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HomeMy WebLinkAbout07/06/1993, 4 - REVIEW OF A COOPERATION AGREEMENT WITH THE COUNTY OF SAN LUIS OBISPO REGARDING CITY PARTICIPATION IN THE URBAN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM ADMINISTERED BY THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HU �I��N��Ggl�lllll��l�lll�ylr MEETING GATE: h►�u�l p1 cior San lues ogIspo COUNCIL AGENDA REPORT ITEM NUMBER: 0 FROM: Arnold Jonas, ommunity Development Director; By: Jeff Hook, Associate Planner SUBJECT: Review of a Cooperation Agreement with the County of San Luis Obispo regarding City participation in the Urban County Community Development Block Grant (CDBG) program administered by the U.S. Department of Housing and Urban Development (HUD). CAO RECOMMENDATION: Adopt resolution approving the Cooperation Agreement and authorize the Mayor to sign the agreement for the City. SITUATION At its May 18th hearing, the City Council directed staff to work with the County of San Luis Obispo and other cities in the County to establish an "Urban County" CDBG program. Since then, the County and the cities of San Luis Obispo, Atascadero, EI Paso de Robles, Grover Beach, and Pismo Beach have notified HUD of their intent to form an Urban County and to apply for CDBG funding. The attached draft Cooperation Agreement, if executed with the County, would provide for the City's participation in the CDBG program starting in July 1994. The next step in the CDBG application process is review and execution of the Cooperation Agreements. To qualify for CDBG funding, the three "Metro Cities" (San Luis Obispo- Atascadero-El Paso de Robles) must individually enter into a cooperation agreement with the County. HUD requires that the. County, as lead agency, submit the executed agreements to HUD by July 16, 1993. Failure to do so could affect the Cities' funding eligibility in the 1994 Federal fiscal year. The model agreement spells out the terms of the County/City funding relationship, and also contains certain "boilerplate" language dealing with various Federal requirements, eg. affirmative action and prohibition against the use of excessive force. The agreement was drafted by City staff following model agreements used by other "urban counties" and provided by HUD. This agreement and adopting resolution will also be used by the other cities participating in the CDBG program in this county. DISCUSSION Summary The attached draft Cooperation Agreement follows the Council's May 18th direction to pursue an Urban County strategy, including measures to: retain City control over CDBG projects within its boundaries; allow flexibility and discretion in use of program funds; provide up to 20% of program funds for general grant administration; and to provide additional financial incentives for city participation. County and Cities' staff met several times during April and May to review the draft agreement and discuss its provisions. The revised draft has been tentatively approved by the County Administrator, and the administrative officers of the metro cities and the two non-entitlement cities who will be participating, Grover Beach and Pismo Beach. HUD's Program Manager also reviewed the draft agreement and made some minor changes which have been incorporated into the revised agreement. If the draft Cooperation 1111011111111101111 JI city of san Luis oBispo Ilia; COUNCIL AGENDA REPORT Staff Report Page 2 Agreement is approved, the County Board of Supervisors will consider San Luis Obispo's agreement, along with those of the other participating cities, at its July 13, 1993 hearing. If the agreements are approved by the Board, the Chairman will sign the agreements and submit them to HUD by July 16th. Briefly, the agreement consists of seven sections, each addressing key aspects of the City/County grant relationship. Much of the agreement is "boilerplate" language required by HUD and applicable Federal law. Section IV, however, spells out how program funds are allocated, based on a strategies discussed and conceptually agreed to by staff from the County and all the participating cities. Following is a summary of each section and its key provisions: Section I: Identities responsible officers, affirms cooperation among the parties to the agreement, sets the 3-year term of the agreement, and defines the agreement scope. ■ The City Administrative Officer (CAO) is authorized to act.as the responsible officer in implementing the CDBG program. ■ Agreement term is for 3 years, and remains in effect until CDBG funds and any income received are expended and funded projects are completed. The parties may not terminate or withdraw from the agreement while it remains in effect. Section H: Defines City and County responsibilities in applying for the CDBG grant and in preparing the Comprehensive Housing Affordability Strategy (CHAS). ■ Guarantees that the City of San Luis Obispo will be included in the CDBG application for CDBG funding submitted to HUD. ■ City agrees to assist and cooperate with the County in preparing the CHAS, and to prepare a Community Development Plan identifying the City's community development and housing needs. ■ County agrees to serve as applicant and be responsible for holding public hearings, preparing and submitting the grant application, CHAS, and supporting materials in a timely and thorough manner to enable funding to begin July 1, 1994. ■ Parties agree that they are not eligible to participate in the Small Cities or State CDBG program during the time they are participating in the Urban County CDBG program through HUD. Section III: Describes the mutual responsibilties