The URL can be used to link to this page

SR-11-26-1985-RA2~ . -~ , ~D ~ra~ - ~ 1 . _ . ~r ~ _ . - .-:. ~R - 2 _ _.~ z~ ~fOV 2 6 19~~ ~ ~ G'r~Q-a~a C/ED: HD:CR: ~t ~ ~ ' R' ~edevelop~r~ent Agency ~leeting: 11/26/85 Santa ~Ionica, Californ~a TO: Chairperson and Redevelop~r~ent Agency FROM: Agency Staff SUBJECT: Recon~~r~endatlon to Apprave Revised Progran~ Gu~dE-- lines for the City--wide Housa.ng Acguisi~ion and Rehabilitation Prograrr„ and to Authorzze the Ex-- eeutlve Dlrector to Execute a Cantract with Ca~~-- ~r~unity Corporatzan of Santa Monica for Earnest Funds. INTRODUCTTON Thzs report transn~its revised ~rograrr~ guid~lines for the continu-- ing in~pZe~r~entation ot the City--wide Housing Acquisition and Rehabllitat7.on Progran~ (CfiARP) . The report also reeo~~rt~ends 'that the Agency authorxze the Execut~ve Dir°ctor to execu~e a contract with Co~r~R+unity Corporation of Santa Mona.ca ~or the disbursaZ of $75, OB0 in "earnest zr~oney" funds. BACKGROUND On Decerr~ber 13, 1983 the Redevelopn~ent Agency approved the pro-- grarr, o~erating gnidelines for the uity--wide Housing Acquisitian and R~habilitation P~ogzarr~ (CFiARP). The p~ogra~t~ was created in order to praserve and expa~d the supply of housing affordable to law and rr~oc3erate ~ncorr,e hauseha~ds throughout the City. In Fiscal Yea~ 1983--84, th~ Agency appropriated $3~JQ,~~B ~ro~~ the Dawntown Redeve~opr~~ent Pra~ect Func3 for hous~ng acti~lties. In subsequent fisca~ years the Agency has appropriated $991,496 in ~~ "~ NliY~$;~ _. ~ .. ~ rt, ~ ~-r~ ~~~ FY 84--85 fron, the ~owntown and Ocean Parlc 1(Ay and 1(B) R~-- ~~~ develop~r~ent P~q~ect Funds, and $5~0,~q~ in FY 85--85 fron~ 'th~ Ocean Par~ 1(A} and 1(B) Redeve3op~r~ent Pro~ect ~unds for use a.n CHARP. Eligi~le borrowers are non--profit housing develop~~ent corpora-- tions or other non--prof~t sponsors. "Not~ces of Fund Ava~.labil~-- ty" hav~ been pub2ished in the 2~~a1 rrt~dia regarding the availability of p~ograzr~ ~.oan feands, The participation of Co~~-- n~uni~y Corporation af Santa Monica has been key in t~e in~plen~en-- tat~.on of the Progran~, although any non--profi~ housing develop- n~er~t carpara~ian n~ay apply to the Ageney for progra~t~ loan funds. The following table details the p~oject loans :t~ade to CCSM to datz: Site Ac3dress #Units Loan An~ount Pro~ect Ty~e Per~t.anent Loans 724 Pac~.fic 8 $12~1, ~G~O acq & rehab* 1843--45 17th 8 $2~, ~1041 acq & rehab In~erin~ Loans 2405--0~7 4th 1~ $29~J, 0~~ R~ave--on/r~hab** 1544 Berkeley 8 $22~1, 0~~ ~r~o~e--on/rehab ~939 Claverf~eI.d 62 $65~,~10~! acq & rehab TOTALS gb 5~,30~,~~0 ~acquisition and rehabil~'tat~on **n~o~e--on and rehai~xlitation af existing properties As detailed ~.n the above tal~le, Con~n~unity Corporation of Santa i~onica (CCSM) ~as rec~ived deferr~d loan funds for the deve~op-- rr~ent af n~.nety-•six (96} unzts ~rom the Progran~ fund. ~ ~ _ - TT ~ ~` y ! DzscUSSZOnr Current ~rogran~ Guid~].znes The City--wzde Housing and Acquisition Progran~ Gu~deiines are si:~~ilar to those adopted by the City Coun~il for the Pico Neiqh - borhood Hovsing Trust Fund. The Prograrr~ p~ovides twenty--five (25) yaar deferred principal interest ~oans to non-•profzt housing develop~r~ent corporations. This ~s the sarr,e financial n~echanis~r~ used in the Pico Netghborhood Houszng Tzust Fund. The s~ate laws which govern the use of GHARP funds are found in the Calxfornia Health and Safty Code Section 330J~D~ et seq. The definition af low and ~r~oderate income house:~olds for th~ CHARP progza~~ is de-- fined as thosz persons or households with incon~es below 7.2~ls of the ~r~edian incom~e. Prograrr~ funds can be used on eliginle projects throughout the City. Eliqibl~ borrowers are con~~r~unity--based non--profit develop-- n~ent corporations. The procedure for ~rocessing loan applaca-- txons includes a~ init~al feasibility review by staff, w~th f;nal review and approval by the Agency. The following detazls the recon~~~ended revisivns to th~ curr~n~ progra~t~ guidelines which are deter~r~~r~ed necessary to contznue the eff~ctive and efficient op-- eration of th~ progran~. Propased R~vis~.ons to Proyra~r~ Gu~,delznes There are three n~a~or areas where progran~ revisa.ons are reco~~rr~er~-- ded, (1) the progran~ procedures for revxewzng loan applications, -- 3 -- ~ , r' (2) expanszon of elxgible uses of the f~nds, and (3} the te~n~s of the progran~ loans. (1) Progran~ Procedures Currently a11 p~o~ect loan a~~lications ~~ust receive final ap-- pxaval by tne Agency, after an ad~r~inis~rative review by staff. It is recorr~rr~ended that the Agency authorize th~ Executive Direc-- tor to review and approve pro~ect loans that are found to conforrr+ to the reqe~~ren~ents of the approved Prbg~a~r~ Guidelines. This pracedure is consxs~ent with the Pico Neighborhood xousing Trust Fund prog~an~ opezations over the pas~ two years. Pro~ect loan requests which exceed the per uni~ loan ce~ling or otherwise do not conforn~ to the progran~ guidel ines, bu~ which are recp~r,n,ended by staf~ far loan approvals, w~ll be brought to the Agency for review and approval. The chanqe ta an adn,inistrative revlew wil~ allow ~oans to be processed w~.tl~in a shorter ti~r~efran~e yet stil~ ensur~ strict adherence to the nrograr~~ guid~7~znes approved by the Agency. Other rev~s~ons to the progra~r~ procedures concern the znternal process~.ng of laan applications. The proposed reviszons detaal th~ ~oles of the various C~ty Departments involvec7 i~ loan ap-- p~ ication revfew and fund disb~rsal r I.riCiud 1[]~ th~ ~epartrr~ent of Co~t,n,unity and Economic Deveiopn~ent, the ~'inance Departrr~ent, the City Attorney's office, and the City Manager's office. All the s~eps necessary to approve and process a pro]ect loan have been _ 4 _ ~ _ f ~ spelled out, thus clarifying for a~l part~es concezned the proce-- dures to be used. This clarification will enabl~ Agency staff to revi~w and nrocess ioan applications r~ore efficiently. (2) Use of Funds Th~ second n~a~or area conc~rns the elzgible us~s of progran~ funds. Currently funds rr~~y be used ~or def~rr~d laans to (1} acquire and rehabilitate rental housing, and (2) purchase or l~ase a~ land and/or ~uild~ngs for ~ew constructzon. However, Ca~ifornia Redeveiopn~~nt Law and the Age~cy's existing resolu~ tapns of ~enefit that gove~n ~he use of CHARP funds per~r,it pro-- gran, ~unds to ~~ use in any way necessary to acquire, rehabili-- ta+~e, or construct affordable housing for law and rr~oderate income households ~arning less than 12f~~ of ~r~~dian ~nco~~e. ~+Then the Progran, was originally a~prov~d the n~a~ority of oppor-- tunities and fedezal and state resources existed for l~v~raging acquisition and reha~ilitation pro~ects. However, wzth the elin,inatian of the Section 8 Moderate Rehabilztation Program and the Iirn~ted availab~lity of other rental ~ousing subs~c3~esr greatQr flexibility in use of Pragran~ funds zs requ~red. Ft as reeon~n~ended tnat ellgxble uses of CHARP deferred loan funds include: 1} acquis~tion and rehabilitation of existing rental houszng 2) new construction of rpnta~ ar li~r~ited equity cooperative housing 3) acquisitaon and reY~abi~itation o~ short--tern~ occupancy -- 5 -- ~ r rsntal housang (exan~~le: Single~Roorr~ Occupancy Hotels) 4) interin~ loans far site acquis~tion or construction The expansion of t~e elzgible progran~ activities will provide ~~e flexibility necessary to effecti~ely take adva~tage of tne publxc and pr~vate resources which are currently available for the developn~ent of affordable renta~ housing. ( 3 ~ Loan Ter;r~s The financial mechanis~~ cUrrently used in the progran, is a long-- tern~ (25 year) deferred principal and interes~, subordinate loan. The n~axin,un~ loan an,ount per uni~ is $15,~41~, unless there zs szg-- nificant benefit to 1ow and n~oderate inco~~e households. In ex- change fpr favorable loan tern~s the borrower agre~s to ~~aintain eighty--five percent (85$) of the units in a pro~erty available for occupancy by low and ~r~oderate incorr~e househo~ds. The ~.oan ss secured by a Pro~r~issory Note, Deed of Trust, and Regu~atory Agreen,en~ wnich governs the tenant selection, occupancy, ~t~anag-- n~ent and ~~aintenance of ~he property. The revisions zeco~~n~ended at this ti~~e include: (1) extensa.on o~ the loan terrr~, (2} increase in the per unit ceiling, and (3} clar~fzcation of affordal~~lity, n~anageroent and n~aintenanc~ requaren~ents. l. Ex~enszon of Loan Tez~t.: Sn order to n~axarr~ize the benefit of the ava~lable progran~ funds it is recon~n~ended that the ter~r~ of the d~ferred loan be extended -- 6 -- ~ r' to thzrty-•five (35) years. At the end of the 35 year tern~ the loan an~ount plus sin~ple interest of l~°s per annu~r~ is due and pay-- aale. In lieu of payn~ent, the Borrower and Agency n~ay agre2 to an optional ex~ensaon af fifteen (15) years. Tne regulatory restrictions would apply for thz full terrr~ of the loan and the extension. yost acquisit~on and rehabil~tation pro~ects have a useful lafe of be~.ween tw2nty--f~ve (25) and thirty (3~1) years, and rr~ost new construct~.an projec~s have useful. ~ife of up to fifty (50) years. T}~e tern~ and extenszan will thus allow the Ag~ncy t~ ensure that the property provides affordab2e housing for the usef~l life of the proper~y. 2. Increase in P~r Unit Loan Arr~ount: Th~ second revzsion ta the loan ~ern.s is an increase in the ~er unit ceiling ta $20.~1~0 p~r uni~ for acquis~tion and rehabil~ta-- tion pro~ects, and $25,~f~f~ per unit for new cons~ruct~on pro~-- ec~s. Due to increas2d casts of *~~aterials, labor, and 1and, ~nd due to the lack of ~ental subsidxes the gap between total develapn~ent costs and affordable rent levels has widened in ~he past three years, thus requ~ring a larg~r loan in order to rr~ake affordable housing deveZop~~ents fe~szbJ.e. 3. ~~arification of Affordability, Managerr~ent, ar~d Maintenance: Finally, revisions clarifyzng affo~dability, property n~anagen~ent and ~r~aintenance reqt~iren~ents are zncluded in the revised Progra~r~ Guidelines. One of the cra.tical aspects of the Progra~t~ is assea~-- ing attordable, well--rr~a~ntained hauszng far low and tr~oc3ezate in-- co:r,e households far the ter~r~ of the loan. The re~~sed Prograrr~ -- 7 -- ~ ~ Guidelines w~l~ requirz borrowers to ~rovide a~~ore detailed n~an~ agen~ent and n~aintenance plan at thE ti~,e of application, which ~ncludes detailed inforn~antion on tenant selection procedures, ~rocedures for dEtern~in~ng tQnant eligibility, tenant ~raining efforts includ~ng the training o~ t~nants to take on soecific rr~aintenance and n~anagen~~nt functions, and ~r,aint~nance and repa3r schedule. In addition, the borrower ~r~ust subr~~at a project package which guarantees affordab~e rents for the lxfe of the Progran~ Loan, particularZy in cases where the senior financing is a variable pay:r,ant n~ortgage. The borrower :r~ust den~onstrate through a detailed long--ter:r~ cash flow projection ~hat affordable rent levels can be maxntained as ~,ortgage payrr~ents and ex~enses in-• crease annually. Earnest Fund ~ontract In the last two fiscal years the Agency has authorzzed a portion of the budgeted CHARP funds to be dis'~ursed as "Earnest ~Ioney Funds" to CCSM. These funds are pravzded undez contract to CCSM ~n a lu~~p sun~ to i~e depos~.ted ~nto an interest--bearing account ~nd used to nur~hase optzons on buildings or vacant land to be acquired for affordable housing developrr,ent activi~ies. The "~arnest rr~oney" funds will be returned to the Agency at tne end af the contract t~r~~. Tn order to in,ple~,ent the City--wide Housing Acqu~sition and R~haailitation PragraR~ for Fiscal Year 1985--86, it is necessary to approve and execute a standard contract for the disbursal of ~ g _. . ~ "earnest funds". It is recazr~~r~ende~ ti~at thfs contract be awarded to Contrr~unzty Corporation af Santa Monica. CCSM has proven capacity and ~xperienc~ wath the progra~r~, and has successfully developed o~Er ninety units through the prograrr~. The contract includ~s all appro~riat2 pro~~sions of stat~ and locaz ~aw ap-- g~icable to Rede~eJ.opn,ent Agency activities, as we11 as the stan-- dard Agency reqnire~r~ents regard~ng grants n~anagen~ent, politica~. acti~itz~s and equal~ en~ployn~ent oppor~unity. The "earnest fund" contract an~aunt wz1~ be $75,~0~. The award of tl~~s contrac~ ta CCSM will not prohibit the Agency frozr~ accepting applicat~.ons for Ioan funds fro~r~ other eligible borrowers. As in past years a"Notice of Fund Avaalabil~.ty" will be publish~d in ~he loca? n~2dia. Eligible barrow~rs xnciude non--profit housing development corporations or other non-•profit agencies wlth the capacity to d~velop and opezate affordab~e rental housing. However, due to the larr~ited opera~ing subsidies aaailable fro~r~ the Agency, it is recozr~n~ended tY~at the progran~ loans funds be availaale to self--sustainang organizations that w~li not require on--going operating subszdies fro~t~ the Ag~ncy. F~NANCIAE, AND BUDGETARY IMPACT The Fiscal Year I985--86 budget appropriated redeveloprr~~nt tax incren,en~ funds for the provision of low and n~ad~rate ancon~e hous~ng, and the necessary resolutions of ber~efit were approved on S~pte~r~ber l~, 1985. The following chart sun~n~arizes the fund~ng sources and FY 1985-86 appropr~atzons fo~ CHARP: ~ g .. . . FY 1985~$6 Appropriations to ~HARP FY 1985-86 Budget 18--72~--264--128--947 Ocean Park 1(a) 365,~1~~ 18--72~--264--129--947 Ocean Park 1(b} 135,~~0 Subtotal 5q0, ~4~0 FY 1984--85 Carry--~ver 16-•72~1--264--~'f~f~--942 Dawn~own 579, 598 18--720--254--128--942 Ocean Park 1(a) 113,459 18--72~--264--129--942 Oc~an Park 1{b) 41, 939 Subtotal 734,996 Totat 1,234,996 Of th~s total of $1,234,996, $870,4141~J has been obligated for loans to purchas~ Clover~ield Gardens and 1544 Berk~ley. In ad-- dit~.on, ~her~ is $325,0~4~ outstandang, $25~,~1~J0 fro~r+ the 24~7 4th Street loan, and $75,0Q0 in earnes~ funds khat will be returned to CHARP in FY 85--86. The approval of the contract for earnest rr~oney w~].l r~quire the exp~nditure of $75,~0fl fron~ a4count nurr~bers: 16--720--264--0~~--942 $37, 5~~ 18-7241--264--128-942 27, 375 18--72~--264--I29-942 1~1, 125 Total $75, ~1~~ There are na fuzther financ~al or budgetary i~r~pacts as a result of ~he actions recorr~n~ended in this report. RECOMMENDATION It ~.s recozr~rr~ended ~hat the Agency: -- 1 ~ -- , ~ . ~ v',j/ ~ G~~ ~/ ~'` 1 I. Approve the revised progra~r~ gz~idelknes for the City--wide .