Loading...
HomeMy WebLinkAboutR34- Economic Development Agency CITY OF SAN BERNARDINO ORIGINAL ECONOMIC DEVELOPMENT AGENCY FROM: Emil A.Marzullo SUBJECT: Affordable Housing Solutions of San Interim Executive Director Bernardino - Subrecipient Agreement under the Neighborhood Stabilization Program DATE: September 17,2009 ----------------------------------------------------- ------ ---------- -------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): On June 4,2009,Redevelopment Committee Members Johnson, Baxter and Brinker unanimously voted to recommend that the Community Development Commission consider this action for approval. ------------------------------------------------------ --------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) 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 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 Contact Person(s): Carey K. Jenkins Phone: (909)663-1044 Project Area(s): N/A Ward(s): All Supporting Data Attached: El Staff Report 0 Resolution(s) Q Agreement(s)/Contract(s) B Map(s) ❑Letter(s) Funding Requirements: Amount: S 5,000 Source: Low and Moderate Housing Set-Aside Budget Authority: 2009-2010 Budget Signature: /e Fiscal Review- Emil A.Marzullo,Interim Execut a Director us' DeJ sus nterim Administrative Services Director -------------------------------------------------- - ----- — - -------- ----------------------------------------------------------------------------- Commission/Council Notes: Q Snj�JaOD' 5j ------------------------------------------------- ---------- ---,1—q--------------------- PWgeMus\CommDev Commission\CDC2lIl19\U9-21-09Afnniable HousingSontions-SubmetpientAgre ementSRFlnal.docx COMMISSION MEETING AGENDA Meeting Date: 09//21/2009 Agenda Item Number: ''3y ECONOMIC DEVELOPMENT AGENCY STAFF REPORT AFFORDABLE HOUSING SOLUTIONS OF SAN BERNARDINO - SUBRECIPIENT AGREEMENT UNDER THE NEIGHBORHOOD STABILIZATION PROGRAM BACKGROUND: On May 4, 2009, the Community Development Commission of the City of San Bernardino (the "Commission") approved the Economic Development Agency's (the "Agency") request to acquire the Global Mobile Home Park Corporation ("Global"), an inactive housing and economic development non- profit corporation created and operated by the City of Pomona("Pomona"). The request was made to facilitate the acquisition of foreclosed properties under the Neighborhood Stabilization Program ("NSP") in order to streamline the rehabilitation process under a structure where the properties are owned by the corporation. Under this structure it is anticipated the rehabilitation and resale to qualified home buyers who have been screened and are ready to take on the responsibility of home ownership will be greatly facilitated. Formed in February 2005, Global was intended to be used by Pomona for the purchase of mobile home parks within that city. However, the program did not commence, the corporation has not taken any action other than formation activities and the corporation had no existing liabilities. The purchase price of Global was $5,000 and the transfer has been finalized with Pomona. This amount is approximately equal to the amount necessary to have an attorney set-up the corporation by the creation of articles of incorporation, bylaws, notice, resolution and minutes of the first meeting, preparation and filing of Form 1023 with the Internal Revenue Service ("IRS") and the provision of follow-up data with the IRS to obtain tax exempt status for the non-profit corporation. The determination letter from the IRS granted non-profit status to Global based upon the corporation's purpose of "lessening governmental burdens." Corporations which are granted non-profit status based upon this purpose are usually controlled by the governmental entity which formed the corporation. The proposed activities of the corporation lessens the burdens of government in that it provides a mechanism to react to changes in the real estate market quickly thereby capitalizing on opportunities to acquire properties more efficiently and thus reduce the transaction costs associated with each purchase. CURRENT ISSUE: Now that the transfer of ownership has been completed, the Agency has already finalized the necessary paperwork to activate the non-profit corporation with the State of California. This included a name change to better signify its new mission within the City of San Bernardino ("City"). The name of the organization has been changed to Affordable Housing Solutions of San Bernardino, a non-profit 501(c)(3) corporation ("AHS"). Thus