HomeMy WebLinkAbout2004-03-22 City CouncilTO:
FROM:
City of Palo Alto
City Manager’s Report
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE:MARCH 22, 2004 CMR: 543:03
SUBJECT:APPROVAL OF AN AGREEMENT IN THE AMOUNT OF $113,672
WITH PALO ALTO HOUSING CORPORATION AND PALO ALTO
HOUSING CORPORATION APARTMENTS, INCORPORATED
FOR FUNDS ALLOCATED DURING FISCAL YEAR 2003/04
UNDER THE COMMUNITY DEVELOPMENT BLOCK GRANT
PROGRAM
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or his
designee to execute the attached agreement in the amount of $113,672 with Palo Alto
Housing Corporation and Palo Alto Housing Corporation Apartments, Incorporated to
replace the domestic water supply system at Oak Manor Townhouses located at 630 Los
Robles Avenue.
BACKGROUND
Palo Alto Housing Corporation (PAHC) is a private non-profit organization that develops
and operates low and moderate-income housing in the City. Palo Alto Housing
Corporation Apartments, Inc. (PAHCA, Inc.) is the non-profit controlled entity that holds
title to several PAHC properties. (The board of PAHC is also the board of PAHCA, Inc.)
PAHC applied for fiscal year 2003/04 Community Development Block Grant (CDBG)
funding to assist in replacing the water supply system at Oak Manor Townhouses on
behalf of PAHCA, Inc. On May 12, 2003, the City Council approved allocating $113,672
in fiscal year 2003/04 CDBG funds to the Oak Manor domestic water system project.
The agreement for this project is with both PAHC and PAHCA, Inc. since the property is
owned by PAHCA, Inc.; however PAHC is responsible for managing the property and it
will be responsible for the work on this project.
CMR: 543:03 Page 1 of 3
DISCUSSION
Oak Manor Townhouses is a 33-unit apartment property and 22 of the units are assisted
under the Section 8 Moderate Rehabilitation Program. The building was bi~ilt in 1966
and has major capital plumbing needs due to corroded galvanized pipes that cause low
water pressure and abrupt temperature changes. PAHCA, Inc. spends thousands of
dollars in temporary repairs to the pipes each year. Replacing the water pipes will
provide a permanent solution to Oak Manor’s plumbing needs.
The funding for this project will be provided as a loan to PAHCA, Inc. consistent with
City practice; the City does not provide grants of housing funds, except for en-~ergencies
or under very unusual circumstances. Structuring the funding as a loan ensures that the
use of the property will be maintained for a CDBG-eligible activity for a specified length
of time. In this case, the loan term is for 30 years. The loan for this project will be
subordinated to the existing City loan of $2,100,000.00 with’PAHCA, Inc. of January 7,
1991 for the acquisition of the project site.
RESOURCE IMPACT
The $113,672 of the agreement will be funded with federal CDBG funds provided
through the U.S. Department of Housing and Urban Development (HUD). Repayment of
the loan will not be required unless the property is sold or the program terrninated or
changed to a use that has not been approved by the City prior to July 1, 2033.
POLICY IMPLICATION
The recommendation in this staff report does not represent any change to City policies.
ENVIRONMENTAL REVIEW
HUD environmental regulations for the CDBG program is contained in 24 CFR 58
"Environmental Review Procedures for Title I Community Development Block Grant
Programs." The Oak Manor Townhouses domestic water system project meets the
conditions specified for exemption under 24 CFR Part 58.34.
ATTACHMENTS
Attachment A:Agreement Between the City of Palo Alto and Palo Alto Housing
Corporation (PAHC) and Palo Alto Housing Corporation
Apartments, Inc. (PAHCA, Inc.) for Funds Allocated During Fiscal
Year 2003/04 Under the Community Development Block Grant
Program
CIvIR: 543:03 Page 2 of 3
PREPARED BY:
Eloiz Murillo-Garcia, Associate Planner-CDBG
APPROVED BY:
EM~LIE, Director of Planning & Community Environment
CITY MANAGER APPROVAL: ~:~ /~.~/Ot ~
EMILY HA!~ON, Assis-tant City Manager
Palo Alto Housing Corporation
Citizens Advisory Committee
CMR: 543:03 Page 3 of 3
AGREEMENT NO.
BETWEEN THE CITY OF PAL0 ALTO AND
PALO ALTO HOUSING CORPORATION (PAHC) AND
PAL0 ALTO HOUSINCE COROPRATION APARTMENTS (PAHCA)
FOR FUNDS ALLOCATED DURING FISCAL YEAR 2003/04
UNDER THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
This Agreement No. is entered into
, 2004, by and between the CITY OF PALO ALTO, a
chartered city and a municipal corporation of the State of
California ("City"), and PALO ALTO HOUSING CORPORATION, a
corporation duly organized and existing under the Nonprofit
Corporation Law of the State of California (~PAHC"), and PALO
ALTO HOUSING CORPORATION APARTMENTS, INCORPORATED, a corporation
duly organized and existing under the Nonprofit Corporation Law
of the State of California ("PAl{CA, INC.").
RECITALS:
WHEREAS, the City has applied for and received funds
(~Funds") from the Government of the United States under Title I
of the Housing and Community Development Act of 1974; and
WHEREAS, PAHCA, INC. is a private non-profit
organization which develops and operates low and moderate income
housing in the City; and
WHEREAS, PALO ALTO HOUSING APARTMENT CORPORATION,
INC., is a controlled affiliate of PALO ALTO HOUSING
CORPORATION, with identical boards of directors; and
WHEREAS, PAHC has requested funds to replace the
domestic water supply system at Oak Manor Townhouses (the
"Project") located at 630 Los Robles Avenue, Palo Alto,
California which is owned by its controlled affiliate, PAHCA,
Inc. but managed by PAHC; and
WHEREAS, City wishes to lend funds to PAHCA, INC., and
forgive the loan if certain conditions are met by PAHC and
PAHCA, INC., for the purposes set forth in this Agreement, and
any exhibits thereto; and
WHEREAS, City has approved and authorized the
provision of up to One Hundred Thirteen Thousand Six Hundred
Seventy Two Dollars ($113,672) drawn from FY 2003/04 CDBG funds
040316 syn 0091341
to PAHCA, INC. for the purposes and under the terms contained
herein; and
WHEREAS, the City neither warrants or makes any
representations as to the quality, method or adequacy of the
work products or services to be provided to PAHCA, INC. under
the terms and conditions of this Agreement, except with respect
to compliance with Federa! Regulations.
NOW, THEREFORE, in consideration of the covenants,
terms, conditions, and provisions set forth in this Agreement,
the parties agree:
SECTION i. TERM
i.i Time of Performance.This Agreement shall
commence on the day above written and terminate on December 31,
2033. The term of this agreement and the provisions herein
shall be extended to cover any additional time period during
which the PAHCA, INC. remains in control of Funds or other
assets including program income.
SECTION 2.SCOPE OF SERVICE
2.1 Activities.PAHCA, INC. shall replace the
domestic water supply system at Oak Manor Townhouses at 630 Los
Robles Avenue, in Pa!o Alto ("Project"), as more fully described
in Exhibit "A" which is incorporated herein by reference and
made a part of this agreement.
2.2 Provision of Funds. The City agrees to make a
loan to PAHCA, INC. of the principal amount of One Hundred
Thirteen Thousand Six Hundred Seventy-Two Dollars ($113,672)
drawn from its CDBG "funds for Phase I of the Oak Manor
Townhouses Domestic Water System project as shown on the
attached scope of services ("Exhibit A"). Phase I shall include
the replacement of water mains from meter with the 2-1/2" RPP
device, tie into all branch lines below plumbing with isolation
bal! valves, two branch lines for every two units.
The city shall not provide any funding for Phase II
costs which shall include the plumbing of internal units (total
of 33) from new branch lines to all fixtures as per
specifications. Repair sheetrock to paint-ready surface.
PAHC agrees to perform construction management
services for Phase I and Phase II of the project, including
coordinating the work of the construction contractors at no
cost. In the event that the amounts payable by PAHCA, INC., to
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040316 syn 0091341
any and al! sources for the Project-Phase I costs shall exceed
the sum $113,672, then PAHCA, INC. shall be solely responsible
for paying any and all amounts in excess of $113,672 and the
City shal! not be obligated to !oan any amount in excess of the
commitment set forth herein. City shall make funds available to
PAHCA on the following basis:
(i)City has reviewed and approved the bidding
process and the contract for the rehabilitation
work; and
(2)PAHCA, INC. has provided City with a copy of the
actual invoice(s) for work done and performed in
accordance with this Agreement;
(3)Project is in compliance with all Federal, State
and City Rules and Regulations.
