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HomeMy WebLinkAbout09033RESOLUTION NO. 9033 A RESOLUTION APPROVING AN AGREEMENT BETWEEN POSADA INC., AND THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, FOR THE CONSTRUCTION OF 4 UNITS OF MULTIFAMILY HOUSING IN ACCORDANCE WITH THE CITY OF PUEBLO HOME/CDBG CONSOLIDATED PLAN DESCRIBING PROJECTS THAT MEET AN AFFORDABLE HOUSING STRATEGY FOR LOW AND MODERATE INCOME HOUSEHOLDS BELOW 80% AREA MEDIAN INCOME UNDER THE 1999 HOME INVESTMENT PARTNERSHIP PROGRAM WHEREAS, the City of Pueblo, pursuant to the HOME Investment Partnerships Act, the Cranston - Gonzales National Affordable Housing Act; 42 U.S.0 12701 et seq; and implementing regulations under 24 CFR 92, has been a recipient of HOME federal funds under the program since 1992; and WHEREAS, in accordance with the provisions of the Act and 24 CFR 92 92:200 a portion of such financial assistance, subject to appropriation by the City Council, may be made available to non- profit organizations for the purpose of carrying out specific elements of the City of Pueblo housing strategy including the expansion of the availability of affordable housing for low and moderate income Pueblo residents; and WHEREAS, at the council work session held on October 25, 1999, City Council listened to a request for funding from Posada Inc., in the amount of $110,000 in HOME federal funds for the purpose of carrying out the construction of 4 new multi- family units more fully described in "Exhibit A "; and in accordance with the provisions of the Act and 24 CFR 92 92:200 a portion of such HOME funds are encouraged to be under a partnership with other low income housing non-profits; NOW THEREFOR BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PUEBLO, COLORADO, that: SECTION 1. The City of Pueblo Affordable Housing Agreement dated June 12, 2000 between the City and Posada Inc., a copy of which is attached hereto and incorporated herein, having been approved as to form by the City Attorney, is hereby approved, and $110,000 in HOME federal dollars is appropriated to Posada Inc., to be expended and used subject to the terms and conditions of the attached City of Pueblo Affordable Housing Agreement. SECTION II. The President of the City Council is authorized to execute the City of Pueblo Affordable Housing Agreement in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. INTRODUCED June 12. 2000 BY Patrick los C n ' person a / APPROVED , k President of City Council ATTEST: P 4- City Cl COUNCIL AGENDA A RESOLUTION APPROVING AN AGREEMENT BETWEEN POSADA INC., AND THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, FOR AFFORDABLE HOUSING DEVELOPMENT SERVICES IN FURTHERANCE OF THE CITY'S HOUSING STRATEGY, AND AUTHORIZING THE PRESIDENT OF THE COUNCIL TO EXECUTE SAME Department: Housing & Community Development I. SUMMARY A. ISSUE: Agenda Item # Date: June 12, 2000 A resolution authorizing ($110,000) of HOME funds to be provided to Posada Inc. for a four (4) units multi - family project, known as Morning Glory Apartments, on vacant land located on Fifth Street, in Pueblo, CO. B. RECOMMENDATION: Approve the resolution, thus approving a contract with Posada Inc., for 1999 HOME funds. The project meets the HOME eligibility program in that it provides affordable housing to families within the City of Pueblo whose household income falls below 80% of the area median income (AMI). All of the proposed units (4) will be affordable to families making 50% of the area median income. II. BACKGROUND The City of Pueblo has been the recipient of HOME funds since 1992. The City is in the 5th year of the CDBG/HOME Consolidated Plan. As part of that Plan the City must implement an affordable housing strategy using HOME funds. This project will assist the City in meeting the goals and objectives of that Plan by entering into a partnership with Posada Inc., for multi- family units. See attached agreement and exhibits, including project narrative and pro formas. II. FINANCIAL IMPACT The $110,000 in Federal HOME funds will be used in conjunction with the following funding sources: Colorado Division of Housing $ 50,000 Boettcher Foundation $ 20,000 Packard Foundation $ 50,000 Chamberlain Foundation $ 10,000 Def d Dev. Fee & Equity $ 22,500 $ 152,500 III. ALTERNATIVES A. The City could elect to not partner with Posada Inc., and let Posada Inc., proceed without City's assistance. B. The City could approve this resolution Rev. 515100 CITY OF PUEBLO AFFORDABLE HOUSING DEVELOPMENT AGREEMENT (CHDO Set Aside) This Agreement is made and entered into this 12th day of June 2000 by and between the City of Pueblo, a Municipal Corporation (hereinafter referred to as "City ") and Posada. Inc. (hereinafter referred to as "CHDO "). WITNESSETH, that: WHEREAS, the City has, under date of March 1, 1999, entered into an agreement with the U.S. Department of Housing and Urban Development ( "HUD "), whereby federal financial assistance may be made available to City as a participating jurisdiction for the purpose of expanding the availability of affordable housing pursuant to the Home Investment Partnerships Act ( "the Act ") (42 U.S.C. 12701 et. seq.), the Cranston - Gonzales National Affordable Housing Act and implement -ing regulations, including but not limited to those at 24 CFR Part 92; and WHEREAS, in accordance with the provisions of Section 231 of the Act and 24 CFR Section 92.300, a portion of such financial assistance, subject to deobligation (and subject to appropriation with respect to any assistance payable out of future fiscal year allotments), may be made available to qualifying community housing development organizations for the purpose of carrying out specific elements of the participating jurisdiction's housing strategy including new construction of affordable rental housing; and WHEREAS, CHDO has represented to City that it is a duly qualified community housing development organization which is eligible and willing to undertake certain approved elements of City's housing strategy identified herein and in the Scope of Services attached hereto; and WHEREAS, based upon CHDO's representations, the City believes CHDO is capable or can reasonably be expected to become capable of carrying out said approved elements of City's housing strategy, and City is willing to allocate federal funds to CHDO for investment in housing to be developed, sponsored or assisted by CHDO which will comply with and fulfill said approved elements of City's housing