of the City and County in administering the CDBG grant, including City performance of housing development activities described in the o� l►�h���►IVIIIIIIUIpa���`� city Of San tins OBISpo amns COUNCIL AGENDA REPORT Staff Report Page 3 City-prepared community development plan. ■ County Administrator is authorized to carry out the CDBG program during Federal fiscal years 1994, 1995, and 1996. ■ County assumes the responsibility and legal liability for proper performance of the plan and the overall CDBG program. ■ City agrees to act in good faith and with due dilligence in carrying out its responsibilities and obligations under the agreement and under subrecipient agreements which define how specific project grant monies are dispersed. Section IV: Prescribes how grant monies will be allocated among the participating jurisdictions, and establishes a "Special Urban Projects Fund" which is an annual set aside amount available to all participating jurisdictions within San Luis Obispo County on a competitive basis. ■ Cities of San Luis Obispo, Atascadero, and El Paso de Robles would receive grant funds in amounts equal to that which they would have otherwise been entitled as "Entitlement Cities." ■ County will not charge any "fees" to cities to meet its obligations under the agreement. ■ County agrees to allocate at least 12.50 percent of the Net County Funding to the participating non-Metropolitan cities of Grover Beach and Pismo Beach. ■ Non-Metro cities may opt to receive their program allocation by an "in-kind" project implemented by the County within the non-Metro cities' corporate limits. ■ 15 percent of the Net County Funding will be set aside annually as a "Special Urban Projects Fund" and awarded by the County Board of Supervisors annually, following criteria developed jointly by the County and the participating cities. ■ In the event of disagreement between the City and County, the Parties agree to accept HUD's binding arbitration and resolution of the conflict. Section V: Provides for the amendment or extension of the agreement, and requires the City and County to prepare a Supplemental Statement annually which describes the projects to be undertaken, time schedule, and additional funding sources, if any. Section VI: Lists Federal requirements regarding citizen participation, compliance with Federal laws (eg. Civil Rights Act of 1964, Fair Housing Act), conflict of interest, use of excessive �`3 I����►�N►�IIIIII�Ip 11U111 MY Of San LUSS OBISPO COUNCIL AGENDA REPORT Staff Report Page 4 force and enforcement of State and local laws barring entrances. Section VII: Provides for the certification of development activities carried out in the City, and assigns responsibility for recordkeeping. CDBG Funds Allocation The Cooperation Agreement is structured so that the Metro Cities receive at least as much funding under the Urban County program as they would have been entitled to as "Entitlement Cities" if they had applied alone, without County participation. The amount metro cities receive annually would be determined by a HUD formula which takes into account population, poverty level, and residential overcrowding. These funds would then be allocated from the total County funding to each Metro City, consistent with the approved CHAS and the Supplemental Statement, a detailed annual plan which describes projects, funding, and scheduling. Grant funding is not allocated to the cities as a lump sum. Basically, the cities' allocation works like an electronic letter of credit. The cities submit invoices to the County, and the CDBG funds would be transferred to the cities within 30 days of the request. HUD can authorize payment to the cities up to five days in advance of need. According to HUD, had all of the incorporated cities and the County participated in the CDBG program as an Urban County in 1993, the total funding would have been $2,581,000. Under the draft agreement, the grant monies would have been allocated as follows: Sample CDBG Urban County Funding Allocation based on 1993 Estimated Funding Levels as Determined by HUD. Total Allocation, Urban County $2,581,000 Adjustment for non-participating cities [100,000] Less Metro Cities allocations City of San Luis Obispo [794,000] City of Atascadero [207,000] City of El Paso de Robles [220.000] Unallocated County Funds 1,260,000 Less maximum County administrative fees' 1`252.0001 Net County Funding $1,008,000 '1 " III�h�IR�����Illlllll�l�ll1l "J f MEETING DATE: city o san lues o��spo COUNCIL AGENDA REPORT ITEM NUMBER: Staff Report Page 5 Less 12.50% each for Grover Beach and Pismo Beach [252,0001 756,000 Less 15% for Special Urban Projects Fund [151,0001 Unincorporated County CDBG Program Funding $605,0002 Notes: 'HUD sets a cap on administrative costs equal to 20% of the total CDBG funds. County's maximum eligible administrative costs equals the 20% cap on total adjusted CDBG funds less 20% of the Metro Cities' allocation (eg. Urban County administrative costs "cap" equals .20 X $2,481,000 = $496,200; 496,200 - [.20 X 1,221,000 = 244,200] = $252,000. 