~J Ho~s~ng Acquisitian and Rehabilitation Program (CHARF), as described in th~s report and as attached. 2. Apprave the attached Contract by and between Ca~~n,unity Cvr-- paratiQn of Santa Manica and the Rede~elo~arr~ent Agency for "earnest rr~oney" funds, and authozize the Executive Director to execute the Contract. Pr~pared By: Ann Sewill, Housing Program Manager Candy Rupp, Housing Developn~ent Analyst Depart~r~ent of Con~n~unity & Econon~ic Develon~ent Attachn~ents: 1) City--wide Housing Acquas~tion and Rehabilita-- tion Revisec3 Prograrr~ Guidelznes 2) Grantee Contract by and between Con~~r~unity Cor-- porataon o~ 5ar~ta Monica and tne Redevelopment Agency for "eaznest n~oney" funds -- 11 -- s , + ' CITY-WIDE HOUSI~G ACQUISI~IQN AND REHABiLTTATION PRQGRAM GUIDELI~ES INTRODUCTIQN The C~ty~wide Housing Acquis~tion and Rehabalitation Progran~ pro~ vides funds to ~ligzble non-•profit borrowers as ~eferred loans ta ~~ake up the financial gap betw~en a~ailable non~progran~ resaur~ ces, inciuding the borrower's equity and privat~ fina~cing, and the cast of developing a€fordabZe n~~iti~fan,ily hausing. Proper- ties n~ay be acquir~d and rehabilitatec~ for use as elderly or fan~-- iZy rental ho~ssng, or ~in~itec~ eq~~ty cooperatives, as defined h~rein. In each fiscal year ~ront 1983--84 to I985-85 the RedevelopR~ent Agency has al~ocated tax ~ncre~r,ent funds from the Downtown, Ocean Par~ 1(a) and 1(b) projects ~o pravid~ supplen~entary ~inancir~g for the acquisitaon, re~a~Zlitation. and new constructaon af pzoperti~s to preserve and increas~ affordable housing opporttanz-- t~.es for law and ~~oderate incon~e households t~izouqhout the City. The Agency established operatang policzes and procedures for the adrt~xnist~a~ion of the City--W3de Housing Acqu~sztion and Rehabilitation Progra~~ are detailed as follows. DEFINITI4NS C/ED: Depart~r~ent of Co~~rr~unz~y and Econo~r~zc De~~laprnent, Ci~y o£ Santa Manica. This Departrr~ent will administer the Prograrn tor the Redevelop~~~nt Agency under the direction o~ the Executive Director. -- 1 -- T , ~ ~ HDC: A co~r~n~un~ty bas~d non--prof~.t Hous~ng Developcr~ent Car~oration. Low and Moderate Incon~e Households: Househplds with inco~r~es be-- low 12~s of the Los Angeles Standard Metropolitan Statisticai Area n~edzan, ad~usted far fafi,~~y size, as publashed by the U.S. Departrr~ent af ~Io~szng anc~ Urban Developn~ent (HUD) fra~~ tin~e to ti~r~e. Within this graup of households, those with incorr~e below 50p of the rr~edzan are consaderzd c*ery low incon~e, and those below 8~J~ are consid~red iow inco~r+e. Fair Market Rents: Maxi~~un~ rents as publisned by HUD for the 5ection 8 pragrarr~s for the Los Angeles area, adjusted for unit s1z~, Lin~ited Equity Coa~erati~e: A forr~~ of ownership whereby ~he res~dents forn~ a cvopera~ive corparation which owns and rt~anages ~he property, and where the return on res~dents the original eq-- uity is lin~~.ted to no ~r~ore than 190, as defined in the California Health and Safety Code, Section 330P17.5. Maxirr~un~ Afforc3able Rent: The arr:ount of ~en~ not to exceed thirty percent (30~) of the houseno~d's incon~~ for rent. affordable to the ~.nco~~~ range, i.~. 3~•°s x 8~% of n~edian, and 3~$ x 12D~°s of median. Maxi~r~u[r, A13~owabl~ Rent: The legal rent far the un~t under Santa Manica Rent Control Charter An~endn~~nt, with al3owable ad,7ust~r~ents - by the Rent Control Board for annual. expenses increases or ~or capital iR,proverr~ents. ~ 2 _ New Constr~ction: The construction of new housing inciuding, bu~ nat lin~ited ta asserr~bly o~ factory--built ~r~odular housing, or con-- vent~.onal on--site constructzon. Progzan~: The City--Wide Housing Acquisition and Rehabilitation Prog ra~r~. Rehabilitataon: Car~ect~.on of local code violatians and ren~oval of health anc3 safety hazards; upgrading of h4using units to de- cent, safe and san~.tary conditions to con~ply with the Hous~.ng Quality Standarc~s pro~r,u~gated ~y fiUD, and with local s~anaards; and repair or replacerr,ent of ~r~a~or huilding sys~en+s or co~r,ponents in danger of failure. E}.igible rehabi~itation work rr,ay znclude alterations, add~tions and ~r~~pro~en~ents need~d to i~r,prove the basic ~ivability, energy efflciency, access~biiity for the dis-- abZ~d, seeuraty of ~he property, and to reduc~ overcrowdir~g. TORCA Ho~r~eown~rship Ass~stance Progran.: A nousing subsidy pro-- gra~t which prov~des financing ~o low and ~r+oaerate incozr~e house-- holds ta purchase rental ~nits in whzch they reside. The forrr~ of hoR~eownership ~r~ay be either condan~iniu~r~ or cooperat~~e. PROGRAM REQUIREMENTS E~igible Sorzowers Elig~b].e borrowers are con,zr,un~ty based non--profit housing deveZopcrEer~t cor~aratzons duZy organizEd to prorr~ote and urtdertake con~[r~unity developn~ent activities on a not--for---profit basis, with proven capacity to develop, vwn, and operate affordable ho~sing. -- 3 -- i ~ ~ ~ El.igible Pzojects Elig~ble rehabilitation projects will: (l~ ha~~ four or n~ore apart~r~ent units; (2) have at least 850 of tne unzts occup~~d by ].ow and n~oderate incon~E tenants at the tin~e of acqu~sxtion; (3} be in need of rehabilitation as defined here~.n; (4) be located in the City of Santa Manica, (5) be free fran~ s3g~l1flCarit ac3verse environrr~ental zzr,pacts except those that can be n,itiga'ted through rehabilitation, and 4~? nat ~equire pern~anent involuntary tenant displace~r~ent to carry ou~ the nrogra~t~. Eligi'o~e new construction prajec~s wili ~a~e 1P1~J; of th~ uni.ts occupiec3 by low and ~r~oderate incon~e t~nants, and wzli conforn~ to ite~~s (1~, (4), (5) and (b) above. El~gible Us~s of the Fund Funds can be used ~a ~~ake deferred loans to elxgible borzowers to pro~id~ affordable housing, ~rzr~cipally for ~ow and n~oderate ~n-- con,e households, including but no~ ~in~~ted to the followzng: 1} aCquisition and r~habiyitation of eligible renta~ properties 2) new construction of rental. or iz~r,ited equity cooperative hoUSing unats 3) acquisition of shart-terrr~ accupancy r~n~al housing 4) interin~ loans up to a per;od of six n~onths for site ac-- quisition or construction -- 4 -- c , ~ ` Funds can also be used for related pzedevelopn~ent activities, incl~ding professional sezv~~es whzch cannot be obtained on a contingency basis. Fund Use Allocations ~unds are allocatec3 ta predevelap~~ent and development activitzes as follows: Earnest Money Funds Up to $75,fl0~d of the funds shall t~e available for the purehase of options artc~ "earnest ~r~oney" deposits for the pUrchas~ of build-- zngs or land to ~ae rehabil~tated or de~eloped with assistance fro~r~ th~ ProgranE, These funds n~ay a~so be usea for p~archase of options or deposits on properties that will not receive further subsidies under the Progran~, bu~ that will be used for hausing pro~ects ~hat :r,eet the sa~r~e require~r~ents. Th~s fund will be ~eleased ta a HDC under contract wzth the City of Santa Monica. The f~nds shall be held 3n a separa~e, interest--bearing account by the HDC and used only for thes~ purpases. The funds shall be returned at the end of each fiscal year. Predevelopn~ent Funds Up to ten percEnt (J.0°s) of ~he total funds rr~ay b~ used for pre-- d~v~lopment expenses on projects that receive pr~l~rr~xnary fundin~ coR~~r~itn~ents fron~ the Agency. T~ese expenses shalZ be li~t~ited ta services that cannot be obtained on a cont~ngency basis and ~r~ay- include architectural and engineering fees, t~tle reports, legal -- 5 - ~ ~ and organizational fees, and n~ortgage application fees. Pr21i~~i~ nary ~{arket or feasibility stud~es, or organizatlonal operating expenses shall not be elig~ble. These ~redevelopR~ent funds shall be disbursed ta eligible borrowzrs as deferred loans a~ the tzn~e of the Agency`s prQliminary agproval of spec~fic pro~ects. The an~ount of predeveloprr~ent funds disbursQd to ~ach pro~ect shall be included in the calculatian of the ~r~axir~~uR~ def~rred loan froR~ the progra~r~ and shall. b~ conszder~d as par~ of ~he principal. Develo~ment Costs The rerr~azning funds shall be used for deferred pay~r,ent, subardi-- nate loans for the following e1~g~i~le uses: 1. The ptarchase of existing ~r~ult~~aR,z].y bu~ldings consisting of four or ~~ore uni~s for rent to low and moderat~ incor~,e hauseholds. 2. The puzchase or lease ot land and/or buildings ~or new con-- structron or substantial reha~ilatation of low and n~oderate inco~,~ hous2ng in tande~~ with available State or Federal sub-- sidy progra~r~s, ~ncluding but not lin~it~d to; the Rental Hous-- ing Construction Progran~, the Section 202 da~ect Ioan progra~~, developa~ent of incluszonary housing through an "80/2~" tax-- exeR~pt bond financzng, or other new canstruction or conversion progra~r,s as :r~ay be available. 3. The d~velop~~ent of lin~i~ed equity caoperatives either ~hrough con~ersion or new construction, in tande~r~ with othez availablE ~ ~ ~ subsidy progza~~s, s~ch as the TQRCA Hon~eownership Assistance Progra~,. 4. The purchase and conversion of exist~ng buiidings to r~ntal housing a~ailable to law and n~ode~a~e ancon~e households. 5. The provisfon of supplen~ental funds for any of the a~ove pzoj-- ec~s that will alsa receive assistance fro~~ th~ ~and Use Ele-- R~ent rr~itigation fees, or fro~r~ a proJect that wil.3 recezve £unds from a private develaper as par~ of an incluszonary oz re~lacen~ent prv~ect's require~r~ents. only ta tne extent re- quired ta increas~ the nu~~ber of affo~dable unzts ~n a develop~r~ent. 6. The pzovision of interi~~ loan funds tor any of the above prxor to th~ fund~ng of a pri~ate loan. El.igiple developn~ent casts fo~ ~he abo~e uses anclude: (1) site acquisitian and preparation; (2) rehabilitation of dweiling un~,ts, corr~r~on ar~as and related structures; (3} carrying charges and financing fees; (4} archztect~aral, ~egal and organizationa~ fees, (S) terriporary reZoca~3on eosts and, (S) developer fee not to exceed ane per cent (1~). Pze--payn~ent of cer~ain ffnancing ~ees, sucn as, bond issuance f~es, is an elig~ble cast if requested by the HDC as necessary to make ~avorable financing ava~lable. _ ~ _ r , ~ ~ Loan Tern,s: The Trust rund's loan shall have the following ter~t~s and condit~ons: 'Tern,: Loans sha~l be d~ferred foz a thirty--five (35} year terrr, sub~ect to the t~rn~s of th~ Regulatory Agreerr~ent. Interest Rate and PaXn~ents: The interest rate shall be set at the rate establisl~ed by ~he F~deral Han~~ Loan Mortqage Corporat~on for the average conventional con~rr~itn~ent of a fixed rate, thirty-year (3P~) n~ortgage, and co~t~pounded an-- nuall.y. TE~e differ~nce betwe~n this in~erest rate and ten percent (1~J~) sin~ple interest shall be forgiven if the boz-- rower complies with the ter~r~s of the R~gulatory Agreerr~~nt for the full tern~. Payrr~ents shall be rr~ad~ as fallows: A. All payrr~ents of pr~nc~pal and znterest sha11 be deferred for the terrr, of the ~oan. B. The Borrower :t~ay elect to pay the Prorr~issory Note prior ~.o the end af the tern~, hawever, the Regulatory Agree-- n~ent shall re~r~ain ~n fuil ~orce and effect for ~ts ~ern~ regard~ess of any prepayn~ent. In the event that the Nate xs prepaid in order to convert the rentaz property to a Ii~r~~ted equity coop~rative