HomeMy WebLinkAboutMINUTES - 04201993 - 1.7 (2) 170
Contra
. Costa
TO: BOARD OF SUPERVISORS �u /
rcOuh J � .`J
FROM: Harvey E. Bragdon
Director of Community Development
DATE: April 20, 1993
SUBJECT: Approval of Community Development Block Grant (CDBG) Program Project
Agreement; The Active Reading Clinic
SPECIFIC REQUEST(S) OR RECOMMENDATIONS (S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
Authorize the Deputy Director or his Designee to execute the CDBG
Program Project agreement with .the Active Reading Clinic, implementing
activity 18-22, with a payment limit of $12,000 during the period
beginning April 1, 1992 and ending March 31, 1993 .
FISCAL IMPACT
NONE ( 100% HUD Funds)
BACKGROUND/REASONS FOR RECOMMENDATIONS
This project will fund a reading training services available to low-
income, learning disabled, and illiterate adults throughout the Urban
County. The Active Reading Clinic works closely with project Second
Chance.
CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECO ATIO OF BOARD COkMITTEE
APPROVE OTHER
SIGNATURE(S) :
ACTION OF BOARD ON O APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A
UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
SUPERVISORS ON THE DATE SHOWN.
Contact: Larry Jones
646-4208
cc: Community Development ATTESTED
CAO PHIL BAT OR, ERK. OF
Auditor THE BOARD OF SUPERVISORS
County Counsel AND COUNTY ADMINISTRATOR
Contractor
BY �AIVIA�J-Zv-Akf DEPUTY
Li6/18-22act.bos
47
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RETUP.NED YOUR CALL SPECIAL ATTENTION
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SGNEO
LITHO 1N U.S.A.
TOPS FORM 3002W
P C G MPrOGRAM O
COMMUNITY DE\V P IV
1. Agreement Identification. Number 18-22
Department: Community Development Department
Subject: Allocation of Federal funding under Title I of the Housing and
Community Development Act of 1974, as amended.
2. Parties. The County of Contra Costa, California (County), for its Department named above, and
the following named Contractor mutually agree and promise as follows:
Contractoi: Active Reading Clinic
Address: 235 Lakewood Road
Walnut Creek, CA 94595
3. Term. The effective date of this Agreement is April 1, 1992 and it terminates March 31, 1993,
unless sooner terminated as provided herein, subject to all terms, conditions, and assurances
contained or incorporated herein.
4. Allocation Payment Limit. County's total payments to Contractor under this Agreement shall
not exceed $12,000.
5. County's Obligation. County shall make those allocation payments to the contractor described
in the "Payment Provisions" attached hereto which are incorporated herein by reference, subject
to all terms, conditions, and assurances contained or incorporated herein.
6. General Conditions and Certifications. This Agreement is subject to the "General Conditions" i
and the "Assurances" attached hereto, which are incorporated herein by reference.
7. Contractor's Obligation. Contractor shall provide those services and carry out that work as
described in and in accordance with the "Project Work Program" attached hereto, which is
incorporated herein by reference, subject to all the terms, conditions and certifications contained
or incorporated herein.
8. Project. This Agreement implements in whole or in part the following described project, the
application and approval documents of which are incorporated herein by reference: That project
as described in the Community Development Block Grant Program Application dated February
11, 1992, and approved by HUD on April 1, 1992; and as more particularly described in the
"Project Work Program", attached hereto.
9. Signatures. These signatures attest the parties' agreement hereto:
COUNTY OF CONTRA COSTA, CALIFORNIA CONTRACTOR
By: By:
Deputy Director Redevelopment (Designate Official Capacity
in Organization)
ATTEST: Phil Batchelor, County Clerk
of the Board of Supervisors
and County Administrator
By:
(Designate Official Capacity
in Organization)
Note to Contractor:
(1) If a public agency, designates official
capacity in public agency and
certified copy of the governing body
resolution authorizing execution of this
agreement.
Form Approved: County Counsel (2) All others: execute acknowledgement
from above, and if a corporation, designate
official capacity in business, execute
acknowledgement form and affix corporation
seal.
