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HomeMy WebLinkAboutReso 96-153 - Executing agreement between the COR and the Superior Calif Economic Dev Dist for the economic Dev Revolving Loan Fund, & Auth the Mayor to Sign Same . � � RESOLUTION NO. ��0-/53 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING EXECUTING AN AGREEMENT BETWEEN THE CITY OF REDDING (CITY) AND THE SUPERIOR CALIFORNIA ECONOMIC DEVELOPMENT DISTRICT (SCEDD) FOR THE ECONOMIC DEVELOPMENT REVOLVING LOAN FUND, AND AUTHORIZING THE MAYOR TO SIGN SAME WHEREAS, the CITY has entered into a grant agreement with the Department of Housing and Urban Development (HUD) to carry out the Community Development Block Grant (CDBG) program within CITY; and WHEREAS,the City Council has determined that it is in the best interest of CITY, to provide certain economic development services in connection therewith; and WHEREAS, the City Council previously in July 1994 determined that the SCEDD is the appropriate provider of Revolving Loan Funds for the purpose of economic development by creating or retaining jobs for low/moderate-income residents of the City of Redding; WHEREAS, the CITY is extending operation and administration of the Economic Development Revolving Loan Program through SCEDD for a term of (18) months from September 1, 1996, through February 28, 1998; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Redding as follows: 1 . The Mayor of the City of Redding is hereby authorized and directed to sign all necessary documents on behalf of the City of Redding, and the City Clerk is hereby authorized and directed to attest the signature of the Mayor and to impress the official seal of the City of Redding on the aforesaid documents. 2. A true copy of the Agreement referred to herein is attached hereto and made a part hereof. I HEREBY CERTIFY that the foregoing resolution was introduced and read at a regular meeting of the City Council of the City of Redding on the 20th day of August 1996, and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: P. Anderson, R. Anderson, Kehoe, Murray and McGeorge NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None ABSTAIN: COUNCIL MEMBERS: None . G , DAVID . EOR ay City of Redding ATTEST: . � CONNIE STROHPJIAYER, ity Clerk �� J FORM APPR01(ED: �`� ��� � � ` � ��e���.2,� � � � ... _.. ._....... , .,.. .. . _. .. ..... ,...;: , : .. W. LEONARD WINGAT , City Attorney "- "" � � � � `�� � ���� � , ! ! AGREEMENT BETWEEN CITY OF REDDING AND SUPERIOR CALIFORNIA DEVELOPMENT DISTRICT REVOLVING LOAN FUND PROGRAM THIS AGREEMENT, made and entered into this day of , 19 , by and between the CITY OF REDDING, a municipal corporation, hereinafter called "CITY" and the SUPERIOR CALIFORNIA ECONOMIC DEVELOPMENT DISTRICT, a California non- profit corporation, hereinafter called "PROVIDER;" and RECITALS WHEREAS, the CITY has allocated Community Development Block Grant (CDBG) funds to PROVIDER for the specific purposes set forth herein; and WHEREAS, said funds are provided to the CITY through the Community Development Block Grant Program of the U.S. Department of Mousing and Urban Development (HUD); and WHEREAS, the CITY has allocated said funds for the sole purpose of supporting PROVIDER's delivery of services and programs to CITY's residents as set forth herein. NOW, THEREFORE, it is mutually agreed by PROVIDER and CITY as follows: I. PROVISIONS AND SERVICES. PROVIDER will render to residents of the City of Redding services as set forth in attached Exhibit "A," and as represented in the application dated June 14, 1994, and which is hereby incorporated by reference as if set forth in full. I I. TERM. The term of this Agreement shall be from September 1, 1996 through February 29, 1998. III. AMOUNT AND USE OF FUNDS. Use of CITY's funds allocated hereunder to PROVIDER shall be subject to the following terms and conditions: A. Any funds paid to PROVIDER shall be used solely for the purposes set forth in Exhibit "A." p p y nefit..of City;.of Re,dding; .::........ .. . unds ai hereun er s a be ex ended solel for the be . .. ... .._ businesses. All businesses assisted shall be located within��the� Red�ding City limits and priority on new jobs shall be given to City residents. . , � ! � � AGREEMENT/City of Redding & SCEDD for the Revolving Loan Fund Program Page 2 C. PROVIDER shall render services utilizing funds paid by the CITY hereunder only to recipients meeting appropriate eligibility criteria under the Revolving Loan Fund Guidelines as approved by the CITY. IV. APPORT/ONMENT OF FUNDS. A. No allocated funds will be disbursed under this Agreement until final fund drawdown authorization has been received by the City from HUD. B. Payment of said funds will be made in accordance with a schedule established by the Finance Officer of the City of Redding. V. TERMINA TION. A. If PROVIDER defaults in the performance of any term or condition of this agreement, it must cure that default by satisfactory performance within 10 days after service upon it of written notice of default. If PROVIDER fails to cure the default within that time, then CITY may terminate this agreement without further notice. B. Notwithstanding subdivision V-A above, in the event that CITY fails to receive CDBG funds, or the allocation of such funds are reduced by HUD, CITY may terminate this agreement by giving notice to PROVIDER by registered mail. C. Upon termination, PROVIDER shall transfer to CITY any CDBG funds on hand at the time of termination and any accounts receivable attributable to the use of CDBG funds. VI. REVERS/ON OF ASSETS. Upon expiration of this Agreement, PROVIDER shall transfer to CITY any CDBG funds on hand at the time of expiration and any accounts receivable attributable to the use of CDBG funds. VII. PROGRAM INCOME. A. "Program Income" means amounts received by PROVIDER generated from the use of funds under the terms of this Agreement. It includes, but is not limited to, the following: 1 . Proceeds from the disposition by sale or long-term lease of real property purchased with CDBG