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HomeMy WebLinkAboutHOUSING AUTHORITY - Section 108 Federal Loans FundAGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO iC V AND THE HOUSING AUTHORITY OF THE CITY OF SAN LUIS OBISPO FOR USE OF SECTION 108 FEDERAL LOAN FUNDS G + } THIS AGREEMENT is made and entered into on 45X4, 1998, by and between the Housing Authority of the City of San Luis Obispo, a public housing agency (hereinafter referred to as "Contractor"), and the City of San Luis Obispo, a charter municipal organization in the State of California (hereinafter referred to as "City"), jointly referred to as "Parties." WITNESSETH: WHEREAS, the Section 108 Loan Guarantee Program was established under Title 1 of the Housing and Community Development Act of 1974 (the "Act"), as amended, for the purpose of financing community development projects; and WHEREAS, on December 3, 1996 the City Council approved a Section 108 Loan application in the amount of $1,650,000 and on March 4, 1997, adopted Resolution No. 8637 authorizing the City Administrative Officer to submit the Section 108 federal guaranteed loan application and amendments thereto to the County of San Luis Obispo (hereinafter "County"), and to execute the application, amendments thereto, and other agreements necessary to implement the Section 108 loan; and WHEREAS, the City prepared and submitted the Section 108 loan application to the County on March 10, 1997, with the intent of using loan funds for seismic retrofit, handicapped access and other code improvements to the San Luis Obispo County Historical Museum and for development of a 30 -unit low income rental housing project by the Housing Authority of the City of San Luis Obispo and its affiliate, the San Luis Obispo Non -Profit Housing Corporation; and WHEREAS, the County approved the Section 108 loan application on March 25, 1997 Section 108 Federal Guaranteed Loan - Contractor Agreement Page 2 and submitted the application to the U.S. Department of Housing and Urban Development (hereinafter referred to as "HUD") on April 2, 1997; and WHEREAS, HUD, by letter dated December 4, 1997, conditionally approved the County's application for a Section 108 Loan in the amount of $1,650,000; and WHEREAS, the City has agreed to accept the Section 108 Loan in the amount of One Million Six Hundred and Fifty Thousand Dollars ($1,650,000), subject to repayment of the loan over a six year period using City Community Development Block Grant Funds; and WHEREAS, HUD requires that the City and County pledge security to repay the Section 108 Loan in the event that Community Development Block Grant funds are not available for this purpose; and WHEREAS, the City has agreed to pledge its municipal assets to guarantee repayment of the loan and has entered into a Subrecipient Agreement with. the County to meet County and HUD requirements, and the County and HUD have approved the City's pledge of security; WHEREAS, to provide the necessary loan security and meet HUD and County requirements, the City and the Contractor must enter into an agreement; NOW, THEREFORE, in consideration of mutual covenants, conditions, promises and agreements herein set forth, the Parties agree as follows: 1. Scope of Activities Refer to attached Section 108 Loan application, Exhibit "A." 2. City Responsibilities a) The City shall be responsible for signing the notes from HUD for $1,650,000 in Section 108 funds; b) The City shall allocate $1,000,000 for the Section 108 Loan funds to the contractor I Section 108 Federal Guaranteed Loan - Contractor Agreement Page 3 for uses specified in Exhibit "A"; c) The City shall be responsible for retiring the debt connected with the Section 108 Loan and shall pledge repayment from its annual CDBG allocation, or if CDBG funds are not available, from other municipal funding sources; d) The City shall fulfill the responsibilities of the Grantee pursuant to the Grant Agreement between the City and the County of San Luis Obispo. Nothing in this agreement shall constitute approval of the project by the City Community Development Department, Planning Commission or City Council. 3. Contractor Responsibilities The Contractor hereby pledges up to $1,000,000 in assets of the Housing Authority of the City of San Luis Obispo, as an independent agency established under State law, to guarantee repayment of the Section 108 loan in the event that CDBG funds are not available for this purpose, and to abide by the terms of this agreement. 4. Relationship to Grant Agreement The Contractor acknowledges and agrees that this Agreement is subject to the obligations and limitations imposed on the City by the Grant Agreement and all future amendments to the Grant Agreement and is intended to be in conformance and harmony with it. The Contractor further acknowledges that if the Grant Agreement is terminated by the United States Government, prior to its implementation by appropriation and/or funding, the City shall have the right to terminate or amend this Agreement by giving written notice of the termination or amendment of this Agreement to Contractor. The Contractor hereby expressly agrees to the provisions of the Grant Agreement and further expressly agrees that nothing in this Agreement shall be deemed to require the City to perform an obligation in conflict with the Grant Section 108 Federal Guaranteed Loan - Contractor Agreement Page 4 Agreement. The Contractor further agrees that the County's right to enter into amendments to the Grant Agreement is not, and shall not be restricted or impaired, in any way, by this Agreement. 5. Compliance with other agreements The Contractor acknowledges and agrees that this Agreement is subject to the obligations and limitations imposed on the City by Cooperative Agreement and by the Subrecipient Agreement between City and the County of San Luis Obispo. 6. Compensation The City of San Luis Obispo shall authorize payment of One Million dollars ($1,000,000) in Section 108 Loan funds to the Contractor for the Contractor's use in acquiring property at 611 and 633 Brizzolara Street and 750 Nipomo Street, San Luis Obispo, California, for the construction of a 30 -unit low-income apartment project for elderly and handicapped persons, as further described in Exhibit "A." The City awards said funds to the Contractor as a grant, and does not require repayment of the funds, except under the circumstances described below. 