strategy; NOW, THEREFORE, in consideration of the foregoing recitals and the covenants, terms and conditions set forth herein, the parties agree as follows: 1. CHDO SERVICES (a) CHDO shall assist, in accordance with all applicable federal, state and local laws and regulations, in the development of a project, to be known as the Morning Glory Apartments Project (hereafter referred to as "the Project ") in furtherance of City's housing strategy and approved by the City by providing necessary loan financing therefor using federal HOME funds provided under this Agreement. CHDO shall also undertake and perform the tasks and functions described in the Scope of Services attached hereto as Exhibit "A" and incorporated herein by reference, in full compliance with all provisions of this Agreement. Before proceeding with such financing for the Project, CHDO shall furnish City with all information which City may reasonably request concerning the Project, demonstrate eligibility of the Project for assistance under this Agreement, and obtain the written approval of City's authorized representative as to the Project, which approval will not be unreasonably withheld. Upon and after such approval, CHDO shall enter into a written loan agreement with the Owner /Developer of the Project setting forth the terms and conditions of the loan assistance to be provided by CHDO, which loan agreement shall comply with all requirements of this Agreement and the regulations incorporated by reference. (b) CHDO warrants and represents that (i) it has the requisite authority and capacity to perform all terms and conditions on CHDO's part to be performed hereunder; (ii) that it is duly organized as a non - profit corporation under state law and is in good standing with the Secretary of State of Colorado; (iii) that it meets, or before accepting any payment hereunder will meet, the organizational, membership and accountability requirements of community housing development organizations as that term is defined and limited in 24 CFR §92.2; (iv) that it is aware of and understands its duty to perform all functions and services in accordance with the regulatory requirements of 24 CFR Part 92 and those identified in Exhibit "C" hereto; and (v) that it is accepting federal financial assistance hereunder subject to certain mandatory repayment provisions. (c) Time is of the essence hereof. CHDO agrees that it shall meet the following deadlines with respect to the Project: (i) CHDO shall obtain satisfactory evidence that the Owner /Developer of the Project has the financial ability to undertake and construct the Project, including proof that it has secured loan commitments for a construction loan and the primary loan permanent financing for the Project, and furnish such evidence to City, on or before June 1, 2000; CHDO shall thereafter provide to the Owner/Developer a loan commitment which sets forth the terms and conditions of the loan. (ii) CHDO shall enter into a loan agreement with the Owner /Developer of the Project consistent with the terms of this Agreement on or before August 1, 2000; (iii) CHDO shall require the Owner /Developer to commence construction of the Project not later than September 1, 2000; and (iv) CHDO shall require the Owner /Developer to substantially complete construction of the Project not later than September 30, 2001. (d) CHDO acknowledges that because it is the policy of the City Council of City that fair and prevailing wages be paid to all laborers and mechanics on projects funded through the City and which rely upon federal funds, CHDO shall require in the loan agreement that in all contracts for the -2- hereunder. 4. TERM OF AGREEMENT; SECURITY (a) Unless sooner terminated, the term of this Agreement, for purposes of undertaking the loan and construction and completion of the project, shall be from the date of execution hereof until December 1, 2001; provided however, that with the respect to the Project for which CHDO has received financial assistance under and during the term of this Agreement, CHDO and the Owner/Developer of the Project shall have continuing responsibility to comply with the performance, certifications, repayment, affirmative marketing, housing affordability compliance and recordkeeping requirements of this Agreement, and 24 CFR Part 92 (including, without limitation 24 CFR Sections 92.252, 92.254, 92.301, 92.351 and 92.508) which shall survive expiration or termination and remain in effect throughout the required full period of affordability, notwithstanding termination or expiration of this Agreement. As used herein, "period of affordability" shall mean 20 years from the completion of the Project except that if the assistance provided hereunder is used in connection with other financing insured by HUD under Chapter II of Title 24, Code of Federal Regulations, the period of affordability shall be the full original term of said mortgage or 20 years, whichever is longer. (b) (i) The full amount of loan assistance provided to the Project pursuant to this Agreement shall constitute an indebtedness of the Owner/Developer to CHDO which shall be evidenced by a promissory note (hereinafter referred to as the "Promissory Note" or "Note ") which shall be due and payable with interest as provided therein and which shall be secured by the following real property located in Pueblo County, Colorado (the "Property "): Lot 2, Block 27, East Pueblo Subdivision , as evidenced by a Deed of Trust to be executed contemporaneously with said Promissory Note. The loan instruments shall require the Owner/Developer to pay to CHDO or holder the indebtedness as and to the extent same becomes due under the provisions of the Promissory Note and this Agreement. CHDO shall include terms in said Promissory Note or Deed of Trust stating that the amount of the assistance shall continue as an indebtedness until paid in full, and notwithstanding such payment in full, the affordability restrictions described in this Agreement shall continue in effect and be enforceable for the full period of affordability without regard to the term of the Note or Deed of Trust. (ii) In order to secure CHDO's repayment obligations hereunder to City, City may, at any time, require an assignment and transfer of said Note and Deed of Trust to City. (c) During the full Term of this Agreement and for the period of affordability, (1) any failure by the Owner/Developer or CHDO to perform any obligation, covenant or provision of the Note or this Agreement required to be performed by the Owner/Developer or CHDO, or (ii) any breach of any warranty made by CHDO in this Agreement, or (iii) any other violation of any material term of this Agreement or the Deed of Trust given to secure the Note, shall constitute a in default under this Agreement. Upon any such default, the City may demand that CHDO repay to City the full amount of assistance provided hereunder, plus interest at the rate of 12% per annum from and after the date of such default. CHDO further agrees that no release of any security for the indebtedness or extension of time for payment of same, or any installment thereof, and no alteration, amendment or waiver of any provision of the Note or the Deed of Trust securing same shall in any manner, release, discharge, modify or affect the obligations of CHDO under this Agreement. 