funds; � � AGREEMENT/City of Redding & SCEDD for the Revolvin� Loan Fund Program Page 3 2. Income from the temporary use, lease, or sale of properties acquired or developed with CDBG funds; 3. Payments of principal and interest on loans made using CDBG funds; 4. Interest earned on CDBG funds held in a revolving fund account; 5. Interest earned on program income pending disposition of such income; and 6. Fees charged to clients in conjunction with the provisions of services and/or financing assisted with CDBG funds. B. Program income may be retained by PROVIDER and used for those activities as set out in the "Scope of Work" section of this Agreement. C. Program income earned shall be substantially disbursed to the approved activities prior to requesting disbursement of additional funds from CITY. PROVIDER shall show all program income generated using CDBG funds as adjustments on their requests for funds submitted to CITY. D. In the event that PROVIDER is unable to expend all program income in the current yea�, it will be considered as carryover funds available for successive CDBG grant years. VIII. D�CUMENTS REPORTS AND RECORDS. A. PROVIDER shall at all times maintain a complete and current set of financial and statistical records of all its activities, which shall include, but shall not be limited to, those specifically set forth below or otherwise mentioned herein, and which shall in particular reflect clearly the application and use of funds paid to it by the CITY. All such records shall be in a form satisfactory to the CITY and shall be subject to inspection or audit by CITY staff at any reasonable time during the normal and usual business hours of PROVIDER. Any inspection or audit of both financial and nonfinancial files shall be made by the Housing Administrator or his/her designee. B. Recognizing that PROVIDER may from time to time render services to recipients which are highly personal and confidential in nature, the CITY shall only disclose such information as required by law. C. PROVIDER agrees to keep all necessary books and records including property, personnel and financial records in connection with the services performed under this Agreement in accordance with CITY Finance Officer and in compliance with requirements of Office of Management and Budget Circular A-133, A-122, and A-1 10. Submittal of an independent audit in accordance with OMB Circular A- 133 and A-122 shall also be required of PROVIDER in relation to contract services. ....._.. .._.... .. .. _.. ................ , � � AGREEMENT/City of Redding & SCEDD for the Revolving Loan Fund Program Page 4 D. PROVIDER agrees to maintain and preserve such records during the period from the start of Agreement performance until three (3) years from the submission of the final report or until the CDBG audit hereinafter referred to is conducted and PROVIDER receives CITY notification that said audit has been accepted by HUD, whichever is later. Provided, however, that records which are the subject of audit findings shall be retained over three (3) years after such findings have been resolved. E. The Secretary of HUD, the Comptroller General of the United States, CITY or any of their duly authorized representatives shall have access to and right to examine such records related to this Agreement during said period at any reasonable time during normal and usual business hours of PROVIDER. However, recognizing that PROVIDER may from time to time have records of recipients which are highly personal and confidential in nature, CITY, in its dealings with PROVIDER will at all times maintain said confidentiality and will not require public record to be made or provided that will serve to violate the confidentiality requirements of PROVIDER. F. Specifically, PROVIDER shall maintain the following program information: 1 . Evidence of marketing efforts (e.g., brochures, meeting notices, etc.). 2. Loan applications and disposition of application (e.g., denied, withdrawn, approved). 3. A log of all activity on all loan packages, and advisory services, including work performed, hours, and persons working on project. 4. Client files of all businesses assisted. 5. Verification that the business could not obtain other financing, and that without Revolving Loan Fund assistance the project could not take place. 6. Statistical information on program beneficiaries as required by HUD and CITY. G. In addition, in order to meet HUD requirements for benefit to low/moderate income persons, PROVIDER shall obtain and maintain the following for each loan package: 1 . For businesses which will create new jobs: , a. A copy of a written Agreement containing: . s� �� AGREEMENT/City of Redding & SCEDD for the Revolving Loan Fund Program Page 5 (1) A commitment by the business that it witl make at least 60% of the jobs available to low- and moderate-income persons and will provide training for any of those jobs requiring special skills or education; (2) A listing by job title of the permanent jobs to be created indicating which jobs will be available to low- and moderate- income persons, which jobs are part-time, and which jobs require special skills or education; and f3) A description of actions to be taken by the grantee and business to ensure that low- and moderate-income persons receive first consideration for those jobs; and b. A listing by job title of the permanent jobs filled, which jobs were available to low- and moderate-income persons, and a description of how first consideration was given to such persons for those jobs. 2. For businesses which will retain existing jobs: a. Evidence that in the absence of CDBG assistance jobs will be lost; and b. A listing by job title of permanent jobs retained, indicating which of those jobs are part time and (where it is known) which are held by low- and moderate-income persons at the time the CDBG assistance is provided. c. Where applicable, identification of any of the retained jobs (other than those known to be held by low- and moderate-income persons) which are projected to become