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HomeMy WebLinkAbout6/2/2004 - STAFF REPORTS DATE: June 2, 2004 TO: City Council FROM: Assistant City Manager - Administration SUBJECT: Participation in the Coachella Valley Home Purchase Finance Authority RECOMMENDATION: It is recommended that the Community Redevelopment Agency consider whether to participate in the proposed Coachella Valley Home Purchase Authority and provide appropriate direction to staff. SUMMARY: The Coachella Valley Association of Governments (CVAG) has been working with a consortium of local financial institutions to create a program to assist qualified individuals with the monies necessary to bridge the gap between the mortgage amount a homebuyer can qualify for and the actual purchase price of a single- family detached home, townhouse, or condominium. This program, which would be administered by a separate joint powers authority (IPA) comprised of the redevelopment agencies of CVAG's member cities, would provide down payment assistance of up to 25% of the home price to first-time homebuyers. In order to form this JPA, CVAG is requesting all of its member cities to consider whether or not they are interested in participating in this JPA. BACKGROUND: CVAG has been working with a consortium of local financial institutions to create a program to serve first-time homebuyers in the moderate income bracket by providing down-payment assistance of up to 25% of the home purchase price. This consortium is comprised of eight (8) private lending institutions from the local area. These institutions have pooled approximately $2.35 million to fund this program which is required under the 1977 Federal Community Reinvestment Act. Under this Act, private financial institutions are obligated to help meet the credit needs of the communities in which they operate by offering financial programs and services to low- and moderate-income individuals. CVAG's program is modeled on successful first-time homebuyer assistance programs in other parts of Southern California, including Orange County and the Montclair-Pasadena area. Under this program, the JPA acts as guarantor for loans made by the participating financial institutions and repays those institutions with the money from the homebuyers' second-mortgage payments. For example, for a home costing $200,000 a qualified individual would receive a first mortgage of 75% of the home value - $150,000 - from one of the participating consortium institutions. The JPA would then use the funds that have been set aside by the consortium to provide a second mortgage of 25% of the home cost to the buyer. JPA members would not be required to contribute any funds towards this program. Funds would be available on a first-come, first-served basis. It should be noted that the City is currently a member of the Pacific Housing and Finance Authority (PHFA). The PHFA is a coalition of 52 California cities that have joined together to help individuals who can afford monthly payments but lack enough savings to pay for the additional costs associated with buying a home. The PHFA currently provides a Lease-to-Own Program. This program, which began on December 21, 2001 with $22 million in funding, provides an opportunity for renters with stable incomes to find the house they want to own and then partner with the Agency who buys the home and leases it to the applicant for 39 months. At the end of the 39-month lease, the lease-purchaser assumes the mortgage loan and takes full title to the home. CVAG's proposed program is different from the program offered by the PHFA in several ways. First, instead of requiring an individual to enter into a lease-to- own arrangement, the JPA will loan qualified first-time homebuyers up to 25% of the home purchase price. Second, the CVAG program is designed specifically to assist the moderate-income homebuyer realize their dream of purchasing a home. This matter has been discussed and approved by the CVAG Executive Committee. Although the JPA would be a separate legal entity from CVAG, the program will be administered by CVAG personnel. For your information, a copy of the proposed JPA agreement is attached. To date, the cities of Blythe, Cathedral City, Coachella, Desert Hot Springs, and Palm Desert have agreed to participate in the formation of the JPA. The cities of Indian Wells, Indio, La Quinta and Rancho Mirage have decided not to participate. Without the cities of Indio and La Quinta, there is now some question whether the consortium will be willing to fund the program. CVAG is currently in the process of ascertaining whether the consortium is still willing to participate with the remaining cities and has indicated that they will have an answer prior to the Council taking an action on this matter. Staff has prepared the attached Resolution should the Agency Board be interested in participating in the Coachella Valley Home Purchase Finance Authority. "L. ssistant City Manager - Administration APPROVED �z✓1� i City Manager Attachments: 1. Draft Joint Powers Authority Agreement 2. Resolution /� �h JOINT POWERS AGREEMENT COACHELLA VALLEY HOME-PURCHASE FINANCE AUTHORITY This Agreement is made and