HomeMy WebLinkAboutCDC/2009-58
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RESOLUTION NO. CDC/2009-58
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE A CERTAIN SUB-RECIPIENT AGREEMENT BY AND
BETWEEN THE AGENCY AND AFFORDABLE HOUSING SOLUTIONS
OF SAN BERNARDINO AND DELEGATING PROPERTY ACQUISITION
RESPONSIBILITIES IN FURTHERANCE OF THE ADMINISTRATION
AND MANAGEMENT FOR THE USE OF CITY OF SAN BERNARDINO
NEIGHBORHOOD STABILIZATION PROGRAM ("NSP") FUNDS IN
ACCORDANCE WITH THE HOUSING AND ECONOMIC RECOVERY ACT
OF 2008
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10 WHEREAS, the City of San Bernardino (the "City") has received a certain grant in the
11 principal amount of $8,408,558 as Neighborhood Stabilization Program ("NSP") funds pursuant to
12 the Housing and Economic Recovery Act of 2008 ("HERA") and in accordance with a Funding
13 Approval and Grant Agreement duly executed by and between the City and the United States
14 Department of Housing and Urban Development ("HUD") as NSP Grant Number B-08-MN-06-
15 0520;and
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WHEREAS, the City pursuant to a duly adopted Resolution No. CDC/2009-38 as approved
17 on July 20, 2009, has authorized the Redevelopment Agency of the City of San Bernardino (the
18 "Agency") pursuant to said Resolution to administer all such NSP funds as shall be received by the
19 City pursuant to said NSP Grant and to otherwise authorize the Agency to provide for and
20 administer the NSP activities that shall be undertaken within the City by the Agency as required of
21 the City under the Funding Approval and Grant Agreement; and
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WHEREAS, the Agency receives an annual allocation of Low and Moderate Income
23 Housing 20% Set Aside Funds ("Set Aside") pursuant to California State Community
24 Redevelopment Law; and
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WHEREAS the City receives an annual allocation of HOME Investment Partnerships
26 Program Funds ("HOME") pursuant to 24 CFR Part 92 and has authorized the Agency to administer
27 and distribute these funds on its behalf; and
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1 WHEREAS, the Agency intends that various non-profit corporations, whether controlled by
2 the Agency or which are independent of the Agency, will be acquiring title to single-family
3 foreclosed homes and multi-family foreclosed rental projects that have similarly been foreclosed by
4 the applicable lenders in an effort to implement the process for the acquisition, demolition or
5 rehabilitation and resale of all such foreclosed properties or building lots after completion of
6 demolition; and
7 WHEREAS, it is necessary at this time for this Community Development Commission of the
8 City of San Bernardino (this "Commission") to specifically authorize Affordable Housing Solutions
9 of San Bernardino, a California non-profit corporation (the "Sub-Recipient"), to undertake actions
10 for the acquisition and administration of those properties to be acquired in furtherance of the NSP
11 funds pending the rehabilitation or demolition, as appropriate, as to foreclosed properties within
12 designated target areas or elsewhere in the City as may be permitted by HERA and in furtherance of
13 the use of the NSP funds by the Agency on behalf of the City; and
14 WHEREAS, it is necessary for the Agency to comply with the Funding Approval and Grant
15 Agreement (the "NSP Grant Agreement") by and between HUD and the City that was executed on
16 April 23, 2009; and
17 WHEREAS, it is further necessary for the Agency to approve that certain Sub-Recipient
18 Agreement in the form as attached hereto and authorize the Sub-Recipicnt to take actions as set forth
19 therein to acquire title to those foreclosed and/or abandoned properties with funds available as stated
20 herein.
21 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
22 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS
23 FOLLOWS:
24 Section 1. The facts set forth in the Recitals to this Resolution are accurate and correct in all
25 respects.
26 Section 2. This Commission hereby authorizes and directs Agency Staff to implement all
27 aspects of the NSP program and the disbursement of the NSP grant funds that are available to the
28 City pursuant to HERA and as further set forth in the NSP Grant Agreement through the acquisition
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I of qualifying properties by the Sub-Recipient. The Commission recognizes that the Agency Staff
2 whether directly on behalf of the Agency or through the corporate structure of the Sub-Recipient
3 shall be solely responsible for all administrative, audit and compliance matters required either under
4 HERA or the NSP Grant Agreement as may be required for the use of the NSP funds within the
5 City.
6 Section 3. This Commission further authorizes and directs Agency Staff to fund the Sub-
7 Recipient with Set Aside and HOME Funds that are available to the City for the purpose of
8 acquisition of qualifying residential properties.
9 Section 4. This Commission hereby further authorizes the expenditures of the following
10 dollar amounts of the funds and from the sources as indicated herein for the implementation of the
II Sub-Recipient Agreement between the Agency and the Sub-Recipient.
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Source of Funds:
Dollar Amount:
Low and Moderate Income Housing Funds
$2,000,000
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15 demolition)
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NSP (acquisition and rehabilitations
$3,700,000
17 of foreclosed properties through intermediary
18 agreements)
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HOME Investment Partnerships Program Funds
$600,000
$2,000,000
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NSP (demolition)
21 (acquisition ofnon-NSP properties and demolition)
22 Section 5. This Commission hereby approves the Sub-Recipient Agreement as attached
23 hereto and authorizes the execution and delivery thereof by the Interim Executive Director with such
24 non-substantive changes as may be approved by Agency Counsel.
25 Section 6. The Agency is hereby authorized to pay directly or to otherwise be reimbursed
26 for those costs and expenses of the administration and management of the NSP, including those
27 costs of the Sub-Recipient subject to such dollar limitation and other limitations on eligible
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1 expenditures as may be established by HUD either pursuant to HERA or which are otherwise
2 applicable to the use of the NSP funds.
