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HomeMy WebLinkAbout08/17/1999, C1 - APPROVE ECONOMIC VITALITY CORPORATION (EVC) AGREEMENTS council "�°°= j agcnba Repout �N CITY OF SAN LUIS OBISPO FROM: Ken Hampian,ACAO Prepared By: Diane Sheeley,Economic Development Manager r&S SUBJECT: Approve Economic Vitality Corporation(EVC)Agreements CAO RECONMIENDATION Approve and authorize the Mayor to execute: 1. 1999-00 EVC Agreement in the amount of$15,000 for Economic Development Services. 2. 1999-00 EVC Sub-recipient Agreement in the amount of$100,000 for Revolving Loan Fund (RLF) Services. DISCUSSION Background The approved 1999-00 Budget includes a General Fund appropriation of$15,000 to the EVC for Economic Development Services and a Community Development Block Grant (CDBG) appropriation of$100,000 to the EVC for RLF services. Both of these appropriations support the continuation of existing services provided by the EVC, and were made by Council after reviewing EVC activities under the 1998-99 agreements. However, these agreements expired on June 30, 1999, and need to be renewed for the current fiscal year. Agreement Renewal Renewal of the agreements involves fairly minor changes from the prior agreements. Modified language includes updated dates and revised financial figures to reflect the 1999-00 budget allocations. Consistent with the 1998-99 Subrecipient Agreement for CDBG RLF Services, loan guarantees will be drawn-down as requested following the City's receipt of written EVC loan approval documentation. Again, the 1999-00 Agreement for Economic Development Services will be paid in quarterly installments, thus allowing staff the opportunity to review written quarterly activiiy reports from the EVC in advance of releasing additional quarterly payments. For fiscal year 1998/99, three loan guarantees were made totaling $61,600, which supported loans in the amount of$115,000. The creation of nine jobs have been contracted with the loan recipients as a result of these loan guarantees. Both CDBG requirements and City agreements state that the EVC retain or created one full-time equivalent position for a low-moderate income C1-1 Council Agenda Report—Approve Economic Vitality Corp. (EVC)Agreements Page 2 person for every $25,000 loaned. Thus far, the EVC has contracted to create one full-time equivalent position for every$6,844.44 loaned. With regard to the economic development component, this helps to support the overall services provided by the EVC. In addition, because the agreement allows the City to be represented in the Central Coast Regional Marketing Team, the City is afforded the opportunity to leverage both our economic development resources (human and financial). Therefore, the City is included as part of the overall county exposure and representation at national trade shows and economic development missions. FISCAL EMPACT RLF services. Council appropriated $100,000 from the 1999-00 Community Development Block Grant (CDBG) fund (page E-20 of the approved 1999-00 budget). If the program is more active-this fiscal year, subsequent allocations for RLF services may be recommended. On the other hand, no additional investment will be made without a thorough 2-year performance evaluation and subsequent Council action prior to the next fiscal year. In order to increase program activity, the EVC has increased its advertising efforts through local newspapers and through discussions with various business groups throughout the City. The EVC will continue to seek out new opportunities to increase exposure. A new updated brochure has also been created in both English and Spanish to provide further outreach. The brochure has been customized for the City and have been provided to staff for distribution as needed. Economic Development Services Council appropriated $15,000 from the 1999-00 General Fund (page D-124 of the approved 1999-00 budget). This represents the third "step" in a three phase "stair step" approach to funding a proportionate share of EVC costs, based on population (from an initial appropriation of $6,200). However, subsequent Council action and a 2-year performance evaluation will be required prior to allocating additional resources. ALTERNATIVES Do nothing. We can operate our economic development program without supplementing the City's previous 1998-99 allocation of$12,400 for economic development services and $100,000 for RLF services. However, this alternative is not recommended based on stab's desire to continue to leverage our resources by providing expanded economic development services. Use in-house staff resources. Although we may have the staff capabilities to perform both the RLF and the economic development services in-house, this would be a major staff responsibility consuming considerable human resources which would mean that existing programs and services would suer. This approach would require evaluating and repriontizing existing Council priorities. Therefore,based on existing staff resources,this alternative is not recommended. eCL-2 Council Agenda Report Approve Economic'VMUty Corp. (EVC).Agreements Page 3 ATTACHMENTS L Economic Development Services Agreement 2. Sub-Recipient Agreement for CDBG Funds for Revolving Loan Fund Services ECONOMIC DEVELOPMENT SERVICES AGREEMENT THIS AGREEMENT is made and entered into in the City of San Luis Obispo on this 17th day of August, 1999, by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as City, and the ECONOMIC VITALITY CORPORATION (EVC) of San Luis Obispo County, a non-profit corporation, hereinafter referred to as Contractor. WITNESSETH: WHEREAS, the incorporated cities of San Luis Obispo County have agreed to participate and support the establishment of a regional economic development effort;and WHEREAS, the City of San Luis Obispo desires to diversify and expand its industrial, retail, commercial, recreational,and general business services economic base;and WHEREAS,the ECONOMIC VITALITY CORPORATION(EVC)of San Luis Obispo County is charged with the mission"to stimulate the economic vitality of San Luis Obispo County,generate jobs and increase financial inveshnent within the County by promoting die retention,expansion,and attraction of business and industry to the area";and WHEREAS, the EVC is organized for such economic development activities on behalf of the City and is in a position to accomplish such goals and purposes of the City in an efficient and economical manner,and . WHEREAS, the Government Code of the State of California authorizes the expenditure of public fiords by a municipal corporation for economic development activities as therein provided NOW,THEREFORE,in consideration of their mumual promises,obligations,and covenants hereinafter contained, the parties hereto agree as follows: 1. TERM The term.of this Agreement shall become effective on the date of execution hereof by both parties,and shall continue in effect until June 30,2000,provided,however,that this Agreement shall be renewed each year hereafter, for periods of one year, commencing July 1 through Jane 30 of the succeeding year, by action of the City Council and EVC's acceptance of said renewal. 2. CITY'S OBLIGATIONS. For providing economic development services as specified in this Agreement,City will pay and Contractor shall receive therefore compensation quarterly not to exceed$3750.The anoint shall be allocated as follows: The first quarterly payment shall be paid shall be paid in September(or immediately after the City Council approves the Agreement,whichever is lata). C1-4 3• CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and agreements herein before mentioned to be made and performed by City, Contractor agrees with City to do everything required by this Agreement and the said specifications: A. That the foregoing recitals are true and correct and constitute statements of fact herein. B. EVC shall carry on regional economic development activities as follows: 1. Employ competent personnel to carry on regional economic development activities herein enumerated 2 To assist in the development of job employment,training and business opportunities for residents of the City of San Luis Obispo,especially for targeted low and moderate income residents through the retention and expansion of private sector faros. 3. To coordmate the planning and management of economic development implementation activities,programs and projects that would attract the expansion and creation of new firms,and retain and expand existing businesses,including but not limited to those owned by targeted low and moderate-income residents of the City of San Luis Obispo. 4. To assure strong communication and compatibility with City goals and policies,coordinate all City related business retention and recruitment activities consistent with a protocol satisfactory to the City's Economic Development Manager. 5. To assist in the establishment and support of forums and other mechanisms for maximtmr feasible participation. 6. To assist in the preparation and submittal of applications on behalf of the City of San Luis Obispo and/or particTammg agencies to public and private findmg sources for fmancmg and/or to state and federal agencies for special designations m support of economic,business and employment development activities. 7. To assist in providing research,analysis and recommendations to the City of San Luis Obispo and private organizations on economic development 8. To provide appropriate corntywide business marketing and busmess expansion activities and to liaisam with appropriate local,regional,state and federal agencies and private parties,including actively participating in the Central Coast Madmtmg Group. 9. To assist in the development and management of coordinated,competitive program of bush= incentives to expand,retain and attract desirable funs,mchrdmg incubators,business parks to accommodate space needs,loan funds to provide financing,employee recruitment and trainmg, technical and management assistance. C. EVC shall fianish quarterly reports of its activities to City, which shall consist of the activities scheduled for the next three (3) succeeding months and a review of the activities accomplished during the proceeding three (3) months. Said reports shall include a detailed breakdown of all activities and expenses. D. The amount of the contract shall be$15,000 paid in quarterly instalhnents of$3750 and approved by the City Council. E. This agreement may be amended or modified only by written agreement signed by both parties. -z- C1-5 emagreemenal799 Failure on the part of either party to enforce any provision of this Agreement shall not be construed as a waiver of the right to compel enforcement of such provision or provisions in the future. F. It is understood that the contractual relationship of EVC to City is that of independent contractor. 