entered into, pursuant to Government Code Sections 6500 et seq. and under the sponsorship of the Coachella Valley Association of Governments, by and between the following public agencies : (a) County of Riverside [Redevelopment Agency] (b) City of Blythe [Redevelopment Agency] (c) City of Coachella [Redevelopment Agency] (d) City of Indio [Redevelopment Agency] (e) City of La Quinta [Redevelopment Agency] (f) City of Indian Wells [Redevelopment Agency] (g) City of Palm Desert [Redevelopment Agency] (h) City of Rancho Mirage [Redevelopment Agency] (i) City of Cathedral City [Redevelopment Agency] (j ) City of Palm Springs [Redevelopment Agency] (k) City of Desert Hot Springs [Redevelopment Agency] These public agencies are sometimes referred to herein as "Parties" and/or "Members . " RECITALS WHEREAS, California Government Code Sections 6500, et seq. , provide that two or more public agencies may by agreement jointly exercise any power common to the contracting Parties; WHEREAS, the Parties to this Agreement each have and possess the power to provide down-payment assistance for first-time moderate-income homebuyers in the form of loans, including but not limited to the power to borrow monies from private lenders to fund such first-time home-buyer assistance programs; (900k \�5 12/21/03 Draft 1 Finance Authority JPA WHEREAS, numerous programs and special subsidies are available to low and very-low income borrowers, but not to moderate-income buyers; WHEREAS, the absence of programs directed at the moderate-income buyer has created an affordability gap for the prospective buyer who cannot save enough for a down payment on a first home, but who has an income too high to qualify for low or very-low income assistance programs; WHEREAS, private lending institutions are required by federal law, the Community Reinvestment Act, to participate in programs to assist such buyers; WHEREAS, individually, the Member agencies can not offer a program large enough to attract significant participation of private lending institutions; WHEREAS, collectively, the Member agencies can offer a program large enough to attract the participation of several private lending institutions in a regional program for the benefit of moderate-income, first-time homebuyers in Blythe and the Coachella Valley; WHEREAS, the participation of several private lending institutions seeking to meet their obligations under the Community Reinvestment Act will allow the Member agencies, collectively, to secure a funding source at a cost that is expected to be below the cost of administrating the loan program; WHEREAS, the Parties to this Agreement desire to join together for the purpose of jointly contracting with a consortium of private lenders to underwrite and create (a) pool (s) of funds from which secured loans might be made available by the contracting agencies to qualified, moderate-income, first-time homebuyers; and cvok A 12/21/03 Draft 2 Finance Authority JPA WHEREAS, the Parties to this Agreement desire to join together for the further purpose of jointly administering such a program; NOW, THEREFORE, it is agreed by and between the Parties hereto as follows : Article 1 Definitions Section 1 . 1 Definitions . As used in this Agreement, unless the context requires otherwise, the meaning of the terms set forth below shall be as follows : (a) "Accrue, " in the context of the date that an obligation of the Authority accrued, shall not refer to the date of a demand or claim. Rather, where there is one act, omission or event giving rise to the obligation, the date of that one act, omission or event shall be the date the obligation accrued. However, where an obligation arises out of more than one act, omission or event, the accrual date shall refer to the entire period of time running from the first act, omission or event through the date of the last act, omission or event related to the same obligation. (b) "Authority" shall mean the Coachella Valley Home- Purchase Finance Authority created by this Agreement . (c) "Consortium" shall mean, collectively, the private lending institutions that contract with the Authority to underwrite and provide the 12/21/03 Draft 3 Finance Authority JPA pool (s) of funds from which the Authority shall provide loans to qualified homebuyers . (d) "CVAG" shall mean the Coachella Valley Association of Governments . (e) "Law" or "the Law" shall mean the Joint Exercise of Powers Act, being Articles 1 and 2 of Chapter 5 of Division 7 of Title 1 of the California Government Code (Sections 6500, et seq. ) . (f) "Loan Committee" shall mean a committee that, subject to approval of the Board of Directors, sets all underwriting standards, rates and policies . (g) "Member" shall mean any public agency listed in the opening paragraph of this Agreement that becomes a signatory to this Agreement or any new Parties as permitted pursuant to Article 14 (Admission and Withdrawal of Parties) . (h) "Moderate-income" means eighty (80) to one hundred twenty (120) percent of the median Riverside County income as determined by the U. S. Department of Housing and Urban Development . (i) "Represented Member Agency" refers to the Member agency represented by a Director, i . e. , the Member agency that appointed a particular Director. (j ) "Treasurer" for the Authority shall be the Treasurer of CVAG, or any other person designated by the Board, who is to perform the duties of the Treasurer and Auditor-Controller of the Authority. 