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HomeMy WebLinkAboutR-2010-064 CDBG Economic Development Grant Agreement with the National Development CouncilRESOLUTION NO. R-2010-64 A RESOLUTION authorizing the City Manager to execute an Economic Development Grant Agreement with the National Development Council (NDC) in the amount of Two -Hundred Thousand Dollars ($200,000) for the purpose of establishing the Grow America -Yakima Fund. WHEREAS, the City has received and is responsible for the administration of annual Entitlement Grants of Community Development Block Grant ("CDBG") funds made available through the United States Department of Housing and Urban Development (HUD) and authorized by Title I of the Housing and Community Development Act of 1974, as amended; and WHEREAS, federal regulations governing the use of CDBG funds for special economic development projects allow the City to use such funds as an economic incentive to provide loans to assist private, for-profit businesses with projects that provide an appropriate level of public benefit; and WHEREAS, the City has determined that the CDBG assistance described below is necessary and appropriate to ensure that the National Development Council (NDC) continues its economic development activities in the City of Yakima's Renewal Community Area; and WHEREAS, the City has determined that provision of CDBG assistance would provide substantial appropriate public benefits to the City and the Renewal Community, particularly by retaining jobs and supporting economic recovery; and WHEREAS, the City of Yakima has worked closely with NDC in efforts to improve economic development in the City of Yakima, including Section 108 loans, Economic Development Initiative Grant; New Markets Tax Credits and other state and federal initiatives; and WHEREAS, the City desires to expand economic opportunity for residents of Yakima so that these residents may become economically self-sufficient; and WHEREAS, the City desires to encourage sustainable community and economic development activities so that various neighborhoods in its geography may revitalize themselves; and WHEREAS, accordingly, the City wants to encourage NDC to continue such operations in the City of Yakima's Renewal Community Area as a special economic development project and is willing to use CDBG funds to assist NDC through a grant of not more than $200,000 to establish the Grow America -Yakima (GAF) loan fund; and WHEREAS, GAF is recognized and certified by the U.S. Treasury Department as a Community Development Financial Institution (CDFI) and Community Development Entity (CDE) as a domestic corporation having a primary mission of serving or providing investment capital for low income communities or low income persons; and WHEREAS, GAF, a U.S. Small Business Administration (SBA) licensed and regulated Small Business Lending Company (SBLC) entitled to make SBA guaranteed loans to eligible small businesses, is the nation's only SBLC devoted solely to economic and community development financing; and WHEREAS, NDC, a national 501(c)(3) not-for-profit corporation engaged in economic and community development, GAF its wholly owned subsidiary, and the City, intend to enter into an Agreement to create a self-sustaining community development investment fund for small business financing in Yakima. WHEREAS, the City Council deems it to be in the best interest of the City of Yakima to enter into the attached Grow America Fund Yakima Agreement, with NDC, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is authorized to execute the attached and incorporated "Grow America -Yakima Fund Agreement" with the National Development Council for the purpose of providing financing to qualified economic development projects in the City of Yakima Renewal Community. The final form of the Agreement shall be approved by the City Attorney or his designee. ADOPTED BY THE CITY COUNCIL this 1st day of June, 2010. ATTEST: Micah Cawley, May City Clerk AGREEMENT BETWEEN THE CITY OF YAKIMA OFFICE OF NEIGHBORHOOD DEVELOPMENT SERVICES AND GROW AMERICA FUND, INC., A WHOLLY OWNED SUBSIDIARY OF THE NATIONAL DEVELOPMENT COUNCIL 1. Contracting Organization: Grow America Fund, Inc. (hereinafter "GAF"), a wholly owned subsidiary of the National Development Council. 2. Address: 708 Third Avenue, Suite 710, New York, NY 10017 and 708 Third Avenue, Suite 710, New York, NY 10017 3. Phone: j ) -- 4. Contact Person: Robert W. Davenport, Chairman (GAF) 5. Title of Service or Program being funded: Establishment of Grow Yakima Fund 6. Amount of Contract Award: Two Hundred Thousand Dollars and 00/100 ($200,000.00) 7. The term of.this Contract shall commence upon the execution hereof and terminate on July 31, 2010 at midnight, unless sooner terminated by either party in accordance with Section B of Exhibit "B", Scope of Services, attached hereto and incorporated herein by this reference. 8. This contract award and the rights and obligations of both parties hereto shall be subject to and governed by the following: 1) "Terms and conditions" attached hereto as Exhibit "A" and incorporated herein by this reference; and 2) Operating budget including the funding sources and uses statement and the work plan, attached hereto as Exhibit "B" and incorporated herein by this reference. 3) City of Yakima Resolution No. R-2010-64 , a copy of which is attached hereto as Exhibit "C" and incorporated herein by this reference. Final Contract payment shall be subject to satisfactory completion of the project described in Exhibit "B", and satisfaction of all contract terms and conditions as stated in Exhibit "A", Exhibit "B" and Exhibit "C". This written document, together with all of the incorporated exhibits hereto, constitutes the entire Contract and terms of agreement between the parties hereto. 1 of 17 City of Yakima - GAF Establishment of Grow Yakima Fund IN WITNESS THEREOF the parties have executed this Contract as of the day and year stated below. Michael A. Morales, CED Director R.A. Zais, J anager Rob; rt T' D. ve ' , C FJW an and President for GAF, a wh. y owned subsidiary of NDC Date Date U�O..36 / ATTEST: City Clerk City Contract No.: .0Z0)0- 5/ 2 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund Date EXHIBIT "A" TERMS AND CONDITIONS DESIGNATION The City of Yakima, as recipient of a housing and community development grant from the U.S. Department of Housing and Urban Development, hereby designates GAF to undertake, and GAF hereby agrees to undertake that certain community development or housing assistance project described in Exhibit "B", Scope of Work (hereinafter "the project"). II SUB -GRANT A. NOTICE TO PROCEED No work on the project shall occur prior to or without written approval from the City of Yakima Office of Neighborhood Development Services (ONDS). ONDS shall furnish GAF with written notice to proceed upon release of funds from HUD related to the project pursuant to 24 CFR Part 58. B. AMOUNT OF GRANT The City hereby grants to GAF up to $200,000 for said project. III GENERAL BUDGET PROVISIONS The City reserves the right to hold payment until adequate documentation has been provided by GAF and reviewed by the City. GAF agrees to the following provisions in satisfying the terms and conditions of this contract: A. PAYMENT AND DISBURSEMENTS Disbursements by the City of Yakima from this contract/grant award shall be on a reimbursement basis covering actual expenditures by GAF or obligations of GAF currently due and owing, but not paid. Disbursements shall be limited to allowable costs and so shall be made upon the occurrence of all the following, in addition to any other conditions contained herein or in the special conditions: 1. Receipt by the City of Yakima ONDS of a written reimbursement request on forms provided by the City of Yakima ONDS supported by copies of vouchers, invoices, salary and wage summaries, or other acceptable documentation; and 2. Determination by the City of Yakima ONDS that the expenditures or obligations for which reimbursement is sought constitute allowable costs under the principles set forth in Federal Management Circular 74-4 "eligible costs under the CDBG Program" and that also fall within the applicable Project Budget. 