HomeMy WebLinkAbout6/3/2009 - STAFF REPORTS - 5.A. 1
COOPERATION AGREEMENT FOR THE USE OF
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NEIGHBORHOOD STABILIZATION PROGRAM FUNDS
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4 This Agreement is made and entered into this __ day of , 2009 by and
5 between the COUNTY OF RIVERSIDE ("Lead Agency"), a political subdivision of the State oC
6 California and the CITY OF COACHELLA ("Coachella "), a public body, corporate and politic, the
7 CITY OF PALM SPRINGS ("Palm Springs"), a public body, corporate and politic and the CITY OF
8 PALM DESERT ("Palm Desert"), a public body, corporate and politic, collectively referred to as
9 "Cooperating Units
10 WITNESSETH:
11 WHEREAS, the Neighborhood Stabilization Program ("NSP"), which was enacted under
12 Title III of Division B of the Housing and Economic Recovery Act of 2008 ("HERA") and appropriated
13 under Community Development Block Grant (CDBG) funds, was created under the heading of
14 Emergency Assistance for Redevelopment of Abandoned and Foreclosed Homes for the purpose of
15 assisting in the redevelopment of abandoned and foreclosed homes, and stabilize neighborhoods in areas
16 with greatest need and stem the decline of house values of neighboring homes; and
17 WHEREAS, the State of California ("State") received NSP funds from the U-S.
18 Department of Housing and Urban Development ("HUD") for statewide local distribution; and
19 WHEREAS, the Lead Agency and the Cooperating Units are eligible to receive an NSP
20 allocation from the State; and
21 WHEREAS, the Lead Agency and the Cooperating Units wish to apply jointly to the
2� State in order to meet the minis um application threshold of$1 million; and
23 WHEREAS, the County of Riverside will serve as the lead entity and be the direct NSP
24 grant recipient; and
25 WHEREAS, the Cooperating Units will become subrecipients of the NSP funds; and
26 WHEREAS, upon the State's acceptance of this Agreement and the subsequent
27 submission of a successful joint grant application, the Cooperating Units will become a part of the Lead
28 Agency's program for purposes of program planning and implementation for the lifetime of the State
NSP grant; and L I
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I WHEREAS, the Agency For Economic and Facility Development ("AEFD") will
2 administer this Agreement on behalf of the Lead Agency; and
3 WHEREAS, the Cooperating Units have proposed to utilize NSP funds for the
4 acquisition, rehabilitation and resale of single-family homes to qualified low-, moderate-, and middle-
5 income (LMMI) first-time homebuyers within their respective jurisdictions ("Project"); and
6 WHEREAS, the NSP Project described herein complies with the objectives as required
7 under NSP.
8 NOW, THEREFORE, the Lead Agency and the Cooperating Units mutually agree as
9 follows:
10 1. LEAD AGENCY'S OBLIGATIONS:
I 1 a. Lead Agency shall submit a completed joint grant application on behalf of
12 the Cooperating Units to the State.
13 b. Lead Agency shall inform the Cooperating Units, with fifteen (15) days of
14 being in formed by the State that the joint grant application was successful.
15 c. Lead Agency shall, consistent with HUD regulations, 24 CFR 570.308, be
16 responsible for administering the State NSP grant on behalf of the
17 Cooperating Units with applicable program requirements.
18 d. Lead Agency shall ensure that all NSP requirements, including but not
19 limited to NSP program income and rent affordability, as set forth in
20 HERA acid the State NSP Program are complied with after grant closeout.
21 e. Lead Agency shall comply with all reporting requirements including
22 submitting to the State the following reports:
23 i) The NSP Program Income Report; and
24 ii) The Performance and Expenditure Report,
25 2. COOPERATING UNIT'S OBLIGATIONS:
26 a. The Cooperating Units shall take all actions necessary to assure
27 compliance with the certification required by Section 104(b) of Title I of
28 the Housing and Community Development Act of 1964, as amended,
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I including Title VI of the Civil Rights Act of 1964, the Fair Housing Act,
2 Section 109 of Title I of the Housing and Community Development Act of
3 1974 and all other applicable-laws.
