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HomeMy WebLinkAboutReso. 1987 - 347 - Approving agreement between the City and Business Incubator, Inc for small business incubator services and authorizing Mayor to sign same . ' � {• � RESOLUTION N0. 5�,��, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING APPROVING THE AGREEMENT BETWEEN THE CITY OF REDDING AND BUSINESS INCUBATOR, INC. FOR SMALL BUSINESS INCUBATOR SERVICES, AND AUTHORIZING THE MAYOR TO SIGN SAME. BE IT RESOLVED by the City Council of the City of Redding as follows: 1. The City Council of the City of Redding hereby approves the Agreement between the City of Redding and Business Incubator, Inc. providing for small business incubator services which will in turn create jobs for the poor and disadvantaged citizens of the City of Redding. 2. 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, when appropriate. 3. 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 17th day of November , 1987, and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: Fulton, Gard, Johannessen, & Carter NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Dahl ABSTAIN: COUNCIL MEMBERS: None L��f�! Scott Carter, Vice Mayor City of Redding ATTEST: � c��Q. �.c, ETHEL A. NICHOLS, City Clerk FORM APPROVED: ALL A. HAYS, ity ttorney � � � V , , ''. • • . AGREEMENT BETWEEN CITY OF REDDING AND BUSINESS INCUBATOR, INC. FOR USE OF CDBG FUNDS THIS AGREEMENT, made and entered into this day of , 19 , by and between the CITY OF REDDING, a municipal corporation, hereinafter called "CITY" and BUSINESS INCUBATOR, INC. a California non-profit corporation,� hereinafter called "BII, " : WITNESSETH: WHEREAS, 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 develop- ment services in connection therewith; and WHEREAS, the City Council has determined that the BII is the appropriate provider of business incubator services in the Redding community; NOW, THEREFORE, in consideration of the recitals and the mutual obligations of the parties as herein expressed, CITY and BII agree: - 1 - . i • I. SCOPE OF SERVICES. A. BII shall promote and assist the growth and development of small business concerns located or desiring to locate within the City of Redding Sphere of Inf luence by providing a large facility where several small businesses can reside together, sharing centralized services and advisory resources. The Business Incubator' s overall mission will be to improve the success rate of new and existing small businesses by expanding business opportunities., increasing the local . tax base, improving business services, and ultimately creating and retaining jobs within CZTY. 1. BII shall market its services to businesses in CITY. 2. BII shall work with clients to develop feasible business plans. 3 . BII shall coordinate allocation of space in the Business Incubator facility with the developer, as well as .handling all landlord/ tenant arrangements with the incubator tenants. 4. BII shall provide management and technical assistance to tenant businesses as well as businesses that are considering locating in the BII facility. 5. BII shall provide centralized services to incubator tenants such as, but not limited to, - clerical support, shipping and receiving assis- tance, conference facilities, computers, copiers and word processors. B. BII shall establish and maintain working relationships with Greater Redding Chamber of Commerce, Downtown Redding Business Association, economic development entities and CITY staff in marketing and implementing its Small Business Incubator program. C. BII shall maintain contact with businesses assisted and report information regarding each business, as required by CITY. D. BII shall certify for each incubator tenant that assistance rendered will be of primary benefit to low- and moderate-income persons, which for purposes of this Agreement means that at least 51� of the jobs affected (i.e. , created or retained) must meet the following requirements: 1. Be made available to persons residing within the Redding City limits who are low/moderate income persons; or - 2 - � / • • . 