3 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund No payment shall be made for any service rendered by GAF except for services within the scope of a category set forth in the budget in Exhibit "B" of this Contract, and all funds received must be used for service as identified in Exhibit "B" of this Contract. C. 1. GAF shall submit to the City of Yakima ONDS a written request for approval of budget revision when a proposed revision would result in an increase or decrease of ten percent (10%) or more per home, from what has been set forth in the approved budget subject category. The City's written budget revision approval must be received by GAF prior to GAF incurring any expenditures against the revised budget subject categories. 2. When the revision of GAF's budget does not exceed ten percent (10%) of an approved budget subject category, GAF must submit a revised budget to the City of Yakima ONDS prior to the submittal of claims against the budget. IV COMMENCEMENT OF WORK This signed contract will serve as written notice to proceed from the City of Yakima ONDS in accord with Sec. II, "Sub -Grant" A (above)." V BILLING PROCEDURES A. GAF shall submit monthly written claims for reimbursement of services performed under this contract in the manner prescribed in paragraph III above, and as prescribed by the City of Yakima ONDS. VI LOCAL FINANCIAL SUPPORT The sub -grant shall not be utilized to substantially reduce the amount of local financial support for community development activities below the level of such support prior to the availability of such assistance. VII BUDGET SURPLUS GAF agrees that funds determined by the City of Yakima ONDS to be surplus budget funds at the end of the project shall be subject to cancellation by the City of Yakima ONDS and may be negotiated if they are to be included in future Contracts. Assets purchased with CDBG funds shall continue to be used in accordance with its original purpose as provided in 24CFR 570.503 (b)(8). VIII COMPLIANCE WITH LAWS A. GENERAL GAF, in performance of this Contract, agrees to comply with all applicable Federal, State and Local Laws and ordinances, and the rules and regulations promulgated by the U.S. Department of Housing and Urban Development, including, but not limited to, Federal HOME Regulations and other policies and 4 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund guidelines established by the City of Yakima ONDS. B. PROCUREMENT AND CONSTRUCTION OR REPAIR PROJECT REQUIREMENTS The following federal provisions may apply, among others, to this Contract: 1. CERTIFICATION REGARDING DEBARMENT, SUSPENSION OR INELIGIBILITY AND VOLUNTARY EXCLUSION—PRIMARY AND LOWER TIER COVERED TRANSACTIONS A. GAF, defined as the primary participants and their principals, certifies by signing these General Terms and Conditions that to the best of its knowledge and belief that they: B. Are not presently debarred, suspended, proposed for debarment, declared ineligible or voluntarily excluded from covered transactions by any Federal department or agency. C. Have not within a three-year period preceding this Agreement, been convicted of or had a civil judgment. rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement or transaction, violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, receiving stolen property, making false claims, or obstruction of justice; D. Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated in paragraph (1 )(b) of this section; and 1. Have not within a three-year period preceding the signing of this Agreement had one or more public transactions (Federal, State, or local) terminated for cause of default 2. Where GAF is unable to certify to any of the statements in this Agreement, GAF shall attach an explanation to this Agreement. 3. GAF agrees, by signing this Agreement, that it shall not knowingly enter into any lower tier covered transaction with a person who is debarred, suspended, declared ineligible or voluntarily excluded from participation in this covered transaction. 4. GAF further agrees by signing this Agreement that it will include the clause titled "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion -Lower Tier Covered Transaction," as follows, without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions: 5 of 17 City of Yakima – GAF Establishment of Grow Yakima Fund E. LOWER TIER COVERED TRANSACTIONS i) The lower tier GAF certifies, by signing this Agreement, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible or voluntarily excluded from participation in this transaction by any Federal department or agency. ii) Where the lower tier GAF is unable to certify to any of the statements in this Agreement, such GAF shall attach an explanation to this Agreement. 5. Office of Federal Contract Compliance Programs regulations, 41 CFR Part 60, Executive Order 11246 as amended by Executive Order 12086, and 24 CFR 570.601 (Discrimination prohibited). 6. The Lead Based Paint Poisoning Prevention Act, 42 USC Section 4831 et seq., and HUD regulations implementing the Act, 24 CFR Part 35, where, residential structures are involved. GAF shall provide whatever assistance is necessary to enable the City of Yakima's Building Official to carry out its inspection and certification responsibility under those regulations. 7 Historic and Archaeological Preservation requirements as set forth in 24 CFR Section 570.604.36 CFR Part 800, RCW 27.44.010 (Native American Burial Law), RCW 27.53.010-.090 (Protection of Archaeological Resources), and RCW 43.51.750-.820 (Preservation of Historic Properties). 8. Architectural Barriers Act of 1968 as amended, 42 USC Section 4151 et seq., implementing regulations, and Chapter 70.92 RCW. 9. Accessibility Standard as set forth in 92.251(a)(3). 10. Clean Air Act as amended, 42 USC Section 1857 et seq; Water Pollution Control Act, as amended, 33 USC Section 1251 et seq.; and Environmental Protection Agency regulations, 40 CFR Part 15. 11. Section 3 of the Housing and Urban Development Act of 1968 (12 USC Section 1701u) and 24 CFR Part 135 (Employment opportunities for project area businesses and low income persons). 12. Contract Work Hours and Safety Standards Act, 40 USC Sections 327- 333, (Overtime Compensation). 13. Davis -Bacon Act, as amended, 40 USC Sections 276a — 276a — 5, and RCW Chapter 3 — 12 (Prevailing Wage Rates). 14. Attachment 0 of the Office of management and Budget Circular, A-102 (Procurement Standards) and Federal Management Circular, FMC 74-4. 6 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund 15. The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and regulations contained in 24 CFR Parts 42 and 570. 16. Title VI of the Civil Rights Act of 1964 (P.L. 88-352) as amended, and HUD regulations with respect thereto including the regulations under 24 CFR Part 1. In the sale, lease or other transfer of land acquired, cleared or improved with assistance provided under this Agreement, GAF shall cause or require a covenant running with the land to be inserted in the deed or lease for such transfer, prohibiting discrimination upon the basis of race, color, religion, sex, or national origin, in the sale, lease or rental, or in the use or occupancy of such land or any improvements erected or to be erected thereon, and providing;; that :GAF; the :'County, - and the United:'States-are beneficiariesof and entitled: to enforce such covenant. GAF, in undertaking its obligation in carrying out the program assisted hereunder, agrees to take such measures as are necessary to enforce such covenant and will not itself so discriminate. 17. Age Discrimination Act of 1975 (24 CFR 146). 18. Fair Housing Act (24 CFR 100, CFR 107 and 24 CFR 1). 19. Washington State/Local Building Codes/Housing Quality Standards (24 CFR 882.109). 20. WBE/MBE (24 CFR 85.36 (e)). 