2Tota1 SLO County CDBG funding would equal program funding plus funding for administrative costs, for example, $605K plus $252K equals $857,000. Actual 1994 funding levels will depend on several factors, including Congressional funding decisions for the 1994 program year; 1993 population and income figures for the County and cities; the number of participating cities; and the CDBG application strategy pursued. Early in the CDBG application process, the cities of Arroyo Grande and Morro Bay expressed a preference for the State CDBG program, and will not be participating in the Urban County program at this time. Consequently, the total funding was reduced by $100,000 due to reflect the reduced population base used by HUD to determine total funding. Eligible Projects/Programs HUD's primary objectives for use of CDBG funds are: ■ To benefit low- and moderate-income persons. ■ To aid in the prevention or elimination of slums or blight. ■ To meet community development needs having a particular urgency. At least 70 percent of the grantee's overall expenses must be used for activities that benefit low- and moderate-income persons. Grant funds can be used for a broad range of projects. Federal grant regulations change each program year; however based on a recent HUD publication, the following projects and programs are eligible for CDBG funding: 'T— IIIh�►Rllllyllllllllll�lllllfl � r MEETING DATE: I►►��►� c� o san suis os�spo COUNCIL AGENDA REPORT ITEM NUMBER: Staff Report Page 6 ■ Land acquisition and disposition (write-down) for affordable housing. ■ Removal of urban blight. ■ Job training programs. ■ Conversion of non-residential structures into permanent affordable housing. ■ Rehabilitation of existing housing. ■ Economic development programs (eg. staffing, business assistance). ■ Job counseling and training. ■ Relocation assistance. ■ Removal of architectural barriers to handicapped persons. ■ Infrastructure improvements. ■ Expansion of existing shelters. ■.Improvement of slums or blighted areas. ■ Correction of serious, hazardous community conditions which wouldn't otherwise be possible due to financing or funding limitations. The grant can also be used for certain public services like child care, health care, education, public safety, housing counseling, senior citizens and homeless persons, drug abuse counseling and treatment, and energy conservation counseling and testing, provided that such funding provides either a new or increased level of service, and the amount spent on such services does not exceed 15 percent of the annual CDBG grant plus 15 percent of program income from the previous year. Up to 20 percent of the total grant funding may be used to cover the costs of overall program management, coordination, monitoring, and evaluation, including: staff salaries, wages, and related costs; travel costs; legal, accounting, and audit services under 3rd party contracts; goods and services necessary to administer the program; public information services; and costs to prepare federal program applications. Activities generally not eligible for CDBG funds include: assistance for repairing, operating, and maintaining public buildings; general government expenses; political activities; purchase of construction equipment; repairing, operating, and maintaining public facilities, improvements or services (except in connection with other eligible activities); income payments; new housing construction (except under special provisions). Next Steps City and County staffs have begun work on the Comprehensive Housing Affordability Strategy (CHAS), a 5-year plan required by HUD which describes local resources and programs to provide affordable housing. Public housing needs workshops were held at three locations in the County last month to provide input for the CHAS and to meet HUD requirements. City staff is developing a preliminary list of projects or programs eligible for CDBG funding, to be included in the First Year Plan, a required section of the CHAS describing specific programs and projects to be undertaken in the first year of CDBG funding. The City Council is tentatively h1- lllllAll��llllln�l� III "J o san lMEETING GATE: city oBispo COUNCIL AGENDA REPORT ITEM NUMBER: Staff Report Page 7 scheduled to review the list of possible CDBG programs and funding levels in July. Each participating city will submit information to the County regarding its housing needs, characteristics, and targeted programs for inclusion into the CHAS by the end of July. County staff anticipates completion of the draft CHAS by early August. Following a required 30-day public review period, the CHAS would return for Council and Board approval in September. The target date for submitting the final application materials and the CHAS to HUD is October 1, 1993, to allow HUD sufficient time to qualify the County and cities for the program starting in July 1994. December 31, 1993 has been set as the absolute latest date HUD will accept application materials for the upcoming funding cycle. Until the Cooperation Agreement is executed, the Metro Cities have the option of proceeding with the CDBG program independently of the County and each other as "Entitlement Cities." This approach was discussed, but was not the preferred strategy, at the Council's May 18, 1993 meeting. This is still a viable option if the Metro Cities and County cannot reach agreement on the terms of the Cooperation Agreement; or if the Council prefers the maximum flexibility afforded by "going it alone." There are drawbacks to the "go it alone" approach: the County as a whole would receive approximately $1.36 million less funding than under the Urban County approach; moreover, the City would have full responsibility for completing the CHAS and CDBG applications, administering the grant program, and handling all paperwork and recordkeeping. Consequently, the City would probably incur more cost to administer the same amount of program funds, and would not be eligible to compete for an additional "Special Urban Projects Fund." FISCAL IMPACT Staff anticipates an overall beneficial effect of CDBG funding on the City's fiscal condition, since the costs to administer the program are funded through