HomeMy WebLinkAbout11 CONT KM97209 07-20-98AGENDA
DATE: JULY 20, 1998
NO. 11
7-20-98
TO:
FROM:
SUBJECT:
WILLIAM A. HUSTON, CITY MANAGER
REDEVELOPMENT AGENCY STAFF
APPROVAL OF COUNTY OF ORANGE
DEVELOPMENT CONTRACT KM97209
HOUSING AND COMMUN~Y
SUMMARY: The County of Orange has awarded Tustin a total of $190,000 in HOME program[
funds for use in the city's first time homebuyers program. In order for Tustin to utilize these fundsI
for its homebuyers program, a contract needs to be entered into between the County of Orange andI
Tustin.. .I
RECOMMENDATION
It is recommended that the City Council, at its regular meeting of July 20, 1998, authorize the
Mayor to sign a County of Orange contract, subject to a furore amendment, which will allow the
City of Tustin to utilize $190,000 in HOME program funds for the City's fa'st time homebuyers
program.
FISCAL IMPACT
The execution of the contract will provide Tustin with $190,000 in program funds which will be
used as a portion of the funding for the city's first time homebuyers programs. Existing staff and a
previously selected contractor will be used to administer the fn'st time homebuyers program. So
there will be no new costs to administer this program.
BACKGROUND
In 1993 Tustin entered into a cooperative agreement with Orange County in which the parties
agreed to cooperate in the undertaking, or assist in the undertaking of community development and
housing assistance programs. To assist in the development of housing assistance programs, Tustin
was awarded a total of $190,000 in HOME program funds from the United States' Department of
Housing'and Urban Development.
Like other Orange County cities, Tustin finds that market rate housing prices exceed the ability
of many in the community to afford home ownership. Two specific barriers for these purchasers
have been identified:
The ability to have adequate funds for downpayments and closing costs
C'ity Council Report
July 20, 1998
Approval of Contract
Page 2
· The ability to make monthly mortgage payments within acceptable housing cost to
income ratios.
To assist in removing these barriers, staff previously received City Council approval to provide
two types of "silent" loans, subordinated to market issued first trust loans. The first will be used
for downpayment and closing cost assistance, and the second will be used for loans to reduce the
size and amount of monthly payment for first trust deed mortgages to allow for buyers to achieve
market level housing cost to income ratios. The programs will be available city-wide and will
also benefit the Town Center and South Central project areas by creating opportunities for
affordable housing.
The initial funding for these loans will come from two sources: the Redevelopment Agency's
tax increment housing set-aside funds ("Set-Aside Funds") and the HOME Program as
established and regulated by the United States Department of Housing and 'Urban Development
(HUD). The Agency intends to utilize HOME funds for all applicants eligible under federal
regulations until our current allocation of them is depleted. Other applicants will be assisted
under a Redevelopment Agency assistance package utilizing Housing Set-Aside funds. The
execution of the subject contract will allow the City to utilize the HOME program funds awarded
to it by the County of Orange.
The City Attorney's office has reviewed and approved the Proposed contract.
Christine A. Shingleton ~/
Executive Director
Tustin Community Redevelopment Agency
David Gottlieb
Senior Redevelopment Project Manager
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,..atract No. KM97209
COUNTY OF ORANGE
HOUSING AND COMMUNITY DEVELOPMENT
CITY ADMINISTERED
HOME Program Year VI
TITLE OF PROJECT: City of Tustin- "First Time Home Buyer Program" (FTHB)
MEMORANDUM OF CONTRACT entered into this
day of ., 1998
AND BETWEEN
City ofTustin, a municipal
corporation, in the State of California, and
hereinafter referred to as "CITY".
COUNTY OF ORANGE, a political sub-
division of the State of California and
recognized Urban County under the Federal
Housing and Community Development Act
of 1974 (Public Law 93-383), as amended,
hereinafter referred to as "COUNTY".