3 Section 7.
4 Commission.
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This Resolution shall take effect from and after its date of adoption by this
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CDC/2009-58
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE A CERTAIN SUB-RECIPIENT AGREEMENT BY AND
BETWEEN THE AGENCY AND AFFORDABLE HOUSING SOLUTIONS
OF SAN BERNARDINO AND DELEGATING PROPERTY ACQUISITION
RESPONSIBILITIES IN FURTHERANCE OF THE ADMINISTRATION
AND MANAGEMENT FOR THE USE OF CITY OF SAN BERNARDINO
NEIGHBORHOOD STABILIZATION PROGRAM ("NSP") FUNDS IN
ACCORDANCE WITH THE HOUSING AND ECONOMIC RECOVERY
ACT OF 2008
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
Development Commission of the City of San Bernardino at a joint regol"r
day of September ,2009, by the following vote to wit:
meeting
Ayes
X
Navs
Abstain
Absent
X
X
-1L.
X
X
X
J!)~~
Secretary
The foregoing Resolution is hereby approved this .~ day of September
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,2009.
Patrie 1. Morris, CIi' son
nity Development Commission
of the City of San Bernardino
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Approved as to Form:
~: By: \~~
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CDC/2009-58
NEIGHBORHOOD ST ABILIZA TION PROGRAM
SUB-RECIPIENT AGREEMENT
BY AND BETWEEN
THE REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
AND
AFFORDABLE HOUSING SOLUTIONS OF SAN BERNARDINO,
A CALIFORNIA NON-PROFIT CORPORATION
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Neighborhood Stabilization Program
Sub-recipient Agreement
This Agreement is entered into this 21st day of September, 2009 ("Agreement"), by and between
the Redevelopment Agency ofthe City of San Bernardino, a public body, corporate and politic, hereinafter
referred to as the "Agency" and Affordable Housing Solutions of San Bernardino, a California Non-profit
Corporation, hereinafter referred to as the "Subrecipient."
WITNESSETH
WHEREAS, the City of San Bernardino (the "City") has entered into a contract with the United
States of America through its Department of Housing and Urban Development ("HUD") to execute the
City's Community Development Block Grant ("CDBG") Program under the Housing and Community
Development Act of 1974, as amended, hereinafter called the "Act"; and
WHEREAS, the Agency and the Sub-recipient have an interest in providing necessary services to
and enhancement of the quality of life of its citizens; and
WHEREAS, the Agency and the Sub-recipient recognize that the project herein is eligible under
HUD regulations; and
WHEREAS, the Agency and the Sub-recipient desire to cooperate in the implementation of the
Program by reason of experience, preparation, organization, staffing, and facilities to provide homes and
services for the benefit of low-, moderate- and middle income persons; and
WHEREAS, on July 30, 2008, the United States Government adopted the Housing and Economic
Recovery Act of2008 ("HERA"); and
WHEREAS, pursuant to Title III of Division B of HERA (Public Law 110-289, 122 Stat. 2650),
the United States Government created a program known as the Neighborhood Stabilization Program
("NSP"); and
WHEREAS, the purpose of the NSP is to make funding available for certain qualified uses in order
to assist state and local governments with emergency assistance for the redevelopment of abandoned and
foreclosed upon homes and residential properties; and
WHEREAS, on October 6, 2008, HUD published its "Notice of allocations, waivers granted,
alternative requirements applied, and statutory program requirements" for the NSP in the Federal Register,
Volume 73, No. 194, Docket No. FR-5255-N-OI ("Notice"); and
WHEREAS, pursuant to the Notice, NSP funds are to be considered CDBG funds unless stated
otherwise in the Notice; and
WHEREAS, in order to qualify for an NSP grant, the City has adopted a substantial amendment to
its CDBG program setting forth the criteria and guidelines for implementation of the NSP within the City
("Substantial Amendment"); and
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WHEREAS, the Substantial Amendment, and all provisions contained therein, is incorporated by
reference into this Agreement as though fully set forth herein; and
WHEREAS, HUD has reviewed and approved the Substantial Amendment, and will make NSP
grant funding available to the Agency as the administrative agent for the City; and
WHEREAS, under the NSP regulations, the City's NSP funding allocation must be obligated
within eighteen (18) months from and after the date of the City's grant agreement with HUD; and
WHEREAS, in addition to other sources of funding and other program opportunities, the
Community Development Commission of the City of San Bernardino ("Commission") as the governing
body of the Agency on behalf ofthe City seeks to establish and engage Sub-recipient as a NSP grant sub-
recipient to assist the City in utilizing its NSP funds for the purchase, rehabilitation and resale of
abandoned and foreclosed upon eligible properties ("Eligible Properties") within the NSP Target Zone, as
defined in Exhibit "C," to households whose annual income does not exceed 120% of the Area Median
Income ("AMI") who meet all other tenancy requirements established under NSP ("Eligible
Homeowners"), all as further set forth in the Substantial Amendment and in this Agreement and with the
demolition of such properties that are inspected and deemed beyond repair.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth and the mutual
benefits to be derived therefrom, the parties agree as follows:
OPERATIVE PROVISIONS
I. Incorporation of Recitals
The Recitals set forth above are true and correct and are incorporated into this Agreement as
though fully set forth herein.
2. Sub-recipient's Name
The name of the non-profit Sub-recipient shall be the Affordable Housing Solutions, as adopted in
the Sub-recipient's bylaws and stated in the amended Articles ofIncorporation. Any substitution
of name shall require a majority vote ofthe Sub-recipient's Board of Directors and approved by the
governing body of the Agency.
3. Supervision of Sub-recipient
A. The Agency Staff designated in Exhibit "B" shall be responsible for the direction of any
work to be performed by Sub-recipient and any other consultants or sub-consultants to the
Agency under this Agreement. Sub-recipient shall not undertake any work under the terms
of this Agreement, unless instructed to do so by one of the designated staff members. No
other staff member is authorized by the Agency to request services from Sub-recipient.