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CONTRA COSTA COUNTY
COMMUNITY DEVELOPMENT PROGRAM 1992-1993
A. PROJECT DESCRIPTION
This project will make reading training services available to low-income, learning disabled, and
illiterate adults throughout the Urban County
B. PROJECT TIME SCHEDULE
Time Schedule on a month-by-month basis for the above Project indicating when major activity items
are expected to be undertaken and completed.
Work Item Start Date Completion Date
conduct reading training workshops February
C. PROJECT GOALS
Contractor shall define project objectives in accordance with the approved application and any
conditions, if applicable. Goals are to be quantified in all cases to provide a benchmark for
evaluation.
Provide 6 months of reading training services available to low-income, learning disabled, and
illiterate adults throughout the Urban County.
PROJECT WORK PROGRAM
D. PERFORMANCE STANDARDS
The performance standards indicated (details of project implementation) will be applied in
implementing the Work Program.
1. In all contracts, purchase agreements, invoices entered, comply with appropriate HUD
regulations including Equal Opportunity and Section 3 provisions, as provided in the "Guide
for Compliance with Assurances and Certification Under the Housing and Community
Development Act", as provided by the County Community Development Department.
2. In all contracts, purchase agreements, contracts, invoices entered into over $100, the contractor
shall obtain the required signed Equal Opportunity/Section 3 Compliance Form signed by the
supplier service prior to the receipt of any goods or initiation of any services. The required
forms are available from the County Community Development Department.
3. All contracts under $10,000 entered into shall be in compliance with procurement procedures
contained in Office of Management and Budget (OMB) Circular A-102, Attachment 0 and any
other applicable Office of Management and Budget circulares and HUD regulations.
4. In all construction contracts over$2,000 enforce and administer Labor Standards Requirements
in accordance with Title 1 of the Housing and Community Development Act of 1974, HUD
Handbook 6500.3 -Labor Standards Administration and Enforcement, Community Development
Block Grant Program, and as provided in the Compliance Guide cited.
5. All construction contracts over $10,000 shall be in compliance with bid procedures contained
in the Compliance Guide cited.
6. All construction contracts over$100,000 shall be in compliance with the bonding and insurance
requirements contained in OMB A-102 Attachment B, and with the requirements of the Clear
Air Act and Federal Water Pollution Control Act.
7. Comply with all applicable building codes and laws in the construction work and ensure that
access to the handicapped will be provided in accordance with the requirements of the
"American Standard Specifications for Making Buildings and Facilities Accessible to, and
usable by, the Physically Handicapped", Number A-117-1-R-1971.
8. Shall, at a minimum,notify applicable minority owned business funis located in Contra Costa
County of bid opportunities for Community Development funded projects and maintain
documentation of such efforts. A listing of minority owned businesses located in Contra Costa
County and Neighboring counties is available from the County Community Development
Department.
9. Transmit to the County Community Development Department a copy of all construction
contracts over $2,000 prior to the Contract being advertised to ensure that all appropriate
requirements and provisions have been included.
10. Contractors providing direct benefit type activities such as single and multi-family residential
rehabilitation; public services such as day care, job training, economic development, health
services, relocation, etc. must track such assistance to low and moderate income
households/persons, to include data on ethnicity, and female heads of households.
11. Contractors must give credit for Community Development Block Grant funding to the County
in advertisements, brochures or news releases to the media. Projects involving construction or
acquisition must place a sign in a clearly visible location on the site where County Community
Development Block Grant funds are used for all or part of the funding for that project.
12. Contractors must submit to the County Community Development Department by October 1, of
the current contract year an independent evaluation of the project in terms of meeting the stated
goals in Item C. PROJECT GOALS, and overall program. performance.
E. PROJECT ADMINISTRATION
Contractor shall indicate who will be responsible for administering the Work Program.
Judy Kranzler (510) 944-5559
PROJECT WORK PROGRAM
F. PROGRAM MONITORING
1. Contractor shall report at least quarterly to the Community Development Department the status
of funds expended, balances remaining and a narrative of the project status relative to the stated
goals and objectives in item C. PROJECT GOALS.