under the TORCA program the R2gulatory Agxeerr,ent res~.rictions w111 be ter~~i~nated and a new Regulatary Agreerr~ent consist~nt with the TQRCA loan will be recorded. _ g ~ . , • ~ C. If the Borrower violates the ter~r,s of the Regulatory Agreerr~ent such that the Agency declares the Prorr~issory Note zn c3efault, th2 entire am~ount of unpaid principal plus the znterest at t~e rat~ established at the t~me of Ioan closing. shall be added to the principal du~, and compounded annualZy, s~all be due. D. A~ the end o~ the t~rrr~ the note is dUe and gayable in f~ll with all accrued ~nter~st. Th~ d~fference between the aecrued can~oounded interest and szn~ple interest at 1~o p~r annun~ sha~.l be forgiven if the borrower has con~- plied with the tern~s of the Regulatory Agree~r~ent. The Agency n,ay accept an extension of the tern~ of the exist-- ing R~gulatary Agreerr~ent for a R~in~n~ur~ of fifteen (15) years in lae~ of fu1l payR~ent. Securf~~: The Ioan shall be secured by a Deed of Trust and 1'ron~-- issory Note which ~~ay be subardinated to Deeds of Trust securing othez federaJ. ar state agency lo~ns, or loans frorr~ conver~tional financing inst~tutions incl~ading seller take--back f~t~atzCing~ used in con7unctian with the Trust Fund Laan on the sa~r~e property. The Agency n~ust approve ali requests for subordination. The ~oan shall be furth~r secur~d by a Regulatory Agree~t~ent to assure that Trust Fund Progra~r~ funds are used to provide long--term affordable Y~ousing opportunities for low and n~oderate ~ncor~~~ households. The HDC and Agency shall execute an Agreen~ent regulating pro~ect rents, tenant selection procedurES, use of proj~ct ineon,e n~anage-- n~~nt and ~r~a~ntenance and perrr,itted for~~s of ownership and or use. The Regu~atory Agreerr~ent shal~ be recorded with the De~d of Trust ~ g ~ K ~ i an3 ~Fot~. Maxin~un~ Loan An~ount: The maxi~~urr~ Trust Fund loan ~er project shal~ be $2P1,~3f~~ per unit for acquisition and rehai~alztation projects, and $25,~~~ per unit ~or new cons~ruction or substan-- tial rehabilitativn of unanhabitable housing. The per unit cei.~-- ing ~r,ay be waived by the Age~cy if there w~.11 be a sign~ficant benef~.t ta Iow income tenants i.e. exceeds the 65$ benefit re-- quirerr~ent, or srgnificantly adds to the affaxdable ho~sing s~.ock, or the a~r~ount of rehabilitataon exceeds thir~.y percent (3~0) of the total developrr~ent ca5ts, In cases where the un~.t ceiling is waived no de~~laper fee shal~ be pazd. On a case~by--case basis where the per unit ceil~.n~ is exceeded and the pro~ect warrants review, the pro~ect will be p~esented to the Agency for review and approval. Underwriting Gu~delines Detern~inat~on of Reasonable Costs and Ex~ens~s C/ED shall review the borrower's est~~t,ates and pro~ections of rents, expenses, reser~es and developn~ent costs. Mini~s,un~ per- centage for reserves is to be set at two percenti (2°s), and the n~axin~un, perc~ntage for dev~loper fee is to be set at one percent (l~) of total developrr~ent Casts. The borrower shall ~rovide background dacun,entat~on on all costs as required. The Agency r~~ay ac3~ust cost and ~xpEnse arrtounts as appropriate to conforn~ 'to current n~arke~ and inc~ustry standards. The total an~ount of th~ progran~ loan and all prieate loans shall not exceed the total approved developrr,ent costs. -- 1 ~ -- ~ , .~ Clear T~tle The Borrower will subn,it for Agency review a prelin~inazy title report. C/ED wzll conduct a title review of the proposed proper~ ty including reviewzng the rent con~rol regis~ration and rerr~oval per~,zt iss~es, cond~tions, covenants, and zestrictions, and the legal description of the oroperty. The Ci~y Attorney wzll ap~ pro~e th~ titie report prior to recordation of loan docu~~ents. Senior ~~nancing The ~orrower sha~l s~cure other resources such as tax exefi~pt financing, f~d~ral and state hous~ng rental and dsvelopn~ent sub- s~~ies and available pravate f~nanczng ta n~inin~zze the arr~ount of the ~rogra~r~ loan. The borrower wi11 subt~,it to the Agency for rev~ew the terrr~s and conditions of the sen~or financxng. If the Trust Fund loan is su~ordinate to a variable pay:~~ent ~oan the borrower n~ust subtr~it projected cash flows for the t~r~r~ of the laan, showxng the ~r~axin~u~-~ possible ~ncreases (z.e., worst case scenario) in debt service pe~ year, the pro~ected ren~ and ex-- pens~ increases, and the ~~eans of making up any deficits. The Agency shal.l analyze the feasibi~ity af the project to carry the loan, and ~f feas~ble will approve the te~r~~s of ~he senior financing. The Ageney n~ay, at Zts soZe discre~ion, ealculat~ the rr~ortgage arr~ount at the te~~t~s and rates of avai.lable tinancing progra~r~s - other than that propased by the HDC, if the alternatzve terrt~s and ~ ~~ ~ rates are avai~able that would reduce the a~~ount of Ag~ncy subsi~ dy r~quir~d, and otherwzse confor~~ to the Progra~~ r~quiren,ents. On a case -by-case basis staff will process applzcatrons for pro~- ects that r~quire interi~~ loans of u~ to six n~onths fo~ site ac-- quisition or constr~ction costs. These loans will be approved anly when the Borrower subn,its evidence that pravate financing w~.~l be available within the six ~r~onths and that a delay in site acqu~sition would ~r~ake the project infeasible. Refinancing of Pri~~ary Loan If the Borrawer re-finances the ~ri~~ary debt, or borrows addz-- tianal funds after the init~al closing, the Agency n~ust review and approv~ the ter~~s and COnditipns, and the proposed us~ of the oroceeds. Eligi}~le uses of proceeds frorr~ refinancing or new debt are: 1. The prepay~~ent of the principal and interest an the Pro-- gram laan; 2. The ~r~a~.ntainence, operation, or in~proven~~nt oE the secured property; 3. The purchase of additianal properties sub~ect to the Progra~r~ eligzbiiity and operatzr~g requir~n~ents; Co~~pliance wxth state Regu~.ations All pro~ects ~r,ust con~ply with aI~ applicable state requirerr~ents for the expenditure of the ~iousinq T~us~ Fund established in ac-- cordance with Health and 5afety Code Section 33334.2. Borrowers _ 12 ~ should note: (~) all work shall be coR~pl~t~d by licensed can~ tractors, and (2} all con~racts n~ust be corr~petitively bxd. Contracts ov~r ~1Q1,0~~1~ n~ust be in acc~rd with C~ty's wa~~en and Minority ~usiness ~nterprise Progra~r~. All efforts shall be made by the HDC to prov~de equal opportunity for e~t~ployrr~ent withptat discrin~anation as to race. rr.ari~al status, sex, color, age, rel~qlo~lr nationai origin, ancestry, or sexual preferen~e, in seek2ng out contractors and subcontractors. Tenant Aelocation Plan The~e shall be no per:r~anent involuntary das~lacen~ent of tenar~ts. Tne Borrower shaYl develor~ a plan for teR~parary relocatzon where necessary for re~iew by the Ag2ncy. In cases where there are tenants to be voluntar~.ly displaced the Borrower n~ust sub~r~it a copy of ~he ietter to the tenants detailzng their righ~s to as-- sistance, which has been signed by the t2nants indicating that they vole~ntariiy waive any relocation payn~ents. The relocation plan shal~ be in accord with the Czty's Relocat~on and Tenant Assistance P~an. Marketzng and Tenant Selection The 8orrower shall establi.sn an affircr~ative zr~arketing anci tenant se~ect~an plan. The plan sha~l desczii~e 'the ~~arketing efforts and tenant selection procedures the Borrower will use ta n,air~tain the percentag~ of units occup~.ed by low and rr~oderate--incon~e and to ~ increase law and n~oderate incorr,e housing oppo~tunities in the -- 13 -- pzo~ect. The n,ark~ting and tenant se~ectian plan shal~ be sub ~ mitted with the loan application. Pro~~ct Mana~ement Plan The Borrower snaZ~ prepare a Prolect Manage~~ent P~an far the Agency's re~~ew and approval. The Plan sha11 be an attachrr~ent ~o the Regulatozy Agr~en~ent and sha~l describe the Borrower's pali~ cies and procedures concerning: 1. Tenant selection procedures including applicatzon p~oce- d~res, waiting lasts, and lease agreements. 2. Procedures ~or deter~,~ning tenant el~gibi~ity and cer- tzfying 3nco~,es. 3. ManageR,ent/tenant relations and assistance ta tenant org~nizations, inclu~ing the txaining and ~s~ of tenants to perforn~ rr~azntenance and ~t~anagen,ent functians as app~opriat2. 4. Maintenance and repa3r servxces. 5. On--sit~ n~anager~~en~ facilities. 6. Rent collection. 7. Records and reporting requir~n~ents. $. Personnel and staffinq. 9. Corr~pliance wsth all. t~nant protection laws, lncluaing zent contzol law and buildzng health and sa~ety codes. 1PJ, Fee schedule. ~ ~~ , APPLICATIQ~T SUBMITTAL AND REVIEW PROCEDURES All appl ications for Trust Funds shall be seab~~itted to C/ED and shali be r~viewed and approv~d ~h=ough an ad~r,inistrative reivew process as established in these guid~lines. "Eaznest Money" ~'und A standard Grantee Agreen~ent will be ~xecuted ]~Etween a HDC and the Agency, and will be appro~ed ~y the A~ency. Upon approval the C/ED staf~ wr~~ srabrr~it a rquest far warrant to the Finance Director accp~r~pani~d by thE executed agreerr~ent. The ~'inance De-- partment shall then disburse the funds ta the Grantee. These funds sha11 be denosited an an anterest--bearxng account. The funds shall "r~volve", as loans are closed the HDC shall return the a~,oUnt of tY~e earnest rr~oney depos~.t to the account far use ~~ othez developrt~en~ pro~ects. At th~ enc~ of tne ter~rE of t2~e Grant~e Agree~r,er~t th~ H~C shaZZ return the "earnes~ [~~aney" fund wlth any and all interest that has accrued to the func~ over ~he terrr~ of the Agreen~ent. if funds are tied up at the end of the contrac~ tern~, the HDC sha}.l subtr~lt a list of pro~ects zn~olving any earnest n~oney funds with a sehec3~le of escrow closing aates. Ft~nds shal~ be returned as esc~ows are closed or terR~inated. -- 15 -- Applications for Deferred Loans Applicatian Sub~;zttal: T~e HDC shaii con,plete and sub~~it to C/ED the Application for Frogra~~ Funds and prepare aIl required at~ tach~~en~s~ including the m~anagement plan, tenant selection and rr~arketing plan, relocation plan if necESSary, signed purchase agreement and escrow ~nstructions, and preli~~inary title report at least for~y~five (45) days prior to the scheduled c~ose of escrow. Appl~cations n~ay be subR~itted at any tin~e during the progran~ year and w~.li be considered ~.n the order subn~it~ed ~o C/ E~. Ap~lication Re~~ew: The Hous~.ng Division staff shall review the appl~catzon ~o: a. deter~r~~.ne that the m~znin~u~r~ progran~ requir~~~ents are rr~et; b. ensure that the es~in+ated dev~lop~~ent costs a~e reasonable; c. review the ~stimated n~ortgage a:tEount and HDC equ~ty con- tzi~utxon in accordance with the progra~~'s underwriting guideiines. Within fifteen (15) days of the application subrr~issian the Hous-- ing ai.vision sha23. determine that the proposa3 is approvable for Prelzrr~inary Co~r~~~zt~t~ent, with or without conc3itions. If the ap-- p~ication is con~plete and n~eets all the prograrr~ eriter~a a Pre-- I~n~inary Cor-~rr~itrr~ent le~tgr sha3i be ~ssued. I~ the applacatzon is not approvable the Agency staff w~ll xndicate the specif~c reasons. ~ Z~ ~ A~p~ication Revi2w Criteria The proposal evaluation crifieria are divided into ~~inin~un~ el~gibil~ty requirerr~ents for all projects, a~d co~~petitive criteria to be applied in sel~cting an~ong eZigibl~ pro~ects, as necessary. M~ni~r,um Requiren~ents A. Financia~ Feasibility: Each pro~ect rr~ust rr~eet twa feasibilz-- ty tests: 1. The prograrn~ ioan sha11 not exceed the ~atal an~ount af the gap between the n~axinE~aR~ affordable rr~ortgag~ arr,ount available from nor~--Pragran~ sou~ces and th~ fiotal Developrr~ent Costs plus any on--going annuzty necessary to ~~aintazn affardable rent ].evels, as defined ~n the progra~r~ application. The ~~axin~urr~ Progran~ loan shall be $2fd,HPJ~J per unat for acquisition a~id r2habilitation and $25,~P14~ p~r ~nit for new canstzuction pro~ects. The pro~ect ~oan may not exceed these a~~ounts without C/ED deter~~ination of special benefit to the low--Znco~~e tenants. f 2. The tota2 Prograrr~ r~quest shall no~ exce~d 33~ of the Total DevelopR~ent Cost (TDC). All oro~ects ~~ust n~aintaan rents a~fordable ta low incon~e persons and households for the life Qf the Iaan. When deter~r~ining the maxirt~urr~ Frogra~, loan C/ED wzll scruti.nize the rent schedule anc~ annuaZ cash flows in order to ensure that long--terR~ affordabF~~ty -- 17 -- is n~a~ntained, and t~at the an~ount of the "affordability reserv~" is sufficient to cover the differenc~ bet~,aeen a~fordab3.e rents and the rental inco~~e ava~lable. The "affordabzlity reserve" is a separate account established tor the soie pe~rpose of sustaining rents affordable to low incan~e households. The ~r~axim~rr~ affordable rr~ortgage arr~ount slzall be calculated using ~he rent schedule proposed by the bar~ower as approved by the Agency~ the proposed interest rate and terrr,s of the pri~~ary loan(s), and reasanable operating allowances and reserves includ-- ing a reserve to an~ortize a variable rate z~~ortgage as needed. The HDC's esti~r~ate of tatal developn~ent costs w~~l be revi~wed by C/ED, which rr~ay ad~ust costs as appropriate given t~~arket in€ora~a- tion. E~o pro~ect shall receivE a greater deferred loan than is requ~red ta rt~eet the gap between the n~axi~t~um affordable ~r~ortgage a~r~ount and the ~otal develop~~ent cos~s. B. Low and Mvderate Inco~~e Benefit: Each pro3ect n~ust rr~eet the the n~inin~un~ requ~.rerr~ents for benefit to low and n~oderate ~ncorr,e persons at the ti~~e of acquisition by the HDC. An equal oz great~r nun~b~r of units rr~ust rent to Iow and moderate incon~e pez-- sons and households at levels affordable as defined ~n Section 50Sd93 af the California Health and Safety Code for the life of th~ loan. C. Pra~ect Location: All pra~ects ~t~ust be located 1n the City af Santa Monica. Project sites ~~ust be free from adverse en-- vironn~en~al in~pacts, e.g,, noise, or the reha3~il~.tation actxvi-- ties ~r~ust successfully n~itigate these in~pacts. -- 18 -- i ~ r * D. Teaant Partica~at~on: At least 75a of the existing tenants in a proposed r~hab~.l~tation pra~ect rr~ust affirn~ interest in par-- ticipating xn th~ progra~~ by signing letters. Corr,peti~ive S~l~ction Criteria In selecting a~,ong corr~peting project applications, priority shall be given to projects that: A. S~gnificantly increase atfordable housxng oppportuni~zes ~or hauseholds who have diff~culty finding hous~.ng including large fan~ilies, arid the a~sa~i~a, B. Use barga~n saZe or seller--financing techniques, or use of equity syndication, or ~everaging of oti~er federal or stat~ hous-- ing subsidy prog~ar~~s to reduce to~al acquisition casts. C. S~.gnificantly i~~prove the housing stock by rehabilitating be~ildings wit~ health and safety probierr~s, local code ~iolatians or ine~pien~ danger af failure of rr,a~or building systen~s. ~. Benef~~ hi.gh percentage af very low and 1ow incorr~e hot~seholds. Preli:~~inary Con~~,itnEent Let~ez: A Prel.i~~inary Co~,rr,i~:r,ent l~t~er sha1Z be prepared by the Hausing Bivision, reviewed by the Di-- rector of C/ED, and signed by th~ Executive Director. The letter shall state the ~r~axin~un~ a~r~oun~ of Progra~r~ E'unds reserved for ~he pro~ect and list all the additional conditions, c3ocu~r~ents and steps that [r~ust be taken by the HDC to obtain a firrr, cart~~r~~tn~ent af Progra~r~ Funds. _ lg , . Releasz of Pr~develop~t~ent Funds: Upon issuzng a PreiiR~inary Con~- ~~it~,ent Letter the Execut~ve Director n~ay authorize release of the predevelopn,ent funds approved for the project, zf atsy. The Housing Divisaon shall request the Budge~ Dzrectar to establish an account nurr~ber for the ~oan. The Housxng Drv7.sion will subn~it a request for waxrant for predevelopn~ent funds to the Finance Director, aecon~panied by ~he Prelir~~inary Co~,~,it~r~ent Letter. The Finance Department shall disburse the funds to the HDC. S}aecial Requi~err,ents for New Constructzon and Chan9e of Use Prajects: Borrowers involv~d in new cons~ruetion oz change of use af pro~ects, including the R~ovi.ng on of 'au~idings to vacant s~tes, will be responsible ~ar notifyzng the neighbors of the proposed pro~ect plans for the site at the ti~~e the project is se~b~t,itted to the Architectura~ Rev~~w Board (ARB) for appro~al. Neighbors w~.ll be inva~ed to review the pro~ect design and con~n~ent an the plans at th~ ARB n~eet~ng. The Borrower will notify the neighbars at least s~v~n (7) days prior to the ARB cr~eeting at which the p~aject ~s scheduled to b~ reviewed. Senior Laan Package: The HDC shaZl con,plete the loan appro~al process with the przrr.ary lender and shall obtain all other re-- quired approvals such as ~.ocal buiiding pern~its, When the lend~r has gi~~n final approval af the Ioan package, wF~ich naay be con-- tingent upon a final func~ing con~~~itrr~ent by the Czty, the HDC sha11 subn~it the final loan closing docun~ents package to the C/ED for review. The Housing Divis2o~ shall r~view the fxrial loan package using the criter~a detailed abave, and if acceptable { ~ ~ ~ shall pr~pare a final corr~m~it~~ent ietter anc3 the closing docurr~ents far the Pragrarr~ loan. L~gal T3oc~rr~ents: Upon re~e~pt of the fznal loan package the Housing Dlvisian shall sub~~it a~equ~st for a Pron~zssory Note, Deed of ~'rust, and Reg~J.atory Agreerr~ent fron~ the Czty Attorney's Offic~. The request shall include copxes of ~.he preli:~~inary ti-- tIe ~eport, instrucfi~ans to escraw concerning the iten~s ~hat may appear on the t~tle upon clos~ngr and the purchase agreerr~ent. FinaZ Approval and Release af Loan Funds: The Dzrector af C/E[] shall review, and the Executive Dir~ctor shall sign the final corr~rrtit~~ent letter. The Executive D~.rector shail avthorize release af the deferred loan funds ~nta the escrow account establ3shed for th~ loan clas-- ing with ~nstzuct~ans foz disbx~rserr~ent. A requ~st for warrant for the full a~r~ount of the loan less the pr~viously releaseci predevelopR.ent ex~enses wi~l be subn~itt~d to the F1nanLe Dirzctor accorr,panYed by the signed Finai Corr~~t~itrr~ent lette~ ar~d th~ final loa~ docurr,ents. The Finance Depart~r~ent will trans~r~it a wa~zan~ to the Housing D~vis~an to be deposited into the Escrow account assigned to the Iaan. This warrant sha11 be delivered to the pri~ate escrow of~icer w~th the lEgal doc~rr~ents to be executed by the Borrower and the escrow ins~ruc~ions twenty--four hours grior to the scheduled close of escrow. Pro~~ct Mani.toring: The Housing Dzvision shall ~r~onitor the proj-- ect during rehabilitatzon or construction as needed to ensuze con~pliance with state regulations. Th~ Hausing Division shall a ~ ~ i request notification of the final ~nspec~ion and final canstruc- t~an release from th~ pr~~~ary lender, and shall review n~anagement practices and report~ng piocedures with the HDC and pro~ect n~an-- agen~ent ag~nt at tha~ tin~e to ensure full understanding of pro- qran, req~a~.ren~ents. Tnereafter the Housing Di~ision shall n~Qnitor co~r~pl xance with the Regulatory Agree:r~ent on an annual basas. , ~ f List of Exhibats A: Def2rred Loan A~plication B: Cantents of C~osinq Packaqe t . ~ ' • CITY OF SA[VTA NlOiVICA Depar~rr,ent of Co~r~~r~ur.ity & Econo~r~~c Deveiop~r+ent Loan application CIiY WIDE HOUSI:~iG ACQfJISITI0P7 AVD REHABILITATICN PROGRAM Date: Appiicant: Address: Locat~on of Property: Address: Legal ~escription. Type of Property; yatur~ of Applicant's Int~rest: Fee Leaseha~d DESCRIPTIDN OF PRdPERTY Type of Project: ~ow Detached Se~~x --~etached WaZk--up Elevator ~1u~r~ber of Units: yumber of Sua~dings: Foundation Type: No. Stox~.es: S1ab or Grade 1--2 Full Baserr~ent 2--4 Craw:. Space 4+ Partial Base~r~ent Am~enities- Foal Laundry Other Accessory B~ildings: (no., type, size? • 1 ~ t ~ - ' SITE INFQRMATION Lot S ~ze: Building Sq. F~.: Exterior Finish: 5tructuzal Finish: Parking TyQe: ~r. Bui1t Zoning: Floor Sys~em: Heating/AC Systesr~: No. o~ Farking Spaces:__ Existing ~n~prove~r~ents: ~]ate of Purchase: Purchase Price: Resident~al Area: 4a~anercial Area. EQUIPMENT AND SERVICES I~ICLJDED IN RENT: (check all ite~r~s includ~d? Ranges {gas/elec} Dishwasher Refrig (gasfeZec) Carpet A3r Cond (equip only) Dra~es Kitchen Exha~st Fan Hat Wa~er Laundry Facil.~ty Heat Gar~age Disposal Water Gas Electricity Other INCOME ESTIMAT~: (pronide be~vw cr attach rent schedule} Unit# Bedroo~ss Existir~g Propased Rent Rent Total. Anticipated Income: ~ , , • --- - - II , I~ICOME ~IvD ~XPENSES A. ESTIMA~'~' OF ANNUAL EXPENSE ADNfINIS'~RATIVE 1. Advertasinq $ 2. ~7anagerr~en~ S 3. OtY~er $ 4. TOTAL OPERATING 5. E~eating & Hot Water $ 6. Lighting, etc. $ 7. Water $ 8. Gas $ 9. Garbage S I~. ~ayroll $ ~1. Other $ 12. TOTAL $ MAINTENANCE i3. Renazrs $ 14. Insurance S 15. Replace~r~~nt Reser~es $ 16. TOTAL S TAXES 17, Real Property $ Z8. Personal Property $ ~9. E~r~p~oyee Payroll $ 2fb. Other $ 21. TOTAL $ TOTAL EXPENSES ..........................................$ B. iNCOME COMF[3T~TION PR0,7ECT GROSS I*ICOME VACANCY RATE EFFLCTIVE GROSS INC4ME TOTAL PROJECT EXPENS~S NET INCOME TO PRflJECT $ $ $ $~ I ~ III. ESTI~AT~D DEVELOPMENT COSiS A. SIT~ I~PROVE~ENTS I. Neca Ut~lities $ 2. Landscape Work $ TOTAG SiTE IMPROVEMENTS $ B. CONSTRUCTION C05TS 3. ~welling Unxts $ 4. Garages/Parking $ 5. Co~~~~on Areas $ 6. Den~olatlon $ 7. Bond Pre~r~iu~r~ $ TOTAL CONSTRUCTION $ C. FEES 8. Builder's Overhead $ Profi~. 9. Archit~ct -- Design $ 10. Archxtzct Supervision $ 1J.. Others: $ TOTAL FEES $ E. C?~RRYING CHARG~S A[~i3 FINAt~CING 13. Canstructton Interest $ c ~os. ~ ~y on ~ S 14. Taxes $ 15, Insuranc~ $ 16. ~~tle and RecoYding $ 17. Oth~r S TO'~~L FINANCIyG S F. LEGAL. ORGANIZATIO[~ AND SPONSQR`S FEES 18. Relocation $ 19. Legal Fezs $ 2~. Organzaational $ 21. Audit Fees $ 22. 5ponsor Fee . ( °s o f $ ) $ mo~~~, LEGAG ~ pRG~,NIZATIONAL $ TOTAL ~STI;~IATED REHABILITATION S G. ACQtTISITION 23. Land/Acq. Cost $ TQTAL ESTIMATED DEVEi..OPM~NT COST $ , , , . IV. PRL--CLOSING EXPEL~SES DESCRIPTION ~MOUN'I' REQLIESTED DAT£ NEEDED TDT~L REQUEST $ V. SENIaR FI~ANCIVG T~RMS Mon~hiy deb~ service S L~nder 2. Constructzon L,oan A~r~ount $ Interest ~ Ter1r~S Lender A. PRdPOSED PRI~IATE FINALVCI!+IG 1. Per~r~anent Loan lst T.D. A~r~oun~ $ Interest Rate °s Fixed Variable If Var~able, describe ter*r~s B. TOTAL FINACVCIl~1G SOURCES 1. Housing Trust Fund S 2. Soonsor's Equity $ 3. Pr~va~e Lender $ 4. Qther ~ 'FOTAL S~URCES $ VI, OCCUPANCY PROFILE ~NIT# FAMILY SIZE/ OCCUPA~CY 3Y INCOME T~PE OF RENTAL BEDROOMS 50~ 8~~ 120~ ASSISTANCE • ~ ~ - ATTACHME~TS 1. Rehabilitatian/Construction Work Write~UpsfB~d Package 2. Esti~~ated Costs and Su~pozt Dacuments 3. Prelin~inary Plans 4. Description of Tern~s and Conditzons of Fi~anc~ng ~fina~ corr,m~;.trr~ent: at~ach copzes of financing documents) 5. Pro~ect Scnedu~e 6. Furchase Agree~r~ent ~azth Seller/Escrow Instruc~ions 7. Evidet~ce of Per:r~issa~e Zoning & any necessary Varz~nces, etc. 8, Prelin~inary Tz~Ze Report 9. Boar~ ResolutFOn Approving Transactian Na:~~es and addresses of sponsozs (if corpo~a~xon, partnershzp, etc. zdentify officers and stockho~.dersi: Narr~e, address and license nu~si~e~ of general contracto~, if known: Architect's na~r~e and address: Application se~b~,itted by: Name Title Date Sub~r~ission approved by: S~gnat~ze, Executive Director CITY WIDE HOUSING ACQUESITION ~ND REHABIQITATION PROGRAM CHECKLIST OF DEF~RRED LOA~ CLQSING DOCUMENTS THE FOLLOWING DOC~M~N~S MUST SE SUBMITTED PRIOR TO THE ~EFERRED LQAN CLOSING: GOAN DOCU~E~TS 1. ~PQLICATION FOR DEFERRED LOAN 2. FI~AL C~MMITMEN~ LETTER FROM TRUST FUND PROGRAM 3. FINAL C4~MITMENT 0~ EI~ANCING ~ROM PRIMARY LENDER 4. REGULAT~RY AGREEMENT WITH AGENCX ~RGAN~ZATION DOCUME~TS 5. CERTIFIED ARTICLES OF INCORPORAT~ON 6. CERTIFIED BX,~AWS 7. CERTIFIED R~SOLUTION OF BOARD OF D~RECTORS AUTHORIZING TRANSACTIQN 8. TAX EX~~PTIQN RULING LETTERS ~RQM IRS AND FRANCHISE TAX $OARD CONTRACT4R DOCUM£NTS 9. B4RROWER - CONTRACTOR CONTRACT 1~. PERFORMANC~ BOND ii. FINAL COST BREAKD4WN BY TRADE 12. INSURANCE POLICIES OR BINDERS INCLUDING WORKER'S COMPENSATION, LIABILITY AND B~iLDER'S RISK 13. BUILDING PER~ITS IF REQJIRED , I4. APPLICATTON FOR F~ND DTS$URSMENT/CONSTQUCTIO~ SCHEDULE 15. flWNER - ARCHITECx ~GREEMENT (SUPLRVISIQN AND DESIGN) OTHER 16. PRO FORMA ALTA LENDER'S PQLICY IN FAVOR OR PR~MARY LENDER AND AGENCY FOR AM~UNT O~ TOTAL DEVELOAMENT COS1 17. INDQRSEMENTS TO ALTA INCLUDIyG: A. 10~ COVERING CC&R VIOLATIO~ B. 116 COVERING STREET aD~RESS A~D ~EGAL DESCRIPTION (AT RE~WRITE) C. MECHANIC'S LIEN GUARANT~ES (PaR EaC~ DISBURSE~ENT) D. TAX SERVICE 18. ALTA SURVEY OF PROPERTY CERTIFIED WITHIN 6Q ~AYS ~F CLOSING :~ AGREEME~T ~~. AGREEMENT THIS AGREEMENT, entered ~nto on thls day of , 1985, by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN- TA MONICA, (her2ina€ter referred to as "Agency"), and , a California non-profit carporation, whose address is , Calitornia (i~ereinafter referred to as "Contracto~"), is made with referenc~ ta the following: R E C I T A L S: A. The R~deve~opment Agency of the C~ty af San~a Mon~ca ~s carrying aut the Downtown and Ocean Park 1(a) and ~(b~ Redevelop- ment Projects. B. The Redevelapment Agency of the City of Santa ~lonica has established ~he~Downtown Redevelopment Project Low and Moderate Incame Hausing Trust Fund and the Ocean Park Redevelopmer~t Pro~- ect 1(a) and 1(b) Low and Moderate Incon~e Hous~.ng Trust Funds zn order to increase the supply of affo~dable Zow and n~oderate in- came housing. C. The RedevelopnEent Agency of the City of Santa Monica has adopt~d Program Guidelines and Pracec3ures for the City W~de Hous- ing Acquisitian and Rehab~litation Program. D. The Contractor, a non-profit organization, desires to provid~ an affordabl~e housing acquisition, rehabilitation, new - 1 - , ,,r ~ , construction, and manage~~ent prograna pursuant to the adop~ed oro- gram Guidelines and Proc~dur~s for ~he City Wide Housing Acquis2- tion and Re~abil~tat~.on Progrart~. NOW, THEREFORE, ~t is mutually agreed by and between the undersignec7 parties as follows: 1. TERM OF AGREEME[VT. The term of this Agree~t~ent shall comrt~ence Ju~y ~, 1985, and shall continue in effec~ until ti~e pzog~art~ services provided for herein have been p~rforr.ied or until 3une 30. 