1. ENVIRONMENTAL REVIEW A. NEPA The City of Yakima ONDS retains environmental review responsibility for purposes of fulfilling requirements of the National Environmental Policy Act, under which the City of Yakima ONDS may require GAF to furnish data, information and assistance for the City's review and assessment in determining whether the City must prepare an Environmental Impact Statement. B. SEPA GAF retain responsibility for fulfilling the requirements of the State Environmental Policy Act and regulations and ordinance adopted thereunder. COMPLIANCE AS PRE -CONDITION Performance by either the City of Yakima ONDS or GAF under this Agreement shall be contingent upon satisfaction of all applicable requirements of the National and State Environmental Policy Acts. 7 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund IX NON-DISCRIMINATION IN EMPLOYMENT A. The City of Yakima is an Equal Opportunity Employer. B. During the performance of this Agreement, GAF shall not discriminate in violation of any applicable federal, state and/or local law or regulation on the basis of race, color, sex, religion, national origin, creed, age, marital status, disability, honorably discharged veteran or military status, pregnancy, sexual orientation, political affiliation, or the presence of any sensory, mental or physical handicap, and any other classification protected under federal, state, or local law. This provision shall include but not be limited to the following: employment, upgrading, demotion, transfer, recruitment, advertising, layoff or termination, rates of pay or other forms of compensation, selection for training, and the provision of services under this Agreement. GAF specifically agrees to abide by the Office of Federal Contract Compliance Programs regulations; 41 CFR Part 60, Executive Order 11246 as amended by Executive.. Order 12086, and HUD Anti Discrimination Requirements, 24 CFR 570.601. X NON-DISCRIMINATION IN CLIENT SERVICES A. GAF agrees to make all services available through this contract (24 CFR 92.352), and shall not, on the grounds of race, color, sex, religion, national origin, creed, marital status or age: 1. Deny a qualified individual any facilities, financial aid, services or other benefits provided under this Contract; 2. Provide any service(s) or other benefits to a qualified individual which are different, or are provided in a different manner, from those provided to others under this Contract; separate treatment in any manner related to his receipt of any service(s) or other benefits provided under this Contract; 3. Deny any qualified individual an opportunity to participate in any program provided by this Contract through the provision of service(s) or otherwise, or will afford him an opportunity to do so which is different from that afforded others under this Contract. B. GAF shall abide by all provisions of Section 504 of the HEW Rehabilitation Act of 1973 prohibiting discrimination against handicapped individuals either through purpose or intent. C. If assignment and/or subcontracting has been authorized, said assignment or subcontract shall include appropriate safeguards against discrimination in client services binding upon each GAF or SubContractor. GAF shall take such action as may be required to ensure full compliance with the provisions of this clause, including sanctions for noncompliance. 8 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund XI LICENSING AND PROGRAM STANDARDS GAF agrees to comply with all applicable Federal, State, City and Municipal standards for licensing, certification and operation of facilities and programs, and accreditation and licensing of individuals, and any other standards or criteria as described in the Contract to assure quality of services. XII MONITORING AND ACCESS TO RECORDS A. GAF agrees that City may carry out monitoring and evaluation activities so as to ensure compliance by GAF with this GAF Agreement, with the CDBG and/or HOME Compliance Documents, and with all other laws, regulations and ordinances related to the performance hereof. GAF agrees to provide City with any data determined by City to be necessary for its effective fulfillment of its monitoring and evaluation responsibilities. B. At any reasonable time and as often as City may deem necessary, GAF shall make all of its records available to City, HUD, the Comptroller General of the United States, or any of their authorized representatives, and shall permit City, HUD, the Comptroller General of the United States, or any of their authorized representatives to audit, examine, and make excerpts and/or copies of same. GAF records shall include, but shall not be limited to, the following: payroll, personnel and employment records; procurement bidding documents; contracts; sales closing statements; and invoices. C. The City shall have the right to review and audit all records of GAF pertaining to any payment by the City. Said records shall be maintained for a period of seven years after the completion of the project. D. GAF shall be required to make reasonable changes in the services as completed or to be completed if said services fall below the standards and specifications set forth in the Special Terms and Conditions, Project Description or Statement of Work. XIII SAFEGUARDING OF CLIENT INFORMATION The use or disclosure by any party of any confidential information concerning a recipient or client for any purpose not directly connected with the City's or GAF's responsibilities with respect to services provided under this Contract is prohibited except on written consent of the recipient or client, his/her attorney or his/her responsible parent or guardian or as otherwise provided by law. XIV ASSIGNMENT AND/OR SUBCONTRACTING GAF shall not assign or subcontract any portion of the services provided within the terms of this Contract without obtaining prior written approval from the City. All terms and conditions of this Contract shall apply to any approved subcontract or assignment related to the Contract. 9 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund XV STANDARDS FOR FISCAL ACCOUNTABILITY A. GAF agrees to provide project line item draw requests, annual verification of rents, annual audited financial statement to compare income and expenses, records, documents and accounting procedures which accurately reflect all direct and indirect costs related to the performance of this Contract. Such fiscal books, records, documents, reports and other data shall be retained in a manner consistent with the "Budgeting, Accounting, Reporting System for Counties and Cities, and Other Local Governments", hereinafter referred to as "BARS", as issued by the Office of State Auditor, State of Washington. GAF further agrees that the City of Yakima ONDS shall have the right to monitor and audit the fiscal components of the organization to insure that actual expenditures remain consistentwith the terms of this Contract. GAF shall retain all books, records, documents and other material relevant to the Contract for seven (7) years after settlement of this Contract. GAF agrees that the City of Yakima, the U.S. Department of Housing and urban Development, the Washington State Auditor, or their designees, shall have full access to and a right to examine any of said materials at all reasonable times during said period. B. GAF agrees that any contributions or payments made for services furnished under this Contract shall be used for the sole benefit of this program. XVI PROGRAM PROPERTY Any personal property having a useful life of more than one year and purchased wholly or in part with sub -grant funds at a cost of three hundred dollars ($300) or more per item, shall upon its purchase or receipt become the property of the City of Yakima and/or federal government. Final ownership and disposition of such property shall be determined under the provisions of Attachment N of OMB, A-102. GAF shall be responsible for all such property, including its care and maintenance, and shall comply with the following procedural requirements: 1. Property records shall be maintained accurately and provide for: A description of the property; manufacturer's serial number or other identification number; acquisition date and cost; source of the property; percentage of HOME funds used in the purchase of property; location, use, and condition of the property. 