B. Sub-recipient shall obtain approval for its activities affecting the acquisition, rehabilitation
or demolition and disposition of real estate and procurement of services by the Board of
Directors of Sub-recipient without any further approval by the Agency.
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4. Organization of Sub-recipient
A. The Sub-recipient's sole purpose is to implement the foreclosure acquisition, rehabilitation,
and resale components ofNSP funding as set forth herein.
B. Sub-recipient Administration.
1. The Sub-recipient shall be comprised of a five-member Board of Directors
("Board") consisting ofthe Interim Executive Director ofthe Agency, the Housing
and Community Development Director ofthe Agency, the Interim Administrative
Services Director of the Agency, and two additional members appointed by other
members ofthe Board. General legal counsel shall be provided by the Agency's
existing counselor the office of the City Attorney of the City.
H. The Board will provide a list of the then-cHrrent members ofthe Board to the City
and will notify the Agency immediately upon the appointment of new Board
members.
HI. The Interim Executive Director of the Agency shall serve as the Chairman of the
Board and the Chief Executive Officer ("CEO") of the Sub-recipient and shall have
the authority to convene meetings of the Sub-recipient, as needed. Administrative
oversight and daily management of Sub-recipient activities shall be controlled by
its Chief Operating Officer ("COO") who also serves as the Director of Housing
and Community Development of the Agency.
5. Sub-recipient Funding and Support
A. The Agency shall provide all staffing for the Sub-recipient for completion of the services
described in the Scope of Services set forth in Exhibit "A
B. The Agency has adopted Resolution No. _, dated September 21,2009 that has authorized
the following funds as shall be made available to Sub-recipient to fund foreclosure
acquisitions, rehabilitations, demolition and resales, as more thoroughly discussed in
Section 8 below, provided such acquisitions, rehabilitations and resales are appropriate
pursuant to any and all NSP regulations and program guidelines approved by HUD.
Initial amonnts allocated to Snb-recipient:
Source of Funds:
Dollar Amount:
Low and Moderate Income Housing Funds
(acquisition of non-NSP properties and
demolition)
$2,000,000
NSP (acquisition and rehabilitations
of foreclosed properties through intermediary
agreements)
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$3,700,000
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HOME (acquisition ofnon-NSP properties)
$600,000
$2,000,000
NSP (demolition)
6. Scope of Sub-recipient Services
The Subrecipient shall perform all the services described and set forth in the Scope of Services set
forth attached hereto as Exhibit "A" to this Agreement and incorporated herein by this reference.
Sub-recipient hereby agrees to perform the work set forth in the Scope of Services, in accordance
with the terms of this Agreement. Sub-recipient shall perform the services as set forth on said
Scope of Services within the time periods to be identified by the appropriate Agency
representative.
7. Time of Performance
Said services of the Sub-recipient are to commence on September 21, 2009, and shall continue
until termination by either Party.
8. Initial Capital Allocation
A. The Sub-recipient shall be funded through an initial allocation of$8.3 million, as indicated
by the NSP, HOME and Set-aside amounts mentioned in Section 5.B. above. Of this
amount, $3.7 million in NSP Funds was originally approved by the Mayor and Common
Council of the City of San Bernardino ("Council") on November 17, 2008, for the purpose
of acquiring previously foreclosed residential properties. Most of these properties will be
rehabilitated and resold to households whose annual income does not exceed 120% of AMI
("Eligible Homebuyers"). For those properties that are inspected and deemed beyond
repair an active strategy of demolition will take place which will be funded under NSP with
an initial allocation of $600,000. This, together with the $3.7 million ofNSP funds, the
$2.0 million of Set-aside funds and the $2.0 million in HOME funds shall be determined to
be the Initial Capital Allocation.
B. Subsequent funding allocations may be authorized based on need and funding availability.
Potential funding sources include, but are not limited to, additional NSP funds from both
state and federal sources, Agency Low-to-Moderate 20% Housing Set Aside and HOME
Program funds. In all cases, future allocations, should they occur, shall be subject to
Council or Commission approval, as applicable, and must be for the promotion of
affordable housing and economic development opportunities within the City.
C. Initial Acquisition Funding.
1. Sub-recipient hereby verifies that prior to the execution of this Agreement, it has
provided a list of any and all acquisitions expected to occur during the first two (2)
weeks that this Agreement is in effect and the amount of funding necessary therefor
to the City ("Initial Acquisition List").
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11. Agency hereby covenants that it has placed NSP funds in an amount consistent with
the amount indicated in Sub-recipient's Initial Acquisition List into designated
funds and accounts of the Agency which, upon execution of this Agreement, shall
be made available for use by the Sub-recipient.
111. Agency shall, at the time of designation of the NSP funds to Sub-recipient, provide
for the similar designation of the Low and Moderate Income Housing Funds of the
Agency, which shall be administered by the Agency and disbursed only at the
written permission of the Interim Executive Director of the Agency for other
acquisitions of foreclosed homes or other desired acquisitions of properties.
9. Record Retention
Records, maps, field notes and supporting documents and all other records pertaining to the use of
funds disbursed to the Sub-recipient hereunder shall be retained by the Sub-recipient and available
to the Agency for examination and for purposes of performing an audit for a period of five (5)
years from the date of expiration or termination of this Agreement or for a longer period, as
required by law. Such records shall be available to the Agency and to appropriate county, state or
federal agencies and officials for inspection during the regular business hours of the Sub-recipient.
