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HomeMy WebLinkAbout1999-338 .. RESOLUTION NO. 1999-338 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO APPROVING THE JOINT EXERCISE OF POWERS AGREEMENT CREATING THE RIVERSIDE-SAN BERNARDINO HOUSING AND FINANCE AGENCY AND AUTHORIZATION TO PARTICIPATE IN THE LEASE-TO-OWN PROGRAM. 3 4 5 6 WHEREAS, the City of San Bernardino seeks to promote home ownership to improve 7 the City's housing stock and to further economic development for the welfare of its residents; 8 and 9 WHEREAS, the City of San Bernardino has adopted the promotion of home ownership 10 programs as one of its priority goals in both the Housing Element of the General Plan and the 11 Consolidated Plan; and 12 WHEREAS, there is growing need for cities to find new and cooperative ways to develop 13 programs that will increase home ownership and improve community life; and 14 WHEREAS, the Riverside-San Bernardino Housing & Finance Agency (RISFA) is a 15 cooperative approach among cities that will increase home ownership and thereby improve the 16 quality of community life for those cities participating in the RISF A; and 17 WHEREAS, the City of San Bernardino will further its adopted goal of promoting home 18 ownership within the community through membership in the RISF A; and 19 WHEREAS, the RISF A provides for home ownership programs individually tailored for 20 each member city; 21 NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 22 23 Section 1. The Mayor and Common Council hereby approve the "Joint Exercise 0 24 Powers Agreement Creating the Riverside-San Bernardino Housing & Finance Agency" (th 25 "Agreement") in substantially the form attached hereto. -1- Section 2. The Mayor, as presiding officer, is hereby authorized to execute th 2 Agreement on behalf of the City as an Associate Member and this resolution signifying it 3 adoption by the City Council of the City of San Bernardino and the City Clerk duly appointed, i 4 directed to attest thereto: 5 III1 6 1111 7 III1 8 III1 9 II1I 10 I1II 11 1III 12 III1 13 III1 14 II1I 15 I1II 16 1III 17 IIII 18 1II1 19 III1 20 1II1 21 III1 22 1II1 23 1/11 24 I1II 25 IIII -2- 1999-338 3 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO APPROVING THE JOINT EXERCISE OF POWERS AGREEMENT CREATING THE RIVERSIDE-SAN BERNARDINO HOUSING AND FINANCE AGENCY AND AUTHORIZATION TO PARTICIPATE IN THE LEASE-TO-OWN PROGRAM. 2 4 5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 6 Common Council of the City of San Bernardino at a joint regu1ameeting thereof, held on the 20th day of December ,1999, by the following vote to wit: 7 8 Council Members: Ayes Nays Abstain Absent ESTRADA x 9 - LIEN x 10 - MCGINNIS ~ 11 SCHNETZ ~ 12 SUAREZ x - 13 ANDERSON X 14 MILLER -L 15 16 c~~ h. UPA--lc.- 17 18 The foregoing resolution is hereby approved this ,;2; day of December \t::~ ,1999. 19 -- 20 21 Susan Lien Mayor Pro Tern 22 Approved as to form and Legal Content: 23 James F. Penman City Attorney 24 Jr~ 25 -3- EXHIBIT "A" 1999-338 J. K. CHILTON & ASSOCIATES, INC. MEMBER NASD INVESTMENT BANKERS Lease-to-Own Prol!:ram Description Promoting Home Ownership is Good Public Policy There is a strong correlation between good citizenship and home ownership. Neighborhoods tend to be more stable and suffer less crime when people own their own homes and have a vital stake in their community. Therefore, most cities promote home ownership when possible and when resources are available. The lease-to-oviU program concentrates on making the dream of home ownership possible for families who have sufficient income to make mortgage payments but who have not been able to save enough money to atlord conventional down payment and closing costs. In a lease-to-own program, private industry and a joint powers authority work together to offer new opportunities to a wide range of citizens. The cost of the management of the joint powers authority is covered by the fee paid by the participant. Thus, the home ownership program places no fiscal or administratiye burden on city officials. A city joining a joint powers authority could customize the focus and application of the program within the city by communicating the city's program criteria and priorities to the administrator of the joint powers authority dedicated to the implcmentation of the program. The program could function separatdy from existing housing programs or be used as a tool to enhance or expand those programs. Since a lease-to-own program is self-financing, it increases city resources. The program is free of restrictive low and moderate income provisions or first- time home buyer requirements and is open to all those with incomes up to 140% of median income. The lack of regulatory restriction allows a city the flexibility to tailor lease-to-own criteria to fit its needs and policy goals. A city's use of the program could make possible any combination of the following: . the purchase of any new or existing house by any person meeting city criteria; . the purchase of any new or existing house by municipal employees; . a renter's purchase of a home from an absentee landlord; and, . the purchase and substantial rehabilitation of a house. Although the financing of the program incorporates the use of tax exempt bonds, there is absolutely no fiscal obligation and no indebtedness on the part of any city incurred as a result of the bond financing. In a worst case scenario in which there are no participants, or all participants fail to meet their obligations, the program will remain solvent and the bond holders will receive 100% of their interest and principal. 