5. TERMINATION OF AGREEMENT (a) For Cause This Agreement may be terminated by City for cause, including any nonperformance by CHDO, upon ten (10) days written notice to CHDO including a statement of the reasons therefor, and after an opportunity for a hearing has been afforded. If a hearing is requested, it shall be held before the City's Director of Housing and Community Development whose decision as to both the grounds for termination and the appropriateness thereof shall be final and binding upon both City and CHDO. In accordance with 24 CFR 85.43, cause for termination shall include any material failure by CHDO to comply with any term of this Agreement. (b) For Convenience This Agreement may be terminated for convenience in accordance with the provisions of 24 CFR 85.44. This Agreement shall terminate immediately upon any non - appropriation of funds, or upon any suspension or non - receipt of federal assistance provided to City under the Act, regardless of cause. (c) Post Termination Procedures In the event of termination, CHDO shall continue to be responsible for those matters which survive termination identified in paragraph 4 above, unless City takes over the Project and, in connection therewith, prospectively releases CHDO from one or more specific responsibilities in writing. Additionally, at City's sole option, all property acquired by CHDO with grant funds, all grant funds, program income, and mortgage loans originated with grant funds or by payments therefrom and payments received under such mortgage loans, held, owned or retained by CHDO shall immediately become the sole and separate property of the City and CHDO shall perform all acts and execute all instruments necessary to transfer and assign such property, funds, income, and mortgage loans to City. All finished or unfinished documents, data, studies reports and work product prepared by CHDO under this Agreement or with grant funds shall, at the option of the City, become its property and CHDO shall be entitled to received just and equitable compensation only for satisfactory work completed and eligible costs for which compensation has not previously been paid nor reimbursement made. 6. ASSIGNABILITY This Agreement shall not be assigned or transferred by CHDO without the prior written consent of the City. Any assignment or attempted assignment made in violation of this provision shall, at City's election, be deemed void and of no effect whatsoever. 7. CONFLICT OF INTEREST -5- HOME Regulation 24 CFR, Part 92.356 is incorporated herein by reference, and sets forth applicable laws and regulations that apply to Conflict of Interest. CHDO, and its Board of Directors, officers and employees, shall avoid all conflicts prohibited by applicable regulations, including but not limited to those set forth in 24 CFR Part 92 as presently promulgated and as same may be revised from time to time in the future. 8. CHDO RECORDKEEPING CHDO shall maintain, and shall require the Owner/Developer to maintain, records as to the Project work and activities undertaken with assistance hereunder, services provided, reimbursable expenses incurred in connection with the Project and complete accounting records. Accounting records shall be kept on a generally recognized accounting basis and as requested by the City's auditor. CHDO agrees to comply with all applicable uniform administrative requirements described or referenced in 24 CFR Part 92. The compliance provisions attached as Exhibit "B" hereto are made a part of this Agreement, and CHDO agrees to perform and comply with same, and shall require the Owner/Developer to do likewise. The City, HUD, the Comptroller General of the United States, the Inspector General of HUD, and any of their authorized representatives, shall have the right to inspect and copy, during reasonable business hours, all books, documents, papers and records of CHDO and the Owner/Developer which relate to this Agreement for the purpose of making an audit or examination. Upon completion of the work and end of the term of this Agreement, the City may, at any time during the period of affordability or within 5 years thereafter, require all of CHDO's and the Owner/Developer's financial records relating to this Agreement to be turned over to the City. 9. MONITORING AND EVALUATION The City shall have the right to monitor and evaluate the progress and performance of CHDO to assure that the terms of this Agreement are being satisfactorily fulfilled in accordance with HUD's, City's and other applicable monitoring and evaluation criteria and standards. The City shall at least quarterly review CHDO's performance using on -site visits, progress reports required to be submitted by CHDO, audit findings, disbursement transactions and contact with CHDO as necessary. CHDO shall furnish to the City monthly or quarterly program and financial reports of its activities in such form and manner as may be requested by the City. CHDO shall fully cooperate with City relating to such monitoring and evaluation. 10. CHDO FILES AND INFORMATION REPORTS CHDO shall maintain files containing information which shall clearly document all activities performed in conjunction with this Agreement, including, but not limited to, financial transactions, conformance with assurances, activity reports, and program income. These records shall be retained by CHDO for a period of five years, except that with respect to the Project undertaken with assistance provided hereunder, such records shall be maintained for the full required period of affordability. Activity reports shall be submitted monthly or quarterly no later than the ninth day [am of the month following the end of month or quarter for which the report is submitted. 