available to low- and moderate-income persons through job turnover within two years of the time CDBG assistance is provided. Information upon which the job turnover projections were based shall also be included in the records; and d. For each retained job claimed to be held by a low- and moderate- income person, information on the size and annual income of the person's immediate family; and e. For jobs claimed to be available to low- and moderate-income persons based on job turnover, the information set forth above; and f. Where jobs were claimed to be available to low- and moderate-income persons through turnover, a listing of each job which has turned over to date, indicating which of those jobs were either taken by, or avail- able to low- and moderate-income persons. For jobs made available, . � � AGREEMENT/City of Redding & SCEDD for the Revolving Loan Fund Program Page 6 a description of how first consideration was given to such persons for those jobs shall also be included in the record. IX. INDEPENDENT CONTRACTOR. In providing its services, PROVIDER will act as an independent contractor and no officer or employee of PROVIDER will be deemed a CITY officer or employee for any purpose. X. HOLD HARMLESS Each party to this agreement agrees to defend, indemnify, and hold harmless each other, its officers, agents, employees, and volunteers, from and against any liability for all claims, losses, damages, attorney's fees and other expenses to the extent such claims, losses, damages, attorneys' fees and other expenses to the extent such claims; losses, damages, attorneys' fees or expenses are caused by a party's � negligent acts, er�ors, or omissions. In the event such claims, losses, damages, attorneys' fees or expenses are caused by the joint or concurrent negligence of more than one of the parties hereto, such liability shall be borne by each party in proportion to its own negligence. XI. INSURANCE PROVISIONS. PROVIDER shall comply with CITY insurance requirements as detailed in Exhibit "C." XII. LEGAL COMPLIANCES. PROVIDER shall at all times during the term of this Agreement comply with all legal requirements, including any applicable Federal, State or City regulations, and shall secure at its full cost and expense any and all permits, applications or other requirements in connection therewith. XIII. UNIFORM ADM/NISTRATIVE REQUIREMENTS A. PROVIDER shall comply with the requirements of Title 24, Part 135, Employment Opportunities for Businesses and Lower-Income Persons in Connection with Assisted Project, which implement Section 3. The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance of HUD-assisted projects covered by Section 3 shall, to the greatest extent feasible, be directed to low- and very low-income persons, particularly persons who are recipients of HUD assistance for housing. B. PROVIDER shall comply with the requirements and standards of OMB Circular No. A-122, A-1 10, and A-21, including all stated restrictions on the use of � � AGREEMENT/City of Redding & SCEDD for the Revolving Loan Fund Program Page 7 appropriated funds for lobbying purposes in connection with a specific contract, grant, or loan. To this effect, PROVIDER further agrees to execute Exhibit "D," Anti-Lobbying Certification, attached hereto. C. PROVIDER will comply with the requirements of Section 504 of the Rehabilitation Act of 1973 as amended by 29 USC 794. D. No member of or Delegate to the Congress of the United States and no Resident Commissioner shall be admitted to any share or part of this Agreement or to any benefit to arise from the same. E. No member, officer or employee of the City of Redding, or its designees or agents, no members of the governing body of the City of Redding, and no other public official of the City of Redding who exercises any functions or responsibilities with respect to the program during his tenure or for one year thereafter shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the program assisted under this Agreement. F. The assistance provided under this Agreement shall not be used in the payment of any bonus or commission for the purpose of obtaining HUD approval of the application for such assistance, or HUD approval of applications for additional assistance, or any other approval or concurrence of HUD required under this Agreement, Title I of the Housing and Community Development Act of 1974 or HUD regulations with respect thereto; provided, however, that reasonable fees or bona fide technical, consultant, managerial or other such services other than actual solicitation, are not hereby prohibited if otherwise eligible as program costs. G. PROVIDER shall comply with the prevailing wage provisions of the Davis - Bacon Act on any project costing in excess of $2,000.00 when 25 percent or more of the costs of such project are paid with Community Development Block Grant funds. H. PROVIDER shall pay individuals employed in jobs financed in whole or in part with CDBG funds not less than the prevailing rates of pay for such jobs. This provision does not apply to an employee or employees in any program category who are being paid in whole, or in part with CDBG funds unless 25 percent or more of the total wages paid to all employees in that category are paid from CDBG funds. . � � AGREEMENT/City of Redding & SCEDD for the Revolving Loan Fund Program Page 8 X I V. pISCR/M/NA TION Except as provided in section 12940 et seq. of the Government Code, PROVIDER shall not discriminate against any person because of his/her race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, mental status, age, or sex nor refuse to hire or employ the person or to refuse to select the person for a training program leading to employment, or to bar or to discharge the person from employment, or from a training program leading to employment, or to discriminate against the person in compensation or in terms, conditions or privileges of employment. The PROVIDER shall insert in all subcontracts for any work covered by this Agreement this nondiscrimination provision. , XV. ASSIGNMENT