2.3 Performance Monitoring.The City will monitor
the performance of PAHC and PAHCA,INC. against goals and
performance standards required herein.CITY will retain a
consultant who will monitor labor to be performed pursuant to
this Agreement according to Davis-Bacon Act standards
("Consultant") CITY will be responsible for directing all work
to be performed by Consultant, and Consultant will report
directly to CITY. PAHCA, INC. agrees that CITY shall charge the
cost of the Labor Monitoring Consultant against the project
funds. Total cost for such labor monitoring services will not
exceed Ten Thousand Dollars ($!0,000) and wil! be paid from the
project funds. Any unexpended funds, after payment of all labor
monitoring costs, may be used by PAHCA, INC. for project
construction costs for Phase I, only. Substandard performance
as determined by the City will constitute non-compliance with
this Agreement. If action to correct such substandard
performance is not taken by PAHC and PAHCA, INC. within a
reasonable period of time after being notified by the City,
contract suspension or termination procedures will be initiated.
SECTION 3. TRANSFER OF FUNDS AND SECURITY
3.1. City Loan. City shall pay to PAHCA, INC. a sum
of money in an amount not to exceed One Hundred Thirteen
Thousand Six Hundred Seventy Two Dollars ($113,672) for the
purposes set forth in Section 2 and Ekhibit "A". Payment of
such sum shall be evidenced by a promissory note ("Note"), in
the form attached hereto as Exhibit "B" and incorporated herein
by this reference. The entire sum transferred, and any part of
it, shall, at the option of City, become immediately due and
payable upon the occurrence of any of the fol!owing conditions:
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040316 syn 0091341
(i
(2
(3
(4
The failure by PAHC and PAHCA, INC. to commence
and complete the Project services set. forth in
this Agreement before the termination date of
June 30, 2005;
PAHC’s and PAHCA, INC.’s breach in performance of
the Project or any of the terms of this agreement
between City and PAHCA, INC.;
A use by PAHCA, INC. of the Project, prior to
October i, 2033, which violates the applicable
provisions of City’s Charter, ordinances, or
regulations, or which is not an ~eligible
activity" under the Program of the Housing and
Community Development Acts of 1974 and 1977, as
amended, and the regulations issued pursuant
thereto, by HUD or a successor agency; or
An uncured default under th~s Agreement or the
Note.
This shall be a simple interest, noncompounding loan
with interest at three percent (3%) per annum. It is agreed
that the loan shall be payable in monthly installments over ten
(i0) years. However, all payments of interest and principal
shall be deferred until October i, 2023, as long as PAHC and
PAHCA, INC. continue to comply with all terms and conditions of
this Agreement. If at any time any of the above conditions are
not met, City has the right to demand repayment of the One
Hundred Thirteen Thousand Six Hundred Seventy-Two Dollars
($113,672), plus all accrued interest and any other costs or
amounts due.
3.2 Use, Occupancy and Rent Restrictions.
PAHCA, Inc. shall operate and maintain the Project as
a rental housing complex for occupancy by Very Low Income
Households and Low-Income Households. Without derogating the
importance of PAHCA, Inc.’s compliance with the other provisions
of this Agreement, PAHCA, Inc.’s compliance with Section 3.2 is
of particular importance to City and is one of the principal
reasons for which City agreed to make the Project loan to PAHCA,
Inc.
040316 syn 0091341
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3.2.1 Very Low-Income Units
(a)At all times during the term of this Agreement,
at least seventeen (17) of the Units shall be
rented and occupied by, or if vacant, made
available for rental and occupancy by, Very Low-
Income households, as certified according to
Section 3.3 immediately prior to each Tenant’s
initial occupancy and annually thereafter. Very-
Low Income means a household whose annual income,
adjusted for household size, does not exceed the
Very-Low limit for the CDBG program for Santa
Clara County, established periodically by HUD,
which currently is 50% of the Area Median Income
for Santa Clara County.
(b)Subject to Section 2.4 below, the maximum monthly
Rent charged to each of the Tenants of the Very
Low-Income Units shall not exceed 30% of 50% of
the Area Median Income, divided by twelve (12) as
published annually for the Santa Clara County
based on the size of the actual unit.
(c)Owner may designate any seventeen (17) of the
Project’s thirty-three (33) Units as the required
Very Low-Income Units and may change the
designated Very Low-Income Units from time to
time, as vacancies occur and Tenant incomes and
household composition changes.
(d)If a household ceases to qualify as Very Low
Income, as required by this Agreement, the
household may be included in the Low Income
category, if they do not exceed the Low Income
limits. If a household’s status changes from
Very Low Income to Low Income, the next vacancy
shall be filled by a Very Low Income household to
restore the unit balance.
3.2.2 Low-Income Units
040316 syn 0091341
(a)At all times during the term of this Agreement,
at least fifteen (15) of the Units shall be
rented and occupied by, or if vacant, made
available for rental and occupancy by, Low-Income
households, as certified according to Section 3.3
immediately prior to each Tenant’s initial
occupancy and annually thereafter. Low Income for
5
the purposes of this agreement means a household
whose annual income, adjusted for household size,
does not exceed 60% (sixty) of the Area Median
Income for Santa Clara County.
(b)Subject to Section 2.4 below, the maximum monthly
Rent charged to each of the Tenants of the Very
Low-Income Units shal! not exceed 60% (sixty) of
the 100% (one-hundred) Income Level, as published
annually for the Santa Clara County based on the
size of the actua! unit by the California Tax
Credit Allocation Committee (CTAC). The current
CTAC maximum rents for 2 and 3 bedroom units are
listed in the following table:
CALIFORNIA TAX CREDIT ALLOCATION COMMITTEE
2003 Maximum Rents
Santa Clara County
Effective: February 20, 2003
2 Bedroom 3 Bedroom
Income Level $2,374 $2,742
Income Leve!$1,425 $1,645
(c)If a household ceases to qualify as Low Income,
as required by this Agreement, the household
shall be required to pay the market rate for the
unit and shall be given a term of 1 (one) year to
vacate their unit.
3.2.3 Other Units
(a)The remaining one (i) Unit is not required to
comply with the rent and occupancy restrictions
of this Section 3.2 if it is occupied by a
resident manager, as a condition of employment.
3.2.4 Units Occupied by Section 8 Assisted
Households
Units occupied by Section 8 Assisted Households shall
be considered to be qualified Very Low or Low-Income Units based
on each household’s annua! income as certified pursuant to
regulations and procedures of the Section 8 Assistance Program.
Notwithstanding anything to the contrary contained in Section
3.2.1 or 3.2.2, the Rent for Units occupied by Section 8
Assisted Households shal!be set pursuant to Section 8
regulations and procedures.
040316 syn 0091341
3.2.5 Vacancies
Vacancies shall be filled in a manner to maintain the
al!ocation of units as described in this Agreement. Seventeen
(17) units shall be maintained for Very Low Income households;
fifteen (15) units shall be maintained by Low Income Households;
and one (i) unit shall be maintained for a resident manager.
3.2.6 Noncompliance
A failure by PAHCA, Inc to maintain the rent
affordability and occupancy restrictions required by this
.Agreement will constitute a default of this Agreement. The
Project will comply with the affordability covenants,
notwithstanding a temporary noncompliance with the provisions of
this Article, if the noncompliance arises as a result of an
increase in the income of any Tenant, and if the next vacancy is
filled in accordance with this Agreement.
3.2.7 Lease Provisions
PAHCA, Inc. shall include in the leases or rental
agreements for all Units occupied by Very Low Income or Low
Income Households a provision which authorizes PAHCA, Inc. to
immediately terminate the tenancy of any Tenant after PAHCA,
Inc. determines that one or more members of such Tenant’s
household has misrepresented any fact materia! to the Tenant’s
qualification for occupancy. Each lease or rental agreement
shall provide that the Tenant is subject to the requirement for
the execution of an annua! income certification in accordance
with Section 3.3 below, and that, if the Tenant’s income
increases above the applicable income limits, such Tenant’s Rent
may be increased.
3.3 Income Certification
PAHCA, Inc. will obtain, complete and maintain on
file, immediately prior to initial occupancy and annually
thereafter, an income certification from each Tenant renting any
of the Very Low-Income and Low-Income Units. PAHCA, Inc. shall
make a good faith effort to verify that the income provided by
an applicant or occupying household, in an income certification
is accurate in accordance with the CDBG Regulations. Copies of
tenant income certifications shall be made available to the
City, including its designated representatives and HUD upon
request.
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SECTION 4.NOTICES
4.1 Communications. All notices, correspondence, and
other communications concerning this Agreement shall be directed
to the parties’ duly authorized representatives at the addresses
set forth below or at any other addresses as may be noticed, in
writing:
CITY:City of Palo Alto
Department of Planning &
Community Environment
Attn: CDBG Coordinator
250 Hamilton Avenue
Palo Alto, CA 94301
and
PAHCA, INC.Palo Alto Housing Corporation
Apartments, Inc.
Attn: President, Board of Directors
725 Alma Street
Palo Alto, CA 9430i
PAHC :Palo Alto Housing Corporation
Attn: Executive Director
725 Alma Street
Palo Alto, CA 94301
SECTION 5.SPECIAL CONDITIONS
5.1 Compliance with Federal Regulations. P~HC and
PAHCA, INC. agree to comply with the requirements of the Housing
and Urban Development regulations concerning. Community
Development Block Grants (24 CFR Part " 570) and all federal
regulations and policies issued pursuant to these Regulations.
