HomeMy WebLinkAboutC-4303 - MOU Agreement for Section 108 Loan Repayment FY 09-10I
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MEMORANDUM OF UNDERSTANDING AGREEMENT
The City of Newport Beach ( "City) has received a grant from the United States
Department of Housing and Urban Development ( "HUD ") under Title I of the
Housing and Urban Development Act of 1974, as amended (hereinafter referred
to as the "Act'). As one of the programs to be funded by the City from the HUD
grant, the City desires as of July 1, 2009, to authorize the ECONOMIC
DEVELOPMENT DIVISION, a City of Newport Beach Department (hereinafter
referred to as the "Department') to provide the services (herein the "Services ")
set forth in Exhibit "A" to this MEMORANDUM OF UNDERSTANDING
AGREEMENT (herein the "Memorandum "). This memorandum sets forth the
obligations of the Department regarding the Services.
1. CONTENTS. Exhibit "A" is attached hereto and the Department
acknowledges that the said exhibit is incorporated herein by this
reference.
2. SCOPE OF SERVICES. The Department hereby agrees to
perform all work necessary to complete the services set forth in
Exhibit "A" to this Memorandum. All services shall be performed to
the satisfaction of the City's Economic Development Division.
3. TIME OF PERFORMANCE. The services of the Department shall
commence as of July 1, 2009, and shall be completed on or before
June 30, 2010 (herein sometimes referred to as the "program
year").
4. CHANGES/TERMINATION /BUDGET MODIFICATION. The
authorization granted by the Memorandum may be terminated by
the City at any time. The City may, from time to time, make
changes in the scope of services to be performed hereunder, and
will so notify the Department in writing. The City reserves the right
to reduce funding allocations contained in this memorandum at any
time, and for any reason.
5. COMPENSATION. The Department shall be paid by the City out of
funds allocated to the Department from the City's FY 2009 -2010
Program Year Community Development Block Grant (CDBG)
Funds received from HUD to pay for the services. The funds shall
be disbursed to the Department, subject to availability and approval
by HUD, in an amount not to exceed ONE HUNDRED NINETY
SEVEN THOUSAND FIVE HUNDRED THIRTY FIVE DOLLARS
AND 00 /100 ($197,535.00). The sum shall include all related costs
in accordance with the limitations and funding requirements set
forth in Exhibit "A" attached hereto. The City shall disburse the
funds on a reimbursement basis for the Services.
6. MAINTENANCE AND AVAILABILITY OF RECORDS. The
Department must establish and maintain, on a current basis, a
project records file and adequate accounting system in accordance
with generally accepted accounting principals and standards. The
Department shall retain all records for at least five (5) years after
the termination of this Memorandum.
The Department shall make available for inspection, its
performance, financial, and all other records pertaining to the
performance of this Memorandum, to authorize City and HUD
personnel, and allow those personnel to inspect and monitor its
facilities and program operations, including the interview of
Department's staff and program participants as required to enable
the City and HUD officials to fulfill their obligations to ensure
compliance with all applicable laws and regulations.
7. NON - EXPENDABLE PROPERTY. A record shall be maintained
by the Department for each of non - expendable property acquire
under this Memorandum. This record shall be made available to
the City upon request. The term "Non- expendable property" shall
include tangible personal property (including but not limited to office
equipment), real property and any interest in such real property,
including any mortgage, trust deed, or other encumbrance of real
property, and the funds received from the sale of any interest in real
property. Any utilization of funds from the disposition, including
sale, of non - expendable property must have approval of the City
and HUD and otherwise comply with HUD or other Federal laws
and regulations. In the event of termination of this Memorandum,
the City reserves the right to determine the final disposition of said
non - expendable property, including funds and /or any other assets
derived there from. The disposition may include the City taking
possession of said non - expendable property. The term "Non -
expendable personal property" means leased and purchased
tangible personal property having a useful life of more than two (2)
years and an acquisition cost of $1,000 or more per unit.
8. PROGRAM REPORTS. Quarterly, the Department shall provide
the City, on forms provided by the City, a program report on the
status of the scope of services, and evidence of compliance with
HUD regulations no later that the 15th of the month following the
end of each quarter. The Department shall maintain project data
and make available project records that might be required for the
annual evaluation and biennial audit. The Department shall provide
the City an accounting of program income on a quarterly basis.