If the Sub-recipient does not maintain regular business hours, then such records shall be available
for inspection between the hours of9 a.m. and 5 p.m. Monday through Friday, excluding federal
and state government holidays. In the event of litigation or an audit relating to this Agreement or
funds paid to the Sub-recipient by the Agency under this Agreement, such records shall be retained
by the Sub-recipient until all such litigation or audit has been resolved.
10. Acquisition Procedures
Upon the review and analysis of specific properties by the COO, a recommendation for acquisition
shall be presented to the Board ofthe Sub-recipient. Based and upon a majority vote of the Board
in support of each such proposed acquisition, the COO and his/her Staff or agents shall negotiate
the acquisition of said properties under the terms and conditions approved by the Board and
detailed in the "Use of Allocated Funds" section.
11. Use of Allocated Funds
A. NSP Funds shall be used for the acquisition of foreclosed upon and abandoned properties to
be rehabilitated and resold to income eligible households or acquired and demolished in the
event such properties are deemed to be beyond rehabilitation. The Sub-recipient shall hold
title to the properties acquired until they are resold to Eligible Households, or other
qualified nonprofit and/or for-profit organizations to own, maintain and manage based upon
covenants and other deed restrictions imposed to promote affordable housing. Funds in the
Low and Moderate Income Housing Fund and HOME Fund shall likewise be used in a
similar marmer consistent with this Agreement.
B. At a time deemed appropriate by the COO, properties shall be forwarded to the Board for
consideration to acquire. Upon a majority vote of the Board, the Sub-recipient shall enter
into escrow for said properties. Authority to sign the necessary paperwork to enter into
escrow shall be given to the COO, or in his absence, the CEO.
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C. Not less than five (5) business days prior to close of escrow, Staff shall request that funds
necessary to acquire the properties in escrow be drawn from the appropriate source and
deposited into a segregated account deemed appropriate by the Interim Director of
Administrative Services serving in his capacity as Chief Financial Officer ("CFO") of the
Sub-Recipient. At the appropriate time identified in the escrow instructions, the CFO shall
transfer these funds into escrow in order to close the transaction at which time the Sub-
recipient shall hold title to the properties until their final disposition at a later date.
D. At the time ofInitial Capital Allocation the Sub-recipient shall have the authority to acquire
properties deemed appropriate under the Program and/or under the programmatic
requirements ofthe specific funding source. In all instances, property acquisition shall be
conducted utilizing sound real estate practices deemed necessary for the specific
transaction to include, but not limited to, the review of: (1) the preliminary title report; (2)
phase I environmental study, when applicable; (3) property environmental assessment; (4)
current appraisal report; (5) property inspection and cost estimate report.
12. Requirements for Transfer ofProoertv
A. Sub-recipient shall have the responsibility of:
1. assuring that all transfers of properties to Eligible Homeowners purchasing the
acquired foreclosed homes after rehabilitation contain a deed covenant assuring
affordability for 45 years and running with the land and that separate Affordability
Covenant documents will be executed by the Eligible Homeowners and recorded
against the applicable properties;
Il. verifying that required notices are recorded against the rehabilitated properties to
evidence affordability covenants;
Ill. providing a homeowner's education program for each homeowner whereby such
homeowners are aware of the affordability and resale restrictions;
IV. ensuring that sales are not made to investors and that the property shall only be sold
to Eligible Homebuyers as a principle place of residence;
v. ensuring that all properties rehabilitated pursuant to the Program are sold at a price
not greater than the lesser of the total cost of acquisition or the appraisal value of
the property.
13. Accounting
A. The Sub-recipient shall establish and maintain on a current basis a adequate accrual accounting
system in accordance with generally accepted accounting principles, practices, and standards.
B. At all times, the CFO shall maintain the financial books and records of the Sub-Recipient
separate and apart from other Agency financial records.
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C. The Board shall provide an annual audit report and an annual audit of the list of properties
acquired and demolished or rehabilitated and resold, as well as an accounting of all NSP
funds received and expended for each category of expenditures. The CFO shall maintain
the books of the Sub-Recipient in order to conduct such annual reports and audits as may
be necessary per HUD or other governmental and/or regulatory bodies.
D. For expenses incurred by the Sub-Recipient, the CFO shall have the authority to pay for
them from funds requested by HUD and/or other sources deemed appropriate by the Board
and, if applicable, the Commission.
E. The CFO shall maintain accurate lists/records of the following:
I. all homeowners by property;
n. all contractors by property;
lll. the acquisition price of the foreclosed homes;
IV. the rehabilitation funds required for each home;
v. the resale price of each home; and
VI. the amount of any other down payment assistance from the Sub-recipient or the
Agency.
14. Regular Reporting Requirements
A. The Sub-recipient shall commit to an Agency-approved program to provide periodic
monitoring of compliance of each homeowner purchasing a NSP acquired foreclosed home.
B. Within thirty (30) calendar days after the end of each calendar quarter, the COO shall
provide a status report to the Council and the Commission regarding the activities of the
Sub-Recipient. Such report shall detail, among other things: funds expended to date,
progress made on acquisition activities, any relocation that has occurred, properties resold
to private owners, demolitions completed and properties rehabilitated.
15. Authoritv to Enter Into Agreements
Recommendations for the Sub-recipient to enter into all third party service agreements shall be
made by the COO to the Board who must approve of such recommendations by a majority vote.
The third party service agreements and the other obligations incurred pursuant thereto shall be
obligations solely of the Sub-recipient and not that of either the City or the Agency.
16. Dates and Times of Board Meetings
Board meetings shall occur on the second Tuesday of each month unless a time earlier is deemed
necessary. Any Board member shall have the right to call a special meeting of the Board provided
that all Board members have been given at least twenty-four (24) hours prior written notice or
otherwise are in attendance at such special meeting regardless of the notice, if any, given to such
Board member.