4. INDEMNIFICATION. The Contractor agrees to defend, indemnify, protect and hold City and its agents,officers,and employees harmless from and against any and all claims asserted or liability established for damages or injuries to any person or property,including injury to Contractor's employees,agents,or officers which arise from or are connected with or are caused or claimed to be caused by the acts or omissions of Contractor,and its agents, officers, or employees, in performing the work or services herein, and all expenses of investigating and defending against same; provided,however,that Contractor's duty to indemnify and hold harmless shall not include any claims or liability arising from the established sole negligence or willful misconduct of the City,its agents,officers,or employees. 5. INSURANCE. The Contractor shall procure and maintain for the duration of the contract insurance that meets the requirement of Attachment A. As evidence of this insurance,the Contractor shall provide the City with a Certificate of Insurance and an Endorsement naming the City as"Additional Insured". 6. AMENDMENTS. Any amendment,modification,or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the Council or the City Administrative Officer of the City. 7. COMPLETE AGREEMENT. This written Agreement,including all writings specifically incorporated herem by reference,shall constitute the complete agreement between the parties hereto. No oral agreement,understanding or representation not reduced to writing and specifically incorporated herein shall be of any force or effect,nor shall any such oral agreement,understanding,or representation be binding upon the parties hereto. 8. NOTICE. All written notices to the parties hereto shall be sent by United States marl,postage prepaid by registered or certified mail addressed as follows: City Lee Price,City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo,CA 93401 Contractor Ray Johnson,EVC Chairman of the Board Economic Vitality Corp.of San Luis Obispo County 412 Higuera-Suite B San Luis Obispo,CA 93401 9. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant that each mdividual executing this ageement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party. .3- C1-6 evccgreemeW817.W IN WITNESSWBEREOF, the parties hereto have caused"this:instrument:to be executed the day and year fust above written ATTEST--- my OF SAN_LUIS OBISPQ, A Municipal Corporation - - --- By: City Clerk,Lee Primo Mayor,Allen K.Settle APPROVED AS TO FORM: CONTRACTOR f City Attorney;Jeff J - EVC Cfiauman of the Board,Ray Johnson i _4. C1.7 eveagnevnau81799 ATTACHMENT A INSURANCE REQUIREMENTS: Consultant Services The Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Contractor, its agents,representatives,employees,or subcontractors. 11Tnimum Scope of Insurance. Coverage shall be at least as broad as: 1. hrsurance Services Office Commercial General Liability coverage(occurrence form CG 0001). 2. Insurance Services Office form number CA 0001 (Ed. 1/87)covering Automobile Liability,code 1 (any auto). 3. Worker;Compensation insurance as required by the State of California and Employer's Liability Insurance. 4. Errors and Omissions Liability inamance as appropriate to the consurltaiit's profession. Alinimum Limits of Insurance. Contractor shall maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit 2. Automobile Liability $1,000,000 per accident for bodily injury and property damage. 3. Employer's Liability: $1,000,000 per accident for bodily injury or disease. 4. Errors and Omissions Liability. $1,000,000 per occurrence. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either. the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Contractor shall procure a bond guaranteeing payment of losses and related investigations,claim administration and defense expenses. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain,the following provisions: 1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Contractor;products and completed operations of the Contractor,premises owned, occupied or used by the Contractor;or automobiles owned, leased,hired or borrowed by the Contractor. The coverage shall contain no spacial limitations on the scope of protection afforded to the City,its officers,official,employees,agents or volunteers. 2. For any claims related to this project,the Contractor's insurance coverage shall be primary insurance as respects the City,its officers,officials,employees,agents and vohmteem Any insurance or self-insurance maintained by the City,its officers,officials, employees,agents or volunteers shall be excess of the Cofactor's insurance and shall not coutnIate with it 3. Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City,its officers,officials,employees,agents or volunteers. 4. The Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurers liability. 5. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided,canceled by either party,reduced in coverage or in limits except after thirty(30)days'prior written notice by certified mail,retum receipt requested,has been given to the City. 6. Coverage shall not extend to any indemnity coverage for the active negligence of the additional insured in any case where an agreement to indemnify the additional insured would be invalid under Subdivision(b)of Section 2782 of the Civil Code. Acceptability of Insurers. Insurance is to be placed with insurers with a current AM Best's rating of no less than A:VII. Verification of Coverage. Contractor shall furnish the City with a certificate of insimance showing maintenance of the required insurance coverage. Original endorsements effecting general liability and automobile liability coverage required by this clause must also be provided. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences. 5_ C1-8 emwgreement81799 SUB-RECIPIENT AGREEMENT FOR CDBG FUNDS FOR REVOLVING LOAN FUND SERVICES THIS AGREEMENT is made and entered into in the City of San Luis Obispo on this 17th day of August, 1999, by and between the CITY OF SAN LUIS OBISPO, a charter city, incorporated in the State of California, hereinafter referred to as City,and the Economic Vitality Corporation of San Luis Obispo County,a non-profit corporation,hereinafter referred to as EVC;jointly referred to as Parties. WITNESSETH: WIMZEAS, the incorporated cities of San Luis Obispo County have agreed to participate and support the establishment of a regional economic development effort;and WHEREAS, the City desires to diversify and expand its industrial,retail, commercial, recreational, and general business services economic base;and WHEREAS,the EVC is charged with the mission-0 stimulate the economic vitality of San Luis Obispo County, generate jobs and increase financial investment within the County by promoting the retention,expansion,and attraction of business and industry to the area";and WHEREAS, the EVC is organized for such economic development activities on behalf of the City and is in a position to accomplish such goals and purposes of the City in an efficient and economical manner,and Wf EREAS, the Government Code of the State of California authorizes the expenditure of public finds by a municipal corporation for economic development activities as therein provided;and WHEREAS, the City,has entered into grant agreements with the Federal Department of Housing and Urban Development,hereinafter called"HUD",to implement the Housing and Community Development Act of 1974,herein called the "Act" Said Act is omnibus legislation relating to federal involvement in a wide range of housing and community development activities under the Community Development Block Grant(CDBG)Program;and WHEREAS, the San Lis Obispo County Board of Supervisors has recommended establishing a non-profit Economic Vitality Corporation to have primary lead responsibility for planning, implementation and monitoring of economic,business and job development programs in San Luis Obispo City and County;and WHEREAS, the EVC has been incorporated as a private, non-profit corporate entity under the Nonprofit Corporation Law of the State of California and pursuant to section 501(c)of the Federal Internal Revenue Code to have primary lead responsibility to conduct economic development activities in the County of San Luis Obispo, specifically including but not limited to the following: f C1-9 EYCCDBG9900 A. To develop and manage a coordinated, Revolving Loan Fund to expand, retain and attract desirable firms to provide financing,employee recruitment and training,technical and management assistance, etc.; B. To develop job, employment, training and business opportunities for residents of San Luis Obispo City and County, especially for targeted low and moderate income residents through the attraction, retention and expansion of private sector firms; C. To plan and manage economic development implementation activities, programs and projects which would attract and create new firms, and retain and expand existing businesses, including but not limited to those owned by targeted low and moderate income residents of San Luis Obispo City;and WHEREAS,the City and HUD have approved and allocated$100,000 of 1999-00 program year CDBG funds for implementation by the EVC of specific activities eligible under the Act and set forth herein in furtherance of benefit to low and moderate income person;and WHEREAS, the Parties' participation in the programs funded by the Act is pursuant to compliance with all applicable federal laws,regulations and executive orders;and WHEREAS, according to federal regulations 24 CFR.part 570.503,before disbursing any CDBG funds to a "Sub recipient,"a written agreement shall be signed by the"Recipient"and"Sub recipient";and WHEREAS, this Agreement shall remain in effect throughout the implementation of projects specified in the 1999 CDBG Final Statement and 1999 Consolidated Plan-and any amendments thereto. NOW,THEREFORE,in consideration of their mutual promises,obligations,and covenants hereinafter contained, and pursuant to the provisions of Title 24,Chapter V of the Code of Federal Regulations,the Parties agree as follows: 1. TERM The term of this Agreement shall become effective on the date of execution hereof by both Parties,and shall continue in effect until June 30,2000,provided,however,that this Agreement may be renewed each year bereafter, for periods of one year, commencing July 1, 1999, through June 30, 2000,by action of the City Council and EVC's acceptance of said renewal 2. CITY'S OBLIGATIONS. For managing the City's Revolving Fund as specified in this Agreement, (Sty will pay and EVC shall receive therefore compensation in a total sum not to exceed$100,000,including no more than 20%for administrative fees.The amount shall be allocated as follows: on an"as-committed"basis. 