far, Agency Staff has been devising a series of operating practices, funding allocation procedures and general oversight requirements for AHS which will constitute the basis of the sub-recipient agreement with the City and are highlighted below. ------------------------------------------------------------------------------—------------------------------------------------------------ P\Agendn\CommDevCommisaion\CDC 2009\09-2"9 Affordable Housing Solutions-Subrecivient Agreement SR Final.docxCOMMISSION MEETING AGENDA Meeting Date: 09/211//2(009 /2 Agenda Item Number: �+ 1 Economic Development Agency Staff Report AHS—Subrecipient Agreement Page 2 Oreanizational Administration AHS will be overseen by a five-member Board of Directors consisting of the Interim Executive Director of the Agency, the Housing and Community Development Director of the Agency, the Interim Administrative Services Director of the Agency and two additional members appointed by the other Board of Directors. General legal counsel will be provided by the Agency's existing counsel. The Agency's Interim Executive Director will serve as the Chairman of the Board and Chief Executive Officer ("CEO") and will have the authority to convene meetings, as needed. Administrative oversight and daily management of AHS activities will be controlled by the Chief Operating Officer ("COO") who otherwise serves as the Agency's Director of Housing and Community Development. Initial Capital Allocation Funding for AHS will be through an initial allocation of $3.7 million in Federal NSP Funds for the purpose of acquiring previously foreclosed residential properties. Many of these properties will be rehabilitated and resold to households whose annual income does not exceed 120% of the Area Median Income ("AMI"). The rehabilitation and resale process will be conducted by a pool of intermediaries previously procured and established by AHS. For those properties that are inspected and deemed beyond repair, an active strategy of demolition will take place which will also be funded under the NSP in the amount of$600,000. As NSP activities have ramped up, the Agency has identified numerous opportunities for AHS to acquire, rehabilitate and resell residential properties that are outside of the City's pre-designated NSP target zone. The Agency has designated $2,000,000 from the Agency's Low and Moderate Income Housing set-aside Funds ("Set-aside") and $2,000,000 from Federal HOME Investment Partnerships Program Funds ("HOME") specifically for this purpose. This added funding will provide AHS with greater flexibility in the properties it intends to buy because this funding will not be subject to the various NSP limitations. By providing greater flexibility, these funds will enable AHS to address the foreclosure problem throughout the City with greater speed and effectiveness. The NSP funding of$3.7 million in acquisition, rehabilitation and resale funds and the $600,000 in NSP demolition funds together with the Set-aside funding of $2.0 million and the HOME funding of $2.0 million, will constitute the Initial Capital Allocation. Subsequent to the adoption of the proposed Resolution, if approved by the Commission, the Agency will amend its Annual Plan to reflect the allocation to AHS of$2.0 million in HOME Funds for FY 2009-2010 for the purposes identified in the Resolution, which are mainly the acquisition and rehabilitation of single- family and multi-family properties within the City. Future funding allocations will be recommended based on need and funding availability. Potential funding sources include, but are not limited to, additional NSP funds from both state and federal sources, the Agency's Set-aside and HOME Program Funds. In all cases future allocations, should they occur, will be subject to the Mayor and Common Council of the City of San Bernardino ("Council") and/or Commission approval and must be for the promotion and production of affordable housing and economic development opportunities within the City. ---- -------------------------------------------------------------------------------------------------------- P1AgeWun mmuevCmmusbnlM2W91 21-0 AMWWeHousingWutions-SubmipientAgreement5RFtnal.docxCOMMISSION MEETING AGENDA Meeting Date: 09/21/2009 Agenda Item Number: al Economic Development Agency Staff Report AHS—Subrecipient Agreement Page 3 Use o{Allocated Funds Funds will 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. Title to these properties will be held by AHS until they are resold to Income Eligible Households, or other