PAHCA, INC. further agrees to utilize Funds available under this
Agreement to supplement rather than supplant Funds otherwise
available.
5.2. National Objectives.PAHC and PAHCA, INC.
certify that the activities carried out with funds provided
under this Agreement will meet the CDBG Program’s National
Objective of benefiting low/moderate income persons as defined
in 24 CFR, Part 570.208.
5.3 PAHC and PAHCA, INC. shall procure all
subcont rac tots, cons i s tent with Federal procurement
requirements. All bid documents must be reviewed and approved
by the City or its designee before being made available to the
public. PAHCA, INC. shall sign a written agreement (s) with
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040316 syn 0091341
selected subcontractor(s), and sha!l
reimburse all project subcontractors.
SECTION 6.GENERAL CONDITIONS
direct, manage and
6.1 General Compliance. PAHC and PAHCA, INC. agree
to comply with all applicable federal, state, county,and
municipal laws, ordinances, resolutions, rules, policies,and
regulations ("Laws") governing the Funds provided under this
Agreement.
6.2 Independent Contractor. Nothing contained in
this Agreement is intended to, or shall be construed in any
manner, as creating or establishing the relationship of employer
and emp!oyee between the parties. PAHC and PAHCA, INC. shall at
all times remain independent contractors with respect to the
services to be performed under this Agreement. The City shal!
be exempt from payment of all unemployment compensation, FICA,
retirement, life and/or medical insurance and workers’
compensation insurance as PAHC and PAHCA, INC. is an independent
contractor.
6.3 Hold Harmless. PAHC and PAHCA, INC. shall hold
harmless, defend and indemnify the City, its council members,
officers and employees from any and al! claims, actions, suits,
charges and judgments whatsoever that arise out of PAHC’s and
PAHCA, INC.’s performance or nonperformance of the Services or
subject matter called for in this Agreement.
6.4 Insurance and Bonding. PAHCA, INC., at its sole
cost and expense, shal! obtain and maintain during the term of
this Agreement, insurance as more fully described in Exhibit "C"
which is incorporated herein by reference and made a part of
this Agreement. PAHCA, INC. shall comply with the bonding and
insurance requirements of Attachment B of OMB Circular A-II0,
Bonding and Insurance.
6.5 Funding Recognition. PAHC and PAHCA, INC. shall
ensure recognition of the role of the City in providing services
through this Agreement. All activities, facilities and items
utilized pursuant to this Agreement shall be prominently labeled
as to funding source. In addition, PAHC and PAHCA, INC. will
include a reference to the support provided herein in all
publications made possible with Funds made available under this
Agreement.
6.6 Amendments. The parties may amend this Agreement
at any time provided that such amendments make specific
reference to this Agreement, and are executed in writing, and
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040316 syn 0091341
signed ~by their duly authorized representatives. Such
amendments shall not invalidate this Agreement, nor relieve or
release any party from its obligations under this Agreement. At
any time during the term of this Agreement, the City, in its
discretion, may amend this Agreement to conform with federal,
state or local governmental guidelines, policies and available
funding amounts, or for any other reasons. If such amendments
result in a change in the funding, the scope of Services, or
schedule of, the activities to be undertaken as part of this
Agreement, such modifications will be incorporated only by
written amendment signed by the parties.
6.7 Suspension or Termination.
6.7.1 Either party may terminate this Agreement at
any time by giving written notice to the other party of such
termination and specifying the effective date thereof at least
30 days before the effective date of such termination. If
PAHCA, INC. terminates the Agreement, all .sums transferred to
PAHCA, INC. pursuant to this-Agreement and the Note shall become
immediately due and payable to City. Partial termination of the
Scope of Services described in Exhibit "A" may only be
undertaken with the prior approval of the CITY.
6.7.2 The CITY may also suspend or terminate this
Agreement, in whole or in part, if PAHC and PAHCA, INC.
materially fai! to comply with any covenant, term, condition, or
provision of this Agreement, or with any of the rules,
regulations or provision referred to herein; and the CITY may
declare PAHC and PAHCA, INC. ineligible for any further
participation in CITY contracts, in addition to other remedies
as provided by Law. In the event there is probable cause to
believe PAHC and PAHCA, INC. are in noncompliance with any
applicable rules or regulations, the CITY may withhold up to
fifteen percent (15%) of the Funds until such time as PAHC and
PAHCA, INC. are found to be in compliance by the City, or are
otherwise adjudicated to be in compliance.
SECTION 7.ADMINISTRATIVE REQUIREMENTS
7.1 Financial Management.
7.1.1 Accounting Standards. PAHC and PAHCA, INC.
agree -to comply with Attachment F of 0MB Circular A-If0 and
agree to adhere to the accounting principles and procedures
required therein, utilize adequate interna! controls and
maintain necessary source documentation for all costs incurred.
040316 syn 0091341
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7.1.2 Cost Principles. PAHC and PAHCA, INC. shall
administer its program in conformance with OMB Circulars A-122,
"Cost Principles for Non-Profit Organizations," or A-21, ~Cost
Principles for Educational Institutions," as applicable. These
principles shall be applied for all costs incurred whether
charged on a direct or indirect basis.
7.2 Documentation and Record-Keeping.
7.2.1 Records to be Maintained. PAHC and PAHCA, INC.
shal! maintain all records required by the federal regulations
specified in 24 CFR Section 570.506, and that are pertinent to
the activities to be funded under this Agreement.Such records
shall include, but are not limited to:
(a)Records providing a full
activity undertaken;
description of each
(b)Records demonstrating that each activity
undertaken meets a National Objective of the CDBG
Program;
(c)Records required to determine the eligibility of
activities;
(d)Records required to document the acquisition,
improvement, use or disposition of real property
acquired or improved with CDBG assistance;
(e)Records documenting compliance with the fair
housing and equal opportunity component of the
CDBG Program;
(f)Financial records as required by 24 CFR Section
570.502, and OMB Circular A-Ii0; and
(g)Other records necessary to document compliance
with Subpart K of 24 CFR Part 570.
7.2.2 Retention. PAHC and PAHCA, INC. shall retain
all records pertinent to expenditures incurred under this
Agreement for a period of four (4) years after the termination
of al! activities funded under this Agreement, or after the
resolution of all federal audit findings, whichever occurs
later. Records for non-expendable property acquired with Funds
under this Agreement shall be retained for four (4) years after
final disposition of such property. Records for any displaced
person must be kept for four (4) years after he or she has
received final payment. Notwithstanding the above, if there is
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040316 syn 0091341
litigation, claims, audits, negotiations or other actions that
involve any of the records cited and that have started before
the expiration of the four-year period, then such records must
be retained until completion of the actions and resolution of
al! issues, or the expiration of the four-year period, whichever
occurs later.
7.2.3 Client Data.PAHC and PAHCA, INC. shall
maintain confidential records of client data demonstrating
client eligibility for services.Such data shall include, but
not be limited to, client name,address, income level or other
basis for determining eligibility, and ethnicity. Such
information shal! be made available to the City’s monitors or
their designees for review upon request in order to determine
compliance with the Agreement.
7.2.4 Disclosure. PAHC and PAHCA, INC. understand
that client information collected under this Agreement is
private and the use or disclosure of such information, when not
directly connected with the administratiQn of the City’s or
PAHC’s and PAHCA, INC.’s responsibilities with respect to
Services provided under this Agreement, is prohibited by the
laws of the State of California, unless written consent is
obtained from such person receiving the service and, in the case
of a minor, that of a responsible parent or guardian.
7.2.5 Property Records. PAHC and PAHCA, INC. shall
maintain rea! property inventory records which clearly identify
properties purchased, improved or sold. Properties retained
shall continue to meet eligibility criteria and shall conform
with the "changes in use" restrictions specified in 24 CFR
Section 570.503(b (8), as applicable.
7.2.6 National Objectives. PAHC and PAHCA, INC.
agree to maintain documentation that demonstrates that the
activities carried out with Funds provided under this Agreement
meet the CDBG Program’s national objective of benefiting !ow
and moderate income persons,as defined in 24 CFR Section
570.208.
7.2.7 Close-Outs.PAHC’s and PAHCA, INC.’s
obligation to the City shall not end until all close-out
requirements are completed. Activities during this close-out
period shall include, but are not limited to, making final
payments, disposing of CDBG Program assets (including the return
of all unused materials, equipment, unspent cash advances,
program income balances, and receivable accounts to the City),
and determining the custodianship of records.
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7.2.8 Audits and Inspections. All of the PAHC’s and
PAHCA, INC.’s records with respect to any matters covered by
this Agreement shal! be made available to the City, grantor
agency, their designees or the Government of the United States,
at any time during normal business hours, as often as the City
or grantor agency deems necessary, to audit, examine, and make
excerpts or transcripts of all relevant data. Any deficiencies
noted in audit reports must be fully cleared by the PAHC and
PAHCA, INC. within 30 days after receipt by the PAHC and PAHCA,
INC.. Failure of the PAHC and PAHCA, INC. to comply with the
above audit requirements will constitute a violation of this
Agreement and may result in the withholding of future payments.