7. Repayment of Grant Funds The Contractor agrees to repay the grant to the City under the following circumstances: a) In the event that said funds are used for purposes other than those approved by the City, as described in Exhibit "A"; or b) The Contractor sells, leases or transfers the property without the express, written permission of the City; or c) The Contractor uses loan funds for purposes which are determined by the City, County or HUD to be ineligible under federal regulations 24 CFR Ch. V, Part 570 governing Community Development Block Grants; or Section 108 Federal Guaranteed Loan - Contractor Agreement Page 5 d) During the City's loan repayment term, the Contractor's loan security is no longer available to the City or is determined by the City to be inadequate to ensure repayment of the loan; or e) HUD or the County of San Luis Obispo reduces the City's annual entitlement so that CDBG funds are no longer available or are insufficient to cover debt service for the Section 108 loan; or f) The Contractor otherwise fails to comply with the terms of this agreement, as determined by the City Administrative Officer or the City Council. 8. Obligations and Limitations The Contractor acknowledges and agrees that this Agreement is subject to the obligations and limitations imposed on the City by the Department of Housing and Urban Development (HUD). The City shall have the right to terminate or amend this Agreement by giving written notice of the termination or amendment of this Agreement to the Contractor. 9. Term The term of this Agreement shall commence on the date first above written and shall terminate two (2) years from that date or upon successful completion of the project or retirement of the loan, whichever comes last, unless sooner terminated as hereinafter provided. The City Community Development Director may extend the term 90 days upon receiving a written request from the Contractor. 10. Termination for cause If the City determines that the Contractor has incurred obligations or made expenditures for purposes which are not permitted or are prohibited under the terms and provisions of this Agreement, or if the City determines that the Contractor has failed to fulfill its obligations Section 108 Federal Guaranteed Loan - Contractor Agreement Page 6 under this Agreement in a timely and professional manner, or if the Contractor is in violation of any of the terms or provisions of this Agreement, or if the City is given notice by the County that it is terminating its Cooperative and Subrecipient agreements with the City, or if the Contractor is adjudged to be bankrupt, or if the Contractor makes a general assignment for the benefit of the Contractor's creditors, or if a receiver should be appointed in the event of the Contractor's insolvency, then the City shall have the right to terminate this Agreement effective immediately upon giving written notice thereof to the Contractor and call for repayment of the grant. Termination shall have no effect upon the rights and obligations of the Parties arising out of any transaction occurring prior to effective date of such termination. If the City's termination of this Agreement for cause is defective for any reason, including but not limited to the City's reliance on erroneous facts concerning the Contractor's performance, or any defect in the notice thereof, City's maximum liability shall not exceed the amounts payable to the Contractor under paragraph 6 of this Agreement. 11. Sources and Availability of Funds It is understood by the Parties hereto that the funds being used for the purposes of this Agreement are funds controlled by and currently available to the City. Notwithstanding any other -provision of this Agreement, the liability of the City shall be limited to CDBG funds allocated to the project. 12. Reimbursement of Improper Expenditures If at any time within applicable statutory periods of limitation it is determined by the City or its duly authorized representatives, the County or its duly authorized representatives, or by the United States Secretary of Treasury or his duly authorized representatives that funds provided for under the terms of this Agreement have been used by or on behalf of the Contractor in a Section 108 Federal Guaranteed Loan - Contractor Agreement Page 7 manner or for purposes not authorized or prohibited. by said Act or regulations adopted pursuant thereto, the Contractor hereby obligate themselves, at the City's request, to pay to the City an amount equal to one hundred percent of the amount improperly expended. 13. Employment Status Nothing in this Agreement is intended nor shall be construed to create an employer-employee relationship or a joint venture relationship between the City and the Contractor. Neither the Contractor nor any of the Contractor's agents, employees or contractors are or shall be considered to be agents or employees of the City, the County, or HUD in connection with the performance of the Contractor's obligations under this Agreement. 14. Inspections The City reserves the right to inspect any properties acquired or work performed hereunder to ensure that the activity is being and has been performed in accordance with the applicable federal, State and/or local requirements and with this Agreement. The Contractor agrees that all work found by such inspections not to conform to the applicable requirements shall be corrected and that the City may withhold payment until such corrections are completed. 15. Reporting The Contractor shall submit quarterly reports to the City describing the progress made toward accomplishing the project objectives. The Contractor further agrees to submit to the City a final report within 60 days of completing the project, describing the project objectives and activities that have been accomplished. The report shall contain sufficient detail to enable the City to properly evaluate contractor performance in completing the objectives and activities of the project. Section 108 Federal Guaranteed Loan - Contractor Agreement Page 8 16. Recordkeeping a. All records, accounts, documentation and all other materials relevant to a fiscal audit or examination, as specified by the City, the County or HUD, shall be retained by the Contractor for a period of not less than three (3) years from the date of termination of this Agreement. If so directed by the City or HUD upon termination of this Agreement, the Contractor shall cause all records, accounts, documentation and all other materials relevant to the work to be delivered