The Department shall be required to compile and maintain, as part
of the record, files that verify that program recipients, clients or
beneficiaries met applicable program eligibility requirements
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pursuant to Title 24 Code of Federal Regulations Part 570, Subpart
J, Section 570.506. The Department shall provide the information
required by the City and hereby agrees to and shall provide the
information required for submission to HUD in August of each year
for the annual evaluation performance report for the previous 12-
month period ending June 30, 2009; and shall provide the City with
such information as may be reasonably required at various times
for reporting to HUD, the City Council, and other citizen
committees.
CERTIFICATION AND ASSURANCES. The Department
acknowledges that it understands that the funds for this
Memorandum are originally provided by HUD and that,
consequently, the expenditure of these funds is subject to specific
requirements set forth in various Federal regulations and
agreements between the City and HUD. In particular, this
Memorandum is subject to requirements contained in Title 24 Code
of Federal Regulations Part 570 and Title 1 of the Housing and
Community Development Act of 1974. The Department agrees to
ensure compliance with all Federal requirements in all sub-
contracts or sub - grants entered into pursuant to this Memorandum.
The Department will not use funds provided this Memorandum to
pay for entertainment, meals or gifts.
11. NOTICES. All notices to parties, requested in writing, shall be sent
to the City:
City of Newport Beach
Attn: Kathlyn Bowden
Economic Development Coordinator
3300 Newport Blvd.
P.O. Box 1768
Newport Beach, CA, 92658 -8915
With a copy to:
LDM Associates, Inc.
Attn: Rudy E. Munoz, Senior Vice President
10722 Arrow Route, Suite 822
Rancho Cucamonga, CA 91730
Phone: (909) 476 -6006 x 103
Fax: (909) 476 -6086
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12. REQUEST FOR RENTAL FINAL PAYMENT. If applicable, the
City reserves the right to withhold ten percent (10 %) of the funding
amount authorized by this Memorandum on a completed project
until the City receives a copy of a "Certificate of Completion" for
each such completed project, as executed by the property owner.
13. BUDGET MODIFICATIONS. The City Manager, the Assistant City
Manager, or his /her Designee is authorized to modify the budget of
this Memorandum in the form of a written amendment or written
document hereto for the movement of funds within the budget
categories identified in Exhibit "A" on behalf of the City, when such
modifications:
A. Are at least ten percent (10 %) of the total Memorandum
amount;
B. Are specifically requested by the Department or the City in
writing prior to May 15, 2010;
C. Do not alter the total amount of compensation under this
Memorandum;
D. Will not change the project goals or scope of services;
E. Are in the best interest of the City, HUD, and the Department
in performing the scope of services under this Memorandum;
and
F. If related to salaries, are in accordance with any applicable
salary ordinances or laws.
14. TIME OF PERFORMANCE MODIFICATIONS. The City Manager
may grant time of performance modifications to this Memorandum
when such modifications:
A. In the aggregate, do not exceed twelve (12) calendar
months;
B. Are specifically request by the Department or the City in
writing;
C. Will not change the project goals or scope of services;
D. Are in the best interest of the City, HUD, and the Department
in performing the scope of services under this Memorandum;
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E. Do not alter the amount of compensation under this
Memorandum; and
F. Is memorialized by written amendment hereto signed by the
parties.
15. TERMINATION.
A. This memorandum may be terminated on thirty (30) days'
written notice. In the event of such termination, the
Department shall only be entitled to reimbursement for
approved expenses incurred to the effective date of
termination.
B. This Memorandum may be suspended or terminated by the
City upon five (5) days written notice for violation by the
Department of Federal Laws governing the use of
Community Development Block Grant Funds. In the event of
such suspension or termination, Department shall only be
entitle to reimbursement for approved expenses incurred up
to the effective date of suspension or termination.
C. In Accordance with Title 24 C.F.R. Part 85.43, Suspension of
termination may occur if the Department materially fails to
comply with any term of this award. This award may also be
terminated for convenience in accordance with Title 24
C.F.R. Part 85.44.
16. REIMBURSEMENT. In the event that the City is required to
reimburse the Federal Government as a result of a determination,
after audit, that the Department has misused funds, the Department
shall pay the City all disallowed sums within thirty (30) days after
the receipt of notice by the Department of the amount due.