11. INDEPENDENCE OF CHDO Nothing herein contained nor the relationship of CHDO to the City, which relationship is expressly declared to be that of an independent contractor, shall make or be construed to make CHDO or any of CHDO's agents or employees, or the Owner/Developer, the agents or employees of the City. CHDO shall be solely and entirely responsible for its acts and the acts of its agents, employees and subcontractors. 12. LIABILITY & INSURANCE (a) As to the City, CHDO agrees to assume the risk of all personal injury, including death and bodily injury, and damage to and destruction of property, including loss of use therefrom, caused by or sustained, in whole or in part, in conjunction with or arising out of the performance or nonperformance of this Agreement by CHDO or by the conditions created thereby. CHDO further agrees to indemnify and save harmless the City, its officers, agents and employees, from and against any and all claims, liabilities, costs, expenses, penalties and attorney fees arising from such injuries to persons or damages to property or based upon or arising out of the performance or nonperformance of this Agreement by CHDO or out of any violation by CHDO of any statute, ordinance, rule or regulation. (b) CHDO agrees that it shall procure and will maintain during the term of this Agreement, such insurance as will protect it from claims under workers' compensation acts, claims for damages because of personal injury including bodily injury, sickness or disease or death of any of its employees or of any person other than its employees, and from claims or damages because of injury to or destruction of property including loss of use resulting therefrom; and such insurance will provide for coverage in such amounts as set forth in subparagraph (c). (c) The minimum insurance coverage which CHDO shall obtain and keep in force is as follows: (i) Workers' Compensation Insurance complying with statutory requirements in Colorado. (ii) Comprehensive General and Automobile Liability Insurance with limits not less than Six Hundred Thousand and No /100 Dollars ($600,000.00) per person and occurrence for personal injury, including but not limited to death and bodily injury, and Six Hundred Thousand and No /100 Dollars ($600,000.00) per occurrence for property damage. (d) CHDO further agrees that it shall require the Owner/Developer of the Project to procure and maintain, at the Owner/Developer's expense, hazard and fire insurance upon the property described in the Deed of Trust on an "all risk" form in such amounts as City's Department -7- of Housing and Community Development may require, but in any event, for not less than the amount of all liens against the property and the amount of funds provided to CHDO by City pursuant to this Agreement. CHDO shall furnish a certificate of insurance certifying such coverage to City's Director of Finance prior to disbursement of any funds to CHDO. Both said certificate of insurance and the policy procured by the Owner/Developer shall name the City as an additional loss payee. 13. CERTIFICATIONS CHDO agrees to execute and abide by the certifications contained in Exhibit "C" hereto, which are hereby expressly made a part of this Agreement. 14. PROGRAM INCOME; REVERSION OF ASSETS (a) (I) Unless otherwise authorized by City in writing in a separate instrument executed after date of this Agreement, all program income shall be returned to City within 30 days of receipt by CHDO. In the event City authorizes CHDO to retain any portion of program income, it shall only be used to accomplish the work set forth in the Scope of Services, and the amount of grant funds payable by City to CHDO shall be adjusted as provided by 24 CFR 92.503 and the applicable requirements of 24 CFR 85. (II) Additionally, all developer fees received by CHDO, including any such fees paid from or out of rental income for the Project, regardless of when received, shall be used and applied by CHDO only to or for programs and projects approved in writing by the City which serve to assist low and moderate income persons in obtaining housing. (b) Upon expiration of the term of this Agreement, or upon any prior termination, CHDO shall transfer to City any funds provided hereunder which are on hand at the time of expiration or termination together with any accounts receivable attributable to the use of funds provided hereunder. (c) The Project, the Property, and any other real property acquired, constructed or improved in whole or in part with funds provided pursuant to this Agreement shall be used as affordable rental housing within the meaning of 24 CFR § 92.252 for the full period of affordability as defined in paragraph 4 hereof. In the event the Project, the Property or such other property ceases to be so used, CHDO shall immediately pay to City the greater of (i) an amount equal to the current market value of the Project and property less any portion of the value attributable to expenditures of funds not provided under this Agreement for the construction of the Project or acquisition of, or improvement to, the Property (that is, the calculation of the portion of value attributable to expenditures not provided by City under this agreement shall be the market value multiplied by a fraction whose numerator is the total Project cost or costs of acquisition determined as of the date of Project completion less the amount of assistance provided by City and whose denominator is the total Project cost or cost of acquisition determined as of the date of Project completion) or, (ii) the remaining principal balance and accrued interest owing under the Note. The use restriction and repayment obligation set forth in this subparagraph shall survive termination or expiration of this IF-111 Agreement and shall be fully enforceable and subject to collection by City or HUD in accordance with applicable laws. CHDO shall require the Owner/Developer to comply with the requirements of this paragraph and to execute a Deed of Trust which shall be and constitute a lien upon the Property and all other real property acquired or improved with funds provided hereunder, and which shall secure the affordability requirements hereunder. (d) In the event City incurs any cost or expense in enforcing the requirements of this Agreement, including but not limited to the requirements of this paragraph 14, or in bringing any action to recover the