2. A physical inventory of property shall be taken and the results reconciled with the property records at least once every two years to verify the existence, current utilization, and continued need for the property. 3. A control system shall be in effect to insure adequate safeguards to prevent lose, damage, or theft to the property. Any loss, damage, or theft of the property shall be investigated and fully documented. 4. Adequate maintenance procedures shall be implemented to keep the property in good condition. 5. If GAF elects to capitalizeand depreciate such nonexpendable personal property 10 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund in lieu of claiming the acquisition cost as a direct item of cost, title to such property shall remain with GAF. An election to capitalize and depreciate or claim acquisition cost as a direct item of cost shall be irrevocable. 6. Nonexpendable personal property purchased by GAF under the terms of this Contract, in which title is vested in the City of Yakima or Federal Government shall not be rented, loaned, or otherwise passed to any person, partnership, corporation, association or organization without the prior express approval of the City of Yakima ONDS. 7. Any nonexpendable personal property furnished to, or purchased by GAF, title to which is vested in the City of Yakima ONDS or federal government shall, unless otherwise provided herein or approved by the Contracting Officer, be used only for the performance of activities defined in this Contract. 8. As a condition prerequisite to reimbursement for the purchase of nonexpendable personal property, title to which shall vest in the City of Yakima ONDS or federal government, GAF agrees to execute such security agreements and other documents as shall be necessary for the City of Yakima ONDS or federal government to perfect its interest in such property in accordance with the "Uniform Commercial Code -Secured Transactions" as codified in Article 9A of RCW Chapter 62A. GAF shall be responsible for any Toss or damage to the property of the City of Yakima ONDS or federal government (including expenses entered thereunto) which results from negligence, willful misconduct, or lack of good faith on the part of GAF to maintain and administer in accordance with sound management practices that property, to ensure that the property will be returned to the City of Yakima ONDS or federal government in like condition to that in which condition the property was acquired by purchase, fair wear and tear accepted. XVII RELATIONSHIP OF THE PARTIES The parties intend that an independent GAF/city relationship shall be created by this Contract. The City of Yakima ONDS is interested only in the results to be achieved, the implementation of services will lie solely with GAF. No agent, employee, or representatives of GAF shall be deemed to be an employee, agent, servant or representative of the City of Yakima for any purpose, and the employees of GAF are not entitled to any of the benefits the City of Yakima provides for City Employees. GAF shall be solely and entirely responsible for its acts and for the acts of its agents, employees, servants, and Subcontractors, or otherwise during the performance of this Contract. XVIII TAXES AND ASSESSMENTS GAF shall be solely responsible for and shall pay all taxes, deductions, and assessments, including but not limited to, sales tax, federal income tax, FICA, social security tax, assessments for unemployment and industrial injury insurance, and other deductions from income which may be required by law or assessed against either party as a result of this Contract. In the event the City is assessed a tax or assessment as a result of this Contract, GAF shall pay the same before it becomes due. 11 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund XIX QUARTERLY REPORT GAF agrees to submit written quarterly reports outlining the progress towards completion of activities included in Exhibit B, to the City of Yakima ONDS. XX INSURANCE A. NO INSURANCE It is understood that the City does not maintain liability insurance for GAF and/or its employees, agents, officers, and subcontractors. B. COMMERCIAL LIABILITY INSURANCE On or before the effective date of this Contract, GAF shall provide the City with a certificate of insurance as proof of liability insurance in the amount of One Million Dollars ($1,000,000.00) that clearly states who the provider is, the amount of coverage, the policy number, and when the policy and provisions provided are in effect (any statement in the certificate to the effect of "this certificate is issued as a matter of information only and confers no right upon the certificate holder" shall be deleted). Said policy shall be in effect for the duration of this Contract. The policy shall name the City, its elected officials, officers, agents and employees as • additional insured, and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City thirty (30) calendar days prior written notice (any language in the clause to the effect of "but failure to mail such notice shall impose no obligation or liability of any kind upon the company" shall be crossed out and initiated by the insurance agent). The insurance shall be with an insurance company or companies rated A -VII or higher in Best's Guide and admitted in the State of Washington. C. COMMERCIAL AUTOMOBILE LIABILITY INSURANCE On or before the date this Contract is fully executed by the parties, GAF shall provide the City with a certificate of insurance as proof of commercial automobile liability insurance with minimum liability limit of One Million Dollars ($1,000,000.00) combined single lirnit bodily injury and property damage. Automobile liability will apply to "Any Auto" and be shown on the certificate. The certificate shall clearly state who the provider is, the amount of coverage, the policy number, and when the policy and provisions provided are in effect (any statement in the certificate to the effect of "this certificate is issued as a matter of information only and confers no right upon the certificate holder" shall be deleted). Said policy shall be in effect for the duration of this Contract. The policy shall name the City, its elected officials, officers, agents, and employees as additional insured/s, and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City thirty (30) calendar days prior written notice (any language in the clause to the effect of "but failure to mail such notice shall impose no obligation or liability of any kind upon the company" shall be crossed out and initialed by the insurance agent). The insurance shall be with an insurance company or companies rated A -VII or higher in Best's Guide and admitted in the State of Washington. 