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HomeMy WebLinkAboutContract 33442 CITY SECRETARY STATE OF TEXAS § CONTRACT No. 5 COUNTY OF TARRANT § THIS contract ("Contract") is made and entered into by and between the City of Fort Worth ("City"), whose address is 1000 Throckmorton St., Fort Worth TX 76102, acting by and through Dale A. Fisseler, its duly authorized acting Assistant City Manager, and Mental Health Housing Development Corp ("MHHDC"), whose address is 603 West Magnolia Street, Suite 204, Fort Worth, Texas 76104, acting by and through David Fielding, its duly authorized President of the Board of Directors. (Sometimes City and MHHDC are referred to individually as a"Party" and collectively as the "Parties"). WHEREAS, the City of Fort Worth ("City") has received a grant from the United States Department of Housing and Urban Development ("HUD") through the HOME Investment Partnerships Program ("HOME"), Program No. M-04-MC-48-0204, Catalog of Federal Domestic Assistance ("CFDA") No. 14.239, with which the City desires to promote activities that expand the supply of affordable housing and the development of partnerships among the City, local governments, local lenders, private industry and neighborhood-based nonprofit housing organizations; WHEREAS, the primary, purpose of the HOME program ("HOME Program") pursuant to the HOME Investment Partnerships Act at Title II of the Cranston Gonzales National Affordable Housing Act of 1990, as amended, 42 U.S.C. 12701 el seq. ("NAHA") and the HOME Investment Partnerships Program Final Rule, as amended, 24 CFR Part 92 el seq. (the "HOME Regulations" or "Regulations") is to benefit low and very-low income citizens by providing them with affordable housing; WHEREAS, MHHDC, a Texas nonprofit corporation managed by a volunteer Board of Directors and qualified as a Community Housing Development Organization ("CHDO") according to HUD guidelines, is working to assist low and very low income individuals who have special needs by increasing the number of safe, affordable housing units available to them, WHEREAS, MHHDC will apply for Low Income Housing Tax Credits ("LIHTC") from the Texas Department of Housing and Community Affairs ("TDHCA") to rehabilitate and reconstruct MHHDC's affordable rental housing project commonly known as Hanratty Place. WHEREAS, the citizens of the City and the City Council have determined that the development of safe, decent, and affordable housing is needed for moderate, low, and very low- income citizens who are persons with special needs. HOME FUNDS CHDO SET-ASIDE Page 1 Mental Health Housing Development Corporation Rev. 03-27-06 ai "1 NOW, THEREFORE, THIS AGREEMENT FURTHER WITNESSETH: L GENERAL PROVISIONS A. Purpose The express purpose of this Contract is to provide MHHDC with HOME funds ("HOME Funds") not to exceed TWO HUNDRED TWENTY-EIGHT THOUSAND AND NO/100 Dollars ($228,000.00) for eligible pre-development expenses and operating costs for its LIHTC application to TDHCA for the rehabilitation and reconstruction of Hanratty Place, MHHDC's affordable housing apartment complex located at 800 South Jennings, Fort Worth TX 76104 (the "Property") which will provide rental housing for low and moderate income persons, with a target population of persons with mental illness (the "Program"). The HOME Funds will be used for two purposes: a) $178,000 for HOME-eligible pre-development expenses provided in the form of a subordinate interest bearing loan (the "Pre-Development Loan"), and b) $50,000 for HOME-eligible CHDO operating costs provided in the form of a grant ("Operating Costs Grant"); all in accordance with the attached Exhibit "A" — Program Summary. HOME Funds must be used for eligible activities and costs in connection with the Program set forth in the HOME Regulations including but not limited to architectural, engineering, attorney, consultant, appraisal and other applicable fees directly related to carrying out the Program. Eligible activities and costs may include those activities and costs directly related to the Program that were incurred prior to the date of the execution of this Contract. HOME Funds will be disbursed to MHHDC on a reimbursement basis upon MHHDC's request in accordance with established City Housing Department policies for disbursement of CHDO funds. The Pre-development Loan may be forgiven, at City's discretion and in accordance with the Regulations, 24 CFR 92.301, if the Program proves infeasible. The Operating Costs Grant is provided to support MHHDC's operations during the time period that it is applying to TDHCA for the LIHTC, and if awarded the tax credits, during the time period that it takes to complete the project. City certifies that MHHDC is a Community Housing Development Organization and acts as a housing developer as defined by HUD. City shall act through its agent, the City Manager, or his or her duly authorized representative, unless otherwise stated in this Contract. MHHDC agrees to comply with the HOME Regulations and any applicable City Codes and regulations. B. Duration / Period of Affordability This term of this Contract begins on the date of its execution and terminates two (2) years HOME FUNDS CHDO SET-ASIDE Page 2 Mental Health Housing Development Corporation Rev. 03-27-06 ; � ' - thereafter except for any applicable provisions relating to ensuring affordability. This Contract may be extended for an additional one (1) year term. MHHDC shall request the extension in writing and submit the request to City sixty (60) days prior to the end of the Contract term. It is specifically understood that it is within the City's sole discretion whether to approve or deny the request for an additional term. Any such extension must be in writing as an amendment to this Contract and approved by the City Manager or his or her designee. The per-unit subsidy provided for in this Contract shall be set forth in more detail in Exhibit "A" — Program Summary. Two (2) of the rental housing units developed by MHHDC will be considered HOME-assisted units and must qualify as affordable rental housing for a period of fifteen (15) years from the date these units are set up in HUD's Integrated Disbursement and Information System ("IDIS System") as required by the HOME Regulations. These units may "float" throughout the total number of units in the entire apartment complex, and shall be affordable to tenants whose incomes are verified as being at or below fifty percent (50%) of the area median income as defined by HUD. If these two (2) housing units do not qualify as affordable rental housing, the loan proceeds under this Contract are immediately due and payable to City. The two (2) rental housing units assisted under this Contract will remain affordable as required by 24 CFR Part 92.252 of the Regulations. Housing purchased, renovated or constructed with HOME Funds must remain affordable and subject to recapture for the following minimum time periods: five (5) years where the per unit amount of HOME Funds provided is less than $15,000; ten (10) years where the per unit amount of HOME Funds provided is $15,000 to $40,000; fifteen (15) years where the per unit amount of HOME Funds provided is greater than $40,000 or HOME-assisted rehabilitation of the units involved refinancing; and twenty (20) years when the multi-family units assisted are newly constructed. MHHDC must repay City any HOME Funds attributable to any unit or units that do not maintain the HOME affordability requirements. Further, the rental housing units must remain affordable without regard to the term of any mortgage or transfer of ownership, pursuant to the terms of the loan documents, beginning on the later of the date the project is complete or entered into the IDIS System. C. Income Eli ibility The HOME Program uses the income definitions used by HUD's Housing Choice Voucher Program. Annual income includes earned income, income from assets, and income from other sources as defined by 24 CFR Part 5.609. Annual income is used to establish tenant eligibility. MHHDC shall use the most current HUD Income Guidelines and Technical Guidance for Determining Income and Allowances to determine Program eligibility. D. Tenant Rent and Selection Rents charged to tenants in HOME-assisted units are subject to review and approval by City. Under no circumstances may the maximum rental amounts charged to tenants of HOME- HOME FUNDS CHDO SET-ASIDE Page 3 Mental Health Housing Development Corporation Rev. 03-27-06 assisted units exceed the lesser of. a) the HUD-established Fair Market Rent for existing comparable housing units in the area: or b) thirty percent (30%) of the adjusted income of a family whose annual income equals sixty five percent (65%) of the median income for the area, with applicable adjustment for the bedroom size of the relevant housing unit. Rents may not exceed the above amounts minus monthly allowances for utilities and services (excluding telephone) established by City. City agrees to provide MHHDC with copies of HUD-approved schedules of maximum HOME rent levels as requested by MHHDC. MHHDC must adopt written tenant selection policies and criteria that: 1. Are consistent with the purpose of providing housing for very low-income and low-income persons; 2. Are reasonably, related to Program eligibility and the applicants' ability to perform the obligations of the lease; 3. Provide for a) the selection of tenants from a written waiting list in the chronological order of their application, insofar as is practicable; and b) the prompt written notification to any rejected applicant of the grounds for such rejection. 