HomeMy WebLinkAbout07/06/1993, C-11 - AGREEMENT WITH THE WOMEN'S SHELTER ����III�NIIWIIIIIIIIII=�IOUIII MEETING DATE:
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city Orr San
Luis OuISPO ITEM NUMBER:
COUNCIL AGENDA REPORT 61
FROM: Ken Hampian, Assistant City Administrative Officer
Prepared By:, Deb Hossli, Administrative Analyst .
SUBJECT: Agreement with the Women's Shelter
CAO RECOMMENDATION: Approve and authorize the Mayor to execute an agreement
with the Women's Shelter providing $198,000 to assist in the purchase of the Shelter
property.
DISCUSSION:
Background
In 1992, the City was asked to apply for a Community Development Block Grant (CDBG)
on behalf of the Women's Shelter to purchase and rehabilitate the Shelter site. Although
the Shelter serves women countywide, the City agreed to serve as the applicant to satisfy
CDBG regulations (non-profits cannot apply directly) and to support a very worthy program
that benefits City residents. The City was subsequently notified in early summer that we
were successful in securing the CDBG grant.
After accepting the grant, however, the City learned that the State would not allow
expenditure of CDBG monies until the City had an adopted Housing Element in place that
"substantively complied"with State law. This disclosure placed the CDBG grant in jeopardy
as the City and the State have had difficulty reaching agreement on a major issue
surrounding the Housing Element adoption(i.e., the Regional Housing Needs requirement).
This situation was further complicated by the fact that, due to timing constraints, the City
could not adopt the Housing Element and access the CDBG grant funds in time to buy the
property before the purchase option expired.
This dilemma was presented to the City Council in March of this year. In discussing the
situation, the City Council acknowledged the importance of the grant to the Women's
Shelter Program, and as such, committed to working expeditiously to complete a draft of the
Housing Element and submit it to the State for review. At the same time, however, in
recognition of the potential for the City to reach impasse with the State over the Housing
Element and ultimately be forced to decline the CDBG grant, the City conceptually agreed
to make available up to $198,000 (from prior CDBG loan repayment proceeds) to the
Women's Shelter for the Shelter property purchase.
The City has followed through on its commitment to expeditiously complete its review of
the Housing Element. A draft Housing Element was submitted to the State for comments
in early June (the City expects to have a formal response from the State by the July 6th City
Council meeting). In addition, the City, the Women's Shelter, and the San Luis Obispo
Housing Authority have been working together to develop an interim plan to deal with the
more immediate issue of purchasing the Shelter property before the purchase option expires.
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i COUNCIL AGENDA REPORT
Proposal to Purchase Women's Shelter Property
A proposal has been developed that calls for using a combination of the $198,000
conceptually committed by the Council at the March 1993 meeting and monies from an 18
month interest only loan secured by the Housing Authority to purchase the Shelter property.
Under this arrangement, the Women's Shelter will purchase the Shelter property prior to
the purchase option expiration. The City, in turn, will have 18 months to work with the
State to attempt to resolve the issues surrounding the Housing Element. Then, in the event
the City is able to adopt a Housing Element and expend the CDBG grant, the City will use
proceeds from the grant to reimburse itself for the $198,000 expenditure (the State has
agreed to this arrangement). If the City is unable to accept the grant, the City's $198,0000
will be viewed as a one-time contribution to the Women's Shelter to assist in the purchase
of the Shelter property. In addition, during the 18 month period, the Women's Shelter will
commit to undertaking a fundraising campaign to raise the additional $118,000 needed,
should the CDBG grant not be available.
Kgy Elements of Agreement
Staff is supportive of this proposal for purchasing the Shelter property and has developed
the following agreement to provide the Women's Shelter with the City's $198,000. The key
elements of the agreement include:
■ The Women's Shelter will use the City's $198,000 for the sole purpose of assisting
with the purchase of the Shelter property.
■ The Women's Shelter will hold title to the property. This is a preferable
arrangement for the City given the potential liabilities associated with owning an
interest in the Women's Shelter's property.
■ The agreement is interim in nature. Within 18 months of the execution of this
agreement, the City will make a final determination as to the whether we intend to
accept or decline the CDBG grant to purchase the Women's Shelter property. Once
this decision is made, the City will terminate this agreement and enter into a new
agreement with the Women's Shelter for the long-term maintenance of the Shelter
property.