2. Economic development and job creation activity sponsors must also report monthly on the status
of each economic development activity. This report must include a cumulative update by
project on the number of jobs filled by position, the date filled and a narrative describing
progress on completing the hiring plan, and program income.
G. CONTRACTOR'S DETAILED EXPENDITURE SCHEDULE
CONTRACTOR: Active Reading Clinic ACTIVITY NUMBER: 18-22
BUDGET PERIOD: 4/1/92-3/31/93
(a) (b) (c) (d)
Budget Item CD Funds - $ +Other Funds - $ =Total -
Salaries $12,000 $0 $12,000
Benefits @ 15%
Supplies
Consultant's fees
(e)
TOTAL $12,000 $0 $12,000
Notes: (a) Detailed categories pursuant to OMB A-102.
(b) Items are eligible to be funded by CDBG funds.
(c) Estimate of other necessary expenditures that cannot be funded with CD monies; and
indication of anticipated sources.
(d) Sum of(b) and (C) above including both Community Development and non-Community.
Development funds.
(e) Contract Payment Limit for CD project.
L16 18-22.AGR
GENERAL CONDITIONS
1. Compliance with Law. Contractor shall be submit to and comply with all
Federal, State and local laws and regulations applicable to public agencies
with respect to its performance hereunder, including but not limited to
Federal regulations, guidelines, bulletins, and circulars pursuant to Tile
I of the Housing and Community Development Act of 1974, including Title 24
of the Code of Federal Regulations, Chapter V, Part 570 as published in the
Federal Register, Vol. 30, No. 220, Wednesday, November 13, 1974, as may be
revised and amended; and which are incorporated herein by reference.
Documentation of such compliance shall be made available for review by the
County upon request.
2. Inspection. Contractor's performance, place of business and records
pertaining to this Agreement are subject to monitoring, inspection, review
and audit by authorized representatives of the County, the State of
California, and the United States Government.
3. Records. Contractor shall keep and make available for inspection by
authorized representatives of the County, the State of California, and the
United State Government, the Contractor's regular business records
pertaining to this Agreement and such additional records as may be required
by the County.
4. Retention of Records. The , Contractor and County agree to retain all
documents pertaining to this Agreement for three years from the date of
submission of the Annual Performance Report by the County to HUD, except as
follows:
(a) Records that are the subject of audit findings shall be retained for
three years after such findings have been resolved.
(b) Record for nonexpendable property which was acquired with Federal
grant funds shall be retained for three years after its final
disposition.
(c) Records for any displaced persons shall be retained for three years
after he has received final payment.
5. Termination.
(a) Failure to Perform. In the event the Contractor fails to perform
properly any of its obligations hereunder and such failure of
performance is not cured by the Contractor within thirty (30) days
after receipt of written notice from the County, the County may in
addition to any other remedies, complete the Contractor's obligations
in any reasonable manner it chooses, take possession of any real or
personal property associated with the project, and construct, operate
or maintain the project as the County may deem necessary to fulfill
requirements of the Federal Government. The Contractor agrees to
reimburse the County for any costs or expenses incurred by the County
because of said failure to perform and also agrees to convey title to
any real property acquired by Contractor with project funds should
County request such title.
(b) Cessation of Funding. In the event the Federal funding for this
Agreement ceases, this Agreement is terminated.
(c) Failure by the Contractor to perform properly any of its obligations
under this Agreement may be cause for suspension of all obligations of
the County thereunder.
6. Entire Agreement. This Agreement contains all the terms and conditions
agreed upon by the parties. Except as expressly provided herein and in the
"COOPERATION AGREEMENT, H.C.D.A. 1974" effective November 24, 1981, and
amendments relating thereto, if any, no other understandings, oral or
otherwise, regarding the subject matter of this Agreement shall be deemed
to exist or to bind any of the parties hereto.
General Conditions - Page 2
7. Further Specifications for Operating Procedures. Detailed specifications
of operating procedures and budgets required by this Agreement, including
but not limited to monitoring, auditing, billing or regulatory changes, may
be developed and set forth in written "Informal Agreements" entered between
the Contractor and the County. Such "Informal Agreements" when entered
shall not be modifications to this Agreement except to the extent that they
further detail or clarify that which is already required hereunder.