RECITALS
This Contract is made with reference to the following facts;
WHEREAS, the COUNTY has applied for and received funds from the United
States Government pursuant to the HOME Investment Partnership Program
(enacted by the National Affordable Housing Act of 1990), hereinafter referred to as
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HOME , and
WHEREAS, COUNTY and CITY previously entered into a Cooperatiori Agreement
dated June 8, 1993 in which both parties agreed to cooperate in the undertaking, or
assist in the undertaki'ng, of community development and housing assistance
activities; and
WHEREAS, CITY was previously awarded funding under the HOME Program,
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Contract No. KM97209
which on January 13, 1998 was re-programmed for use in the First Time Home-
Buyer program by action of the Orange County Board of Supenrisors; and
WHEREAS, CITY has submitted to COUNTY an application for funding of a
project described herein; and
WHEREAS, HUD has accepted and certified the aforementioned Final Annual
Action Plan, on July 16, 1996; as well as the reprogramming for this activity.
NOW, THEREFORE, IT IS AGREED by and between the parties that the following
provisions as well as all applicable Federal Regulations, including 24 CFR Part 92, and
appropriate State and Countylaws and regulations including the attached GENERAL
CONDITIONS, identified as Exhibit "A", and Exhibit "B" are part of this Contract.
I. SCOPE OF SERVICES
A. ACTIVITIES
CITY will act as PROJECT MANAGER and will be. responsible for
administering a Year V HOME project described as follows in a manner satisfactory to the
COUNTY and consistent with any standards required as a condition of providing these funds:
Project Description:
The City of Tustin will utilize HOME funding for its "First Time Home-
Buyer Program" (FTHB). The program will provide assistance with down payments
for households with annual incomes pursuant to HUD regulations.
Program Delivery:
Activity No. 1' Second mortgage loan/Down payment
General Administration: CITY Shall provide the oversight, administration and
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Contract No. KM97209
project management necessary to accomplish all contracted activities.
Housing Affordability: The housing which is for acquisition by a family must be
affordable as defined in 24 CFR Part 92'254. The resale/recapture requirements are
intended to assure that affordable housing is maintained in the community pursuant to HUD
regulations. Deed restrictions regarding affordability will be placed on each property.
B. LEVELS OF ACCOMPLISHMENT
Activity
Activity No. 1: Second trust deed/mortgage loans
Level of Accomplishment
C. BUDGET
1. This contract is in an amount not to exceed $190,000.00 (One Hundred
Ninety Thousand Dollars and 00 cents).
2. Funds shall be used for the following items: Costs relating to assisting with
down. payments for first time homebuyers.
Furthermore, compensation may be reallocated to address any costs incurred for previously
unbudgeted uses eligible under the applicable State and Federal regulations upon written request
from CITY and written approval by the DIRECTOR, particularly the Federal regulations at 24 CFR
Parts 92.205 - 92.215 and 254(a).
D. PERFORMANCE MONITORING
The COUNTY will, in accordance with Section III.A. of this Contract, monitor the performance of
the CITY against the goals and performance standards, required herein. Substandard performance
as determined by COUNTY will constitUte non-compliance with this Contract and COUNTY may
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Contract No. KM97209
thereafter terminate the Contract pursuant to Section H of Exhibit A "General Conditions", attached
hereto.
CITY agrees:
1. To comply with all applicable Federal and COUNTY regulations, as may be
periodically revised by HUD, Office of Management and Budget, or other Federal agencies and
COUNTY.
2. To fully cooperate with the COUNTY on matters concerning the scheduled
completion and submittal of materials, information and documentation requested by the COUNTY
to comply with Federal Grantee Performance Reporting requirements. Failure to do so may'result
in the COUNTY withholding future payment.
3. To comply with COUNTY procedures concerning the Grantee
Performance Report (GPR) Form. The CITY also acknowledges that the GPR FORM is
a monitoring tool that will be reviewed and evaluated by County to determine CITY's level of
accomplishments relative to this Contract.
4. To fully comply with the terms and conditions of the subject agreement. Failure to
do so may result in the suspenSion or termination of said agreement. Any terms or conditions
proposed subsequent to the effective date of this contract are invalid until such time that the
DIRECTOR has considered and approved said terms and conditions in writing. Any revisions to
the terms and conditions set forth herein shall be incorporated into this agreement in accordance
with Section I.G. (Amendments) of Exhibit "A" attached.
II. TIME OF PERFORMANCE
Services of the CITY shall begin on May 1, 1998 and funds shall be committed by
November 30, 1998. The term of this contract and provisions herein may be extended to cover an
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Contract No. KM97209
additional time period as specified in Section V.B. of this Contract.