17. D"IS -BACON ACT. The Department shall comply fully with the
requirements of Title I of the Housing and Community Development
Act of 1974, as amended, and other applicable laws including
Section 110 of the Act covering Davis - Bacon, as amended, (40
U.S.C. 276a — 276a -7) and related acts; the Contract Works Hours
and Safety Act (40 U.S.C. 327 — 333); the Copeland Act (40 U.S.C.
276(c)); and U.S Secretary of Labor Regulations (20 C.F.R., Part 3
& 5). Davis -Bacon and related acts will be enforced, and if the
State and Federal wage rates are applicable, then the higher of the
two will be used. Any contractor or sub - contractor working on a
federally assisted project must be eligible to participate in the award
of that contract.
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18. SUSPENSION OF FUNDING. The City may suspend payments to
the Department prior to termination in whole or in part of cause.
Cause shall include the following:
A. Failure to comply in any respect with either the terms and/ or
conditions of this Memorandum.
B. Submission to the City of reports which are incorrect or
incomplete in any substantial and material respect.
C. Termination or suspension of the grant of the funds to the
City from HUD for this program.
The City may also withhold payment of any unearned portion of the
amount authorized under this Memorandum if the Department is
unable or unwilling to accept any additional conditions that may be
required by law, by executive order, by regulation, or by other policy
announced by HUD at any time. Upon the suspension of funds, the
Department agrees not to expand any funds related to or
connected with any area of conflict concerning which the City has
determined that suspension of funds is necessary.
19. DISALLOWED COSTS. The Department hereby covenants and
agrees that it has full responsibility to ensure the proper
expenditure of CDBG fund paid to it under this Memorandum. Any
funds expended by the Department under this Memorandum which
are later determined by HUD, the City, or representatives thereof,
not to have been allowable, must be immediately returned to the
City.
If the Department fails to refund any disallowed cost, the City may,
in its sole discretion, terminate any and all contracts or agreements
(including this Memorandum) with the Department effective
immediately thereon.
20. FINANCIAL PHASE -OUT PERIOD. The Department agrees to
complete all necessary financial phase -out procedures required by
the City's Economic Development Division, within a period of not
more than sixty (60) calendar days from the expiration date of this
Memorandum or any earlier termination hereof. This time period
will be referred to as the financial phase -out period. The City shall
not be held liable to provide reimbursement for any expenses or
costs associated with the financial phase -out, if such costs or
expenses will result in total program expenditures exceeding the
total amount of the project budget. After the expiration of the
financial phase -out period, those funds not paid to the Department
under this Memorandum, if any, shall be immediately
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reprogrammed by the City into other eligible activities in the City.
The City's Program Manager shall request a final financial audit for
activities performed under this Memorandum at the expiration of the
final phase -put period.
21. USE OF FUNDS. All funds approved under this Memorandum
shall be used solely for cost approved in the program budget for
this Project attached hereto as Exhibit "A" and made a part hereof.
Separate financial records shall be kept for each funding source.
22. PROGRAM INCOME.
A. "Program Income," as defined at Title 24 C.F.R. Part
570.500 (a), means gross income received by the
Department directly generated from the use of CDBG funds.
When such income is generated by an activity that is only
partially assisted with CDBGF funds, the income shall be
prorated to reflect the percentage of CDBG funds used.
L Program income includes, but not limited to the following:
(a) Proceeds from the disposition by sale or long term
lease of real property purchase or improvement
with CDBG funds;
(b) Proceeds from the disposition of equipment
purchased with CDBG funds;
(c) Gross income from the use or rental of real
personal property acquired by the Department with
CDBG funds, less the costs incidental to the
generation of such income;
(d) Gross income from the use or rental of real
property owned by the Department that was
constructed or improved with CDBG funds, less the
cost incidental to the generation of such income;
(e) Payments of principal and interest on loans made
using CDB funds.
(f) Proceeds from the sale of loans made with CDBG
funds;
(g) Proceeds from the sale of obligations secured by
loans;
(h) Interest earned on funds held in a revolving fund
account;
(i) Interest earned on program income pending
disposition of such income;
(j) Funds collected through special assessments
made against properties owned and occupied by
households not of low and moderate income,
where such assessment are used to recover all or
part of the CDBG portion of a public improvement.
(ii) Program income does not include interest earned (except
for interest described in Title 24 C.F.R. Part 570.513) on
cash advances from the U.S Treasury.