amount of any repayment obligation, or, upon assignment of the Note and the Deed of Trust to City, to foreclose or obtain sale under the Deed of Trust or mortgage instrument, City shall be entitled to recover its costs and expenses, including reasonable attorneys fees. (e) To further ensure that the funds provided hereunder do not constitute an investment of more HOME funds than are necessary to provide affordable housing (as required by 24 CFR §92.250(b)), CHDO shall require the Owner/Developer to retain ownership of the Project for a period of not less than 20 years from and after the completion of the Project. Consequently, in the event the Owner/Developer should sell or transfer title to the Project, the Property or other real property or improvements constructed or improved with funds provided pursuant to this Agreement, within 20 years after substantial completion of the Project or said improvements, the Loan Agreement, Note and Deed of Trust shall provide that the entire indebtedness under the Note shall immediately become due and payable and shall be collected by CHDO and repaid to City, together with interest thereon at the rate of 12% per annum from the time of substantial completion until said repayment is made. If Owner/Developer is a limited partnership, nothing in this subparagraph (e), nor in subparagraph (f) of this paragraph 14, is intended to prohibit a transfer of ownership from Owner/Developer to any general partner or limited partner in Owner/Developer. (f) It is the intent of the parties that §38 -30 -165, C.R.S. and any similar statute hereafter enacted, be preempted under federal law and regulations in order to maintain affordability of the rental units within the Property. Consequently, the Loan Agreement between CHDO and the Owner/Developer and the Note and Deed of Trust executed by the Owner/Developer shall not be assumable, and the indebtedness shall be due and payable upon sale, transfer or assignment, or any attempted sale or transfer of the Property by the Owner/Developer, unless all of the following circumstances are demonstrated to exist: (i) more than 20 years have elapsed since the substantial completion of the Project, (ii) the Primary Lender also consents to assumption of the mortgage or obligation to which the Deed of Trust is subordinate, (iii) the sale of the Property is to a subsequent purchaser who agrees in writing to comply with the affordability requirements of this Agreement and applicable requirements, including those set forth at 24 CFR, §92.252, (iv) the sale price and payment of principal, interest, property taxes and insurance by the subsequent purchaser must permit the rental units to remain affordable for the remaining period of affordability specified in this Agreement, with affordability determined by applicable regulations and requirements, and (v) both the City and the holder of the Note expressly consent to assumption of the Owner /Developer's obligations under the loan agreement and the Note by the subsequent purchaser prior to sale or transfer, which consent shall be granted only upon the Owner/Developer's showing circumstances (i) through (iv) have or will be satisfied. M 15. SPECIAL REQUIREMENTS APPLICABLE TO IMPROVEMENTS TO PROPERTY (a) In addition to all procurement requirements otherwise applicable to the Project pursuant to any other provision of this Agreement or pursuant to any requirement of law or regulation incorporated in this Agreement by reference, CHDO shall comply with all requirements of this Paragraph 15. (b) No improvements shall be undertaken to the Property or other real property with funds (or reimbursement) provided hereunder unless and until: (1) plans and specifications therefor have been prepared by either a registered Professional Engineer in good standing and duly licensed to practice in the State of Colorado or an Architect duly licensed and authorized to conduct a practice of architecture in the state of Colorado; (ii) such plans and specifications have been filed with the City and approved by both the City's designated representative and the City's Director of Public Works; and (iii) all construction contracts for improvements for which funds are provided from City shall have been awarded only after an open, competitive bidding process which has been approved by City's Director of Purchasing and which allows qualified contractors to reasonably participate in the competitive bidding procedures. (c) No disbursement of funds to CHDO shall be made by City hereunder unless and until all conditions precedent to payment specified elsewhere in this Agreement have been satisfied and CHDO files with City's Director of Housing and Community Development a written request for payment signed by an officer of CHDO that certifies (i) that the amounts included in the request for payment have not been included in any prior request for payment, (ii) that the improvements listed therein for which payment is sought have been completed in accordance with the approved plans and specifications therefor, and (iii) that the improvements for which payment is sought have been constructed so as to comply with City of Pueblo building codes and Section 8 Housing Quality Standards. (d) In every contract for construction of improvements for which payment or reimbursement from City is to be provided under this Agreement, CHDO shall include a contract clause or clauses, approved by City's Director of Purchasing, requiring the Owner/Developer, the contractor, and all of the contractor's subcontractors of all tiers, to comply with the requirements of the Davis -Bacon Act and implementing regulations, and to pay all laborers and mechanics engaged in work upon the improvements at the prevailing wage rates for such work as determined by the U.S. Department of Labor. (e) Every contract for construction of improvements, and all lower tier covered transactions, shall include a requirement that the contractor, subcontractor or vendor certify that neither it nor its principal is debarred, suspended, proposed for debarment, declared ineligible or voluntarily excluded from participation in any federally funded project. 