4 b. The Cooperating Units shall warrant and represent that the Cooperating
5 Unit have adopted and is enforcing:
6 i) A policy prohibiting the use of excessive force
7 by law enforcement agencies within its
8 jurisdiction against any individuals engaged in
9 non-violent civil rights demonstrations; and
10 ii) A policy of,enforcing applicable sate and local
I I laws against physically barring entrance or exit
12 from a facility or location, which is the subject
13 of such non-violent civil rights demonstrations
14 within jurisdictions.
15 c, Pursuant to 24 CFR 570.501(b), the Cooperating Units are subject to the
16 same requirements applicable to subrecipients, including the requirement
17 of a written agreement as described in 24 CFR 570.503.
18 d. The Cooperating Units agree to satisfy all requirements of the National
19 Environmental Policy Act (NEPA) and the California Environmental
20 Quality Act (CEQA) and that for each Project assisted with NSP funds the
21 Cooperating Units will designate one of the participating units as the lead
22 entity for compliance purposes.
23 e. The Cooperating Units shall be responsible for the completion of the
24 Project and complying with applicable federal requirements including but
25 not limited to citizen participation, procurement, NEPA environmental
26 review, Labor Standards, Equal Opportunity and Fair Housing, Relocation
27 and Lead Based paint.
28
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1 3. SUBRECIPIENT AGREEMENTS. In the event the Lead Agency's joint
2 application is deemed successful by the State, the Lead Agency and Cooperating Units shall execute a
3 written subrecipient agreement containing the minimum requirements set forth in 24 CPR 570.503
4 before the disbursement of any NSP funds for any eligible NSP activity funded by the Lead Agency-
5 4, NSP PROGRAM INCOME. The NSP Program Income shall belong to the Lead
6 Agency's NSP even if it is generated from activities undertaken within or by a Cooperating Unit's
7 jurisdiction.
8 5. PROHIBITION ON USE OF NSP FUNDS. NSP fmrds shall not be used for
9 activities in, or in support of, any Cooperating Unit that does not affirmatively further fair housing with
10 the Cooperating Unit's jurisdiction of that impedes the Lead Agency's actions to comply with the Lead
11 Agency's fair housing certification.
12 6_ RECORDS. The Cooperating Units shall establish and maintain financial,
13 programmatic, statistical, and other supporting records of its operations and financial activities in
14 accordance with the requirements set forth in HERA and the State NSP Program as they relate to the
15 acceptance and use of NSP funds under this Agreement. Records shall be open to inspection and audit
16 by authorized representatives of the Lead Agency, State, HUD, and the Comptroller General of the
17 United States or any of their authorized representatives, at any time during nomlal business hours, as
18 often as deemed 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 Cooperating Units within thirty(30) days
19 11
20 after receipt by the Cooperating Units. Failure of the Cooperating Units to comply with the above audit
requirements will constitute a,violation of this contract and may result in the withholding of future
21
allocations of NSP funds. Lead Agency, State, HUD, and the Comptroller General, or any of their
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representatives, have the right-of access to any pertinent books, documents, papers, or other records of
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the Cooperating Units, in °order to make audits, examinations, excerpts, and transcripts. Said records
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shall be retained for such time as may be required by the regulations of the NSP but in no case for less
25 than five (5) years after the Project completion date; except that records of individual tenant income
26 verifications, project rents, and project inspections must be retained for the most recent five (5) year
27 period, until five (5) years after the affordability period terminates. If any litigation, claim, negotiation,
28 audit, or other action has been started before the expiration of the regular period specified, the records
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I must be retained until completion of the action and resolution of all issues which arise from it, or until
2 the end of the regular period, whichever is later.