PAHC and PAHCA, INC. agree to have an annual agency audit
conducted in accordance with current City policy concerning the
PAHC’s and PAHCA, INC.’s audits, and as applicable, OMB Circular
A-133.
7.3 Procedures Concerning Reporting and Payments.
7.3.1 Budgets. PAHC and PAHCA, INC. shall submit a
detailed budget of a form and content prescribed by the City for
its approval. The parties may agree to revise the budget from
time to time in accordance with existing City policies.
7.3.2 Program Income. The receipt of any program
income, as defined in 24 CFR 570.500(a), as amended, generated
by the use of grant funds under this Agreement, will be
recorded, reported and returned to CITY in accordance with 24
CFR 570.504, as amended.
7.3.3 Indirect Costs. If indirect costs are charged,
PAHC and PAHCA, INC. shall develop an indirect cost al!ocation
plan for determining the appropriate City share of
administrative costs and shall submit such plan to the City for
approval, in a form specified by the City.
7.3.4 Payment Procedures. The City will pay to
PAHCA, INC. funds available under this Agreement based upon
information submitted by the PAHCA, INC. and consistent with any
approved budget and City policy concerning payments. With the
exception of certain advances, payments will be made for
eligible expenses actually incurred by PAHCA, INC., and not to
exceed actual cash requirements. Payments will be adjusted by
the City in accordance with advance fund and program income
balances available in the PAHCA, INC. accounts. The City shall
withhold ten percent (10%) of funds from each reimbursement
request from PAHC, Inc. The ten percent (10%) of withheld funds
shall be released at the completion of the project and when
PAHCA, Inc. has demonstrated to the City that all CDBG
13
040316 syn 0091341
requirements, which include but are not limited to: prevailing
wages and labor standards and equa! opportunity requirements,
which include but are not limited to prevailing wages and labor
standards and equal opportunity requirements have been met. In
addition, the City reserves the right to liquidate Funds
available under this Agreement for costs incurred by the City on
behalf of PAHCA, INC.
7.3.5 Progress Reports. PAHC and PAHCA, INC. shall be
responsible for filing periodic reports, including but not
limited to monthly activity reports and weekly certified wage
payment reports which evaluate the manner in which the project
is achieving its goals and objectives according to standards
established by City. The report shall be on forms approved by
City and shall be filed within five (5) days of the request by
the City.
7.4 Procurement.
7.4.1 Compliance. PAHC and PAHCA, INC. shall comply
with current City policy concerning the purchase of equipment
and shall maintain inventory records of all non-expendable
personal property as defined by such policy as may be procured
with Funds provided herein. All program assets, including,
without limitation, unexpended program income, property, and
equipment, shall revert to the City upon termination of this
Agreement.
7.4.2 OMB Standards. PAHC and PAHCA, INC. shall
procure materials in accordance with the requirements of
Attachment 0 of O}4B Circular A-f10, Procurement Standards, and
shall subsequently follow Attachment N of OMB Circular A-If0,
Property Management Standards, as modified by 24 CFR
470.502(b) (6) covering utilization and disposal of property.
7.4.3 Travel. PAHC and PAHCA, INC. shall obtain
written approval from the City for any travel outside the
metropolitan area with Funds provided under this Agreement.
7.4.4 Relocation. P~_~C and PAHCA, INC. agree to
comply with (a) the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970, as amended (URA), and
implementing regulations at 49 CFR Part 24 and 24 CFR
570.606(b) ; (b) the requirements of 24 CFR 570.606(c) governing
the Residential Antidisplacement and Re!ocation Assistance Plan
under section 104(d) of the HCD Act; and (c) the requirements in
CFR 570. 606(d) governing optional relocation policies. PAHCA,
INC. shal! provide relocation assistance to persons (families,
individuals, businesses, nonprofit organizations and farms) that
14
040316 syn 0091341
are displaced as a direct result of acquisition, rehabilitation,
demolition or conversion for a CDBG-assisted project. PAHC and
PAHCA, INC. also agrees to comply with applicable City
ordinances, resolutions and policies concerning the displacement
of persons from their residences.
SECTION 8. PERSONNEL AND PARTICIPANT CONDITIONS
8.1 Civil Rights.
8.1.1 Compliance. PAHC and PAHCA, INC. agree to
comply with all federal, state, and local laws, including,
without limitation, Title VI of the Civil Rights Act of 1964, as
amended, Title VIII of the Civil Rights Act of 1968, as amended,
Section 104(b) and Section 109 of Title I of the Housing and
Community Development Act of 1974, as amended, Section 504 of
the Rehabilitation Act of 1973, the Americans with Disabilities
Act of 1990, the Age Discrimination Act of 1975, Executive Order
11063, and Executive Order 11246, as amended by Executive Orders
11375 and 12086.
8.1.2 Nondiscrimination. PAHC and PAHCA, INC. will
not discriminate against any employee or applicant for
employment because of race, skin color, gender, age, religion,
disability, national origin, ancestry, sexual orientation,
housing status, marital status, familia! status, weight or
height of such person. PAHC and PAHCA, INC. will take
affirmative action to ensure that all employment practices are
free from such discrimination and in compliance with all
Federal, State and local directives and executive orders
regardingnondiscrimination in employment.Such employment
practices include, but are not limited to the following:
hiring, upgrading, demotion,transfer, recruitment or
recruitment advertising, layoff,termination, rates of pay or
other forms of compensation,and selection for training,
including apprenticeship. PAHC and PAHCA, INC. agree to post in
conspicuous places, available to employees and applicants for
employment, notices to be provided by the contracting agency
setting forth the provision of this nondiscrimination clause.
8.1.3 Land Covenants. This Agreement is subject to
the requirements of Title VI of the Civil Rights Act of 1964, as
amended, and 24 CFR Part 570.601 and 602. In regard to the
sale, lease, or other transfer of land acquired, cleared or
improved with assistance provided under this Agreement, PAHC and
PAHCA, INC. shall cause or require a covenant running with the
land to be inserted in the deed or lease for such transfer,
prohibiting discrimination as herein defined, in the sale, lease
or renta!, or in the use or occupancy of such land, or in any
15
040316 syn 0091341
improvements erected or to be erected thereon, providing that
the City and the United States are beneficiaries of and entitled
to enforce such covenants. PAHC and PAHCA, INC., in undertaking
their obligation to carry out the CDBG Program assisted
hereunder, agree to take such measures as are necessary to
enforce such covenant, and will not themselves so discriminate.
8.1.4 Section 504. PAHC and PAHCA, INC. agree to
comply with any federal regulations issued pursuant to and in
compliance with Section 504 of the Rehabilitation Act of 1973
(29 U.S.C. 706), as amended, which prohibit discrimination
against the disabled in any federally assisted program. The
City shal! provide PAHC and PAHCA, INC. with any guidelines
necessary for compliance with that portion of the regulations in
force during the term of this Agreement.
8.2 Affirmative Action.
8.2.1 Compliance With California Constitution.
Article I, Section 31 of the California Constitution, adopted by
the People of the State of California as Proposition 209 in
1996, prohibits the City from discrimination or the grant of
preferentia! treatment on the basis of race, sex,color,
ethnicity or national origin in public employment,public
education, and public contracting. Article I, Section 31 (e)
provides that nothing in Section 31 shall be interpreted as
prohibiting actions which must be taken to establish or maintain
eligibility for any federal program where ineligibility would
result in a loss of federal funds to the City. The provisions
of this Section 8.2 are those necessary to establish and
maintain eligibility for federal funds. At such time as any
provision of this Section 8.2 is not required to establish and
maintain such eligibility, that provision shall be waived by
City. If PAHC and PAHCA, INC. believe any provision of this
Section 8.2 should be waived under this Section 8.2.1, PAHC and
PAHCA, INC. shall provide notice to City in writing, identifying
the provision for which a waiver is sought and the legal basis
for the waiver. City shall respond to the request for waiver
within thirty days after notice is received.
8.2.2 Approved Plan. The PAHCA, INC. agrees that it
shall be committed to carry out pursuant to the City’s
specifications an affirmative action program in keeping with the
principles as provided in Executive Order 11246 (September 24,
1965). The City shall provide affirmative action guidelines to
PAHC and PAHCA, INC. to assist in the formulation of such
program. PAHC and PAHCA, INC. shal! submit a plan for an
affirmative action program for approval prior to the award of
Funds.
16
040316 syn 0091341
8.2.3 Women and Minority Business Enterprises. PAHC
and PAHCA, INC. will use their best efforts to afford minority
and women-owned business enterprises the maximum practicable
opportunity participate in the performance of this Agreement.
As used in this Agreement, the term "minority and female
business enterprise" means a business at least fifty-one percent
(51%) owned and controlled by minority group members or women.