1236 SOUTH CAMDEN DRIVE. LOS ANGELES, CALIFORNIA 90035 .310-277-4037. FAX 310-277-2833 17500 WEST CHILTON ROAD, BOX 423 . ARIVACA, ARIZONA 85601 . 520-398-9194 . FAX 520-398-3324 Member of the National Association of Securities Dealers, Municipal Securities Rulcmaking Board and the Securities Investor Protection Corporation 1999-338 How the Program Works After signing a three-year lease, the home purchaser makes monthly payments to the program's non-profit corporation which holds title to the home. After three years, lease payments cease to be paid to the non-profit and mortgage payments are paid directly to the mortgage company. The lease-to-own conversion takes place without increases in monthly payments. All lease payments would reflect the monthly payments under a traditional 30-year conyentional fixed rate mortgage established at the time the lease-purchaser commits to the house. Since the home purchaser never pays down payment or closing costs. the home buyer receives, in effect, an outright grant of the down payment and closing costs (approximately 8% of the purchase price of the house) in exchange for paying the 1 % of program costs. Other down payment assistance programs simply increase mortgage amounts to decrease up front costs. In contrast, the lease-to-own program saves the buyer about 7% up front on the price of the house, including closing costs, as demonstrated by the following chart: I Lease-to-own Home Purchase I Unassisted Home Purchase Price of House . $150,000 Price of House $150,000 Mortgage $145,500 Mortl!al!e $145,500 Down Payment $0 Down Payment (3%) $4,500 Closing Costs $0 ClosinQ Costs $7,500 ProQram fee (I %) $1,500 I Total Cost to Buyer I $147,000 I Total Cost to Buyer ,I $157,500 I During the lease period, the purchaser pays down the mortgage, Both principal and interest are paid on the loan so a lease-to-own program truly reduces the effective price of the house and the initial down payment and closing cost barrier to home ownership. Upon conversion to home ownership status, the home owner would make the monthly mortgage payments for the remaining 27 years (30 years minus the 3-year lease period). Thus, the renter has a real opportunity to create equity and a great incentive to become a homeowner. As with any commitment to purchase a home, the buyer chooses more responsibility in order to reap the potential benefits of home ownership. In order to enhance success rates, purchasers will be required to complete home ownership education. During the first three years, a program participant must demonstrate the ability to make payments by meeting the home lease financial obligation. A participant who fails to do so will be evicted and replaced by another family desiring home ownership. The new family benefits from the program costs and amortization already met by the prior participant. ].K.CHILTON & ASSOCIATES, INC. MEMBER NASD INVESTMENT B,\NKERS 1999-338 The home purchaser and substantial rehabilitation The lease-to-own program can assist both in the purchase of a house and in the financing of substantial rehabilitation. In this manner, the program can help upgrade a community and arrest neighborhood deterioration. The lease-to-own program would provide the financing necessary to take advantage of the Freddie Mac program which allows the house to be purchased, rehabilitated, and leased to the program participant at a lease and mortgage rate reflecting the yalue of the house after rehabilitation. The loan originatorlservicer would administer the construction and monitor costs. The program participant would then moye into a substantially improved house and pay a mortgage which rel1ected the purchase price and rehabilitation costs. In this manner, the participant receives the benefit of an improyed house without paving the high interest costs tvpically associated with a second mortgage for home improyement. Forming and Financing the Lease-to-Own Program Lease-to-Own program participants find an existing home or a newly constructed home they would like to purchase. The Authority, through its non-profit corporation, purchases and holds title to the homes purchased on behalf of the program participants. In order to finance the purchase of the homes, the Authority sells Lease-Revenue Certificates of Participation. These Certificates of Participation with five-year maturities are a debt of the Authority