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HomeMy WebLinkAboutContract 56783-A1CSC No. 56783-A1 FIRST AMENDMENT TO CITY SECRETARY CONTRACT NUMBER 56783, A VENDOR SERVICES AGREEMENT BETWEEN THE CITY OF FORT WORTH AND CDFI FRIENDLY AMERICA, LLC This FIRST AMENDMENT TO CITY SECRETARY CONTRACT NUMBER 56783 ("First Amendment") is made and entered into by and between the CITY OF FORT WORTH ("City"), a Texas home rule municipal corporation, acting by and through its duly authorized Assistant City Manager, and CDFI FRIENDLY AMERICA, LLC ("Vendor"), a Pennsylvania limited liability company, actin by and through its duly authorized representative, each individually referred to as a "party" and collectively referred to as the "parties." WHEREAS, the City and Vendor are currently parties to a Vendor Services Agreement, wherein Vendor has agreed to provide consulting services to assess the potential roles of CDFI financing in the community, organize potential CDFI-friendly strategies, develop an actionable CDFI friendly business plan, and provide the City with consultative capacity -building support for the implementation of that business plan, the same being City Secretary Contract No. 56783 ("Agreement"); WHEREAS, as part of the Agreement, the City committed up to (i) $1,500,000 for CDFI consulting services ("Services"); (ii) $500,000 for a pool of grant funding that Vendor would use to incentivize CDFI engagement in Fort Worth ("Grant Fund"); and (iii) $1,000,000.00 to seed capitalize the CDFI Friendly Fort Worth Enhancement Fund ("Enhancement Fund"), with the stated intent to help finance small business, affordable housing, individuals, nonprofits, and commercial real estate to advance the CDFI Friendly strategy in Fort Worth ("Enhancement Fund"); WHEREAS, the Parties agreed that they would enter into separate agreements with each other to set out the terms and conditions for use of the Grant Fund and Enhancement Fund; WHEREAS, the Parties have agreed that this First Amendment serves to set out the terms and conditions governing the use of the money in the Grant Fund and Enhancement Fund; NOW, THEREFORE, for and inconsideration of the mutual undertaking hereinafter set forth and for adequate consideration given, the City and Vendor agree to the following: I. Section 3.1 of the Agreement is revised to set forth the terms and conditions for the Grant Fund and Enhancement Fund and read as follows: "3.1 The City's total commitment under this Agreement and any related agreements mentioned herein will not exceed Three Million Dollars and Zero Cents ($3,000,000.00) ("City Commitment"). The City's Commitment is broken down as follows: 3.1.1 City will pay an amount up to One Million Five Hundred Thousand Dollars and Zero Cents ($1,500,000.00) for all Services performed and expenses incurred under this Agreement in accordance with Exhibit B, which is attached hereto and incorporated herein for all purposes. OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX (a) City will pay Vendor for Services in accordance with the Prompt Payment Act (Chapter 2251 of the Texas Government Code) and provisions of this Agreement. (b) Vendor will not perform any additional services or bill for expenses incurred for City not specified by this Agreement unless City requests and approves in writing the additional costs for such services. City will not be liable for any additional expenses of Vendor not specified by this Agreement unless City first approves such expenses in writing. 3.1.2 City agrees to pay Vendor an amount up to Five Hundred Thousand Dollars and Zero Cents ($500,000.00) to use as grant funding to incentivize CDFI engagement in Fort Worth during the time that CDFI Fort Worth is ramping up its operations and outreach ("Grant Fund"). Specifically, Vendor will use the money in the Grant Fund to incentivize CDFIs to make loans in the City of Fort Worth in ways it finds effective, including, but not limited to, offering origination fees for eligible loans, offering grants to "buy down" interest rates, providing funding for partnerships with CDFIs and other mechanisms that result in more loans made by CDFIs in the City of Fort Worth. 