For the purpose of this definition, "minority group members" are
Afro-Americans, Spanish-speaking, Spanish surname or Spanish-
heritage Americans, Asian-Americans, and American Indians. PAHC
and PAHCA, INC. may rely on written representations by
businesses regarding their status as minority and female
business enterprises in lieu of an independent investigation.
8.2.4 Access to Records. PAHC and PAHCA, INC. shal!
furnish and cause each of its contractors or subcontractors to
furnish all information and reports required hereunder and will
permit access to its books, records and accounts by the City,
HUD or its agent, or other authorized federal officials for
purposes of investigation to ascertain compliance with rules,
regulations and provisions stated herein.
8.2.5 Notifications. PAHC and PAHCA, INC. will send
to each labor union or representative of workers with which it
may have a collective bargaining agreement or other contract or
understanding, a notice, to be provided by the agency
contracting officer, advising the labor union or worker’s
representative of PAHC and PAHCA, INC.’s commitments hereunder,
and shall post copies of the notice in conspicuous places
available to employees and applicants for emp!oyment.
8.2.6 EEO/AA Statement. PAHC and PAHCA, INC. will,
in all solicitations or advertisements for employees placed by
or on behalf of PAHC and PAHCA, INC., state that they are an
Equal Opportunity or Affirmative Action Emp!oyers.
8.2.7 Subcontract Provisions. PAHC and PAHCA, INC.
will include the provisions of Sections 8.1 and 8.2 in every
subcontract or purchase order, specifically or by reference, so
that such provisions will be binding upon each contractor or
subcontractor or vendor.
8.3 Employment Restrictions.
8.3.1 Prohibited Activity. PAHC an~ PAHCA, INC. are
prohibited from using Funds provided herein or personnel
employed in the administration of the CDBG Program for political
040316 syn 0091341
17
activities, sectarian or religious activities,
politica! patronage, and nepotism activities.
or lobbying,
8.3.2 Labor Standards. PAHC and PAHCA, INC. agree to
comply with the requirements of the Secretary of Labor in
accordance with the Davis-Bacon Act, as amended, the provisions
of Contract Work Hours, the Safety Standards Act, the Copeland
"Anti-Kickback" Act (40 U.S.C. 276a-276a-5; 40 U.S.C. 327 and 40
U.S.C. 276c and all other applicable Laws pertaining to labor
standards insofar as those acts apply to the performance of this
Agreement. PAHC and PAHCA, INC. shal! maintain documentation
which demonstrates compliance with the hour and age requirements
of this part. Such documentation shall be made available to the
City for review upon request.
PAHC and PAHCA, INC. agree that, except with respect
to the rehabilitation or construction of residential property
containing less than eight (8) units, all contractors engaged
under contracts in excess of $2,000 for construction, renovation
or repair of any building or work financed, in whole or in part,
with assistance provided under this Agreement, shall comply with
the federal requirements adopted by the City pertaining to such
contracts and with the applicable requirements of the
regulations of the Department of Labor, under 29 CFR Parts i,
3, 5 and 7 governing the payment of wages and ratio of
apprentices and trainees to journeymen; provided, that if wage
rates higher than those required under the regulations are
imposed by state or local laws, nothing hereunder is intended to
relieve PAHC and PAHCA, INC. of their obligation, if any, to
require payment of the higher wage. PAHC and PAHCA, INC. shall
cause or require to be inserted in full, in all such contracts
subject to such regulations, provisions meeting the requirements
of this paragraph.
8.3.3 "Section 3" Clause.
040316 syn 0091341
(a)Compliance with the provisions of "Section 3"
regulations set forth in 24 CFR Part 135, and all
applicable rules and orders issued hereunder
prior to the execution of this Agreement, shall
be a condition of the federal financial
assistance provided under this Agreement and
binding upon the City, PAHC and PAHCA, INC. and
any contractor or subcontractor. Failure to
fulfill these requirements shall subject the
City, the PAHCA, INC. and any contractor or
subcontractor, their successors and assigns, to
those sanctions specified by the agreement
through which federal assistance is provided.
18
PAHC and PAHCA, INC. certify and agree that no
contractual or other disability exists which
would prevent compliance with these requirements.
PAHC and PAHCA, INC. further agrees to comply
with these "Section 3" requirements and to
include the following language in all
subcontracts executed under this Agreement:
"The work to be performed under this agreement is
a project assisted under a program providing
direct federal financial assistance from HUD and
is subject to the requirements of Section 3 of
the Housing and Urban Development Act of 1968, as
amended, 12 U.S.C. 1701. "Section 3" requires
that to the greatest extent feasible
opportunities for training and employment be
given to low and very low income residents of the
project area and contracts for work in connection
with the project be awarded to business concerns
that provide economic opportunities for low and
very low income persons residing in the
metropolitan area in which the project is
located."
040316 syn 0091341
PAHC and PAHCA, INC. further agree to ensure that
opportunities for training and employment arising
in connection with a housing rehabilitation
(including reduction and abatement of lead-based
paint hazards), housing construction, or other
public construction project are given to low and
very low income persons residing -within the
metropolitan area in which the CDBG-funded
project is !ocated; where feasible, priority
should be given to low and very low income
persons within the service area of the project or
the neighborhood in which the project is located,
and to !ow and very !ow income participants in
other HUD programs; and award contracts for work
undertaken in connection with a housing
rehabilitation (including reduction and abatement
of lead-based paint hazards), housing
construction, or other public construction
project are given to business concerns that
provide economic opportunities for low and very
low income persons
metropolitan area in
project is located;
should be given to
19
residing within the
which the CDBG-funded
where feasible priority
business concerns which
provide economic opportunities to low and very
low income residents within the service area of
the neighborhood in which the project is located,
and to low and very low income participants in
other HUD programs.
PAHC and PAHCA, INC. certify and agree that no
contractual or other legal incapacity exists
which would prevent compliance with these
requirements.
(b)PAHC and PAHCA, INC. agree to send to each labor
organization or representative of workers with
which it has a collective agreement or other
contract or understanding, if any, a notice
advising the labor organization or worker’s
representative of its commitments under this
"Section 3" clause and shall post copies of the
notice in conspicuous places, available employees
and applicants for emp!oyment or training.
(c)PAHC and PAHCA, INC. will include this "Section
3" clause in every subcontract and wil! take
appropriate action pursuant to the subcontract
upon a finding that the contractor or
subcontractor is in violation of regulations
issued by the grantor agency.PAHC and PAHCA,
INC. will not subcontract with any contractor or
subcontractor where it has notice or knowledge
that the latter has been found in violation of
regulations under 24 CFR Part 135 and will not
let any subcontract unless the contractor or
subcontractor has first provided it with a
preliminary statement of ability to comply with
the requirements of these regulations.
8.4 Conduct.
8.4.1 Assignability. PAHC and PAHCA, INC. shall not
assign or transfer any interest in this Agreement without the
prior written consent of the City; provided, however, that
claims for money due or to become due to PAHCA, INC. from the
City under this Agreement may be assigned to a bank, trust
company, or other financial institution without such approval.
Notice of any such assignment or transfer shall be furnished
promptly to the City.
8.4.2 Hatch Act. PAHC and PAHCA, INC. agrees that no
Funds provided, nor personnel employed under this Agreement,
2O
040316 syn 0091341
shall be in any way or to any extent engaged in the conduct of
political activities in violation of Chapter 15 of Title 5 of
the United States Code.
8.4.3 Conflict of Interest. PAHC and PAHCA, INC.
agree to abide by the provisions of 24 CFR Section 570.611 with
respect to conflicts of interest, and covenants that they
presently have no financia! interest and shall not acquire any
financial interest, direct or indirect, which would conflict in
any manner or degree with the performance of Services required
under this Agreement. PAHC and PAHCA, INC. further covenants
that in the performance of this Agreement, no person having such
a financial interest shall be employed or retained by PAHC and
PAHCA, INC. hereunder. These conflict of interest provisions
apply to any person who is an employee, agent, consultant,
officer, or elected official or appointed official of the City,
or of any designated public agencies or PAHCA, INC.s which are
receiving Funds under the CDBG Program.
8.4.4 Subcontracts.
(a PAHC and PAHCA, INC. shall not enter into any
subcontracts with any agency or individual in the
performance of this Agreement without the written
consent of the City prior to the execution of
such subcontracts.
(b PAHC and PAHCA, INC. will monitor all subcontract
services on a regular basis to assure contract
compliance. Results of monitoring efforts shall
be summarized in written reports and supported
with documented evidence of follow-up actions
taken to correct areas of noncompliance.
(c PAHC and PAHCA, INC. shall cause all of the
provisions of this Agreement in its entirety to
be included in and made a part of any subcontract
executed in the performance of this Agreement.
(d PAHC and PAHCA, INC. shall undertake to ensure
that all subcontracts let in the performance of
this Agreement shall be awarded on a fair and
open competition basis. Executed copies of all
subcontracts shall be forwarded to the City a!ong
with documentation concerning the selection
process.