16. RECOGNITION OF HUD, CITY -10- In all printed materials, project descriptions and other activities undertaken with funds provided under this Agreement, CHDO shall either provide recognition that funds have been provided by the U.S. Department of Housing and Urban Development and the City of Pueblo or shall cause the Owner /Developer to do so. Recognition shall be accomplished by prominent disclosure of the role of HUD and the City in all such printed materials and project signage, if any. 17. ENTIRE AGREEMENT: AMENDMENTS The provisions set forth in this Agreement, and all Exhibits and attachments to this Agreement, constitute the entire and complete agreement of the parties hereto and supersede all prior written and oral agreements, understandings or representations related thereto. No amendment or modification of this Agreement, and no waiver of any provision of this Agreement, shall be binding unless made in writing and executed by the duly authorized officers of both the CHDO and City. 18. SIGNATURES The persons signing this Agreement on behalf of CHDO represent and warrant that such persons and CHDO have the requisite power and authority to enter into, execute and deliver this Agreement and that this Agreement is a valid and legally binding obligation of CHDO enforceable against CHDO in accordance with its terms. IN WITNESS WHEREOF, CHDO and the City have executed this Agreement as of the date first above written and under the laws of the State of Colorado. ATTEST: City C k [SEAL] ATTEST. � r CITY UEBLO AM ic' al Corp ion By: Y President of City Council POSADA, INC., a Colorado Noil Profit Corporation Name: K__- k M Title: ecl C)✓ Rev. 5/5/00 TJF -11- EXHIBIT A SCOPE OF SERVICES ALPHA WEST -- HOME Project: Morning Glory Apartments HOME Project #: 1. PROJECT DESCRIPTION, OBJECTIVES, AND REQUIREMENTS. This Project is constructing one four -unit apartment building on land at 724 East 5 Street, Pueblo, CO., which the Sponsor currently owns. The three of the 2- bedroom units will be maintained as rental units for families whose income is equal to or less than 50 percent of the Area Median Income (AMI) for Pueblo County, CO. The remaining unit will provide housing in exchange for services to a resident manager. The project is located adjacent to Posada's existing transitional housing facility, which allows for the combined management of both facilities. A. Form of Subsidy. $110,000 of HOME grant funds for construction, will be administered in accordance with the requirements of this agreement, and the performance goals and timelines outlined in the Agreement. B. Time of Performance. The Project shall commence upon the full and proper execution of the Agreement and the completion of the appropriate environmental review and shall be complete on or before September 30, 2001. C. Payment Schedule. Payments will be made in accordance with the Affordable Housing Development Agreement. 2. ELIGIBLE BENEFICIARIES. The Sponsor shall insure that all of the units will be occupied by persons whose household income is equal to or less than 50 percent of the AMI. 3. INCOME ELIGIBILITY DETERMINATION. For the initial project lease up, the Sponsor must determine annual income of the project beneficiaries using "Annual Income ", as defined under the public housing and Section 8 programs in 24 CFR 5.601. 4. USE RESTRICTION AND AFFORDABILITY ENFORCEMENT. Rent and tenant income requirements must be enforced. A. Beneficiary Income. All of the units will be occupied by persons whose household income is less than or equal to 50 percent of the Area Median Income (AMI). B. Rent Restriction. To insure the housing is affordable to very low income persons, the rental units must have rents which are the lesser of the Section 8 Fair Market Rents (FMR), as periodically established by the U.S. Department of Housing and Urban Development (HUD), or rents which are 30 percent of adjusted income for households at 65 percent of AMI minus tenant paid utilities. Pueblo MSA (A/0 2/00) 1 1- Bedroom 2- Bedrooms I 3- Bedrooms I 4- Bedrooms Fair Market 432 540 727 867+ 65% of Median Rent Limit 472 569 648 703 The owner must reexamine the rents upon receipt of new HOME rents, which are recalculated on a periodic basis by the HUD, and adjust the rents of the HOME - assisted units to reflect the changes. Regardless of changes in FMR and AMI over time, the HOME rents for this project are not required to be lower than the HOME rent limits shown above. 5. PROJECT BUDGET See attached Housing Analysis Worksheets. CITY OF PUEBLO HOME — Affordable Housing Program Rental Project Worksheet Project Name: MorningGlory Project MSA or County: Pueblo Area Median Income (AMI) for the project location: <80% 50% Area Median Income (AMI) for the project location: $ 18,750 06/02/00 Targeted HUD Income Limit 1 2 3 Household Size 4 5 6 7 8 50% $ 14,800 $ 16,900 $ 19,050 $ 21,150 $ 22,850 $ 24,550 $ 26,250 $ 27,900 60% #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? 70% #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? % $ 23,700 $ 27,050 $ 30,450 $ 33,850 $ 36,550 $ 39,250 $ 41,950 $ 44,650 Number of Bedrooms Income Restriction (% AMI) # of Units Maximum AHP Rent Proposed Rent Annual Rent Revenue Efficiency 50 0 60 $0 70 $0 80 $0 > 80 $0 1 Bedroom 50 0 60 $0 70 $0 80 $0 > 80 $0 2 Bedroom 50 4 400 400 $19,200 60 $0 70 $0 80 $0 > 80 $0 3 Bedroom 50 0 60 $0 70 $0 80 $0 > 80 0 4 Bedroom 50 0 60 $0 70 $0 80 $0 > 80 $0 Total nits 4 Total Annual Rent $19,200 Very Low - Income Units Very Low - Income Units 4 100.0% 236.975 Rental Project Worksheet CITY OF PUEBLO HOME — Affordable Housing Program Development Budget Total AHP Land and Buildings 6/2/00 16:13 Other Per Unit Land Acquisition $ 10,000 Building Acquisition Liens and Taxes $ 5,000 Holding Period Interest $ 4,000 Relocation Costs $ 5,000 $ Other: Survey $ 2,000 Subtotal $ 12,000 1 $ - 1 $ - Site Work Site Grading, Clearing, Demolition $ 182,500 Off -Site Improvements Environmental $ 5,000 Other $ 4,000 Subtotal $ 5,000 $ Construction and Rehabilitation Costs New Construction Costs $ 182,500 Rehabilitation Costs Accessory Structures General Requirements $ 4,000 Contractor Overhead $ 8,800 $ Contractor Profit Construction Contingenc Local Permit Fees $ 1,500 Tap Permit Fees $ 6,700 Other: Landscaping $ 5,000 Other: On -Site Infrastructure 1 $ 9,000 Subtotal 1 $ 204,700 Professional Fees Architect Design $ 4,800 Architect Supervision Attorney, Real Estate Engineering Fees $ 4,000 Subtotal $ 8,800 $ Construction Interim Costs Hazard/Risk/Liability Insurance $ 600 Construction Bond Premium Performance Bond Credit Report Construction Loan Interest Construction Loan Fee Discount Points Credit Enhancement Fee Inspection Fees Title, Recording and Escrow Fees Le al Fees Construction Period Interest Security Real Estate Taxes Other