only and are payable solely from the lease revenues. Member cities incur no debt. The program uses the proceeds of a Series A bond issue to purchase the house. The Series B bond issue proceeds then provide both the down payment and the closing costs. The basic bond program meets all state and federal tax law requirements in the opinions of nationally recognized bond counsel, tax counsel, and underwriter's counsel. Moreover, a certified public accounting tirm would review the bond program and verify all numbers. Team members have arranged for mortgage pool insurance, lenders, investment agreements, forward purchase contracts, and other critical elements of the program. It is expected that bond insurance will be purchased resulting in the Bonds being rated AAA by Standard & Poors. J. K. CHILTON & ASSOCIATES, INC. MEMBER NASD INVESTMENT BANKERS 1999-338 84 Opinion Daily Bulletin, Tuesday, December 8.1998 Helpful boost for home ownership One of the biggest obstacles to home ownership for mid- dle- and low-income fami- lies always has been the down payment. It's difficult for families who want to purchase a home to raise 5 percent to 10 percent of the pur- chase cost, and still have enough money for closing costs, moving expenses and all the other little things that always seem to arise. That's why a new program involving 10 communities - including two right here in the Inland Valley - is an important step in the right direction. Upland and Rancho Cucamonga are among those cities taking part in the newly created California Cities Home Ownership Author- ity, which will allow middle- and low-income renters to become home buyers for much less than would otherwise be required. CCHOA makes the down pay- ment and covers the closing costs, and the would-be homeowner then leases the property for three years. At the end of that time, the lease is converted to a 30-year, fixed-rate mortgage. Buyers in San Bernardino County will be eligible with incomes up to $65,100. They']; be asked to pay 1 percent of the prop- erty's market value asa paricipa- tion fee and to make the first month's lease payment in advance. While this hardly makes home ownership a reality for eve:')'one, it certainly turns it into a possibil- ity for many people who co.uld not otherwise dream of having their own homes. This is a good thing, not only for them but for their communities. Homeowners are good citizens. people with a vested interest in the future of the cities in which they live. Anything that encourages tha~ vested interest at very little finan. cial risk to taxpayers is an extremely positive step. INlAND VAllEY ;.-. Daily Bulletin Michael R. Ferguson Publisher Michael J. Brossart. ...... ....... . .. ..' Editor Peggy del Toro . . . . . . , . . . . Advertising D~recror Edwin E. Parker. . . . . . . . . . Circulation Director ". -'Emily Billings. . . . . . . . . . . . . Promotion Director Mama McClellan. . . . . . . . . . . Business Manager James M. Missett.......... Production Director Elliott Andorko. . . . . . Human Resources Director Richard L. Nagey . . . . . . . . . . . . . . . MIS Director A LOCALLY OPERATED MEMBER Of THE ... DONREY MEDIA GROUP ~ DONALD W. REYNOLDS, fOUNDER Please Note!: This editorial is for another Joint Powers Authority which limited membership to only 10 cities in southern California and which operates the same way PHFA would operate in your City. 1999-338 JOINT EXERCISE OF POWERS AGREEMENT CREATING THE RIVERSIDE-SAN BERNARDINO HOUSING & FINANCE AGENCY This Joint Exercise of Powers Agreement (the "Agreement"), dated for convenience as June 1, 1999, is made and entered into by the signatories hereto, each a public entity duly organized and existing under the Constitution and laws of the State of California (each a "Member" or a "City" or "County" and, collectively, the "Members"). REmALS WHEREAS, the Members are each authorized and empowered to provide home mortgage loans to qualified persons and families; finance the construction, rehabilitation, acquisition, lease, and sale of housing; promote economic development; finance other capital improvements; and issue revenue bonds to provide the funds therefor; and WHEREAS, Chapter 5 of Division 7 of Title 1 of the California Government Code (commencing at Section 6500) (the" Act") provides that two or more public agencies may by agreement jointly exercise any powers common to the parties to the agreement and may by that agreement create an entity which is separate from the parties to the agreement; and WHEREAS, the parties to this agreement have each determined (1) that the public interest and economy will be served by, and require, the joint exercise of their common powers and (2) that a separate agency shall be created which shall have and exercise those powers common to the Members; NOW, THEREFORE, for and in consideration of the mutual benefits and premises contained herein, the Members agree as follows: ARTICLE 1 DEFINITIONS AND INTERPRETATION Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall have the meanings herein specified for all purposes of this Agreement. Agenc;y The term "Agency" shall mean the Riverside-San Bernardino Housing & Finance Agency created by this Agreement. Agreement The term "Agreement" shall mean this Joint Exercise of Powers Agreement as it now exists or as it may from time to time be amended, supplemented or modified by the addition of signatory parties or by any supplemental agreement or amendment entered into pursuant to the provisions hereof. Associate Member The term "Associate Member" shall mean those Members identified as such in Section 3.03, and which shall not be entitled to appoint a representative to serve on the Board. 