the grant itself, up to a maximum of 20 percent of the total funding. Up to 20 percent of the City's allocation could be used for general grant administration, including additional staff costs to administer the CDBG program. Based on the hypothetical 1993 funding, this would allow about $159,000 from the City's allocation to be spent on administrative costs. Depending on the type of CDBG programs or projects undertaken, the City's administrative costs and staffing needs will vary. For example, some of the candidate programs, such as the Homeless Shelter or Women's Shelter, are established programs and would not require alot of staff time to implement. Other projects may involve a collaborative effort between the City and the Housing Authority or non-profit housing agencies, and .may require a substantial committment of staff time. There is a possibility that the San Luis Obispo Housing Authority could play a major role in administering the CDBG. Details of the Authority's involvement VIII^I��II�IIIIInIIIpIp�II II�III � o san suis oBIspo MEETING DATE: II II illY'nll C� ITEM NUMBER: COUNCIL AGENDA REPORT Staff Report Page 8 have not been discussed; however initially, it appears that the Authority would be willing to work closely with the City provided that staffing and facility resources were adequate. ALTERNATIVES 1. Proceed with CDBG Urban County Strategy. Adopt resolution approving the Cooperation Agreement with changes and authorize the Mayor to execute a revised agreement which includes the changes. This approach may enable the timely submittal of an executed agreement, while still allowing councilmembers to address specific concerns or changes. The changes would need to be reviewed by HUD and the other participating jurisdictions. 2. Proceed with CDBG independently as an "Entitlement City." With this approach, no cooperation agreement is needed. The Council should direct staff to proceed with the CDBG application process independently as an "Entitlement City," and the City would have until October 1, 1993 to submit its application and CHAS to HUD. 3. Do not apply for the CDBG Program at this time. Do not authorize the Mayor to execute the agreement, nor direct staff to proceed with the CDBG application independently as an Entitlement City. According to HUD, the County and metro cities must submit the executed Cooperation Agreements, along with the appropriate resolutions from each jurisdiction, by July 16,1993. Failure to do so may affect the Urban County's eligibility to receive CDBG funds in 1994. The City and/or Urban County could then reapply for CDBG funding in the 1995 program year. RECOMMENDATION Adopt resolution approving the Cooperation Agreement, Exhibit "A", and authorize the Mayor to execute the agreement for the City. Attachments: -Draft Resolution -Exhibit A: Draft Cooperation Agreement -Letter from County Administrator RESOLUTION NO. (1993 Series) A RESOLUTION OF THE CITY COUNCIL OF SAN LUIS OBISPO, CALIFORNIA, APPROVING A COOPERATION AGREEMENT BETWEEN THE CITY AND COUNTY OF SAN LUIS OBISPO ESTABLISHING JOINT PARTICIPATION IN A COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM. WHEREAS, the County of San Luis Obispo ("County"), a political subdivision of the State of California, and the City of San Luis Obispo ("City"), a municipal corporation, desire to participate in the Community Development Block Grant (CDBG) program administered by the U.S. Department of Housing and Urban Development (HUD); and WHEREAS, said program will promote the public health, safety and welfare by providing grant funds to be used by the City and County ("parties") to improve housing opportunities for low- and moderate-income households, to encourage economic reinvestment, to improve community facilities and public services, and to provide other housing-related facilities or services; and WHEREAS, to qualify for CDBG funds under HUD eligibility guidelines, the County must have a population of at least 200,000 persons; and WHEREAS, the City, as part of the federally designated "San Luis Obispo - Atascadero - Paso Robles Metropolitan Area", wishes to defer its entitlement status to the County for the mutual benefit of both jurisdictions; and WHEREAS, HUD requires that the parties enter into a cooperation agreement to define their rights and obligations as a prerequisite of participation in the CDBG program; THEREFORE, BE IT RESOLVEp BY THE SAN LUIS OBISPO CITY COUNCIL AS FOLLOWS: - �9 Resolution No. (1993 Series) Page 2 SECTION 1. Findings. 1. The proposed Cooperation Agreement is consistent with the general plan and with City and County policies encouraging cooperation between agencies on issues of regional significance such as affordable housing. 2. The proposed Cooperation Agreement will promote the public health, safety and welfare by enabling the City and County to participate in the U.S. Departmentof Housing and Urban Development's Community Development Block Grant Program (CDBG) under an "Urban County" entitlement; thus making available funds for a variety of housing, economic development, and public services programs not otherwise available. 3. The Parties intend to enter into subrecipient agreements which will establish administrative policies and procedures, performance standards and funding schedules, project descriptions, and guidelines for funding specific CDBG programs and projects. 