2. Be held by low/moderate income persons who reside within the Redding City limits. Low/Moderate income persons are those whose incomes prior to being hired do not exceed the incomes set forth in Exhibit "A" attached hereto and incorporated herein and who reside within the CITY limits. E. BII agrees that no less than eight new full-time permanent jobs shall be created or retained and filled by qualifying low- or moderate-income persons within the business incubato� facility during the course of this Agreement. For the purposes of this Agreement, the term "full-time permanent job" shall mean a position that is expected to continue for two years or more and consist of a minimum of 35 hours per week. � F. BII shall assure that all contracts with CDBG assisted . BII participants shall require such participants to meet the requirements of I .D. above and the require- ments of section VII of this Agreement. II . TERM . The term for services to be provided by BII under this Agreement shall be from October 1, 1987 through September 30, 1988, provided that the Agreement may be extended if all funds allocated herein have not been expended. In the event BII violates the provisions of this Agreement for any reason other than the occurrence of circumstances over which it can exercise no effective control and such violation shall not be cured or remedied within sixty ( 60) days after notice - thereof by CITY, in addition to any other remedies provided for herein, CITY shall have the right to terminate this Agreement by written notice duly serviced upon BII. III . PAYMENT A. CITY shall provide a loan under this Agreement not to exceed $23,800 for services described in Section I . above. B. Upon execution of this Agreement, payment will be disbursed to the BII upon receipt of invoices docu- menting reimbursable expenses and accomplishment of milestones, as set forth in Exhibit "B" attached hereto and incorporated herein. Said payments shall not exceed the amount as designated on the disbursement schedule on Exhibit "C. " C. Unless otherwise approved, funds paid hereunder shall be deposited in a Redding bank with fiscal control as approved by CITY Finance Director. - 3 - � , � . i • IV. REPAYMENT OF FUNDS A. CITY agrees that a four-year period of time may be required before BII becomes financially self- sufficient. In consideration, CITY further agrees to postpone initial repayment of the loan for up to four years from the execution date of this document. This does not preclude earlier payments should BII determine it is in the best interest of BII to do so. During the four-year period interest shall accrue on the out- standing balance from the date of initial disbursement . at the rate of 1.75o simple interest per annum. B. At the conclusion of the four-year grace period, the principal balance and accrued interest shall be repaid by the BII in annual payments over a 10-year period at the rate of 1.75� per annum. The outstanding balance may be repaid in full before it is due and payable if the BII determines it is in their best interest to do so. The first installment shall be due October 1, 1991, with subsequent annual payments due in accordance with the schedule set forth in Exhibit "C. " C. It is agreed by CITY and BII that the incubator project is expected to be self-sufficient over time. It is also agreed that funds provided under this Agreement are a loan and as such are obligated to be repaid. However, if circumstances should occur beyond the control of the BII, that result in the termination of the incubator project and the dissolution of the BII, - CITY will release the BII from repayment of any amounts due under this Agreement. V. RECORDS A. BII 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 Director and in compliance with requirements of Office of Management and Budget Circular A-110. B. BII 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 BII 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 for three ( 3 ) years after such findings have been resolved. - 4 - , . � • . C. 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 BII. However, recognizing that BII may from time to time have records of recipients which are highly personal and confidential in nature, CITY, in its dealings with BII 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 BII. D. Specifically, BII shall maintain the following program information: 1. Evidence of marketing efforts (e.g. , brochures, meeting notices, etc. ) . 2. A log of all activity on advisory services, and clerical-support services, including work per- formed, hours, and persons working on project. 3 . All participant-related information as required to issue reports as set forth in Exhibit "D. " E. In addition, in order to meet HUD requirements for benefit to low/moderate income persons, and in order to demonstrate conformance with these requirements, BII shall obtain and maintain records consisting of the following: 1. Creation of new jobs: a. A copy of a written Agreement with business incubator tenants containing: ( 1) A commitment that it will make at least 51� of the jobs available to low- and moderate-income persons, and will provide training for any of those jobs requiring special skills or education; and ( 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 ( 3 ) A description of actions to be taken to ensure that low- and moderate-income persons receive first consideration for those jobs. - 5 - � ' � • b. A written record shall be maintained including 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. Retention of 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 turn- over, the information set forth in V.E.1. 