to the City as depository. The Contractor understands that they shall be subject to the examination and audit by the City Auditor and/or the Auditor General for a period of three (3) years after the final payment under this Agreement. b. All records, accounts, documentation and other materials deemed to be relevant to the undertaking enabled by this Agreement shall be accessible at any time to the authorized representatives of the City, the County or federal government, on reasonable prior notice, for the purpose of examination or audit. Any expenditure which is not authorized by this Agreement or which cannot be adequately documented shall be disallowed and must be reimbursed to the City or its designee by the Contractor. Expenditures for work not described in this Agreement shall be deemed authorized if the performance of such work is approved in writing by the City prior to the commencement of such work. Absent fraud or mistake on the part of the City, the County and HUD, the determination by the City, the County and HUD of allowability of any expenditures shall be final. 17. Indemnification The Contractor shall defend, indemnify and save harmless the City, its officers, agents and Section 108 Federal Guaranteed Loan - Contractor Agreement Page 9 employees from any and all claims, demands, damages, costs, expenses, judgments, or liability occasioned by the performance or attempted performance of the provisions hereof, or in any way arising out of this Agreement, including, but not limited to, (a) those predicated upon theories of violation of statute, ordinance or regulation, violation of civil rights, (b) any adverse determination made by the Internal Revenue Service or the State Franchise Tax Board with respect to the Contractor that would establish a City liability for failure to make social security and income tax withholding payments, (c) inverse condemnation, (d) equitable relief, or (e) any wrongful act or any negligent act or omission to act on the part of the Contractor or of agents, employees, or independent contractors directly responsible to the Contractor; providing further that the foregoing obligations to defend, indemnify and save harmless shall apply to any wrongful acts, or any actively or passively negligent acts or omissions to act, committed jointly or concurrently by the Contractor their agents, employees, or independent contractors and the City, its agents, employees, or independent contractors. Nothing contained in the foregoing indemnity provisions shall be construed to require the Contractor to indemnify the City against any responsibility or liability in contravention of Section 2782 of the Civil Code. 18. Insurance The Contractor shall obtain and maintain for the entire term of this Agreement and the Contractor shall not perform any work under this Agreement until the Contractor has obtained comprehensive general liability insurance, in companies acceptable to the City, and authorized to issue such insurance in the State of California. Said insurance shall consist of the following: a. The Contractor shall maintain in full force and effect, for the period covered by this Agreement, comprehensive liability insurance. This comprehensive general and Section 108 Federal Guaranteed Loan - Contractor Agreement Page 10 automobile liability insurance shall include, but not be limited to, protection against claims arising from bodily and personal injury, including death resulting therefrom, and damage to property, resulting from any act or occurrence arising out of the Contractor's operations in the performance of this Agreement, including, without limitation, acts involving vehicles. The amount of insurance shall be not less than one million dollars ($1,000,000) combined single limit coverage for bodily and personal injury, including death resulting therefrom, and property damage. The following endorsements shall be attached to the policy: (1) If the insurance policy covers an "accident" basis, it must be changed to "occurrence. it (2) The policy must cover personal injury as well as bodily injury. (3) Blanket contractual liability must be afforded and the policy must contain a cross liability or severability of interest endorsement. (4) The City, its officers, agents, and employees shall be named as additional insured under the policy, and the policy shall provide that insurance will operate as primary insurance and that no other insurance affected by the City will be called upon to contribute to a loss hereunder. b. In accordance with the provisions of Labor Code section 3700, The Contractor is required to be insured against liability for workers' compensation or to undertake self-insurance for any individuals working as their employees. The Contractor agrees to comply with such provisions before commencing the performance of the work under this Agreement. c. The following requirements apply to all insurance to be provided by the Contractor: Section 108 Federal Guaranteed Loan - Contractor Agreement Page 11 (1) A certified copy of each insurance policy and a certificate of insurance shall be furnished to the City within sixty (60) days after execution of this Agreement. A certificate alone is not acceptable. Provided, however, a certificate of insurance shall be furnished to the City prior to the approval of any advances by the Auditor of the City pursuant to this Agreement. (2) Certificates and policies shall State that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City. (3) Approval of the insurance by the City shall not relieve or decrease the extent to which the Contractor may be held responsible for payment of damages resulting from the Contractor's services or operations pursuant to this Agreement. d. If the Contractor fails or refuses to procure or maintain the insurance required by this paragraph, or fails or refuses to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to. forthwith terminate this Agreement. 19. Equal Employment Opportunity During the performance of this Agreement, the Contractor agrees that they will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin, and specifically agrees to comply with the provisions of Section 202 of Presidential Executive Order No. 11246. 