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Home My WebLink AboutMINUTES - 08052014 - C.21RECOMMENDATION(S): APPROVE and AUTHORIZE the Conservation and Development Department Interim Director, or designee, to execute a contract with the City of Pittsburg to pay the County in accordance with a specified fee scheduled to administer the City's Housing Rehabilitation Loan Program loan portfolio for the period July 1, 2014 through June 30, 2019. FISCAL IMPACT: No fiscal impact to the General Fund. All funds will be from the City of Pittsburg. BACKGROUND: Pursuant to a related Board Order on this August 5, 2014 agenda, Department of Conservation and Development staff anticipate administering a Housing Rehabilitation Program for the City of Pittsburg. Staff anticipates executing two to three loans on behalf of the City in fiscal year 2014/15. The City may ask the County to administer this program in future years, which will result in additional loans. In addition to executing new loans, the City wishes to enter into a contract with the County to provide loan administration services. These services will include confirming on-going owner occupancy of the properties, collecting loan payments from the borrowers and remitting the payments to the City, responding to requests for subordination agreements, and notifying the City of any known violations of the loan terms. The City will be responsible for executing subordination agreements, and taking corrective action on any loan violations, including issuing notices of default and foreclosing on properties. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 08/05/2014 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Candace Andersen, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Contact: Kara Douglas 674-7880 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: August 5, 2014 David Twa, County Administrator and Clerk of the Board of Supervisors By: Chris Heck, Deputy cc: C.21 To:Board of Supervisors From:John Kopchik, Interim Director, Conservation & Development Department Date:August 5, 2014 Contra Costa County Subject:Administration Agreement Between Contra Costa County and the City of Pittsburg for the Administration of its Home Rehabilitation Loan Portfolio BACKGROUND: (CONT'D) The City will reimburse the County on a payment schedule for specific services. Total compensation the first year is expected to be less than $1,000. The total compensation will increase as the loan portfolio increases. County staff currently manages a home-owner rehabilitation loan portfolio of approximately 250 loans. The City loans will be included in the established County routine. CONSEQUENCE OF NEGATIVE ACTION: If the Board of Supervisors does not approve this agreement, the City of Pittsburg will be responsible for managing its loan portfolio without assistance from the County. CHILDREN'S IMPACT STATEMENT: N/A ATTACHMENTS Pittsburg CDBG NPP loan portfolio management agreement 1 HOUSING REHABILITATION LOAN PORTFOLIO ADMINISTRATION AGREEMENT This administration agreement (this “Agreement”) is dated as of July 1, 2014, and is entered into between Contra Costa County, a political subdivision of the State of California (the “County”), and the City of Pittsburg, a California municipal corporation (the “City”). RECITALS A. The City intends to make a number of loans through the Neighborhood Preservation Program (“NPP”) to qualified residents of the City. The number of loans outstanding at any time will vary as new loans are executed and loans are repaid. B. The City desires that the County manage the NPP loan portfolio until such time the loans have been paid in full and/or no longer exist. The City is willing to pay the County for providing the services described in this Agreement. C. This administrative agreement between the City and the County is an agreement separate from the agreement for rehabilitation services for the provision of rehabilitation loans and exists entirely for the express purpose of loan administration after rehabilitation has been completed and loan documents have been recorded. The parties therefore agree as follows: AGREEMENT 1. Term. Unless sooner terminated as provided in this Agreement, the term of this Agreement is from July 1, 2014 through June 30, 2019. 2. County Obligations. a. Amortizing Loan Processing. If a loan requires regular monthly payments of principal and interest, the County will: i. Send monthly statements to the borrower with the current loan balance and amount due. ii. Collect payments from the borrower. iii. Remit funds to the City quarterly. 2 b. Deferred Loan Processing. The County shall send a letter annually to all deferred loan recipients to confirm on-going occupancy of the rehabilitated home. c. Subordination and Demand for Payment Requests. The County shall respond to all requests for subordination or loan payoff requests. The County will request City signatures on all subordination agreements. d. Violation of Loan Terms. The County shall inform the City of any known violation of loan terms such as non-owner occupancy, foreclosure by another lender, payment delinquency, deteriorated condition of property, or cancellation of required homeowners insurance. 