4. The proposed Cooperation Agreement is not a "project" for purposes of compliance with the provisions of the California Environmental Quality Act and the City's Environmental Guidelines, and is therefore, exempt from environmental review. SECTION 2. Authorization to enter into Cooperation Agreement. Pursuant to Federal Regulations 24 CFR 570.501 (b), et. seq., the City Council hereby authorizes the Mayor to enter into a cooperation agreement, Exhibit "A", with the County to enable joint participation in the Community Development Block Grant program U.S. Department of Housing and Urban Development (HUD). SECTION 3. City Administrative Officer authorized to act for City. The City's Administrative Officer is hereby authorized to act on behalf of the City in connection with the implementation of the agreement, on-going operation of the Community Development Block Grant Program, and other activities necessary to carry out the intent of the agreement. SECTION 4. Public Notice. A summary copy of this resolution, together with the ayes and noes, shall be published at least once in full, within 10 days after its adoption, in the Telegram-Tribune, a newspaper published and circulated in the City. A copy of the full text of this resolution shall be on file in the office of the City Clerk and shall be available to any interested member of the public. Resolution No. (1993 Series) Page 3 On motion of , seconded by. and on the following roll call vote: AYES: NOES: ABSENT: the foregoing resolution was passed and adopted this day of , 1993. Mayor Peg Pinard ATTEST: Diane Gladwell, City Clerk APPROVED: i Att rney 0 Attachment: Exibit A - Cooperation Agreement A COOPERATION AGREEMENT BETWEEN THE COUNTY OF SAN LUIS OBISPO AND THE CITY OF SAN LUIS OBISPO FOR JOINT PARTICIPATION IN THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM FOR FISCAL YEARS 1994 THROUGH 1996 THIS AGREEMENT is made and entered into this day of , 1993, by and between the County of San Luis Obispo, a political subdivision of the State of California, hereinafter called "County"; and the City of San Luis Obispo, a municipal corporation of the State of California, located in the County of San Luis Obispo, hereinafter called "City"; jointly referred to as "Parties." WITNESSETH: WHEREAS, In 1974, the U. S. Congress enacted and the President signed a law entitled, 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 and contains eight separate titles; WHEREAS, Title 1 of the Act is entitled "Community Development" and consolidates several existing categorical programs for housing and community development into new programs for such housing and development under block financial grants. The primary objectives of Title I are the improvement and development of metropolitan cities and urban counties or communities by providing financial assistance annually for area-wide plans and for housing, public services and public works programs; WHEREAS, The City of San Luis Obispo has been designated as an entitlement city by the U.S. Department of Housing and Urban Development (HUD), and it has been determined that the City is eligible to receive Community Development Block Grant (CDBG or "program") funds under HUD guidelines; y-IA Cooperation Agreement Page 3 WHEREAS, The County of San Luis Obispo has requested of HUD that the County be designated as an "urban county", and County has been informed preliminarily, subject to final determination, that it will qualify as an urban county and be eligible to receive program funds provided that the County's entitled cities defer their entitlement to County to enable both the County and the entitlement cities to jointly participate in the program; WHEREAS, The City desires to participate jointly with the County in said program, and is willing to defer its entitlement to the County tinder the terns of this agreement; WHEREAS, The Housing and Community Development Block Grant Regulations issued pursuant to the Act provide that qualified urban counties must submit an application to the Department of Housing and Urban Development for funds and that cities and smaller communities within the metropolitan area not qualifying as metropolitan cities may join the County in said application and thereby become a part of a more comprehensive county effort; WHEREAS, As the urban county applicant, the County must take responsibility and assume all obligations of an applicant tinder Federal statutes, including: the analysis of needs, the setting of objectives, the development of community development and housing assistance plans, the community development program, and the assurances or certifications; WHEREAS, By executing this agreement, the Parties hereby give notice of their intention to participate in an Urban County Community Development Block Grant program. NOW THEREFORE, in consideration of the mutual promises, recitals and other provisions hereof, the parties agree as follows: SECTION I. General. �`-/3 Cooperation Agreement Page 4 A. Responsible Officers. The Administrator of the County of San Luis Obispo ("Administrator") is hereby authorized to act as applicant for the Community Development Block Grant Program and to administer block grant funding and activities under the program. The City Administrative Officer ("CAO") is hereby authorized to act as the responsible officer of the City under the program. B. Full Cooperation. Parties agree to fully cooperate or to assist each other in undertaking eligible grant programs or projects, including but not limited to community renewal and lower income housing assistance activities, specifically urban renewal and publicly assisted housing; public services; and economic development. C. Term of Agreement. The term of this Agreement shall be for a period of three (3) years commencing on the date specified below and extending through Federal fiscal years 1994, 1995, and 1996. The Agreement remains in effect