3 7. PROJECT MONITORING AND EVALUATION- Except as otherwise provided
4 for in this Agreement, the Cooperating Units shall maintain and submit records to the Lead Agency
5 within ten (10) business days of the Lead Agency's request which clearly documents the Cooperating
6 Unit's performance under each requirement of NSP or this Agreement.
7 8. ACCESS TO PROJECT SITE. The Lead Agency shall have the right to visit the
8 Project site at all reasonable times, and upon completion of the Project upon reasonable written notice to
9 Cooperating Units, to review the operation of the Project in accordance with this.Agreement.
10 9. COMPLIANCE WITH LAWS AND REGULATIONS. By `executing this
11 Agreement, the Cooperating Units hereby certifies that it will adhere to and comply with all federal,
12 state and local laws, regulations and ordinances. In particular, the Cooperating Units shall comply with
13 the following as they may be applicable to the Cooperating Units for finds granted pursuant to the NSP
14 Program:
15 a. NSP regulations as set forth under HERA, as it now exists and may
16 hereafter be amended,,and Federal Register / Vol. 73, No. 194 / Monday,
17 October 6, 2008 / Docket No. FR-5255—N-01, Notice of Allocations,
18 Application Procedures, Regulatory Waivers Granted to and Alternative
19 Requirements for Emergency Assistance for Redevelopment of Abandoned
70 and Foreclosed Homes Grantees Under the Housing and Economic
21 Recovery Act, 2008.
22 b. CDBG statutory and regulqj2nLprovisions, including those at 24 CFR Part
23 570 subpart A, C, D, J, K, and O, as appropriate, shall apply.
24 c. Other Federal requirements and non-discrimination. As set forth in 24 CPR
25 Part 5, subpart A, Cooperating Units is required to include the following
26 requirements: non-discrimination and equal opportunity; disclosure;
27 debarred, suspended, or ineligible contractors; and drug-free workplace.
28 d- Displacement, Relocation, and Acquisition. The relocation requirements of
Title it and the acquisition requirements of Title III of the Uniform
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I Relocation Act (URA) and Real Property Acquisition Policies Act of 1970,
2 and the inrplementinb regulations at 24 CFR Part 42.
3 C. Prevailing Wanes and Compliance with Davis-Bacon Act. The exclusive
4 and sole public funds used to acquire and rehabilitate the Project will be
5 NSP funds. Cooperating Units shall comply with any applicable labor
6 regulations and all other State and Federal Laws in connection with the
7 construction of the improvements which comprise the Project, including if
8 applicable, requirements relating to the Davis-Bacon Act (40 U.S.C. 276a--
9 276a-5). Cooperating Units agrees and acknowledges that it is the
10 responsibility of Cooperating Units to obtain a legal determination, at
I I Cooperating Unit's sole cost and expenses as to whether prevailing wages
12 must be paid during the rehabilitation of the Project. Cooperating Units
I3 agrees to identify, defend, and hold Lead Agency harmless from and
14 against any and all liability arising out of and related to Cooperating Unit's
15 failure to comply with any and ,all applicable prevailing wage
16 requirements.
17 f. Lead-based Paint. Housing assisted with NSP funds is subject to the lead-
18 based paint regulations of 24 CFR Part 35, subparts A, B, 7, K, and R,
19 issued pursuant to the Lead-Based Paint Poisoning Prevention Act (42
20 U.S_C. 4821, et seq.).
21 g_ Conflict of Interest. In the procurement of property and services by
22 Cooperating Units, the conflict of interest provisions at §570.611 shall
23 apply.
24 h. Section 3 of the Housing and Urban Development Act of 1968. To the
25 greatest extent feasible, opportunities for training and employment arising
26 from NSP funds will be provided to low-income persons residing in the
27 Target Area. To the greatest extent feasible, contracts for work to be
28 performed in connection with NSP funds will be awarded to business
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1 concerns that are located in or owned by persons residing in the Target
2 Area. Contracts funded From Section 3 must abide by the Section 3 Clause
3 prescribed at 24 CFR 135.38.