Further, the agreement has been structured so that in the event the City accepts the
CDBG grant, the $198,000 will be viewed as a short-term loan and, as such, CDBG
grant monies will be used to reimburse the City for the $198,000 expenditure.
Conversely, if the City declines the CDBG grant, the $198,000 will be viewed as a
one time contribution of funds to the Women's Shelter solely to assist in the
purchase of the Shelter property (and not subject to repayment). Should the
city of San Luis o81Spo
COUNCIL AGENDA REPORT
property ever be sold, however, the City would be eligible to receive 63% (or a
minimum of $198,000) of the proceeds from the sale of the property based on the
amount of the City's original contribution.
■ The Women's Shelter will be required to record this document against the Shelter
property deed and furnish the City with a recorded copy of this document. The
Women's Shelter will also be required to, upon execution of an agreement for the
long-term management of the property, add a restriction to the deed that insures the
property remains in perpetuity as a Women's Shelter or a use acceptable to the City
(if City funds are ultimately used to acquire the property) or State (if CDBG funds
are ultimately used to acquire property).
■ The Women's Shelter will be required to prepare a fund-raising plan that sets out
how the group will raise the balance of property's cost over the next 18 months
(which equates to $118,000 and is currently funded through an 18 month interest only
loan guaranteed by the San Luis Obispo Housing Authority). This plan will have to
be submitted to the City for approval by October 1, 1993 and include a provision that
requires the Women's Shelter to provide quarterly updates to the City demonstrating
fund-raising progress. This provision has been included in recognition of the
potential that the City will have to decline the CDBG grant (it is the City's intention
that the Women's Shelter will begin fund-raising immediately).
■ The Women's Shelter will be required to use the Shelter property solely to provide
a Shelter and necessary services to assist women and children that are victims of
domestic violence.
■ The Women's Shelter will not be able to lease, assign, sell, or enter into a sale or
cause to be sold, the Shelter property without approval of the City Council.
■ If the Women's Shelter defaults on any of the provisions of this agreement, the City
will have the right to require the Women's Shelter to immediately repay the City's
its $198,000 contribution toward the property purchase.
CONCURRENCES:
The Women's Shelter has reviewed the agreement and finds it acceptable.
FISCAL IMPACT:
Approval of the agreement with the Women's Shelter will result in a total cost of $198,000
to the City. "Miscellaneous revenue" from a CDBG grant received by the City in the early
1980's and earmarked for affordable housing projects will be used to fund the $198,000
expenditure (no general fund monies will be involved).
ATTACHMENTS: Agreement with the Women's Shelter
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of San Luis Obispo
Attn: City Administrative Officer
P.O. Box 8100
San Luis Obispo, CA 93403-8100
APN:
AGREEMENT AFFECTING REAL PROPERTY
AND
AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND
SAN LUIS OBISPO WOMEN'S SHELTER PROGRAM PROVIDING $198,000
TO ASSIST IN THE PURCHASE OF THE WOMEN'S SHELTER PROPERTY
This agreement entered into this day of 1993, by and between the
City of San Luis Obispo (hereinafter referred to as "City") and the San Luis Obispo
Women's Shelter, a non-profit California corporation (hereinafter referred to as "SLOWS").
INTENT
Whereas, in 1990 the SLOWS conducted an in-depth site selection analysis to
determine the most appropriate permanent Shelter location and financing source to
purchase the site. The report revealed that the Shelter's present site represented the
most desirable location and Community Development Block Grant (CDBG)funds the most
viable funding source;
Whereas, the Shelter site is more particularly described in the attached Exhibit A,
and incorporated herein by reference;
Whereas, with this knowledge in hand, the SLOWS secured an option to purchase
the current Shelter property for the appraised value of $315,000 and requested the City
to apply for a CDBG grant on their behalf to carry out the purchase;.