Subtotal $ 600 $ is - $0 $0 $1,250 $0 $1,250 1 $51,1751 $1,200 $0 $0 $1,000 $2,200 Permanent Financing Bond Premium $0 Development Budget Credit Report Not Discount Points - AHP Permanent Loan Origination Fee Eligible Permanent Loan Credit Enhancement $ 30,000 Costs Title, Recording and Escrow Fees $ 600 $ 30,000 $ Le al Fees Cost Certification Prepaid Mortgage Insurance Premium Contingency Soft Costs Other Appraisal Subtotal 1 $ 600 $ $ 800 Soft Costs Feasibility Stud Not Market Stud - AHP Environmental Stud Eligible Tax Credit Fees $ 30,000 Costs Compliance Fees $ 30,000 $ Cost Certification Contingency Soft Costs Appraisal Marketing $ 800 Subtotal $ 800 $ Syndication Costs Organization Costs Not Bridge Loan Expenses - AHP Tax Opinion Eligible Other $ 30,000 Costs Subtotal $ 30,000 $ Developer Fees Developer Overhead Not Developer Profit - AHP Consultant Fee Eligible Other: Developer Fees $ 30,000 Costs Subtotal $ 30,000 $ Project Reserves Rent Up Expense Not Operating Reserves - AHP Replacement Reserve Eligible Escrows Costs Debt Service Reserve Subtotal $0 $0 $0 $0 $0 $0 $0 $0 $7,500 $7,500 Total Residential Costs $ 262,500 $ - $ - $65,625 Development Budget CITY OF PUEBLO HOME -- Affordable Housing Program Sources of Funds MomingGlory 6/2/00 Permanent Financing Type (eg Loan Grant or Equity) Amount Rate Term (in months) Amortization (in months) Status (eg Approved, Requested) Monthly Debt Service Annual Debt Service Colorado Div of Housing rant 50,000 Boettcher Foundation grant $10,000 Chamberlain Foundation grant $20,000 Packard Foundation grant $50,000 Deferred Development Fee equity $10,000 Owner equity equity $12,500 City of Pueblo loan $110,000 Total Sources $262,5001 - - Construction /Interim Type Amount Rate Term Status Financing (eg Loan (in months) (eg Approved, Grant or Requested) Equity) Total Sources so Sources of Funds CITY OF PUEBLO HOME -- Affordable Housing Program RENTAL PROJECTS PRO FORMA Project: MomingGlory Number of Units: Year 1 1 Year 2 1 Year 3 1 Year 4 Year 5 Year 6 1 Year 7 1 Year 8 1 Year 9 Year 10 1. EFFECTIVE GROSS INCOME Estimated Rate of Annual Increase: Income A. Scheduled Residential Rents $19,200 $19,968 $20,767 $21,597 $22,461 $23,360 $24,294 $25,266 $26,277 $27,328 B. Less Vacancy 5° $960 $998 $1,038 $1,080 $1,123 $1,168 $1,215 $1,263 $1,314 $1,366 C. Commercial Rents $0 $0 $0 $0 $0 $0 $0 $0 $0 D. Less Vacancy 5° $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 E. Laundry, Parking & Other Rev. $0 $0 $0 $0 $0 $0 $0 $0 $0 F. Other: $0 1 $0 1 $0 $0 $0 $0 $0 $0 $0 $0 Total Effective Gross Income 1 1 $18,2401 $18,970 1 $19,7281 $20,518 1 $21,338 $22,192 1 $23,079 1 $24,0031 $24,963 1 $25,961 2. OPERATING EXPENSES Estimated Rate of Annual Increase: Expenses 4 0 / A. Management Fee $4,800 $4,992 $5,191 $5,398 $5,614 $5,839 $6,072 $6,315 $6,568 $6,831 B. Legal & Audit $2,500 $2,600 $2,704 $2,812 $2,925 $3,042 $3,163 $3,290 $3,421 $3,558 C. Advertising $250 $260 $270 $281 $292 $304 $316 $329 $342 $356 D. Gas & Electric $0 $0 $0 $0 $0 $0 $0 $0 $0 E. Water & Sewer $0 $0 $0 $0 $0 $0 $0 $0 $0 F. Supplies $0 $0 $0 $0 $0 $0 $0 $0 $0 G. Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 H. Waste Removal $420 $437 $454 $472 $491 $511 $531 $553 $575 $598 I. Pest Control $0 $0 $0 $0 $0 $0 $0 $0 $0 J.Repair $400 $416 $433 $450 $468 $487 $506 $526 $547 $569 K. Maintenance $1,200 $1,248 $1,298 $1,350 $1,404 $1,460 $1,518 $1,579 $1,642 $1,708 L. Grounds & Decorating $600 $624 $649 $675 $702 $730 $759 $790 $821 $854 M. Insurance 1 $1,200 $1,248 $1,298 $1,350 1 $1,404 $1,460 $1,518 $1,579 $1,642 $1,708 N. Other: $1,050 $1,092 $1,136 $1,181 $1,228 $1,277 $1,329 $1,382 $1,437 $1,494 3. TAXES & FEES A. Real Estate $2,200 $2,288 $2,380 $2,475 $2,574 $2,677 $2,784 $2,895 $3,011 $3,131 B. Local & State Assessments $0 $0 $0 $0 1 $0 $0 $0 $0 $0 C. Other: $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Operating Expenses $14,620 1 $15,205 $15,812 1 $16,4441 $17,1021 $17,7871 $18,497 1 $19,237 1 $20,007 $20,808 4.RESERVES A. Replacement Reserves $2,000 $2,080 $2,163 $2,250 $2,340 $2,433 $2,531 $2,632 $2,737 $2,847 B. Operating $1,400 $1,456 $1,514 $1,575 $1,638 $1,703 $1,771 $1,842 $1,916 $1,993 C. Other: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5. TOTAL RESERVES & EXPENSES $18,020 $18,741 $19,490 $20,269 $21,080 $21,923 $22,800 $23,712 $24,660 $25,64T 6. NET INCOME $220 $229 $239 $249 $259 $269 $280 $291 $302 $314 7. ANNUAL DEBT SERVICE $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $220 $229 $239 $249 $259 $269 $280 $291 $302 $314 DEBT COVERAGE RATIO #DIV /0! #DIV /0! #DIV /0! #DIV /0! #DIV /0! #DIV /0! #DIV /0! #DIV /0! #DIV /0! #DIV /0! Line 6 divided by Line 7 Pro Forma CITY OF PUEBLO HOME - A 6/2/00 RENTAL PROJECTS PRO FO Number of Units: Year 11 Year 12 Year 13 Year 14 Year 15 1. EFFECTIVE GROSS INCOME A. Scheduled Residential Rents $28,421 $29,558 $30,740 $31,969 $33,248 B. Less Vacancy $1,421 $1,478 $1,537 $1,598 $1,662 C. Commercial Rents $0 $0 $0 $0 $0 D. Less Vacancy $0 $0 $0 $0 $0 E. Laundry, Parking & Other Rev. $0 $0 $0 $0 $0 F. Other: $0 $0 $0 $0 $0 Total Effective Gross Income $27,000 $28,080 $29,203 $30,371 $31,586 2. OPERATING EXPENSES A. Management Fee $7,104 $7,388 $7,683 $7,991 $8,310 B. Legal & Audit $3,701 $3,849 $4,003 $4,163 $4,329 C. Advertising $370 $385 $400 $416 $433 D. Gas & Electric $0 $0 1 $0 $0 $0 E. Water & Sewer $0 $0 $0 $0 $0 F. Supplies $0 $0 $0 $0 $0 G. Payroll $0 $0 $0 $0 $0 H. Waste Removal $622 $647 $672 $699 $727 I. Pest Control $0 $0 $0 $0 $0 J. Repair $592 $616 $640 $666 $693 K. Maintenance $1,776 $1,847 1 $1,921 $1,998 $2,078 L. Grounds & Decorating $888 $924 $961 $999 $1,039 M. Insurance $1,776 $1,847 1 $1,921 $1,998 $2,078 N. Other: $1,554 $1,616 $1,681 $1,748 $1,818 3. TAXES & FEES A. Real Estate $3,257 $3,387 $3,522 $3,663 $3,810 B. Local & State Assessments $0 $0 $0 $0 $0 C. Other: $0 $0 $0 $0 $0 Total Operating Expenses $21,640 $22,505 $23,405 $24,342 $25,315 4. RESERVES A. Replacement Reserves $2,960 $3,079 $3,2021 $3,330 $3,463 B. Operating $2,072 $2,155 $2,241 $2,331 $2,424 C. Other: $0 $0 $0 $0 $0 5. TOTAL RESERVES & EXPENSES $26,673 $27,740 $28,849 $30,003 $31,203 6. NET INCOME $327 $340 $354 $368 $383 7. ANNUAL DEBT SERVICE 1 0 $0 $0 $0 $0 $327 $340 $354 $368 $383 DEBT COVERAGE RATIO #DIV /0i Line 6 divided by Line 7 I #DIV/0! I #DIV /0! I #DIV /0! #DIV /0! Pro Forma EXHIBIT 11 . ACCOUNTING SYSTEM COy1Pl_.IANCE PROVISIONS As used in this Exhibit, the term "Sponsor" shall mean the entity entering into the Agreement Nvith the City of Pueblo, a Municipal Corporation to which this Exhibit is attached. 