4. Ensure that holders of rental assistance subsidies (such as HUD's Housing Choice Voucher or similar subsidy) are not excluded from renting a unit in the Project. E. Lease MHHDC shall use a tenant lease that complies with the provisions in the HOME Regulations, 24 CFR Part 92.253, regarding the following issues: length of lease terms, agreement to be sued, treatment of property, responsibility of property owner, waiver of notice, waiver of legal proceedings or jury trial or right to appeal, and whether the tenant is chargeable with cost of legal action regardless of outcome. F. Construction and Other Local Building Codes / Standards. Housing units constructed with HOME Funds furnished under this Contract shall meet City's Housing Minimum Quality Standards and all other applicable standards under City Codes and ordinances. G. Other Requirements MHHDC will be required to execute a Note and Deed of Trust ("Loan Documents") in the amount of the Pre-Development Loan in conjunction with this Contract. The City's lien on the Property for the Predevelopment Loan shall be subordinate to MHHDC's first lien loan from Bluebonnet Savings Bank FSB and a second lien loan from the City. In addition, City agrees to subordinate its Pre-Development Loan to MHHDC's construction loan or permanent financing. The term of the Pre-Development Loan shall be fifteen (15) years, at four percent (4%) simple interest. The Pre-Development Loan may be repaid from construction loan proceeds or other HOME FUNDS CHDO SET-ASIDE Page 4 Mental Health Housing Development Corporation Rev. 03-27-06 f. f Program income prior to the end of the fifteen (15) year term, with no prepayment penalty. Repayment of the Pre-Development Loan may be waived, at City's discretion, if the Program proves to be infeasible and MHHDC submits verification of such infeasibility to City in a timely manner. Should the Program prove feasible, repayment of the Pre-Development Loan shall not relieve MHHDC of its responsibilities to maintain the affordability of the HOME-assisted units for the required fifteen (15) year period as set forth above. Further, all provisions of this Contract, and particularly those regarding the Period of Affordability, Income Eligibility, Tenant Rent and Selection, Lease, and Housing Quality Standards for the designated HOME-assisted units, must be assigned to any new owner upon sate or transfer of the Property. MHHDC shall maintain all appropriate documentation to demonstrate that the CHDO loan funds shall not be used for costs that are ineligible under the HOME Program, and that all such costs are paid for by other funding sources. The Parties acknowledge that the HOME Funds paid hereunder are intended to provide funding only for MHHDC's Program-related pre-development costs and operating costs as specified in the attached Exhibit "B1" - Predevelopment Costs Budget, and Exhibit "B2" - Operating Costs Budget. H. Independent Contractor MHHDC shall operate hereunder as an independent contractor and not as an officer, agent, servant or employee of City. MHHDC shall have exclusive control of, and the exclusive right to control, the details of the work and services performed hereunder, and all persons performing same, and shall be solely responsible for the acts and omissions of its officers, members, agents, servants, employees, subcontractors, Program participants, licensees or invitees. The doctrine of respondeat superior shall not apply as between City and MHHDC, its officers, members, agents, servants, employees, subcontractors, Program participants, licensees or invitees, and nothing herein shall be construed as creating a partnership or joint enterprise between City and MHHDC. It is expressly understood and agreed that no officer, member, agent, employee, subcontractor, licensee or invitee of neither MHHDC, nor any Program participant is in the paid service of City and that City does not have the legal right to control the details of the tasks performed hereunder by MHHDC, its officers, members, agents, employees, subcontractors, Program participants, licensees or invitees. City shall in no way nor under any circumstances be responsible for any property belonging to MHHDC, its officers, members, agents, employees, subcontractors, Program participants, licensees or invitees, which may be lost, stolen, destroyed or in any way damaged.- and amaged;and MHHDC hereby indemnifies and holds harmless City, and its officers, agents, and employees from and against any and all claims or suits pertaining or connected with such property. HOME FUNDS CHDO SET-ASIDE Page 5 Mental Health Housing Development Corporation Rev. 03-27-06 I. Termination City may terminate this Contract in the event of MHHDC's default, inability or failure to perform, or otherwise whenever such termination is determined by the City to be in the City's best interest. Likewise, this Contract may be terminated by MHHDC if the City does not provide the HOME Funds set forth in this Contract. This Contract may be terminated for mutual convenience upon agreement of the Parties. City shall notify the MHHDC in writing of any breach of this Contract, and specify a reasonable time within which to cure the particular breach. If MHHDC fails to cure the breach within the time stated in the notice, this Contract shall automatically terminate at the expiration of the stated time allowed for cure. MHHDC will return to City any unused HOME Funds previously advanced under this Contract within thirty (30) days of the effective date of Contract termination. City will have no responsibility or liability for MHHDC's expenditures or actions occurring after the effective date of Contract termination. However, any applicable affordability requirements shall survive the termination of this Contract and shall be governed by the HOME Regulations and the provisions of the Loan Documents securing affordability. J. Venue Venue for any action, whether real or asserted, at law or in equity, arising out of the execution, performance, attempted performance or non-performance of this Contract, shall lie in Tarrant County, Texas. K. Written Instrument is Entire Agreement All terms of this Contract shall apply to any and all subcontractors of MHHDC which are in any way paid with HOME Funds or who perform any work in connection with MHHDC's Program. The provisions of this Contract are severable, and, if for any reason a clause, sentence, paragraph or other part of this Contract shall be determined to be invalid by a court or Federal or state agency, board or commission having jurisdiction over the subject matter hereof, such invalidity shall not affect other provisions which can be given effect without the invalid provision. City's failure to insist upon the performance of any term or provision of this Contract or to exercise any right herein conferred shall not be construed as a waiver or relinquishment to any extent of City's right to assert or rely upon any such term or right on any future occasion. HOME FUNDS CHDO SET-ASIDE Page 6 Mental Health Housing Development Corporation Rev. 03-27-06 This written instrument and the exhibits attached hereto, which are incorporated by reference and made a part of this Contract for all purposes, constitute the entire Contract by the parties hereto concerning the work and services to be performed under this Contract. Any prior or contemporaneous oral or written agreement, which purports to vary the terms of this Contract, shall be void. Any amendments to the terms of this Contract must be in writing and must be approved by each Party to this Contract. The paragraph headings contained herein are for convenience in reference to this Contract and are not intended to define or to limit the scope of any provision of this Contract. 2. DUTIES AND RESPONSIBILITIES OF CITY A. Disbursement of Funds The City will furnish HOME Funds for use as stated herein. City will monitor the use of such funds to ensure appropriate use. Funds shall be disbursed on a reimbursement basis after execution of this Contract and compliance with its provisions. Payment to MHHDC shall require completion of appropriate City forms and copies of adequate supporting documentation verifying the eligibility of expenses. Reimbursement of eligible expenses shall be made against the line item budgets specified in Exhibit "B1" — Pre-Development Costs and Exhibit "B2" — Operating Costs of this Contract (collectively, the "Budgets"). MHHDC may not increase or decrease line-item amounts of the Budgets without City's prior written approval. No additional funds will be disbursed if the City has not received the necessary financial reports that account for previously disbursed funds. Costs eligible for reimbursement may include certain costs directly related to and in support of the Program, as verified by City, which were incurred prior to execution of this Contract. To further the purposes of the Program and only as requested in writing by MHHDC, City may disburse funds to directly pay MHHDC vendors in accordance with the City Housing Department's Disbursement Policy for Community Housing Development Organizations. B. Amount of Funds It is agreed that the total distribution of HOME Funds inade available to or paid on behalf of MHHDC during the term of this Contract shall not exceed the total sum of TWO HUNDRED TWENTY-EIGHT THOUSAND and NO/100 Dollars ($228,000.00). 3. DUTIES AND RESPONSIBILITIES OF MHHDC A. Statement of Work and Performance Objectives MHHDC will utilize HOME Funds for pre-development expenses and operating costs related to its application for Low Income Housing Tax Credits to fund the rehabilitation and reconstruction of its existing rental affordable housing apartment complex to produce housing HOME FUNDS CHDO SET-ASIDE Page 7 Mental Health Housing Development Corporation Rev. 03-27-06 units for lease to qualified low-income tenants in accordance with Exhibit "A" — Program Summary. B. Budget MHHDC agrees that the HOME Funds will be expended in accordance with the attached Exhibit "131" — Pre-Development Costs and Exhibit "132" — Operating Costs. No change in the Budgets shall be made without City's prior written approval. MHHDC shall demonstrate to City's satisfaction that the CHDO funds are leveraged by other funding sources, including LIHTC proceeds. C. Time Line for Goals and Expenditures MHHDC shall work in accordance with the schedule set forth in the attached Exhibit "C" - Program Implementation Timeline and ensure that Program goals and expenditures correspond with the completion of the Program. D. Reversion of Assets MHHDC agrees to return to City any HOME Funds, or property acquired with HOME Funds, remaining on hand at the end of the Contract. If repayments, interest or other returns on investment attributable to HOME Funds are received after the end of the term of this Contract, they shall be returned to City to be deposited in accordance with HOME Regulations. E. Affirmative Marketing MHHDC must adopt affirmative marketing procedures and requirements for all HOME- funded housing. The procedures and requirements must include methods for informing the public, owners and potential tenants about Fair Housing laws and policies so as to ensure that all individuals, without regard for race, color, religion, sex, national origin, familial status or disability, are given an equal opportunity to participate in the Program. MHHDC will be solely responsible for the effective marketing responsibilities necessary to achieve MHHDC's Program goals. F. Provisions to Secure Affordability Period 1. The City's interest in preserving the HOME-required affordability period for the HOME-assisted units will be secured by a combination of the subordinate Note and Deed of Trust referenced herein, and the Land Use Restriction Agreement ("LURA") established and enforced by TDHCA for the Low Income Housing Tax Credits. If MHHDC retains ownership of the Property for the full fifteen (15) year period of affordability, no further HOME restrictions will apply. HOME FUNDS CHDO SET-ASIDE Page 8 Mental Health Housing Development Corporation Rev. 03-27-06 2. Any sale or transfer of the Property by MHHDC during the fifteen (15) year affordability period will require the new owner or transferee to affirmatively assume in writing the obligations established hereunder for the designated HOME-assisted units. 3. Refinancing by MHHDC shall require the review and prior written approval of the City for the purposes of ensuring compliance with the HOME affordability requirements. G. Recordkeeping 1. MHHDC will keep or cause to be kept an accurate record of all actions taken and all funds expended, with source documents, in performance of this Contract. Such records shall be kept for the period of affordability mandated by the Regulations and this Contract. 2. MHHDC will obtain and keep on file the following information on each tenant served by the HOME-Assisted units of the Program throughout the period of affordability: a. Annual income and size of the household; b. Race and Ethnicity of each tenant household, using reporting categories as required by HUD. C. Whether the head of household is male or female, whether the head of household is single, and whether there are children in the household; d. Any additional Program performance data and statistical information as may be required by the City Housing Department, HOME Regulations or other HUD regulations and any amendments thereto. 3. MHHDC will keep on file the following information and documentation: a. Proof that the project meets applicable property, building construction and housing quality standards; b. Documentation verifying compliance with affirmative marketing requirements and existence of acceptable procedures; C. Documentation verifying compliance with MHHDC's temporary relocation plan and HUD relocation requirements, as applicable; d. Documents and other information verifying compliance with HOME conflict of interest regulations at 24 CFR 92.356 (f), which provide that no officers. agents, consultants or employees of the developer HOME FUNDS CHDO SET-ASIDE Page 9 Mental Health Housing Development Corporation Rev. 03-27-06 1 R _ �r of HOME-assisted units may occupy such units. H. Reports During the term of this Contract, MHHDC will submit to City monthly activity reports and financial reports due by the 15`x' of each month, regarding the services provided by MHHDC as a result of this Contract, and the expenses charged to the HOME Funds provided through this Contract, with the first report due on the 15`' of the month immediately following execution of this Contract. These reports shall be submitted in the format specified by City. The reports will provide details on: 1. Progress toward achievement of objectives identified in Exhibit "A" - Program Summary; 2. The dollar amount of funds leveraged by the Pre-Development Loan, including any items that qualify as HOME match. MHHDC will submit to City annually during the HOME affordability period a copy of the report MHHDC provides to TDHCA for Low-Income Housing Tax Credit reporting purposes. I. Cost Principles MHHDC shall administer the Program in compliance with OMB Circular A-122, "Cost Principles for Non-Profit Organizations", as amended from time to time and with the following: All non-federal entities that expend $500,000 or more in Federal funds within one year, regardless of the source of the Federal award, must submit to City an annual audit prepared in accordance with specific reference to OMB Circular A-133, "Audits of States, Local Governments, and Non-Profit Organizations". The audit may cover either MHHDC's fiscal year during which this Contract is in force or cover the period of this Contract. The audit must be prepared by an independent certified public accountant, be completed within twelve (12) months following the end of the period being audited and be submitted to City within thirty (30) days of its completion. MHHDC's audit certification is attached hereto as Exhibit "D" — Audit Certification Form and Audit Requirements. The Audit Certification Form must be submitted to City within sixty (60) days of the end of period being audited (MHHDC's fiscal year). Costs of preparation of this audit may be an allowable expenditure of Federal funds in an amount proportional to that of the Federal funds used in MHHDC's total agency operating budget. Non- profit entities that expend less than $500,000 a year in Federal funds are exempt from Federal audit requirements for that year, but records must be available for review or audit by appropriate officials of the Federal agency, City, and General Accounting Office. HOME FUNDS CHDO SET-ASIDE Page 10 Mental Health Housing Development Corporation Rev. 03-27-06 City reserves the right to perform an audit of MHHDC's Program operations and finances at any time during the term of this Contract, if City determines that such audit is necessary for City's compliance with OMB Circular A-133, and MHHDC agrees to allow access to all pertinent materials as described in Section G, Record Retention and reports. If such audit reveals a questioned practice or expenditure, such questions must be resolved within (15) days after notice to MHHDC of such questioned practice or expenditure. If questions are not resolved within this period, City reserves the right to withhold further funding under this Contract and/or future contract(s) with MHHDC. If as a result of any audit it is determined that MHHDC has misused, misapplied or misappropriated all or any part of the HOME Funds, MHHDC agrees to reimburse the City the amount of such monies so misused, misapplied or misappropriated, plus the amount of any sanctions, penalty or other charge levied against City by HUD because of such misuse, misapplication or misappropriation. J. Monitor Effectiveness of Services and Work The City will review, the activities and performance of MHHDC for this Program not less than annually during the term of the Contract as required in Section 92.504 (a) of the HOME, Regulations, and not less than every three (3) years during the affordability period following completion of construction of the HOME-assisted units as required by Section 92.504(d) (1) of the HOME Regulations. MHHDC agrees to fully cooperate with City in monitoring the effectiveness of the services and work to be performed by MHHDC in compliance with the terms of this Contract. City shall have access at all reasonable hours to offices and records (dealing with the use of the funds that are the basis of this Contract) of MHHDC, its officers, directors, agents, employees, and subcontractors for the purpose of such monitoring. MHHDC agrees to likewise monitor the effectiveness of the services and work to be performed by its subcontractors. K. Compliance with All Applicable Laws and Regulations MHHDC agrees to comply with the following laws and the regulations as they are currently written or are hereafter amended during performance of this Contract: (1) Federal Title VI of Civil Rights Act of 1964 (42 USC 2000d et seq.) Title VIII of Civil Rights Act of 1968 (42 USC 3601 et seq.) Executive Orders 11063, 11246, as amended by 11375 and 12086 and as supplemented by Department of Labor regulations 41 CFR, Part 60 HOME FUNDS CHDO SET-ASIDE Page I I Mental Health Housing Development Corporation Rev. 03-27-06 q - C The Age Discrimination in Employment of 1967 (29 USC et seg.) The Age Discrimination Act of 1975 (42 USC 6101 et seq.) Section 504 of the Rehabilitation Act of 1973 (29 USC 794 et seq.) and 24 CFR Part 8 where applicable National Environmental Policy Act of 1969, as amended, 42 USC 4321 et .seq. ("NEPA") and the related authorities listed in 24 CFR Part 58 The Clean Air Act, as amended. (42 USC 1251 et seq.) and the Clean Water Act of 1977, as amended (33 USC 1251 el seq.) and the related EPA regulations at 40 CFR Part 15, as amended from time to time, and Executive Order 11738. In no event shall any amount of the assistance provided under this Contract be utilized with respect to a facility that has given rise to a conviction under the Clean Air Act or the Clean Water Act. Immigration Reform and Control Act of 1986 (8 USA 1101 et seq.) specifically including the provisions requiring employer verifications of legal status of its employees The Americans with Disabilities Act of 1990 (42 USC 12101 et seq.), the Architectural Barriers Act of 1968, amended, (42 USC 4151 et seq.) and the Uniform Federal Accessibility Standards, 24 CFR Part 40, Appendix A HOME Investment Partnerships Act at Title II of the Cranston Gonzales National Affordable Housing Act of 1990, as amend, 42 U.S.C. 12701 et seq. ("NAHA") Regulations at 24 CFR Part 87 related to lobbying, including the requirement that certifications and disclosures be obtained from all covered persons Drug Free Workplace Act of 1988 (41 USC 701 et seq.) and 24 CFR Part 23, Subpart F Executive Order 12549 and 24 CFR Part 5.105 (c) pertaining to restrictions on participation by ineligible, debarred or suspended persons or entities Regulations at 24 CFR Part 882.708 (c) pertaining to site and neighborhood standards for new construction projects (2) Section 3 of the Housing and Urban Development Act of 1968, as amended, (12 USC 1701 u et seq.) and its related regulations at 24 CFR Part 135 As the work performed under this Contract is on a project assisted under a program providing direct Federal financial assistance from HUD, Section 3 of 24 CFR 135.38 ("Section 3") requires that the following clause be inserted in all covered contracts ("Section 3 Clause"): "A. The work to performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u (Section 3). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assisted or 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. The parties to this Contract agree to comply with HUD's regulations in 24 CFR Part 135, which implement Section 3. As evidenced by their execution of this Contract, the HOME FUNDS CHDO SET-ASIDE Page 12 Mental Health Housing Development Corporation Rev. 03-27-06 parties to this Contract certify that they are under no contractual or other impediment that would prevent them from complying with the Part 135 regulations. C. The contractor agrees to send to each labor organization or representative of workers with which it has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representatives of the contractor's commitments under this Section 3 clause and will post copies of the notice in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference, shall set forth minimum number and job titles subject to hire, availability of apprentice and training positions, the qualifications for each; and the name and location of the person(s) taking applications for each of the positions; and the anticipated date the work shall begin. D. The contractor agrees that it will include this Section 3 clause in every subcontract to comply with regulations in 24 CFR Part 135, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon finding that the subcontractor is in violation of the regulations in 24 CFR Part 135. The contractor will not subcontract with any subcontractor where it has notice or knowledge that the subcontractor has been found in violation of regulations in 24 CFR 135. E. The contractor will certify that any vacant employment positions, including training positions, that are filled (1) after the contractor is selected but before the contract is executed, and (2) with persons other than those to whom the regulations of 24 CFR Part 135 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 CFR Part 135. F. Noncompliance with HUD's regulations in 24 CFR Part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts. G. With respect to work performed in connection with Section 3 covered Indian housing assistance, section 7(b) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this Contract. Section 7(b) requires that to the greatest extent feasible (i) preference and opportunities for training and employment shall be given to Indians, and (ii) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indian—owned Economic Enterprises. Parties to this contract that are subject to the provisions of Section 3 and Section 7(b) agree to comply with Section 3 to the maximum extent feasible, but not in derogation of compliance with Section 7(b)." City and MHHDC understand and agree that compliance with the provisions of Section 3, the regulations set forth in 24 CFR Part 135, and all applicable rules and orders of HUD shall be a condition of the Federal financial assistance provided to the Program, binding upon the City and MHHDC, and their respective successors, assigns and subcontractors. Failure to fulfill these requirements shall subject MHHDC and its subcontractors, and their respective successors and assigns, to those sanctions specified by the Grant Agreement through which Federal assistance is provided and to such sanctions as are specified by 24 CFR Part 135. HOME FUNDS CHDO SET-ASIDE Page 13 Mental Health Housing Development Corporation Rev. 03-27-06 (3) Other Laws MHHDC covenants and agrees that its officers, members, agents, employees, Program participants and subcontractors shall abide by and comply with all other laws, (Federal, state and local) relevant to the performance of this Contract, including all City ordinances, rules and regulations and the HOME Regulations. MHHDC further promises and agrees that it has read, and is familiar with, the terms and conditions of the Federal grant under which HOME Funds are granted and that it will fully comply with them. It is agreed and understood that, if City calls the attention of MHHDC to any such violations on the part of MHHDC or any of its officers, members, agents, employees, Program participants or subcontractors, then MHHDC shall immediately desist from and correct such violation. (4) Prohibition Against Discrimination MHHDC, in the execution, performance or attempted performance of this Contract will not discriminate against any person because of sex, race, religion, color or national origin, or familial status, nor will MHHDC permit its officers, members, agents, employees, subcontractors or Program participants to engage in such discrimination. During the performance of this Contract MHHDC agrees, and will require all its subcontractors to agree, as follows: MHHDC will not unlawfully discriminate against any employee or applicants for employment because of race, color, religion, sex or national origin. MHHDC will take affirmative action to ensure that applicants are employed and that employees are treated fairly during employment without regard to their race, color, religion, sex or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. MHHDC agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause. MHHDC will, in all solicitations or advertisements for employees placed by or on behalf of MHHDC, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex or national origin. MHHDC covenants that neither it nor any of its officers, members, agents, employees, Program participants or subcontractors, while engaged in performing this Contract, shall, in connection with the employment, advancement or discharge of employees or in connection with the terms, conditions or privileges of their employment, discriminate against persons because of their age or because of any handicap, except on the basis of a bona fide occupational qualification, retirement plan or statutory requirement. HOME FUNDS CHDO SET-ASIDE Page 14 Mental Health Housing Development Corporation Rev. 03-27-06 -3. .-.. MHHDC further covenants that neither it nor its officers, members, agents, employees. subcontractors. Program participants, or persons acting on their behalf, shall specify, in solicitations or advertisements for employees to work on this Contract, a maximum age limit for such employment unless the specified maximum age limit is based upon a bona fide occupational qualification, retirement plan or statutory requirement. In accordance with the provisions of the Americans With Disabilities Act of 1990 ("ADA"), MHHDC warrants that it and any of its subcontractors will not unlawfully discriminate on the basis of disability in the provision of services to the general public, nor in the availability, terms and/or conditions of employment for applicants for employment with, or employees of MHHDC or any of its subcontractors. MHHDC warrants it will fully comply with ADA's provisions and any other applicable Federal, state and local laws concerning disability and will defend, indemnify and hold City harmless against any claims or allegations asserted by third parties or subcontractors against City arising out of MHHDC's and/or its subcontractors' alleged failure to comply with the above-referenced laws concerning disability discrimination in the performance of this Contract. This Contract is made and entered into with reference specifically to the ordinances codified at Chapter 17, Article III, Division 3 ("Discrimination in Employment Practices"), of the City Code, and MHHDC hereby covenants and agrees that MHHDC, its officers, members, agents, employees and subcontractors, have fully complied with all provisions of same and that no employee, applicant or Program participant has been discriminated against under the terms of such ordinances by either the MHHDC or its officers, members, agents, employees or subcontractors. (5) Prohibition Against Interest No member, officer or employee of City or its designees or agents; no member of the governing body of the locality in which the Program is situated; and no other public official of such locality or localities, who exercises any functions or responsibilities with respect to the program funded hereunder during his tenure or for one (1) year thereafter, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed hereunder. MHHDC shall incorporate, or cause to be incorporated, like language prohibiting such interest in all contracts and subcontracts entered into in connection with the Program. No officer, employee, member or Program participant of MHHDC or its subcontractors shall have a financial interest, direct or indirect, in this Contract or the HOME Funds transferred hereunder or be financially interested, directly or indirectly, in the sale to MHHDC of any land, materials, supplies or services purchased with any funds transferred hereunder, except on behalf of MHHDC, as an officer, employee, member or Program participant. Any willful violation of HOME FUNDS CHDO SET-ASIDE Page 15 Mental Health Housing Development Corporation Rev. 03-27-06 this paragraph with the knowledge, expressed or implied, of MHHDC or its subcontractors shall render this Contract voidable by the City. No officer, employee, agent, consultant, elected official or appointed official of the participating jurisdiction, Contractor or its subcontractors who exercised any functions or responsibilities with respect to activities assisted with HOME funds or who are in a position to participate in a decision making process or gain inside information with regard to these activities, may obtain a financial interest or benefit from a HOME assisted 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. (6) Minority and Women Business Enterprise Commitment MHHDC agrees to abide by the City's policy to involve Minority and Women Business Enterprises ("M/WBEs") in all phases of its procurement practices and to provide them equal opportunity to compete for contracts for construction, provision of professional services, purchase of equipment and supplies and provision of other services required by City. Therefore, MHHDC agrees to incorporate City Ordinance No. 15530, and all amendments or successor policies thereto, into all contracts and subcontracts and will further require all persons or entities with whom it contracts to comply with said ordinance. L. Assignment MHHDC shall not assign all or any part of its rights, privileges, or duties under this Contract without the prior written approval of City, which shall not be unreasonably withheld. Any attempted assignment of same without approval shall be void, and shall constitute a breach of this Contract. It is agreed that the City has the right to inspect and approve in writing any proposed subcontracts between MHHDC and any subcontractor engaged in any activity in conjunction with this HOME funded project prior to any charges being incurred. M. Indemnification and Release MHHDC COVENANTS AND AGREES TO INDEMNIFY, HOLD HARMLESS AND DEFEND, AT ITS OWN EXPENSE, CITY AND ITS OFFICERS, AGENTS, SERVANTS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS OR SUITS FOR PROPERTY LOSS OR DAMAGE AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, OF WHATSOEVER KIND OR CHARACTER, WHETHER REAL OR ASSERTED, ARISING OUT OF OR IN CONNECTION WITH THE EXECUTION, PERFORMANCE, ATTEMPTED PERFORMANCE OR NONPERFORMANCE OF THIS CONTRACT AND/OR THE OPERATIONS, ACTIVITIES AND SERVICES OF THE PROGRAM DESCRIBED HEREIN, WHETHER OR NOT CAUSED IN WHOLE OR IN PART, BY ALLEGED HOME FUNDS CHDO SET-ASIDE Page 16 Mental Health Housing Development Corporation Rev. 03-27-06 NEGLIGENCE OF OFFICERS, AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS OR SUBCONTRACTORS OF CITY; AND MHHDC HEREBY ASSUMES ALL LIABILITY AND RESPONSIBILITY OF CITY AND ITS OFFICERS, AGENTS, SERVANTS, AND EMPLOYEES FOR ANY AND ALL CLAIMS OR SUITS FOR PROPERTY LOSS OR DAMAGE AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, OF WHATSOEVER KINDS OR CHARACTER, WHETHER REAL OR ASSERTED, ARISING OUT OF OR IN CONNECTION WITH THE EXECUTION, PERFORMANCE, ATTEMPTED PERFORMANCE OR NONPERFORMANCE OF THIS CONTRACT AND AGREEMENT AND/OR THE OPERATIONS, ACTIVITIES AND SERVICES OF THE PROGRAMS DESCRIBED HEREIN, WHETHER OR NOT CAUSED IN WHOLE OR IN PART, BY ALLEGED NEGLIGENCE OF OFFICERS, AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS OR SUBCONTRACTORS OF CITY. MHHDC LIKEWISE COVENANTS AND AGREES TO AND DOES HEREBY INDEMNIFY AND HOLD HARMLESS CITY FROM AND AGAINST ANY AND ALL INJURY, DAMAGE OR DESTRUCTION OF PROPERTY OF CITY, ARISING OUT OF OR IN CONNECTION WITH ALL ACTS OR OMISSIONS OF MHHDC, ITS OFFICERS, MEMBERS, AGENTS, EMPLOYEES, SUBCONTRACTORS, INVITEES, LICENSEES, OR PROGRAM PARTICIPANTS, OR CAUSED, IN WHOLE OR IN PART, BY ALLEGED NEGLIGENCE OF OFFICERS, AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS OR SUBCONTRACTORS OF CITY. IT IS THE EXPRESS INTENTION OF THE PARTIES, BOTH MHHDC AND CITY, THAT THE INDEMNITY PROVIDED FOR THIS SECTION INCLUDES INDEMNITY BY MHHDC TO INDEMNIFY AND PROTECT CITY FROM THE CONSEQUENCES OF CITY'S OWN NEGLIGENCE, WHETHER THAT NEGLIGENCE IS ALLEDGED TO BE THE SOLE OR CONCURRING CAUSE OF THE INJURY, DAMAGE OR DEATH. MHHDC AGREES TO AND SHALL RELEASE CITY, ITS AGENTS, EMPLOYEES, OFFICERS AND LEGAL REPRESENTATIVES FROM ALL LIABILITY FOR INJURY, DEATH, DAMAGE OR LOSS TO PERSONS OR PROPERTY SUSTAINED IN CONNECTION WITH OR INCIDENTIAL TO PERFORMANCE UNDER THIS CONTRACT, EVEN IF THE INJURY, DEATH, DAMAGE OR LOSS IS CAUSED BY THE CITY'S SOLE OR CONCURRENT NEGLIGENCE. MHHDC SHALL REQUIRE ALL OF ITS SUBCONTRACTORS TO INCLUDE IN THEIR SUBCONTRACTS A RELEASE AND INDEMNITY IN FAVOR OF THE CITY IN SUBSTANTIALLY THE SAME FORM AS ABOVE. N. Waiver of Immunity HOME FUNDS CHDO SET-ASIDE Page ]7 Mental Health Housing Development Corporation Rev. 03-27-06 If MHHDC, as a charitable or nonprofit organization, has or claims an immunity or exemption (statutory or otherwise) from and against liability for damages or injury, including death, to persons or property, Contractor hereby expressly waives its rights to plead defensively such immunity or exemption as against City. This section shall not be construed to affect a governmental entity's immunities under constitutional, statutory or common law. O. Insurance and Bonding For the term of this Contract, MHHDC will maintain blanket fidelity coverage in the form of insurance or bond in the amount of$25,000.00, to insure against loss from the fraud, theft or dishonesty of any of MHHDC's officers. agents, trustees, directors or employees. The proceeds of such bond shall be used to reimburse City for any and all loss of HOME Funds occasioned by such misconduct. To effectuate such reimbursement, such bond shall include a rider stating that reimbursement for any loss or losses thereunder shall be made directly to City for the use and benefit of MHHDC. MHHDC shall furnish to City, in a timely manner, certificates of insurance as proof that it has secured and paid for policies of commercial insurance as specified herein. Such insurance shall cover all insurable risks incident to or in connection with the execution, performance, attempted performance or nonperformance of this Contract. MHHDC shall maintain the following coverages and limits thereof: Commercial General Liability (CGL) Insurance $500,000 each occurrence $1,000,000 aggregate limit Business Automobile Liability Insurance $1,000,000 each accident on a combined single-limit basis, or $250,000 Property Damage $500,000 Bodily Injury per person per occurrence $2,000,000 Aggregate Insurance policy shall be endorsed to cover"Any Auto" Pending availability of the above coverage and at the discretion of the MHHDC, the policy shall be the primary responding insurance policy versus a personal auto insurance policy if or when in the course of MHHDC's business as contracted herein. Workers' Compensation Insurance Part A: Statutory Limits Part B: Employer's Liability $100,000 each accident $100,000 disease-each employee $500,000 disease-policy limit Note: Such insurance shall cover employees performing work on any and all projects HOME FUNDS CHDO SET-ASIDE Page 18 Mental Health Housing Development Corporation Rev. 03-27-06 1 � including but not limited to construction, demolition, and rehabilitation. MHHDC or its subcontractors shall maintain coverages. In the event the respective subcontractors do not maintain coverage, the MHHDC shall maintain the coverage on such subcontractor for each applicable subcontract. Directors and Officers Insurance Optional (Highly Recommended) Note: This insurance shall cover MHHDC and any member of its Board of Directors. Additional Requirements: Such insurance amounts shall be revised upward at City's option; and MHHDC shall revise such amounts within thirty (30) days following notice to MHHDC of such requirements. MHHDC will submit to City documentation that it has obtained insurance coverage and has executed bonds as required in this Contract prior to payment of any monies provided hereunder. Each insurance policy shall be endorsed to provide City with a minimum sixty (60) days notice of cancellation, non-renewal, and/or material change in policy terms or coverage. Insurance policies required herein shall be endorsed to include City as an additional insured as its interest may appear. Additional insured parties shall include employees, officers, agents, and volunteers of the City. The Workers' Compensation Insurance policy shall be endorsed to include a waiver of subrogation, also referred to as a waiver of rights of recovery, in favor of City. Any failure on part of the City to request certificate(s) of insurance shall not be construed as a waiver of such requirement or as a waiver of the insurance requirements themselves. Insurers of MHHDC's insurance policies shall be licensed to do business in the state of Texas by the Department of Insurance or be otherwise eligible and authorized to do business in the state of Texas. Insurers shall be acceptable to the City insofar as their financial strength and solvency and each such company shall have a current minimum A.M. Best Key Rating Guide rating of A: VII or other equivalent insurance industry standard rating otherwise approved by the City of Fort Worth. Deductible limits on insurance policies shall not exceed $5,000 per occurrence unless otherwise approved by City. HOME FUNDS CHDO SET-ASIDE Page 19 Mental Health Housing Development Corporation Rev. 03-27-06 In the event there are any local, federal or other regulatory insurance or bonding requirements for the Program, and such requirements exceed those specified herein, the former shall prevail. As applicable, MHHDC shall require its subcontractors to maintain applicable insurance coverages, limits, and other requirements as those specified herein; and, MHHDC shall require its subcontractors to provide MHHDC with certificate(s) of insurance documenting such coverage. Also, MHHDC shall require its subcontractors to have City and MHHDC endorsed as additional insureds (as their interest may appear) on their respective insurance policies. MHHDC shall require its subcontractors to maintain builders risk insurance at the limit of applicable project(s) costs when the value of materials involved exceeds $10,000 or at a different limit value as specified by the City of Fort Worth. P. Certification Regarding Lobbying The undersigned representative of MHHDC hereby certifies, to the best of his or her knowledge and belief, that: No Federal appropriated funds have been paid or will be paid, by or on behalf of MHHDC, 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 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. If any funds other than federally 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, member of Congress in connection with this Federal contract, grant, loan or cooperative agreement, MHHDC shall complete and submit Standard Foran-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. This certification is a material representation of fact upon which reliance was placed when this Contract was made or entered into. Submission of this certificate is a prerequisite for making or entering into this Contract imposed by 31 USC Section 1352. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000.00 and not more than $100,000.00 for each such failure. MHHDC shall require that the language of this certification be included in all subcontracts or agreements involving the expenditure of Federal funds. HOME FUNDS CHDO SET-ASIDE Page 20 Mental Health Housing Development Corporation Rev. 03-27-06 �-y Q. MISCELLANEOUS PROVISIONS All terms of this Contract shall apply to any and all subcontractors of MHHDC who are in any way paid with HOME Funds or who perform any work in connection with the Program. All notices required or permitted by this Contract must be in writing and are deemed delivered on the earlier date of the date actually received or the third day following (i) deposit in a Untied States Postal Service post office or receptacle; (ii) with proper postage, certified mail return receipt requested; and (iii) addressed to the other party at the address set out in the preamble of this Contract or at such other address as the receiving party designates by proper notice to the sending party. If applicable, MHHDC must meet conditions and limitations for use of HOME Funds involving a primarily religious entity as set forth in the HOME Regulations. MHHDC shall notify City in writing of any changes in its 501 (c) (3) tax exempt status during the term of this Contract as well as any other change that alters MHHDC's certification as a CHDO under the HOME Regulations. MHHDC agrees to document its continued compliance, including but not limited to annually providing City with an updated board roster and verification of continued compliance with requirements for maintaining certification as a Community Housing Development Organization. [SIGNATURES APPEAR ON FOLLOWING PAGE] HOME FUNDS CHDO SET-ASIDE Page 21 Mental Health Housing Development Corporation Rev. 03-27-06 _ t � g IN WITNESS WHEREOF, the Parties hereto11ave executed four copies of this Contract in Fort Worth. Tarrant County, Texas, this ;�U day of .`�y`Llt.� 2006. ATTEST: CITY OF FORT WO By. City Secretary 0 Dale A. E'sseler Assistant City Maria r APPRCVF,D AS TCF ORM AND LEGALITY: C;ma ot- 2ortract authorization �S. gat'4�_ _ I Assistant City AttorneyI Date MENTAL HEALTH HOUSING DEVELOPMENT CORPORATION, INC. A By: David Fielding, Board Preside t STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on 2006 by Dale A. Fisseler, the Assistant City Manager, of the City of fort Worth, on behalf the City of Fort Worth. r• ' JONI R JACOB UY ;* NOTARY PUBLIC N ry Public, to of Texas +N„ ice; State or Texas +7' Comm. Exp. 05-27-2007 STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on 2006 by David Fielding, the Board President of Mental Health Hou in Development Corporation, Inc., a Texas non-profit corporation, on behalf of said corpo on. Ybil� rfii r- - s f^f Notsry Public,State of Texas My Commission Expires Sophmbr►08,2007 HOME FUNDS CHDO SET-ASIDE Page 22 Mental Health Housing Development Corporation Rev. 03-27-06 n, EXHIBIT A PROGRAM SUMMARY SCOPE OF WORK Mental Health Housing Development Corporation (MHHDC) DESCRIPTION: MHHDC, Inc. currently owns and operates the 32-unit Hanratty Place Apartments, providing affordable housing to low income tenants, many of whom are persons with mental illness. The physical plant is currently functionally obsolete. MHHDC proposes to demolish the building down to the foundation slab, and replace the existing building with a three (3) story thirty-two (32) unit complex with larger and more efficiently designed units and updated amenities. This reconstruction program will ensure the sustainability of MHHDC's affordable housing program into the future. MHHDC will apply to the Texas Department of Housing and Community Affairs (TDHCA) for an allocation of Low Income Housing Tax Credits (LIHTC) to secure financing for this project. This HOME CHDO Contract is to provide support to MHHDC to ensure continued provision of affordable housing to disabled low income tenants, through provision of a Pre-Development Loan of 5178,000.00, and an Operating Costs Grant of $50,000.00. These HOME Funds will allow MHHDC to act as its own developer for the project, ensuring retention of developer fees and control of development costs. The Pre-Development Loan will cover the costs of the LIHTC application, and the Operating Costs Grant will cover overhead expenses until developer fees are earned. Should the project prove infeasible, CITY may waive repayment of the Pre-development Loan. SPECIFIC PURPOSE: The specific purpose of this Program is to preserve and ensure the long-term quality of existing affordable housing for low income disabled tenants. PROGRAM OBJECTIVES: Reconstruction of functionally obsolete affordable housing project, to preserve thirty-two (32) units. Two (2) of these units will be dedicated "HOME- assisted" units,with a per-unit subsidy amount of 589,000 per unit (5178,000/2 = $89,000). PROGRAM MEASURES: 2006-2008 Budget 1. Secure allocation of tax credits with which to reconstruct 32 units rebuilt $ 228,000 thirty-two (32) units of quality affordable rental housing for disabled low-income tenants. 2. Ensure fifteen (15) year quality and affordability of two (2) Affordability & designated HOME-assisted units in the reconstructed quality of assisted project. units verified by on-going Final Program Operation Costs monitoring $ 228,000 TOTAL PROGRAM BUDGET $ 228,000 Exhibit B1: Budget: Pre-Development Costs Cost Item Amount Appraisals S12,500 Market Study 5,000 Environmental 8,000 Survey 3,000 Property Condition Report 3,000 Audit 7,500 Attorney Fees 79,670 Architectural Fees 10,000 Consulting Fees 14,000 TDHCA Fees (Application, Commitment, Property Inspection, etc.) 26,600 Real Estate Fees & Related Costs 5,100 Project Related Supplies 1400 Project-Related Postage 230 Project Related Printing 200 Project Related Communications/Telephone Costs 300 Project-Related Information Technology Costs 1500 Total Eligible Pre-Development Costs S 178,000 Exhibit B2: Budget: Operating Costs Cost Item Amount Executive Director Salary 12,232 Insurance/Payroll Taxes 8,054 Telephone 1,330 Membership Dues 240 Financial, Accounting & Audit Fees 12,040 Rent 6,658 Office Supplies 1,246 Insurance 8,200 Total $ 50,000 Exhibit C Program Implementation Timeline Rehabilitation/Reconstruction of 32-unit Hanratty Place Apartments Target Date Development Activity 3/1/06 Mental Health Housing Development Corporation (or assigns) will submit an application for an allocation of Low Income Housing Tax Credits to the Texas Department of Housing and Community Affairs (TDHCA) for the rehabilitation/reconstruction of 32-unit Hanratty Place Apartments, 800 South Jennings. 3/31/06 Mental Health Housing Development Corporation will execute all City- required legal documents necessary to secure the City's HOME Funds investment in the Program. These documents will include, but not be limited to, a note and deed of trust on the Property. 7/31/06 Mental Health Housing Development Corporation (or assigns) will obtain approval by TDHCA for an allocation of Low Income Housing Tax Credits. 5/31/07 Mental Health Housing Development Corporation (or assigns) will execute an agreement for syndication and sale of the allocation of Low Income Housing Tax Credits; Mental Health Housing Development Corporation (or assigns) will execute an agreement for construction and permanent financing. 6/1/07 Mental Health Housing Development Corporation (or assigns) will prepare and begin implementation of a temporary relocation plan for residents of Hanratty Place Apartments. Approval of the Fort Worth Housing Authority will be obtained for relocation of those residents who may be receiving Housing Choice Vouchers, Shelter Plus Care assistance or other federal housing assistance. 4/1/08 Mental Health Housing Development Corporation (or assigns) will complete rehabilitation/reconstruction of 32-unit Hanratty Place Apartments. 4/30/06 - 4/1/08 During the Contract term, Mental Health Housing Development Corporation (or assigns) will submit monthly program and financial reports to the City. 1) If the Program is determined to be infeasible and/or MHHDC is not successful in obtaining Low Income Housing Tax Credits from the Texas Department of Housing & Community Affairs, MHHDC will advise the City of such infeasibility no later than 60 days after such infeasibility is determined. 2) Should the Program prove to be feasible, MHHDC shall furnish the City with the following information a) during lease-up period, and until project is fully leased, on a quarterly basis, summary beneficiary data regarding the household income, size, race, ethnicity, gender of head of household, and disability status of all tenants. b) During the period of affordability, Copy of rent rolls and copy of lease forms used. c) Other such information as may be necessary to verify compliance with HOME regulations. EXHIBIT D CITY OF FORT WORTH HOUSING DEPARTMENT Audit Certification Form Subrecipient: Fiscal Year Ending: 1 1 Mo Day Yr ❑ We have exceeded the federal expenditure threshold of $500,000. We will have our Single Audit or Program Specific Audit completed and will submit the audit report within nine (9) months after the end of the audited fiscal year. ❑ We did not exceed the $500,000 federal expenditure threshold required for a Single Audit or a Program Specific Audit to be performed this fiscal year. (Fill out schedule below) Federal Expenditure Disclosure Federal Funds Must be filled out if Single Audit or Program Audit is not required: Pass Through Program Name& Contract Federal Grantor Grantor CFDA Number Number Expenditures Total Federal Expenditures for this Fiscal Year $ Printed Name Title(Must be CFO,CEO or equivalent) Authorized Signature(Must be CFO,CEO or equivalent) Phone Number Date Failure to submit this or a similar statement or failure to submit a completed single audit package as described in the audit requirements by the required due date will result in suspension of funding and will affect eligibility for future funding. Submit this form to the City of Fort Worth within 60 days after the end of your Fiscal year � � iv1 CITY �RR '•w��"55qq�� r �f Ui .�.v1:tlTlt I G'd CITY OF FORT WORTH HOUSING DEPARTMENT AUDIT REQUIREMENTS Organizations expending $500,000 or more in federal awards (from City of Fort Worth and other funding sources) during their fiscal years shall obtain either an annual single audit or a program specific audit. Organizations may have a program specific audit in accordance with OMB Circular A-133 if they expended funds for only one federal program as listed in the Catalog of Federal Domestic Assistance (CFDA). If funds are spent for more than one federal program, a single audit is required. The audited time period is the organization's fiscal year, and not the City of Fort Worth's funding period. The audit shall be conducted by a certified public accountant (CPA) that is licensed at the time of the audit by the appropriate regulatory body. The CPA shall meet all of the general standards concerning qualifications, independence, due professional care and quality control as required by Government Auditing Standards, including the requirements for continuing professional education and external peer reviews. Auditor selection must adhere to federal procurement requirements. A separate supplementary schedule of revenues, expenditures and changes in fund balance for each City of Fort Worth contract is no longer required. The Schedule of Expenditures of Federal Awards should list City of Fort Worth 's contract numbers, the total expended for each individual federal program, and the CFDA number (OMB A-133 § .310). The independent auditor's report should include all of the relevant items listed on the "Audit Report Checklist." Additional guidance on the conduct and reporting of these audits is contained in the latest issuance of the following publications: Government Auditing Standards issued by the Comptroller General of the United States, 2003 OMB Circular A-133 as revised 6/30/97 and amended June 2003 OMB Circular A-133 Compliance Supplement AICPA's Statement of Position 98-3, "Audits of States, Local Governments, and Not-for-Profit Organizations Receiving Federal Awards" Various AICPA audit guides for nonprofits, colleges and universities and health and welfare organizations AICPA's Audit Risk Alert "State and Local Governmental Developments" All organizations that receive a City of Fort Worth award must submit the provided Audit Certification Form which certifies whether you are subject to a single/program audit. Organizations receiving federal awards from the City of Fort Worth who are not required to have an audit shall certify in writing to the agency. The organizations Chief Executive Officer or Chief Financial Officer shall make the certification within 60 days of the end of the organization's fiscal year. The following items should be submitted to the City of Fort Worth Housing Department within the required timeframe: Due 60 days after organization's fiscal year end: (required for all subrecipients) Completed Audit Certification Form Due within the earlier of 30 days after receipt of the auditor's report or nine months after the end of the audit period. • Two copies of the entire audit report issued by the CPA • Two copies of any management letter issued by the CPA in conjunction with the audit report • Two copies of management's comments on all findings, recommendations, & questioned costs contained in the audit report and management letter, including a detailed corrective action plan Failure to submit any of these items by the required due date may result in holds on current draw requests, suspension of the organization's contract(s) and eligibility for future funding. If the organization does not meet the requirements of having a single/program audit conducted, records must still be kept available for review or audit by City of Fort Worth staff (OMB A-133 Subpart B Sec 200(d). If additional information is needed concerning the audit requirements, please call (817) 392-6141. CITY OF FORT WORTH HOUSING DEPARTMENT SINGLE AUDIT REPORT CHECKLIST The Department developed this checklist to help organizations improve the quality and completeness of audit reports. General Purpose or Basic Financial Statements of the Organization Opinion/Report on Organization's Financial Statements in accordance with Government Auditing Standards Notes to the General Purpose or Basic Financial Statements of the Organization A Schedule of Expenditures of Federal Awards, including the Department's contract numbers, the total expended for the federal program, and the CFDA number (OMB A-133 Subpart C Sec 310). Opinion/Report on Schedule of Expenditures of Federal and State Awards Report on Compliance and on Internals Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards. (OMB A-133 § 505 (b)) Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133. (OMB A-133 § 505 (c)) Schedule of Findings and Questioned Costs (OMB A-133 §. 505d), including: Summary Schedule of Prior Audit Findings reporting the status of all findings included in the prior audit's schedule of findings and questioned costs. (OMB A- 133 Sec. 315 (a) and (b)) Corrective Action Plan including (OMB A-133 Sec. 315 (c)) name of person responsible for the corrective action, corrective action planned, anticipated completion date, and explanation and reason if auditee does not agree with findings or believes correction is not required. All reports are signed and dated by the auditor Two copies of the audit reports are submitted Two copies of the management letter, if issued in conjunction with the audit report Two copies of comments by management concerning all findings and recommendations included in management letter, including a corrective action plan Page 1 of 2 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved As Amended on 2/21/2006 DATE: Tuesday, February 21, 2006 LOG NAME: 05MHHDCREHAB REFERENCE NO.: C-21312 SUBJECT: Authorize Allocation of $228,000 in HOME Investment Partnerships Grant Funds to, and Authorize Execution of a Contract with, the Mental Health Housing Development Corporation for Predevelopment and Operating Costs Associated with the Rehabilitation of 32 Units of Quality Affordable Rental Housing for Special Needs Clients at Hanratty Place RECOMMENDATION: It is recommended that the City Council: 1. Allocate $228,000 in HOME Community Housing Development Organization (CHDO) funding for the Mental Health Housing Development Corporation (MHHDC), for Predevelopment and Operating Expenses in support of a Multi-Family Rehabilitation project; 2. Authorize the City Manager or his designee to execute a contract with MHHDC for the project, with a two-year performance period beginning on the date of the execution of the contract; 3. Authorize the City Manager or his designee to extend or renew the contract for up to one year if MHHDC requests an extension and such extension is necessary for completion of the project; and 4. Authorize the City Manager or his designee to amend the contract, if necessary to achieve project goals, provided that the amendment is within the scope of the project and in compliance with all applicable laws and regulations governing use of federal grant funds. DISCUSSION: The HOME Investment Partnership Grant program regulations require local jurisdictions to provide a minimum of 15% of their annual grant awards to eligible CHDO. The Housing Department has received a CHDO proposal from MHHDC. MHHDC is requesting $178,000 to cover eligible predevelopment project expenses for a Low Income Housing Tax Credit (LIHTC) application for rehabilitation of the 32-unit Hanratty Place Apartments, and $50,000 in CHDO operating funds to support their organization for a one-year period. Predevelopment funds would be provided in the form of a zero-percent loan to be repaid from tax credit proceeds or permanent lender financing, to be secured by a note and deed of trust. Eligible project costs to be covered include legal, architectural, and appraisal fees, costs of a required environmental review and market study, fees required by the Texas Department of Housing & Community Affairs (TDHCA) for tax credit applications, and reimbursement of previously incurred project-related expenses. If the project proves infeasible and/or the LIHTC application is unsuccessful, HOME Regulations allow the city to waive repayment of CHDO predevelopment loans. The $50,000 in operating funds would be provided in the form of a grant. MHHDC proposes to fully reconstruct the existing Hanratty Place building at 800 South Jennings, http://www.cfwnet.org/council_packet/Reports/mc_print.asp 4/25/2006 Page 2 of 2 maintaining the current 32 units, but upgrading their size, quality and amenities. MHHDC provides affordable housing to low income families and individuals with mental health issues, and works with other local non-profit entities to obtain appropriate support services for their tenants. The City Council previously reviewed a related proposal from MHHDC in December 2005; the current proposal does not include any acquisition of land or expansion in the number of units at Hanratty Place. The proposed housing unit mix will be eighteen 1 bed/1 bath; eight 2 bed/2 bath, and six 3 bed/2 bath. MHHDC has experience in completing projects similar to the one proposed, as they currently own and operate Pennsylvania Place Apartments, a 152-unit LIHTC project. MHHDC ensures that appropriate support services are provided to its special needs clients through partnerships with other non-profit and governmental entities, including mental health support services, after-school child care, and educational and financial self-sufficiency training. Service provider partners include MHMR of Tarrant County, Tarrant County College, and Buckner Family Services. Hanratty Place is located in Council District 8. FISCAL INFORMATION/CERTIFICATION: The Finance Director certifies that upon approval of the above recommendations, funds will be available in the current operating budget, as appropriated, of the Grants Fund. TO Fund/AccounVCenters FROM Fund/Account/Centers GR76 539120 005206128XXO $22,123.80 GR76 539120 005206128040 $22,123.80 GR76 539120 005206698XXO $24,007.74 G476 539120 005206698170 $24,007.74 GR76 539120 005206698XXO $16,254.73 GR76 539120 005206698250 $16,254.73 GR76 539120 005206846XXO $27,107.73 GR76 539120 005206846070 $27,107.73 GR76 539120 00520693OXX0 $50,134.00 GR76 539120 005206930030 $50,134.00 GR76 539120 005206006XXO $38,372.00 GR76 539120 005206006030 $38,372.00 GR76 539120 005206846XX0 131_476.06 GR76 539120 005206846020 $31,476.06 GR76 539120 00520693OXXO 18 523.94 GR76 539120 005206930020 $18,523.94 Submitted for City Manager's Office by: Dale Fisseler (6266) Originating Department Head: Jerome Walker (7537) Jason Hall (7381) Additional Information Contact: Barbara Asbury (7331) http://www.cfwnet.org/council_packet/Reports/mc_print.asp 4/25/2006