until the CDBG (and HOME, where applicable) funds and income received with respect to the three-year qualification period are expended and the funded activities are completed. The Parties may not terminate or withdraw from the agreement while the agreement remains in effect. D. Scope of Agreement. This agreement covers both the CDBG Entitlement Program and, where applicable (i.e., where the urban county receives funding under the HOME program as a participating .jurisdiction or as a member of a HOME consortium), the HOME Investment Partnership Program. SECTION H. Preparation and Submittal of CDBG Funding Applications. T�� Cooperation Agreement Page 5 A. Inclusion of City as Applicant.. Parties agree that City shall be included in the. application the County shall submit to the Department of Housing and Urban Development for Title I Housing and Community Development Block funds under the above recited Act. B. Community Development Plan. City shall prepare a community development plan, for the period of this agreement, which identifies community development and housing needs, projects and programs for the City; and specifies both short- and long-term City objectives, consistent with requirements of the Act. County agrees to: (1) include the City plan in the program application, and (2) include City's desired housing and community development objectives, policies, programs, projects and plans as submitted by City in the County's program application. C. Preparation of "CHAS." City agrees to assist and cooperate with County in the preparation of a Comprehensive Housing Affordability Strategy (CHAS), as required by HUD, by providing the housing, economic and demographic data, community development objectives, policies, programs, plans and other relevant city information reasonably necessary for the timely and thorough completion of the CHAS. D. Application Submittal. County agrees to commit sufficient resources to completing and submitting the CDBG application, CHAS, and supporting documents to HUD in time for the Parties to be eligible to receive funding beginning July 1, 1994, and to hold public hearings as required to meet HUD requirements. E. County Responsibility. Parties agree that the County shall, as applicant, be responsible for holding public hearings and preparing and submitting the CDBG funding application and Cooperation Agreement Page 6 supporting materials in a timely and thorough manner, as required by the Act and the Federal regulations established by HUD to secure entitlement grant funding beginning July 1, 1994. F. Grant Eligibility. In executing this agreement, the Parties understand that they shall not be eligible to apply for grants under the Small Cities or State CDBG Programs for appropriations for fiscal years during the period in which the Parties are participating in the Urban County CDBG entitlement program; and further, the City shall not be eligible to participate in a HOME consortium except through the urban county, regardless of whether the urban county requires a HOME formula allocation. SECTION III. CDBG Program Administration. A. Program Authorization. County Administrator is hereby authorized to carry out activities which will be funded from the annual Community Development Block Grant from Federal fiscal year 1994, 1995, and 1996 appropriations and from any program income generated from the expenditure of such funds. B. Responsibilities or Parties. Parties agree that the County shall be the governmental entity required to execute any grant agreement received pursuant to the CDBG application, and that County shall thereby become legally liable and responsible thereunder for the proper performance of the plan and CDBG Urban County program. City agrees to act in good faith and with due diligence in performance of City obligations and responsibilities under this agreement and under all subrecipient agreements. City further agrees that it shall fully cooperate with the County in all things required and appropriate to comply with the provisions of any Grant Agreement received by the County pursuant to the Act and its Regulations. Cooperation Agreement Page 7 C. City Assistance. City agrees to undertake, conduct, perform or assist the County in performing the essential community development and housing assistance activities identified in the City's community development plan. Pursuant to the Act and pursuant to 24 CFR 570.501 (b), the unit of local government is subject to the same requirements applicable to subrecipients, including the requirement of a written agreement with the County as set forth in 24 CFR 570.503. SECTION IV. Use of Program Funds. A. Allocation of funds. All funds received by County pursuant to this agreement shall be identified and allocated, as described below, to the specific projects or activities set out in the application, and such allocated amounts shall be expended exclusively for such projects or activities; provided, however, that a different distribution may be made when required by HUD to comply with Title I of the Housing and Community Development Act of 1974, as amended. 1) Metropolitan Cities' Allocation. Parties agree that County shall "pass through" the allocated funds to City as subrecipient within 30 days of written request by City to fund specific projects or programs, up to a total amount equal to that to which City would have been entitled had it applied separately as a "metropolitan city", using HUD allocation formulas, and that no "administrative" fee or other fees will be deducted by County to meet its obligations under the terns of this agreement. Further, with respect to such "pass through" funds, County agrees to fully cooperate and assist City in implementing City projects and activities. 