20. Entire Agreement and Modification This Agreement sets forth the full and entire understanding of the Parties regarding the matters set forth herein. Any other prior or existing understandings or agreements by the Parties, Section 108 Federal Guaranteed Loan - Contractor Agreement Page 12 whether formal or informal, regarding such matters are hereby superseded or terminated in their entirety. No changes, amendments, or alterations to this agreement shall be effective unless in writing and signed by all Parties hereto. The Contractor specifically acknowledges that in entering into and executing this Agreement, the Contractor relies solely upon the provisions contained in this Agreement and no others. 21. Funding for Additional Services Funding of any programs, projects; or services beyond the term of this Agreement, by any new agreement or amendment or extension of this Agreement, have not been authorized and will depend upon the County's determination of satisfactory performance of this Agreement by the Contractor and upon the availability to the City of additional grant funds allocated for such purposes. Neither the City nor any employee of the City has made any promise or commitment, express or implied, that any additional funds will be paid or made available to the Contractor for the purpose of this Agreement over and above the funds expressly allocated under the terms of this Agreement. 22. Laws and Regulations The Contractor agrees that they are familiar with and will comply with all local and State laws and regulations that pertain to construction, health and safety, labor, fair employment practices, equal opportunity and all other matters applicable to the Contractor, their subcontractors, and the undertaking enabled by this Agreement. The Contractor agrees that they are familiar with and will comply with all federal laws and regulations applicable to the CDBG program. 23. Contractors and Subcontractors Contractor agrees to, and shall require its subcontractors to agree to: Section 108 Federal Guaranteed Loan - Contractor Agreement Page 13 a) Perform the work in accordance with federal, State and local housing and building codes as applicable. b) Comply with the Labor Standards described in 24 CFR 570.603 and with the provisions of the California Labor Code, as applicable. c) Comply with the applicable Equal Opportunity requirements described in 24 CFR 570.607. d) Maintain at least the minimum State -required workers' compensation insurance for those employees who will perform the work or any part of it. e) Maintain, if so required by law, unemployment insurance, disability insurance and liability insurance in an amount to be determined by the State which is reasonable to compensate any person, firm, or corporation who may be injured or damaged by Contractor or any subcontractor in performing the work or any part of it. 24. Non -Assignment of Agreement Inasmuch as this Agreement is intended to secure the specialized services of the Contractor, the Contractor shall not have the right to assign or transfer this Agreement, or any part hereof or monies payable hereunder, without the prior written consent of the City, and any such assignment or transfer without the City's prior written consent shall be considered null and void. 25. Law and Governing Venue This Agreement has been executed and delivered in the State of California, and the validity, enforceability and interpretation of any of the clauses of this Agreement shall be determined and governed by the law of the State of California. All duties and obligations of the Parties created hereunder are performable in San Luis Obispo County, and such County shall be that Section 108 Federal Guaranteed Loan - Contractor Agreement Page 14 venue for any action, or proceeding that may be brought, or arise out of, in connection with or by reason of this Agreement. 26. Enforceability If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. 27. Agreement Binding All provisions of this Agreement shall be binding on the Parties and their heirs, assigns and successors to interest. 28. Waivers The City's waiver or breach of any one term, covenant or other provision of this Agreement shall not be a waiver of a subsequent breach of the same term, covenant or provision of this Agreement or of the breach of any other term, covenant or provision of this Agreement. 29. Notices Unless otherwise provided, all notices herein required shall be in writing, and delivered in person or sent by United States first class mail, postage prepaid. Notices required to be given to the City shall be addressed as follows: City Administrative Officer City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401-3249 Notices required to be given to the Contractor shall be addressed as follows: George Moylan, Executive Director Housing Authority of the City of San Luis Obispo 487 Leff Street San Luis Obispo, CA 93406 Section 108 Federal Guaranteed Loan - Contractor Agreement Page 15 Provided that any party may change such address by notice in writing to the other Parties and thereafter notices shall be transmitted to the new address. IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written. Contractor: City: By: -'4-pv� .jL'-- George &Aoecutive Director Authority Board Dunn, City Administrative Officer APPROVED AS TO FORM AND LEGAL EFFECT: By: C Atto ey Dated: — 3 — % (Notary) Attachment: Exhibit "A": Section 108 Loan Application jh/L:section108.agreement State of California } County of San Luis Obispo) On August 5, 1998, before me, Diane R. Stuart, Notary Public, personally appeared John Dunn, personally known tome to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. Witness my hand and official seal. CL"e [7 M1F, DianR. Stuart, Notary Public State of California } County of San Luis Obispo) oFMciALSM ..Ny NY,AR�BMU FOM ly � tune 2g00p On August 5, 1998, before me, Diane R. Stuart, Notary Public, personally appeared George Moylan, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. Witness my hand and official seal. DME ice'UA o NOTARYPUBUCMFCMM C p� COMMISSION / 1142M C t SAN uJIS ONISPp COUM as Diane R. Stuart, Notary Public Agreement between the City of SLO and the Housing Authority of the City of SLO for use of Section 108 Federal Loan Funds State of California } County of San Luis Obispo) On August 5, 1998 before me, Diane R. Stuart, Notary Public, personally appeared David R. Booker, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity; and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. Witness �Wmy hand and official seal. Notary Public ' wDIAM.� UnJAF r COWASM�UA/11 MCOU46 w/e6�„tureII�.