12 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund D. WORKERS' COMPENSATION GAF agree to pay all premiums provided for by the Workman's Compensation Act of the State of Washington. Evidence of GAF's workers' compensation coverage will be furnished to the City. GAF holds the City harmless for any injury or death to GAF's employees while performing this Contract. E. INSURANCE PROVIDED BY SUBGAF AND NDCS GAF shall ensure that all subcontractors it utilizes for work/services rendered under this Contract shall comply with all of the above insurance requirements. XXI INDEMNIFICATION AND HOLD HARMLESS All services that are rendered or performed under this Contract shall be performed or rendered entirely to GAF's own risk and GAF expressly agrees to defend, indemnify and hold harmless the City of Yakima and all of its officers, agents, employees and elected and appointed officials from any and all liability, loss, fines, penalties or damage, including reasonable cost of defense, they may suffer as a result of claims, demands, actions, or damages to any and all persons or property, costs or judgments against the City of Yakima which result from, arise out of, or are in any way connected with the services to be preformed by GAF under this Contract. Nothing in this section of the Contract shall be construed to create a liability or a right of indemnification in any third party. XXII CONTRACT, TERMINATION AND CLOSE OUT If GAF fail to comply with the terms and conditions of this Contract, the City of Yakima ONDS may pursue such remedies as are legally available including but not limited to, the termination of this Contract in the manner specified herein. A. TERMINATION FOR CAUSE If GAF fails to comply with the terms and conditions of this Contract and any of the following conditions exist: 1. The lack of compliance with the provisions of this Contract are of such scope and nature that the City of Yakima ONDS deems continuation of this Contract to be substantially non -beneficial to the public interest; 2. GAF has failed to take satisfactory corrective action as directed by the City of Yakima ONDS or its authorized representative within the time specified by same; 3. GAF has failed within the time specified by the'City of Yakima ONDS or its authorized representative to satisfactorily substantiate its compliance with the terms and conditions of this Contract, then: The City of Yakima ONDS may terminate this Contract in whole or in part, and 13 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund thereupon shall notify GAF of the termination, the reasons therefore and the effective date provided such effective date shall not be prior to notification to GAF. After this effective date, no charges incurred under any terminated portions are allowable. B. TERMINATIONS ON OTHER GROUNDS This Contract may also be terminated in whole or in part by mutual agreement of the parties. C. TERMINATION FOR WITHDRAWAL, REDUCTION OR LIMITATION OF FUNDING In the event that funding from the Federal government is withdrawn, reduced or limited in any way after the effective date of this Contract, and prior to its normal completion, the City of Yakima ONDS may summarily terminate this Contract as to the funds reduced or limited, notwithstanding any other termination provision of this Contract. If the level of funding so reduced or limited is so great that the City of Yakima ONDS deems that the continuation of the program covered by this Contract is no longer in the best interest of the public, the City of Yakima ONDS may summarily terminate this Contract in whole notwithstanding any other termination provisions of this Contract. Termination under this Section shall be effective upon receipt of written notice by GAF or its representative. The City of Yakima ONDS agrees to promptly notify GAF of any proposed reduction in funding by Federal or other officials. GAF agrees that upon receipt of such notice it shall take appropriate and reasonable action to reduce its spending in the affected funding area so that expenditures do not exceed the funding level which would result if said proposed reduction became effective. This Contract may further be terminated by the City of Yakima upon written demand by the City of Yakima ONDS for assurances that the terms of the Project Description are being timely complied with, if such assurances are not made to the City's satisfaction within thirty (30) days of the date of such written demand. D. CLOSEOUT In the event that this Contract is terminated in whole or in part for any reason, the following provisions shall apply: 1. Upon written request by GAF, the City of Yakima shall make or arrange for payment to GAF of allowable reimbursable costs not covered by previous payments. 2. GAF shall submit within thirty (30) days after the date of expiration of this Contract, all financial, performance and other reports required by this Contract, and in addition, will cooperate in a program audit by the City of Yakima or its designee. 3. In the event a financial audit has not been performed prior to closeout of 14 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund this Contract, the City of Yakima ONDS retains the right to withhold a just and reasonable sum from the final payment to GAF after fully considering the recommendation on disallowed costs resulting from the final audit. XXIII COVENANT AGAINST CONTINGENT FEES GAF warrants that no person or selling agency has been employed or retained to solicit or secure this contract upon an agreement or understanding for a commission, percentage, brokerage or contingent fee, excepting bona fide employees or bona fide established commercial or selling agency maintained by GAF for the purpose of securing business. The City of Yakima ONDS shall have the right, in the event of breach of this clause by GAF, to annul this Contract without liability or, in its discretion, to deduct from the Contract price or consideration or otherwise recover the full amount of such commission, percentage, brokerage or contingent fee. XXIV CONFLICT OF INTEREST The City may, by written notice to GAF: A. Terminate this Contract if it is found, after due notice and hearing, by the City that gratuities in the form of entertainment, gifts, or otherwise offered or given by GAF, or agent or representative of GAF, to any officer or employee of the City of Yakima, with a view towards securing this Contract or securing favorable treatment with respect to the awarding or amending or the making of any determinations with respect to this contract. B. In the event this Contract is terminated as provided in (A) above, the City of Yakima shall be entitled to pursue the same remedies against GAF as it could pursue in the event of a breach of the Contract by GAF. The rights and remedies of the City of Yakima provided for in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law. C. GAF warrants and covenants that it presently has no interest and shall not acquire any interest, directly or indirectly, which could conflict in any manner or degree with the performance of its services hereunder. GAF further warrants and covenants that in the performance of this contract, no person having such interest shall be employed. XXV RIGHTS IN DATA The City of Yakima ONDS may duplicate, use and disclose in any manner and for any purposes whatsoever, and have others so do, all data delivered under this agreement. GAF hereby grants to the City of Yakima, a royalty -free, non-exclusive, and irrevocable license to publish, translate, reproduce, deliver, perform, dispose of, and to authorize others to do so, all data now or hereinafter covered by copyright: Provided, that with respect to data not originated in the performance of this Contract such license shall be only to the extent that GAF has the right to grant such license without becoming liable to pay compensation to others because of such grant. GAF shall exert all reasonable effort to advise the City of Yakima ONDS, at the time of delivery of data furnished under this agreement, of all invasions of the right of privacy contained therein and of all portions of 15 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund such data copied from work not composed or produced in the performance of this agreement and not licensed under this clause. GAF shall report to the City of Yakima ONDS, promptly and in written detail, each notice or claim of copyright infringement received by GAF with respect to all data delivered under this agreement. GAF shall not affix any restrictive markings upon any data, and if such markings are affixed, the City of Yakima ONDS shall have the right at any time to modify, remove, obliterate, or ignore such markings. XXVI RULE OF CONSTRUCTION In the event of an inconsistency in this contract/grant award unless otherwise provided herein, the inconsistency shall be resolved by giving precedence in the following order: 1. Appropriate provisions of state and federal statutes and regulations including HUD CDBG Regulations. 