1 ` 12/21/03 Draft 4 Finance Authority JPA Article 2 Creation of the Authority Section 2 . 1 Creation. There is hereby created pursuant to the Law a public entity to be known as the "Coachella Valley Home-Purchase Finance Authority, " which shall be an agency or entity that is separate from the Parties to this Agreement . Article 3 Powers and Duties of CVAG Section 3 . 1 CVAG' s Participation. CVAG shall be an ex-officio member organization of the Authority and shall have the following powers and duties : (a) To provide all administrative services for the Authority and its Initial Program; (b) To empower its Executive Director to serve as the General Manger and Secretary of the Authority; (c) To exercise such other powers and duties as the Board of Directors deems necessary to achieve the purposes of this Agreement . Section 3 . 2 Principal Office. The principal office of CVAG shall be the principal office of the Authority. The Board of Directors is hereby granted full power and authority to change said principal office from said location to another within the Coachella Valley. Article 4 Term of Agreement Section 4 . 1 Term. This Agreement shall become effective and the Authority shall exist at such time as L?o A 61to1 12/21/03 Draft 5 Finance Authority JPA this Agreement has been executed by the Member public agencies identified hereinabove . Article 5 Membership Section 5 . 1 Membership. With the exception of CVAG which shall be an ex-officio member, each public agency which has executed or hereafter executes this Agreement, and any addenda, amendments or supplement thereto, and which has not, pursuant to the provisions hereof, withdrawn or been terminated, shall be a Member of the Authority. Article 6 Purposes and Powers Section 6 . 1 Purpose. The purpose of this Agreement is to provide for the joint exercise, through the Authority, of powers common to each of the Parties, as described in the Recitals above, to provide down-payment assistance to qualified moderate-income, first-time homebuyers, in the form of secured loans, and to fund, originate, and administer such an assistance program, and to do all acts related or incidental thereto, either by the Authority alone or in cooperation with the Consortium or other entities, in order to educate and assist moderate-income buyers with their first purchase of a home . Section 6 . 2 Powers . The Authority shall have the power to exercise any power common to all the Parties as authorized by the Law and is hereby authorized to do all acts necessary for the exercise of these common powers, including, but not limited to, any of the following: (a) To exercise jointly the common powers of its Members to implement, manage and administer the CVF\ \�&0 12/21/03 Draft 6 Finance Authority JPA Initial Program and any Specific Project Agreements; (b) To make and enter into contracts; (c) To incur debt, liabilities or obligations; (d) To acquire, hold, and dispose of property by lease, lease purchase or sale as necessary to the full exercise of its powers; (e) To lease, acquire, construct, manage, maintain, and operate any buildings, works, or improvements; (f) To sue and be sued in its own name; (g) To contract for the services of engineers, attorneys, planners, educators, housing assistance entities, technical specialists, financial consultants, and separate and apart therefrom, to employ such other persons as it deems necessary; (h) To issue bonds, notes and other indebtednesses, and to enter into leases, installment sale and installment purchase contracts, all as provided for in Section 12 . 9 (Issuance of Bonds, Notes and Other Indebtedness) . (i) To apply for, accept and receive state, federal or local licenses, permits, grants, loans or other aid from any agency of the United States of America, the State of California or other public or private entities necessary for the Authority' s full exercise of its powers; (j ) To receive gifts, contributions and donations of property, funds, services and other forms of financial assistance from persons, firms, corporations and any governmental entity; ("qo ywkA 12/21/03 Draft 7 Finance Authority JPA (k) To adopt rules, regulations, policies, bylaws and procedures governing the operation of the Authority; (1) To perform all acts necessary or proper to carry out fully the purposes of this Agreement; and (m) To the extent not hereinafter specially provided for, to exercise any powers in the manner and according to the methods provided under the laws applicable to the County of Riverside. Section 6. 