PROVIDER shall not assign any interests in this agreement and shall not transfer any interest in the same without the prior written consent of CITY. XVI. MODIFICATION This agreement may only be modified by written amendment hereto, executed by both parties, however, matters concerning the scope of services which do not affect the agreed price may be modified by mutual written consent of PROVIDER and CITY executed by the Mayor. XVl/. �EVERAB/LITY If any provision of this agreement is held to be unenforceable, the remainder of this agreement shall be severable and not affected thereby. XVlII. NOTICES All notices that are required to be given by one party to the other under this agreement shall be in writing and shall be deemed to have been given if delivered personally while enclosed in a properly addressed envelope and deposited with the United States Post Office for delivery by registered or certified mail, addressed to the parties at the following addresses, unless such addresses are changed by notice, in writing, to the other party. City of Redding Superior California Development District Housing Division 737 Auditorium Drive, Suite A 760 Parkview Avenue Redding, California 96001 Redding, California 96001 � � AGREEMENT/City of Redding & SCEDD for the Revolving Loan Fund Program Page 9 XIV. ADDITIONAL PROV/S/ONS This agreement shall be governed by the laws of the State of California. It constitutes the entire agreement between the parties regarding its subject matter. This contract supersedes all proposals, oral and written, and all negotiations, conversations or discussions heretofore and between the parties related to the subject matter of this agreement. CITY OF REDDING ATTEST: gy DAVID L. McGEORGE, Mayor City of Redding CONNIE STROHMAYER, City Clerk SUPERIOR CALIFORNIA ECONOMIC DEVELOPMENT DISTRICT FORM APPROVED: By BOB NASH, Executive Director W. LEONARD WINGATE, City Attorney � • EXHIBIT "A" � SCOPE OF SERVICES A. PROVIDER shall provide services in the implementation of the CITY's Revolving Loan Fund for the primary benefit of low/moderate-income residents as requested by and under the supervision of the Director of Development Services or designee, and in compliance with the Economic Development Revolving Loan Fund Operating Procedures attached hereto as "Exhibit B." 6. PROVIDER agrees to promote and assist the growth and development of small business concerns in Redding under the CITY's Revolving Loan Fund Program. PROVIDER shall provide financial analysis, loan packaging and related advisory services as a means of assisting the CITY's Revolving Loan Fund. C. PROVIDER shall maintain staffing arrangements necessary to competently administer the RLF. D. PROVIDER shall work with clients to develop feasible financial loan packages. E. PROVIDER shall provide financial analysis of loan applications to determine the borrower's eligibility for the loan and ability to repay the loan. F. PROVIDER shall analyze the loan packages according to the Revolving Loan Fund Guidelines established by the CITY. G. PROVIDER shall submit requests to the CITY for environmental determinations and review of HUD "necessary" and "appropriate" determinations. H. PROVIDER shall submit loan packages to the PROVIDER Loan Committee with recommendations of loan approval and terms or disapproval, and to appropriate governmental agencies and/or private lending institutions for loan approval. PROVIDER shall ensure that loan packages are complete and accurate prior to submission to potential lenders. I. PROVIDER shall continue working with clients and potential lenders until the loan is approved and disbursed or declined or withdrawn. J. PROVIDER shall establish and maintain working relationships with lenders, both governmental and private, and with area accountants, brokers and realtors. In addition, PROVIDER shall work closely with CITY staff in marketing and implementing CITY's Revolving Loan Fund. K. PROVIDER shall maintain contact with businesses assisted under the CITY's Revolving Loan Fund for a period of 24 months after signing the loan, and report all such information regarding each business as required by CITY and HUD. After the 24- month period, PROVIDER shall conduct a job audit to insure compliance with job creation/retention requirements. After the 24-month period, PROVIDER shall submit quarterly reports on the status of the loan portfolio within ten working days of the end of each calendar year quarter for the life of the loan. . � • L. PROVIDER must certify for each loan application that assistance will be either: 1. Of primary benefit to low- and moderate-income persons, which for purposes of this Agreement means that at least 60% of the jobs affected (i.e., created or retained) meet the following requirements: a. Be made available to low/moderate income persons; or b. Be held by low/moderate income persons. (Low/moderate income persons are those whose total household income prior to being hired do not exceed 80% of the Median Area Income as annually established and updated by HUD and provided by the CITY to PROVIDER; or 2. That the project is in a Redevelopment Area and will aid in the prevention or elimination of slums and blight. M. PROVIDER shall determine those participants who are eligible for services, the extent of such services and the amount, if any, of Revolving Loan Funds to be expended for such services. N. PROVIDER agrees to establish a goal to obligate 75% of funds available within the next twelve months, and to maintain this percentage level at all times thereafter, except when the fund falls below S 15,000. � O. PROVIDER agrees to establish a goal of funding a minimum of 67% of loans packaged. P. PROVIDER agrees to establish a goal to obtain private local loan commitments for the purpose of supporting the goals of the Revolving Loan Fund Program in the amount of S150,000 over the next two years and be able to show that they are actively pursuing that goal. Q. PROVIDER agrees to establish an accounting procedure to ensure program principal