8.4.5 Lobbying.
040316 syn 0091341
21
PAHC and PAHCA, INC. hereby certify that:
(a)No Federal appropriated funds have been paid or
will be paid, by or on behalf of it, to any
person for influencing or attempting to influence
an officer or emp!oyee of any agency, a Member of
Congress, an officer or employee of Congress, or
an emp!oyee of a Member of Congress in connection
with the awarding of any Federal contract, the
making of any Federal grant, the making of any
Federal !oan, the entering into of any
cooperative agreement, and the extension,
continuation, renewal, amendment,or modification
of any Federa! contract, grant, !oan, or
cooperative agreement;
(b)If any funds other than Federal appropriated
funds have been paid or will be paid to any
person for influencing or attempting to influence
an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or
an employee of a Member of Congress in connection
with this Federa! contract, grant, loan, or
cooperative agreement, it will complete and
submit Standard Form-LLL, ~Disclosure Form to
Report Lobbying," in accordance with its
instructions;
(c)It will require that the language of paragraph
(d) of this certification be included in the
aware documents for all subawards at all tiers
(including subcontracts, subgrants, and contracts
under grants, ’loans, and cooperative agreements)
and that all PAHCA, INC.s shall certify and
disclose accordingly; and
(d)Lobbying Certification - Paragraph d
This certification is a material representation
of fact upon which reliance was placed when this
transaction was made or entered into. Submission
of this certification is a prerequisite for
making or entering into this transaction imposed
by section 1352, Title 31, U.S. Code. Any person
who fails to file the required certification
shall be subject to a civil penalty of not less
than $i0,000 and not more than $i00,000 for each
such failure.
040316 syn 0091341
22
8.4.6 Copyrights. If this Agreement results in any
copyrightable material, the City or grantor agency, or both,
reserves the right to royalty-free, non-exclusive and
irrevocable license to reproduce, publish or otherwise use and
to authorize others to use, the work for government purposes.
8.4.7 Religious Organizations. PAHC and PAHCA, INC.
agrees that Funds provided under this Agreement will not be
utilized for religious activities, to promote religious
interests, or for the benefit of a religious organization in
accordance with the federal regulations specified in 24 CFR
Section 570.200(j) .
SECTION 9. ENVIRONMENTAL CONDITIONS
9.1 Air and Water. PAHC and PAHCA, INC. agree to
comply with the following regulations insofar as they apply to
the performance of this Agreement: Clean Air Act, 42 U.S.C.
7401, et seq.; Federal Water Pollution Control Act, as amended,
33 U.S.C. 1251, et seq., as amended, 1318 relating to
inspection, monitoring, entry, reports, and information, as well
as other requirements specified in said Section 114 and Section
308, and all regulations and guidelines issued thereunder; U.S.
Environmental Protection Agency regulations pursuant to 40 CFR
Part 50, as amended.
9.2 Flood Disaster Protection. In accordance with
the requirements of the F!ood Disaster Protection Act of 1973
(42 USC 4001), PAHC and PAHCA, INC. shall assure that for
activities !ocated in an area identified by FEMA as having
special flood hazards, flood insurance under the National Flood
Insurance Program is obtained and maintained as a condition of
financial assistance for acquisition or construction purposes
(including rehabilitation).
9.3 Lead-Based Paint. PAHC and PAHCA, INC. agree
that any construction or rehabilitation of residential
structures with assistance provided under this Agreement shall
be subject to HUD Lead-Based Paint Regulations at 24 CFR Part 35
et seq. as amended. Such regulations, effective September 15,
2000, set requirements for notification, evaluation and
reduction of lead-based paint hazards in residential property
being assisted with Community Development B!ock Grant Funds.
9.4 Historic Preservation. PAHC and PAHCA, INC.
agree to comply with the historic preservation requirements set
forth in. the National Historic Preservation Act of 1966, as
amended (16 U.S.C. 470) and the procedures set forth in 36 CFR
Part 800, Advisory Council on Historic Preservation Procedures
23
040316 syn 0091341
for Protection of Historic Properties, insofar as they apply to
the performance of this Agreement. In general, this requires
concurrence from the State Historic Preservation Officer for all
rehabilitation and demolition of historic properties that are
fifty years old or older or that are included on a federal,
state, or local historic property list.
SECTION i0. SEVERABILITY
If any provision of this Agreement is held invalid,
the remainder of the Agreement shall not be affected thereby and
all other parts of this Agreement shal! nevertheless be in full
force and effect.
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040316 syn 0091341
24
IN WITNESS WHEREOF, the parties hereto have by their
duly authorized representatives executed this Contract on the
date first above written.
ATTEST:CITY OF PALO ALTO
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
APPROVED:
Assistant City Manager
Director of Administrative
Services
Director of Planning and
Community Environment
Mayor
By:
Name:
Title:
By:
Name:
Title:
FED. I.D.
HOUSING CORPORATION
PAL0 ALTO HOUSING CORPORATION
Insurance Review By:
Name:
Title:
By:
Name:
Attachments :
EXHIBIT "A" :
EXHIBIT "B".
EXHIBIT "C":
040316 syn 0091341
Title:
Taxpayer I.D. No. #23-7050326
(Compliance with Corp. Code § 313 is
required if the entity on whose behalf
this contract is signed is a corporation.
In the alternative, a certified corporate
resolution attesting to the signatory
authority of the individuals signing in
their respective capacities is
acceptable)
SCOPE OF SERVICES &TIME SCHEDULE
PROMISSORY NOTE
INSURANCE
25
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code § 1189)
STATE OF CALIFORNIA )
)
COUNTY OF SANTA CLARA )
On ~\~\-~\..~J~_ _, before me, the undersigned,
a notary public in And .for said County, personally appeared
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) ~/are
subscribed to the within instrument, and acknxiwledged to me that
he/~they executed the same in~ his/ ~eer)their authorized
capacity(ies),~-~ and that by his/.~e~their~signature(s) on the
instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
040316 syn 0091341
26
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code § 1189)
STATE OF CALIFORNIA )
)
COUNTY OF SANTA CLARA )
On , before me, the undersigned,
a notary public in and for said County, personally appeared
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that
he/she/they executed the same in his/ her/their authorized
capacity(ies), and that by his/her/their .signature(s) on the
instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
040316 syn 0091341
27
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code § 1189)
STATE OF CALIFORNIA )
)
COUIqTY OF SANTA CLARA )
On , before me, the undersigned,
a notary public in and for said County, personally appeared
t
personally known Go me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that
he/she/they executed the same in his/ her/their authorized
capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upo~ behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
040316 syn 0091341
28
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code § 1189)
STATE OF CALIFO~IA )
)
COUNTY OF SANTA CLARA )
On , before me, the undersigned,
a notary public in and for said County, personally appeared
personally known to me (or proved to me on th~ basis of
satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that
he/she/they executed the same in his/ her/their authorized
capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upo~ behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
040316 syn 0091341
29
EXHIBIT "A"
PALO ALTO HOUSING CORPORATION, OAK MANOR TOWNHOUSES
DOMESTIC WATER SYSTEM
SCOPE OF SERVICES
Palo Alto Housing Corporation (PAHC) is a community-based non-
profit agency that develops and operates low and moderate income
housing in the City of Palo Alto. PAHC’s activities involve the
administration of the City’s Below market Rate purchase program,
deve!opment and acquisition of rental housing, property
management, and general housing advocacy.Pa!o Alto Housing
Corporation Apartments, Inc. (PAHCA, Inc.is a non-profit
entity that owns severa! properties located throughout the City.
This project consists of replacing the domestic water supply
system at Oak Manor Townhouses. Oak Manor Townhouses is a 33-
unit apartment property. 22 of the units are assisted under the
Section 8 Moderate Rehabilitation Program. CDBG funding will be
provided for Phase I of the project. The major tasks that
PAHCA, Inc. will perform in connection with the project include,
but are not limited to, the following:
o
Apply for City required permits and/or variances based on
proposed modifications to existing housing units;
Prepare bid specifications in accordance with federal
regulations including but not limited to, prevailing wage
and competitive bid requirements;
3.Select contractor;
4.Attend pre-construction conference; and
o Complete all components of Phase I, which includes:
a.Replacement of water mains from meter with the 2-1/2"
reduced pressure principle valve device;
b. Trench new mains to property;
c.Run new mains to all boilers; and
Run new main and tie onto existing risers to each
unit.
040316 syn 0091341
Competitive Bid Process
All contracts and subcontracts shall be awarded through a fair
and open competitive bidding process. The process shall be
reviewed and approved by City. PAL0 ALTO HOUSING CORPORATION
and PAL0 ALTO HOUSING CORPORATION APARTMENTS, INC. will use its
best efforts to afford minority and women-owned business
enterprises the maximum practicable opportunity to participate
in the contracts let in the performance of this project.
Executed copies of all contracts shall be supplied to City along
with documentation concerning the selection process.