2. General Terms and Conditions (Exhibit A). 3. Those attachments incorporated by reference herein, including the statement of work/project description, approved HUD grant budget, in the order in which attached, (Exhibit B). 4. City of Yakima Resolution No. R-2010-49 (Exhibit C); and 5. Any other provisions whether incorporated by reference herein or otherwise provided that nothing herein shall be construed as giving preference to provisions of this contract/grant award over any provisions of law. XXVII GOVERNING LAW This Contract has been and shall be construed as having been entered into and delivered within the State of Washington, and it is mutually understood and agreed by each party hereto that this Contract shall be governed by laws of the State of Washington, both as to interpretation and performance. XXVIII VENUE The venue for any action to enforce or interpret this Contract shall lie in the Superior Court of Washington for Yakima County, Washington. XXIX MODIFICATION Either party may request changes in this Contract, however, no change or addition to this Contract shall be valid or binding upon either party unless such change or addition be in writing, and executed by both parties, except budget adjustments as specified in Section IV of this Contract. XXX SEVERABILITY It is understood and agreed by the parties hereto that if any part, term, or provision of 16 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund this Contract is held by the courts to be illegal, the validity of the remaining provisions shall not be affected; and the rights and obligations of the parties shall be construed and enforced as if the Contract did not contain the particular provision held to be invalid. If it should appear that any provision hereof is in conflict with any statutory provision of the United States or the State of Washington, said provision which may conflict, therewith, and shall be deemed modified to conform to such statutory provision. XXXI PROGRAM INCOME Any program income shall be accounted for by GAF, over the contract time period, and shall be reported to the City. Income is to be used to continue or benefit the program, as determined by the intent and purpose of the project. XXXII RETURN OF FUNDS GAF shall return to the City all monies provided hereunder by the City to GAF if any of the following occur: 1. GAF materially changes the primary purpose and scope of the Project as described on Exhibit "B" to the Contract. 2. GAF is unable to continue and/or provide services as described in Exhibit "B". 17 of 17 City of Yakima — GAF Establishment of Grow Yakima Fund Community and Economic Development Advisement Agreement EXHIBIT B Scope of Services AGREEMENT TO ESTABLISH THE GROW YAKIMA FUND BY AND BETWEEN CITY OF YAKIMA AND GROW AMERICA FUND, INC. National Development Council / Grow America Fund, Inc. Page 1 of 11 AGREEMENT TO ESTABLISH THE GROW YAKIMA FUND BY AND BETWEEN CITY OF YAKIMA AND GROW AMERICA FUND, INC. THIS AGREEMENT TO ESTABLISH THE GROW YAKIMA FUND (hereinafter referred as the "Agreement") is entered into as of the _ day of June, 2010 by and between the City of Yakima, WA, a municipal corporation with principal offices at 129 North 2nd Street, Yakima, WA 98901 (hereinafter referred to as the "Client") and the Grow America Fund, Inc., a corporation organized and existing under the laws of the State of Delaware and having its principal office at 708 Third Avenue, Suite 710, New York, New York, 10017 (hereinafter referred to as "GAF"). WITNESSETH: WHEREAS, the Client desire to expand economic opportunity for residents of Yakima so that these residents may become economically self-sufficient; and WHEREAS, the Client desire to encourage sustainable community and economic development activities so that various neighborhoods in its geography may revitalize themselves; and WHEREAS, the Client desire to establish a community investment fund for small business financing known as the Grow America Fund -Yakima (Grow Yakima Fund) to achieve these goals; and WHEREAS, GAF is recognized and certified by the U.S. Treasury Department as a Community Development Financial Institution (CDFI) and Community Development Entity (CDE) as a domestic corporation having a primary mission of serving or providing investment National Development Council / Grow America Fund, Inc. Page 2 of 1 1 capital for low income communities or low income persons; and WHEREAS. GAF, a U.S. Small Business Administration ("SBA") licensed and regulated Small Business Lending Company (hereinafter "SBLC") entitled to make SBA guaranteed loans to eligible small businesses, is the nation's only SBLC devoted solely to economic and community development financing; and WHEREAS, GAF, wholly owned subsidiary of the National Development Council, and the Client, intend to enter into an Agreement to create a self-sustaining community development investment fund for small business financing in Yakima. NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein contained the parties hereto, intending to be legally bound, hereby agree as follows: A. GENERAL PROVISIONS AND RESPONSIBILITIES Grow Yakima will be capitalized with funds provided by the Client (as described in Section C below). These funds will be used solely for loans within the areas identified by the Client, which are sponsored by the Client and which meet the purposes of Grow Yakima as determined by the Client. GAF and Client will jointly create an Economic Development Financing system that recognizes the purpose of bringing the Grow Yakima Fund to the community is to provide sound financing to healthy, growing small businesses, which is critical to the creation of permanent jobs. As such, fully trained professional staff (referred to as Economic Development Professionals (EDP)) provided by the Client are essential to imbue the program with credibility in the local community and to complete the team necessary for the program's success. 3. EDP's will perform the following services: a) Participate in developing a marketing program and establishing periodic goals b) Assist in establishing a database of potential referral sources for the Grow Yakima program c) Assist in preparation of marketing materials d) Disseminate the application package provided by GAF to potential borrowers. e) Gather the application information and perform a review for package completeness and preliminary qualification of potential borrowers f) Assist GAF loan officer in scheduling meetings and site visits with potential borrowers' places of business. g) Provide support to the GAF closing and servicing teams when needed and National Development Council / Grow America Fund, Inc. Page 3 of 11 requested. 3. GAF will use its SBLC license to make SBA guaranteed loans sponsored by the Client and provide staff to operate Grow Yakima in conjunction with the client's local staff provided by the Client to operate the fund in a prudent and businesslike manner. Staff provided by GAF will perform the following services: a) Assist in marketing the Grow Yakima program b) Assist in originating and packaging loans c) Underwrite all loans d) Obtain GAF and SBA approvals e) Close, service, and collect loans f) Perform appropriate periodic reviews of each loan g) Provide reporting as required by the Client in a form acceptable to Client. (The parties agree that acceptable form and format for this documentation is the complete GAF quarterly portfolio status report to the Client and the loan report for each Grow Yakima borrower including all relevant information as provided by the borrower.) 4. GAF has a fiduciary responsibility to underwrite, approve, close, and service all program loans, and otherwise operate Grow Yakima Fund in a prudent and businesslike fashion. In addition, the SBA requires all SBLC's to follow SBA regulations and to use SBA documents and procedures in making and servicing loans. These fiduciary responsibilities and SBA regulations cannot be delegated or waived and they are hereby incorporated by reference into this Agreement B. COMMENCEMENT, DURATION, COMPENSATION 1. GAF shall commence services for Client effective - and except as noted in Section C below, shall provide services co -terminus with the Client - NDC Community and Economic Development Advisement Agreement to which this Agreement is a sub -part. 2. This Agreement shall be renewable upon written notice provided thirty (30) days prior to the end of the term of the Client -NDC Community and Economic Development Advisement Agreement. 