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17. Comoliance with Laws and Assurances
The Sub-recipient hereby assures and certifies that it has complied and will continue to comply
with the Act and all applicable federal, state, and local laws, ordinances, regulations, policies,
guidelines, and requirements as they relate to acceptance and use of federal funds for this federally-
assisted Program. This Agreement is subject to all such laws, ordinances, regulations, policies and
guidelines, including, without limitation, the Act; HERA; Title 24, Code of Federal Regulations,
Part 85; Title 24, Code of Regulations, Part 570; and U.S. Office of Management and Budget
Circulars applicable including, without limitation, A-87, A-95, A-I 10, A-122 and A-128.
18. Affirmative Action
The Sub-recipient shall make every effort to ensure that all projects funded wholly or in part by
HUD CDBG and/or NPS funds shall provide equal employment and career advancement
opportunities for minorities and women. In addition, the Sub-recipient shall make every effort to
employ residents of the area and shall keep a record of the positions that have been created directly
or as a result of this Program.
19. Discrimination
A. No person shall, on the grounds of race, sex, creed, color, religion or national origin, be
excluded from participating in, be refused the benefits of, or otherwise be subjected to
discrimination in any activities, programs, or employment supported by this Agreement.
B. The Sub-recipient shall not discriminate against any person on the basis of race, color,
creed, religion, natural origin, ancestry, sex, marital status or physical handicap in the
performance of the Scope of Services of this Agreement. Without limitation, the Sub-
recipient hereby certifies that it will not discriminate against any employee or applicant for
employment because of race, color, religion, sex, marital status or national origin.
C. Further, the City, the Agency and the Sub-recipient shall promote affirmative action in their
hiring practices and employee policies for minorities and other designated classes in
accordance with federal, state and local laws. Such action shall include, but not be limited
to, the following: recruitment and recruitment advertising, employment, upgrading and
promotion. In addition, the City, the Agency and the Sub-recipient shall not exclude from
participation under this Agreement any employee or applicant for employment on the basis
of age, handicap or religion in compliance with State and Federal laws.
20. Changes in Grant Allocation
The Agency, through the Commission, may grant additional funds at its discretion for use by the
Sub-recipient to assure the successful completion of the Program.
21. Notices
All notices herein required shall be in writing. Notices shall be sent by prepaid First Class Mail to
the following Address:
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To the Agency:
Economic Development Agency
Attn.: Emil A. Marzullo, Interim Executive Director
201 North "E" Street, Suite 301
San Bernardino, California 92401
To the Sub-recipient:
Affordable Housing Solutions of San Bernardino,
a California non-profit corporation
Attn.: Chief Operating Officer
201 North "E" Street, Suite 301
San Bernardino, California 9240 I
22. Assignment
This Agreement is not assignable by the Sub-recipient without the express prior written consent of
the Agency, which consent shall be given in the Agency's sole discretion. Any attempt by the Sub-
recipient to assign any performance of the terms of this Agreement shall be null and void and shall
constitute a material breach of this Agreement upon which the Agency may, among its other
remedies, and without limitation, cancel, terminate or suspend this Agreement.
23 . Termination
(a) This Agreement may be terminated at any time by either Party upon giving its thirty (30)
day notice in writing to the other Party. The CEO or hislher designee is hereby empowered
to give said notice, subject to ratification by the Commission. Further, the Agency may
immediately terminate this Agreement upon the termination, suspension, discontinuation or
substantial reduction in HUD NSP funding for the Agreement activity. Further, and not
withstanding any other provision of this Agreement, ifthe Sub-recipient materially fails to
comply with any term of this Agreement, the City may take anyone or more of the
following actions, as appropriate in the circumstances:
(i) temporarily withhold cash payments pending correction of the deficiency by the
Sub-recipient or more severe enforcement action by the awarding agency;
(ii) wholly or partly suspend or terminate the current award for the Program;
(iii) withhold further awards for the Program; or
(iv) take other remedies that may be legally available.
Further, and notwithstanding any other provision of this Agreement, the award may be terminated
for convenience in accordance with Title 24, Code of Federal Regulations, Part 85.44.
24. Program Income
Any and all Program Income (as defined at Title 24, Code of Federal Regulations, Part 570.500(a))
received by the Sub-recipient during the term of this Agreement shall be used and applied by Sub-
recipient and upon any termination of this Agreement shall immediately be retumed to the Agency.
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".
Any and all Program Income on hand with the Sub-recipient at the time of the expiration of this
Agreement, or received by the Sub-recipient after the expiration of this Agreement, shall be paid to
the Agency pursuant to the provisions ofthis Agreement as further provided in Section 25 below.
25. Reversion of Assets
Upon the expiration or termination of this Agreement, for any reason whatsoever, the Sub-recipient
shall forthwith transfer to the Agency, any CDBG or NSP funds on hand at the time of such
expiration or termination and any accounts receivable attributable to the use of CDBG or NSP
funds including, without limitation, Program Income.
26. Fiscal Limitations
HUD may in the future place progranunatic or fiscal limitations on CDBG and/or NSP funds not
presently anticipated. Accordingly, the Agency reserves the right to revise this Agreement in order
to take account of actions affecting HUD program funding. In the event of funding reduction, the
Agency may reduce the Allocated Funding of this Agreement, and may, at its sole discretion, limit
the Sub-recipient's authority to commit and spend funds. Where HUD has directed or requested
the City or the Agency to implement a reduction in funding, with respect to funding for this
Agreement, the Interim Executive Director or his/her Designee may act for the Agency in
implementing and effecting such a reduction and in revising the Agreement for such purpose. The
Interim Executive Director or his/her Designee may act for the Agency in suspending the operation
of this Agreement for up to sixty (60) days, upon three (3) days' prior written notice to the Sub-
recipient of hislher intention to so act. In no event, however, shall any revision made by the
Agency affect expenditures and legally binding commitments made by the Sub-recipient before it
received notice of such revision, provided that such amounts have been committed in good faith
and are otherwise allowable and that such commitments are consistent with HUD cash withdrawal
guidelines.