1986, which~ver oc- curs later, unless tY~is Agreement is sooner tern~inat~d as pro- vi~3ed hereinafter. Serv~ces shall be under~aken ar~d completed in such a sequence as to assu~e their effectiveness in implementing this Agrzement. 2. PROGRAM S~RVIC~S '~0 BE PERFORMED BY CONTRACTOR. A. The Contractoz shall in a proper and satisfactory n~anner as determined by the Agency~ implenient, operate, conduct and per- for~t~ the dut~es, services and funct~ons o£ said program as set forth in the Exhibits id~ntzfaed helow. ~xhibit A Grantee Work~lan Exhibit B Program Fknancia~. Status Report Exhabit C Citx of 5anta Monica Aqreement and Adrt~inistrative Handbook Exhibit D City W~de Housinc~ Acquisition and . Rehabilitation Frogram Guidelines - 2 - , , • ~ , EX~']1I~1~5 A~ B, C and D, which are attached hereto, are zt~ade a part her~of by reference and ~.ncorporated herein as ~f fully set forth herein. B. This Agreement shal~ be a~tEplemented and ad~~inistered in co~~p~.iance with all federal, state and ~acal laws, and a~aplicable provisions of California H~alth and Safe~y Code (Governnkent Code 33f~410 et. seq. } including, bu~ not iartiited to, the following: 1.) Selection of participants and staff. 2) Use af rede~elopn~ent tax increnEent funds. 3) Requ~rements far recordkeep~ng and reporting. 4) Pravisions rela~ive to the co~r~pensation an~ working con- ditions of participants. 5) Non d~scr~~« nation r~quirements. 6) Govern~~ent Code Sec~aons 726a et. seq. C. The Cantractor shall allow the du~y autharzzed agents, employees o~ servants of the Agency or the aopropriate State agency to inspect, durang nor*.t~al business hours, those records, bOb~5~ documen~s, anci other data which pertain to the progra~~. 3. REPORTS AND RECORDS. A. The Contxactor shall file each and every one flf the her~znafter descrzbed reports or r~cords with the Agency on or before the d~adl~ne set forth herein}~elow; provided, however, . that if the date of one of said dea.dlines falls on a Sunday. Saturday, or legal holiday, then said record or report shall be - 3 - filed with t~e Agency on or b~fore the f~rst business day prece~- ~ng said deadline date. $. ~he Contrac~or sha~l sub~~it a quarterly Program Financial Status Report to th~ Agency. mhe Program Fanancial Status Report shall Ynclude znforrnation an the disbursemen~s froz~i the earnest mon~y fund account including an accounting of any earned int~res~ and inforn~ation on the proposed pro~ect. 'This Fznanc~al Report shall be delivered no lat~r than t~ie tenth (l~th) workinq day of the quar~er followzng khe quarter foz which it is prepared. The forrt~at ta be Utilized an developing this report is attachec3 here- to as Exh~bit "B" and incorporated herein by this reference. C. In add~tion to the other requirert~en~s of this Agreen~ent, Contractor agrees to provide any and all such other reports, books, records and other da~a as may b~ r~asonably requested by the Agency. D. Th2 anforr~iatian contained in said reports, books, records and ather data shall be sub~ect to a11 applicable provi- sians of FederaZ and State law concerning the confidentzality or disclosure thereof. E. Either an original oz legiale photostatzc copy of each and e~ery report, book, record, or other data prepared or sup- plied by Contraetor in accordance with the ternis and cond~tions af thas Ag~eement shall be retain~d by ~he Contractor for a peri- od of at least three (3) years following the term of this Agreem~nt. - 4 - F. The Con~ractor sna~l fully cooperate wzth any authorxzed agen~, e~~g~oyee, or servant of the Agency, City of 5anta Manica, or the State of Califarnia to interview or communicate with any agen~, e~~ploy2e, or servant of the Contractor dur~ng any norma]. business hours for pUrposes contained withi.n this Agr~e~t~ent. 4. DISBURSEMENT OF F[It~DS AND PROGRAM BUDGET. The appropr~ation and disburse~t~ent of funds, the incurr~ng of costs and expenses and other financial ar acco-~nting ~t~atters ~n regarc3 to the pertor:tEance of this Agreen~ent shall be pursuant to the Program Guidelines which is attached hereto as Exhibit "D" and made a part of tnis Agre~n~ent by refezence. The Contractor shal~ receiv~ and deposit in an lnterest-bearing account. the lump surn of 575, 43P10 of Agency funds to be used for Earnest Maney deposits as ~o~lows: To gain sxte contzol thraugh earnest deposits or options on buzld~ngs or sitAs wzthin the City of 5anta Monica for rehabilita~ion or construc~ion a~ housing units that will meet the criteria of ~ow and moderate xncon~e benetit as establash~d by th~ C~ty Wide Housing Acquisitian and Rehabilitation Prograrn G~aidelines. These funds are to be accavnted £or separately, and the total amoun~ and any ~arned interest mus~ be returned to the Ag~ncy within thirty (30} ca~endar days of the Agreen~ent expira- tzon or ter;t~ination date. - ~ - ~. ~~x~~~TS ma CO~TRACTOR. A. Tne Agency sha11 ad~~anc~ funds to the Contractor in one lump sum. It is exPressly understood and agr2ed that ~n no event will the total co~~pensa~ion to be paid the Contractor ~xceed the to~al gra~t a~~ount as sp~cified xn Section 4 of this Agreement. B. AIl co~~pensatian for this Agreement shall be paid by ~he Agency out of f~nds al~ocated to the Downtown and/or Ocean Park 1(a) and 1(b) Redevelb~n~ent Low and Moderat~ Income Housing Trust Funds, and shall not be a c~arge upon the General Fund of th~ City zn any manner. 6. I1V~}EPENDE[~T CONTRACTOR. The Contractor is an independent contractor and not an agent, employee, officer, servant or otherwise o~ the Agency. Contractor shall, at its sa~e cast and ex~ense, comply with all Zaws, rules, ordinances and regulations applicable ta this Agreement. 7. PUBLIC STATEMEwTS. The Contractor sha~~ indicate in any press releas~ or state-- ment to the ptabl~.c related to the program funded under this Agreement that it is fundec3 by the i2ed~velopment Agency of the City of Santa Monica fro~ti the Downtown and ~cean Park ~(a) and 1(b) Redevelopment Low and Moderat~ Incon~e Housing Trust Funds. -- 6 - , ~ 8. INDEM~IFICATIaN AND HQLD HARMLESS. A. Contractor shall indensnify and hold harmless t~e Agency, its governing body, boards and con~misszons, officers, agents, servants, an~ enEployees fra~~ and against any and all loss, dan~ages, liabil~ty, clain~s, su~ts, costs and expenses, whatsoenpr, includxng reasonable attorneys' fees, zegardless of the ~r~erit ar outconEe of any such clazm or suat, arising fro~r~ or in any n~anner cor~nected to the ser~ices or work conducted p~r- suant ~o this Agreen~ent. B. The Contractor agre~s ~hat a~l participants in ~ne pro- gram assigned ta or en~ployed by the Contractor in ~ts perforr~Eance under this Agreen~ent are agents, e~r~~loyees, officers or servants of the Contractor and not the ag~nts, enEployees, officers or ser- vants o~ the Agency. In this connection, the Contractor shali, unless specifzcal.~y exe~~pted by ~aw, ma~ntain appropriate Work- ers' Compensation insuranc~ coverag~ for each and every sa~c3 par- t~.cipant ~n th~ progra~~. 9 . I iVSURAE~ICE . On or before the commence:~~ent of the texr~~ flf thzs Agree~t~ent, Contractor shall ~urnish the Agency with cert~ficates showing the type, amaunt, class of operations covered, effective dates and da~~s of expiration of insurance polxcies, Such certif~cat~s, wl~ich do nat li~~zt Contractor's inde~~~zfication, shall also con- tain substantially the following statement: "The znsurance cov~red by this certificate w~Il no~ be canceil~d or rr~aterially - 7 - alter~d, except after ten (l~) days written notice has been r~ce~v~d by the Rede~el~pmen~ Agency of the City of Santa Monica." it is agreed that Contractor sha3.1 ma~nta~.n in farce at al~ times during the performance af this Agree~~ent all appropriate ppl.acxes of insurance, and that said policies of insurance sha~l be secured fron~ a good and r2sponsible company or con~panies, doing insurance business in ~he State of California. All such insurance shall na~ae the Agency as additional insured. Contractor shall nEaintain the following insurance cove~age: A. Worker's Con,~ensat~on. Contractor shall provide Workers' Compensatian insurance and benefits, and/or n~ed~cal and ac- cident covezage as requared by S~ate and/or Fedeza~. law. B. Liability Insurance. Contractor shall purchase liability insur~nce in the amoe~nt of Five Hundred Thousand Dollars ($5~~,~~~) combined singl~ lin~i~ for all liab113ty far per- sonal ~n~uries, death, prope~rty damage, and, if required by the Agency, comprehensive auto liability, professionaZ liability or znczdenta2 malprac~~ee insurance to protECt the Agency, i~s officers ana enip~oyees against liabili~y result- ing from any neg~igent act or omission of any officer, agent, or en~ployee of the Contractor in the perfora~ance of thas Agreement or froni the condition of any property owned or cont~olled by the Contractor ~sed in the performance of_ this Agreen~ent. - S - C. Cri~~e Caverage. Contzactor shall grovide a comprehens~ve crime coverage poiicy in an amount no ~ess ~han Twenty-~'zve Thausand Dollars ($25,~0~) insuring against loss of money, securities or other property referred to hereunder, which may result from (a} dishonest or fraudulent acts of of- ficers, directors, agents or e~t~ployees, or {b} disap- pearance, destruc~ion or wrongful abstraction inside the premises of the Contractar while in care, custody, or con- trol of the Contractor, or (c) sustained thznugh fargezy or alterat~on of checks, drafts, or any order or direction to pay a sum certain of money. D. Suhroc~ation 6Vaiver. Con~ractaz agrees that in the even~ of loss due to any of ~he perils for which Zt has agrzed ~o provide zns~arance, that Contractor shall ~oak so~ely to its insurance for recovery. Contractar hernby grants to Agency, on behalf af any a.nsurer provid~ng insurance to either Con- tractor or the Redevelop~~en~ Agency of the City of Santa Monica wxth respect to ~he services of Contractor herein, a waiver of any right of subrqgation which any such insurer of said Contractor may acquire agaanst Agency by vir~ue of the payn~ent of anx loss unde~ stach xnsuranc~. E. ~'ailure to Secure. if Contractor at any time during the term her~of, should £ak~ to secure or ~t~aintain the foregoing insurance, Agency shall be pernutted to obtain such in- surance in the Contractor's name or as an agent of the Con-. tractor and shall be conipensated hy the Contractor for ti~e _ g _ costs af the ir~surance pre~t~iunis a~ the maximum rate nermit- t~d by law cor~~puted frort~ the dat2 written notice is received ~hat the pre~riiums have been pa~.d. F. Additional Insured. The Agency, its governing body, officers, agen~s, servants and employees sha].1 be named as an add~t2onal ~nsured under all polic~es of ins~rance re- quired by this Agreement. The naming of an additiqnal in- sured sha11 not affect any recovery ~o which such addztior~al insured would b~ entitled under this pol~cy if not namec3 as st~ch additional insured; and an adc~~tional insur~c3 named herein sha11 not be held liable for any premitam or expense of any nature on this polrcy or any extension ther~of. Any other insur3nce held by an addi~ional ins~red shall not be ~equired to contr~.bute anything taward any loss ar ~xpense caverec3 by the insurance provided by this policy. Praceeds fro~~ any such policy oz policies shall be payable to the Agency pr~marily, and to t~e Contractor secondarily, it necessary. l~. PERMImS A[~D LICE~ISES. Contrac~or, at its sole expense, shall obtain and maintain during the ter~i of th~s Agreement, ail appropriate ~ermits, l~censes and certificates that may be required in connectlon with the performance of services hereunder. - 1~ - ~, ~' 11. PR~HIBITION AGAINST TRANSFERS. Con~ractor shall no~ assign, sublease, hypothecate, or transfer this Agreement or any interest therein direct~y or indi- rectly, by operatlon af law ar otherwase without the prior writ- ten consent of the Agency; any attem~t to do so withou~ said con- sent sha~l be nu~l and void, and any assignee, sublesse~, hypoth- ecate or transferee shall acqu~r~ no right ar znterest by reason of such atte~t~pt~d aSS1gC1~r~etZtr hypothecat~on or transfer. In the event that a subcontract, assignment or transfer of this Agree- n~ent or any portzan thereof, xs approved by the Caty, a11 appro- priate proeisian and requirements of this AgreenEent shall apply to any subcontract, assignrnent or transfer. Z2. NOTICE TO AGENCY OF LABOR QISPUTES. Whenever ~he Cantractaz has knowledg~ that any actual or gotential labor dispute invol~ing cli~n~s or other en~ploye~s is deiaying or threatens to dezay the ti~~ely perfor~raance of th~s Agr~En~ent, the Contractor shall i~~rr~ediately g~~e notxce thereof includ~ng alZ pertinent inforrr~ation with resp~ct there~o. 13. COPYI2IGHT. No material produced in whole or in part under this Agree- ment shal~ be sub~~ct to copyright in the Un~ted Stat~s or in any other country. Unrestrzct~d authority to publish, disclose, dis- tribute and otherwise use, in whole or in part, any repvrts. data_ or other materials pre~ared undez this Agzeemen~ vests with the Agency. - 11 - E ,, 14. LIMITATION 0~ COSTS. Na cost sha11 be allow~d under this Agreement which is not included in the Contractor's Grantee Budget, attached here~o as Exhibit "B" and incorporated herein by this refezence. 