Further, any "Informal Agreement" entered may not enlarge in any manner the
scope of this Agreement, including any sums of money to be paid the
Contractor as provided herein. "Informal Agreements" may be approved for,
and executed on behalf of the County by the head of the County Department
for which this Agreement is made or his designee.
8. Modifications and Amendments.
(a) General Aareements. This Agreement may be modified or amended only be
a written document executed by the Contractor and the Contra Costa
County Board of Supervisors, subject to any required State or Federal
(United States) approval.
(b) Administrative Amendments. Subject to the Payment Limit, only the
Payment Provisions and the Project Work Program may be amended by a
written administrative amendmerit executed by the Contractor and the
head of the County Department for which this Agreement is made or his
designee, subject to any required State of Federal (United States)
approval, provided that such administrative amendments may not
materially change the Payment Provisions or the Project Work Program.
(c) Extension of Term for Performance. Without requiring Contractor to
provide consideration in addition to that supporting this Agreement,
the County of Contra Costa, through its Community Development
Director, may grant Contractor an extension of time for performance,
beyond that time specified above under "Term" (Paragraph 3) . Any such
extension must be in writing and shall be at the sole discretion of
the County.
9. Disputes. Disagreements between the County and Contractor concerning the
meaning, requirements, or performance of this Agreement shall be subject to
final determination in writing by the head of the County Department for
which this Agreement is made or his designee or in accordance with the
applicable procedures (if any) required by the Federal Government.
10. Law Governing Agreement. This Agreement is made in Contra Costa County and
shall be governed and construed in accordance with the law of the State of
California.
11. Conformance with Federal and State Regulations. Should Federal or State
regulations touching upon this Agreement be adopted or revised during the
term hereof, this Agreement is subject to modification to assure con-
formance with such Federal or State requirements.
12. No Waiver by County. Subject to the disputes provision contained herein,
inspections or approvals, or statements by any officer, agent or employee
of the County indicating the Contractor's performance or any part thereof
complies with the requirements of this Agreement, or acceptance of the
whole or any part of said performance, or payments therefore, or any
combination of these acts, shall not relieve the Contractor's obligation to
fulfill this Agreement as prescribed; nor shall the County be thereby
stopped from bringing any action for damages or enforcement arising from
any failure to comply with any of the terms and conditions thereof.
13. Original Agreement. The original copy of this Agreement and of any
modification thereto is that copy filed with the Clerk of the Board of
Supervisors of Contra Costa County.
14. Independent Contractor Status. This Agreement is- by and between two
independent contractors and is not intended to and shall not be construed
to create the relationship of agent, servant, employee, partnership, joint
venture or association.
General Conditions - Page 3
15. Conflicts of Interest. Contractor agrees to furnish to the County upon
demand a valid copy of the most recently adopted bylaws of any Corporation
and also a complete and accurate list of the governing body (Board of
Directors or 'Trustees) and to timely update said bylaws or the list of its
governing body as changes in such governance occur, if contractor is a
corporation. Contractor promises and attests that the Contractor and any
members of its governing body shall avoid any actual or potential conflicts
of interest and will establish safeguards pursuant to Paragraph 12 of the
attached "Assurances".
16. Confidentiality. Contractor agrees to comply and to require his employees
to comply with all applicable State of Federal statutes or regulations
respecting confidentiality, including but not limited to, the identify of
recipients, their records, or services provided them, and assures that:
(a) All applications and records concerning any individual made or kept by
Contractor or any public officer or agency in connection with the ad-
ministration of or relating to services provided under this Contract
will be confidential, and will not be open to examination for any
purpose not directly connected with the administration of such
service.
(b) No person will publish or disclose or permit or cause to be published
or disclosed, any list of persons receiving services, except as may be
required in the administration of such service. Contractor agrees to
inform all employees, agents and partners of the above provisions, and
that any person knowingly and intentionally disclosing such infor-
mation other than as authorized by law may be guilty of misdemeanor.