qualified non-profit and/or for profit organizations to own, maintain and manage based upon covenants and other deed restrictions imposed to promote affordable housing. During the period of AHS ownership of the acquired housing units, the intermediaries from the previously approved AHS list will provide the rehabilitation, property maintenance and marketing of these units to income eligible households. Potential properties eligible for acquisition with the appropriate funding source will be identified by the Board of Directors of AHS for purchase consideration. Based on a majority vote of the Board of Directors, AHS will enter into escrow for those properties approved. Authority to sign the necessary paperwork to enter into escrow will be given to the CEO or in his absence, the COO of the corporation. Not less than five business days prior to close of escrow, the COO will request that funds necessary to acquire the properties be drawn from the appropriate source and deposited into a segregated account managed and maintained by the Interim Director of Administrative Services of the Agency acting in the capacity of Chief Financial Officer ("CFO") of the corporation. At the time identified in the escrow instructions, the CFO will transfer these funds into escrow in order to close the transaction and allow AHS to take title to the properties. In all instances, property acquisition will be conducted utilizing sound real estate practices deemed necessary for the specific transaction to include, but not limited to, the review o£ (1) the preliminary title report; (2) phase I environmental study, when applicable; (3) property environmental assessment; (4) current appraisal report; and(5) property inspection and cost estimate report. At all times, the CFO will maintain the financial books and records of AHS separate and apart from other Agency financial records. For expenses incurred by AHS the CFO will have the authority to pay for them from funds as authorized by the COO and/or other sources deemed appropriate by the Board of Directors if applicable, the Council or the Commission. Authority to Enter Into Agreements Recommendations for AHS to enter into all third party service agreements will be made by the COO to the Board of Directors who must give its approval by a majority vote. Third party service agreements and the other obligations incurred pursuant to AHS activities will be the sole obligations of AHS and not that of the City or the Agency. Dates and Times of Meetings Board meetings shall occur on the second Tuesday of each month unless an earlier time is determined to be necessary by the CEO in his capacity as Chairman of the Board of the corporation. Any Board member will have the ability to call a special meeting of the Board provided that all Board members have been given at least 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. ------------------------------------------------------------------------------------------ ------------------------- P UgeMaAComm Dev Commusiun�DC 2099019-21-09 Af undeble Housing Solutions-Subrecipient Agreement SR Final.docxCOMMISSION MEETING AGENDA Meeting Date: 09/21/2009 Agenda Item Number: Economic Development Agency Staff Report AHS—Subrecipient Agreement Page 4 ENVIRONMENTAL IMPACT: None. FISCAL IMPACT: There will be no fiscal impact to the City's General Fund. The cost of$5,000 to acquire and reconstitute AHS is derived from the Agency's Low and Moderate Income Housing 20% Set Aside Funds. Funding from this source has been identified in the Agency's FY2009-2010 Budget. Additional appropriation of funds as set forth in the attached Resolution are available through the NSP and from the Agency's Low and Moderate Income Housing 20% Set Aside Funds and HOME Investment Partnerships Program. RECOMMENDATION: That the Community Development Commission adopt the attached Resolution. Emil A. Marzullo, Interim xecutive Director P:\Agendn\Conrar Dev Co n ainonWIX 2009\09-21-09 Affordable Housing Solutions-Sub.ipient Agreement SR F1nal.doexcommISSION MEETING AGENDA Meeting Date: 09/21/2C0�09 Agenda Item Number: Ja 1 RESOLUTION NO. 2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF 3 THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT 4 AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE A CERTAIN SUB-RECIPIENT AGREEMENT BY AND 5 BETWEEN THE AGENCY AND AFFORDABLE HOUSING SOLUTIONS 6 OF SAN BERNARDINO AND DELEGATING PROPERTY ACQUISITION RESPONSIBILITIES IN FURTHERANCE OF THE ADMINISTRATION 7 AND MANAGEMENT FOR THE USE OF CITY OF SAN BERNARDINO