3.1.3 City will fund Vendor in an amount up to One Million Dollars and Zero Cents ($1,000,000.00) ("Enhancement Funds"), with payment to be issued in one lump sum within thirty (30) days after the City executes this First Amendment. Use of the Enhancement Funds is restricted to the terms of this Agreement. a. Vendor will ensure that the Enhancement Funds are not expended per se but, rather, ensure that they are held by CDFI Friendly Fort Worth as equity or "net worth capital" until December 31, 2026. The ability to use the Enhancement Funds as equity or "net worth capital" is critical for the following reasons: It permits greater risk in lending to borrowers with limited credit histories by providing investors with adequate protections. ii. It enables flexible loan pricing and longer terms, as needed. i i i. It permits lenders to refinance balloon loans made to borrowers when designated take-out financing is delayed. iv. It gives CDFIs the financial clout to attract new investment from sources that traditionally have not supported them — such as insurance v ii companies, banks, mutual funds, and universities — and that require minimum net worth levels. It generates earned income as "spread," giving CDFls the financial independerce to forge creative partnerships with borrowei s. that erid, Vendor will ensure that the Enhancement Funds used to originate mission -related loans to affordable ising developers, non-profit organizations, small inesses, and/or other CDFI borrowers in Fort Worth, along h pledging them to independent CDFI(s) as a credit lancerr ent (in the form of a partial guarantee) to encourage h CD�FI(s) to extend loans to affordable housing ,elopers, non-profit organizations, and small businesses in two j Miscellaneous i 1. All to s and condit[ons of t �e Agreement not addressed herein effect and are binding upon ti he parties. 2.' All terms in!this First Amendment that are capitalized but not de assigned to them in the Agreement. I IN WITNESS WHEREOF, the City and Vendor have caused this First Ai and delivered by their duly authorized representatives in Fort Worth, Tarrant Cou in full foxce and d have the mbanings Iment to be e7. (ecuted Texas. City: Vendor) i By: William Johnson (M 30, 2023 528 CDT) Name: William Johnson Title: Assistant City Manager Date: M a r 30, 20�3 I I BY: Name: Adina Abramowitz Title: Managing Member Date: 1` f GIB ) to 7'�> FOR CITY OF FORT WORTH INTERNAL PROCESSES: Approval Recommended: By: Name: Title: Robert Sturns Director, Economic Development Approved as to Form and Legality: W By: Name: Tyler Wallach Title: Assistant City Attorney Contract Authorization: M&C: M&C 21-0809 Form 1295: 2021-817003 Contract Compliance Manager: By signing I acknowledge that I am the person responsible for the monitoring and administration of this contract, including ensuring all performance and reporting requirements. By: Name: Title: .Qe6o,Lt�'tu�.nd Robert Sturns Director, Economic Development City Secretary: By: Name: Title: U Jannette Goodall City Secretary gd444UQ� pad *oRr �4a p�,°°°�o Lp9dd ptg o.ld 1 . e=o pd1 * � °o *mod da� araa5b4b OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX City of Fort Worth, Texas Mayor and Council Communication DATE: 10/19/21 M&C FILE NUMBER: M&C 21-0809 LOG NAME: 17ARPA ALLOCATION CDFI FRIENDLY AMERICA SUBJECT (ALL) Approve Allocation of $3,000,000.00 in Funds from the American Rescue Plan Act and Authorization Execution of a Contract with CDFI Friendly America, LLC to Bring Financing from One or More Community Development Financial Institutions to the City in Support of Business Equity Capacity Building RECOMMENDATION: It is recommended that the City Council: 1. Approve the allocation of up to $3,000,000.00 from the American Rescue Plan Act, Subtitle M (Coronavirus State and Local Fiscal Recovery Funds); and 2. Authorize the City Manager to enter into a contract with CDFI Friendly America, LLC to bring financing from one or more Community Development Financial Institutions to the City in support of Business Equity Firm capacity building. DISCUSSION: The proposed contract with CDFI Friendly America, LLC would engage the consultant to provide consulting services in assessing the potential roles of Community Development Financial Institution (CDFI) financing in the community, organizing potential CDFI Friendly strategies, developing an actionable CDFI Friendly business plan, and providing the City with consultative capacity -building support for the implementation of that business plan in collaboration with the Economic Development Department and the Department of Diversity & Inclusion. A general outline of the scope of work to be provided includes: • Inform and create a CDFI Friendly strategy to significantly increase CDFI