Prevailing Wage and Federal Labor Standards
PALO ALTO HOUSING CORPORATION and PAL0 ALTO HOUSING CORPORATION
APARTMENTS, INC., its contractors and subcontractors shall
comply with the Federal Davis-Bacon Act Prevailing Wage
requirements including inserting the applicable wage decision
into the bid documents, and all contracts awarded under this
Agreement. PAHC and PAHCA, Inc., the selected contractor and
any subcontractors will participate in a pre-construction
conference with City to review Davis Bacon compliance
requirements, including reporting and monitoring.
Timeline:
The project will attempt to adhere to the following timetable:
March 22, 2004
April i, 2004
April 15, 2004
City Council contract approval
Meeting with City Staff to review project
specifications
Bid Specifications Available/Ad in paper
April 15, 2004
May i, 1004
City Contract signed
Bid opening and contractor selection
Hay 15, 2004 Pre-construction conference
June !, 2004 Start of Construction
August i, 2004 Work Completed
040316 syn 0091341
2
EXHIBIT ’~B"
FORM OF NOTE
PROMISSORY NOTE FOR REHABILITATION
SECURED BY
DEED OF TRUST AND ASSIGNMENT OF RENTS AS MODIFIED
(COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS)
$113,672.00 Date:, 2004
Palo Alto, California
FOR VALUE RECEIVED, the undersigned, PALO ALTO HOUSING
CORPORATION APARTMENTS, INC., a corporation organized under the
Nonprofit Benefit Corporation Law of the State of California
("Maker"), hereby promises to pay to the CITY OF PALO ALTO
("Holder"), or order, at its Office of Revenue Collections, 250
Hamilton Avenue, Palo Alto, California, or at such other place
as may be designated in writing by the Holder, the prinicipal
sum of One Hundred Thirteen Thousand Six Hundred Seventy-Two
Dollars ($113,672.00) ("Loan Amount"), together with accrued,
unpaid interest thereon, from the date of this PROMISSORY NOTE
FOR REHABILITATION (the "Note"), until paid, at the rate of
three percent (3%) interest per year, on a simple interest
basis, on the unpaid principal balance, as required hereunder,
or as required under the Amended Agreement referenced below.
ADDITIONAL TERMS AND CONDITIONS
i. This Note is made in connection with the agreement
between Holder and Maker entitled "Agreement No. Between
The City Of Palo Alto And Paio Alto Housing Corporation
Apartments, Inc. (PAHCA, Inc.) For Funds Allocated During Fisca!
Year 2003/04 Under The Community Development Block Grant
Program" ("Agreement"), pursuant to which Holder provided to
Maker a portion of the funds to be used by Maker to rehabilitate
the apartment complex known as Oak Manor Townhouses at 630 Los
Robies Avenue, Palo Alto, California (the "Property"). Maker
will operate the Property in accordance with the terms and
conditions of the Agreement. All terms, conditions, agreements
and provisions, including the convenants, representations, and
terms of default and remedies for default set forth in the
Agreement are incorporated herein by reference, and made a part
hereof.
2. This Note evidences the obligation of the Maker to
make full payment of the Loan Amount to the Holder, in
1
040316 sm 0091341
accordance with the provisions of this Note and the Agreement.
Such funds are to be used solely by the Maker, together with
funds obtained by Maker for other sources, to rehabilitate the
Property, as more fully described in the Agreement.
3. This Note is secured by a Deed of Trust and Assignment
of Rents recorded against the Property (the ~Deed of Trust").
4. At any time, and from time to time, the Maker may
prepay to the Holder the principal sum of this Note, or any part
thereof, without penalty.
5. Payment of principal and interest on this Note shall
be deferred from the date of its execution to that date which is
October i, 2023 as defined in the Agreement.
Notwithstanding any provision of this Note or the
Agreement, this Note shall become due and payable immediately,
without notice or demand, in the event all or any part of the
Property,or all or any part of the Maker’s interest in the
Project,(a) is sold, transferred, assigned or otherwise
conveyed,or (b) is further encumbered without the prior written
consent of Holder.
6. The Maker and any other maker, co-maker, endorser,
guarantor, and any other party to this Note (collectively,
"0bligors"), and each of them:(i) waive notice of default
(except as provided in Section i0) notice of acceleration,
notice of nonpayment, presentment for payment, demand, protest,
notice of demand, notice of protest, notice of nonpayment, and
any other notice required to be given under the law to the
0bligors: (ii) consent(s) to any and all delays, extensions,
renewals, or other modifications of this Note or waivers of any
term hereof or release or discharge by the Holder of any of the
Obligors or release, substitution, or failure to act by the
Holder, from time to time, and agree(s) that no such action,
failure to act, or failure to exercise any right or remedy on
the part of the Holder shall in any manner affect or impair the
obligations of any Obligor or be construed as a waiver by the
Holder of, or otherwise affect, any of the Holder’s rights under
this Note or the Agreement, under any endorsement or guaranty of
this Note; and (iii) (jointly and individually, if more than
one) agree(s) to pay, on demand, any and all costs and expenses
of collection of this Note or of any endorsement or any guaranty
hereof, including attorney’s fees.
No extension of time for payment of this Note or any
portion thereof made by agreement of Holder with any person now
or hereafter liable for the payment of this Note shall operate
2
0~316 sm 0091341
to release or discharge liability of Maker under this Note,
either in whole or in part.
7. The pleading of any statute of limitations as a
defense to any demand against the Maker is expressly waived by
the Maker.
8. If any default is made hereunder, the Maker promises
to pay the Holder’s reasonable attorneys’ fees and other related
costs and expenses incurred by the Holder in connection with the
enforcement of any rights of the Holder. The Holder’s right to
such fees shal! include but not be limited to, its
representation by staff attorneys of the Holder’s office of the
City Attorney, and such representation shall be valued at the
customary and reasonable rates for private sector legal
services.
9. The occurrence of any of the following shall
constitute an event of default under this Note: (i) the Maker
fails to pay any amount due hereunder within fifteen (15) days
of its due date; or (ii) any default by the Maker under the
Agreement; or (iii) any default by Maker under the Modification
of Deed of Trust.
Upon the occurrence of any event of default, or at any time
thereafter, at the option of the Holder hereof, the entire
unpaid principa! and interest owing on this Note shal! become
immediately due and payable. This option may be exercised any
any time following any such event, and the acceptance of one or
more installments thereafter shall not constitute a waiver of
such option with respect to any subsequent event. The Holder’s
failure in the exercise of any other right or remedy hereunder
or under any agreement which secures the indebtedness or is
related thereto shall not affect any right or remedy and no
single or partial exercise of any such right to remedy shall
preclude any further exercise thereof.
If the outstanding unpaid principal balance of this Note is
not paid within thirty (30) days of demand therefor, the Maker
shall pay to the Holder in addition to interest at the
Applicable Interest Rate, interest equa! to one percent (1%) of
the unpaid principal amount, or the highest rate permitted by
law, whichever is less, per calendar month, or fraction thereof.
If this Note be reduced to judgment, such judgment shall bear
the statutory interest rate on judgments.
i0. The Holder shall not exercise any right or remedy
provided for herein because of any default of the Maker unless,
in the event of a monetary default, the Maker shall have failed
3
040316 sm 0091341
to pay the outstanding sums within a period of thirty (30)
calendar days after notice that payment was due. In the event
of an uncured nonmonetary default, the Holder shall have first
given written notice thereof to the Maker, and the Maker shall
have failed to cure the nonmonetary default within a period of
thirty (3.0) days after the giving of such notice of such
default; provided that if the nonmonetary default cannot be
Cured within thirty (30) days and the Maker proceeds diligently
and uses best efforts to cure such default until it shall be
fully cured within no more than ninety (90) days after the
giving of such notice, then the Holder shall not exercise any
right or remedy provided for herein until such 90-day period
shall expire; provided, however, the Holder shall not be
required to give any such notice or allow any part of the grace
period if the Maker shal! have filed a petition in bankruptcy or
for reorganization or a bill in equity or otherwise initiated
proceedings for the appointment of a receiver of its assets, or
if the Maker shal! have made an assignment for the benefit of
creditors, or if a receiver or trustee is appointed for the
Maker and such appointment or such r~ceivership is not
terminated within forty-five (45) days of such appointment.
With respect to any right to cure or cure period in this
Section i0, performance of a cure by any affiliated entity or
partner of the Maker shall have the same effect as would like
performance by the Maker.
ii. Any notice, demand, or other communication required
hereunder shal! not be deemed sufficiently given, unless sent by
certified mail, postage prepaid, return receipt requested, or by
express delivery service or overnight courier service, to the
principal office of the addressee, or at such other address as
may be designated, in writing, from time to time:
Holder:City of Palo Alto
250 Hamilton Avenue
Pa!o Alto, CA 94301
Attn: City Clerk
Maker:Palo Alto Housing Corporation
Apartments, Inc.
725 Alma Street
Pa!o Alto, CA 94301
Attn: President, Board of Directors
The delivery shall be effective on the date shown on the
delivery receipt or the date on which the delivery was refused.