1 1999-338 Board The term "Board" shall mean the governing board of directors of the Agency as described in Article 8 hereof. Bonds The term "Bonds" shall mean revenue bonds, notes, certificates of participation, or other evidences of indebtedness of the Agency, authorized and issued pursuant to law. Members The term "Members" shall mean the governmental entities jointly exefClsmg power through, and which are signatory to, this Agreement, and shall include both Voting Members and Associate Members. The Members may also be referred to as the "Cities" or "Counties". Program The term "Program" shall mean the Agency's activity of furthering home ownership in the geographical area of the Members signatory to this Agreement and of financing other capital improvements, through the sale of revenue bonds, the purchase, construction or rehabilitation of housing or other capital improvements, the entering into of leases, the sale of housing, the provision of low-down-payment mortgages for buyers, and the exercise of any other powers available to the Agency under Article 2 or Article 4 of the Act. Voting Members The term "Voting Members" shall mean those Members identified in Section 3.02 as such, and which shall be entitled to appoint a representative to serve on the Board as a voting member. Section 1.02. Captions and Headings. Captions and headings used herein are for convenience of reference only, do not define or limit the scope of any provision hereof, and are not to be considered in construing this Agreement. ARTICLE 2 PURPOSE Section 2.01. Purposes of Agreement and Agency. This Agreement is made pursuant to the Act for the joint exercise of certain powers common to the Members. The Members are empowered by the laws of the State of California to exercise powers as specified in the Recitals. It is also the purpose of this Agreement to provide for the inclusion at a subsequent date of such additional Members as may desire to become signatories to this Agreement and members of the Agency. The purpose of the Agency is to carry out the Program for the public good and for the residents who will benefit from the increased availability of housing affordable for purchase by them. ARTICLE 3 MEMBERSHIP; WITHDRAWAL Section 3.01. Contract With All Other Members. Each Member certifies that it intends to and does contract with all other Members which are signatories to this Agreement and with 2 1999-338 such other Members as may later be added as signatories to this Agreement. Each Member also certifies that the deletion of any Member as a party to this Agreement, except as a joint effort to terminate the Agreement pursuant to Section 7, shall affect neither this Agreement nor its intent to contract with the remaining Members to carry out the purpose of this Agreement. All Members to this Agreement acknowledge and agree that additional parties may become Members to this Agreement without formal amendment hereof, by the execution of a counterpart signature page. Section 3.02. Voting Members. The Voting Members of the Agency are listed on Exhibit A, attached hereto, and shall be entitled to appoint a City Councilmember, a member of the Board of Supervisors or a staff member to serve on the Board. Section 3.03. Associate Members. The Associate Members of the Agency are listed on Exhibit B, attached hereto, and shall not be entitled to appoint a City Councilmember, a member of the Board of Supervisors or a staff member to serve on the Board, and shall not have voting power on such Board. Section 3.04. Withdrawal. Members of the Agency may withdraw from membership in the Agency at any time upon thirty (30) days' advance written notice, subject to the following exceptions: (a) the restriction on withdrawal contained in Section 7.01 hereof; and (b) a Member may not withdraw for so long as bonds or other obligations of the Authority issued pursuant to and under the Program are outstanding, but only if the proceeds of such bonds or other obligations were used to make loans or finance a project within the jurisdiction of such Member. ARTICLE 4 CREATION OF THE AGENCY Section 4.01. Creation of the Agency. There is hereby created a joint exercise of powers authority to be known as the Riverside-San Bernardino Housing & Finance Agency. The Agency shall be a public entity