will not be encroached upon by program administrative costs. R. PROVIDER agrees that if for any reason the funds covered under this Agreement are no longer used for the established purpose, that all• payments from the CITY contribution to the revolving loan fund will be returned to the CITY's Community Development Block Grant Program. S. The representative of CITY shall have the right to review and monitor services performed pursuant to this Agreement. CITY, the Department of Housing and Urban Development, the Comptroller General of the United States, or any of their duly authorized representatives shall have the right to inspect and/or audit any books, documents, papers and records of PROVIDER which are directly pertinent to the services performed under this Agreement. � � EXHIBIT "B" ECONOMIC DEVELOPMENT REVOLVING LOAN FUND � OPERATING PROCEDURES � � TABLE OF CONTENTS PAGE I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 II. ELIGIBLE APPLICANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 III. ELIGIBLE ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 IV. INELIGIBLE LOAN ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 V. TARGET AREAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 VI. TYPES OF FINANCIAL ASSISTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 A. Jobs Generated/Retained . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 B. Maximum Loan Amount . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . 3 C. Private Financial Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 D. Loan Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 E. Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 F. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 G. Timely Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 H. Recapture of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 I. Compliance with City and Federal Conditions/Regulations . . . . . . . . . . . . 5 J. Interest Supplements and Loan Guarantees . . . . . . . . . . . . . . . . . . . . . . 6 VII. LOAN APPLICATION AND APPROVAL PROCESS . . . . . . . . . . . . . . . . . . . . 6 VIII. ADMINISTRATION/LOAN APPROVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 IX. DELINQUENT LOAN/LOAN DEFAULT PROCEDURES . . . . . . . . . . . . . . . . . . 9 X. SALE OR TRANSFER OF BUSINESS; ASSUMPTION OF RLF LOANS . . . . . . 10 � � /. /NTRODUCTION = . The City of Redding has established an Economic Development Revolving Loan Fund (RLF) as part of its Community Development Block Grant (CDBG) Program to expand economic opportunities benefitting principally persons of low- and moderate-income in accordance with reg�lations in Title I of the Housing and Community Development Act of 1974, as amended (24 CFR, Part 570). Loan funds are available for various economic development activities undertaken by private businesses which create or retain jobs accessible to low- and moderate-income people, expand the City's tax base and leverage public and private investments. The RLF shall be administered by the Superior California Development Council (PROVIDER). The RLF will provide public loans in conjunction with private investments for the development and expansion of businesses. The program is intended to provide assistance to projects whose needs are not currently being met by existing federal and other programs. //. EL/G/BLE APPL/CANTS Funds will be made available on a competitive basis to assist new and existing manufacturing or assembling businesses located in the City of Redding as a sole proprietorship, partnership or for-profit corporation with a proposed project in the City of Redding. Target Industries, as identified by the Coopers and Lybrand study dated April 1991, will be given priority. ///. EL/G/BLE ACT/V/T1ES Eligible activities for funding under the RLF Program include all normal project development costs, including but not limited to: - Land and building acquisition; - Off-site improvements; - Building construction/renovation/expansion; - Capital equipment; - Interim financing; - Clearance, demolition and site preparation; - Parking facilities; - Relocation; - Project "soft costs" (i.e., reasonable engineering and architectural costsl; � � ! � ECONOMIC DEVELOPMENT REVOLVING LOAN FUND/ OPERATING PROCEDURES Page 2 - Working capital (In tandem with a bank loan, no singular working capital loans will be made; working capital loans will generally be limited to 30 percent of the total Loan Fund portfolio); - Venture capital; - SBA 504 Program Companion Loan (Provides long term, fixed rate financing for land and building acquisition, construction and equipment; requires a minimum 50% private loan and 10% equity.) The RLF inay be used to provide up to 5% of the required equity. /V. /NEL/G/BLE LOAN ACT/V/T/ES The following activities/borrowers will not be eligible for an RLF loan: - Non-profit organizations; - Speculative building and renovation; - Land banking; - Loans for the sole purpose of investing in high interest accounts or other investments not related to direct job creation/retention. - Substitution of HUD monies for private financing. - Use of HUD monies for refinance of existing debt. V. TARGET AREA The RLF inay be used throughout the City of Redding providing that it is demonstrated that the funded activities principally benefit low- and moderate-income persons and/or aid in the elimination of slums and blighted areas. V/. TYPES OF F/NANC/AL ASS/STANCE All RLF projects must comply with the following financing standards and policies as specified by the HUD "necessary" and "appropriate" guidelines. A. Jobs Generated/Retained A major goal of this program is to create new jobs and to retain existing jobs. It is expected that one new job will be created or one existing job retained for every S 10,000 in RLF funding provided. These jobs should principally benefit low- and moderate-income people. - -, - �� - � -- • � . ECONOMIC DEVELOPMENT REVOLVING LOAN FUND/ ' OPERATING PROCEDURES Page 3 B. Maximum Loan Amount The maximum loan amount is 550,000 as a companion loan, 525,000 