3. EVC's OBLIGATIONS. For and in consideration of the payments and agreements herein before mentioned to be made and performed by City,EVC agrees with City to do everything required by this Agreement and the said specifications: _z_ C1-10 EVCCDBG9900 A. That the foregoing recitals are true and correct and constitute statements of fact herein. B. EVC shall manage the City's Revolving Loan Fund as follows: a. Retain or create at least one(1)full-time permanent position for every$25,000 loaned. b. Request input from Economic Development Manger prior to making a loan. c. Provide written quarterly reports to the Economic Development Manager. d. Perform outreach efforts to market available Revolving Loan Fund assistance. e. Screen applicants, review and underwrite applications for assistance; prepare any necessary agreements. f. Monitor assisted activities; provide (or arrange for provision of) services involved in screening, referring, placement and training for persons filling employment opportunities generated by the CDBG economic development assistance. g. Conduct micro-lending program in accordance with 24 CFR 50.201 (ii)(o). 4. INSURANCE. EVC shall proem and maintain for the duration of the contract insurance which meets the requirement of Attachment A. As evidence of this insurance,EVC shall provide the City with a Certificate of hiscuance and an Endorsement naming the City as"Additional Insured". 5. AMENDMENTS. Any amendment,modification, or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the Council or the City Administrative Officer of the City. 6. FEDERAL REGULATIONS. All references in the Agreement to "federal regulations" refer to numbered sections of Title 24,Chapter V, of the Code of Federal Regulations,April 1, 1994 edition,unless otherwise indicated 7. STATEMENT OF WORK The statement of work in attached Attachment B provide sufficient detail to give a sound basis for the City to effectively monitor performance of all activities being implemented under this Agreement Attachment B addresses the eligible use of 1998 CDBG finds according to federal regulation outlined in 24 CFR Sections 570.201 through 570.203. Attachment B includes a description of the activities,related tasks,target completion dates and a budget EVC may request modification of the tasks,schedules or budgets in wilting to the City. The City shall review each request to modify tasks,schedule or budget on a case-by-case basis and will respond to the EVC within 14 days of the request The EVC may make budget revisions within the budgeted amounts shown in Attachment B without prior approval of the City, provided that any increases or decreases in the total amounts of CDBG finds shown in Attachment B shall remain subject to approval by City. 8. RECORDS. According to federal regulation 570.503 (b)(2), records that the EVC must maintain, and the reports that must be submitted to assist the City in meeting its record keeping and reporting requirements,shall be specified in this Agreement To effectively monitor projects for compliance with CDBG regulations, all records must be available for review,or may be required for submittal to the City. All records required by section 570.506 of federal regulations shall be maintained by the EVC and shall be,on the request of the City,submitted to the City. 3- C1-11 EVCCDBG9900 9. REPORTS. All reports required by federal regulations 570.502 and 570.507 shall be prepared and maintained by the EVC. The following reports shall be maintained by the EVC to the City: A. The EVC shall submit an annual performance and evaluation report no later than 30 days after the completion of the most recent program year showing the status of all activities as of the end of the program year. B. Quarterly reports shall be submitted by the EVC to the City on,or before,the 15th day following the quarter end The quarterly report shall include a complete description of the approved activities completed,including loan to job ratio,any problems encountered and corrective actions taken. C. The EVC agrees to provide access by City to its accounting records and documents and to provide non-financial assistance needed by City in the performance of its monitoring function. D. The EVC will contract with an independent certified public accountant to conduct a financial audit of their whole organization each year and will include an audit with a separate report of the projects funded by CDBG funds in accordance with federal OMB Circular No.A-133,"Audits of Institutions of Higher Education and Other Non-profit Institutions." E. Copies of any audited financial reports and the single audit report will be provided to the City. F. The EVC will require each of its non-profit contractors that receive at least$25,000 of CDBG funds to procure audits of their financial records in accordance with OMB Circular No.A-133. G. Other reports and information may be required as determined necessary by HUD to carry out its responsibilities under the Act or other applicable laws. The EVC agrees to provide any HUD required reports. 10. PAYMENTS. The EVC may request payments on an"as-committed"basis. The form required by HUD for cash disbursements shall be used by the EVC to request payment from the City. The City shall review payment claims for compliance with the statements of work and other provisions of this Agreement All payments of claims are subject to the availability of funds to the City from HUD. If claims are approved, the City shall make payment to EVC according to the following schedule: A. If the EVC submits a cash request on or before the 10th of the month,the City shall make payment to the EVC by the 20th of the month. B. If the EVC submits a cash request on or before the 20th of the month,the City shall make payment to the EVC by the 13th of the month. 