3. GAF shall be compensated during the term of this Agreement solely from revenue generated from loans made to eligible businesses participating in GAF - Yakima. C. CAPITALIZING GROW YAKIMA FUND AND THE INVESTMENT PERIOD National Development Council / Grow America Fund, Inc. Page 4 of 1 1 1. The Parties agree that Grow Yakima Fund will be capitalized with an investment provided by the Client. This investment will be used solely for funding eligible SBA -guaranteed loans within the targeted areas identified by the Client in Exhibit 1 hereto. 2. On or by the Client shall either invest or set-aside the funds to invest $200,000 required to capitalize the GAF -Yakima program. It is anticipated that the investment will be provided by Client, but the actual source, disbursement, and breakdown of the capitalization of the Grow Yakima Fund is at the sole discretion of the Client. The Client may elect to invest additional equity from time to time, all of which will be governed by the terms and conditions of this Agreement unless otherwise agreed to in writing. Payments made under this section shall be made by check or electronic funds transfer payable to "Grow America Fund — Yakima." a. The Client investment represents the "unguaranteed portion" of each outstanding loan funded under the program. The parties acknowledge that the Client investment is therefore fully at risk of loss. It is anticipated that as principal is repaid by the small business borrowers, it will be relent in the same capacity to other borrowers eligible under the program. b. GAF using its SBLC license shall fund the "guaranteed portion" of each outstanding loan funded under the program. The parties acknowledge that the intent of the Client investment is to realize total loans funded of $800,000 (approximately 4 times the amount of the initial Client investment). 3. The Client's Investment Period shall commence on the date above. The investment period will remain in effect until the final receipt by GAF of the final payment of principal and interest from all outstanding loans in the Grow Yakima Loan Portfolio (the Termination of the Investment Period). 4. No party to this Agreement may terminate the Client's Investment Period earlier than 24 months from the date of the initial investment or set-aside of funds to capitalize the Grow Yakima Fund as referenced in Paragraph C-2 above. It is agreed by all parties that this initial period will give all parties adequate time to perform under the terms of this contract. 5. After 24 months from the initial investment or set-aside date, any party to this Agreement may terminate this Agreement by giving ninety (90) days prior written notice to the other parties. National Development Council / Grow America Fund, Inc. Page 5 of 11 D. RETURN OF INVESTMENT The Client has elected, and GAF has agreed to accept, the Client's investment to capitalize Grow Yakima Fund as a "recoverable grant investment." Accordingly, the City of Yakima and GAF agree that if the program is successful, the funds will be "permanently" invested in GAF, supporting a revolving series of small business loans. If the program is not successful, or if it is only moderately successful in , the Client's "net investment" available for distribution (defined as the Client's investment less the net unguaranteed principal balances of the loans outstanding) will be returned in part or in its entirety in accordance with paragraphs "a" or "b" below. If the program is successful, the Client will be entitled to a return in accordance with paragraph C. a. IF GROW YAKIMA FUND LOANS TOTAL LESS THAN 100% OF THE CLIENT'S INVESTMENT. If the Agreement is terminated and total Grow Yakima Fund loans are less than 100% of the equity invested, l00% of the Client's net investment held by GAF will be returned ' to the Client at Termination plus 100% of all subsequent principal payments received that are a return of net investment amounts. b. IF GROW YAKIMA FUND LOANS TOTAL AT LEAST 100%, BUT LESS THAN 400% OF THE CLIENT'S INVESTMENT. If the Agreement is terminated and Grow Yakima Fund loans total at least l00% but less than 400% of the equity invested, GAF will retain 25% of the Client's net investment. 75% of the Client's net investment held by GAF will be returned to the Client at termination plus '75% of all subsequent principal payments received that are a return of net investment amounts. c. IF GROW YAKIMA FUND LOANS TOTAL AT LEAST 400% OF THE CLIENT'S INVESTMENT. If the Agreement is terminated and total Grow Yakima Fund loans exceeds 400% of the equity invested, GAF will retain 50% of the Client's net investment available at the Termination of the Investment Period plus 50% of all additional principal payments received that are a return of net investment amounts. The Client shall not be obligated to make payments to GAF beyond the equity invested into GAF, and GAF shall not be obligated to return to the Client any portion of the investment due beyond the actual principal repayments received from the borrowers (or collateral reductions in the event of a liquidation) under the Grow Yakima Fund program in accordance with the appropriate formula above. E. MISCELLANEOUS PROVISIONS National Development Council / Grow America Fund. Inc. Page 6 of 11 1. Ownership of Material and Documents. All final reports and other materials prepared by GAF for the Client shall be the property of the Client, however all work papers and other source materials not provided to the Client shall be the property of GAF. GAF shall deliver such materials to the Client in accordance with the terms and conditions of this Agreement. The Client shall not, without GAF's written consent, associate GAF's name with the report/product, if a subsequent change is made in such report\product after submission to the Client. 2. Right to Audit. GAF shall establish and maintain appropriate procedures, which will ensure the proper accounting of all funds paid to it under this Agreement. The Client or any of their duly authorized representatives shall have access to any books, documents, papers and records of GAF, which are directly pertinent to a specific program for making an audit, an examination excerpts and transcriptions. All such books and records shall be retained for such periods of time as required by law, provided, however, notwithstanding any short periods of retention, all books, records and supporting details shall be retained for period of at least three (3) years after the expiration of the term of the Community and Economic Development Advisement Agreement to which this is a sub -part. 3. Equal Opportunity. GAF shall comply with all provisions of Title VI of the Civil Rights Act of 1964 and of the rules, regulations and relevant orders of the Secretary of Labor regarding discrimination. In the event a party is determined by the final order of an appropriate agency or court to be in violation of any non-discrimination provision of federal, state, or local law, this Agreement may be cancelled, terminated or suspended in whole or in part by the Client, and that party may be declared ineligible for further Client contracts. 4. Conflicts of Interest. No board member, officer or employee of the Client or its designees or agents, and no other public official who exercises any functions or responsibilities with respect to any requested technical assistance, shall be permitted to financially benefit from this Agreement or have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with this Agreement. National Development Council / Grow America Fund, Inc. Page 7 of 11 5. Notices. All notices shall be sent by certified mail, hand -delivery or overnight mail and in all events with a written acknowledgment of receipt to the address set forth at the beginning of this Agreement. 