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HomeMy WebLinkAbout10- Community Development Block Grant Revolving Loan Fund Sub-Recipient Agreement with ProsperaSUB-RECIPIENT AGREEMENT FOR COMMUNITY DEVELOPMENT BLOCK GRANT REVOLVING LOAN FUND TIIIS AGRL;I:',NIFNT is entered into this 21" day of June, 2010 by the CITY OF BOZEMAN, MONTANA, whose address is 121 N Rouse, Bozeman NfT59715, herein referred to as the "Cite ", and the GALLATIN DEVELOPMENT CORPORATION, doing business as PROSPERA BUSINESS NETWORK, whose address is 222 Fast i4lain Street, Suite 102, Bozeman X1'1'59715, a nonprofit economic development corporation, herein referred to as the "Sub-Recipient." WITNESSETH THAT: WHEREAS, the (ity has applied to and has been approved by the ,'Montana Department of Con (NITDOC) for the receipt of grant funds under the Montana Community Development Block Grant Fconornic Development (CDBG) Program; and WHEREAS, the CIn - wishes to use present and future CDBG grants and loan fund revenu to further develop the "(.I)B(; Revolving Loan I 'und" (IU,F) which is designed to leverage private investment ill lie\-,- business for the purpose of generating new jobs within the City- of Bozeman; and WHEREAS, the City has entered into an,kgreement the Sub-Recipient to sub -grant the (DBG funds to the Sub-Recipient and engage the Sub-Recipient to administer the City of Bozeman (RI. F) jointly on their behalf for a period of twelve four months; and WHEREAS, in order to maintain accountability, professional management and program performance, it is dectricd to be in the best interests of the C ' itNT to extend the,\greemeiit with the Sub- Recipient untilNlay 26, 201 as hereinafter provided; WHEREAS, the (,iry desires to sub-grant the CI)BG funds to the Sub-Recipient and engage the Sub- Recipient to administer the RI-F on the City behalf, and WHEREAS, the parties to this \greement understand flint 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' and - new organization or legal entity, NOW THEREFORE, in consideration of the mutual covenants and conditions set out in this kgrceincnt, the parties agree that the foregoing statements of fact are true and correct and further agree as follows: .\. SPI PROVISIONS. The City agrees, under the terms and conditions of thiskgreement, to sub- grant to the Sub-Recipient the (-'DB(, loan funds as a grant for gap financing and technical assistance to eligible borrowers and does hercbv transfer, assign and convey to Sub Recipient all of the City's interest in and to its existing RlJ` loan portfolio. B. IN'l3I-,PFNQF1NJ` CONTRACTOR. It is understood by the parties hereto that the Sub- Recipient is all independent contractor and that neither its principals nor its employees, if anN•, are employees of the Cltt for purposes of tax, retirement system, or social security (FICk) -,Nitbholdllig. It is further understood that pursuant to section 39-71-401, 1\1CA, 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. ' QFSI:RVICE'S, The Sub - Recipient will perform the follo services: il 1, The Sub - Recipient will be responsible for all facets of the CDBO financing program as described in the Management Plan for the CDBG project, a colw of which the CitN� has delivered or will deliver to Sub- Recipient prior to execution of this Agreement. 'llie Sub - Recipient -will also he responsible for all aspects of the Revolving Loan fund program, including the following: (a) Develop, apply- and enforce xx-ritten policies and procedures as they relate to the City of l3ozetriali RLF program and/or administerhig the RLPprograrn 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 m at eri als i als 1). 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. Decisions as to loan approval or denial are the sole responsibility of the RLF Loan Committee, and the Cin� shall have no authority or ability to intervene in the loan approval or denial process. (c) Loan Closing and Docunientation 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 UNIS, Loan accounting software d. Collection and retention, for-Sub-Recipient's use, of loan fee, 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 monthl\I loan payments a. Track, receive, process and account for all monthly loan payments 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 the Rl,FI.oaii 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 clairns in bankruptcy, where applicable, subject to the approval of the Rl,Fl,oan Committee. 2. During the term of this Agreement, the Sub-Recipient will maintain reasonable records of its performance under this Agreement in a manner consistent Nvith generally accepted accounting principles. The 'Sub - Recipient will provide the City (or its authorized representatives) access to these records at any time during normal business hours. Upon xritten request of the City, the Sub-Recipient K will submit to the City, in the format prescribed by the City, semi- annual status reports on its performance under this Agreement. 3. Except as set forth in Section (4) below, the Sub-Recipient will retain, administer, Manage, record, and account to the Cir\~ 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 RIA'prograiii for the benefit of all eligible borrowers located within the City of Bozeman. 4. As payment for the sen-ices rendered by Sub-Recipient under this Agreement, the City agrees that the Sub- Recipient shall retain sixty percent (60') o) annually, payable by the Sub-- Recip ipient retaining and paying such compensation to itself from RLF revenue derived solely from interest earned on deposited funds and interest paid by borrowers on loan granted under the RLF program. '17he Sub-Recipient inay retain and pay such compensation tea itself in installments, not more frcquently than nionthh-, so long as the total of such installments does not exceed the total annual compensation to be paid to Sub- Recipient under this Agreement. 