III. PAYMENTS
A. CONTRACT AMOUNT
It is expressly agreed and understood that the total amount to be paid by the coUNTy under this
Contract shall not exceed the amount stated in Section I.C. of this Contract.
On a monthly basis CITY may invoice COUNTY for reimbursement of eli~ble coSts (See Exhibit
·
A). Concurrently with its request for the aforementioned funds, CITY shall submit to the
COUNTY the following support documentation: Copies of paid invoices, receipts, payroll records,
bank Statements, canceled checks and other items adequate to document project expenditures.
CITY shall also proVide a performance report for the time period identified in the aforementioned
reimbursement invoice, including Grantee Performance Direct Benefit Activity Information
addressing its level of performance with each activity undertaken relative to the scope of services
set forth in Section I., herein. Compensation of CITY reimbursement invoices will depend upon
appropriate and timely performance of objectives as set forth above. COUNTY may withhold
>ayment if CITY fails to meet measurable objectives as set forth in Sections I.A. and I.B. above.
.Xlo payment will be authorized if any preceding month's reports or invoices are not submitted to
COUNTY.
V. SPECIAL CONDITIONS
A. DEFINITIONS
For the purposes of this Contract the following definitions shall apply:
1. PROJECT MANAGER: The City of Tustin
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Contract No. KM97209
2. DIRECTOR: Director of the Orange County Housing and Community
DeveloPment Department, or his designee.
3. REIMBURSABLE BASIS: The CITY will provide the funds for the project
and will submit proof of payment to COUNTY, whereupon after approval by COUNTY,
COUNTY will repay the CITY.
B. PROJECT FUNDING
1. CITY shall submit any invoices for expenditure under this Contract within 90 days
of the Contract expiration date.
2. The date for PROJECT completion and expenditure of all funds may be
extended by the DIRECTOR for a period not to exceed twelve (12) months from November 30,
1998.
Any such extension must be in writing and signed by the DIRECTOR. In the event of such
extensiOn the deadline for submittal of invoice shall be 90 days after the new completion date.
After Contract expiration, all unexpended funds remaining from this Contract may be allocated by
COUNTY to other eligible programs.
3. Prior to the DIRECTOR authorizing any contract extension, the COUNTY
must receive a written request from an officially recognized CITY representative (i.e. Director,
Mayor, City Manager) to extend this'Contract. Said written request must include a revised budget
for funds being extended, if that budget is different in scope of services from the originally agree
upon scope of services.
4. Any request for the extension of this contract must be received by the
DIRECTOR at least forty-five (45) days prior to November 30, 1998.
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Contract No. KM97209
5. Fa/lure to extend this contract prior to the agreed upon termination date may result in
the COUNTY withholding payment of future payments, terminating this contract anct/or
reallocating all unobligated funds to be used on other eligible projects managed through the HOME
PROGRAM.
6. After Contract expiration, all unexpended funds remaining from this Contract may
b'e allocated by COUNTY to other eligible programs.
C. PROGRAM INCOME
1. The CITY shall comply with regulations set forth in TITLE 24 CFR 570.504,
as well as related federal, state or County regulations concerning the reporting and payment
)rocedures for program income, as set forth in Section II.C. of the attached Exhibit "A".
2. All Program Income accrued shall be drawn down prior to the CITY receiving
any reimbursement fi'om grant funds administered by COUNTY.
D. CITY agrees:
1. That DIRECTOR shall periodically evaluate the CITY's progress in complying with
the terms of tiffs Contract. CITY shall cooperate fully during such monitoring. DIRECTOR shall
report the findings of each monitoring to the CITY. DIRECTOR may, at his discretion, report said
findings to the Orange County Board of Supervisors. If it is determined by the Board of
Supervisors that CITY performance'to or progress on performance is unsatisfactory, the Board of
Supervisors may terminate this Contract. In addition, the Board of Supervisors may require the
CITY to reimburse the COUNTY any funds that it determined to be improperly expended or not
expended on the project in a timely manner based on applicable HOME Program Regulations.
2. That this Contract is conditional upon COUNTY being funded by HUD, and
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the release of funds to COUNTY.
Contract No. KM97209
3. To comply with HUD Environmental Review pursuant to 24 CFR, Part 50 which
implements Section 102(2)(c) of the National Environmental Policy Act of 1969.
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To comply with the California Environmental Quality Act.
5. That funds may not be disbursed until the required environmental
documentation clearance has been issued.