Such Interest shall be remitted to HUD for transmittal to
the U.S Treasury and will not be reallocated under
Section 106(c) or (d) of the Act. Examples of other
receipts that are not considered program income are
proceed from fund raising activities carried out by the
Department receiving CDBG assistance; funds collected
through special assessments used to recover the non-
CDBG portion of a public improvement; and proceeds
from the disposition of real property acquired or improved
with CDBG funds when such disposition occurs after the
applicable time period specked in Title 24 C.F.R. Part
570.503(b) (8).
B. Any program income received by the Department shall be
immediately returned to the City.
C. The Department shall file a quarterly statement with the City
regarding the monthly amount of program income generated
by Department within two months of its generation.
23. CLOSE -OUT PROCEDURES. This Memorandum shall be closed
out when:
A. All costs to be paid for by CDBG funds have been incurred,
with the exception of close -out costs and costs associated
with contingent liabilities as set forth in Title 24 C.F.R. Part
570.509(1);
B. Any rehabilitation activities to private property have actually
been completed; and
B
C. Other responsibilities of the Sub - recipient under the
Memorandum have been completed. Upon close -out and
after demand by the City, the Department shall provide the
City with:
A full and complete listing of all outstanding loans;
ii. Original loan documents and any all original security
instruments for
all loans generated with CDBG funds;
iii. Document assigning the loan from the Department to
the City.
24. UNIFORM ADMINISTRATIVE REQUREMENTS. To the extent
applicable, the Department shall comply with the requirements and
standards of OMB Circular No. A-87, "Cost Principles for State,
Local, and Indian Tribal Governments", as applicable, OMB Circular
No. A -128, "Audits of State, Local Government" and Title 24 C.F.R.
Part 85 "Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments".
25. INTERPRETATION.
A. Order of Precedence. In the event there are inconsistencies
or conflicts in this Memorandum or any exhibits or
attachments hereto, the inconsistencies shall be resolved by
giving precedence in the following order.
Housing and Urban Development Act of 1974,
including any amendment thereto;
ii. The Regulations as approved by the Secretary of the
U.S Department of Housing and Urban Development
( "HUD "); and any additional regulations codified in the
Code of Federal Regulations applicable to the CDBG
program;
iii. The provisions of this Memorandum and Exhibits and
attachments thereto.
iv. In case of conflict between the terms of this
Memorandum and the terms contained in any
document attached as an exhibit, the terns of the
Memorandum will strictly prevail unless said terms are
in conflict with federal, state or local law, in which
case said law shall strictly prevail.
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IN WITNESS WHEREOF, the parties have caused the Memorandum to
be executed on the day and year first above written.
Terms and conditions understood and accepted:
APPROVED AS TO FORM:
OFF CE OF THE CITY ATTORNEY
Aaron C. Harp,
Assistant City Attorney
for the City of Newport Beach
I_'%a1*35
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By: C)�, �'v�
Leilani Brown,
City Clerk
\�PoRV
CITY OF NEWPORT BEACH,
A Municipal Corporation
By: Z��z Z4�
omer BU ,
City Manager
for the City of Newport Beach
DEPARTMENT:
Economic Development
By:
Sharron Wood,
Assistant City Manager
Exhibit A
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CITY OF NEWPORT BEACH CDBG
Exhibit A: Section 108 Loan Repayment
Project: Section 108 Loan Repayment
Organization: City of Newport Beads
Description:
Funds will be used to repay the City's Section 108 Loan. The loan was used to partially fund public improvements
to the Balboa Target Area totaling $8 million. The scope of work includes: the Balboa Village Pedestrian and
Streetscape Plan, Street Improvements to Balboa Blvd., Pier Parking Lot, Pier Plaza, and Lot A connecting access
to Main Street.
HUD Matrix Code: 108 Loan Payment CDBG I $197,535
Eligibility Citation: 1570,201 ( c ) I HOME 1 $0
National Objective: 1 570 Mad
(a Area ESG I $0
Accomplishment I N/A HOPWA I $0
Goal:
Start Date: 107/01/2009 1 Other: 1 $0
End Date: 06/30/2010 1 Total: 1 $197,535
Service Area: Balboa Peninsula
Census Tract/Block Group 62800.1
Help the homeless? No
Help persons with HIV / AIDS? No
Help persons with Special Needs? No
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City of Newport Beach
3300 Newport Blvd
Newport Beach, CA 92658
Kathlyn Bowden, AICP
Economic Development Coordinator
Phone: 949 -644 -3230