separate from the Members. The debts, liabilities, and obligations of the Agency shall not constitute debts, liabilities, or obligations of any Member. ARTICLE 5 POWERS OF THE AGENCY; RESTRICTION UPON EXERCISE Section 5.01. Powers of the Agency. The Agency shall have all powers common to the Members and is hereby authorized to do all acts necessary for the exercise of said common powers, including, but not limited to, the following: (a) the power to make and enter into contracts; (b) the power to accept the assignment of contracts which relate to the purposes of the Agency and which were entered into by the Members prior to formation of the Agency; (c) the power to incur debts, liabilities, or other obligations which are not debts, liabilities or obligations of the Members, or any of them; 3 1999-338 (d) the power to employ agents and employees; (e) the power to acquire, construct, manage, maintain, and operate any building, works or improvements; (f) the power to acquire, hold, lease (as lessor or lessee), or dispose of property, including property subject to home mortgages; (g) the power to sue and be sued in its own name; (h) the power to incur debts, liabilities or other obligations to finance the Program and any other powers available to the Agency under Article 2 or Article 4 of the Act; and (i) all powers necessary and proper to carry out the terms and provisions of this Agreement, or otherwise authorized by law. Section 5.02. Membership Agreements. The Agency shall have the power to enter into membership agreements with any public agency upon the approval of the Board. Section 5.03. Other Powers. Each Member agrees that: (a) all of its powers to acquire, construct, rehabilitate, finance, lease, or dispose of property may be exercised by the Agency; (b) the Agency may originate or acquire home mortgages with respect to properties within its geographical boundaries to further the Agency's Program; and (c) its grant of power to the Agency is to further the purposes of the Agency and this Agreement and shall not be deemed to limit its power to act independently of the Agency. Section 5.04. Restrictions. The powers of the Agency shall be exercised subject only to the restrictions upon the manner of exercising such powers as are imposed upon the City of . California, as provided in Section 6509 of the Act. Section 5.05. Investments. Subject to the applicable provisions of any indenture or resolution providing for the inveshnent of moneys held thereunder, the Agency shall have the power to invest any money in the treasury that is not required for the immediate necessities of the Agency, as the Agency determines is advisable, in the same manner as local agencies pursuant to California Government Code Sections 53601 et seq. ARTICLE 6 COOPERATION Section 6.01. Additional Proceedings and Actions. Each Member agrees to undertake such additional proceedings or actions as may be necessary in order to carry out the terms and the intent of this Agreement. Section 6.02. Actions Affecting Ratings. Each Member further agrees to refrain from taking any actions which would, to its knowledge, tend to adversely affect the rating on any Bonds sold or to be sold to further the Program of the Agency. The exercise by any Member of 4 1999-338 its independent power to issue bonds or other indebtedness shall not be within the restrictions of the preceding sentence. ARTICLE 7 TERMINATION OF POWERS; DISTRIBUTION OF ASSETS Section 7.01. Termination. The Agency shall continue to exercise the powers herein conferred upon it until the earlier of June 1, 2049 or such time as all Members shall have mutually agreed to terminate this Agreement. However, if any Bonds shall have been issued and are outstanding, then neither this Agreement nor the powers granted hereunder shall terminate, and Members benefiting from such Bonds, directly or indirectly, shall not withdraw from the Agency, until all such Bonds and the interest thereon shall have been paid or provision for such payment shall have been made. Section 7.02. Distribution of Assets. (a) In the event that Bonds are not issued, upon termination of this Agreement, all assets of the Agency shall be distributed to the respective grantors or assignors in proportion to their respective contributions. (b) In the event that Bonds are issued and following payment of all principal and interest on the Bonds, or following the provision therefor, upon termination of this Agreement, one half of all assets of the Agency shall be divided equally among the Voting Members, and the other half of the Agency's assets shall be divided pro rata among all Members, based on participation in the Program. Section 7.03. Continued Existence of Agency. Upon termination, this Agreement and the Agency shall continue to exist for the limited purpose of distributing the assets of the Agency and all other functions necessary to close out the affairs of the Agency. ARTICLE 8 GOVERNING BOARD Section 8.01. Board of Directors. The Agency shall