11. PROGRAM INCOME-SECTION 570504(c). A. The EVC shall notify the City on a quarterly basis of any income generated by the expenditure of CDBG funds and received by the EVC. Such income may be retained by the EVC subject to the provisions of this Agreement, the Act, and its regulations. Any program income retained by EVC shall be used only for eligible activities in accordance with all CDBG requirements. B. EVC shall assist City in monitoring the use of program income and reporting the use of such income to HUD. In the event of grant close-out as defined in section 570.509 of the federal regulations or change of status of EVC, all program income on hand or received by the EVC subsequent to the -4- C1-12 EVCCDBG9900 close-out or change of status shall be paid to the City. 12. OTHER ADMINISTRATIVE REQUIREMENTS. The EVC shall comply with the requirements and standards of MOB Circular No. A-122, "Cost Principals for Non-profit Organizations," applicable provisions of OMB Circular No..A-133,"Audits of Institutions of Higher Education and Other Non-profit Institutions"(as set forth in 24 CFR,part 45),and applicable provisions of OMB Circular No.A-110(as set forth in 24 CFR.part 84). 13. OTHER PROGRAM REQUIREMENTS. The EVC shall carry out each activity in compliance with all federal laws and regulations described in subpart K of the federal regulations, except that the EVC does not assume the City's environmental clearances described in federal regulations section 570.604;and EVC does not assume City's responsibility for initiating the review process under the provisions of 24 CFR part 52 per federal regulation 570.503(5)(ii). The EVC is responsible for spending all funds in compliance with all applicable regulations, laws and executive orders, and warrants it will do so. In the event that the EVC violates any such regulations, laws and/or executive orders, and such violation(s) result in the City incurring expenses and/or malting payments to HUD attributable to some or all of the funds received by EVC,then the EVC shall pay City,on the demand of City,all of the said expenses incurred by City and all of the payment made by City as a result of EVC's said violation(s). 14. . SUSPENSION AND TERMINATION. If City determines that EVC has incurred obligations or made expenditures for purposes which are not permitted or are prohibited under the terns and provisions of this Agreement, or if City determines that EVC has failed to fulfill its obligations under this Agreement in a timely and professional manner,or if EVC is in violation of any of the terms or provisions of this Agreement, or if City is given notice by HUD that HUD is terminating its Grant Agreement with the City, or if EVC should be adjudged to be bankrupt, or if EVC makes a general assignment for the benefit of the EVC's creditors, or if a receiver should be appointed in the event of EVC's insolvency, then City may elect to suspend or terminate this Agreement with EVC. 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 City's termination of EVC for cause is defective for any reason,including but not limited to City's reliance on erroneous facts concerning EVC's performance,or any defect in the notice thereof, City's maximum liability shall not exceed the amount payable to EVC under Attachment B of this Agreement Nothing in this Agreement shall prevent EVC form requesting a hearing before the San Luis Obispo City Council to seek relief from any decision of City pursuant to this paragraph to suspend or terminate this Agreement 15. REVERSION OF ASSETS-SECTION 570503. All transfers of assets are subject to the provisions of this Agreement Upon termination or expiration of this Agreement,the EVC shall transfer to the City any CDBG funds on hand at the time of such temrination or expiration and any accounts receivable attributable to the use of CDBG funds. Any real property under EVC's control that was acquired or improved in whole or in part with CDBG funds in excess of$25,000(whether in the form of a grant or loan)must be used to meet one of the national objectives in federal regulations section 570.208 until five year;after the expiration or termination of this Agreement. If EVC chooses not to use the real property to meet one of the national objectives for five years,then EVC shall pay City upon expiration or -5- C1-13 EVCCDBG9900 termination or this Agreement an amount equal to the current market value of the real property less any portion of the value attributable to expenditures of non-CDBG funds for the acquisition of,or improvement to,the property. 16. INDEMNIFICATION. EVC shall defend,indemnify and save harmless the City,its officers,agents and employees, from any and all claims, demands, damages, costs, expenses,judgments or liability arising out of this Agreement or attempted performance of the provisions hereof, including but not limited to those predicated upon theories of violation of statute,ordinance,or regulation,professional malpractice,negligence,or recklessness including negligent or reckless operation of motor vehicles or other equipment, famishing of defective or dangerous products or completed operations,premises liability arising from trespass or inverse condemnation,violation of civil rights and also including any adverse determination made by the Internal Revenue Service or the State Franchise Tax Board with respect to EVC's "independent contractor"status that would establish a liability for failure to make social security and income tax withholding payments, failure