�gf EXHIBIT A CITY OF SAN LUIS OBISPO SECTION 108 LOAN GUARANTEE APPLICATION LOAN REQUEST The City of San Luis Obispo is requesting $1,650,000 in Section 10S Loan Guarantee funds to assist with property acquisition in association with the development of affordable housing units and for the rehabilitation of a designated historical structure. All of the proposed projects sites are located within the City. The Section 10S request is within the maximum loan amount of five times the City's Block Grant allocation of approximately $926,374 for the 1997-98 program year. The City will transfer $1 million of the Section 108 funds to the Housing Authority of the City of San Luis Obispo (HASLO) for the development of affordable housing. PROJECT BACKGROUND AND DESCRTPTION With the Section 108 funds being allocated to two separate subrecipients, the request has been separated based on each agency's proposed projects. Housiniz Authority of the City of San Luis Obispo Amount Of Section 108 Funds Requested: $1,000,000 Project Background: The Housing Authority of the City of San Luis Obispo was established in 1968 and currently provides services to over .1,500 lower income individuals and families. The City Housing Authority is unique in that it acts as the housing authority for the City while operating the Section 8 program throughout the County of San Luis Obsipo. The Housing Authority currently administers over 1,400 Section 8 units under contract, of which 307 are Iocated within the City. The Authority also operates 172 units of public housing at 14 locations, all within the City of San Luis Obispo. It also operates both a First Time Homebuyer's program and a Mortgage Credit Certificate Program throughout the City and County. The Housing Authority has adopted a policy whereby public housing assistance waiting lists would be open until a manageable number of applications were received, at which time the lists would be closed and no further applications would be accepted. All of those on the list would then be processed, and if eligible, would be maintained on the list until they could receive housing assistance. When the lists are exhausted they would be re -opened and the process repeated. This approach was adopted by the Authority in lieu of a system with a continuous open waiting list on which some people would never be served because there would always be somebody ahead of them due to the various mandated preference requirements. The Authority . last closed its list at the end of December 1995, and anticipates it will be about two years before all of the 1,500 applicants will have been served and the list can be opened again. As with most Housing Authorities throughout the country, San Luis Obispo's housing needs far exceed the funds and number of affordable housing units available. The greatest numerical need is clearly for handicapped and disabled housing, one bedroom units for those who can live independently and two-bedroom units for those who require live-in aides, followed by housing for small families, two and three bedroom units. There is a lesser need for elderly and large family housing. Project Description: HASLO will use Section 103 fiends to acquire two sites. The first site is located at the corner of Brizzolara and Nipomo Streets (see Attachment A) in Census Tract 111. The 37,838 square foot site is occupied by five residential structures containing a total of 16 rental units. The structures are in a deteriorating condition, providing unsafe housing for their occupants. The property has been the subject of several building and zoning code violations in recent years, due to substandard conditions and lack of corrective maintenance. The acquisition cost is estimated to be $560,000. The County committed 5250,000 of HOME funds to assist with acquisition. After acquisition, the existing tenants will be relocated, the existing units demolished, and the site turned over to the Housing Authority's affiliate, the San Luis Obispo Non -Profit Housing Corporation, for development. The new development will include from 24 to 30 units to be occupied by elderly/disabled/handicapped residents, possibly with some two and three bedroom family units. Tenant rents may be subsidized through the Section S program. The Housing 2 - - — Authority serves as managing agent for the San Luis Obispo Non -Profit Housing Corporation. As with all developments of the Housing Corporation, long term affordability, would be provided. All tenants for the project would have incomes less than 60% of median County income and most would have incomes well under 50% of median income. The location of the second site to be acquired with Section 108 funds has not been finalized at this time. There are currently three projects the Housing Authority is reviewing, -all, within the City (see Attachment A). The first site is a 23,650 square foot parcel located at 380- 382 Pismo Street (Census Tract 111). The site is currently occupied with a warehouse structure and two rental units. If the site is acquired, the Authority will relocate the existing commercial user and two rental tenants, demolish the existing structures and contract through the San Luis Obispo Non -Profit Housing Corporation to constrict 12 to 18 affordable rental units.. The property's estimated acquisition cost is $560,000. The remaining Section 108 funds would be combined with Housing Authority funds to cover the acquisition costs. The second location being considered is a 39,000 square foot site located at 1708 and 1750 Beach Street (Census Tract 111). The site is currently occupied with a. moving company/warehouse structure and a vacant retail building. The moving company, who also owns the Pismo Street site, is consolidating their facilities at another location. The plan is for the Housing Authority (located across the street from this site) to use the moving company's existing structure to house their maintenance operations. The remaining vacant retail structure would be. demolished and eight to ten affordable rental units, each containing two and three bedrooms, would be constructed by the Non -Profit Housing Corporation. The estimated property acquisition cost is $440,000. A third potential project site being reviewed by HASLO is the historic three story Blackstone Hotel located at 840-844 Monterey Street (Census Tract 111). If this site is selected for acquisition, the Authority would leave the existing 7,274 square feet bottom floor as commercial, and contract with the Non -Profit Housing Corporation to rehabilitate the vacant second and third floors (10,876 square feet) into 16 affordable