4 i. Compliance with anti-discrimination laws. Conformity with title VI of the
5 Civil Rights Act of 1964 (42 U.S.C. 2000d), the Fair Housing Act (42
6 U.S.C. 3601-3619), and implementing regulations.
7 j. Affirmative marketing, and minority outreach program. Cooperating Units
8 must adopt affirmative marketing procedures and requirements. These
9 should include:
10 1) Methods for informing the public, owners, and potential tenants
11 about Federal fair housing laws and the affirmative marketing
12 policy.
13 2) Requirements and practices that Cooperating Units must adhere to
14 in order to carry out the affnmative marketing procedures and
15 requirements.
16 3) Procedures to be used by Cooperating Units to inform and solicit
17 applications firom persons in the housing market areas that are not
18 likely to apply without special outreach.
19 4) Records will be kept describing actions taken by Cooperating Units
20 to affirmatively market units and to assess the results of these
21 actions.
22 5) A description of how the Cooperating Units will annually assess the
23 success of affirmative marketing actions and what corrective
24 actions will be taken where affirmative marketing requirements are
25 not met.
26 6) Cooperating Units should prescribe procedures to establish and
27 oversee a minority outreach program to ensure the inclusion, to the
28 maximum extent possible, of minorities and women, and entities
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I owned by minorities and women, including, without limitation, real
2 estate firms, construction firms, appraisal firms, management firms,
3 financial institutions, investment banking firms, underwriters,
4 accountants, and providers of legal services, in all contracts entered
5 into by Cooperating Units with such persons or entities, public and
6 private, in order to facilitate the activities of the Lead Agency to
7 provide affordable housing authorized under this Act or any other
8 Federal housing law. Affirmative steps to assure that minority
9 business enterprises and'women business enterprises are used when
10 possible in the procurement of property and services are at 24 CFR
I l 85.36(e).
12 7) Anti-lobbying. The Cooperating Units must comply with
13 restrictions on lobbying required by 24 CFR Part 87.
14 k. Model Energy Code published by the Council of American Building
15 Officials.
16 1, Consultant Activities. As applicable, pursuant to 24 CFR 570.200(d), no
17 Z person providing consultant services in an employer-employee type of
18 relationship shall receive more than a reasonable rate of compensation for
19 personal services paid with CDBG funds.
20 in. Uniform Administrative Requirements of 24 CFR Part 84 or 85 as
21 applicable, Part 570 and OMB Circular Nos_ A-102, revised, A-110
22 (implemented at 24 CFR Part 84), A-87, and A-122, as applicable and as
23 they relate to the acceptance and use of federal funds under this
24 Agreement.
25 n. The Cooperating Units shall include written agreements that include all
26 provisions of this section if Cooperating Units provides NSP funds to for-
27 profit owners or developers, non-profit owners or developers, Cooperating
28 Units, homeowners, homebuyers, tenants receiving tenant-based rental
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I assistance, or contractors.
2 10. INDEPENDENT CONTRACTOR. Cooperating Units and its agents, servants and
3 employees shall act at all times in an independent capacity during the term of this Agreement, and shall
4 not act as, shall not be, nor shall they in any manner be construed to be agents, officers, or employees of
5 Lead Agency,
6 11. NONDISCRIMINATION. Cooperating Units shall abide by 24 CFR 570.602
7 which requires that no person in the United States shall on the grounds of race, color, national origin,
8 religion, or sex be excluded fiom participation in, be denied the benefits of, or be subjected to
9 discrimination under any program or activity receiving Federal financial assistance including NSP.
10 Under the Act, Section 109 directs that the prohibitions against discrimination on the basis of age under
I I the Age Discrimination Act and the prohibitions against discrimination on the basis of disability under
12 Section 504 shall apply to programs or activities receiving Federal financial assistance under Title I
13 programs. The policies and procedures necessary to ensure enforcement of section 109 are codified in
14 24 CPR Part 6.
