 2 32 Attachment 3: HUD Legal Requirements – HUD-EDI-SP Grants. Source – HUD-EDI-SP 2010 grant application pages 4-7 3 33 Attachment 3: HUD Legal Requirements – HUD-EDI-SP Grants. Source – HUD-EDI-SP 2010 grant application pages 4-7 4 34