be governed by a Board of Directors consisting of one City Council member, member of the Board of Supervisors or staff member (each, a "Director," and collectively, the "Board") from each of the Voting Members. Each of the Directors shall be approved by their respective city councils or board of supervisors forthwith upon approval of this Agreement, and each shall serve at the pleasure of his or her respective city councilor board of supervisors. Section 8.02. Alternates. The city councilor board of supervisors of each Voting Member shall appoint one alternate to the Board of Directors, who shall be a member of the city councilor the board of supervisors or of the staff of such city or county. When the Director from any Voting Member is not present at a Board meeting, the alternate director appointed by such Voting Member may serve in his place with the same authority as a Director. Section 8.03. Compensation and Expenses. Directors may receive compensation for their services pursuant to an authorizing resolution of the Board providing therefor. Each member may be reimbursed for actual expenses, including travel incident to service as a Director, pursuant to an authorizing resolution of the Board. 5 1999-338 ARTICLE 9 MEETINGS OF THE BOARD Section 9.01. Regular Meetings. The Board shall hold at least one regular meeting each fiscal year and, by resolution, may provide for the holding of regular meetings at more frequent intervals. The regular meetings of the Board shall be held in the offices of one of the Voting Members or at such other place and upon a date and hour as may be fixed from time to time by resolution of the Board. Section 9.02. Special Meetings. Special meetings of the Board may be called in accordance with the provisions of California Government Code Sections 54950 et seq. All meetings of the Board shall be called, noticed, held and conducted subject to the provisions of the Ralph M. Brown Act, being Sections 54950 et seq. of the California Government Code. Section 9.03. Minutes. The Secretary of the Agency shall cause minutes of all meetings of the Board of Directors to be kept and shall, as soon as practicable after each meeting, cause a copy of the minutes to be distributed to each member of the Board and to each Member. Section 9.04. Quorum. The attendance of a majority of the Board shall constitute a quorum for the transaction of business. A majority vote of those in attendance shall be necessary to take Board action, except that less than a quorum may adjourn a meeting from time to time. Section 9.05. Voting. Each member of the Board shall have one vote. ARTICLE 10 OFFICERS; DUTIES Section 10.01. Chairperson, Vice-Chairperson and Secretary. The Board shall elect a Chairperson, a Vice Chairperson, and a Secretary of the Agency from among its members, who shall each serve a term of two years. (a) The Chairperson shall preside at all meetings, sign documents as may be necessary for the proper functioning of the Agency, and perform such other duties as may be imposed by the Board of Directors. (b) The Vice Chairperson shall take the place of the Chairperson in the absence of the Chairperson and perform such other duties as may be imposed by the Board of Directors. (c) The Secretary shall cause minutes to be kept of all meetings and to be distributed to the Members and each of the members of the Board of Directors and perform such other duties as may be imposed by the Board of Directors. Section 10.02. the Treasurer of the the Board. Treasurer-Controller. The Treasurer-Controller of the Agency shall be of , California, or such other person or entity designated by (a) Subject to the applicable provisions of any Bond indenture or resolution providing for a trustee or other fiscal agent, the Treasurer-Controller shall have custody of all the money of the Agency, from whatever source, and, as such, shall have the powers, duties and responsibilities specified in Section 6505.5 of the California Government Code. 6 1999-338 (b) The Treasurer-Controller of the Agency is designated as the public officer or person who has charge of, handles, or has access to any property of the Agency, and as such, shall file a fidelity bond with the Secretary of the Agency in an amount to be fixed by the Board. The cost of such bond shall be a proper charge against the Agency. To the extent permitted by an existing fidelity bond, the Treasurer-Controller may satisfy this requirement by filing a fidelity bond obtained in connection with another public office, if the amount of that bond equals or exceeds the bond amount established by the Board of Directors. ARTICLE 11 FISCAL YEAR The fiscal year of the Agency shall be the period from July 1 of each year through and including the following June 30; provided, however, that if the date of this Agreement is other than any July 1, the first fiscal year shall be the period from the date of this Agreement through and including the following June 30. ARTICLE 12 ADMINISlRATION Section 