6. Responsibility for Claims. To the extent permitted by state statutes, the Client agrees to indemnify and save harmless GAF, their agents, officials, and employees from any liability, damage, expense, cause of action, suit, claim, judgment or expenses (including attorneys fees) arising from injury to ,person, including death, or personal property or otherwise caused by or resulting from the bad faith, willful, negligent or unlawful act of the Client in its performance of this Agreement. Provided, however, that such indemnity shall not apply to any actions, claims or damages arising as a result of GAF's bad faith, willful misconduct or gross negligence. GAF agrees to indemnify and save harmless the Client, their agents, officials and employees, from any liability, damage, expense, cause of action, suit, claim, judgment or expenses (including attorneys' fees) arising from injury to person, including death, or personal property or otherwise caused by or resulting from the bad faith, willful, negligent or unlawful act of GAF in its performance under this Agreement. Provided, however, that such indemnity shall not apply to any actions, claims or damages arising as a result of the Client' bad faith, willful misconduct or gross negligence. 7. Compliance with Laws, Venue. GAF agrees to comply with all applicable federal, state and local laws in the conduct of the work hereunder. .This Agreement shall be construed, interpreted and the rights of the parties determined, in accordance with the laws of the State of Washington. The parties hereby irrevocably and unconditionally consent to submit to the jurisdiction of the courts of the State of Washington and of the United States of America located in Washington, which shall have the exclusive jurisdiction for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby. The parties agree not to commence any action, suit or proceeding relating thereto except in such courts, with venue in Yakima County, Washington. 8. Assignment. Neither this Agreement or any rights, duties or obligations described herein may be assigned by either party without the prior express written consent of the other National Development Council / Grow America Fund. Inc. Page 8 of 1 1 party. 9. Severability. A determination that any part of this Agreement is invalid shall not invalidate or impair the force of the remainder of this Agreement. 10. Disclaimer. The Client is a sophisticated business enterprise and has retained GAF for the purposes set forth in this Agreement and the parties acknowledge and agree that their respective rights and obligations are contractual in nature. Each party disclaims an intention to impose fiduciary agency rights or obligations on the other by virtue of the engagement hereunder. 11. Entire Agreement. This Agreement contains the final agreement between the parties regarding the matters covered and supersedes any and all other agreements, either oral or in writing regarding, the matters contained herein. No amendments to this Agreement shall be binding on either party unless in writing and signed by both parties. National Development Council / Grow America Fund, Inc. Page 9 of 11 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first written above Attest: yCiry CIPRK Attest: CITY OF YAKIMA By: Its: i f y 772,44./ e=iZ GROW AMERICA FUND, INC. Robert W Da rig/pairman National Development Council / Grow America Fund, Inc. Page 10 of 11 EXHIBIT 1 Eligible Grow Yakima Lending Areas The Grow Yakima Fund loan program will be available to eligible businesses located throughout the City of Yakima. Other eligibility criteria, if applicable, (job creation or retention, etc) is to be determined and documented by the Client. National Development Council Grow America Fund. Inc. Page 1 1 of 1 1 • BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No.: /0 For Meeting of: June 1, 2010 ITEM TITLE: Consideration of a Resolution authorizing the City Manager to execute a CDBG Economic Development Grant Agreement with the National Development Council SUBMITTED BY: Michael A. Morales, Director CED CONTACT PERSON/TELEPHONE: Michael Morales, 575-3533 SUMMARY EXPLANATION: The Department of Community & Economic Development and the National Development Council propose to establish a community investment fund for small business financing known as the Grow America Fund -Yakima (Grow Yakima Fund). The project would be funded by a $200,000 Community Development Block Grant, which is available within the 2010 budget. The Grow America Fund is recognized and certified by the U.S. Treasury Department as a Community Development Financial Institution (CDFI) and Community Development Entity (CDE). The GAF is also a U.S. Small Business Administration ("SBA") licensed and regulated Small Business Lending Company ("SBLC") entitled to make SBA guaranteed loans to eligible small businesses. The GAF, is the nation's only SBLC devoted solely to economic and community development financing. CONTINUED NEXT PAGE Resolution X Ordinance Contract X Other Specify Funding Source: CDBG Economic Development Funds. APPROVAL FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Approve the contract by adopting the resolution. BOARD/COMMISSION RECOMMENDATION: Neighborhood Development Committee and Economic Development Committee recommend approval. COUNCIL ACTION: As described in the contract, the project would operate as follows: 1. Grow Yakima will be capitalized with $200,000 of CDBG funds provided by the City. These funds will be used solely for loans within the federal Renewal Community. This investment will leverage SBA guarantee funds at a minimum ratio of 4:1. 2. GAF and the City will jointly create an Economic Development Financing system that recognizes the purpose of bringing the Grow Yakima Fund to the community is to provide sound financing to healthy, growing small businesses, which is critical to the creation of permanent jobs. As such, the CED staff will continue to work with the program to provide the following: a) Participate in developing a marketing program and establishing periodic goals; b) Assist in establishing a database of potential referral sources for the Grow Yakima program; c) Assist in preparation of marketing materials; d) Disseminate the application package provided by GAF to potential borrowers; e) Gather the application information and perform a review for package completeness and preliminary qualification of potential borrowers; f) Assist GAF loan officer in scheduling meetings and site visits with potential borrowers' places of business; g) Provide support to the GAF closing and servicing teams when needed and requested. 3. GAF will use its SBLC license to make SBA guaranteed loans sponsored by the City. Staff provided by GAF will perform the following services: a) Assist in marketing the Grow Yakima program; b) Assist in originating and packaging loans; c) Underwrite all loans; d) Obtain GAF and SBA approvals; e) Close, service, and collect loans; f) Perform appropriate periodic reviews of each loan; g) Provide reporting as required by the Client in a form acceptable to Client. (The parties agree that acceptable form and format for this documentation is the complete GAF quarterly portfolio status report to the Client and the loan report for each Grow Yakima borrower including all relevant information as provided by the borrower). 4. GAF has a fiduciary responsibility to underwrite, approve, close, service all program loans, and otherwise operate Grow Yakima Fund in a prudent and businesslike fashion. In addition, the SBA requires all SBLC's to follow SBA regulations and to use SBA documents and procedures in making and servicing loans. These fiduciary responsibilities and SBA regulations cannot be delegated or waived and they are hereby incorporated by reference into this Agreement. A •