15 12. EVENTS OF DEFAULT. The occurrence 6f any of the following events shall
16 constitute an"Event of Default"under this Agreement:
17 a. Discrimination by the Cooperating Units or the Cooperating Unit's on the
18 basis of characteristics prohibited by this Agreement or applicable law; and
19 b. Any substantial or continuous or repeated breach by the Cooperating Units
20 or, the Cooperating Unit's agents of any material obligation on the
21 Cooperating Units imposed by this Agreement; and
22 c. A determination by the Lead Agency that any of the Cooperating Units
23 representations and warranties made in this Agreement were untrue in any
24 material respect when made, or that the Cooperating Units concealed or
25 failed to disclose a material fact from the Lead Agency.
26 13. NOTICE OF DEFAULT AND CURE PERIOD. The Lead Agency shall give
27 written notice to Cooperating Units of any Event of Default by specifying: a) the nature of the Event of
28 Default, b) the action required to cure the deficiency, if possible and c) a date, which shall not be more
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I than thirty (30) calendar days from the mailing of the notice, by which such action to cure must be
2 taken.
3 14. LEAD AGENCY REMEDIES. Notwithstanding Section 15, upon the
4 happening of an Event of Default and a failure by Cooperating Units to cure said defaults with the time
5 specified in the notice of default, the Lead Agency may pursue any remedy allowed at law or in equity-
6 15. TERMINATION OR WITHDRAWAL. The Lead Agency and the Cooperating
7 Units shall not terminate or withdraw from this Agreement while it remains in effect.
8 16. HOLD HARMLESS AND INDEMNIFICATION. The Cooperating Units shall
9 indemnify and hold harmless the Lead Agency, its Agencies, Districts, Special Districts and
10 Departments, their respective directors, officers, Board of Supervisors, elected and appointed officials,
11 employees, agents and representatives from any liability whatsoever, based or asserted upon any act or
12 obligation of the Cooperating Units, its officers, employees, subcontractors, agents or representatives
13 arising out of or in any way relating to this Agreement, including but not limited to property damage,
14 bodily injury, or death or any other element of any kind or nature whatsoever arising from the
15 performance of the Cooperating Units, its officers, agents, employees, subcontractors, agents or
16 representatives from this Agreement. The Cooperating Units shall defend, at its sole expense, all costs
17 and fees including, but'not limited, to'attorney fees, cost of investigation, defense and settlements or
18 awards, the County of Riverside, its Agencies, Districts, Special Districts and Departments, their
19 respective directors, officers, Board of Supervisors, elected and appointed officials, employees, agents
20 and representatives in any claim or action based upon such alleged acts or omissions.
21 In the event there is State and/or Federal audit related to this Agreement and subject to
22 disallowance, the Cooperating Units shall indemnify, defend and hold harmless defend Lead Agency, its
23 Agencies, Districts, Special Districts and Departments, their respective directors, officers, Board of
24 Supervisors, elected and appointed officials, employees, agents and representatives from and against any
25 and all liability arising from the audit and disallowance.
26 With respect to any action or claim subject to indemnification herein by Cooperating
27 Units, Cooperating Units shall, at its sole cost, have the right to use counsel of its own choice and shall
28 have the right to adjust, settle, or compromise any such action or claim without the prior consent of Lead
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I Agency; provided, however, that any such adjustment, settlement or compromise in no manner
2 whatsoever limits or circumscribes Cooperating Unit's indemnification to Lead Agency as set forth
3 herein.
4 Cooperating Unit's obligation hereunder shall be satisfied when the Cooperating Units
5 have provided to Lead Agency the appropriate form of dismissal relieving Lead Agency from any liability
6 for the action or claim involved.
7 The specified insurance limits required in this Agreement shall in no way limit or
8 circumscribe Cooperating Unit's obligations to indemnify and hold harmless the Lead Agency herein
9 from third party claims.