12.01. Administrative Entity. In accord with Section 6506 of the California Government Code, the initial administrative entity of the Agency shall be a California nonprofit corporation established or selected for such purpose, which nonproift corporation shall contract with The City Associates Inc, for administrative services. Section 12.02. Duties of Administrative Entity: Delegation. The administrative entity shall be responsible for implementation of the Program of the Agency. In carrying out its responsibilities for administration of the Program, the administrative entity may contract with others, deemed by it to be qualified, to perform some or all of the administrative functions required for implementation of the program. Section 12.03. Replacement of Administrative Entity. The Board may change the administrative entity at its discretion. Section 12.04. Appointment of Underwriter. J. K. Chilton & Associates, Inc. is hereby appointed as underwriter of the Bonds issued by the Agency. ARTICLE 13 BONDS Section 13.01. Issuance of Bonds. The Agency shall have the power to issue Bonds or other forms of indebtedness authorized by law, at any time, for the purpose of raising funds necessary to carry out its powers and purpose under this Agreement. ARTICLE 14 AGREEMENT NOT EXCLUSIVE Section 14.01. Agreement Not Exclusive. This Agreement is not the exclusive means by which the Members may perform duties relating to housing imposed by law. Each of the 7 1999-338 Members reserves the right to carry out other housing financing programs, to issue other obligations, and to form other joint powers authorities to perform such duties. Section 14.02. Affect On Other Agreements. This Agreement does not alter or modify the terms of other agreements which may exist between the Members except as expressly provided herein. ARTICLE 15 CONTRIBUTIONS, ADVANCES, PRIOR EXPENSES Section 15.01. Contributions and Advances. Contributions or advances of public funds and of personnel, services, equipment or property may be made to the Agency by any Member for any of the purposes of this Agreement. Funds collected from participating developers, lenders, or others may be used to defray the cost of any such contribution. An advance may be made subject to repayment and in such case shall be repaid if subsequently approved by the Agency. If the repayment is approved by the Agency, the manner of repayment shall be as agreed upon by the contributing Member and the Agency at the time of the advance. Notwithstanding any other contrary provision of this Agreement, no Member shall be obligated to make contributions to the Agency, except as may be required pursuant to Section 16.02 or Section 18.02 hereof. Section 15.02. Expenses. Expenses incurred prior to a Bond sale, such as the costs of a Bond rating, printing an official statement and a preliminary official statement, a market study, a feasibility study, attorneys' fees, or other prior expense, shall be charged as costs of issuance of the bonds, payable from the proceeds of the sale of such Bonds. ARTICLE 16 ACCOUNTING AND REPORTING Section 16.01. Accounting: Inspection by Members. The Agency shall establish and maintain such funds and accounts as may be required by generally accepted accounting practice and by any provision of any resolution or indenture securing the Bonds of the Agency. The books and records of the Agency shall be open to inspection by the Members at a reasonable times. Section 16.02. Annual Audit. The Agency shall be responsible for the strict accountability of all funds and the reporting of all receipts and disbursements. Pursuant to Section 6506 of the Act, the Agency shall cause an independent audit by a certified public accountant to be made of its books and accounts each year. The minimum requirements of the audit shall be those prescribed by the State Controller for special districts under Section 26909 of the California Government Code or its successor statute and shall conform to generally accepted auditing standards. The audit shall be provided to the Members within five months after the close of each fiscal year. Any cost of the audit, including contracts with certified public accountants, shall be borne by the Agency and shall be a charge against any unencumbered funds of the Agency available for such purpose. To the extent that the Agency does not have adequate funds to pay the cost of the audit, the Members shall bear the cost of any such deficiency equally. Section 16.03. Inspection by Bondholders. All the books, records, accounts and files referred to in this Section shall be open to the inspection of holders of the Bonds to the extent and in the manner provided in any resolution or indenture providing for the issuance of Bonds. 