5. Sub- Recipient is entitled to use RLF funds for any costs incurred by Sub-Recipient in connection with the collection of delinquent or defaulted loans, including but not limited to any filing fees or legal fees and costs. It is specifically agreed and understood that any such use of RLF funds in this inanner by the Sub-Recipient is separate and distinct from the payment Sub-Recipient will be rcceiving for its services; that is to say, costs and fees incurred in connection with the collection of delinquent or defaulted loans , ,vill be paid by RLF I °unds and not by the Sub-Recipient. 1). Fl`FFICTIVE DATE AND TEME OF PI 'M;ORMANC This Agreement supersedes all previous agreements, whether written or oral, between the Cin and the Sub- Recipient dealing with the City of Bozeman RLF program, The term of this Agreement shall be twelve months, commencing on the date of execution by the parties. '11 Agreement -,Nill terminate upon expiration of its initial term, - unless extended in writing by mutual agreement of the parties, or if either parn- fiils 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. 1.. CONFLICT OF IN'l 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. I �'. CIVIL RIGHTS ACT OF 1964, The Sub-Rccipicnt will abide by the provisions of the Civil Rights Act of 1964, which states that under Title V1, no person maw-, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefit of, or be subjected to discrimination under any program or activih- receiving federal financial assistance. G. SECTION 109 OF T111-1 I MUSING AND C()14EMUNKIA' OF 1974. The Sub Recipient N-611 comply with the following pr 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 19 or with respect to an otherwise qualified handicapped individual as provided in Section 504 of the Rehabilitation Act of 1973 win also apply to any such program or activity. 3 TI. NONDISCRIMINATION. The Sub - recipient agrees not to discriminate in the fulfillnient of this Agreement on the basis of race, color, religion, creed, sex, age, marital status, national origin, or actual or perceived sexual orientation, gender identity or disabilitv. The Sub- recipient agrees that this requirement shall apply to the hiring and treatment of the Sub-recipient's employees and to all subcontract 1. REPORTS AND INI-ORMATION. The Sub-Recipient will maintain accounts and records, including personnel, property and financial records, adequate to identifi and account for all costs pertaining to this Agreement and such other records as nay be deemed necessary by the City to assure proper accounting for all project funds. These record 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. ADMINISTRATION For purposes of implementing this Agreement, the City- will appoint a local govelinvient project representative that will work Nvith 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 CitA and - I subin'tted with the application for economic development assistance to the Montana Department of Commerce. 3. The Sub - Recipient ,hall ensure that all borrowers, to vv-hoin Sub- Recipient lends R1,Ffunds after the effective date of this Agreement, comply with the State of Montana Department of Commerce's Communit Development Block Grant-Ecorionitc 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 rernodel, 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 Rl.F loan fund and Program as conducted by Sub- Recipient under this Agreement. K. TFRIMINATION - DISPOSITION OFRIA1111, PR(_)Pj. RTC' OR EQUIPINIENTACQUIRED Upon the expiration or termination of this Agreement, the Sub-Recipient will transfer to the CitA 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. 0 1.. INDI MNIFIC ATIC)N The parties agree to waive any and all claims and recourse against one another, 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 parties' performance of this agreement. Each party shall indemnify, defend and hold harmless the other party (including such other party's affiliates, partners, officers, directors, emplot °ees, agents and representatives) against any claims and /or liabilities of any nature, including reasonable attorneys" fees, arising out of the performance of this agreement. The Cart- specifically agrees that RI,F loan decisions are the prerogative of the RLF Loan Committee, and that the Sub- Recipient has no liability of any hind for decisions and actions related thereto, including; loan decisions that were made prior to this agreement. IN 1. TERMINATION O AGRITNII?NT `.I "lus .agreement may be terminated, without cause., by either party. Thirty days prior notice of such termination must be made in writing and delivered to the Sub-Recipient or the City. If any of the following events occur, the City may, in its sole discretion, declare such event a default under this agreement ( "Fvent of Default "): 1. any representation or warrant trade 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 an)- 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 1, above. 'Ilhe 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 doers 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 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 can its behalf.. W ATI'ORNFY'S, Fl-'E'S In the event that either party incurs legal expenses, including the costs, expense salary and fees of the in- house counsel, to include City Attorncv, to enforce the terms and conditions of this Agreement, the prevailing part\ 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. JAA1311,11 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 CTR 24,505) IN ,NT NESS WHEREOF, the parties hereto have executed this Sub-Recipient Agreement on the day o T une, 2010. SUB Niel Kotur Date President, Board of Directors Gallatin Development Corporation, DBA "Prospera Business Network" CITY: Date City Manager City of Bozeman Attest: �/, Larr�- Mikkola Date Secretary Board of Directors Gallatin Development Corporation, DBA "Prospera Business Network , , t of , , " Attest: 130 Date _itv C le Crtv of Bozemr 0 C .5