financing in Fort Worth with a priority on financing for communities of color, people of color, and others that have long been denied full access to essential financing on reasonable and appropriate terms; • Help the City build its community's capacity by establishing an independent, permanent CDFI Friendly entity ("CDFI Friendly Fort Worth") with appropriate local board and staff to manage and execute the community's CDFI Friendly strategy; • Perform research and make reports on past community development efforts in Fort Worth, local market conditions, significant market trends and/or opportunities, and other elements that might affect the community's decisions; • Work with the City and identified stakeholders to identify credit gaps that CDFI financing might fill and prioritize them to inform the CDFI Friendly business strategy; and • Prepare —in collaboration with the City and identified stakeholders —a business plan that clarifies and illuminates key findings, assumptions, resource needs, market priorities, and projected outcomes of a CDFI Friendly strategy for Fort Worth. The initial term of the engagement would start on November 1, 2021, and continue until April 30, 2023. At the end of the Initial Term, any additional work shall be performed on a time -and -expense basis at the applicable rate(s) outlined in the contract. The proposed contract would utilize up to $3,000,000 of ARPA funding to launch the program and help capitalize the CDFI Friendly Fort Worth Enhancement Fund that the consultant might use to incent CDFI engagement in Fort Worth while CDFI Friendly Fort Worth is ramping up its operations and outreach. Allocation of ARPA Subtitle M Fundina Responding to the negative economic impacts of the coronavirus pandemic is a specifically identified use of ARPA dollars under Section 603(c) (1)(A) of Title VI of the Social Security Act (added by ARPA). Treasury Department guidance specifically notes that these Fiscal Recovery Funds can be deployed for a broad range of uses to address "the disproportionate ... economic impacts of the crisis on the hardest -hit communities, populations, and households" and to provide services and additional investments in Qualified Census Tracts. Minority owned firms and communities of color have shown disproportionate financial impacts from the pandemic; therefore, it has been determined that establishing this program is an eligible use of funds as a response to negative economic impact on hard-hit communities. Capacity building efforts for Business Equity firms was also determined to be a qualified priority by City Management for ARPA funding as approved by the City Council in M&C 21-0445 on June 22, 2021. ARPA funds must be committed by the end of 2024 and spent by the end of 2026. Approval of this M&C will allocate $3,000,000 for FY2022 in the American Rescue Plan Act project in the Grants Operating Federal Fund budget. Necessary reporting and documentation requirements will be followed to ensure the City can comply with all reporting requirements of the ARPA legislation. The following chart reflects the current status for allocation of the City's ARPA funding under Subtitle M and incorporates each ARPA M&C on the October 19, 2021 Council Agenda: 1 11 JIM&C's Total CFW ARPA Subtitle M Funding 173,745,090.00 F 21-0445 Allocations Approved To -Date $6,000,000.00 25ARPA-VFW-TDG Pending Allocation $1,000,000.00 13ARPA-ADMINISTRATION Pending Allocation $10,100,000.00 19ARPA ALLOCATIONS TO HOUSING AND HUMAN SERVICES PROJECTS Pending Allocation $300,000.00 25ARPA-WRMC MURAL PLAQUES Pending Allocation $2,400,000.00 Ill7ARPA ALLOCATIONS UNTHSC Pending Allocation $4,245,533.42 17ARPA ALLOCATIONS EVANS & ROSEDALE REDEVELOPMENT Pending Allocation $3,000,000.00 17ARPA ALLOCATION CDFI FRIENDLY AMERICA (This M&C) Remaining Unallocated Balance $146,699,556.58 FISCAL INFORMATION / CERTIFICATION: The Director of Finance certifies that upon approval of the above recommendations, funds are available in the current operating budget, as appropriated, of the Grants Operating Federal Fund. The Economic Development Department and Diversity & Inclusion Department shall be responsible for ensuring that only expenditures allowable under the American Recovery Plan Act are charged to this funding source. Submitted for City Manager's Office by; Jay Chapa 5804 Originating Business Unit Head: Robert Sturns 2663 Additional Information Contact: Robert Sturns 2663 Christina Brooks 8988 Expedited