27. [Intentionally Omitted]
28. Use of Funds for Entertainment, Meals or Gifts
The Sub-recipient certifies and agrees that it shall not use funds provided through this Agreement
to pay for entertainment, meals, or gifts.
29. Release, Indemnification, and Hold Harmless
The Sub-recipient shall defend (if requested by the City and the Agency), release, indemnify and
hold the City and the Agency, their officers, officials, attorneys, agents, employees, and volunteers,
harmless from and against any loss, liability, claim, or damages that may arise or result from
activities of the Sub-recipient, its officers, agents, and employees and, shall, at its own costs,
expense and risk, defend any and all legal proceedings that may be brought against the City and the
Agency on any claim, demand, or alleged liability, and shall satisfy any settlement or judgment that
may be rendered against any of them arising or resulting from activities of the Sub-recipient, and
shall assume liability for any and all direct expense incurred in providing services pursuant to this
Agreement and shall assume any and all responsibilities for loss or damage resulting from
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negligence, injury, illness or disease arising out of the provision of services. The Sub-recipient,
however, is obligated to promptly notify the City and the Agency in writing of any such loss or
damage.
30. Insurance Requirements
The Sub-recipient shall secure and maintain throughout the term of the Agreement the following
types of insurance with limits as shown:
A. Statutory Worker's Compensation Insurance. The Sub-recipient shall require the carriers
of this coverage to waive all rights of subrogation against the City and Agency, their
officers, volunteers, employees, contractors and subcontractors. The Sub-recipient shall
maintain all California statutory requirements of One Million Dollars ($ I ,000,000) limit.
B. Comprehensive General and Automobile Liability Insurance. The Sub-recipient shall
obtain general liability insurance on a per occurrence basis with a combined single limit of
One Million Dollars ($1,000,000); and automobile liability insurance for owned, hired and
non-owned vehicles on a per occurrence basis with a combined single limit of One Million
Dollars ($1,000,000). Additional insured endorsements are required for general and
automobile liability policy coverage.
Additional insured shall be listed as:
"The City and the Agency, their officers, officials, attorneys, agents, employees and
volunteers"
C. Other Requirements and Acceptable Proof of Insurance.
l. All insurance coverage must be maintained throughout the duration of this
Agreement.
n. Insurance companies must have an A.M. Best Rating of B+ VII or better.
Ill. Policy deductibles must be stated for each coverage. Deductibles greater than Five
Thousand Dollars ($5,000) must include a letter of credit.
IV. Acceptable Proof of Insurance:
a. ACCORD Certificate of Insurance listing all coverage, limits, deductibles
and insurers; and blanket endorsements for all applicable coverage if agent
has authority to issue it; or
b. Binders of insurance for all coverage. Agents must confirm that policy
endorsements have been ordered from the respective insurance companies.
Upon issuance, policy endorsements and a corresponding Certificate of
Insurance listing all insurers and coverage must be submitted to the City and
the Agency.
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NOTE: Insurance binders are only valid for thirty (30) days and may need to
be reissued if the policy endorsements are still pending. Binders may be
issued for a maximum of three, thirty (30) day periods.
The Sub-recipient shall furnish certified copies of all policies and endorsements to the City and the
Agency, evidencing the insurance coverage above required, five business days prior to the
commencement of performance of services hereunder, which certificates shall provide that such
insurance shall not be terminated or expire without thirty (30) day prior written notice to the City
and the Agency, and shall maintain such insurance from the time the Sub-recipient commences
performance of services hereunder, until the completion of such services. An inventory of such
insurance shall be completed by the Sub-recipient and approved by the City and the Agency prior
to the commencement of performance of services hereunder.
All policies, with respect to the insurance coverage required above, except for the worker's
compensation coverage, shall contain additional insured endorsements naming the City and the
Agency, and their officers, agents, employees and volunteers as additional name insured, with
respect to liabilities arising out of the performance of services hereunder.
3 I. Conflict of Interest
The Sub-recipient, its agents and employees shall comply with all applicable federal, state, county
and city laws and regulations governing conflict of interest. To this end, the Sub-recipient will
make available or shall provide copies of all applicable federal, state, county and City laws and
regulations governing conflict of interest, to its agents and employees.
32. Program Monitoring
The Agency will monitor the Sub-recipient in the performance of this Agreement. The Sub-
recipient shall maintain such property, personnel, financial and other records and accounts as are
considered necessary by HUD, and the Agency, to assure proper accounting for all NPS funds
authorized under this Agreement. The Sub-recipient will permit on-site inspection by the City and
Agency and HUD representatives, and ensure that its employees and board members furnish such
information, as in the judgment of the Agency and HUD, may be relevant to a question of
compliance with contractual conditions and HUD directives, or the effectiveness, legality, and
achievements of the Program. All the Sub-recipient records, with the exception of confidential
client information, shall be made available to representatives ofthe Agency and appropriate federal
agencies. The Interim Executive Director or his/her designee will conduct periodic Program
progress reviews. These reviews will focus on the extent to which the planned Program has been
implemented and measurable goals achieved, the effectiveness of Program management, and the
impact of the Program.
33. Religious Proselytizing or Political Activities
The Sub-recipient agrees that it will not perform or permit any religious proselytizing or political
activities in connection with the performance of this Agreement. Funds under this Agreement will
be used exclusively for performance of the services required under this Agreement and no funds
shall be used to promote any religious or political activities.