15. LVONEXPENDABLE PROPERTY. An inventory sha11 be rtiasnta~ned for each item of nonex~aen- dable property acquired with funds provided uncler this Agreement. IVonexpenda~le property shall include tangzble personal property (including but not li~t~ited to office equiQ~t~ent} costing One Hun- drzd Doilars ($1~~) or more per unit and having a useful life of one (1} year or [t~ore, real praperty and any interest ~.n such zeal property, and any ~~ortgage, trust deed, or option Agreeet~ent to Purchase, or other encumbrance af real propety, and th~ funds receivec3 ~rottE the sale of any stach encunEbrance of real property. The cond~t~on, location and dispos~tion of such nonexpzndable property shall kae reported ~o the Agency annually, using a forniat provided by the Agency. In case of tn~ progra~~'s term~nation, titl~ to such non- expendable oroper~y shall vest in the Agency. The Agency reser- ves the ~ight to deter~tiine the ~inal d~.spositaon of said nonex- pendable property, including funds and/or any other asset derzved therefront. Any u~ilization of funds fror~~ such an encumbranc~ or other disposition, incl~ding tY~e sal.e of nonexpendable property, must have approval of the Agency and orherwzse co~tiply with the fede~al regu~.ations. The proce~ds of such sale to revert back ta - 12 - t • the Agency and the Downtow~ and Oc~an Park 1(a) and 1(b) Re- developrr~~nt Low and Moderate Inco~~e Housing Trust Funds. The Contractor shall abtain at least three (3) documented estirt~ates pzior to purchasing equipR~ent over One Hundred Dollars ($10~~} p~r unit in value as approved in th~ budget. All ~quip- ment purchases must be appzaved in the budget and shall be ini- tiated no Iater than the third quartez of the progzam year, ex- cept under special circumstances with prior approval of the Agen- cy. The above provisions apply to ieasing as well as to purchas- ing eqazpn~ent. 16. RECORDS AND ACCOUNTABILITY. A. Records shaZi be maintained in accordance with the City of 5anta Mon~.ca Agreem~nt Accoun~.ing and Adrninistrative Handbook, attached hereta as Exhibzt "C" and incorpora~ed her~in ay this reference and wxth standards of grantee financial nianagement as specified in OMB Circulars A-$7, A-1~2, A-11~ and A-122. B. All expend~tures shaZl be suppartzd by properly executed payroll, ti~ie ~ecords, rnvoices, contracts, vouchers, ord~rs oz otner accounting documents p~rtaining ~n whole or an part to ~his Agreen~ent, and shall be elearly ident~fied and r~ad~ly accessiole fio Agency and State personne~ or their agents. C. The Contractor agrees to an audit conducted by an zn- c3ependent auditing firni to determine, at a n«.niu~ti, th~ fisc~l ~,ntegrity of financial tra~sactions and reports~ and the co[~i- pliance with laws, zegulations and adrt~inistra~ine require~~ents. - 13 -- s ~ ` Such audits shall be scheduled with reasonable frequency, usually annually, but not less frequently than once every ~wa yeazs. Contractor agrees to estab~ish a sys~ematic method to assure t~~~ely and appropriate resolutian of audit findangs and recon~~enda~ions. ~. Contractor agrees to accept responsibility for rece~v- ing, replying to and/or complying with any a~dzt exceptzons de~ermined by appropriate City, StatE or Federal audit agenc~es occuring as a resu~t of its performance under this Agree~~ent. Contractar also agr~es to pay to the Agency, within thir~y (3~) days of den~and by the Agency, the full anEount of the Agency's liabi~ity, if any, resuYting fron~ any exceptions to the extent such as is attributable to Contractor's failure to perform prop- erly any of its obZiga~ions under this Agreement. T~ie obligation to rEimburse the Agency for any disallowed ex~enditures or n~isus~ ~ of funds shall survZVe the tern~ination ar expirataon of th~s Agre~ment. 17. RETfJRN OF NQNEXPENDE~ FUNDS. In the ~vent Contractor is advanced any funds pursuant to this Agre~n~ent, Contractor agrees that upon con~pletion or ter- mination af this Agree~tent, a11 funds plus any earned ~.nter~st on these funds shal~ be r~turned to the Agency wzthin thirty (3~) working days of the Agreert~en~ expiration or ~ermination date. - 14 - 18. NEPOTISM. Contractor shall not hire nor per~~it ~he hiring of any per- son in a position funded under tnis Agr~ement if a n~ea~ber of the person's im~-ediate ~a~iily ~s an elected official of or zs e~tE- ployed in an ad~t~anistrative capacity as an employee af the C~ty of Santa Monica, or as an employee of this Contrac~or or his/her subcontractors. For the purpose of this section, th~ tern~ "im- niediate faa~ily" meaas wife, husband, son, daught~r~ ~~other, father, brother, sister, brother-in-Iaw, sister--in-Iaw, son-in- law, daughter--zn-law, mother-in-law, father-in-law, aunt, uncZe, ^iece, nephew, stepparent ar~d stenct~il.d. The term "adrtEinastra- tive capacity" n~eans persons who ha~e selection, ~iring or super- visory r~sponsibalities. 19. CONFLICT OF INTER~ST. Contractor covenants that nezthez the Contractor nor any of its agents o~ emglaye~s who presently exeXCise any function or r~sponsibility in connection with this orogram has or shall have or acquire any personal, financial or economic ~nterest, darect or inc3irect, wh2ch w~ll be materiaZly af:Eected by this Agree:t~ent except to the extent that he/she may receivz compensation for hi.s/her pertormance pursuan~ to the Agreement. k'or the purposes of this sectzon, an econon~ac or fznancia~ anter~st includes: A. Any busZness enttty which the person has a d~.rect or an indirect ~nvestment worth ~~ore than One Thausand Doliars~ ~~1~~~~~. - 15 - S. Any real property in wi~ich the persan has a direct ar indirect interest warth n~are than One Thousand Do11a~s ($1,~d0~~?. C. Any source of income, loans or g~fts wh~ch, when com- bined, are wor~h Two Hundred Fit~y I}ollars ($25~) or n~ore in val~e recetved by or pro:~~ised to the p~rson within twelve (12) months ~zior to the time this Agree~rkent was executed. D. Any business entity in which th~ perscn is a director, officer, partner, trustee, e:r~ployee, or holds any position of management. For the purpose af this section, direet or indirect interest means any investment or interest vwnea by the spouse, parent, child, brother, sister, father-in-law, mother-in-law, brother-in- law, sister-in-law, daug~tez-in--law, san-in-law, or the person, by an agent on nis/her behalf, by any business entz~y controlled by said person or by a~rus~ in which he/she has substant~al intErest. A business entity is controlled by a person if that person, ~izs/her agent, vr a relati~e, as def~.ned above, possesses more than fifty percent (5~%) of the ownership in~erest. A per- son has a substantial interest in a trust if sa~d person or an above-defined relative has a current or future interest worth nEOre than ~ne Thousand Dollars ($1,~~1f~) . - 16 - t , } 20. AFFIRMATIVE A~TION. A. Contractor wi11 comply Title VI of the Cival Rzghts Act of 1964 (Public Law 88-352), and in accordance with T~tle VI of that Act, no person in the United States shall, on the grounds nf race, creed, color, disabzlzty, natianal origin, sex, aqe, sexual prefer~nce~ pol~tical affiliation ar beliefs, be excluded from participa~ion in, be denied the bene~~ts of, or oth~rw~se sub- ~~ct~d to discrittiination under any pragrarta or activity for which the Contractor receivec3 financial ass~stance and will immediately take any rrteasures necessaxy to ~ffectuat~ thas Agree:t~~nt. Any subcontracts awarded by Contractor sha~l addit~onally contain this provision. B. Contractor shall keep such records and su}~~r~it such re-- ~orts concerning the racial and ethnic origin of applicants £or en~ploy~ti~n~ and ett~ployees as th~ Agency or the State of Californ~.a n~ay req~ire. Contractor agr~es to comply with sucn rules, reg- ulations or guidelines as the 5tate Depart:~~~nt o~ Housing and Con~munity De~elopment may issue to inip~e~t~ent these rpquire~r~ents. C. Contracto~ agrees to coniply w~th the requ~rements of Section 3 af the I~ousing and Urban Dev~loptt~ent Act o~ 1958, as aR~ended, requirinc} that to the greatest exten~. feasibZe, oppor- tunities ~or t~aining anci e~t~ployment be given lower-inconi~ resi- dents of the proqra~~ area and any contracts for work in connec- tion witY- the program be awarded to el3gible business concerns which are located in, oz owned in substantial part by, persons residxng in the area of the pragran~. - 17 - . , D. In accordance w~th the City's Women and Minority Bus~- ness Enterprise (WMBE) progran~ approved by City Council on March 8f 1983, Contracto~ agrees to review the City's WMBE Library ot Darectnries and Minority Vendors ~ist and cons~dE~ such soarces in the procure~~ent af equipaient, tt~aterzal, supp~ies and profes- sional serv~c~s. E. It involved in the i~t~~lettEentatron of a direct bene£1t acti~ity, Contrac~or shall compile monthly statZStics which indi- catE the number of direct b~neficiaries in the fallowing cat- egorzes: Low and Moderate Incon~e (80g of L.A. County Median In- co~t~e), Low Inco~~e (50°s of L.A. County Median IncomE); Wh~te nat Hispanic, Black not Hispanic, At~~erican Ind~.an or Alaskan NativE, Hispanic, Asian or Pacific Islander; and Fe~taale-Headed Household, 21. SUSPEN~ION BY CITY FOR UNSATISFACTORY PERFORMANCE. 5hoald the Agency at any t~trr~e beconEe dissatisfied wi~h the Contractor's perfarmance under ~his Agreen~en~, the Agency Execu-- ~ive ~irector rt~ay suspend the Agency's p~rfor~t~ance under this Agreen~ent am~r~ediately by giving not~ce in writing to the Contrac- tor, pursuant to 5~ction 23, at least f~.ve (5) days befo~e the effective date of sucn suspension. Such notice shall state the reasons for dissatisfac~ion. Upon rece~pt of this notice, pez- formance shall be suspended by the Cantractor. The Contractor ~~ay a~p~al the suspe~sion ta the men~bers of the Redevelopment Agency at the next r~~u~ar Agency R~eetZng; howe~er, the appea~ sha21 no~ s~ay the suspension. The Agency Execut~ve Direc~or" shall in~media~ely notzfy the Agency af any action to suspend the - 18 - contract. The Agency shall be the sol~ jndge as to whether the perfor~~ance of the Contractor zs satisfactory. 2z. TER~I~ATION. In the ev~nt that the Cantractor de€aults in the perforn~ance of this Agreement or rnaterially breaches any of its provisions, the Agency shal~ have tne ontion of ter~~inating this Agreemen~ ~n«~ediately by gavang written notzficatzon as provzded for hereinafter in Section 23. Such notice shall state the r~asans far the termination. The Contractar n~ay ao~za~ th~ terz~~ination to the Ftedevelopn-ent Agency; hawever, the appeal shall not stay the terrr~anat~on. Th~ Execu~ive Director shall ammediately notify ~he City Counc~l of any action ~o terminate the contract. This Agree~r~ent niay be terrrtinat~d by either party by giving sixty (~0) days, prior wr~tten natice without cause, to th~ other party as provided for in this Agreernent hereinbelow. Thas Agreerrien~ shall immediately termanate zf the ~owntown Redev~lopR~ent and qcean Park Rede~elopn~ent Project 1(a) and ~(b) Low and Moderate Income Hausing Trust Fund or any portion thereof is cancelled o= otherwise ter~~inat~d. If thas Agreement is terminated, in accordance with this section, Contractor shall, w~th~n five (5) days fror~~ receipt of notice of ter~~ination, g~ve not~c~ of such termination to al~ other pazties he/she has subcontracted wath for services in tur~- therance of th~s Agreemen~. Uaon any terniination, each party- - 19 - shall pay or refund to the other party al1 appropriate sun~s under this Agzeement. 