as a single stand alone loan. The minimum loan amount is S 10,000. C. Private Financial Commitments ("But Fo�" ConditionJ Firm private financial commitments must be submitted to the Superior California Development Council Loan Committee (SCDCLC) before preliminary approval. Legally binding private financial commitments must be secured prior to any final RLF loan approval. Applicants must provide, at a minimum, 10 percent cash or equity injection for the project, except in the case of SBA 504 Program Companion Loans. Other private financial commitments may be in the form of loans from financial institutions, the SBA, investors or other sources. RLF participation can be subordinated. Private lender commitments may be qualified only on the condition of SCDCLC approval of funds and/or the award of other funds to be linked to the RLF loan. Any RLF loan made prior to full commitment of private funds will be subject to that commitment. Applicants must demonstrate that an RLF loan would provide "gap" or "last resort" financing. A project will not be awarded RLF funding unless the primary lender can affirm that "but for the RLF loan, the project would not be implemented as defined." There are several typical kinds of "but for" statements and situations which apply to projects. 1 . Projects whose risk would and can prevent the full participation and/or investment by the private sector. 2. New business - these projects would involve entrepreneurs engaged in new businesses, but because of a lack of a "track record" would prohibit private sector financing without public leveraging. 3. Other situations in which the primary lender can affirm that "but for" public leveraging of the financial package, the project would not be feasible. D. Loan Terms 1 . Loans for building construction/renovation/expansion/demolition, improvements and land and building acquisition may have terms of up to a maximum of seven (7) years. The actual term is negotiable; the deal must justify the maximum term. _. _. .. ...., . -... .. ... _... _. ,... .. � � ECONOMIC DEVELOPMENT REVOLVING LOAN FUND/ OPERATING PROCEDURES Page 4 2. Loans for capitai equipment may have terms of up to a maximum of seven (7) years. The actual term is negotiable; the deal must justify the maximum term. 3. Loans for interim financing, project "soft costs" may have terms of up to a maximum of seven (7) years. The actual term is negotiable; the deal must justify the maximum term. 4. The term for working capital loans shall not exceed five (5) years. 5. In no case will the loan term exceed the economic life of the asset to be financed or the term of the lease. E. lnterest Rate The RLF is intended to be a flexible financing tool. The interest rate will be determined as per HUD guidelines, based on projected return on investment (ROI) and tailored for the specific need of the project. Interest rates shall reflect the amounts of risk and pledged security as determined and evaluated by the SCDCLC. Under the appropriate circumstances, loans may be made which permit "interest only" payments for a short period of time at the front end of a loan period. F. Security . The SCDCLC shall obtain sufficient and adequate collateral to secure all RLF loans. It will usually be in the form of liens on the assets financed, including fixed assets such as machinery and real estate, accounts receivable, inventory and lease agreements. Liens upon other non-project assets of the borrower may also be used to secure the loan. It will also be the general policy of the SCDCLC to require personal guarantees by the principal borrowers as deemed appropriate in the circumstances. Personal guarantees will normally be required of all persons/entities holding a 20% or more interest in the borrower. Collateral taken should be of such nature that it is readily marketable, not single purpose. If existing (not being purchased), an independent appraisal shall be obtained. G. Timely Comple tion All projects must be completed in a timely fashion, two years or less, with the total resources (both public and private) which are committed. RLF funds are a one-time only funding source. Additional RLF funds will be not awarded over the amount originally approved. H. Recapture of Funds . � � ECONOMIC DEVELOPMENT REVOLVING LOAN FUND/ ' OPERATING PROCEDURES Page 5 RLF projects are to provide for the recapture of RLF loans. Loan contracts are to include provisions for the repayment of principal and interest and/or provide for an equity participation on behalf of the SCDCLC. Recaptured RLF funds will be returned to the RLF for future loan awards. I. Compliance with City, State and Federal Conditions Each applicant must demonstrate an acceptance of and willingness to follow all applicable City, State and Federal regulations, including but not limited to: - Competitive bid procedures; - Davis/Bacon prevailing wage requirements; - Relocation regulations; - Affirmative Action; - National Environmental Protection Act (NEPA); - Provisions of benefits to low- and moderate-income persons; - Historical preservation requirements. J. lnterest Supplements and Loan Gua�antee Interest supplements and loan guarantees will be handled by the SCDCLC on a case-by-case basis, generally in accordance with this Exhibit. V//. LOAN APPL/CAT/ON AND APPROVAL PROCESS All applications for RLF will be made through the PROVIDER. This office will provide application forms, screen applicants, will analyze the applications using RLF standards and will present all loans to the SCDCLC for approval or rejection. The following are the general processing steps: A. Initial Applicant Contact. 