3 Initial Program. The Authority shall contract with a Consortium to obtain (a) pool (s) of monies from which the Authority shall make loans to qualified, first-time, moderate-income homebuyers . Such loans shall be secured against property to be purchased within the geographical boundaries of any Member agency, in a second priority position, in an amount roughly proportional to the equity position required by the lender providing the first mortgage (or trust deed) . Underwriting for each loan considered by the Authority shall be conducted by an agency approved by the Consortium, and no loan shall be given except upon approval by the underwriting agency and at least two of the three Consortium representatives on the Loan Committee. The interest rate charged to the Authority by the Consortium for the use of funds advanced from the loan pool (s) shall be at least one percent (1%) below the rate to be collected from the homebuyer on the corresponding second mortgage. Further, the interest rate charged to the homebuyer for the second mortgage shall not exceed the interest rate charged by the lender on the first mortgage . Thus, the loan pool funds shall be advanced by the Consortium at a rate to the Authority that is at least one 12/21/03 Draft 8 Finance Authority JPA percent below the rate to be paid by the homebuyer on the first mortgage, as well as at least one percent below the rate to be paid by the homebuyer on the second mortgage. Section 6 . 4 [Reserved. ] Article 7 Board of Directors Section 7 . 1 Governing Body. The Authority shall be governed by a Board of Directors consisting of one Director appointed by and serving at the pleasure of each Member agency. Each Director shall have the voting rights provided for in Section 7 . 13 (Voting) . CVAG shall be represented as an ex-officio, non-voting member organization. The Board shall exercise all powers and conduct all business of the Authority, either directly or by delegation of authority to other bodies or persons pursuant to this Agreement and applicable law. Section 7 . 2 Qualifications . Each Director shall be a current member of the governing body of the appointing Member agency. Termination of office with the Represented Member Agency shall automatically terminate membership on the Board. Section 7 . 3 Regular Board Meetings . The Board shall hold at least one regular annual meeting and shall provide for such other regular meetings as it deems necessary. Meetings of the Board of Directors shall be held at such locations in the Coachella Valley and at such times as may be designated from time to time by the Board of Directors . Section 7 . 4 Special Meetings of the Board. Special meetings of the Board may be called by the Chair, to be held at such times and places within the Coachella Valley as may be ordered by the Chair . Five percent or more of �k 1`, 12/21/03 Draft 9 Finance Authofit y PA the Directors may also call a special meeting for any purpose . Section 7 . 5 Quorum. The Board of Directors shall act only upon a majority of a quorum. A quorum of any meeting of Directors shall consist of a majority of the Directors then designated by and serving on behalf of the Members . In the event that a Member has failed to designate a Director, or a Member' s designated Director has died, resigned, left office, been terminated or is otherwise unwilling or unable to act as the designating Member' s representative, and a replacement Director has not yet been designated such that the Member has no duly acting representative on the Board of Directors, that Member' s vacant board seat shall not be included when calculating the number of Directors necessary to constitute a quorum. Except as otherwise provided in this Agreement, every act or decision made by a majority of the Directors present at a meeting duly held at which a quorum is present is the act of the Board. In the absence of a quorum, any meeting of the Directors may be adjourned from time to time by a vote of the majority present, but no other business may be transacted except as provided for in this section. The Directors present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment notwithstanding the withdrawal of enough Directors to leave less than a quorum, if any action taken, other than adjournment, is approved by at least a majority of the number of Directors required to constitute a quorum. Section 7 . 6 Chair and Vice-Chair. The Board of Directors shall annually elect from its membership a Chair and Vice-Chair to serve for a one-year term. //�� /► (ALR `I- 12/21/03 Draft 10 Finance Authority JPA Section 7 . 7 Conduct of Meetings . The Chair or, in the absence of the Chair, the Vice-Chair, shall preside at all meetings of the Directors . Section 7 . 8 Termination of a Director. Any Director may be terminated for cause by a two-thirds (2/3) vote of the Directors . Additionally, any Director may resign effective on giving written notice to the Board of Directors, unless the notice specifies a later time for the effectiveness of such resignation. A successor shall be appointed by the Represented Member Agency as provided for in this Agreement. After the effective date of termination or resignation and prior to the appointment of a successor, the departing Director' s seat shall not be counted when calculating the number of Directors necessary to constitute a quorum. Section 7 . 