23. NOTICES. Contractor may desire to serve upon the other, shall be ~.n wri~ing and shal~ be conci~sively c3eemed ser~ed when deliver~d personally or forty-eight (48) hours after the depos~t thereof in the United States ~tiazl, postage prepaid, registered or certified, and addressed as hereinafter provided. B. AZ1 notices, denEands, requests, or a~provals froRi the Contractor to tl~e Agency shall be addressed as follows: Redevelopn~ent Agency of the City of 5anta ~Ionica Depar~ment of Corti~tiunity and Economxc ~evelo~ment 1685 ~lain Street Santa MO[]1Car CA 9~4~J1 C. All notices, demands. requests or a~provals from the City to the Contractor shall be addressed as follows: Commvnzty Corporation of 5anta Monica 22~9 Main 5treet Santa Manica, Ca}.i~ornia 9P140]. 24. AUTHORITY TO BIN~ CONTRACTOR. Upon recez~t of a f~lly executed copy of th~.s Agreen~ent, the Contractar shail furnish to the Ag~ncy a wrx~ten list of the per- sons authorized to execute, on behalf of the Contractor, agree- ments, contracts, nEOdifications ta contracts, ax other documents as they ~r~ay be r~quired by the Agency. In the event authority ~s- de~.egat~d to a~os~tion (e.g., Presiden~, Vice-Presid~nt, -ze- ~ . , Treasurer, etc.) rather than to an indivic3ual, tne list of posi- tions so authorized shall be furnished. 25. WARRANTY OF SERVICES. The Contractor warrants and guarantees that all services perforn~ed hereunder for the Agency by the Contzactor shall be performed in a a~anner commensurate with the highest professiflnal standards. 26. EVALUATION. Contractor hereby agr~es to participate fully, with guidance and assistance from th~ Agency, in the imple~~entation and n~ain- tenance of an evaluation Sy5t2IT1 to continuously monitor the pro- gran~. The services descrzbed h~r~~n shall be revxewed by the Departn~ent of Co~r~m~anity and Economic D~velopment on an ongoing basis. The content of the Departmen t's fandings sha11 be dzs- cussed with the Contractor prxar to its sub~~ission to ~he ~t~er~~bers of the Redeveloprrtent Agency. 27. RELIGIOUS ACTIVITIES. A. No progra~n funded under this Agreer~~ent ~~ay be involved in any religious activit~.es, nor ~~ay funds provided under this Agree~r~ent be expended for relzgious or anti--re~igious aetivaties. B. No equipment, materials, or pren~ises acquized, donated or designated as a part of the prograni under the terms of thzs Agreement may b~ used directly nor indirectly for any raligious- or an~i-religio~s acta.vity dur~.ng progxam bus~.ness hours. -zi- , ,. . , 28. POLITICAL ACTIVITIES. A. Contractor sha11 not exp~nd any funds provided under this Agreement nor ~ase or cause the use of staff ~inEe, facili- ties, pre~r~ises, equipment, mater~als or supplies whict~ ar~ pro- vided or d~signatec~ as a part of the progran~ funded under the tern~s of thas Agree~~ent for any politicaZ pur~ose as hereznafter defined. Pol~.tica~. purpose is detined as participation in, or intervention in (includang the pub~.ish~.ng or dastributing of staten~ents) any political campa~.gn on behalf of or ~n opposxt~.on ~o any candidate for public office, any initiative, referenda, ballot n~easure, recall ar any partisan or non--partisan el~ctozal activi~y, inclUding but no ~imit~d to: (1) Sponsoring or conductxng candidates' meet~ngs; (2) Vater regis~ration activity; (3) Vot~r transportation; (4) Any part~.san or non-part~san activity desxgned to pass or defeat any initzative, recaZl or referenda; {5) C~rcuZatzon of petitions to qualify initiatives, referenda or recall n~easures for local or State ballots. B. Contrac~ar sha~l r~o~ expend any funds provided und~r this Agreement for ~.ransportation for large-scale pub~ic assem- blies for the purpase of influencing publac bodies regarding ac- t2~~tes funded under this Agreeni~nt. - 22 - r ~ C. Contractar shall not expend any funds provided under this AgreenEent nar use or causz the use of staff t3me, facili- ties, prznuses, equipment, ma'terials or supplies wh~ch are pro- vided or designated as a part of the program funded undez the ter~r~s o€ this Agre~n~ent foz Io~bying activity that is prohibit~d under this Agree~~ent. T~e Agency shall provide Contractor with adn~inistrative anstructions regarding reZevant Interna~ Revenue Service Cade definitior~s and pro~isions. Contractor is indepen- den~ly responsible foz complying w~th all statutes and regu~atxons. 29. INTEGRATED AGREENlE[~1T. Each party to this Agree~ient acknowledges tktat no regresen- tations, inc3uce~~ents, promises, or agreements, orally or vther- wise, have been made by any party, o~ any one act~ng on behalf of any party, which are not embadied ~ere~n. Any an~endn~ent or modification to thzs Agreement wi11 be ef£ective only if in writ- ing and sagne~ by both partzes. 3~. PARTIAL INVALIDITY. If any pro~lsaon of this Agre~men~ is held by any com~etent court ta be ~.n~alid, vo~d, or unenforceable, the rema~ning provi- szons shall nevertheless contznue in fu~.l force and effect. 3~. WAIVER. A waiver by the Agency of any breach of any term, covenant, or condition contained here~n shall not be dee:~~ed to be a waiver of any subsequent breach of the same or any other ter~i, covenant, - 23 - or condation cantained herein whether of the sa~rie or a different character. 32. GOVERNING LAW. The val.idzty of this Agreen~ent and any of ~ts ~ern~s ar pro- visions, as well as the raghts and du~ies hereunder, shall be in~ernreted and construed pursuant ~o an in accordance with the Iaws of the State of California. 33. SECTION HEADINGS. The section head~ngs appaaring herezn sna~l not ae d~emed to govexn, lzn~~t, n~odify or in any way effect the scope, meaning or int~n~ of these condYtions. 34. COST OF LITIGATIOiV. If any legal action is necessary to enfQrce any pravzsian her~of or for damages '~y x~ason of an alleqed breach of any prv- ~isions of this Agreemer~t, the pr~va~.ling party shall i~e entitied to receave fro~~ the lasing party all cos~s and exp2nses zn such ah~ount as the coe~rt rt~ay ad~udge to be reasonab}.e attorney's fees. _ 24 _ 1 T a ~ iN WITN~SS WHEREOF, tne partles have caused this Agreement to be executed the d~y and y~ar first above wr~tten. RE~EVEL4PMENT AGE~CY OF THE CITY OF SANTA MONICA BY John Jalilz Executive ~irector APPROVED AS TO FORM: ~ri• , Rober~ M. Myers Agency A~torney CONTRACTOR: a Cali~ornia non-profit corporation BY - 25 - ~i~Y ur sANTA HONICA GRANTEE WORKPLAI~ ~ ~ • i Thls 4lorkplan wlll cnvtr ttie parlod July !, 1995 tu ,luna 30~ 19ab ~ GRAN1'EE; COMMUNXTY CORPORATION 0~' SANTA MONICA , ~~~'~~~Ts ALI, ACTIVITI~S , ~ . f 1 • 08JEC~'iV~S ~ TOTAI. S. h. Un I t {~ ' _ ANHUAl. AHliL1A~ of Serv~ce ~ ~ PROGRAM OHJ~CTIV~:S: • - •~ ~ Ta purchase and r~habilitate dw~lla.ng unii~s , $ ~ , fiousing units ~ To 'P gurchas~, r~locat~ and re d l fi l habilitat~: dwelli.ng uni,~e i i 3 ~ 4 ~ Housing units ' ~ o eve vp non~prp t re~z~a ar leas ng ar ~im ted ~quity caop units 6 2 Eiousing units `~o develop n`w construcLion ren~a~. hausing 2~ ' ~~ ~~ousf.ng units To develop and market TOltCA T~chnical Assistance far reztiter:~ 1 ~ 1 Program ~~ . +l~ Consultation~- O(1TR~;ACH DF3JEC'1'IVES: Ta apprise agencies and resfdents o~ a~fozdable housing 4 opportuniti~s ari~ing out af Communi.ty Co~Pora~ion prajecte. .' To meet with tenants and communi~y urganizations ta assegs develo~,nent oQpa~tunitii~;s ai~d pol.icy. 16 `~'o conduat eduaationdl meetfngs about Conunun~.ty Corporation projects Eor the Board af Airectara. ~ q NETWORKIt~G Of3JEC:~'IVES; Ta provide teclxnical assistance ~o the Ci#;y and other community arganizations. 30 1 ^ r' \J~_ ~ I . • 4 Notices ` I 16 Meetings ~ ~ 4 Meetinqs ~ M ~ ~ 30 Eansultations x ~ ~ W H E ~ ( - t I CIrY OF SAN~A ~ONICA a~nti;E~ ~rnt~~cQtati 7h~~ 1lorkplan wi ~~ covcr tlie parlnd July 1, 1'~$~ to .~unc 3Q~ 1986 GRAHTEE; COMMUNITY CORI'OE~ITION OF SAN`1'A MONTCA ~ PROJECT: pLL AGTIVITIES ' , I ~ OBJECTIVES ' T07Al. S.H. lJnl t - ANHt1A{. ANNIlAL o F Serv! ce ~~ EVAi~UAT~ON OD.7GCT~~IES: .'~ ~`1`o evalua~e gaal achieveneent baaed on number oF offere, cantract~, loans and uni~s developec~ at w~ekly staf~ meetinqs and monthly ~oard, mc~etings. ~ A5 95 Meetinys ~ FUNDCtAISING DfiJ~,C'rIV~S; To charg~ a I~ ~ee revenu~ from develapm~nt prajects. 35,Oa0 35,000 Fees ~or . s~rvices. To write fund~ng prop~sals to I~ocal Initiative Su~port Corporati.on, ARCO, Getty OT~IER OBJECTIVES: ~ ~ grants ~ To study potential for u~ing commerc~al }~roperCi~s for coRVersian to hous ing . To develop proposals Ear h4usinq uni~s on ci.ty-own~:d lots. '~ - ,~ 1.~ : 1 1 S~udy 1 1 Study ~ i CITY OF SAHlA HdNICA GRAtJTE£ NOFIKPLAI~ 7his Warkpian ~I11 cove~- tlle perlad July 1~ 1985 ta Juna 30, i98b GfIANTEE; COMMUNITY CORPORATION 0~' SANTA MONICA ~ PROJECX: ~LL ACTIVITIES , , ~ ~ ~ OBJECI'IV~S ' T~jAL 5,~1. ' Iln~ t ANNUAE. ~~~ . ANNIJAL _. af Scrvfcc~ ~, __ . _._ _,~_ EVALIIATYON DaJECTYV~S: ,'"~ To eva}~uate goal achieverzzent~ baaed on number o~ affers, cantracts, loan~ and unit~s devela~ed at weekly staf~ meetinqs and monthly aoard.rn~etings. • 45 a5 Meetings ~ . ti P'UNDRAISING Of3.7~,C'PIV~S: Ta charqe a 1~ fee reve~iu~ fr~m dev~lopment projects. 35,Q00 35,OQ0 F~e~ for services. To write tundinc~ pro~asals to Local Initi~tiv~: Support ~ granks Corparation, ARCQ, Getty 3 3 0'I'fiER OB.3ECTIVE;S : xo study patentia~ for usiny commercial pxoperties for convers~an to housing. 1 Z Study To develop proposaZs far housing uni~s on ci~y-c~wned lo~~. 1 1 Study ~ l, ,~ ~ ~ ~-' i I I ~ CITY OF SANTA r10~ICA GRA~TEE PROGRAM FI~ANCI~L STATUS REPORT , - ' r . .Address Contact Person Report Period F ~ o~ti To e~epnone ,~ / CDBG / / Tax 2nc. 1. PRQGRAM EXPENDITURES i k Descrz~ation of Proposed Depas~t Amount Escrow Closing Date Pro ec~ Includin Address 1. 2. ~ 3. 4. 5. 6. 7• 8. 9. z~. i City of Santa ~onica . ~ GRANTEE PROGRAM STATUS REP4RT Subgrant~e/Praject Source of Fun~S Report Period , Report ~] CDBG [] ~]TY ~a ~ ~ C;RS (~ OTNFR f ram to i ~ - LURRENi LUH SECT~ON i. ~ ~~~ ~~ A. Percentage of Low-Ir~come~ Santa l~onica~Res~d~nt~s ser'vcd~by this program ~~ ~ ~ ~ I - ~^ ~f3, !'crcentage of M nar ty Santa oni~ cn~esia~nts SCf-VC y t~is prograrn ~""~"~ ~ , ~ _ _ _(P1_er~se foatizote how each of thes"e ~crcent~~es w~~s r.l~ri_v~d~ ~____ ,_ .- --- -- -~-µ-^---~'-~ C[J fl ft E f17 , f U M Sf f71f1N ! I OBJFCTlVES UN1T5 Qf SERVfLE lII~NUI4L TARGFT QUARTER i0 ~117F MO'IF i 11S1iZ5 6f SERY4CE~ A~R~1sAL TAftGf~S QuhRTfR Tfl DrFf -sOTE I 7~~~~ S H Tozal S H fotal S H ~- - ~ ----- -- - - - --- - --- - - -. . ._. _ .. _ _ _. ~ ,__.^......_,_,~._ F'rrT~ ----. C'f . ~ ~ v' Tocal $ H. ! Totaf ~S H ~ Yotal ! S~ ~~I ~ro~lems Encountered/Planned Changes Training and Technieal AsSistance Needs CERTlF1C11TI0N I ~ certify that th~s report ~s true. complete and accurate to the best of my ~:nowledge and that all program activities ; ', are ~n co~~pliance witf~ the candit~ons of the Grantee Agreement. ' ~Jarne Titl~ ~ ~ Signature ~~~e ,For City Use Only: Reviewed by: ~ate ~ . ~ , ~ ~ f ~i4~ ~f ; ' 1 f + ~i ~XL,l~lt 11~l1 CITY OF SA:~TA '~O:~IC~ CO`:TR%~,CT ~~.COJ'1TI`.~ r'1~1Q ~D~':IIvTS'^R.'-~'i'iI`•.'E HnL:DB00K . P:~E~'~C° ihe pnrpose of this handbook is ~o es~ahlish account3ng, int~rnal con~rol, financial repor~i~g, anc~ cont~ac~ acn,inistratzon standards ~or Subcontractors wha coat~act with ~he Cz~y of 5anta Mar~ i ca . 4 The acco~n~ing, internal cantrol, and rapprting pri:~cz~les prESe~te~ are funda:~~ental and are not intended to r2~lace acceptable exzstzng ~roc~dur~s and fir.a~cial accountability and r~par4ing methads. Instead, the fur,daR~en~al requi~~:~ents r~present :tiin:muni proceasres and ~on~~ols tnat :~.ust be eR~~odi~d wi ~hin each ~u~~ont~~ctor's ac~:,unt~zg, internai CGI]C?'Ol, and financial ~~nor~ing systeR~. A11 re~er?n^~ to Su~^cn~:acto~ shaJ.l -~~2an Contrac~or. B:~SIj OF ~~C~~iJ"dTItiG h*:D FItirti'~T_":G Z~PORTI~iG (~.~1) Basis of ~:cccuntinG Subccn~rac~or~ n~ay ~lect to isa ~it:,er cas:r basis or accrual basas me~hcd o= accoanta~g ~or r~coruing financia~ ~zansactions. Quarterly i:~vozces n~~st ~e pr~pared on the sa;t~e basis tha~ is used f~r recording fir~ar~cia~ ~ransa~tions. (1.4~11) T~e Ci~y r~co~~~t«~ds th~ use oz the ac~rual basls far xecordang f~nancial transac~ions. (1.Q12) If a Su~^ontracto~ elec~s to us~ ~he cash basis for recording financ~al transact~ons d~zang Lh~ ye~r: A. Vecessary ad~us~r.~en~s r.~ast be made ~o record the accruals at the beainnz:~g and t:~e ~nd o~ the contrsct pe~~od. B. Ail co~t;putations, supportxng records, and expLanatory notss used in convzrtinr~ froz~ cash bas~s io tha ac~.r~a~ baszs r<<ust be rLtai~ed. , , } (1.