Whereas, the City agreed to apply for a CDBG grant for the SLOWS and
subsequently received notification that a CDBG grant had been awarded to the City from
the State's 1992 grant cycle;
Whereas, after accepting the grant, the City learned that the State would not allow
expenditure of CDBG monies until the City had an adopted Housing Element in place that
"substantively complied" with State law. This disclosure placed the CDBG grant in
jeopardy as the City and the State have had difficulty reaching agreement on a major
Page 2
Agreement - Women's Shelter
issue surrounding the Housing Element adoption (i.e., the Regional Housing Needs
requirement). Given the importance of the grant to the Women's Shelter Program,
however, the City and State committed to work cooperatively and expeditiously to resolve
the issues surrounding the Housing Element adoption. At the same time, the City also
conceptually agreed to make available up to $198,000 (from prior CDBG loan repayment
proceeds) to the SLOWS for the Shelter property purchase should the City reach impasse
with the State and ultimately be forced to decline the grant;
Whereas, this situation has been further complicated by the fact that the City, due
to timing constraints, cannot adopt the Housing Element and access the CDBG grant
funds in time to buy the property before the purchase option expires, thereby further
jeopardizing the Shelter property acquisition;
Whereas, this situation has resulted in the need to develop this interim agreement
between the City and SLOWS that enables the SLOWS to buy the Shelter property prior
to purchase option expiration (using the funds conceptually committed by the City) and
provides the City with additional time to resolve issues with the State surrounding the
adoption of the Housing Element.
Now, therefore, in consideration of mutual covenants, conditions, promises and
agreement herein setforth, the City agrees to provide the SLOWS a with $198,000 to
assist with the purchase of the Shelter property subject to the following terms and
conditions:
1. The SLOWS will use the City's $198,000 for the sole purpose of assisting with the
purchase of the Shelter property. SLOWS acknowledges that it has already
secured an 18 month interest only loan from the San Luis Obispo Housing
Authority to fund the balance of the property's cost. This combination of funding
sources will allow the SLOWS to buy the Shelter property prior to the expiration of
the purchase option for the property. The SLOWS will furnish the City with proof
of Shelter property ownership within thirty days of close of escrow.
2. Within 18 months of the execution of this agreement, the City will make a final
determination as to the whether they intend to accept or decline the CDBG grant
to purchase the Women's Shelter property. Once this decision is made, the City
and SLOWS will terminate this agreement and enter into a new agreement for the
long-term maintenance of the Shelter property.
3. In the event the City accepts the CDBG grant, the $198,000 will be viewed as a
short-term loan and, as such, CDBG grant monies will be used to reimburse the
City for the $198,000 expenditure. The State Department of Housing and
Community Development has already agreed to this arrangement (See Exhibit B).
Page 3
Agreement - Women's Shelter
4. in the event the City declines the CDBG grant, the $198,000 will be viewed as a
one time contribution of funds to the SLOWS solely to assist in the purchase of the
Shelter property (and not subject to repayment). Should the property ever be sold,
however, the City would be eligible to receive 63% (or a minimum of$198,000) of
the proceeds from the sale of the property based on the amount of the City's
original contribution.
5. The SLOWS agrees that the property will be used to provide a Shelter and
necessary services to assist women and children that are victims of domestic
violence.
6. The SLOWS will not lease, assign, sell, or enter into a sale or cause to be sold, the
Shelter property without approval of the City Council.
7. Should the SLOWS default on any of the provisions of this agreement, the City
reserves the right to require the SLOWS to immediately repay the City for its
$198,000 contribution toward the property purchase.
8. Upon execution of this agreement, the SLOWS will record this document against
the Shelter property deed and furnish the City with a recorded copy of this
document. The SLOWS further agrees, upon execution of an agreement for the
long-term management of the property (as discussed in Item #2 of this
agreement), to add a restriction to the deed that insures the property remains in
perpetuity as a Women's Shelter or use acceptable to the City (if City funds are
ultimately used to acquire the property) or State (if CDBG funds are ultimately used
to acquire the property).
9. In recognition of the potential for the City to decline the CDBG grant, the SLOWS
will prepare a fund-raising plan that sets out how the group will raise the balance
of property's cost over the next 18 months (which equates to $118,000 and is
currently funded through an 18 month interest only loan guaranteed by the San
Luis Obispo Housing Authority). This plan will be submitted to the City for
approval by October 1, 1993 and include a provision that requires the SLOWS to
provide quarterly updates to the City demonstrating fund-raising progress.
10. The SLOWS will provide proof of insurance in accordance with the requirements
established in Exhibit C attached hereto and incorporated herein by reference.
11. The SLOWS certifies that it is aware of the provisions of the Labor Code of the
State of California, which require every employer to:be insured against liability for
workers compensation or to undertake self-insurance in accordance with the
provisions of that Code, and it certifies that it will comply with such provisions
throughout the term of this agreement.