to comply with workers' compensation laws, or any act or omission to act, whether or not it be wilh9rl,intentional or actively or passively negligent on the part of EVC or its agents,employees or other independent consultants directly responsible to EVC, providing further that the foregoing shall apply to any wrongful acts or any active or passively negligent acts or omissions to act,committed jointly or concurrently by EVC or EVC's agents, employees or other independent contractors and the City, its agents, employees or other independent contractors. Nothing contained in the foregoing indemnity provision shall be construed to require indemnification from claims,demand,damages,costs,expenses or judgments resulting solely from the conduct of the City. 17. EQUAL EMPLOYMENT OPPORTUNITY. During the performance of this Agreement, EVC agrees that it will not discrimmate 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. 18. ENTIRE AGREEMENT AND MODIFICATTON. This Agreement sets forth the full and entire understanding of the Parties regarding the matter set forth herein, and any other prior or existing understandings or agreements by the Parties, whether formal or informal, regarding any matters are hereby superseded or terminated in their entirety. No changes, amendments, or alterations shall be effective unless in writing and signed by all parties hereto. EVC specifically acknowledges that in entering into and executing this Agreement,EVC relies solely upon the provisions contained in this Agreement and no others. 19. FUNDING FOR ADDITIONAL SERVICES. Funding of any programs, projects, or services beyond the teim of this Agreement,by any new agreement or amendment or extension of this Agreement,has not been authorized and will depend upon Recipient's determination of satisfactory performance of this Agreement by EVC and upon the availability to City of additional grant funds allocated for such purposes. Neither City nor any employee of City has made any promise or commitment,express or implied,that any additional funds will be paid or made available to EVC for the purpose of this Agreement over and above the fiords expressly allocated under the terms of this Agreement -6- C1-14 EYCCDBG9900 20. CONTRACTORS AND SUBCONTRACTORS. EVC agrees to, and shall require its subcontractors to agree to: 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 EVC or any subcontractor in performing the work or any part of it 21. COMPLIANCE WITH COUNTY AND STATE LAWS AND REGULATIONS. EVC agrees to comply with all County and State laws and regulations that pertain to construction, health and safety, labor, fair employment practices,equal opportunity and all other matters applicable to EVC,its subcontractors,and the work. 22. NO ASSIGNMENT WITHOUT CONSENT. Inasmuch as this Agreement is intended to secure the specialized services of EVC,EVC 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 City,and any such assignment or transfer without the City's prior written consent shall be considered null and void. 23. LAW GOVERNING AND 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 laws 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 the venue for any action, or proceeding that may be brought,or arise out of in connection with or by reason of the Agreement 24. ENFORCEABILITY. In 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. 25. BINDING ON SUCCESSORS IN INTEREST. All provisions of this Agreement shall be binding on the parties and their heirs,assigns and successors in interest. 26. EFFECT OF WAIVER City's waiver or breach of any one term, covenant or other provision.of this Agreement shall net 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 C1-15 EYCCDBC-"00 27. PATENTS AND ROYALTIES. A. EVC shall provide and pay for all licenses and royalties necessary for the legal use and operation of any of the equipment or specialties used in the projects funded with this Agreement Certificates showing the payment of any such licenses or royalties, and permits for the use of any patented or copyrighted devices shall be secured and paid for by the EVC and delivered to the City upon completion of the projects funded by this Agreement,if required. B. EVC shall assume all costs arising from the use of patented materials, equipment, devices, or processes used m or incorporated in the Project and agrees to indemnify and hold harmless the City and its duly authorized representatives, from all suits of law, or actions of every nature for or on account of the use of any patented materials,equipment,devices,or processes. 28. COMPLETE AGREEMENT. This written Agreement,including all writings specifically incorporated herein by reference,shall constitute the complete agreement between the parties hereto. No oral agreement,understanding, or representation not reduced to writing and specifically incorporated herein shall be of any force or effect,nor shall any such oral agreement,understanding,or representation be binding upon the parties hereto. 29. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows: City Lee Price,City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo,CA 93401 Contractor David L.Spaur,President/CEO Economic Vitality Corp.of San Luis Obispo County 412 Higuera Street,Suite B San Luis Obispo,CA 93403-5257 Any Ply may change such address by notice in writing to the other Party. 30. AUTHORITY TO EXECUTE AGREEMENT. Both City and EVC do covenant that each individual executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party. 