040316 sm 0091341
12. This Note shall be nonrecourse against the Obligors.
No judgment, or execution thereof, entered in any action, legal
or equitable, on this Note shall be enforced directly against
the Maker or any officer, director or employee of the Maker, but
shal! be enforced only against the collateral described in the
Modification of Deed of Trust, and such other or further
security as, from time to time, may be hypothecated for this
Note. The foregoing limitation shall not be applicable in the
event of (a) fraud by the Maker or any material
misrepresentation made by the Maker to the Holder in the Amended
Agreement, this Note, the Modification of Deed of Trust, or any
other document or instrument delivered in connection with the
Loan, or (b) the sale or transfer or other conveyance or
encumbrance of the Property, or any interest therein, without
the Holder’s prior written consent, or (c) the sale or transfer
or other conveyance or encumbrance of al! or any part of Maker’s
interest in the Project without the Holder’s prior written
consent. Furthermore, the foregoing limitation shall not be
applicable to the extent of any loss incurred by the Holder due
to (a) misappropriation by the Maker of any rents (including,
without limitation, the application of rents to other than
operating expenses and debt service), security deposits,
insurance or condemnation proceedings, or (b) the diversion or
other misappropriation by Maker of any funds from any reserve
account maintained in connection with the Project. The-Holder
shall not in any way be prohibited from naming the Obligors, or
any of them, or any person holding under or through them as
parties to any actions, suit or other proceedings initiated by
the Holder to foreclose or otherwise realize upon any other lien
or security interest created under the Modification of Deed of
Trust, and further provided, however, that nothing in this
Section 12 shall be deemed to prejudice the rights of the Holder
to recover any funds or payments which were diverted or
misappropriated by the Obligors, or any of them.
13. The covenants, agreements, terms, and conditions of
this Note shal! inure to, and shall be binding on,the
successors and assigns of the 0bligors.
//
//
//
//
040316 sm 0091341
EXECUTED BY MAKER by its duly authorized representative in
Pa!o Alto, County of Santa Clara, State of California, on the
date first above written.
PALO ALTO HOUSING CORPORATION
APARTMENTS, INC.
A CALIFORNIA NON-PROFIT PUBLIC
BENEFIT CORPORATION
By :
Name:
Title:
By :
Name:
Title:
Taxpayer I.D. No.
040316 sm 0091341
RECORDING REQUESTED BY &
WHEN RECORDED MAIL TO:
City of Palo Alto
Office of City Attorney
250 Hamilton Avenue
Pa!o Alto, CA 94301
Recorded without charge:
Govt. Code Sections 6103, 27383
SPACE ABOVE THIS LINE FOR RECORDER’S USE
DEED OF TRUST AND ASSIGNMENT OF RENTS
(OAK MANOR APARTMENTS CDBG REHABILITATION LOAN)
THIS DEED OF TRUST AND ASSIGNMENT OF RENTS made on
, 2004 between Pa!o ALTO HOUSING CORPORATION
APARTMENTS, INC., a California nonprofit public benefit
corporation ("Trustor"), whose address is 725 Alma Street, Palo
Alto, California 94301, First American Title Guaranty Company, a
California corporation ("Trustee"), whose address is 1737 North
First Street, San Jose, California 95112 and THE CITY OF PAL0
ALTO ("Beneficiary"), whose address is 250 Hamilton Avenue, Palo
Alto, California 94301.
WITNESSETH: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND
ASSIGNS TO TRUSTEE IN TRUST, WITH POWER OF SALE, that real
property and improvements in the County of Santa Clara, State of
California, described in Exhibit "A", attached hereto and made a
part hereof by reference ("Security" or "Property"),
TOGETHER WITH the rents, issues and profits thereof, SUBJECT,
HOWEVER, to the right, power and authority to and conferred upon
Beneficiary, by fictitious deed of trust recorded in the office
of the Recorder of the County of Santa Clara, in Book of
Official Records, at Page , adopted and incorporated herein
by reference and made a part hereof as if fully set forth
herein, to collect and apply such rents, issues and profits,
FOR THE PURPOSE OF SECURING payment of the indebtedness
evidenced by that Promissory Note ("Note"), and any extensions
or renewals thereof, in the principal amount of $113,672
executed by Trustor in favor of Beneficiary.
040316 syn 0091344
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES:
!. Fictitious Deed of Trust. By the execution and
delivery of this Deed of Trust and the Note secured hereby, that
the provisions of and inclusive, of the
fictitious deed of trust recorded in the office of the Recorder
of the County of Santa Clara in Book of Officia! Records,
at Page __, hereby are adopted and incorporated herein and
made a part hereof as fully as though set forth herein at
length; that it will observe and perform said provisions; and
that the references to property, obligations, and parties in
said provisions shall be construed to refer to the property,
obligations, and parties set forth in this Deed of Trust.
2. Prohibited Transfers. Trustor shall not, voluntarily
or involuntarily or by operation of law, se~!, transfer, lease,
pledge, encumber, create a security interest in, or otherwise
hypothecate or alienate all or any part of the security, without
Beneficiary’s prior written consent. The consent by Beneficiary
to any sale, transfer, lease, pledge, encumbrance, creation of a
security interest in, or other hypothecation of the Security
shall not be deemed to constitute a novation or a consent to any
further sale, transfer, lease, pledge, encumbrance, creation of
a security interest in or other hypothecation. Beneficiary may,
at its option, declare the indebtedness secured hereby
immediately due and payable, without notice to Trustor or any
other person or entity (except as provided herein), upon any
such sale, transfer, lease, pledge, encumbrance, creation of a
security interest in, or other hypothecation or alienation in
violation hereof. Without the written consent of Beneficiary,
no sale, transfer, lease, pledge, encumbrance, creation of a
security interest in, or other hypothecation of the Security
shal! relieve or release Trustor from primary liability under
this Deed of Trust or the Note, as the case may be. As used in
this Section 2, the term "transfer" includes, without
limitation, the following transactions:
a. Any total or partial sale, assignment or
conveyance, or creation of any trust or power, or any transfer
in any other mode with respect to the Security or any part
hereof or any interest herein, or any contract or agreement to
do the same;
040316 syn 0091344
b. The cumulative transfer of more than ten percent
(10%) of the capital stock, partnership profit and loss
interest, or other form of interest in Trustor; and
c. Any merger, consolidation, sale or lease of all
or substantially all of the assets of Trustor.
3. Due on Sale. In the event of default by Trustor
under this Deed of Trust, or if the Property or any part thereof
or any interest therein is sold, agree to be sold, conveyed,
alienated or refinanced by Trustor, or by the operation of law
or otherwise, without the written consent of Beneficiary, all
obligations secured by this instrument irrespective of the
maturity dates expressed therein, at the option of beneficiary
hereof and without demand or notice shal! immediately become due
and payable.
4. Notices. Trustor requests that a copy of any Notice
of Default, and of any Notice of Sale hereunder, be mailed to it
at its address hereinabove set forth, and that additional copies
of any such notice be mailed to the City of Palo Alto, Office of
the City Clerk, 250 Hamilton Avenue, Palo Alto, California
94301, and to CalHFA, 1121 "L" Street, 7th Floor, Sacramento, CA
95814.
PALO ALTO HOUSING CORPORATION
APARTMENTS, INC., a California non-
profit public benefit Corporation,
Trustor
CITY OF PALO ALTO, a Municipal
Corporation
040316 syn 0091344
By:
Its:
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code § 1189)
STATE OF
COUNTY OF
)
)
)
On ,~<~<]~\ \_ , 2004, before me,
a notary p~bliq in a~d for said County, .personally appeared
~]@{~h~_ ’~.~<~P_\£<%C~.~b< , personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s)
whose name(s) ~are subscribed to the within instrument,and
acknowledged to me that he/~they executed the same in
his/~their authorized capacity(ies), and that by
hisS?their signature(s) on the instrument the person(s),or
the entity upon behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
040316 syn 0091344
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code § 1189)
STATE OF
COUNTY OF
)
)
)
On , 2004 before me, ,
a notary public in and for said County, personally appeared
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument, and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s),or
the entity upon behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
040316 syn 0091344
5
EXHIBIT ~A"
LEGAL DESCRIPTION OF PROPERTY
A!l that certain real property in the City of Pa!o Alto, County
of Santa Clara, State of California, described as follows:
Commencing, at a point on the center line of Dry Creek or Ditch,
within the tract of land described in the Deed of Edward Barron
Estate Company to Reiter, Driscoll and Driscoll, recorded
December !i, 1919, which point of beginning is distant 850 feet
Southwesterly at right angles from the former Southwesterly line
of the State Highway which line of the Highway is the
Northeasterly boundary of said land so conveyed to Reiter,
Driscoll and Driscoll; thence along the center of Dry Creek,
South 33 deg 08’ West, 150 feet; thence North 56 deg 55’ West,
338.41 feet to the most Southerly corner of that certain tract
of land containing 27.302 acres of land, more or less, as
conveyed to Sebastian C. Jones; thence North 33 deg 05’ East,
150 feet; South 56 deg 55’ East, 338.54 feet to the Point of
Beginning.
APN: 137-12-002
040316 sm 0091344