NEIGHBORHOOD STABILIZATION PROGRAM ("NSP") FUNDS IN 8 ACCORDANCE WITH THE HOUSING AND ECONOMIC RECOVERY ACT OF 2008 9 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 16 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 22 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 25 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 28 1 P:NgenduVtmolmumUtewWtons3W9109-31-09 ARord6k Nowing S.W..NSP S.g ipiem Ag...,CDC Rnso.doc 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-Recipient 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 2 P UgeMw\R=btiions\RmbtmsU009W 2I3 ARordable Housing Solutiom NSP Submipient Agrament CDC Reso.doc 1 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 11 Sub-Recipient Agreement between the Agency and the Sub-Recipient. 12 Source of Funds: Dollar Amount: 13 Low and Moderate Income Housing Funds $2,000,000 14 (acquisition of non-NSP properties and 15 demolition) 16 NSP (acquisition and rehabilitations $3,700,000 17 of foreclosed properties through intermediary 18 agreements) 19 NSP (demolition) $600,000 20 HOME Investment Partnerships Program Funds $2,000,000 21 (acquisition of non-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 28 3 P Aff.M.bk Housing Solutev NSP S.b.,,mt Aw....t CDC 2no.Eoc 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. This Resolution shall take effect from and after its date of adoption by this 4 Commission. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 P-1AgcWas\Rmlutiom\Rc alutionat2W9\t09-21-09 Affordable Hauling SoWtons NSP Subracipinnt Agmawat CDC Resn Aac I RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING 2 THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT 3 AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE A CERTAIN SUB-RECIPIENT AGREEMENT BY AND 4 BETWEEN THE AGENCY AND AFFORDABLE HOUSING SOLUTIONS OF SAN BERNARDINO AND DELEGATING PROPERTY ACQUISITION 5 RESPONSIBILITIES IN FURTHERANCE OF THE ADMINISTRATION AND MANAGEMENT FOR THE USE OF CITY OF SAN BERNARDINO 6 NEIGHBORHOOD STABILIZATION PROGRAM ("NSP") FUNDS IN 7 ACCORDANCE WITH THE HOUSING AND ECONOMIC RECOVERY ACT OF 2008 8 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 9 Development Commission of the City of San Bernardino at a meeting 10 thereof,held on the day of , 2009, by the following vote to wit: 11 Commission Members: Aves Nays Abstain Absent 12 ESTRADA 13 BAXTER — 14 BRINKER — 15 SHORETT — 16 KELLEY 17 JOHNSON 18 MC CAMMACK 19 20 21 Secretary 22 The foregoing Resolution is hereby approved this day of 2009. 23 24 Patrick J. Morris, Chairperson Community Development Commission 25 of the City of San Bernardino 26 Approved as to Form: 27 By: C) 28 Agency o sel /JP���� n f C n S P:WyendavVtnolutnnsVlgoWtioiu�Z009\09-31-09 Affid6k Housing Soto NSP 5.b .pint A,..,.,cD Rm doc NEIGHBORHOOD STABILIZATION 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 4852-71654915.1 P1Agendw AWnda Altadtm s%gwda AIIa mentsNpnda Altad mentsV grmts-Amend 200910821-09 Affordable Housing Solutions-NSP Sub+ pent Agreemenj Neighborhood Stabilization Program Sub-recipient Agreement This Agreement is entered into this 21 st day of September,2009("Agreement"),by and between the Redevelopment Agency of the 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 of 2008 ("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-01 ("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 4852-71654915.1 2 P:1Agendas%genda Atladtmenlsftenda AtladimentsUger a AlledimeMS AW"s-Amend 20M1 21-09 AffordaNe Hwsing SWWions-NSP Sub-redgent Agree,mM.EOc 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 of the 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. Incomoration 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 of Incorporation. Any substitution of name shall require a majority vote of the 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. 4852-71654915.1 3 P:V ge sNga ft Atbtlmrentsftenda Attatltmenta%Wp a AgaW eMSWgrmtsAme 200=90 21-09 Albrdable Horsing SoMions-NSP Su edp w Agrme tdm 4. Organization of Sub-recipient A. The Sub-recipient's sole purpose is to implement the foreclosure acquisition,rehabilitation, and resale components of NSP funding as set forth herein. B. Sub-recipient Administration. i. The Sub-recipient shall be comprised of a five-member Board of Directors (`Board")consisting of the Interim Executive Director of the Agency,the Housing and Community Development Director of the Agency,the Interim Administrative Services Director of the Agency, and two additional members appointed by other members of the Board. General legal counsel shall be provided by the Agency's existing counsel or the office of the City Attorney of the City. ii. The Board will provide a list of the then-current members of the Board to the City and will notify the Agency immediately upon the appointment of new Board members. iii. 