8_ C1-16 EVCCDBG9900 IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written. ATTEST: CITY OF SAN LUIS OBISPO, A Municipal Corporation By: City Clerk,Lee Price Mayor,Allen R Settle APPROVED AS TO FORM: ECONOMIC VrrALI TY CORPORATION By: ?-C4Attom , ff Torg EVC Chairman of the Board,Ray Johnson _9_ C1-17 EVCCDBG9900 ATTACHMENT A INSURANCE REQUII2E14EM:Consultant Services The Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Contractor, its agents,representatives,employees,or subcontractors. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage(occurrence form CG 0001). 2. Insurance Services Office form number CA 0001 (Ed. 1/87)covering Automobile Liability,code 1 (any auto). 3. Workers'Compensation insurance as required by the State of California and Employer's Liability Insurance. 4. Errors and Omissions Liability insurance as appropriate to the consultant's profession. Minimum Limits of Insurance. Contractor shall maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used,either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit 2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage. 3. Employees Liability: $1,000,000 per accident for bodily injury or disease. 4. Errors and Omissions Liability: $1,000,000 per occurrence. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either. the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Contractor shall procure a bond guar-anteeing payment of losses and related investigations,claim administration and defense expenses. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain,the following provisions: 1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Contractor,products and completed operations of the Contractor,premises owned, occupied or used by the Contractor, or automobiles owned, leased,hired or borrowed by the Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the City,its officers,official,employees,agents or volunteers. 2. For any claims related to this project,the Connector's insurance coverage shall be primary insurance as respects the City,its officers,officials,employees,agents and volunteers. Any insurance or self-insurance maintained by the City, its officers,officials,employees,agents or volunteers shall be excess of the Contractor's inS,,,ance and shall not contribute with it 3. Any fiilre to comply with reporting or other provisions of the policies including breaches of wazmannes shall not affect coverage provided to the City,its officers,officials,employees,agents or volunteers. 4. The Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 5. Each inanance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided,canceled by either party,reduced in coverage or in limits except atter thirty(30)days'prior written notice by certified mail,return receipt requested,has been given to the City. 6. Coverage shall not extend to any indemnity coverage for the active negligence of the additional insured in any case where an agreement to indemnify the additional insured would be invalid under Subdivision(b)of Section 2782 of the Civil Code. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M.Best's rating of no less than A:VII. Verification of Coverage. Contractor shall furnish the City with a certificate of insurance showing maintenance of the required insurance coverage. Original endorsements effecting general liability and automobile liability coverage required by this clause must also be provided The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences. C1-18 EYCCDBG9900 / ATTACHMENT B EVC STATEMENT OF WORK CDBG SUB RECIPIENT Contract Amount $100,000 Administration Amount: Not to exceed 20%of the$100,000 Description of Work. EVC Revolving Loan Fund The EVC will act as a sub recipient of$100,000 of the 1999-00 program year CDBG funds from the City and will implement the Revolving loan Fund(RLF)through EVC staff. Of the$100,000,20%may be used for administration. The work will include financial and other forms of assistance to micro-enterprises and other eligible businesses pursuant to applicable CDBG regulations. The EVC will enter into agreements with the assisted businesses to document that the CDBG-funded assistance will result in the retention or creation of one full-time job from an eligible low or moderate income resident of the City of San Luis Obispo for each$25,000 in CDBG fiords utilized in this business assistance program. The EVC will also assist the City by providing adequate information for the City to meet its environmental review responsibilities under 24 DVR 58 et seq. Repayments of loans of CDBG funds will be made directly to the EVC and be deposited into the RLF city pool,consistent with CDBG regulations. Other tasks involved in the Revolving Loan Fund include: 1. Retain or create at least one(1)full-time permanent position for every$25,000 loaned. 2. Request input from Economic Development Manager prior to making a loan. 3. Provide written quarterly reports to the Economic Development Manager. 4. Perform outreach efforts to market available Revolving Loan Fund assistance. 5. Screen applicants,review and underwrite applications for assistance;prepare any necessary agreements. 6. Monitor assisted activities;provide(or arrange for provision of)services involved in screening,referring, placement and training for persons filling employment opportunities generated by the CDBG economic development assistance. 7. Conduct micro-lending program in accordance with 24 CFR 570.201(iixo). C1-19 EVCCDBCrW00