rental units. The estimated acquisition costs for the Blackstone is $920,000. Whichever of these three projects is selected by the Housing Authority, the remaining Section 108 funds would be augmented with existing CDBG/HASLO funds to cover the balance of the acquisition costs: The construction of the affordable housing units would be funded using a combination of a Tax Credit Program, low interest mortgages as provided by the HOME Program and/or the California Community Reinvestment Corporation. The tenants for the selected project would have the same income level requirements as those for the proposed Brizzolara/Nipomo site discussed above. National Objective: The proposed project is being implemented under the CDBG national objective 570.208 (a) Activities benefiting low and moderate, income persons (3) _ Housing activities. Eligible Activity: The proposed project will be implemented under the following CDBG eligibility category: 570.201 (a) Acquisition City of San Luis Obisno Amount of Section 108 Funds Requested: 5650,000 Project Background: The City is proposing to use its portion of the allocation of Section 108 funds for the rehabilitation of a public building owned by the City that is located at 696 Monterey Street (Census Tract 111). The 4,400 square foot building was originally constructed as a Carnegie Library in 1905 and was listed on the National Register of Historic Places in. 1995. Since 1954 the San Luis Obispo County Historical Society (a non-profit organization)'has occupied the building and operated it as the San Luis Obispo County Historical Museum. The historical structure is an unreinforced masonry building. A structural engineering survey completed several years ago found that the building's unreinforced masonry construction poses a public safety risk in the event of a major earthquake. In addition to the seismic safety improvements, the building will also require access improvements for disabled persons. Project Description: A structural engineering analysis completed in 1994 included a list of seismic safety corrections needed to comply with the Uniform Code of Building Conservation and extend the buildings service life. The construction would also include the installation of improvements to meet ADA requirements, including the waterproofing of the lower floor (which is a half basement) to allow accessibility to the elevator during rainy weather. The total project costs, including the seismic retrofitting improvements, code compliance (i.e. new electrical, plumbing, gas, etc.) architectural, engineering and inspection, are estimated to be $835,600. The source of the funding would be the $650,000 in Section 108 funds, with the balance coming from City. CDBG funds already allocated for the ADA portion of the improvements. Attachment B includes a proposed budget for the project that was developed by the City Public Works Department. National Objective: The national objective under which the proposed project is being implemented is 570.205 (b)(2) - Activities to address slums or blight on a spot basis. With the combined requested Section 108 and City 1997 CDBG fiends, the City and County comply with the 70% test of funds benefiting low and moderate income. The ADA project improvements also qualify under 570.208 (a)(2)(ii)(A). Eligible Activity: The proposed project is being implemented under the following eligible activity category: 570.201(c) - Public facilities and improvements. Based on the structure being listed in the National Register of Historic Places, the project would also qualify under the activity of section 570.202(d) - Historic preservation. TERM AND REPAYMENT OF LOAN The term of the repayment of the Section 108 Loan Guarantee funds is six years. The City will be responsible for the 108 Loan repayment. The repayment will come from the City's annual CDBG allocation. The repayment schedule included as Attachment C shows the fixed repayment schedule. The six year repayment period was selected based on the City's ongoing commitments to its CDBG funded projects. The estimated annual average repayment of $324,000 is the maximum the City can afford to commit without having a significant impact on its CDBG programs. The repayment schedule indicates the City will request a drawdown of funds after the next proposed bond offering by HUD, tentatively scheduled for June of 1997. Based on this, the City will make quarterly interim interest payments until the next estimated offering in June of, 1998, The interim interest is based on 20 basis points over current LIBOR rates. The City is aware that the fixed interest rate for the Section 108 funds will be established at the. time HUD sells the public offering on the market and just prior to the City execution of the notes with HUD. The City will establish a separate bank account into which the loan repayments will be deposited. From this account, the required twice yearly payments will be made to HUD, with an interest payment in February and a principal and interest payment in August of each year ADDITIONAL LOAN SECURITY While the City is pledging future years CDBG funds:for.the repayment of the 108 loan, it is aware that HUD will require a formal pledge agreement guaranteeing additional sources of revenues that will be available for the repayment should the CDBG.program be terminated. The City is proposing to use the stricture benefiting from the Section 1.0S funds as the additional security for $650,000 of the Section 108 funds. The Housing Authority will use existing assets it has to provide the additional security for their $ I million of Section IOS funds. These additional security sources will only be required to meet the annual debt service at such time as the CDBG program is terminated or the allocation to the City of San Luis Obispo is reduced to a level that would not meet the annual debt service payments. Under the CDBG Urban County Program, the County is responsible for all CDBG and. Section 108 funds distributed within the County. The City will sign the Section 108 loan documents, provide the loan security, and enter into a Cooperation Agreement with the County setting forth each agency's responsibilities. ACQUISITION AND RELOCATION The Housing Authority of the City of San Luis Obispo will use its portion of the Section 108 funds for property acquisition. In addition, its projects will also have other federal funding sources. The City and Housing Authority will comply with the federal requirements governing -- - - - -- 6 displacement, relocation, real property acquisition, and the replacement of low and moderate income housing as described in Section 570.606. CERTIFICATIONS The City Council conducted a public hearing on March 4, 1997, on the Section 1:08 Application and authorized the submittal of the Application and adopted the resolution included as Attachment D. All of the required program certifications are included in the City Council Resolution. The County Board of Supervisors conducted a public hearing at their meeting of 1997, and authorized the submittal of the application. If you have any questions regarding this Application for Section 103 Loan Guarantee funds, please contact Jeffrey W. Hook, Associate Planner, City of San Luis Obispo at (805) 781- 7176. s1o1108app13 - - 7 1 I I I �1 1 I I � , � i I 1 1 I I 1 7 I J I 1 I 1 1 I I I I ` I I r UGUNA UKE ` I I^^tl SCALE 1'=3500' W CITY LIMIT LINE :.