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 amounts allocated to Sub-recipient: Source of Funds: Dollar Amount: Low and Moderate Income Housing Funds $2,000,000 (acquisition of non-NSP properties and demolition) Q NSP (acquisition and rehabilitations $3,700,000 of foreclosed properties through intermediary agreements) 4852-7165-4915.1 4 P:Nge asWApnda AHaMmentsNgenda Atlachments\Agenda AttachmenlstAgrmts-Amend 2009A9-27-09 AJfwdable Housing Solutions-NSP Sub-redpient Ag uunent.doo ® NSP (demolition) $600,000 HOME (acquisition of non-NSP properties) $2,000,000 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 S.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%ofAMI ("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 of NSP 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. i. 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'). 4852-7165 4915.1 5 P:%gendas%genda Attathmentsl genda AttatitmentslAgeMa Atta"illotslAgrmis-Amend 2009109.21-09 Affordable Housing Solutions-NSP Sub+ pienl Agrees ent c ii. 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. iii. 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 of 9 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 of the 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 manner 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. 4852-71654915.1 6 - P.\Agenda$Agenda AUachmeMs Rena Attact m m%Agenda AttadrmeM%Agrmts-Amend 20091W-71-09 ARadable Housing SoMlws-NSP Sub+edpienf Agreement dw 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 of Initial Capital Allocation the Sub-recipient shall have the authority to acquire properties deemed appropriate under the Program and/or under the programmatic requirements of the 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 of Property A. Sub-recipient shall have the responsibility of: i. 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; ii. verifying that required notices are recorded against the rehabilitated properties to evidence affordability covenants; iii. 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. 4852-71654915.1 7 P.tAgendast4genda Atle ltmentskAgenda Attad,mentslAger4a Atlachments'Ag mts-Amend 7009(09-71-09 Affordable Housing Solu ions-NSP Sub-recipient Agreemerif doc 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; ii. all contractors by property; iii. 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. Authority 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 parry 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. 4852-7165-4915.1 S P'.WgendasfterWa Adadeneraft.rida AdachmentslAgenda Anachments\Agrmts-AmerM 200gM2I� Affordable Housing Solutions-NSP SuGfedpient Agreement doe 17. Compliance 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-110, 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: 4852-71654915.1 9 P-ftendasNgenda Anal menlsNgenda Attatl mentsWgenda Aft c mentsWgrl end 2009109-21-09 Mwdable HwsiN SoUtons-NSP SuE piem Agreemera.doe 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 92401 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 his/her 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,if the Sub-recipient materially fails to comply with any term of this Agreement, the City may take any one 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 returned to the Agency. 4852-71654915.1 10 P'.VgentleslAgentle AeaC nts%AgssWe Atlxb tsVApe AftwmeMsftmts.Am 2009109-21-0 Mendable Housing Solutions-NSP Suareopient Agreement.it= 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 of this 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 programmatic 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 his/her 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 4852-7165-4915.1 11 P 1 gendaslAgenda AtlaMm ntsNgeMa AttaUmentsXAgenda Atlao mentsWgrmts-Amend 200910421-09 Affordable Housing Solutions-NSP Sub-reppierr Agrearra g dx 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 ($1,000,000) 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. i. All insurance coverage must be maintained throughout the duration of this Agreement. ii. Insurance companies must have an A.M. Best Rating of B+VII or better. iii. 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. 