9 Vacancies on the Board. A vacancy on the Board of Directors shall exist (a) on the death, resignation or termination of any Director, (b) upon removal by the Represented Member Agency, (c) at the end of any Director' s term on the governing body of the Represented Member Agency, (d) whenever the number of Directors is increased, or (e) on the failure of the Member agencies to appoint the full number of Directors authorized. Vacancies on the Board of Directors may not be filled by the Directors . A vacancy shall be filled only by the Represented Member Agency for whom a Director is not then serving . Section 7 . 10 Other Officers . The Executive Director of CVAG or his/her designee shall be the secretary of the Authority. Any officer, employee or agent of any Member of the Authority may also be an officer, employee, or agent of any of the Member agencies . The appointment by the Members cQ+ 4 66111 k3 12/21/03 Draft 11 Finance Authority JPA of such person shall be evidence that the two positions are compatible. Section 7 . 11 Minutes . The secretary of the Authority shall cause to be kept minutes of regular, adjourned regular and special meetings of the Board of Directors . Section 7 . 12 Rules . A majority of Directors may adopt rules governing meetings if not inconsistent or in conflict with this Agreement . In the absence of rules adopted by the Directors, Roberts' Rules of Order, as they may be amended from time to time, shall govern the meetings of the Directors in so far as they are not inconsistent or in conflict with this Agreement or any Authority bylaws . Section 7 . 13 Voting. Except as otherwise provided by this Agreement, each Director shall have one vote . Section 7 . 14 Compensation. Directors shall serve without compensation from the Authority. Article 8 Conduct of Meetings Section 8 . 1 Compliance with Brown Act . All meetings of the Board of Directors, or directors of any Specific Project, including, without limitation, regular, adjourned regular and special meetings, shall be called, noticed, held and conducted in accordance with applicable provisions of the Ralph M. Brown Act, California Government Code Sections 54950, et seq. Section 8 . 2 Teleconferencing. The Board of Directors and the directors of any Specific Project may use teleconferencing in connection with any meeting in conformance with, and to the extent authorized by, the Ralph M. Brown Act. J-0 R C, 12/21/03 Draft 12 Finance Authority JPA Article 9 Loan Committee Section 9 . 1 Loan Committee. There shall be a five (5) person Loan Committee. Subject to approval of the Board of Directors, the Loan Committee shall establish all underwriting criteria consistent with applicable government regulations, any requirements established by the members of the Consortium, and secondary-loan-market participants . Section 9 . 2 Qualifications . Subject to approval of the Board of Directors, the Loan Committee shall be composed of three (3) representatives of the participating lenders proposed by the Consortium; one (1) representative proposed by the Board of Directors; and one (1) representative proposed by the underwriting agency. Section 9. 3 Terms of Office. The terms of office for individuals serving on the Loan Committee shall be two (2) years commencing with the date of the first meeting of the Loan Committee. Each Committee person shall hold office until his or her successor is elected or appointed and qualified for such office . Committee persons shall be eligible for re-election, provided they continue to meet the qualifications required by this Agreement . Article 10 Other Committees Section 10 . 1 Committees . From time to time the Board may create by majority vote various committees to carry on the business of the Authority. Lqo(k kA &,o k 12/21/03 Draft 13 Finance Authority JPA Article 11 Employees Section 11 . 1 General Manager and Staff. The Executive Director of CVAG shall serve as the General Manager of the Authority. Unless the use of outside employees or contractors is approved by the Board, the General Manager shall utilize CVAG staff as may be necessary to accomplish the purposes of the Authority. CVAG staff time, as well as office expenses, direct and indirect overhead, shall be charged to the Authority utilizing direct billing and other accounting practices that provide for a clear separation of funds . Section 11 . 2 Status . Where CVAG' s or other Member agency' s staff are utilized to accomplish the purposes of the Authority, all of the privileges and immunities from liability, exemption from laws, ordinances and rules, all pension, relief, disability, worker' s compensation, and other benefits which apply to the activity of officers, agents, or employees of any of the Members when performing their respective functions shall apply to them to the same degree and extent when engaged in the performance of any of the functions and other duties under this Agreement . However, no staff employed directly by the Authority, if any, shall be deemed, by reason of their employment by the Authority, to be employed by any of the Members or, by reason of their employment by the Authority, to be subject to any of the employment requirements of the Member agencies . (,qopt �Aao 12/21/03 Draft 14 Finance Authority JPA Article 12 Financial Provisions Section 12 . 