8 1999-338 ARTICLE 17 DEFAULT AND REMEDIES Section 17.01. Default. If any Member shall default on any covenant contained in this Agreement, such default shall not excuse the defaulting Member from fulfilling its obligations under this Agreement and all Members shall continue to be liable for the performance of all conditions and covenants of the Agreement. Section 17.02. Enforcement of Agreement. The Members declare that this Agreement is entered into for the benefit of the Riverside-San Bernardino Housing & Finance Agency and grant to the Agency the right to enforce, by whatever lawful means the Agency deems appropriate, all of the obligations of each of the Members. Section 17.03. Remedies Cumulative. Each and all of the remedies given to the Agency by this Agreement or by any law now or hereafter enacted are cumulative, and the exercise of one right or remedy shall not impair the right of the Agency to exercise any or all other remedies. ARTICLE 18 DEBTS AND LIABILITIES, INSURANCE AND INDEMNIFICATION Section 18.01. Debts and Liabilities. No Member shall be liable for any indebtedness of the Agency except that which is consented to by his or her City Councilor Board of Supervisors. All persons dealing with or having a claim against the Agency are hereby notified that no Member is liable for the debts of the Agency. Section 18.02. Insurance. The Board shall maintain appropriate insurance to protect the Members from such liabilities and obligations. The cost of such insurance shall be paid by the Agency to the extent sufficient funds are available therefor. To the extent that the Agency does not have sufficient funds available to maintain such insurance, the cost thereof shall be borne equally by the Members. Section 18.03. Indemnification. Each of the Members shall defend, indemnify and hold each of the other Members and the Agency harmless from any and all claims, losses, suits, injuries, deaths, damages, costs and expenses (each, a "Claim"), including reasonable attorney fees, arising from or as a result of (in whole or in part), any acts, errors or omissions of the indemnifying Member or its officers, agents, servants, employees or contractors during the course of carrying out this Agreement, to the extent of such indemnifying Member's negligence or willful misconduct. The Agency shall defend, indemnify and hold harmless each of the Members from any and all Claims, including reasonable attorney fees, arising from or as a result of (in whole or in part), any acts, errors or omissions of the Agency or its officers, agents, servants, employees or contractors, to the extent of the Agency's negligence or willful misconduct. The indemnities granted under this Section shall extend to the officers, agents, servants, employees and contractors of each indemnified party. ARTICLE 19 MISCELLANEOUS PROVISIONS Section 19.01. Severability. If any part, term, or provision of this Agreement is determined by a court of law to be illegal or in conflict with any law of the State of California or otherwise unenforceable, the validity of the remaining parts, terms or provisions shall not be affected. 9 1999-338 Section 19.02. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the successors of the parties. Section 19.03. Assignment and Delegation. Except to the extent expressly provided in this Agreement, a Member may not assign any right or delegate any obligation hereunder without the consent of the Board. Section 19.04. Amendment and Modification of the Agreement. This Agreement may be amended by a supplemental agreement executed by all Members at any time (1) prior to the issuance of Bonds, or (2) after the issuance of Bonds but subject to the conditions and restrictions set forth in the resolution or resolutions authorizing the issuance of Bonds and in any indenture. Additional Members may be added as parties to this Agreement by the appropriate execution of a signature page, and no formal amendment or modification of this Agreement shall be required to accomplish such purpose. Section 19.05. Approvals. Whenever an approval is required by this Agreement, unless the context specifies otherwise, it shall be given by resolution duly and regularly adopted by the City or County whose consent is required. Whenever an approval is required by the Agency, it shall be by resolution duly and regularly adopted by the Board unless such approval can be given by the administrative entity. Section 19.06. Governing Law. This Agreement shall be governed by, and construed under and in accordance with, the laws of the State of California. Section 19.07. Counterparts. This Agreement may be executed in one or more counterparts, and such counterparts, taken together, shall constitute but one and the same Agreement. 10 1999-338 IN WITNESS WHEREOF, the Members identified in Section 3.02 have caused this Agreement to be executed as of the date set forth below by the signatures of their respective authorized officers. Dated: ;:2 b I 1t'1'9'1 I ' CITYOF ..544'l gt'//'i<7~m !1~ h.~ ~ City Clerk 4~~- Susan Lien Mayor Pro Tern Approved as to form: 11 1999-338 EXHIBIT A Voting Members of the Agency A-I /JQI1II~ .{p~HI#fIUJiL4' p-/27hr 1999-338 EXHffiIT B Associate Members of the Agency B-1 /I/JI#/i1,j ;;1E'J.t.."~/ 1.2)~