4852-7165-4915.1 12 P:%Agendas\Agenda AftacbmentsNgerWa Adacbmenl9Agenda Altatl raents\Agrmts-Amend 2009\09-21-09 Affordable Housing 5010tons-NSP Sub-reapient AgreemeM doc 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. 31. 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 of the 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. 4652-71654915.1 13 P:WgendaMpnda MaUmantsNgende Aft tlmentsl genda Altar mentsWgrmts-Amend 2MgM-27-0 9 Affordable Housing Solutions-NSP Sub- pienl AgreemeM.doc 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 of the 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. Counterparts 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. Severability 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 if in 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- 4852-71654915.1 14 P VAgendamgenda AdarllmentslAgande Attacflmants'Agema Atla"entsWgrmts-Amend 2009109-21-09 Affordable Housing Solutions-NSP Sub-ratipient Agreement doe 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"): i. The failure of Sub-recipient to pay or perform any monetary covenant or obligation hereunder or any of the 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); ii. 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: 4852-71654915.1 15 P:WgenCslAgenda Atta ohmentslAgenda Ahap nts%AgenaAttamh ntsWgrmts-Amend 2009109-21- AModable Housing Solutiom-NSP Su eoplent Agreement.t i. 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; ii. Sub-recipient shall(a)apply for or consent to the appointment of a receiver,trustee,_ liquidator or custodian or the like of its 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(10)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; iii. 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 any one or more of the following actions: i. By notice to Sub-recipient declare that the entire unused amount of NSP 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; ii. 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, 4852-71654915.1 16 P\Agendas\Agenda AffatLmentstAgenda AttachmentsxAgenda AttaehmentstAgrmts-AmerM 200909-27-09 Affordable Housing Solutions-NSP Sub-eopient Agreement Ax agreement or covenant of the Sub-recipient under this Agreement or under any �✓ other document executed in connection herewith; iii. 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. City/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: i. Bring an action in equitable relief seeking the specific performance by the City or the Agency of the terms and conditions of this Agreement or seeking to enjoin any act by the City or the Agency which is prohibited hereunder; and/or ii. 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 Liability 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 contract, negligence, strict liability or otherwise. 4852-7165 4915.1 1 P:�Ager asNpen a Att MentsWgenda AttachmentsNgema AtlaMmentsl grmts-Ame 2009109-21-09 Affordable Hwsing Solutions-NSP Sub-recipient Agreement tloc The limitations and exclusions of liability set forth in this Section 44 shall apply regardless of fault, 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. 4852-71654915.1 18 P:WgendaslagenCa AaarhmentMgertda Attar ntsK9enda At1aoh"n(M9mas-Amend 2009109-21 4)9 Affordable Housing Solutions-NSP Suo recpient Agreement.doe 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 By: Emil A. Marzullo, Interim Executive Director Approved as to Form: By: Agency 1nsel SUBRECIPIENT Affordable Housing Solutions of San Bernardino, a California non-profit corporation By: Chief Executive Officer ATTEST: By: Secretary 4852-71654915.1 19 P--.\AgeWas%AgenCa Atladh tsWgenda AttadenentslAgenEa AttaUlm S%A9Mts-AmeM 20OM09-71-09 Affordable Housing SoMions-NSP Sub-recipient Agreenrenl.tloc 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. 4852-71654915.1 20 PV gendas%Apnda AtlaW ntsNge da AtleatmentsWgenda Altaahments\Agrmts-Amend 2009\09-21-09 MWdable Mousing Salutians-NSP Subteapknt Agreeme ,d. EXHIBIT "B" Supervisory Staff Personnel Sub-Recilient Staff: Emil A. Marzullo, Chief Executive Officer Carey K. Jenkins, Chief Operating Officer Russ DeJesus, Chief Financial Officer Q 4852-71654915.1 2 P VWgendasWgenda AttacmnemAAgewa Attacl,"MMAgenda Atlacftments ftrmla-Amend 2009M-2I Affordable Housing Solutions-NSP Sub-mapient Agreement,doc EXHIBIT "C" NSP TARGET ZONE (add applicable map) 4852-7165-0915.1 22 P WgendasWgentla AttaOt ntsNgenda Anao mentsNgen0a Anac mentsWgrmts-Amend 2009W9-2 1-09Aftdable Housing Solutions-NSP Sub-redpient Agreement dm Ilk t.