1 . Applicant makes inquiry; 2. PROVIDER discusses RLF purpose, procedures, and requirements with applicant; 3. PROVIDER may also refer applicants to other sources of public and private capital and, if necessary, direct a client to small business assistance programs. B. PROVIDER provides/sends out application form and operating procedures to applicant. . � • ECONOMIC DEVELOPMENT REVOLVING LOAN FUND/ OPERATING PROCEDURES Page 6 C. Applicant returns completed application form, including proof of private financing commitments and application fee. D. PROVIDER reviews the application to insure that it is complete and to determine initial eligibility, will check credit and other references, undertake credit analysis, rate the applications and prepare a loan report (PROVIDER recommendations). PROVIDER will submit request to City for an environmental determination and review of HUD "necessary" and "appropriate" determination. Environmental clearance must be obtained before loan approval. The PROVIDER report is then presented to the SCDCLC. E. The SCDCLC considers the application and votes to award or deny the loan application, and any imposed conditions. Applicant witl be notified by the PROVIDER. F. IF SCDCLC recommends approval, the PROVIDER prepares the loan documents and requests funds from the City. After SCDCLC approval, the business recommended for funding will be notified and may be required to negotiate provisions, terms and conditions for the loans. A funding recommendation may be withdrawn if a reasonable and appropriate contract cannot be negotiated within a period of two months. Finalized copies of the contract will be processed by PROVIDER and properly signed and duly authorized as a loan agreement between the business and the PROVIDER. G. PROVIDER disperses funds and deposits loan payments. H. PROVIDER monitors the loan and the business activity of the borrower, including number of jobs created and who is filling them, other required data, and provides loan servicing and counseling. V///. ADM/N/STRAT/VEAPPROVAL The PROVIDER shall administer the RLF Program for the City of Redding. Loan applications will be reviewed and recommended for funding by the SCDCLC. The PROVIDER is the appointed agent for the City of Redding in the preparation of loan documentation. All loan documents will be in the name of the PROVIDER as lender but it is understood that the PROVIDER is acting on behalf of the City and that all loan proceeds and documents are the property of the City of Redding. A. Loan Review Committee • � ECONOMIC DEVELOPMENT REVOLVING LOAN FUND/ OPERATING PROCEDURES Page 7 The SCDCLC will be composed of inembers who are knowledgeable in areas of commercial and industrial real estate development, commercial mortgage lending, public development, financing small business development and the needs of the low- and moderate-income persons in the City of Redding. The SCDCLC and the chairperson shall be appointed by the PROVIDER. The SCDCLC will review the loan applications and staff reports to determine eligibility, evafuate the economic feasibility, assess credit risks, and approve or disapprove all loan amounts and interest rates. This determination will be based on the economic and financial feasibility of the borrower and the loan package, and the achievement of the public policy goals established for this program. B. Loan App�oval Authority The SCDCLC shall have the final approval power for all loans. C. Loan Servicing and Disbursements Following loan approval, all loan proceeds will be processed through the PROVIDER office. The City Finance Department will arrange disbursement when all environmental and other clearances are received and all contracts are signed and executed, and certified for compliance by the City of Redding Department of Planning and Community Development. Upon receipt of funds from the City, the PROVIDER will issue payment warrants and establish the borrower's payment schedule. Loan servicing and counseling will be conducted by PROVIDER. PROVIDER will maintain an account, clearly separate from other accounts PROVIDER may hold, at a banking institution of its choice located within the City of Redding, in which to deposit all payments made on outstanding RLF loans. PROVIDER will utilize these recaptured RLF funds to finance future loan awards. D. Administrative Costs Administrative charges for loan origination and any other administrative costs related to this program up to the point through loan settlement shall be reimbursed to PROVIDER in the following manner: 1 . A 5250 application fee may be charged to the borrower. 2. A two percent maximum loan fee charged to the borrower. This amount may be added to the principal of the loan and amortized over the life of the loan. � � � • i ECONOMIC DEVELOPMENT REVOLVING LOAN FUND/ OPERATING PROCEDURES Page 8 3. Administrative costs, screening, analysis and processing will be an allowable expense against program interest only. 4. Any charges made shall not exceed the actual cost of providing the service. Administrative charges associated with loan servicing, which is defined as that activity related to the collection of loan payments, shall be reimbursed to PROVIDER in the following manner: 1 . CDBG funds generated by program interest only from the Revolving Loan Fund. 2. Any charges made shall not exceed the actual cost of providing this service. No administrative charges, loan origination charges, or loan servicing charges shall be collected from the program principal including principal collected from repayment of RLF loans. Costs incurred for RLF promotion and administration including loan servicing, can be charged to program interest only. All requests for reimbursement shall clearly identify the loan for which costs were incurred. The total cost of administration is not to exceed an average of 53,300 per loan funded. /X. DEL/NQUENT LOAN/LOAN DEFAULT PROCEDURES A. Delinquent Loans In the event loan payments are more than 15 days late, a loan shall be declared delinquent. Actions to be taken are; 1 . The PROVIDER shall contact the borrower to determine the cause of the loan delinquency. 2. The PROVIDER shall assist the borrower with technical and management assistance, and shall refer the borrower to other appropriate sources of technical and management assistance. 