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 available to low- and moderate-income persons. For jobs made available, a description of how first consideration was given to such persons for those jobs shall also be included in the record. F. FINANCIAL MANAGEMENT. BII shall maintain a financial management system which provides for: � - 6 - • • 1. Records that identify adequately the source and application of funds for BII activities. 2. Effective control over and accountability for all funds and other assets. BII shall adequately safeguard all such funds and assets and shall assure that they are used solely for authorized purposes under this Agreement. 3 . Comparison of actual outlays with budgeted amounts for CDBG funds. 4. Accounting records that are supported by source documentation. 5. A systematic method to assure timely and appropriate resolution of audit findings and recommendations. G. PROGRAM INCOME 1. "Program Income" means amounts received by �he BII generated from the use of funds under the terms of this Agreement. It includes, but is not limited to the following: a. Proceeds from the disposition by sale or long-term lease of real property purchased with CDBG funds; b. Income from the temporary use, lease, or sale of properties acquired or developed with CDBG funds; c. Payments of principal and interest on loans made using CDBG funds; d. Interest earned on CDBG funds held in a revolving fund account; e. Interest earned on program income pending disposition of such income; and • ' f. Fees charged to clients in conjunction with the provisions of services and/or financing assisted with CDBG funds. 2. Program income may be retained by the BII and used for those activities as set out in the "Scope of Work" section of this Agreement. 3. Program income earned shall be substantially disbursed to the approved activities prior to requesting disbursement of additional funds from CITY. BII shall show all program income generated - 7 - . � � • � o using CDBG funds as adjustments on their requests for funds submitted to CITY. 4. In the event that the BII is unable to expend all program income in the current year, it will be considered as carryover funds available for successive CDBG grant years. If the Agreement is terminated those funds shall revert to CITY. VI . LEGAL COMPLIANCES BII 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. VII. CONDITIONS OF AGREEMENT. A. CI'I'Y shall retain ultimate control over matters involving the exercise of judgement and discretioz� in carrying out the intended program provided for by CDBG f unds. B. BII shall comply with the requirements of Title 24, Part 135, Employment Opportunities for Businesses and Lower-Income Persons in Connection with Assisted Projects. C. 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. D. No person who is an employee, agent, consultant, officer, or elected official or appointed official of CITY, or of any designated public agencies, or subgrantee which is receiving Community Development Block Grant funds, - who exercises or has exercised any functions or responsibilities with respect to CDBG activities assisted under the Community�.,_ Develo ment - - "�" p program; � or - who is in a position to participate in a decision-making process or gain inside information with regard to such activities; may obtain a personal or financial interest or benefit from the activity, or have an interest in any contract, subcontract or Agreement with respect thereto, or the proceeds thereunder; either for themselves or those with whom they have family or business ties, during their tenure or for one year thereafter. - 8 - . , • • E. 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 applica- tion for such assistance, or HUD approval of applica- tions 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. F. BII 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. � G. BII 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. H. BII shall not discriminate against any person on the grounds of race, color, national origin, age, sex or religion, or against an otherwise qualified handicapped individual. I. Environmental Standards l. Environmental reviews of CDBG-funded activities shall be conducted by CITY. The BII may be expected to participate in the review process and may be delegated certain responsibilities relative to the environmental review process. 