----- I 1 I I ,a21 - J.Iw��TO C("y Of PROJECT�� San US OBISp0 SITES (refer to key) 990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 93403.8100 722- CITY OF SAN LUIS OBISPO KEY TO PROJECT SITES MAP 1. Brizzolara Street. Apartments - 611 Brizzolara Street 2. Historical Museum Improvements - 696 Monterey Street 3. Blackstone Apartments - 840-844 Monterey Street 4. Pismo Street Apartments - 380-382 Pismo Street 5. Beach Street Apartments - 1708-1750.Beach Street ATTACHMENT B PROJECTED BUDGET FOR HISTORICAL MUSEUM STRUCTURE 1 IL Y of sAn lois oBispo 955 Morrb Street e San Luis Obisim CA 93401 January 31, 1997 :IL:JC�VLL To: Jeff Hook, Associate Planner 'E8 ] :i 1997 From: Wayne Peterson, City Engineer OF SAN LUIS OBlspo Bridget Fraser, Engineering Assistant Subject: Historical Society Museum Improvements - Current Cost Estimate and Project Scope COST ESTIMATE Design (TO Percent of Construction) $70,600 Construction: 1995 Construction Cost Estimate (without Contingencies) Escalation (5 Percent of 1995 Estimate) Contingencies (40 Percent at Conceptual Phase) Construction Management:. Resident Inspection (5 Percent of Construction) Materials Testing and Inspection Architectural and Engineering Consultation (20 Percent of Design) Total PROJECT SCOPE Seismic Safety and Other Building Improvements: Strengthen unreinforced masonry walls with reinforced structural plaster or pneumatically placed concrete. Install positive interconnections between unreinforced masonry walls and roof and floor joists. Strengthen the roof diaphragm. Pin brick and stone veneers to the underlying masonry walls. Anchor capstones to the masonry walls. Reconstruct brick chimneys with reinforced cores. Repoint deteriorated masonry joints. Clean and seal exterior brick veneers. Repair sheetmetal downspouts Other Possible Code Requirements: Install fire sprinklers Modify electrical system to meet current codes. $480,000 24,000 201.600 705,600 $35,300 10,000 14.100 59.400 $835,600 Accessibility Improvements: Build ramps and walkways from the parking lot to the northwest comer of the building Install an exterior door to the elevator lobby on the lower floor. Provide unisex accessible bathroom Waterproofing Improvements: Waterproof the subgrade exterior surface of the lower level walls. Install a french drain below grade around the building perimeter. Replace clogged and collapsed drainlines to street. Repair roof leaks The City of San Luis Obispo is committed to include the disabled in all of its services, programs and activities. Telecommunications Device for the Deaf /A051 7Rt.7dtn 09 ATTACHMENT C PROJECTED SECTION 108 REPAYMENT SCHEDULE Z n J > J _ co O d r C d U aym �a Geo}W A a O l0 i� r d N m � �:pp a N A E A m CMO q . t E E E Eto CL a LL a a E m e ��� as �zF° a`Si°-F°,w .moi° ATTACHMENT D �4� CITY COUNCIL RESOLUTION RESOLUTION NO. 8637 (1997 Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO AUTHORIZING SUBMISSION OF A SECTION 108 GUARANTEED FEDERAL LOAN APPLICATION TO THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WHEREAS, the City of San Luis Obispo has determined that a high priority exists for development of new affordable housing and for the rehabilitation of the structure housing the San Luis Obispo County Historical Museum; and . WHEREAS, the proposed projects are included in the County's adopted One -Year Action Plan of the Consolidated Plan; and . WHEREAS, the Section 108 Guaranteed Loan program, implemented by the United States Department of Housing and Urban Development (HUD), is designed to provide funds to assist with these types of projects; and WHEREAS, under the Section 108 Guaranteed Loan program, the City can borrow up to five times its annual Community Development Block Grant (CDBG) allocation and can take up to twenty years to repay the principal and interest; and WHEREAS, the City, through the County of San Luis Obispo, is responsible for submitting a Section 108 Loan application to HUD and assumes all responsibility connected with administration and the repayment of the Section 108 loan; and WHEREAS, the City is requesting a total of $1,650,000 in Section 108 Loan funds, with $1,000,000 going to the Housing Authority of the City of San Luis Obispo for the development of affordable housing, and $650,000 going to the City for the rehabilitation of the City -owned building housing the County Historical Museum; NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San Luis Obispo resolves as follows: SECTION 1. As part of its implementation of its Action Plan, the City Council approves the submittal of a Section 108 Guaranteed Loan application to HUD to assist with the development of affordable housing and rehabilitation of the historical museum structure. SECTION 2. As prerequisites for submission of the application to HUD, the City certifies that it has: Resolution No. 8637 (1997 Series) Page 2 (a) Furnished citizens with information required by Section 570.704(a)(2)(1) of Title 1 of the Housing and Community Development Act of 1974, as amended; (b) Held at least one public hearing, on March 4, 1997, to obtain the views of citizens . on community development and housing needs; and (c) Prepared its application in accordance with Section 570..704(a)(2) of Title 1 of the Housing and Community Development Act of 1974, .as amended. SECTION 3. The City has and will continue to follow a: detailed citizen participation plan which meets the requirements described in Section 570.704(a)(2) of Title 1 of the Housing and. Community Development Act of 1974, as amended. SECTION 4. The City hasand will continue