1 Fiscal Year. The fiscal year of the Authority shall be from July 1 of each year to the succeeding June 30 . Section 12 . 2 Depositary. The Treasurer shall be the depositary and have custody of all money of the Authority from whatever source and shall perform the duties specified in Government Code Section 6505 . 5 . All funds of the Authority shall be strictly and separately accounted for, and regular reports shall be rendered to the Board and the Members of all receipts and disbursements at least quarterly during the fiscal year. The books and records of the Authority shall be open to inspection by a Member or Director at all reasonable times upon reasonable notice. The Treasurer shall contract with an independent certified public accountant to make an annual audit of the accounts and records of the Authority, which shall be conducted, at a minimum, in accordance with the requirements of the State Controller under Section 26909 of the California Government Code, and shall conform to generally accepted auditing standards . Section 12 . 3 Property Bonds . The Board shall from time to time designate the officers and persons, in addition to the Treasurer, who shall have charge of, handle, or have access to any property of the Authority. Each such officer and person, including the Treasurer, shall file a bond in an amount designated by the Board. When fixing the amount of such bonds, the Board of Directors shall be deemed to be acting for and on behalf of the Represented Member Agencies in compliance with Government Code Section 6305 . 1 OoR- 0 ^ kol 12/21/03 Draft 15 Finance Authority JPA Section 12 . 4 Budget . As soon as practicable after the effective date of this Agreement, and thereafter at least thirty (30) days prior to the commencement of each fiscal year, the General Manager shall present a proposed budget to the Board for the forthcoming fiscal year. Prior to the commencement of the fiscal year, the Board shall adopt a budget for the new fiscal year. Section 12 . 5 Working Capital Account. A Working Capital account, which is to be used for the purpose of funding general overhead and administrative expenses for the ongoing operations of the Authority, shall be established by the Board in an amount approved in connection with the annual budget process . Funding for the Working Capital Account shall be obtained by a `start-up" contribution from the Consortium equal to one percent (10) of the first (and any subsequent) loan pools established. Additionally, a loan origination fee shall be charged for each loan originated by the Authority, which fee amount may be set and changed from time to time by majority vote of the Board. The Authority shall also collect interest on the funds in the loan pool (s) prior to use, as well as interest on funds in the Loan Loss Reserve Account funded by the Consortium for each loan pool . Additionally, the Authority shall earn income represented by the difference between the interest rate charged to the Authority by the Consortium for the use of the money and the interest rate collected by the Authority from the homebuyers . Grants and other gifts may also be solicited and utilized. Section 12 . 6 Additional Funding. In the event that funding for the Working Capital Account as described in Section 12 . 5 (Working Capital Account) is insufficient, an advance or grant may be requested from CVAG and/or , any �( coo k 12/21/03 Draft 16 Finance Authority JPA Member agency. Should such request be declined, and necessary funds be unavailable, the Authority shall dissolve. Section 12 . 7 Other Contributions . Contributions or advances of other funds and of personnel, equipment or property may be made to the Authority by any Member for any purpose of this Agreement, and credited to the Member' s obligations, with the consent of the Board. Any such advances may be made subject to repayment, and in such case shall be repaid in the manner agreed upon by the Member making the advance and the Authority. Section 12 . 8 Return of Contributions and Revenue. In accordance with Government Code Section 6512 . 1, repayment or return to the Members of all or any part of any contributions made by Members and any revenues received by the Authority may be directed by the Board at such time and upon such terms as the Board may decide. The Board shall hold title to all funds, and property acquired by the Authority during the term of this Agreement . Section 12 . 9 Issuance of Bonds, Notes and Other Indebtedness . The Authority may issue bonds, notes or other forms of indebtedness if such issuance is approved by a two-thirds (2/3) vote of the Directors . The Secretary shall notify all of the Members by registered mail, return receipt required, of the approval for incurring of such indebtedness within ten (10) days after its approval . Any Member may within thirty (30) days of the receipt of such notice withdraw from this Agreement by giving written notice to the General Manager, provided that such withdrawal does not in any way impair any contracts, or other indebtedness of the Authority then in effect. This right to withdraw is in addition to the Member' s right to 12/21/03 Draft 17 Finance Authority JPA withdraw set forth in Article 14 (Admission and Withdrawal of Parties) . No such bonds, notes or indebtedness shall be issued before the expiration of the time given in this Section to Members to withdraw from this Agreement. Section 12 . 