Page 4
Agreement - Women's Shelter
12. The SLOWS will indemnify and save harmless the City, its officers, agents, and
employees against:
A. Any and all claims and demands which may be made against the City, its
officers, agents or employees by reason of any injury or death of any
person or corporation caused by any negligent act or omission of the
SLOWS under this agreement or of the SLOWS employees or agents;
B. Any and all damage to or destruction of the properly of the City, its officers,
agents, or employees, occupied or used by or in the care, custody, or
control of the SLOWS, or in proximity to the site of the SLOWS work,
caused by any negligent act or omission of the SLOWS under this
agreement;
C. Any and all claims and demands which may be made against the City, its
officers, agents, or employees by reason'of any injury to or death of or
damage suffered or sustained by an employee or agent of the SLOWS
under this agreement, however caused, excepting, any such claims or
demands which are the result of the negligence or willful misconduct of the
City, its officers, agents, or employees;
D. Any and all penalties imposed or damages sought on account of the
violation of any law or regulation or of any term or condition of any permit,
when said violation of any law or regulation or of any term or condition of
any permit is due to negligence on the part of the SLOWS.
That SLOWS, at its own costs, expense, and risk shall defend any and all suits,
actions, or other legal proceedings that may be brought against or for employees
on any such claim or demand of such third persons, or to enforce any such
penalty, and pay and satisfy any judgement or decree that may be rendered
against the City, its officers, agents, or employees in any such suit, action, or other
legal proceeding, when same were due to negligence of the SLOWS.
San Luis Obispo Women's Shelter
Director
Page 5
Agreement - Women's Shelter
City of San Luis Obispo
Mayor
Attest:
City Clerk
Approved as to content and form:
me
g\ws
STATE OF CALIFORNIA. BUSINESS,TE.;, SORTATION AND HOUSING AGENCY PETE WILSON,Governor
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT `'`F-�
DIVISION OF COMMUNITYAFFAIRS
1800 THIRD STREET,SUITE 390
P.O.BOX 952054 �Trr'`
SACRAMENTO,CA 94252-2054
(916)322-1560
FAX(916)327-660
May 19, 1993
Deb Hossli
Administrative Analyst
City of San Luis Obispo
Post Office Box 8100
San Luis Obispo, CA 93403-8100
RE: CDBG Agreement No. 92-STBG-572
Dear Deb:
This letter is in response to your correspondence dated May 17, 1993. The Community
Development Block Grant staff has discussed the request from the City of San Luis Obispo
to pursue interim financing for the Women's Shelter pending the adoption of the draft
Housing Element.
The City may pursue interim financing. However, it is critical that the City be aware that
it pursues this option at its own risk. If the draft Housing Element is not adopted pursuant
to Article 10.6 by February 28, 1995, the expiration date of CDBG Agreement No. 92-
STBG-572, the Department will not reimburse the City for obligations incurred in a short
term financing arrangement.
As we have previously discussed, the environmental clearances (NEPA and CEQA) must be
completed before project activity is initiated, i.e. the execution of an interim loan
commitment.
I am scheduled to be in San Luis Obispo on May 28, 1993. If we can schedule a convenient
time, it might be helpful if we meet briefly to discuss these issues. If you have any questions,
I can be reached at (916) 327-3626.
Sincerely,
Michael Montgomery
Community Development Specialist
cc: Tom Cook
Marianne Kennedy
William J. Pavio
Exhibit "B"
INSUR& : REQUIREMENTS FOR CONT' `:TORS
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, his agents, representatives, employees or subcontractors.
,
Minimum Scone 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.
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. Employer's Liability: $1,000,000 per accident for bodily injury or disease.
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 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 Contractor'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 insurance and shall not contribute 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 insurer's liability.
5. Each insurance policy.required by this clause shall be endorsed to state that coverage shall not be
suspended,voided,cancelled by either party, reduced in coverage or in limits except after thirty(30)days'
prior written notice by certified mail, return receipt requested, has been given to the City.
Acceotability of Insurers
Insurance is to be placed with insurers with a current A.M. Best's rating of no less than ANII.
Verification of Coveraee
Contractor shall furnish the City with a'certificate of insurance showing required coverage. Original endorsements
effecting general liability and automobile liability coverage are also required by this clause. 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.
Subcontractors
Contractor shall include all subcontractors as insured under its policies or shall furnish separate certificates and
endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements
stated herein.
Exhibit "C" —