3. City Obligations. The City is responsible for the following: a. Periodic review and approval of subordination terms. b. Timely review and signature of subordination agreements. c. Taking corrective action with the borrower on any loan violations such as non - owner occupancy, foreclosure by another lender, deteriorated condition of property, or cancellation of required homeowners insurance. d. Provision of notices of default to borrower for non -payment, if loan is an amortizing loan. e. Foreclose on the property for non-compliance of loan covenants. 4. Compensation. The City shall pay the County for the services provided by the County to the City under this Agreement. The amount payable to the County will be calculated as follows: a. The City shall pay the County One Hundred Dollars ($100) annually per letter up to a maximum of One Thousand Dollars ($1,000) to send annual letters to confirm owner-occupancy of the rehabilitated home. b. The City shall pay the County Three Hundred Fifty Dollars ($350) for each loan subordination request processed under this Agreement, whether or not a subordination agreement is actually executed by the City. c. The City shall pay the County Two Hundred Dollars ($200) for each payment demand processed by the County, whether or not a loan payment is received. 5. Invoices and Payment. The County shall invoice the City quarterly for amounts due under this Agreement. The City shall pay all amounts due to the County under this Agreement within thirty (30) days of receipt of an invoice. 3 6. Termination. This Agreement may be terminated by the County or the City upon ninety (90) days’ written notice of either party to the other party. Upon termination of this Agreement, the City shall pay to the County all amounts due, or previously due, to the County at the time of termination, and the County will provide all City loan files to the City. 7. Indemnification. The City agrees to indemnify and hold harmless the County and its officers and employees for the City’s share of any and all claims, costs and liability, including attorneys fees, for any damage, injury or death of or to any person or the property of any person arising out of the willful misconduct or the negligent acts of the City in the City’s performance under this Agreement. The County agrees to indemnify and hold harmless the City and its officers and employees for the County’s share of any and all claims, costs and liability, including attorneys fees, for any damage, injury or death of or to any person or the property of any person arising out of the willful misconduct or the negligent acts, errors or omissions of the County in the County’s performance under this Agreement. 8. Third Parties. Nothing in this Agreement is intended, nor shall it be construed, to create rights inuring to the benefit of third parties. 9. Remedies. The sole remedy for violation of this Agreement is the specific performance of this Agreement. The County and City waive their respective rights to trial by jury of any claim or cause of action arising out of this Agreement. The County and City have no liability for damages to one another or to any person or entity resulting from any violation of this Agreement. 10. Notice. All correspondence regarding this Agreement, including invoices, payments, and notices, are to be delivered by deposit in the United States mail, postage prepaid, and directed to the following persons at the following addresses: COUNTY: _________________________ Contra Costa County Department of Conservation & Development 30 Muir Road Martinez, CA 94553 CITY: Joe Sbranti, City Manager City of Pittsburg 65 Civic Avenue Pittsburg, CA 94565 11. Construction. The section headings and captions of this Agreement are, and the arrangement of this instrument is, for the sole convenience of the parties to this Agreement. The section headings, captions and arrangement of this instrument do not in any way affect, limit, amplify or modify the terms and provisions of this 4 Agreement. This Agreement may not be construed as if it had been prepared by one of the parties, but rather as if both parties have prepared it. The parties to this Agreement and their counsel have read and reviewed this Agreement and agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party does not apply to the interpretation of this Agreement. The Recitals are, and are to be enforceable as, a part of this Agreement. 12. Severability. If any term or provision of this Agreement is, to any extent, held invalid or unenforceable, the remainder of this Agreement will not be affected. 13. Authorizations Obtained. The person executing this Agreement on behalf of the City represents that he or she has the requisite legal authority to enter into this Agreement on behalf of the City and to bind the City to the terms of this Agreement. The person executing this Agreement on behalf of the County represents that he or she has the requisite legal authority to enter into this Agreement on behalf of the County and to bind the County to the terms of this Agreement. 14. Entire Agreement. This Agreement contains the entire agreement between the parties and all prior understandings or agreements, oral or written, regarding this matter are superseded. CONTRA COSTA COUNTY CITY OF PITTSBURG By: ____________________________ By: __________________________ Department of Conservation Joe Sbranti, and Development City Manager APPROVED AS TO FORM: APPROVED AS TO FORM: Sharon L. Anderson, County Counsel By: _____________________________ By: __________________________ Kathleen Andrus Ruthann Ziegler Deputy County Counsel City Attorney 2274270.1