to affirmatively further fair housing, and the guaranteed loan funds will be administered in compliance with: (a) Title VI of the Civil Rights Act of 1964 (Public Law 88-352, 42 U.S.C..2000d et seq.); and (b) The Fair Housing Act (42 U.S.C. 3601-20). SECTION 5. The City will expend in the aggregate, at least 71 percent of all CDBG funds, as defined in Section 570:303(e) of Title 1 of the Housing and Community Development of 1974, as amended, during the one, two, or three consecutive years specified by the City for its CDBG program on activities which benefit low/moderate income persons, as described in criteria in Section 570.208(a) of the Act. SECTION 6. The City has and will continue to comply with the requirements governing displacement, relocation, real property acquisition, and the replacement of low and moderate income housing as described in Section 570.606 of the Act. SECTION 7. The City has and will continue to comply with other provisions of the Act and with other applicable laws. . SECTION 8. The City has and will continue to certify regarding debarment, suspension, and other responsibility as follows; (a) The prospective recipients of the Section 108 Guaranteed Loan funds and all of their contractors will certify, to the best of their knowledge and belief, that they. Resolution No. 8637 (1997 Series) Page 3 1) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by and Federal department or agency; 2) Have not, within a three-year period preceding approval of their application, been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; .violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; 3) Are not presently indicted for or otherwise.criminally or civilly: charged by a government entity (Federal, State or local) with commission of any of the offenses enumerated in paragraph (a)2 of this certification; and 4) Have not, within a three-year period preceding approval of their application, had one or more public transactions (Federal, State or local) terminated for cause or default. SECTION 9. The City hereby assures and certifies with respect to its application for a guaranteed loan pursuant to Section 108 of the Housing and Community Development Act of 1974, as amended, that it has made efforts to obtain financing for the activities described herein without the use of such guarantee, that it will maintain documentationof such efforts for the term of the loan guarantee, and that it cannot complete such financing consistent with the timely execution of the program plans without such guarantee. SECTION 10. The City has and will continue to hereby certify, to the best of its knowledge and belief, the following; (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 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 the awarding of any Federal contract, the making of an Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan 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 Resolution No. 8637 (1997 Series) Page 4 agency, a Member of Congress, an officer or employee of Congress, or any employee of grant, loan or cooperative agreement, it -will. complete and. submit Standard Form LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions; and (c) It will require that the language of paragraph (a) of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. SECTION 11. The City shall continue to maintain a drug-free workplace by: (a) Publishing a statement notifying employees that the unlawful manufacture, dispensing, possession, or use of a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be.taken against employees of such prohibition; (b) Establishing an on-going, drug-free awareness program to inform employees about the following: 1) The dangers of drug abuse in the workplace; 2) The grantee's policy of maintaining a drug-free workplace; 3) Any available drug counseling, rehabilitation, and employee assistance programs; and 4) . The penalties that may be imposed upon employees for drug abuse violations occurring in the workplace. (c) Making it a requirement that each employee engaged in grant activity be given a copy of the statement required by paragraph (a). (d) Notifying the employee in the statement required by paragraph (a) that, as a condition of employment under the grant, the employee will: 1) Abide by the terms of the statement; and 2) Notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace, no later than five calendar days after such conviction. Resolution No. 8637 (1997 Series) Page 5 (e) Notifying the agency in writing, within ten calendar days after receiving such notice under subparagraph (d)2, from an employee or otherwise receiving actual notice of such conviction. Employers of convicted employees must provide notice, including position and title, to every grant officer or other.designee on whose grant activity the convicted employee was working, unless the.Federal agency has designated a central point for the receipt of such notices. Notice shall include the identification numbers(s) of each affected grant. (f) Taking one of the following actions, within 30 calendar days of receiving notice under paragraph (d)2, with respect to any employee who is so convicted: 1) Taking appropriate personnel action against such employee, up to and including termination, consistent with the requirements of the Rehabilitation Act of 1973, as amended, and any other applicable Federal and State laws; and 2) In appropriate circumstances, require an employee to participate satisfactorily in a drug abuse assistance or. rehabilitation program approved for such purpose by a Federal, State or local health, law enforcement, or other appropriate agency. SECTION 12. The City Administrative Officer is hereby authorized to submit the Section 108 Federal Guaranteed Loan application and amendments thereto and all understandings and assurances contained therein, and to execute the application, amendments thereto, and other agreements necessary to implement the Section 108 loan and to act in connection with the application to provide such additional information as maybe required. SECTION 13. This Resolution shall be effective immediately upon its adoption. ADOPTED THIS e DAY OF MARCH, 1997, on the following roll call vote: Upon the mjtion of Council Pbsnber Williams seconded by Council 11e b Smith AYES: Council bhmbers Williams, Smith, Romero, Roalimn and Mayor Settle NOES: None ABSENT: None Resolution No.8637 (1997 Series) Page 6 ATTEST: -;�70ty Clerk nnie Gav APPROVED: jb/Secdonl08.ms