2. Sponsor is subject to and shall comply with the requirements of OMB Circular A -133 applicable to a Nonprofit Institution as defined in OMB Circular A -133. 3. Sponsor agrees to maintain (and require the Developer to maintain) Project and accounting records in accordance with generally accepted accounting principles which accurately reflect all costs chargeable to the Project, utilize adequate internal controls, and maintain source documentation for all costs incurred. The City shall have the right to review and approve Sponsor's account system and internal controls prior to the release of any funds under the Agreement. 4. During the preconstruction and construction phases of the Project, the Sponsor shall not allow there to be any material deviation from any approved Project budget unless any proposed major revision thereto has been submitted to City and approved in writing. Change orders of less than $$10,000 each or $50,000 in the aggregate shall not be deemed to be material deviations or major revisions to the Project budget. Nothing in the Agreement or the Exhibits thereto shall obligate City to any third parties nor to any Developer, contractors, subcontractors, consultants, suppliers or workmen who have contracted with Sponsor or provided any materials or services to Sponsor. 6. The City has the right to periodically perform interim audits and a final audit of the Project and funds provided under the Agreement. Sponsor shall fully cooperate (and shall require the Developer to cooperate) with City in undertaking any such audit and shall provide a suitable work area for City's audit personnel to inspect and copy records. EXHIBIT C CERTIFICATIONS Developer hereby certifies that the project will be conducted and administered in compliance with all of the following requirements: (1) Title VI of the Civil Rights Act of 1964 (Pub. L. 88 -352; 42 U.S.C. 2000d, et sea .) and implementing regulations issued at 24 CFR Part 1; (2) Title VIII of the Civil Rights Act of 1968 (Pub. L. 90 -284; 42 U.S.C. 3601, et sec .), as amended; and that the grantee will administer all programs and activities related to housing and community development in a manner to affinuatively further fair housing; (3) Section 109 of the Housing and Community Development Act of 1974, as amended; and the regulations issued pursuant thereto; (4) Section 3 of the Housing and Urban Development Act of 1968, as amended; (5) Executive Order 11246, as amended by Executive Orders 11375 and 12086, and implementing regulations issued at 41 CFR Chapter 60; (6) Executive Order 11063, as amended by Executive Orders 12259, and implementing regulations at 24 CFR Part 107; (7) Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93 -112), as amended, and implementing regulations when published for effect; (8) The Age Discrimination Act of 1975 (Pub. L. 94 -135), as amended, and implementing regulations when published for effect; (9) The relocation requirements of Title II and the acquisition requirements of Title III of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, and the HUD implementing regulations set forth in 24 CFR Part 42; (10) Executive Order 11988 relating to the evaluation of flood hazards and Executive Order 11288 relating to the prevention, control and abatement of water pollution; (11) The flood insurance purchase requirements of Section 102(a) of the Flood Disaster Protection Act of 1973 (Pub. L. 93 -234); (12) The applicable regulations, policies, guidelines and requirements of OMB Circular Nos. A -102, Revised, 24 CFR 85 and Subpart J of 24 CFR 570, A -87, A -110, A -122, A -128 and A -133 as they relate to the acceptance and use of federal funds under this federally - assisted program; (13) The Clean Air Act (42 U.S.C. 7401 et. seq.) as amended; particularly section 176 (c) and (d) [42 U.S.C. 7506 (c) and (d)]; (14) HUD environmental criteria and standards [24 CFR Part 51, Environmental Criteria and Standards]; (15) The Safe Drinking Water Act of 1974 (42 U.S.C. 201, 300 (f) et. seq., and 21 U.S.C. 349) as amended; particularly section 1424 (e) (42 U.S.C. 300 (h)- 303(e)); (16) The Endangered Species Act of 1973 (16 U.S.C. 1531 et. seq.) as amended; including but not limited to section 7 (16 U.S.C. 1536) thereof; (17) The Wild and Scenic Rivers Act of 1968 (16 U.S.C. 1272 et. seq.) as amended; particularly section 7 (b) and (c) [16 U.S.C. 1278 (b) and (c)]; (18) The Reservoir Salvage Act of 1960 916 U.S.C. 469 et. seq.); particularly section 3 (16 U.S.C. 469a -1); as amended by the Archeological and Historical Preservation Act of 1974; (19) Flood Disaster Protection Act of 1973 (42 U.S.C. 4001 et. seq.) as amended; particularly sections 102(a) and 202(a) [42 U.S.C. 4012a(a) and 4106(a)]; (20) Executive order 11990, Protection of Wetlands, May 24, 1977 (42 FR 26961 et. seq.), particularly sections 2 and 5; (21) It will comply with the Lead -Based Paint Poisoning Prevention requirements of 25 CFR Part 35 issued pursuant to the Lead -Based Paint Poisoning Prevention Act (42 U.S.C. 4821 et. seq.); (22) The National Historic Preservation Act of 1966 (16 U.S.C. 470 et seq.) as amended; particularly section 106 (16 U.S.C. 470f); and (23) Executive Order 11593, Protection and Enhancement of the Cultural Environment, May 13, 1971 (36 FR 8921 et. seq.); particularly section 2(c). (24) Constriction work financed in whole or in part with federal funds is subject to the prevailing wage requirements of the Davis Bacon Act (29 CFR, Parts 3 and 5), the Copeland Act (29 CFR Part 3), and the Contract Work Hours and Safety Standards Act (Public Law 91 -54, 83 Stat. 96). When a project meets this applicability requirement, the labor standards provisions of the HUD 4010 and the Davis Bacon Wage Decision issued for the project will be incorporated into this contract document and shall be incorporated into all construction contracts and subcontracts of any tier thereunder. (25) No CDBG funds may be expended for lobbying purposes and payments from other sources for lobbying must be disclosed 24 CFR Part 87. (26) Where asbestos is present in property undergoing rehabilitation, Federal requirements apply regarding worker exposure, abatement procedures and disposal. CPD -90 -44 EPA /OSHA. (27) When HOME Investment Partnership Act funds are used, the Subrecipient will comply with implementing regulations and requirements under 24 CFR 92. Signature