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34. Audits
The Sub-recipient is required to arrange for an independent financial and compliance audit
annually for each fiscal year Federal funds are received under this Agreement. An audit may also
be conducted by Federal, State, or local funding source agencies as part of the City's audit
responsibilities. The results of the independent audit must be submitted to the City within thirty
(30) days of completion. Within thirty (30) days ofthe submittal of audit report, the Sub-recipient
shall provide a written response to all conditions or findings reported in said audit report. The
response must examine each condition or finding and explain a proposed resolution, including a
schedule for correcting any deficiency, within six (6) months after receipt of the audit report. The
City and the Agency, and its authorized representatives shall, at all times, have access for the
purpose of audit or inspection to any and all books, documents, papers, records, property, and
premises of the Sub-recipient, whose staff will cooperate fully with authorized auditors when they
conduct audits and examinations of the Program.
35. Counteroarts
This Agreement may be executed in three (3) counterparts. When executed, each counterpart shall
be deemed an original, irrespective of date of execution. Said counterparts shall together constitute
one and the same Agreement.
36. Severabilitv
Each and every section of this Agreement shall be construed as a separate and independent
covenant and agreement. If any term or provision of this Agreement or the application thereof to
certain circumstances shall be declared invalid or unenforceable, the remainder of this Agreement,
or the application of such term or provision to circumstances other than those to which it is
declared invalid or unenforceable, shall not be affected thereby, and each term and provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.
37. Amendment or Modification
This Agreement may only be modified or amended by written instrument duly approved and
executed by each of the Parties hereto. Any such modification or amendment shall be valid,
binding and legally enforceable only ifin written form and executed by each of the Parties hereto,
following all necessary approvals and authorizations for such execution.
38. Governing Law
This Agreement shall be governed by the laws of the State of California. Any legal action arising
from or related to this Agreement shall be brought in the Superior Court of the State of California
in and for the County of San Bernardino.
39. Compliance with Law
The Sub-recipient shall comply with all local, state and federal laws, including, but not limited to,
environmental acts, rules and regulations applicable to the work to be performed by the Sub-
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recipient under this Agreement. The Sub-recipient shall maintain all necessary licenses and
registrations for the lawful performance of the work required of the Sub-recipient under this
Agreement.
40. Non-Waiver
Failure of either party to enforce any provision of this Agreement shall not constitute a waiver of
the right to compel enforcement of the same provision or any remaining provisions of this
Agreement.
41. Representations of Persons Executing the Agreement
The persons executing this Agreement warrant that they are duly authorized to execute this
Agreement on behalf of and bind the respective Party that each purports to represent.
42. Press Releases
Press or news releases, including photographs or public announcements, or confirmation of the
same related to the work to be performed by the Sub-recipient under this Agreement shall only be
made by the Sub-recipient with the prior written consent of the Agency.
43. Default and Remedies
A. Events of Default
The occurrence of any of the following shall, after the giving of any notice described
therein, constitute a default by Sub-recipient hereunder ("Event of Default"):
1. The failure of Sub-recipient to payor perform any monetary covenant or obligation
hereunder or any ofthe documents executed in connection herewith, without curing
such failure within ten (10) calendar days after receipt of written notice of such
default from the Agency (or from any party authorized by the Agency to deliver
such notice as identified by the Agency in writing to Sub-recipient);
11. The failure of Sub-recipient to perform any nonmonetary covenant or obligation
hereunder or any of the documents executed in connection herewith, without curing
such failure within thirty (30) calendar days after receipt of written notice of such
default from the Agency (or from any party authorized by the Agency to deliver
such notice as identified by the Agency in writing to Sub-recipient) specifying the
nature of the event or deficiency giving rise to the default and the action required to
cure such deficiency; provided, however, that if any default with respect to a
nonmonetary obligation is such that it cannot be cured within a thirty-day period, it
shall be deemed cured if Sub-recipient commences the cure within said thirty-day
period and diligently prosecutes such cure to completion thereafter.
B. Notwithstanding anything herein to the contrary, the herein described notice requirements
and cure periods shall not apply to any Event of Default described in Sections (i.) through
(iv.) below:
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1. The material falsity of any representation or breach of any warranty or covenant
made by Sub-recipient under the terms of this Agreement or any documents
executed in connection herewith;
11. S11b-recipient shall (a) apply for or consent to the appointment ofareceiver, trustee,
liquidator or custodian or the like ofits property, (b) make a general assignment for
the benefit of creditors, (c) be adjudicated a bankrupt or insolvent or (d) commence
a voluntary case under the Federal bankruptcy laws of the United States of America
or file a voluntary petition that is not withdrawn within ten (1 0) calendar days after
the filing thereof or answer seeking an arrangement with creditors or an order for
relief or seeking to take advantage of any insolvency law or file an answer
admitting the material allegations of a petition filed against it in any bankruptcy or
insolvency proceeding;
111. Voluntary cessation of the operation of the Project for a continuous period of more
than thirty (30) calendar days or the involuntary cessation of the operation of the
Project in accordance with this Agreement for a continuous period of more than
sixty (60) calendar days, unless such cessation is approved, in writing, by the
Agency;
IV. A mechanic's lien or any other type of encumbrance on any eligible property
resulting from the Sub-recipient's failure to fulfill its financial or other contractual
obligations with respect to any of its vendors or sub-contractors is not removed
within ten (10) calendar days after receipt of written notice of such default from the
Agency (or from any party authorized by the Agency to deliver such notice as
identified by the Agency in writing to Sub-recipient).
C. Any failure or delay by a party in asserting any of its rights or remedies as to any default
shall not operate as a waiver of any default or of any rights or remedies associated with a
default. Except with respect to rights and remedies expressly declared to be exclusive in
this Agreement, the rights and remedies of the Parties under this Agreement are cumulative
and the exercise by either Party of one or more of such rights or remedies shall not preclude
the exercise by it, at the same or different times, of any other rights or remedies for the
same default or any other default by the other Party.