10 Disbursements . The General Manager shall request warrants from the Treasurer in accordance with budgets approved by the Board of Directors subject to quarterly review by the Board of Directors . The Treasurer shall pay such claims or disbursements and such requisition for payment in accordance with rules, regulations, policies procedures and bylaws adopted by the Board of Directors . Section 12 . 11 Accounts . All funds will be placed in accounts and the receipt, transfer, or disbursement of such funds during the term of this Agreement shall be accounted for in accordance with generally accepted accounting principles applicable to governmental entities and pursuant to Government Code Section 6505 et seq. and any other applicable laws . All revenues and expenditures shall be reported to the Board of Directors . Section 12 . 12 Expenditures Within Approved Annual Budget. All expenditures shall be made within the approved annual budget. No expenditures in excess of those budgeted shall be made without the approval of a majority of a quorum of the Board of Directors . Article 13 Relationship of the Authority and Its Members Section 13 . 1 Separate Entity. The Authority shall be a public entity separate from the Parties to this Agreement. The debts, liabilities and obligations of the Authority shall not be the debts, liabilities or obligations of the Parties . No Member shall be jointly or 12/21/03 Draft 18 Finance Authority JPA severally liable for any debt or obligation of the Authority or any of its Members . All property, equipment, supplies, funds and records of the Authority shall be owned by the Authority, except as otherwise provided in this Agreement. Article 14 Admission and Withdrawal of Parties Section 14 . 1 Admission of New Parties . Additional public entities may become Members of the Authority upon such terms and conditions as provided by the Board of Directors and the consent of two-thirds (2/3) of the then- existing Parties to this Agreement, to be evidenced by the execution of a written addendum to this Agreement signed by all of the Parties including the additional Parties . Section 14 . 2 Withdrawal of Membership. Withdrawal of any Party hereto, either voluntarily or involuntarily, unless otherwise provided by the Board of Directors, shall be conditioned as follows : (a) In the case of a voluntary withdrawal, written notice shall be given to the Authority one year and ninety days prior to the effective date of withdrawal; (b) Withdrawal shall not relieve the Party of its proportionate share of any debt or other liability of the Authority that accrued prior to the effective date of the Party' s notice of withdrawal or assessments related to the administration of outstanding loans secured by real property within the departing Member' s geographical jurisdiction; u OLA ' ` 1 12/21/03 Draft 19 Finance Authority JPA (c) Withdrawal shall result in the forfeiture of that Party' s rights and claims relating to the distribution of property and funds upon termination of the Authority as set forth in Section 14 . 4 (Disposition of Property Upon Termination) . Section 14 . 3 Involuntary Termination. The Board of Directors may terminate, for reasonable cause, any Member of the Authority on a two-thirds (2/3) vote of the Directors . Section 14 . 4 Disposition of Property Upon Termination. In the event of the termination of this Agreement, any property interest remaining in the Authority following the discharge of all obligations shall be disposed of as the Board of Directors shall determine with the objective of returning to each Party a proportionate return on the contributions made by each, less previous returns if any. Section 14 . 5 [Reserved. [ Article 15 Provision for Bylaws Section 15 . 1 . Bylaws . As soon as practicable after the first meeting of the Board of Directors, the Board shall cause to be developed Authority bylaws to govern the day- to-day operation of the Authority. Article 16 Contribution and Indemnity Among Members Section 16. 1 No Third Party Beneficiaries . This Article shall reflect the Members' rights and obligations as by and among themselves . Nothing herein shall create any right in any third party to enforce any right or U40A laa- Z 12/21/03 Draft 20 Finance Authority JPA obligation set out in this Agreement as against any Party hereto. Section 16. 2 Hold Harmless and Indemnity. Each Party hereto agrees to indemnify and hold the other parties harmless from all liability for damage, actual or alleged, to persons or property arising out of or resulting from the negligent or wrongful acts or omissions of the indemnifying Party or its employees/agents . Section 16. 3 Limitations on Liability. Except as Section 16. 