2) Non-Metropolitan Cities' Allocation. County agrees to allocate a portion of x-17 Cooperation Agreement Page 8 program funds to the non-Metropolitan, incorporated cities participating in the program. Amount of allocation per city shall not be less than 12.50 percent of the Net County Funding. "Net County Funding" shall mean the total program funds allocated annually by HUD, less the Metropolitan Cities' (Atascadero, El Paso De Robles, San Luis Obispo) allocation as described above, and less the County's general administrative costs as allowed by HUD regulations. At the non-Metropolitan cities' option, their program allocation may be met "in-kind" by County implementation of eligible programs or projects of equivalent cost within each non-Metropolitan city's corporate limits. 3) Special Urban Projects Fund. It is further agreed that County shall set aside a portion of Net County Funding as a Special Urban Projects Fund, available to all participating jurisdictions in San Luis Obispo County on a competitive basis. Amount of the Fund shall equal fifteen (15) percent of Net County Funding. The Special Fund shall be awarded annually by the County Board of Supervisors, following criteria developed jointly by County and the cities participating in the program. B. Administrative and Public Services Costs. County hereby acknowledges that City, as subrecipient, incurs certain administrative costs in preparing housing and economic development plans, program planning, management and accounting, professional support services, and other reasonable and necessary expenses to carry out City's plan; and further, County agrees that after "pass through" of program funds to City, County shall not use its remaining balance of funds in any way that would limit City's ability to use its CDBG funds to the maximum extent allowed by HUD for administrative, public service, or program ��O Cooperation Agreement Page 9 purposes. C. Income Generated. City shall notify the County of any income generated by the expenditure of CDBG funds received by the City. Such program income may be retained by City subject to the provisions of this Agreement, the Act and its Regulations. Any program income retained must only be used for eligible activities in accordance with all CDBG requirements as then apply. D. Use of Program Income. County shall monitor the use of any program income, requiring appropriate record-keeping and reporting by the City as may be needed for this purpose, and shall report the use of such program income to HUD. in the event of close-out or change of status of the City, all program income on hand or received by the City subsequent to the close-out or change of status shall be paid to the County. E. Change in Use of Property. City shall notify the County of any modification or change in the use of real property acquired or improved in whole or in part using CDBG funds that is within the control of the City, from that use planned at the time of acquisition or improvement including disposition. Such notification shall be made within thirty (30) days .of such change of use. F. Reimbursement Upon Sale or Transfer. City shall reimburse the County in an amount equal to the current fair market value, less any portion thereof attributable to expenditures of non-CDBG funds, of property acquired or improved with CDBG funds that is sold or transferred for a use which does not qualify under the Regulations. City shall inform the County of such program income within thirty (30) days if the income results from the sale ��9 Cooperation Agreement Page 10 or change of use of property acquired or improved with CDBG funds. G. Fair Housing Implementation. Parties agree that no urban county funding shall be allocated or expended for activities in or in support of any cooperating unit of general local government that does not affirmatively further fair housing within its own jurisdiction or that impedes the County's actions to comply with its fair housing certification. H. Conflict Resolution. In the event of disagreement or objections by City or County as to the allocation, disbursement, use, or reimbursement of CDBG fiends, the Parties agree to accept HUD's binding arbitration and written determination as to the appropriate resolution or disposition of funds. SECTION V. Amendment or Extension of Agreement. A. Supplemental Statement. It is anticipated that the program application will be approved prior to July 1, 1994 and be in effect through June 30, 1997. For each fiscal year during the term of this Agreement, County and City shall enter into a Supplemental Statement, prepared jointly by County and City, that will list the project(s) City will undertake with its entitlement funds during that program year. Said agreement will set forth the project changes, time schedule for completion of the project(s), and additional funding sources, if any. B. Extension of Supplemental Agreement. if substantial compliance with the completion schedule cannot be met by the City due to unforseen or uncontrollable circumstances, the City may extend the schedule for project completion, as allowed by Federal Regulations. C. Amendments. Parties agree that a fully executed amendment or amendments to this Cooperation Agreement Page 11 Agreement may be entered into at any time if required or necessary to implement the plans contemplated hereunder, or to comply with any grant agreement or the regulations issued pursuant to the Act. SECTION VI. Conroliance with Federal Regulations. A. General. Parties agree to take