6. To comply with all applicable HUD regulations concerning administrative
requirements, as set forth in Section II. (ADMINISTRATIVE REQUIREMENTS) of the attached
Exhibit "A" (General Conditions), and maintain records as to services provided and total number of
persons served through the project, including percentage of: low income persons and very-low
income persons as defined by HUD; persons by ethnicity; female-headed households. Such
information shall be available for periodic monitoring by representatives of the County or HUD and
shall be submitted in report form to COUNTY per County of Orange procedures.
E. MODIFICATIONS/TRANSFERS
1. Any proposed modification or change in use of real property acquired in whole or in
part by HOME funds from the use planned at the time of the acquiSition, including disposition,
must be reported by CITY to the COUNTY within ten (10) day of such change, and receive written
approval by DIRECTOR prior to modification or change in use.
2. Housing assisted with HOME funds that does not meet the affordability
requirements for the period specified in Section I.A. above, must be repaid as follows:
Any repayment of HOME funds (including repayment required if the housing no longer qualified
affordable housing), and any payment of interest or other return on the investment of HOME funds,
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Contract No. KM97209
must be deposited in Orange County's HOME Investment Trust Fund local account, except that if
Orange County is not a participating jurisdiction when the payment or repayment is made, the
funds
must be remitted to HUD and reallocated in accordance with 24' CFR Section 92.454.
Any amendment to this contract shall be completed in accordance with
Section I.G. (Amendments) of Exhibit "A" attached.
G. AUDITS
1. The Federal government requires that Cities receiving $25,000 or more in Federal
assistance in a fiscal year must secure an audit. Agencies receiving $25,000 or more must meet this
requirement through one of the following methods. Failure to meet this requirement Will result in
the COUNTY denying CITY reimbursement requests.
A. If CITY currently conducts audits of all its funding sources, including
HOME, CITy.must submit a copy of its most recent audit to the COUNTY.
B. If CITY currently conducts audits of its other funding sources but has
neither received nor included HOME in the past, the scope of the audit would be modified to
incorporate HOME audit requirements.
C. If CITY does not have a current audit process in place, CITY will be
:required to develop a process that meets the DIRECTOR's approval.
2. CITY agrees to obtain an annual audit within 180 days after the er~d of each
accounting year. Copies of said audit shall be transmitted to the COUNTY within 30 days
after being received and approved by the CITY. DIRECTOR shall have the fight to ensure
that necessary corrective actions are made by the CITY for any audit findings pertinent to
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Contract No. KM97209
CITY handling of funding attributable to the HOME Program per Federal requirements.
3. All CITY records with respect to any matters covered by this Contract shall be
made available to the COUNTY or the United States government at any time during the
normal business hours, as often as the COUNTY deems necessary to audit, examine or make
excerpts or transcripts of relevant data. Any deficiencies noted in audit reports must be fully
cleared by the CITY within 30 days after the receipt by the CITY. Failure of the CITY to
comply with the above audit requirements will constitute a violation of this contract and
may result in the withholding of future payments. The CITY hereby agrees to have an
annual agency audit conducted in accordance with current COUNTY policy concerning
CITY audits and, as applicable, OMB Circulars A-133 and OMB Circular A-128.
VI. NOTICES
Any communication concerning this Contract shall be directed as follows:
For the COUNTY:
County of Orange
Housing and Community Development
1770 North Broadway
Santa Ana, California 92706
Attn: Chief, Grant Management Section
For the CITY:
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn:
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Contract No. KM97209
IN WITNESS WHEREOF, CITY has caused this Contract to be executed by its Mayor
and attested by its Clerk; COUNTY has caused this Contract to be executed by the
Director of Housing and Community Development, all having been duly authorized
by the City Council of CITY and the Orange County Board of Supervisors.
APPROVED AS TO FORM:
City ofTustin a municipal corporation
in the State of California
CITY ATTORNEY
DATED: 47/ff-/
By:
Mayor
Date
ATTEST:
COUNTY OF ORANGE, a political
subdivision of the State of California
City Clerk Date
By:
Pam Leaning, Director
Housing and Community Development
APPROVED AS TO FORM
LAURENCE WATSON, COUNTY COUNSEL
ORANGE COUNTY, CALIFORNIA
HOME Year VI
lm: 3/12/98
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