2. The BII shall provide CITY with a specific location of the project and shall notify CITY of any situation or changes which may affect the environmental review process. J. Employment and Contracting Opportunities 1. Section 3 of the Housing and Urban Development Act of 1968 requires, in connection with the planning and carrying out of any project assisted under the Act, that to the greatest extent feasible oppor- tunities for training and employment be given to lower-income persons residing within the unit of local government or the metropolitan area in which - 9 - • • the project is located and that contracts for work in connection with the project be awarded to eligible business concerns which are located in, or owned in substantial part by persons residing in the same metropolitan area as the project. K. Use of debarred, suspended, or ineliQible contractors or subrecipients CDBG funds shall not be used directly or indirectly to employ, award contracts to, or otherwise engage, the services of, or fund any contractor or subrecipient during any period of debarment, suspension, or place- ment in ineligibility status under the provisions of 24 CFR Part 24. VIII . ON-SITE MONITORING Authorized representatives of HUD and CITY shall have the opportunity to monitor BII ' s performance� under this Agree- ment at the site where such performance is being conducted. � Such monitoring may include but is not limited to observ- ation of services provided, interviews with BII personnel and staff involved in project operations, interviews with clients and validation of source data used in the prepara- tion of reports to CITY. IX. INDEMNIFICATION BII shall hold CITY, its officers, boards and commissions and members thereof, its employees and agents harmless of and free from any and all liabilities which might arise out - of or relating to this Agreement. Should CITY or any of its officers, boards and commissions and members thereof, its employees or agents be named in any suit or should any claim be made against it or any of them by suit or otherwise, whether the same may be groundless or not, arising out of or relating to this Agreement, BII shall defend CITY and said officers, boards and commissions and members thereof, its employees and agents, and shall indemnify them for any judgment rendered against them or any sums paid out in settlement or otherwise. X. INSURANCE PROVISIONS Workman' s Compensation, Liabilitv and Propertv DamaQe Insurance. BII shall obtain Workman' s Compensation Insurance, and Public Liability Insurance from one or more insurance companies licensed to do business in the State of California. Public liability insurance shall be in the amount of $100,000 per person; $300,000 per occurrence; $50,000 property damage; or $300,000 combined single limit bodily injury and property damage. Said insurance coverage shall be evidenced by a certificate of insurance or such - 10 - �. • • . other form of documentation of coveraqe as may be acceptable to CITY. Said evidence of coverage shall be executed by an authorized official of the insurer(s) . In addition to the limits of coverage provided hereinabove, the certificate or other documentation shall also provide that the City of Redding, its commissions, officers, employees and agents are named as additional insureds under the coverage afforded, that the coverage afforded is primary to any and all other coverages which may be available to CITY in connection with this Agreement, and that the insurer(s) will provide to CITY at least thirty ( 30) days prior to notice of cancellation or material change in coverage. � XI . CLOSE-OUT PROCEDURES BII shall prepare and submit a final invoice for final claims no later than sixty ( 60) days after the termination of this Agreement. The final invoice shall cover all claims for costs incurred by BII during the period of Agreement. � Where funds are due CITY, payment should be made to City of Redding and must accompany the final invoice. XII . AUDIT � r. An auditing agency selected by CITY shall conduct a CDBG audit of BII ' s records maintained in connection with the operations and services performed under this Agreement. Such an audit will be conducted in accordance with audit guidelines prescribed by HUD. CITY will provide BII with a preliminary draft of the audit report and hold a conference with BII to discuss the report if any findings are noted. BII shall respond to all findings within ten ( 10) working days after the conference. The auditing agency will then prepare its final audit report and submit it to CITY Manager and to HUD. CITY will notify BII of any expenses disallowed by HUD. BII shall make payment of disallowed expenses to CITY within thirty ( 30) days of such notification, unless otherwise specified by CITY. CITY OF REDDING ATTEST: By MIKE DAHL, Mayor ETHEL A. NICHOLS, City Clerk BUSINESS INCUBATOR, INC. FORM APPROVED: By DON PEERY, cu ' ve Director R DALL A. HA S, ity Attorney - 11 - . • • EXHIBIT "A" CDBG Income Guidelines: Family Size Maxi.mum Annual Income 1 $ 13,900 2 15,900 3 17,850 4 . 