D. The City's/Agency's Remedies
Upon the occurrence of an Event of Default hereunder, the City, or the Agency as an agent
of the City, may, in its sole discretion, take anyone or more of the following actions:
1. By notice to Sub-recipient declare that the entire unused amount ofNSP funds must
be immediately repaid to the City, and the same shall become due and payable
without further demand, protest or further notice of any kind, all of which are
expressly waived;
11. Subject to any nonrecourse provisions in this Agreement, take any and all actions
and do any and all things which are allowed, permitted or provided by law, in
equity or by statute, to enforce performance and observance of any obligation,
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agreement or covenant of the Sub-recipient under this Agreement or under any
other document executed in connection herewith;
lll. Cease allowing Sub-recipient access to any NSP funds unless and until the Event of
Default (if curable) is cured;
IV. Demand reimbursement from the Sub-recipient for any payments made to it by the
City or the Agency for which the contracted work product was not satisfactorily
delivered by the Sub-recipient;
v. Confiscate any material or other work product purchased or produced by the Sub-
recipient for the Project;
VI. Take any and all actions and do any and all things which are allowed, permitted or
provided by law, in equity or by statute, to enforce performance and observance of
any obligation, agreement or covenant of the Sub-recipient under this Agreement or
under any other document executed in connection herewith.
E. Cityl Agency Default and Sub-recipient Remedies
Upon fault or failure of the City or the Agency, as the City's agent, to meet any of its
obligations under this Agreement without curing such failure within thirty (30) calendar
days after receipt of written notice of such failure from Sub-recipient specifying the nature
of the event or deficiency giving rise to the default and the action required to cure such
deficiency, Sub-recipient may, as its sole and exclusive remedies:
1. Bring an action in equitable relief seeking the specific performance by the City or
the Agency of the terms and conditions ofthis Agreement or seeking to enjoin any
act by the City or the Agency which is prohibited hereunder; andlor
11. Bring an action for declaratory relief seeking judicial determination of the meaning
of any provision of this Agreement. Without limiting the generality of the
foregoing, Sub-recipient shall in no event be entitled to, and hereby waives, any
right to seek indirect or consequential damages of any kind or nature from the City
or the Agency arising out of or in connection with this Agreement, and in
connection with such waiver Sub-recipient is familiar with and hereby waives the
provisions of Section 1542 of the California Civil Code which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
44. Consequential Damages and Limitation of Liabilitv
The City and the Sub-recipient agree that except as otherwise provided in this Section 44, in no
event will either be liable to the other under this Agreement for any damages including but not
limited to, special damages, loss of revenue, loss of profit, operating costs or business interruption
losses, regardless of cause, including breach of conttact, negligence, strict liability or otherwise.
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The limitations and exclusions ofliability set forth in this Section 44 shall apply regardless offault,
breach of contract, tort, strict liability or otherwise of the Sub-recipient and the City, their
employees or subconsultants.
45. Business Registration Certificate
The Sub-recipient warrants that it possesses, or shall obtain immediately after the execution and
delivery of this Agreement, and maintain during the period of time that this Agreement is in effect,
a business registration certificate pursuant to Title 5 of the City of San Bernardino Municipal Code,
together with any and all other licenses, permits, qualifications, insurance and approvals of
whatever nature that are legally required to be maintained by the Sub-recipient to conduct its
business activities within the City.
46. Legal Proceedings
Should any legal proceedings be commenced to enforce, enjoin, or collect funds or otherwise affect
this agreement between the Parties, it shall be filed in San Bernardino County Superior Court. The
prevailing party shall be entitled to recover its reasonable legal fees. The costs, salary and
expenses of the City Attorney and members of his office in enforcing this Agreement on behalf of
the City and the Agency shall be considered as "legal fees" for the purposes of this paragraph.
47. Exhibits
The Exhibits to this Agreement, A through C are an integral part of this agreement and have each
been incorporated herein. The Agreement shall not become effective until such time as the Sub-
recipient has properly filled out and fully executed each exhibit to this Agreement, as required, and
the Interim Executive Director or his/her designee has reviewed and approved the form and content
of each Exhibit.
48. Entire Agreement
This Agreement constitutes the entire agreement between the Parties. This Agreement supersedes
all prior negotiation, discussions and agreements between the Parties concerning the subject
matters covered herein. The Parties intend this Agreement to be the final expression of their
agreement with respect to the subjects covered herein and a complete and exclusive statement of
such terms.
11/
1/1
11/
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and
year first written above.
AGENCY
Redevelopment Agency of the City of San Bernardino
. c-.--? GiJR
By. A:.
Emil A. Marzullo, Interim Executive Director
Approved as to Form:
By: \ ~tfjfL
Agency nsel
SUB RECIPIENT
Affordable Housing Solutions of San Bernardino,
a California non-profit corporation
~~
Chief Executive Officer
By:
ATTEST:
BY:~~'~
Seer ar()
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EXHIBIT "A"
Scope of Services
Sub-recipient shall be responsible for carrying out the following Agency activities: Acquisition of
abandoned and/or foreclosed residential properties that qualify as Eligible Properties under the Agency's
housing opportunities for households which adjusted gross income is at or below 120% of the AMI that
qualify as Eligible Homebuyers; demolition and/or rehabilitation of acquired properties; and resale of these
properties as further negotiated with the Agency. The Program shall be carried out in a manner
satisfactory to the City and consistent with this Agreement, the Substantial Amendment and any standards
required as a condition of providing these funds.
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EXHIBIT "B"
Supervisory Staff Personnel
Sub-Recioient Staff:
Emil A. Marzullo,
Chief Executive Officer
Carey K. Jenkins,
Chief Operating Officer
Russ DeJesus,
Chief Financial Officer
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EXHIBIT "e"
NSP TARGET ZONE
(add applicable map)
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