all actions necessary to comply with the urban county's certification required by section 104(b) of Title I of the Housing and Community Development Act of 1974, as amended, including Title V1 of the Civil Rights Act of 1964, the Fair Housing Act, Section 109 of Title I of the Housing and Community Development Act of 1974; the National Environmental Policy Act of 1969; the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; and other applicable laws. B. Citizen Participation. Parties agree to comply with Federal citizen participation requirements of 570.301 (a)(2), and provide citizens with: 1) An estimate of the amount of CDBG funds proposed to be used for activities that will benefit persons of low and moderate income; and 2) A plan for minimizing displacement of persons as a result of CDBG-assisted activities and programs, and to provide assistance to such persons. C. Citizen Participation Plan. Parties agree to follow a citizen participation plan which: 1) Provides for and encourages citizen participation, particularly those of low or moderate income who reside in slum or blighted areas where CDBG funds are proposed to be used; 2) Provides citizens with reasonable and timely access to local meetings, staff reports, and other information relating to grantee's proposed use of funds, as required by HUD regulations related to the actual use of funds under the Act; Cooperation Agreement Page 12 3) Provides for public hearings to obtain citizen views and to respond to proposals and questions at all stages of the community development program, including at least: 1) formulation of needs; 2) review of proposed grant activities; and 3) review of program performance; for which public hearings shall be held after adequate notice, at times and locations convenient to potential or actual beneficiaries, and with accommodation for handicapped persons; 4) Provides for a timely written answer to written complaints and grievances, within 15 working days where practicable; 5) Identifies how the needs of non-English speaking residents will be met in the case of public hearings where a significant number of non-English speaking residents can be reasonably expected to participate. D. Parties hereby certify, to the best. of their knowledge and belief, that.: 1) Conflict of Interest. No Federal grant monies have been paid or will be paid, by or on behalf of the Parties, to any ofticer or employee of any agency, a Member of Congress, an ofticer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal 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. 2) Influence. If any funds other than Federally appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan or cooperative agreement, the undersigned shall complete and submit standard form LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. 3) Certification Disclosure. Parties agree to include this certification in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements), and that all grant subrecipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was entered into. E. Certification Regarding Policies Prohibiting Use of Excessive Force and Regarding Enforcement of State and Local Laws Barring Entrances. �"02� Cooperation Agreement Page 13 In accordance with Section 519 Public Law 101-144, (the 1990 HUD appropriations Act), the Parties certify that they have adopted and are enforcing: 1) A policy prohibiting the use of excessive force by law enforcement agencies within their respective jurisdictions against any individuals engaged in non-violent civil rights demonstrations; and 2) A policy of enforcing applicable State and local laws against physically barring entrance to or exit from a facility or location which is the subject of such non-violent civil rights demonstrations within their jurisdictions; SECTION VII. Execution of Agreement and Recordkeeping. A. HUD Certification. The CAO or the City Attorney are hereby authorized to execute and submit to the County the HUD Certification Form with respect to the community development activities carried out within the boundaries of the City. It is further understood that the County will rely upon the certifications executed by the CAO or City Attorney for purposes of executing a certification form for submission to HUD. B. Maintenance of Records. City shall maintain records of activities for any projects undertaken pursuant to the program, and said records shall be open and available for inspection by auditors assigned by HUD and/or County on reasonable notice during the normal business hours of the City. IN WITNESS WHEREOF, the City Council of the City of San Luis Obispo and the Board Of Supervisors of the County of San Luis Obispo have authorized this Cooperation Agreement and direct its execution by their respective chief executive officers on this day of 1993. y a3 Cooperation Agreement Page 14 County Counsel Certification The Office of the County Counsel hereby certifies that the terms and provisions of this Agreement are fully authorized under State and local law, and that the Agreement provides full legal authority for the County to undertake or assist in undertaking essential community development and housing assistance activities, specifically urban renewal and publicly assisted housing. By: Jim Lindholm, County Counsel APPROVED AS TO FORM AND LEGALITY: By: . "d. 4mcgn.'y" ('hl/ "Jeff Jorge/rise , City Attorney COUNTY OF SAN LUIS OBISPO By: Chairman of the Board of Supervisors ATTEST: Mitch Cooney, County Clerk �a?�y Cooperation Agreement . Page 15 CITY OF'SAN LUIS O.BISPO: Bye — -- — Peg Pinard; .Mayor ATTEST: Diane Gladwell; City Clerk i�conc .ov n.;ma&-.2193 i �I