2 may apply and the obligations therein are performed, the Authority shall be authorized to defend, indemnify and hold harmless any Director, officer, agent or employee for actions taken or not taken within the scope of the authority given or granted by the Authority and from and against any claim or suit arising out of any act or omission of the Authority, the Board or any Director, officer, agent or employee in connection with this Agreement and may purchase insurance as the Board may deem appropriate for this purpose. In contemplation of Section 895 . 2 of the Government Code, and pursuant to the authority contained in Sections 895 . 4 and 895 . 6 of that Code, and except to the extent that Section 16 . 2 (Hold Harmless and Indemnity) may apply, each of the Members assumes that portion of the liability imposed upon the Authority or any of its Members, officers, agents or employees by law for injury caused by any negligent or wrongful act or omission that is not covered by insurance, that is in the proportion that, as of the date the obligation accrued, the outstanding loan balances in that Member' s geographical jurisdiction bears to the total then outstanding balance of all loans originated by the Authority. Where an obligation accrued over a period of time, each Member' s share shall be L" �1w7 � 12/21/03 Draft 21 Finance Authority JPA fairly apportioned among all agencies participating during the applicable period. To achieve such purposes, each Member shall to the extent provided herein indemnify and hold harmless the other Members for any loss, costs or expenses that may be imposed on such other Members solely by virtue of Section 895 .2 . The Parties acknowledge that, given the possible variables, determination of a proper apportionment may be difficult . Therefore, the Parties agree that the Board' s good faith determination of a fair apportionment shall be final, binding and enforceable as a term of this Agreement. The provisions of this Article shall survive the termination of this Agreement and/or the withdrawal of any or all Members . Article 17 Miscellaneous Provisions Section 17 . 1 Notices . Notices to Members hereunder shall be sufficient if delivered to the principal office of the respective Member. Section 17 . 2 Amendments . This Agreement may be amended or terminated at any time at any duly constituted meeting of the Board of Directors by a two-thirds vote of the Directors . Section 17 . 3 Prohibition Against Assignment . No Member may assign any right, claim or interest it may have under this Agreement, and no creditor, assignee, or third- party beneficiary of any Member shall have any right, claim or title to any part, share, interest, fund, or asset of the Authority. This Agreement shall be binding upon, and shall inure to, the benefit of the successors of each Party. 12/21/03 Draft 22 Finance Authority JPA Section 17 . 4 Agreement Complete. The foregoing constitutes the full and complete Agreement of the Parties . There are no oral understandings or agreements not set forth in writing herein. Section 17 . 5 Severability. If any one or more of the terms, provisions, sections, promises, covenants or conditions of this Agreement shall to any extent be adjudged invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, sections, promises, covenants and conditions of this Agreement shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. Section 17 . 6 Multiple Originals . This Agreement may be executed in counterparts, each of which shall be deemed an original . Section 17 . 7 Execution. The Board of Supervisors of the County of Riverside, [the City Councils of the City Members] [governing boards of the Redevelopment Agency Members] , and the Executive Committee of CVAG have each authorized execution of this Agreement, as evidenced by the authorized signatures below. [Signature blocks . ] 00 00 12/21/03 Draft 23 Finance Authority JPA RESOLUTION NO. OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS APPROVING THE AGENCY'S PARTICIPATION IN THE COACHELLA VALLEY HOME PURCHASE FINANCE AUTHORITY AND AUTHORIZING THE CHAIRMAN TO EXECUTE ALL NECESSARY DOCUMENTS. WHEREAS the Coachella Valley Association of Governments (CVAG) has been working with a consortium of local financial institutions to create a program to assist qualified individuals with the monies necessary to bridge the gap between the mortgage amount a homebuyer can qualify for and the actual purchase price of a single-family detached home, townhouse, or condominium; and WHEREAS, this program, which would be administered by a separate joint powers authority(JPA) comprised of the redevelopment agencies of CVAG's member cities,would provide down payment assistance of up to 25% of the home price to first-time homebuyers; and WHEREAS, the Community Redevelopment Agency (Agency) has reviewed this program and hereby determines that it is in the public's interest to participate. NOW, THEREFORE, BE IT RESOLVED bythe Community Redevelopment Agency of the City of Palm Springs as follows: SECTION 1. The Agency does hereby agree to participate in the formation of the Coachella Valley Home Purchase Finance Authority. SECTION 2. The Agency directs the Chairman to execute all necessary documents pertaining to the Coachella Valley Home Purchase Finance Authority. ADOPTED this day of , 2004. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA By Assistant Secretary Chairman REVIEWED & APPROVED goA