~2) Financial Reporti~a - Each Su~contzactcr shall ~rasent an invaic~ ~o the City each quarter to zeport the financial activ~ty of ~he q4arter. In addition, z~ a3vanced fundzng is znvoivnd an ~nva~ce s~azl ~e prese~ted at ~he be~~~ning o~ the contract perzod. Invoic~s shal? be pr2pare~ in ~he r,iann~r pr~scr~bed ~y the City. ACCOUtiTI:1G SYSTE*~I (2.01} ~ach Subc~ntzactar s~all ~tiaintain (un~ess otherwise ap~~ot~d) a double 4~4iy accouniir~g systQ^~ (utilizing debits anc creaiis) with a General Jour:~a1, a Cash _ Rece~pts .7o~rnal, a General Ledger, and a Cas;~ ,_ D~s~~rseR~~~ts Journal. _~'he Czty reeo~~:~:Qn~s tnaL a Payroll Le3ger a3.so be ~~ain~ai:!ed. T:~e General Lebger and Journais shou~d be pos~~~ as r~quired, at 1~ast monthly. (2. ~i1) Ger~~ra'_ J~urna ~- A Gen~ral Jau~nal s:~ai l i~~ :t~al:]tc.1:32C~{ for r~cc~~in~ GG jU~ ~i:~g entri~s, rev~rs~ng en~xles, ~losing e-~t~~~s, ~nd ct~ar fi:~ar.ci~l trans~c~ions not nor~~i.:Ily r~cord~d i~ tnp Cas:7 Receip~5 Jo~:Ynal cr Casn Disau~se~~enis aourr.al. Ea~~~es in the C~n?.~ai 3ournai ~~us~ be a~epuG~e3y ~oc~.:r~~nt~d, un~ ent2re3 in chrono~~,i~.~~. order ;~;it!~ sufficient expian3tory no"tµ~zcns. - Exam~le: DR. ~~. Rent Ex~~ns~ l~Q Rent Paya~Ie ~~`~ To recard a~cru2d rent to ~Sarch 31, 198~ (2.~~2) Casn Receipts Jour*~~1 -- A Cas~ Re^eipts Journay snall t~e maxntained far rzcard~ng ali cash receapts (e.a., Citiy warrants, contribntions, znte~est inco:-~e, etc.) . T:~e Cash ~ecei~ts J~urna~ sha'_I cor,t3in (~t~znzr.~um requar~n~~n~s} }he follo;~ing c~lu:r~ headings: -~ate -r~ceipt nun~ber -cas:~ de~~~ ~olu:~,~s -inconi~ credit colu:~~ns for ~he foilowin~ acco~:nts: - 2 - -Ci ~y pavr,~~n~s (vne col~-~~n per progra:r~) -Conrri~utions -Other Inca~*~e (G~ants, sa~es of su~pl ies/ser~v ices, ~eenta~ inco^~e, ~riis~ellaneous r~~Je~ue, f~es, 2tc. ) -des4ription (Entries i:l the descriptzon cclumn :r,~,~st spzc~r"y the so:~rce of cash rec~ipts.) (5z~ 4.~1I for addi~zcnal cla~ification} (2.ff13) Cas'rs Disbursenaents .Taurr.al - A Cas~i D~sburser,~ents .~ournal s;za~l be r,~aintained far recording all cas:~ disbursements (e.g., ~ent, utilities, z~ai:~tenance, etc.~) . The Cash nisburse:t~ents (:~~inin~c~m r~q~iz~:~~ents) h~adings: .7o~rnal sha}.l cantain the foZ].owi;~g colu:~En -dat2 ch2~ : nar~~er -cash [cre~i ~) colu:~~n -ex~ens2 aceoun~. nan•~ -d2scrzptaon ~doze (1) S~parac:e ~xpense co].u.^.,ns are reco:~~~~enc~ed ~ar salary expense and o~h~r recurrinq expens~ classi~icacio:~s fo~ ~ach :.rogranc. Note (2) ~ntr~es in t~e dzs^riptaon colu~En nsust specify t;~e nature ~t the exp~nse and the carresponding expense classifica~ion ~f no~ include~ ~n th2 colu:r~n headina. Note (3) Chec~s should not be written 40 em~loyeps {o~her ~han payrall, r~il~ag~, tr~vel, and pettv cas'~ cus~o~,ian ci~ec'c~) . A Check Re~lster :t~ay be SubsLit~4ed for th~ Cash Uis~~rse~.ents .7our~~i, but ~has is not r°~ontn~~nueci. If ~sed, the Chcck RegYStez ~rss~ contain th2 sa^~e expense ciassificatzons and a2scri~tions i:~~or;~~atian requirzd when a Gash Dls'~~;rseni°n~s Jauzr.al ls used. - 3 - , f . ~- ~tsourse:~~en~s ~.azt~ou* s~pQor:.lna ~ocur,ien~ation w~ll ~2 d~sallowe~ on audit. (2.~~4} Genera~ Led~~r - A Ger~era~ LedC~z sha~2 ae mai:~~a~ned wita accounts for ali 35SEt.5, ZI3~2~lt~es, fund b~iances~ 2XL.7Zi7C1tllr25, and TEV°f]U@5. S~~dr3tE c3CCOlZf7tS IiIUS~ ~J~ n~azn~ainea ~or ~ac5 City progra~~'s expens2s ana revenLes. -~ ~har~ of ~cca:~nts sha11 be ma~nta~.ned: The Caty rzco;~n~en3s t~at ag~nts use the expense ~^count ~itZes on the monthly invoicP sub:~utted to the C~ ty. -If the Sui~con~ractar uses a~count titles which differ frort~ the account ~itles on the ~or.th~y in~oic~, eac:~ accaunt_title n~us} c~early adentify thz na~ure of the transact~on{s} posL~d to the accoant, -Sauco~~rac~ors -~~sas~ ~onszsten~?y ~ost transac~_ons tnat ar~ of a sin•ilar nature ~a ~r~ sar.ie a~caun~. ~'oz Axa~snle, ail exp~nses for ~ravel shal~ ~e p~sted Lo tne ac~o~nt tit?zd "t~a~el" or "trave~ ex~ense" a~a aot i~term, xed ~i th o ~i~~r exp~~se a^;.oun~s, (2. ~15) Pa~.roll L~t.'~2r - 1he Cz 4y recor*~r~e-~ds tnat a Payroil Leayer ~e rt:ai:~taincd. T:-~c Iedg~r s;~ould concai~ th~ fol~cwing an~or:~~atron about each ez~glayea: -:~ a?ts~ -p~sition -5oczal Security r:u~*t~e~ -pay:~«nt record ineiudir.g: -accr~al p~riod -gross pay -iten~ized s~ayral~ deciuctions --crec~ nunEber If a Payrcll Ledger is noL ;asLd, th~ abc~,r~ inf;,rr~~taon rr~ust ~e reco~ded in th~ cash G~1S~Ur5en~ents ~ournal. {2.~16) P~tt_y Cas:~ ~~s~urse~«nts A Pp;.ty Lasn Fund ;t~ay be mair~~ained for paya~~nt ~~ sr.~al1 (less ~ra~ 525. ~43) , ircidental aa~enses ~.ncurred ~y t:tz - 9 - i ~ ~ ~ Subcantr~ctor (e.q., pos~age due, s::sa~l p~rcnases of off~ce supply it~Ris, etc.). Petty Cash disbuzse~:ents n~ust be saz~~ ortea by s~o~e recei~ts, ~etty casi~ vouc~ers, or other authenticated da~~r.~entation that ini~~.cat~ the iten~ purc:~ased and rhe enEployee n~aha~g ~~e gurchase. Unsupported De~ty casn d~s5urs~~~ents w~ll be disa~~owed on audi~. The p2tty cas:~ ~und sha~~ b~ ~~aintained on the a:t~pr~s ~ syster;i, a. e., a check shou 1~ he drawn to thz petty cash custod2an ta set up ~he fund and to ~~ake per~odic reaR~burse~~pnts. R~ceipts, noucners, etc., supporting ~ac'~ fund ~~plenis?~n~Ent Riust be bound .together and filed chrvnolog~caliy. A$25 Petty Cash Fuz~d zs r eco~~nEe nd ed . aC~OUhTING RECORDS nND FILING (3,J?) Retan~ior. o~ zccouatin~ Records and F~linc; or Supportin~ Do~ur~ertaticn r (3. s~3.1) Record Ret~n~aor. A1I accuunting r~cc~rds (~o~rzals, 1°dgers~ etc.) Gnd sa~parting docu=r~en~atian (anYo~ces, receints, cY~eck~, vouc;~ers, etc. )~~ust be rptaine~ for a r,~ini~«:n p~riod af £i~~~ (5) years. Adeq~ate cara shall be exerczsed to safeguard the accoun~~ng rec~rds and suppor~ing documenration. Any c3estr~:ction Gr ~heft af ~he Su~contractor's acccunting records or supportar.g doc~:::Ee~tation shaZl be in~n~edza~ely reported to th~ Ci~y. Unsuppor~ed exaenses will be disal~owed upon a~al~, resultinq .~~ o~~zrpay~r~ent ass~ssa~~r±ts. (3,aZ2) Fil~ng and Storage All relevant sUp~or~ing docu~i~nta~ion for repor ~ed proy rar,~ expznd i ~urzs and r~~. enu~s sha11 ~e f~l~d zn a systenEatic and consistent manner. It ;s zeco;~,;~;2:1~,23 that s~ppo~ting aocuments be filed as fo~lows: ch~cks - na~~~ricaily invoices (sales) - date/v~ndor nam2 - 5 - . ~ Y ~ • ~ expense ~ouchQrs s~owing ~ocation, dat~ and t~me a£ travel, pur~ose of trip, and rates clazn~ed; ve:~icle mxleage IDCS shcwing dat~s, ~estinatian and he~dquarters, ~ur~ose of trip anc~ ;~~ileage; nar~inr~ receipts; confer~nce zzgistratian forr.~s; recezpt £or r~~eals ~urct~ased whi~e cn ae~ro~Ted travel o~ att~nd~.ny ap~ro~ed conf~rence. In no cas~ will n~eals zn ex~2ss of t~e followz:~g limits be reimbursed: brea:ifast $6.43~; lunch 519~.43~; d~.nner $2~.~~. In ~o event will re~:t~burse~r~ent ,b~ ap~roved for alcoholic bevezages. Hote~ acco:~~n~odation exp~nses will only be reirt~buzs2d when distar.ce prohibzts tne agency represe:~tatiae from :~~akzng a day trz~, If such a deter:~~ination is uncl~ar, at s;~cslu be a~prov2d by ~:~e Ci;v's rr~onitor pr~or ~o incurring such costs. ~ei:t~bursemenL ror ? odg~ng will oe '~h~ a;~~ouni c£ aLca:~~~~adat~on ~or sangle ccc~~ancy at a r~asonai~iy--pri~~d ~~o~el or r,~o~el ar an e~uivalzn~ a?t~rnat~ve if such acco~~E:~iodai~ons are not availa~~e. Bou~le ocupancy zs z:~^ouraged wh~Z possi~le. Onerating Exp~nses ~ purc:~ase docu~Eents suc:~ as pUrchas2 ordcrs, ~n~~oices, requisitians, st~ck recezved reports, aill of ladz~g, etc., lease and/or ;ease agr~e:tEents, co:~trac~s. IVTERP:~L CO_dTROLS (~.01) Int~r:~al Contr~~ls Internal cont~~ls safeguard the Subcontractor's asses~s from n~isap~zopriatzons oz niissta~er~~eat. Eac~ Sub~ontract~r sna11 prepare necessn~l written ~rocedu~zs establishing in~~rnal controls for it5 p2rson!~el. Th~ ~~bcon~ractor sha~l instruct all o~ its p?rsonnel in said procedures and can~inLOUS3~y :~~ana.tar ~~erations ~o 2ns~re co~~pl~anc~ therewith. Tae foilowi~g ~.ntprna~ controls ar~ ~~andatary: - 7 -- t . _{ ~ - i -JnClan~i„ted or undel ivered checks snall b~ cancelled pzrio3ically. -SUpporting docun~en4s shall be ~xar~in~d by the ~ersons sar~ning or ~or~trallang the signing o~ checks at tne ~.l:~~e chec:cs ~r4 signed. --Suppor~ing docur~,ents shall be marked "pazd". -Support~.ng docea:~~~nts s:~all i~e re~erenced to ch~ck nun~~~r s . -Payroll chec'~s snall h~ dZStribu#:ed by persons not znvolved in timeke~ping, pr~pa~ing of ~ayroll, or reconca~ing of bank acco~nts, ~ -E~:~loyee hiring and t~rR~inating, or pay zate cha:~ginq, shall be a~proved by persons indep~ndent of pa~rc~l funct~.ot~s. -~?1 dssburse;;~ents, excluding bztty cash ~~:~chaszs, s:^.all i~e a~~roved by per~ons ~.ndapende~t of cnec.~ grep~ring znd boo'~;c~epi~g. -Fix~d asset ~urc?~ases shall be ap~roved by ~h2 agency's ~oard of Dir~ctors or the~r autncrized representative. -A c~.:rrent l~sting o~ fixpd assets showi;,g fundang sour~e sna'_i ne :~t31:1t31~edr ana a faxe~ asset inventory shall be conc3ucted ~~ l~ast ann~ally. (4.4313) Bonding - ~11 officArs, ~:~~pioyens, and agents w:~o handle cas:~ or have access ta the Subcontractor's funds snall ae bonded. ovJ~pax:~~:v~s (5.~1) Method foz Deter*tt3n~:~q Ov~r~ayn~ent Asszss:~~ents If u~pn audit, or at any ot:~er t~~r.e duriag the contyact y~ar, it is d2~er:t;xn~d tha~ ~xpendi~ures cr r~venu~s r~po~Ced to the Czty and used ta co:~~put~ the Suucontractor's cas:~ flow n~eds wera ineozr~ct~.y re~orted, the C~ty s~al1 ad~~st the s:~bsequent month's _ invoice ~as~n~ent, or take other ap~ropriate ac~ion, ~:~e ~otal. oc*erpayment(s), sha~l be deter:~~zned as fallows: TotaZ Allawable Progra:~~ Ex~e~Citures $ kXXX - 9 - i * ~ r~porting zzquiren~ents, the faliowzng contract ad~~inastration requirements ar~ adopted and enforcEd. (7.Q1) Audits The Su~contractor will ~iak~ availahle for inspection and audit to C~ty =epresentatives, upon r29uest, during r~gular work~~g nours, during the durat~on of the contract and fo~ a perxod of five years ther2af~~r, a11 of its books and records rela~ing ta the o~eration by it af eaca pro~ect or b~s~ness actavity w~ich is funded in whole or ~n part ~aith govern:t«ntal ~t~onies, ;ahetner ar not such r~~onies are receivec3 through the City. AIl s~ach books and r~cords shall be maintaz:~ed at a locatiQn within Los Angeles County. ~ (7.432) Lin~itatzons on ~xpe:~ditures of Program Funds (7.{32Z) Expendztures Out~~.de af ConLract P~riod ExpQnses Char~ed agair.st prograz~ f~:nds n~ay not i~e incurred praor ~o ~uly l, 1985, or su'~sequent to the contract tern~ination dat~. (7.~22) aapro~riate and Nz~essary Exp~:~~itures Only thos~ ~xpand~tures as needed to carry a~at tre ~ur~osas and 3cti~rities o~ th~ anproved grogran~ a~e a? J.cwable. (7.u23} Allocation of Cost Poo~s For Su~cantra~tors who operate n~any ~rogra:t~s, or have ~~ore than one funaing solirce, the 5~bcontxactors s:~all allacaLZ exp~nditures to the variaus prog~anks ar fund~ng saurces, 'Fhe costs should be al~ocated on the basis :~~ost appro~ri~~e and f~asibl~ in the circu:~EStances. Exarnples: ~1u;.ib~r of ho~:rs saen~. Nun;ber a~ e~~ployees Ne~~~ber or resid~nts Square footage Rel.~t7.v~ reve~u~ vo~ur,~e Relative expense volust~z The Subcontractar shail maintain proper docu~~~ntacion r~~ated to the allocation ~f exp~nses (~.g., ti~t~ecards, txme suri:~~ar~.es, square footage ;t~eas~iraments, etc. ) . (7.4324) 3udQ~t L~rt~i~ation _ ,i _ ~* . r - .` `' ` 4 (9. ~12) Lin~it~t~ons on Ex~enses Travel zeir,~wursement for transpor~ation, n~eals, and lodgzng shall not exc~ed travel ailowances ~lhich az~ allowed by the City. ~ ~31) I~tsur~nee (16.f~11} 5ubcontractors are r~sponsicle for securing r~quired insurance-covezage and ~ri3intaining it in force durzng ~he ent~re contract period. (i~'.ff1.2) Subcont~actors must inEn-edzately notify the City when requir~d ansuranc~ zs revoked, w.~ th~rawn, or ot:~~rwi se cr~ade an~~fectiv~. {~0.Q13} Insurance shall include an endors2ment namzng th2 Caty a~ 5anta ~ionica as acdi~ionally insured. (1~. ~~) Prooe~ty ylana4e-~«nt (~3. ~i~) The Su~co:z~rac~Qr sha~l ass~R~e r~svonslb~l.i~y and ac~ounta~il z ~y for the ;tta~.nt~nance of all non-~x?enaable pra~er"ty pu~chased, leased, or r~nt~c~ wxt~ prqgram funds. (11.~12) Non-exp~nda~le ~rcpez~~a zs defi;~~~ as any ~angible persanal. pro~prty ~os4ing $~~43 or :t~ore p~r unit and hav~~g a us~~;:1 Iife of rrlore ti~a;~ on~ y~ar, real prcp~rty ar~d any ~.nter2s~ i.n suc~ real praperty, sucn as a r~or~gage, trust deed, or other encL:~-~rance of ~2a1 property, and the funds rec~~ved fror~i the sale or any o~hez disoosi~ion oL any non-=x~enda'~1~ pyoperty or interes~ t~er~an, (Ii.~fiI3) Acqu~sition of non-expendable ~roperty iteR~s that w~re riot listed in the ap~raved contrac~ requsres an pKAC~~~L[ mod~fzcat~o;~ to ~~as contraet to prov~ae the nece~sary funds. (11.4f14) Un~ess approv~d `a~ the City in wziting, non--expendable pronerty shali not be order2d or ouzchased '~y t;~e SubconLractor during ~he last thr2e n~ontns Q£ the con~rac~ perioc~. ~1~..{71~) Tn~ Suhcontractor shail ma.~ntair~ an ~p-to-c~a~e in~~r~tory ~~st of a~l non-exp~n~ak~~e ~rop~rty items for which heJshe is responsi:~le. The source of fund~ng foY eacn asset sha~l be not~d. (11.~~6} The 5ubcontractar shall zepor~ pro~~ptly, in writing~ *p the City. a1i cases o~ burglary, - 13 - ~ { iT' \ ~~ 'r'