19,850 5 � . 21,100 6 22,350 7 23,550 $ 24,800 CDBG guidelines include all sources of income in the determination of Adjusted Gross Income except for the following: a. Income from employment of children; b. Payment received for the care of foster children; c. Amounts specifically excluded by any Federal statu�e from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under the 1937 Act; d. Casual, sporadic, or irregular gifts; e. Amounts that are specifically for or in reimbursement of the cost of inedical expenses; f. Lump-sum additions to family assets, such as inheritances, insurance payments ( including payments under health and accident insurance and worker' s - compensation) , capital gains and settlement for personal or property losses; and g. Amounts of education scholarships paid directly to the student or to the education institution, and amounts paid by the government to veteran, for use in meeting the costs of tuition, fees, books and equipment. - 12 - I Q ORG. START � REVISED START MILESTONE CHART � p ORG. COMPLETE L� REVISED COMPLETE � �'�'�� COMPLETED MILESTONES rogram �Job No. ' �Date ' �Rev. No. BUSINESS INCUBATOR � START-UP � NOv . ' 87 �� 4 * = MILESTONE � 1987 � 1988 � ACTION OR MILESTONE OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP COMMENTS *CONSTRUCTION COMPLETE I I I I I I I TOM BROWN OPEN BII OFFICE ► OFFICE LAYOUT PROVISION FOR SERVICE COPY-PHONE-TYPE SITE TENANT NBR 1 I� �71 e I I I I � I I I I I i � STAFF--ADM. ASSISTANT � ? BOOKKEEPING--PROVISION ► �7 � COMPUTER CONSULTATION--PROVISION p p PEER GROUP SITE TENANT NBR 2 I� p ? *25� OCCUPANCY e p 5 400 S . FT. SITE TENANT NBR 3 p d ? REVIEW SERVICES P TENANT NEEDS SITE TENANT NBR 4 p � ? *50� OCCUPANCY � P 10 800 S . FT. SITE TENANT NBR 5 t> ? YEAR END AUDIT HELP TENANTS SITE TENANT NBR 6 7 *75� OCCUPANCY � 16 200 S . FT. SITE TENANT NBR 7 p � � REVIEW BII STRATEGY WHAT NEXT� GOAL OCCUPANCY 87� I I I 18 792-21 600 S F1 NEW JOBS ESTIMATED I I 0 I 1 I2 I 3 I 4 . - - � 8 ACCUMULATED ACTUAL I I I I I I I ( i I I I I TOTALS FROM TOTAL JOBS ESTIMATED I I 5 I 12 I 20 I 26 I 32 I 33�� I 34 135 I 36 I 37 �. I 38 � OCTOBER 1987 � ACTUAL I I I I i I I I I I I I I TO DATE �, • • Exhibit "C" Disbursement and Payback Schedule � Disbursement Schedule Amount Interest to be for Accrued Date Disbursed Period Interest ----------------------------- 10/O1/87 0 - - 11/O1/87 0 0.00 0.00 12/O1/87 5,949 0.00 0.00 O1/O1/88 1,983 � 8. 68 8.68 02/O1/88 1,983 11. 57 20. 24 03/O1/88 1,983 14.46 34.70 04/O1/88 1,983 17. 35 52.05 OS/O1/88 1,983 20. 24 72. 30 06/O1/88 1,983 23 . 14 95.43 07/O1/88 1,983 26. 03 121.46 08/O1/88 1,983 28.92 150. 38 09/O1/88 1,987 31. 81 182 .19 09/30/88 - 34.71 216. 90 (Total Interest Yr 1) 09/30/89 - 416 . 50 633 .40 (Total Interest Yr 2) 09/30/90 - 416. 50 1, 049. 90 (Total Interest Yr 3 ) 09/30/91 - 416.50 1,466. 40 (Total Interest Yr 4) Payback Schedule Pmt 2728. 41 Int 0. 0175 Interest for Remaining Principal Date Period Payment Interest Balance -------------------------------�------- 09/30/91 - - $1,466.40 23 800. 00 10/O1/91 - $2,728. 41 0. 00 22,537. 99 10/O1/92 $394. 41 $2,728. 41 0.00 20, 203 . 99 10/O1/93 $353 . 57 $2,728 . 41 0. 00 17,829. 15 10/O1/94 $312. 01 $2,728.41 0 .00 15,412.75 10/O1/95 $269.72 $2,728. 41 0. 00 12,954. 06 10/O1/96 $226.70 $2,728 .41 0 . 00 10,452. 35 10/O1/97 $182. 92 $2,728. 41 0.00 7,906. 86 10/O1/98 $138. 37 $2,728. 41 0. 00 5, 316. 82 10/O1/99 $93 .04 $2,728 .41 0.00 2, 681. 45 10/O1/00 $46 . 93 $2,728. 38 0.00 0. 00 , • • EXHIBIT "D" MONTHLY REPORT FOR USE OF CITY OF REDDING CDBG FUNDS NAME OF PROVIDER: Contact Person/Title: Phone: Accounting Period for this Report: through 1. Total gross expenditures (all funds) : $ 2. Total fees collected/other resources: $ 3 . Net expenditures ( #1 minus #2) : $ 4. City funds received to date: $ 5. City funds expended to date: $ � 6. City funds as percentage of net expenditures ( #4 divided by #3) : $ 7 . Total new employees hired: ( 100�) (a) City of Redding residents ( ,j (b) Non-City of Redding residents ( o) 8 . For all City of Redding Residents Served: Total Total Income Households Persons ( 1) At or below lower-income level: ( 2) Over lower-income level: 9. For all those served at or below lower- income level: Sex of Head of Household ( 1 ) Male ( 2) Female Minority Status of Head of Household ( 1) white ( 3 ) Black ( 5) Native American � ( 2) Asian ( 4) Hispanic ( 6) Other I hereby certify the above to be true and correct, to the best of my knowledge. (Signature) (Date) (Typed or Printed Name) (Title)