3. PROVIDER shall collect a late charge of five percent of the regularly scheduled payment on any payment that is not paid within 10 days of the date that it is due. Such unpaid installment shall bear interest from the date of its maturity until paid at the rate established for othe� PROVIDER loan programs. B. Loans in Default . � � ECONOMIC DEVELOPMENT REVOLVING LOAN FUND/ OPERATING PROCEDURES Page 9 In the event payments are more than 60 days detinquent and the borrower is not cooperating with the PROVIDER to correct the delinquency, the loan shall be declared to be in default. The case shall be referred to the City Attorney for review and to recommend appropriate action. Actions to be taken are: 1 . The loan may be referred to a collection agency. 2. The PROVIDER may take legal action against the borrower to enforce guarantees and security as approved by the City Attorney. Reasonable legal fees and collection processing costs will be an allowed administrative charge, if appropriate. X. SALE OR TRANSFER OF BUS/NESS; ASSUMPT/ON OF RLF LOANS If all or any part of said business or an interest therein is sold or transferred by Borrower without PROVIDER's prior written consent, PROVIDER may, at PROVIDER's option, declare the Loan and all indebtedness of Borrower to PROVIDER immediately due and payable regardless of any provision or term to the contrary contained in any promissory note securing same. PROVIDER shall have waived such option if, prior to the sale or transfer, PROVIDER and the person(s) to whom the business is to be sold or transferred reach agreement in writing. If PROVIDER has waived the option and if the Borrower's successor in interest has executed a written assumption agreement, with terms, provisions, and conditions accepted in writing by PROVIDER, PROVIDER shall release Borrower from all obligations under this Term Loan Agreement and the promissory note. The loan note and agreement shall include a provision that PROVIDER shall have a right to declare a balance of the loan and any other indebtedness of borrower immediately due and payable in the event of any sale or transfer without PROVIDER's consent. A. Procedure for RLF Loan Assumptions are: 1 . Written request to sell or transfer business submitted to PROVIDER by Borrower. Such request shall include the name/address of Borrower's successor in interest and all terms, provision and conditions pertinent to sale or transfer of said business. Such a request shall also include an agreement by the borrower and its proposed successor to provide to PROVIDER such financial information concerning the proposed successor as shall be requested by PROVIDER. 2. PROVIDER shall approve or deny Borrower's request to sell or transfer said business in writing within 30 days of receipt of written request. 3. Borrower's successor in interest shall execute a written assumption agreement and submit same to PROVIDER. . • • ECONOMIC DEVELOPMENT REVOLVING LOAN FUND/ OPERATING PROCEDURES Page 10 4. PROVIDER shall accept in writing the Borrower's successor in interest assumption agreement. 5. PROVIDER shall release Borrower from all obligations of the term loan agreement and the promissory note upon full payment of the obligation by Borrower. a:\sceddagr.96 EXHIBIT "C" � . INSURANCE REQUIREMENTS FOR CONTRACTORS � Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Contractor, his agents, representatives, and employees. Minimum Scope of Insurance Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001) . 2 . Insurance Services Office form number CA 0001 (Ed.1/87) covering Automobile Liability, owned, non-owned and hired. 3 . Workers' Compensation insurance as required by the State of California and Employers' Liability insurance, including a waiver of subrogation against the City of Redding, its officers, officials, employees, agents and volunteers. Minimum Limits of Insurance Contractor shall maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability insurance or other form with a general aggregate limit is used, the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: $1,000, 000 per accident for bodily injury and property damage. 3 . Employer's Liability: $1,000,000 per accident for bodily injury or disease. Deductibles and Self-Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Contractor shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense expenses. INSURANC.O 1 C :�.:,::: .... .; � _:,,:::: 0 8-0 8=9.6.... .... . . • � Insurance Requirements for Contractors Other Insurance Provisions The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of work performed by or on behalf of the Contractor; products and completed operations of the Contractor; premises owned, occupied or used by the Contractor; or automobiles owned, leased, hired or borrowed by the Contractor. The coverage shall contain no special limitations of the scope of protection afforded to the City, its officers, officials, employees, agents or volunteers. 2. For any claims related to this project, the Contractor's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Contractor's insurance and shall not contribute with it. 3 . Each insurance policy required by this clause shall be endorsed to state that coverage shall not be cancelled except after thirty (30) days prior written notice has been given to the entity. Acceptability of Insurers Insurance is to be placed with insurers with a current A.M. Best 's rating of no less than A- :VII. Verification of Coveraqe Contractor shall furnish the City with certificates of insurance and original endorsementa effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the Cit� before work commences. .., ..._..._ .. ,....,_.:.... ,... ,........ INSURANC.OIC :: �::: ... ,:' ,.: .::� ::: ::08-.08-.g6' . ..: . � � � i EXHIBIT "D" ANTI-LOBBYING CERTIFICATION The undersigned certifies, to the best of his or her knowledge and belief, that: 1 . No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. 2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. 3. The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entere�+ into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than 510,000 and not more than 5100,000 for each such failure. DATE: SIGNATURE: