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HomeMy WebLinkAboutContract 35408l a, tl f t d 11 yS� a{�' ��I �`� :�! I c ..�! � - dC-' . . r � � � ' � { � o � i: �i� � � �V� � � �`�—'�_`�_�__ STATE OF TEXAS § § 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 Corporation ("MHHDC"), whose address is 603 W Magnolia Street, Suite 204, Fort Worth, Texas 76104, acting by and through David Fielding, its duly authoi•ized 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; and 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 et seq. ("NAHA") and the HOME Investment Partnerships Program Final Rule, as amended, 24 CFR Part 92 et seq. (the "HOME Regulations" or "Regulations") is to benefit low and very-low income citizens by providing them with affordable housing; and WHEREAS, the assigned catalog of Federal Domestic Assistance "CFDA") for this Federal Program is number 14.239; and 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 previously received a grant of HOME Funds under City Secretaiy Contract No. 33442 authorized by M&C No 21312 on February 21, 2006 for predevelopment expenses for a Low Income Housing Tax Credit ("LIHTC") application; WHEREAS, in July 2006 MHHDC received an award of LIHTC from the Tezas Department of Housing and Community Affairs ("TDHCA") to demolish and reconstruct its affordable rental housing project commonly known as Hanratty Place Apartments; WHEREAS, MHHDC has formed Hanratty Place Apartments, L.P. (the "Partnership") a single asset entity to own and operate Hanratty Place Apartments for the LIHTC compliance period and has formed MHH Hanratty LLC to act as general partner for the Partnership; and HOME FiJNDS CHDO SET-ASIDE - �� Paee 1 � MHHDC HOUSING Construction Rev. 06-22-07 � WHEREAS, City citizens and the City Council have determined that the development of safe, decent, and affordable housing is needed for low and very low-income citizens who are persons with special needs is a prioriiy. NOW, THEREFORE, THIS AGREEMENT FURTHER WITNESSETH: I. GENERAL PROVISIONS A. Purpose The express purpose of this Contract is to provide MHHDC with HOME funds ("HOME Funds") not to exceed FIVE HLTNDRED NINETY-SIX THOUSAND NO/100 Dollars ($596,000.00) for eligible construction and operating costs for the reconstruction of its special needs housing rental project known as Hanratty Place Apartments, 800 S. Jennings St., Fort Worth, TX 76104 (the "Project") which provides rental housing for low and moderate income persons with a target population of special needs persons (the "Program"). The HOME Funds will be used for two purposes: a) FNE HUNDRED FORTY-SIX THOUSAND NO/100 Dollars ($546,000.00) for eligible construction expenses provided in the form of a grant ("Construction Costs Grant"), and b) FIFTY THOUSAND NO/100 DOLLARS ($50,000) far HOME-eligible CHDO operating costs incurred during the time period that it takes to complete the Project provided in the form of a grant during the reconstruction period ("Operating Costs Grant"). MHHDC will provide the services and activities described in the attached Exhibit "A" — Program Summary. HOME Funds must be used in connection with the Program for eligible activities and costs allowed in the HOME Regulations including but not limited to direct construction costs. architectural, engineering, attorney, consultant, appraisal and other applicable fees directiv related to carrying out the Program as well as CHDO operating costs. 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 in the form of the Construction Costs Grant will be disbursed to MHHDC on the basis of MHHDC's request in the form of a HUD 1 Settlement Statement previously approved by City. HOME Funds in the form of the Operating Costs Grant will be disbursed to MHHDC on a reimbursement basis. All disbursements of HOME Funds will be made in accordance with the City Housing Department's Disbursement Policy foN CHDOs, Model Blocks and Subf°ecipiei�ts. MHHDC will loan the Partnership $546,000.00 pursuant to the terms of a Loan Agreement and will assign City a security interest in the note from the Partnership and all liens securing it (the "Collateral Assignment") to secure MHHDC's performance of its obligations under this Contract for the use of the HOME Funds. The Collateral Assignment shall expire at the end of the Affordability Period described in more detail below. MHHDC shall retain the loan proceeds from the loan to the Partnership as CHDO proceeds ("CHDO Proceeds") which shall be used for HOME-eligible or other housing activities benefiting low-income persons as required by 24 CFR 92.300(a)(2). MHHDC shall report the HOME FiJNDS CHDO SET-ASIDE - Pa�e ? '�! �: �� � MHHDC HOUSING Construction Rev. 06-22-07 '`; v� � �. �`;G�_� _., . _ .� receipt and use of these CHDO Proceeds to City on an annual basis or more often if requested by City. Once CHDO Proceeds are used by 1VIHHDC as required by HOME Regulations, there shall be no further HOME Program requirements. MHHDC shall not commingle the CHDO Proceeds with any other funds in any manner that would prevent City from being able to readily track and identify their receipt and use. 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 /Affordabili . Period The term of this Contract begins on the date of its execution and terminates two (2) years thereafter except for any applicable provisions relating to ensuring affordability. This Contract may be extended for an additional one (1) year tertn. 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. Eleven (11) rental housing units developed by MHHDC will be considered HOME-assisted units and must qualify as affordable rental housing for a period of twenty (20) years (the "Affordability Period"). 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 sixty percent (60%) of area median income ("AMI") as defined by HUD. Eight (8) of these units will be one-bedroom units and three (3) units will be two-bedroom units. If these eleven (11) housing units do not qualify and remain as affordable rental housing immediately upon lease-up or at any time during the Affordability Period, the HOME Funds granted under this Contract will be immediately due and payable in full to City in accordance with the HOME Regulations. The Affordability Period shall commence on the later of (i) the date the Project is completed and MHHDC has reported all income eligible tenant lease up of all HOME-assisted units by reporting the applicable tenant beneficiary data; or, (ii) the HOME assisted units are set up and completed in HUD's Integrated Disbursement and Information System maintained by City and HUD ("IDIS") as required by the HOME Regulations. The terms "set up" and "completed" shall have the meaning set forth in HUD's IDIS Manuel. The eleven (11) rental housing units assisted with HOME Funds 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 repayment for the following minimum time periods: five (5) years where the per unit amount of HOME Funds provided is less then $15,000; ten (10) years here the per unit amount of HOME Funds provided HOME FLJNDS CHDO SET-ASIDE - Paee 3 MHHDC HOUSING Construction Rev. 06-22-07 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 deed restrictions, loan documents or other enforcement mechanisms approved by HUD, for not less than the Affordability Period. C. Income Eli i�tv_ 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 for the eleven (11) HOME-assisted units are subject to the HOME regulatory requirements at 24 CFR 92.252(a) and (b). 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-assisted units exceed the "High HOME Rent". "High HOME Rent" is defined as the lesser of: a) the HUD-established Fair Maxket 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 AMI, ���ith applicable adjustment for the bedroom size of the relevant housing unit. Rents may not e�ceed the above amounts minus monthly allowances for utilities and services (excluding telephone) established by City. For projects with five (5) or more HOME-assisted rental units, twenty (20%) percent of the HOME-assisted units must be occupied by families with incomes no higher than 50 percent (50%) of AMI who are paying the "Low HOME Rent". "Low HOME Rent" is defined as no more than thirty percent (30%) of the annual income of a family at fifty percent (50%) of AIVII adjusted for family size with applicable adjustment for bedroom size. City agreed to provide MHHDC with copies of HUD-approved schedules of these HOME rent levels and utility allowances as requested as 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. HOME FiJNDS CHDO SET-ASIDE - Page a MHHDC HOUSING Construction Rev. 06-22-07 3. Provide for a) bi-lingual leasing and management assistance; b) selection of tenants from a written waiting list in the chronological order of their application, insofar as is practicable; and c) prompt written notification to any rejected applicant of the grounds for such rej ection. 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 term shall not exceed one (1) year; lease may not include agreement by the tenant to be sued, lease may not include agreement by tenant to allow landlord to take, hold or sell tenant's property without notice; lease may not include agreement by the tenant to exclude owner from responsibility for intentional or negligent acts; lease may not authorize owner to institute a law suit without notice to the tenant; lease may not include agreement by tenant to be evicted without institution of court proceedings; lease may not include agreement by tenant to waive a jury trial or right to appeal; lease may not include an agreement by tenant to pay legal costs of court proceedings even if the tenant prevails in those proceedings. F. Construction and Other Local Buildin� 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. MHHDC shall ensure that the Project is maintained to these standards for the duration of the Affordability Period. City will verify maintenance of the Project to these standards through on-site inspections according to the following schedule as applicable: for projects with one (1) to four (4) HOME-assisted units, every three (3) years; for projects with five (5) to twenty-five (25) HOME-assisted units, every two (2) years; for projects with twenty- six (26) or more units, every year. All Project plans, specifications and work shall conform to all applicable Federal, state and local laws, ordinances, rules and regulations. Approval of any plans and specifications relating to the Project or the Program by City shall not constitute or be deemed (i) to be a release of the responsibility or liability of MHHDC or any of its subcontractors, their officers, agents, employees and subcontractors, for the accuracy or the competency of the plans and specifications, including, but not limited to, any related investigations, surveys, designs, working drawings and specifications or other documents, or (ii) an assumption of any responsibility or liability by City for any negligent act, error or omission in the conduct or preparation of any investigation, surveys, designs, working drawings and specifications or other documents by MHHDC or any of its subcontractors, their officers, agents, employees and subcontractors. � � �� � HOME FiJNDS CHDO SET-ASIDE - Page � F �. MHHDC HOUSING Construction Rev. 06-22-07 � � a G. Other Requirements MHHDC will oversee construction activities as the developer and general contractor and earn developer's fees which will assist it in becoming financially self-sustaining. MHHDC will enter into a Ground Lease for a term of 65 years with the Partnership. The Partnership will o�nm and operate the Project which shall be managed and rented in order that it will qualify for the low income housing tax credit provided in Section 42 of the Internal Revenue Code of 1986. MHHDC will act as guarantor of the Partnership's construction and permanent loan and has a Right of First Refusal to purchase the Project so long as MHH Hanratty LLC or an affiliate is serving as the general partner. Such Right of First Refusal is conditioned on the Project being maintained for low-income use for at least fifteen (15) years after the end of the LIHTC compliance period. The Limited Partner and tax credit investor is TRGHT, Inc., an affiliate of FANNIE MAE. The Collateral Assignment shall be subordinate to the Land Use Restriction Agreement ("LURA") established and enforced by TDHCA for the LIHTC and to any first lien construction or permanent financing for the Project. Repayment of the loan by the Partnership to MHHDC shall not relieve MHHDC of its responsibilities to maintain the affordability of the HOME- assisted units for the required twenty (20) year Affordability Period. Further, all provisions of this Contract, and particularly those regarding the Affordability Period, Income Eligibility, Tenant Rent and Selection, Tenant Lease, and Housing Quality Standards for the designated HOME-assisted units, must be assigned to any new owner upon sale or transfer of the Project or landlord upon assignment of the Ground Lease. The Parties acknowledge that the HOME Funds paid hereunder are intended to provide funding only for MHHDC's Program-related construction costs and operating costs as specified in the attached Exhibit "B1" - Construction 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, contractor, licensee or invitee of neither MHHDC, nor any Program participant is in the paid service of Ciiy 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. HOME FLJNDS CHDO SET-ASIDE - Page 6 MHHDC HOUSING Construction Rev. 06-22-07 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 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. 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. MHHDC and the Partnership shall begin construction work within thiriy (30) days froin the date this Contract is executed. Failure to begin construction work within thii-ry (30) days shall be grounds for termination of this Contract. City shall notify 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, MHHD agrees that any provisions of this Contract that pertain to affordability, tenant eligibility, and City Building Codes, ordinances and standards, as well as any applicable HOME requirements, shall survive the termination of this Contract and shall be governed by the HOME Regulations and the provisions of the LURA and any 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 the Project or the 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 HOME FIJNDS CHDO SET-ASIDE - Page 7 MHHDC HOUSING Construction Rev. 06-22-07 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. 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 after execution of this Contract and in compliance with its provisions. Payment of eligible expenses shall be made against tl�e line item budgets set forth in Exhibit "B1" — Construction Costs and Exhibit "B2" — Operating Costs of this Contract (collectively, the "Budgets"). MHHDC may not increase or decrease HOME-funded line-item amounts of the Budgets without City's prior written approval. Payment to MHHDC for CHDO operating costs shall be monthly on a reimbursement basis and shall require completion of appropriate City forms and copies of adequate supporting documentation verifying the eligibility of expenses. No additional funds for CHDO operatin�� costs will be disbursed if the City has not received the necessary financial reports that account for previously disbursed funds. Eligible costs 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 Disbu�•sement Policy fo�• CHDOs, Model Blocks and Subrecipients. B. Amount of Funds It is agreed that the total distribution of HOME Funds made available to or paid on behalf of MHHDC during the term of this Contract shall not exceed the total sum of FIVE HUNDRED NINETY-SIX THOUSAND and NO/100 Dollars ($596,000.00). HOME FLINDS CHDO SET-ASIDE - Page 8 MHHDC HOUSING Construction Rev. 06-22-07 3. DUTIES AND RESPONSIBILITIES OF MHHDC A. Statement of Work and Performance Ob'ec� tives MHHDC will utilize HOME Funds for construction expenses and operating costs related to funding the reconstruction of its existing rental affordable housing apartment complex to produce housing 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 "B1" — Construction Costs and Exhibit "B2" — 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 HOME 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 that have not been used or acquired, as the case may be, in accordance with the terms of this Contract or the HOME Regulations. This provision specifically does not apply to CHDO Proceeds which shall be used as described herein. MHHDC agrees that it will reimburse City for any expenditures of HOME Funds disallowed Uy HUD through audit exception or other monetary action. Any HOME Funds invested in housing that fails to meet affordability requirements for the appropriate affordability period must be repaid to City in accordance with HOME Regulations. E. Affirmative Marketin� 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. HOME FLTNDS CHDO SET-ASIDE - Page 9 MHHDC HOUSING Construction Rev. 06-22-07 Recipients are required to take reasonable steps to ensure meaningful access to their programs and activities by Limited English Proficient persons. F. Provisions to Secure Affordabili Period 1. The City's interest in preserving the Affordability Period for the HOME-assisted units will be secured by a combination of the LURA established and enforced by TDHCA for the Low Income Housing Tax Credits and the Collateral Assignment. If the Partnership or another entity related to or controlled by MHHDC retains ownership of the Project for the full twenty (20) year Affordability Period, no further HOME requirements will apply. 2. Any sale or transfer of the Project by the Partnership during the 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 or the Partnership shall require the review and prior written approval of the City for the purposes of ensuring compliance with the HOME affordability requirements. G. Recordkeepin� l. 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 Affordability Period 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 Affordability Period: a. Annual income and size of the household; b. Race and Ethnicity of each tenant household, using reporting categories as required by HL7D. c. Whether the head of household is male or female, whether the head of household is single, whether any member of the household is disabled, and number of children in the household (in any); d. Unit number and bedroom size of each unit designated as a HOME-assisted unit; e. Type of rental assistance being provided to each tenant, if any (i.e., Housing Choice Voucher, Supportive Housing Program, or other federally-funded rental assistance); ' ..� ; HOME FLTNDS CHDO SET-ASIDE - Page 10 '�'�; t' MHHDC HOUSING Construction Rev. 06-22-07 ,✓�1 £ 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 (�, which provide that no officers, agents, consultants or employees of the developer of HOME-assisted units may occupy such units. 4. City will monitor and inspect the Project throughout the Affordability Period to ensure continued compliance with rent restrictions, low-income occupancy requirements, and property standards. MHHDC shall maintain tenant income recertification documentation in the tenant files available for inspection by City. During the Affordability Period, MHHDC shall submit initial unit rents including utility allowances, income veriiications and beneficiary data within thirty (30) days after obtaining full occupancy, and annually thereafter due by the 15th day of the 3`a month after the end of the year. H. Reports During the term of this Contract, MHHDC will submit to City monthly activity reports and financial reports due by the 15th 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 15t" of the tnonth 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 Construction Costs Grant, including any items that qualify as HOME match. MHHDC will submit to City annually during the Affordability Period a copy of the report MHHDC provides to TDHCA for LIHTC reporting purposes. HOME Fi1NDS CHDO SET-ASIDE - Page 11 MHHDC HOUSING Construction Rev. 06-22-07 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 nine (9) months following the end of the period being audited and be submitted to City within thiriy (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 Contract funds for Subrecipient Operating Costs in an amount proportional to that of the Federal funds used in MHHDC's total agency operating budget, as applicable. 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. 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 thirty (30) 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. Monitoring during the Affordability Period of shall include annual on- site inspection of all HOME-assisted units and review of tenant income documentation described above. HOME FiJNDS CHDO SET-ASIDE - Page 12 MHHDC HOUSING Construction Rev. 06-22-07 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, the Partnership and their respective 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 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") Title VI of Civil Rights Act of 1964 (42 USC 2000d et seq.) including provisions requiring recipients of federal assistance to ensure meaningful access by persons of Limited English Proficiency. 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 The Age Discrimination in Employment of 1967 (29 USC et seq. ) The Age Discrimination Act of 1975 (42 USC 6101 et seq. ) The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 USC 4201 et seq. ) and the related regulations at 49 CFR Part 24 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 et 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 lias 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 FUNDS CHDO SET-ASIDE - Pabe �� MHHDC HOUSING Construction Rev. 06-22-07 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 Housin� and Urban Development Act of 1968, as amended, (12 USC 1701 u et sec�,) and its related re�ulations 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 HLJD 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 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 applicanfs 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 «�ill 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. HOME Fi1NDS CHDO SET-ASIDE - Page l�l MHHDC HOUSING Construction Rev. 06-22-07 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. (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 all program requirements in 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 A�ainst Discrimination MHHDC, in the execution, performance or attempted performance of this Contract will not discriminate against any person because of sex, race, religion, color, disability, national origin, or familial status, nor will MHHDC permit its officers, members, agents, employees, subcontractors or Program participants to engage in such discrimination. HOME FUNDS CHDO SET-ASIDE - MHHDC HOUSING Construction Page 15 Rev. 06-22-07 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, disability 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, se�, disability 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, disability 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. 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 ar 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 HOME FiJNDS CHDO SET-ASIDE - Page 16 MHHDC HOUSING Construction Rev. 06-22-07 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 tenuxe 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 «�ith 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 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. HOME FIINDS CHDO SET-ASIDE - Page 17 MHHDC HOUSING Construction Rev. 06-22-07 L. Assi� 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 contractor 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 HIND 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 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 HINDS 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 PROGR.AMS 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 MAHDC AND CITY, THAT THE INDEMNITY PROVIDED FOR THIS SECTION INCLUDES INDEMNITY BY MHHDC TO INDEMNIFY AND PROTECT CITY FROM THE HOME FLJNDS CHDO SET-ASIDE - Page ] S MHHDC HOUSING Construction Rev. 06-22-07 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 ASOVE. N. Waiver of Immunitv 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, MHHDC 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 Bondin� For the term of this Contract, MHHDC will maintain blanket fidelity coverage in the fornl 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 fiunish 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 HOME Fi1NDS CHDO SET-ASIDE - Page 19 MHHDC HOUSING Construction Rev. 06-22-07 $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 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 contractor 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. HOME FLINDS CHDO SET-ASIDE - Page 20 MHHDC HOUSING Construction Rev. 06-22-07 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. 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 Re ag rdin� Lobb�g 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 Form-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 HOME F[JNDS CHDO SET-ASIDE - Pa�e 21 MHHDC HOUSING Construction Rev. 06-22-07 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 contracts, subcontracts or agreements involving the expenditure of Federal funds. C,�. 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 FLTNDS CHDO SET-ASIDE - Page 22 MHHDC HOUSING Construction Rev. 06-22-07 IN WITNESS WHEREOF, the Parties_l��reto have e� ecuted four copies of this Contract in Fort Worth, Tanant County, Texas, this _��� �r' day of �` � , 2007. ATTEST: � � � i y Secretary APPROVED AS TO FORM AND LEGALITY: �� �� ^ l J' Assistant City Attorney CITY OF FORT WOR H`� ,� ,�J By. �����"� �,L-•,� '�'"�., Da 'A. Fisseler, � Assistant City Manager MENTAL HEALTH HOUSING DEVELOPMENT CORPORATION By: David ie ding, President STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on _�(,( I'L e- f C( , 2007 by Dale A. Fisseler, the Assistant City Manager, of the City of ort Worth, on beh lf the City of Fort Worth. � ,T„ . � a��, �. B�is��� � �, Nolary Pub�ic, Stalo of Texas ` My Commissiun Fxpires Notary Public, State of Texas March 07, 201� 9� STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on �����_ oz�� 2007 by David Fielding, the President of Mental Health Housing evelopment Corporation, Inc., a Texas non-profit corporation, on behalf of said corporation. ,,,,,���,,,,,, � ��!•�pY��e'�' ote f� ������a S of Texas ' � ' ` My Comm�eel�n Ex ir �M�� iy� p ea ? %:;;;,';;,�° saptombor d9, 2d07 HOME FiTNDS CHDO SET-ASIDE - Page 23 MHHDC HOUSING Construction Rev. 016-Ok7-076 EXHIBIT "A PROGRAM SUMMARY SCOPE OF WORK Mental Health Housing Development Corporation ("MHHDC") DESCRIPTION: MH�IDC, operating as a CHDO certified by the City of Fort Worth, currently owns and operates the 32- unit Hanratty Place Aparhnents complex. MHF-IDC provides affordable housing to low income tenants many of whom are persons with mental illness. The physical complex located at 800 S Jennings, Fort Worth, Texas, is currently functionally obsolete. MHIIDC proposes to demolish the existing structure and rebuild in its place a 3-story 32-unit complex with larger and more efficiently designed units with updated amenities ("the Project"). This reconstruction of the Project will ensure the sustainability of MH�IDC's affordable housing program into the future. MI�-�DC has been approved by the Texas Department of Housing and Community Affairs for an allocation of Low Income Housing Tax Credits ("LIHTC") for the Project. This HOME CHDO Contract is to provide support to MH�IDC to ensure continued provision of affordable housing to disabled low income tenants, through a Construction Costs Grant of $546,000.00 for reconstruction costs, and an Operating Costs Grant of $50,000.00 to cover operating eapenses until developer fees are earned. These HOME Funds will allow MH�IDC to act as its own developer for the Project, ensuring retention of developer fees and control of development costs. MH�IDC will loan the $546,000 to Hanratty Place Apartments, L.P. (the "Partnership") a single asset entity created by MHHDC to own and operate the Project for a thirty year (30) term. The note from the Partnership to MHI-�DC and the liens securing it will be assigned to City in a Collateral Assignment to secure MHI�DC's performance of its obligations under this Contract for the use of the HOME Funds. The Collateral Assignment shall expire at the end of the Affordability Period. MHI�DC will dedicate eleven (11) of the units as floating HOME-assisted units and retain all loan payments as CHDO Proceeds for use in continuing and/or furthering their future affordable housing initiatives. The per unit HOME subsidy is $ 49,636.37. 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 in order to preserve 32 low-income rental units. PROGRAM MEASURES: 2006-2008 Budget 1. Reconstruct eleven (11) units of quality affordable rental housing for disabled low-income tenants. 2. Program Operating Costs TOTAL PROGRAM BUDGET 11 HOME Assisted units 8 — 1 bedroom units 3 — 2 bedroom units $ 546,000 50,000 $ 596,000 ��':; r'i'!'�.� l:';:! t:; : v'•' ^'' .^' _ � -',i�� „�t?!� „��7: ; - I; 'j .;�_,i, ��o ,yn,,�;;,/ � � J d�� � V.: �;i id �, �� L�•; ;; ? :;;��;,�.lb `�o I;;� :i!ii� .��� � I i I ��S !�; ; . L� �:;;::lfl.; ���,... i Exhibit `B1"-- Construction Costs Line Item Costs Ground Lease / Acquisition Cost $ 500,000 Title Insurance $ 20,000 (approx) Engineering $ 26,000 (approx) Total $ 546,000 Exhibit "B2" - Operating Costs Cost Item Amount Executive Director Sala 12,232 Insurance / Pa roll Taxes 8,054 Tele hone 1,330 Membershi Dues 240 Financial, Accountin & Audit Fees 12,040 Rent 6,658 Office Su lies 1,246 Insurance 8,200 Total $ 50,000 ��i'1 , �..,:. � - c ,,, � - � � ��:1 ii I� � �` �' �I�:i �;� i� i�'`-L. ;�-,1� '1 �4`� �; ,:j��j,tf ���i1. f �� � . � �,�:i � U . ; . , Tar e� 6/25/07 6/29/07 7/1/07 2"d Quarter 2008 3rd Quarter 2008 4`h Quarter 2008 6/11/07 — 12/31/08 Exhibit "C" Program Implementation Timeline Reconstruction of Hanratty Place Apartments Development Activity Mental Health Housing Development Corporation closes on construction loan, Partnership Agreement and City Contract. Start of demolition Start construction Complete construction and start lease-up Complete lease-up / full occupancy Conversion to permanent loan During the Contract term, Mental Health Housing Development Corporation (ar assigns) will submit monthly program and financial reports to the City: 1) �IDC shall furnish City the following : a) during lease-up period on a quarterly basis until Project is fully leased, , summary beneficiary data regarding the household income, size, race, ethnicity, gender of head of household, and disability status of all tenants on Attachment IVa — Beneficiary Performance Report. b) During the Affordability Period, copy of rent roll and copy of lease forms used. c) Other such information as may be reasonably necessary to verify compliance with HOME Regulations. "��s'rJ�'.;!�':� .,_,..,��,�'.� ��,, i "f ;,,;;�,_._,.�� ,,,., � ,-;,� �v V� L c� 5 L �;:.: �L� �t c. ., ; ;Y,J;;�,�.,,�; � itf �(;,�,�, � �:i�i:�u'i� U`r�4•. EXHIBIT D CITY OF FORT WORTH HOUSING DEPARTMENT Audit Certification Form Subrecipient: Mental Health Housinq Development Corp Fiscal Year Ending: / /_ 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 Please list below all federal sources of funds that your organization has received during the past fiscal year. This section MUST be completed if a Single Audit or Program Audit is not required (Box 1 above). 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 wifhin 60 days after the end of your Fiscal year 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 Audifing 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 davs after orqanization's fiscal vear end: (required for all subrecipients) • Completed Audit Certification Form Due within the earlier of 30 davs 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 threshold for 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 these audit requirements, please call (817) 392-7540 to speak with staff in the Contract Compliance Division. CITY OF FORT WORTH HOUSING DEPARTMENT SINGLE AUDIT REPORT CHECKLIST The following components should be included in an audit submission. 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 Reportinq 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 Findinqs and Questioned Costs (OMB A-133 §. 505d), including: Summary Schedule of Prior Audit Findinqs 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 �;;r,;� �':,�j>-�;l �t;5���-:;;,':� Gv�S���' J? �',�sl `.'.�:'. � ,,� ff;� �..7 1'. :.^n� � ilf `4� �y � : :�v�;:�Ul�o �G�:a H z F� � a a A z � � 0 x � � O � 11 O w �1 O H � L� �I a � U � � 0 � � W � � � V � w W z W � \ � � � i, c �z � r,a � �i: � � C� C� � � O � � a rx � � �� � � � � v � � i, � � � .w z�w ;� � .. o �, � .. � � � � A� `� � ri� a� u e� �r .�' '� o . i.Vi �^ -�-i .i 1q ��.y � � i.`y !�"� 4% �T� W h� � a� � � nn � � O � � 6� C� � � � C� � W W W � � z -a+ � � ... � U � .� s w � v ce a � U U �v �� C � � C Z .� C � C � � "a, � '� x C � � .� � �o� � � y. F c � O � � � � o > d y � � C y C 5 �t� � O � U i �� � � v � •� � � .g Qww � > R z C C Q � � - �. - r = 3 "a u Cy '� L � � v » > L � �w 3Q � � � a � z�z � = �. V � !C .� R �::." .Y r c� vi u n u u 'y� � Cd C ''y. — C) Q (� Q � a� — � � � � •� � � � � � Q Q � C ^O � "O .T' C ^ C GC C.' .� L" r� Cv C' . ^ i"i '� �"'i � � � � C� C b L L� d �x��aQ� � 3 C �L � �L C � � y CJ CQ �� � CO CJ U ^ 3radQZQdccmo 0 i-i N M�' ��O t� 00 G� Page 1 of 2 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 5/22/2007 DATE: Tuesday, May 22, 2007 LOG NAME: 05MENTALHEALTH REFERENCE NO.: **G-15730 SUBJECT: Authorize Award of $596,000 in HOME Investment Partnership Grant Funds To Mental Health Housing Development Corporation, a Certified Community Housing Development Organization RECOMMENDATION: It is recommended that the City Council: 1. Award $596,000 in HOME Community Housing Development Organization (CHDO) funds to the Mental Health Housing Development Corporation (MHHDC) for development costs and operating expenses in support of a multi-family reconstruction project; 2. Authorize the City Manager or his designee to execute a contract with MHHDC for the project, with a two- year term 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 it is necessary for the completion of the project; 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 applicable laws and regulations governing use of federal grant funds; and 5. Authorize MHHDC to retain CHDO proceeds in conformance with the HOME Investment Partnership Program rules and the City's policy. DISCUSSION: Regulations governing the HOME Investment Partnership Grant program require that local jurisdictions provide a minimum of 15 percent of their annual grant awards to eligible CHDOs. MHHDC provides housing in the City of Fort Worth to individuals with mental disabilities and other special needs and currently owns and operates two properties: Pennsylvania Place Apartments, a 152 unit Low Income