10 In the event there is conflict between this clause and California Civil Code,Section 2782,
11 this clause shall be interpreted to comply with Civil Code 2782. Such interpretation shall not relieve the
12 Cooperating Units from indemnifying the Lead Agency to the fullest extent allowed by law.
13 17. INSURANCE. Without limiting or diminishing the, Cooperating Unit's obligation
14 to indemnify or hold the Lead Agency hannless, the Cooperating Units shall procure and maintain or
15 cause to be maintained, at its sole cost and expense, all applicable insurance coverage as required by law
16 during the term of this Agreement,
17 18. ENTIRE AGREEMENT. It is expressly agreed that this Agreement embodies the
18 entire agreement of the parties in relation to the subject matter hereof, and that no other agreement or
19 understanding, verbal or otherwise, relative to this subject matter, exists between the parties at the time
20 of execution.
21 19. AUTHORITY TO EXECUTE. The persons executing this Agreement on behalf of
22 the parties to this Agreement hereby warrant and represent that they have the authority to execute this
23 Agreement and warrant and represent that they have the authority to bind the respective parties to this
24 Agreement to the performance of its obligations hereunder.
25 20. WAIVER. Failure by a party to insist upon the strict performance of any of the
26 provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the
27 default of the other party, shall not constitute a waiver of such party's rights to insist and demand strict
28 compliance by the other party with the terms of this Agreement thereafter.
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1 21. INTERPRETATION AND GOVERNING LAW. This Agreement and any dispute
2 arising hereunder shall be governed by and interpreted in accordance with the laws of the State of
3 California. This Agreement shall be construed as a whole according to its fair language and common
4 meaning to achieve the objectives and purposes of the parties hereto, and the rule of construction to the
5 effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting
6 this Agreement, all parties having been represented by counsel in the negotiation and preparation
7 hereof
8 22. JURISDICTION AND VENUE. Any action at law or,in equity arising under this
9 Agreement or brought by a party hereto for the purpose of enforcing, construing or determining the
10 validity of any provision of this Agreement shall be filed in the consolidated Courts of Riverside
11 County, State of California, and the parties hereto waive all provisions of law providing for the filing,
12 removal or change of venue to any other court or jurisdiction.
13 23. SEVERABILITY. Each paragraph and provision of this Agreement is severable
14 from each other provision, and if any provision or part thereof is declared invalid, the remaining
15 provisions shall nevertheless remain in full force and effect.
16 24. MTNISTERIAL ACTS. The Lead Agency's Assistant County Executive
17 Officer/AEFD or designce(s) are authorized to take such ministerial actions as may be necessary or
18 appropriate to implement the terms,provisions, and conditions of this Agreement as it may be amended
19 from time•to time by both parties.
20 25. MODIrICATION OF AGREEMENT. The Lead Agency or Cooperating Units
21 may consider'it in its best interest to change, modify or extend a tern or condition of this Agreement.
22 Any such change, extension or modification, which is mutually agreed upon by the Lead Agency and
23 Cooperating Units shall be incorporated in written amendments to this Agreement. Such Cooperating
24 Units from any obligations under this Agreement, except for those parts thereby amended. No
25 amendment to this Agreement shall be effective and binding upon the parties, unless it expressly makes
26 reference to this Agreement, is in writing and is signed and acknowledged by duly authorized
27 representatives of all parties.
28
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1 26. ASSIGNMENT_ The Cooperating Units will not make any sale, assignment,
2 conveyance, or lease of any trust or power, or transfer in any other form with respect to this Agreement
3 or the Project.
4 27. RECITALS. The recitals are incorporated herein by this reference-
5 28. NOTICES. All notices, requests, demands and other communication required or
6 desired to be served by either party upon the other shall be addressed to the respective parties as set
7 forth below or the such other addresses as from time to time shall be designated by the respective parties
8 and shall be sufficient if sent by U.S. first class, certified mail, postage prepaid, or express delivery
9 service with a receipt showing the date of delivery.
10 LEAD AGENCY COACHELLA
I I Director of Housing Development
12 Riverside County
Agency for Economic and Facilities
13 Development
1325 Spruce Street, Suite 400
14 Riverside, CA 92507
15
16 PALM SPRINGS PALM DESERT
17
18
19
20 29. COUNTERPARTS. This Agreement may be signed by the different parties hereto
21 in counterparts, each of which skull be an original but all of which together shall constitute one and the
22
same agreement.
23 30. EFFECTIVE DATE. The effective date of this Agreement is the date the parties
24 execute the Agreement. If the parties execute the Agreement on more than one date, then the last date
25 the Agreement is executed by a party shall be the effective date.
26
27
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I IN WITNESS WHEREOF, the Lead Agency and the Cooperating Units have executed this
2 Agreement as of the date first above written.
3 Lead Agency COACI4ELLA
4
5
6 By: By:
7
8 PALM SPRINGS PALM DESERT
9
10
11 By: By_
12
13 APPROVED AS TO FORM:
PAMELA J. WALLS
14 County Counsel
15
16
17 By:
18 Deputy
19
20 ATTEST:
KECIA HARPER-IHEM
21 Clerk of the Board
22
By:
23
24
25
26
27
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4`�F°a"' City Council Staff Report
DATE: June 3, 2009 NEW BUSINESS
SUBJECT: APPROVE THE MEMORANDUM OF UNDERSTANDING BETWEEN THE
CITY OF PALM SPRINGS AND COUNTY OF RIVERSIDE FOR
NEIGHBORHOOD STABILIZATION PROGRAM (NSP) FUNDING
FROM: David H. Ready, City Manager
BY: Department of Community & Economic Development
SUMMARY
The Neighborhood Stabilization Program (NSP) is a special allocation of the federal
Community Development Block Grant (CDBG) funds provided through the U.S.
Department of Housing and Urban Development (HUD) under the Housing and Economic
Recovery Act of 2008 (HERA). The City of Palm Springs is eligible to receive $549,970 in
NSP funding. Applicants that do not meet the $1 million threshold individually are required
to submit a joint application. Therefore, the City of Palm Springs will need to partner with
the County of Riverside, the City of Coachella, and the City of Palm Desert in order to
meet the requirement to pursue funding.
RECOMMENDATION:
1) Approve the Memorandum of Understanding (MOU) between the City of Palm Springs
and the County of Riverside for NSP funding; and
2) Authorize the City Manager/Executive Director to finalize and execute the NSP plan and
MOU joint agreement.
STAFF ANALYSIS:
The basic intent of the NSP is to mitigate the impacts of increasing foreclosures and falling
home prices by purchasing foreclosed and abandoned homes and other residential
properties at a discounted value, rehabilitating or redeveloping these properties if
necessary, and reselling or reusing the properties.
Currently, there are three Tiers of funding available through the State's NSP from the
California Housing and Community Development (HCD). Based on its formula relative to
the number of foreclosures and per mortgage percentage of home foreclosures, Tier 1
jurisdictions were determined to have the greatest need and received direct federal
allocations, provided that the direct allocation was more than $1 million. Tier 2 jurisdictions
were those where the need was identified, but their respective allocation was less than $1
million.
ITFiir+ �30. �•�i
Council Staff Report
June 3, 2009— Page 2 of 3
NSP MOU County Joint Agreement
On its own, the City of Palm Springs is eligible for $549,970; therefore, it is considered a
Tier 2 jurisdiction. Within the County of Riverside there were five jurisdictions that did not
qualify for Tier 1 funding, those include Palm Desert, Palm Springs, Calimesa, Coachella,
and Rancho Mirage for a total of$2,300,235.
In order to meet the minimum application threshold of $1 million, the State permits
jurisdictions in Tier 2 to combine their allocations with other contiguous jurisdictions
through a joint agreement. Contiguous is defined by HUD as jurisdictions that are located
within the boundaries of the same county. As a result, the City of Palm Springs may enter
into a joint agreement with the County of Riverside, the City of Palm Desert, and the City of
Coachella. The County of Riverside would apply as the lead agency to meet the
contiguous requirement. Both Rancho Mirage and Calimesa have decided not to seek Tier
2 NSP funding. If a joint agreement is not approved, the funding allocated to these Tier 2
cities will be reallocated county-wide for those areas which it has designated as having the
greatest need and may not be in the-Coachella Valley.
In addition to the joint agreement, the County is required to prepare and submit an
application to HCD for the NSP Program. Under the requirements provided by HUD, the
City of Palm Springs must give priority emphasis to the areas of greatest need. including
those:
1. With the greatest percentage of foreclosures;
2. With the highest percentage of homes financed by subprime mortgage related
loans; and
3. Identified as likely to face a significant rise in the rate of home foreclosures.
Additionally, under the NSP requirements, participating jurisdictions may perform the
following activities:
A. Establish financing mechanisms for purchase and redevelopment of foreclosed-
upon homes and residential properties. including such mechanisms as soft-
seconds, loan loss reserves, and shared-equity loans for low- and moderate-
income homebuyers.
B. Purchase and rehabilitate homes and residential properties that have been
abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and
properties.
C. Establish land banks for homes that have been foreclosed upon-
D. Demolish blighted structures-
E. Redevelop demolished or vacant properties.
The County's NSP Action Plan identifies the aforementioned eligible activities. The City of
Palm Springs efforts would primarily focus on the following two activities:
Redevelopment of vacant or demolished properties, such as the Rosa Garden
Apartment's infrastructure improvements; and
Enhanced First-Time Home Buyers (FTHB) Program which offers a financing
mechanism to eligible first-time home buyers to enable them to directly acquire
foreclosed or abandoned single-family homes using NSP funds. Additionally, the
Program will provide down-payment assistance to low- and moderate-income
L2
Council Staff Report
June 3, 2009—Page 3 of 3
NSP MOU County Joint Agreement
households that have not owned homes within a three-year period. The Enhanced
FTHB program will be available for households with an annual income that is no
greater than 120% of the area median income as published by HUD. Finally, the
Program will provide up to 20% of the purchase price with a 15-year affordability
period as a "silent second" loan, plus a rehabilitation component to enhance the
physical appearance of the home and remove all health and safety concerns to
satisfy the Housing Quality Standards (HQS). The total amount of assistance for
each home will not exceed $75,000 (which includes both down payment assistance
and rehab).
As part of the overall County of Riverside study, the Economic Development Agency
developed a map of geographical areas of greatest need with the County using the HUD
requirements and local data. These maps, along with other data sources, were used in
determining the areas within Palm Springs of greatest need. The areas identified as
having the greatest need within the City of Palm Springs is concentrated in the northern
part of the city. It is the intent to not only target and stabilize these neighborhoods in the
short term but to strategically incorporate modern, green-building, and energy-efficiency
improvements in NSP activities thereby providing increased sustainability and
attractiveness of housing and neighborhoods.
Staff recommends that the City Council approve the MOU joint agreement as to form; and
authorize the City Manager to finalize and execute the MOU joint agreement and its NSP
activities.
FISCAL IMPACT:
There is no direct fiscal impact to the General Fund. These dollars are the City's allocated
federal Community Development Block Grant (CDBG) funds provided through the U.S.
Department of Housing and Urban Development (HUD) under the Housing and Economic
Recovery Act of 2008 (HERA). If the City fails to approve the MOU Joint Agreement, HCD
will roll-over the funds solely to the County and the County will proceed to reallocate to
other County jurisdictions with the greatest need, and no certainty would be Coachella
Valley jurisdictions.
XCL
DALE E. COOK, THOMAS J,�WILSON
Community Development Administrator Assistant City Manager
DAVID H. READY, Es, D.
City Manager
ATTACHMENT: County of Riverside MOU Joint Agreement
County of Riverside Foreclosure Risk Map
CDBG09.1 O1NSP—CC Sta$Report.Mayo9
County of Riverside MOU Joint Agreement
not included will be provided as Additional Materials at the Meeting.
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