Housing Tax Credit (LIHTC) property and Hanratty Place Apartments which contains 32 units. MHHDC requested and received a CHDO pre-development loan from the City in the amount of $228,000 for expenses related to an application for Low Income Housing Tax Credits for the rehabilitation of Hanratty Place (M&C 21312). As required by the HOME regulations, this predevelopment loan has been repaid. After review of the rehabilitation that was needed to fulfill the tax credit obligation, it was determined that reconstruction was more advantageous and cost efficient. MHHDC has gained approval to reconstruct Hanratty place from the State of Texas Department of Housing & Community Affairs, administrator of the LIHTC program. The total development cost for the project is estimated at $5,000,000. MHHDC has requested $546,000 in CHDO funds from the City to offset additional costs associated with delay of the project and reconstruction of the facility. A total of $546,000 will be used to cover eligible http://www.cfwnet.org/council�acket/Reports/mc�rint.asp 6/20/2007 Page 2 of 2 reconstruction expenses of the 32-unit Hanratty Place apartments, and a maximum of $50,000 in CHDO operating funds is proposed to support the non-profit organization for a one-year period. Construction funds would be provided in the form of a zero-percent loan in accordance with HOME Regulations. The $50,000 in operating funds would be provided in the form of a grant. The Fort Worth Housing Finance Corporation previously reviewed a related proposal from MHHDC in February 2006 and directed staff to explore funding options with MHHDC for this project. The current proposal is the result of that discussion. The proposed project is located in Council District 8. The above recommendations were approved by the Central City Revitalization and Economic Development Committee on April 3, 2007. FISCAL W FORMATION/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/AccountlCenters GR76 539120 005206698XXX GR76 539120 005206772XXX GR76 539120 005206772XXX GR76 539120 005206128XXX GR76 539120 005206772XXX GR76 539120 005206772XXX GR76 539120 005206846XXX GR76 539120 005206930XXX GR76 539120 005206930XXX GR76 539120 005206006XXX GR76 539120 005206006XXX GR76 539120 005206846XXX $131,003.89 $2,678.77 $69,710.86 $83,997.11 $69,632.52 $16,512.27 $1,527.07 $78,572.56 $50,134.00 $38,372.00 3 858.95 $50,000.00 Submitted for City Manager's Office b� Originating Department Head: Additional Information Contact: FROM Fund/AccountlCenters GR76 539120 005206128160 GR76 539120 005206698210 GR76 539120 005206772090 GR76 539120 005206772160 GR76 539120 005206772400 GR76 539120 005206772410 GR76 539120 005206846220 GR76 539120 005206930020 GR76 539120 005206930180 GR76 539120 005206006190 GR76 539120 005206006020 GR76 539120 005206846190 Dale Fisseler (6140) Jerome Walker (7537) Charlie Price (7381) $83,997.11 $131,003.89 $2,678.77 $69, 710.86 $69,632.52 $16,512.27 $1, 527.07 $78,572.56 $50,134.00 $38, 372.00 $3,858.95 $50,000.00 http://www.cfwnet.org/council�acket/Reports/mc�rint.asp 6/20/2007 Page 1 of 1 Ramos, Yolanda From: Hendrix, Marty Sent: Wednesday, June 20, 2007 2:02 PM To: Ramos, Yolanda Subject: FW: Mental Health Housing Development Corporation Yolanda: Please issue Vicki Ganske a contract number as soon as possible and put the following information assigned to that number and create a pending contract file to get the final document. This is a one-time request! Keep this e-mail with the file and the M& C as well. Thanks! Marty Hendrix, TRMC/MMC City Secretary City of Fort Worth 1000 Throckmorton Fort Worth, TX 76102 Telephone: 817-392-6161 FAX: 817-392-6196 E-mail: marty.hendrix@fortworthgov.org From: Ganske, Vicki Sent: Wednesday, June 20, 2007 10:45 AM To: Hendrix, Marty Subject: Mental Health Housing Development Corporation I am preparing a contract between the City and Mental Health Housing Development Corporation for $596,000 in HOME Funds per M&C No. G-15730 dated 5/22/2007. I really appreciate your assistance in getting me a contract number. This is an enormously complex deal, or at least it boggles my little mind, and the authorized signatories are going in different directions. Too many moving parts. Vicki Smith Ganske Senior Assistant City Attorney City of Fort Worth 1000 Throckmorton Street Fort Worth TX 76102 817-392-7765 Fax 817-392-8359 vicki.ganske@fortworthgov.org This message and all attachments are confidential and are intended solely for the use by the individual or entity to which they are addressed. This communication may contain material protected by the attorney-client privilege. Any review, use, distribution, forwarding, printing or copying by persons other than the intended recipients is strictly prohibited. If you believe this email was sent to you in error, please notify the sender by replying to this transmission or by calling Vicki Ganske at 817-392-7765 and delete this message or any copy. Unless expressly stated in this email, nothing in the message should be construed as a digital or electronic signature. 6/20/2007