17. Indemnification.
(a) Contractor hereby waives all claims and recourse against the County
including the right to contribution for loss or damage to persons or
property arising from, growing out of or in any way connected with or
incident to this Agreement except claims arising from the concurrent
or sole negligence of County, its officers, agents and employees.
(b) The Contractor shall defend and indemnify the County and its officers,
agents and employees against and hold the same free and harmless from
any and all claims, demands, damages, losses, costs, and/or expenses
of liability due to, or arising out of, either in whole or in part,
whether directly or indirectly, the organization, development,
construction, operation, or maintenance of the Project except for
liability arising out of the concurrent or sole negligence of County,
its officers, agents or employees.
(c) In the event County is named as co-defendant the Contractor shall
notify the County of such fact and shall represent County in the legal
action unless County undertakes to represent itself as co-defendent in
such legal action in which event County shall bear its own litigation
costs, expenses, and attorney's fees.
(d) This condition shall not terminate on the date specified in the
Agreement but shall remain in full force and effect.
18. Insurance. During the entire term of this Contract and any extension of
modification thereof, the Contractor shall keep in effect insurance
policies meeting the following insurance requirements unless otherwise
expressed in the Special Conditions:
(a) Liability Insurance. The Contractor shall provide a policy or
policies of comprehensive liability insurance, including coverage for
owned and non-owned automobiles, naming the County and its officers
and employees as additional insureds, with a minimum combined single
limit coverage of $500,000 for all damages because of bodily injury,
sickness or disease, or death to any person and damage to or
destruction of property, including the loss of use thereof, arising
from each accident or occurrence.'
I
I
General Conditions - Page 4
(b) Worker's Compensation. The Contractor shall provide the County with a
Certificate of Insurance evidencing workers' compensation insurance
coverage for its employees.
(c) The contractor will provide a policy or policies of All Risk Property
Damage Insurance including Flood Plain Insurance whenever applicable,
particularly where CDBG funds are used in the acquisition of real
property.
(d) Additional Provisions. The policies shall include a provision for
thirty (30) days written notice to County before cancellation or
material change of the above specified coverage. Said policies shall
constitute primary insurance as to the County, the State and Federal
Governments, their officers, agents, and employees, so that other
insurance policies held by them shall not be required to contribute to
any loss covered under the Contractor's insurance policy or policies.
Not later than the effective date of the Contract, the Contractor
shall provide the County with a certificate(s) of insurance evidencing
the above liability insurance.
19. Notices. All notices provided for by this Agreement shall be in writing
and may be delivered by deposit in the United .States mail, postage prepaid.
Notices to the County shall be addressed to Contra Costa County Community ,
Development Department, 651 Pine Street, 4th Floor North Wing, Martinez,
California 94553. Notices to the Contractor shall be addressed to the
Contractor's address designated herein. The effective date of notice shall
be the date of deposit in the mails or of other delivery.
a
20. Available Copies. Copies of the County's Project documents (as specified
in Paragraph 8, Project, of this Agreement) , and all pertinent Federal
statues, regulations guidelines, bulletins, and circulars applicable to
this Agreement, shall be available at all times for inspection by the
Contractor during regular business hours at the Offices of the Community
Development Department, Martinez, California.
21. Retained Powers. All powers not explicitly invested in the Contractor
remain in the County.
22. Project Development.
(a) If the Project includes construction, the construction plans and
specifications shall be reviewed and approved by the •Contractor before
construction is commenced.
(b) The Contractor shall secure completion of the construction work in
accordance with the approved construction plans and specifications.
(c) If the Project includes acquisition of real property, the purchase
price for such property shall be determined in accordance with the' re-
quirements contained in Department of Housing and Urban Development
(HUD) Handbook 1376.1, Relocation and Real Property Acquisition. The
appraisal reports and qualifications of appraisers shall be submitted
for review and approval by the County before initiation of the
acquisition procedure. Contractor agrees to furnish County pre-
liminary title reports respecting such real property or such other
evidence of title which is determined to be sufficient by County.
Contractor agrees in negotiated purchases to correct prior to or at
the close of escrow any defects of title which in the opinion of
County might interfere with the operation of the Project. In
condemnation actions such title defects must be eliminated by the
final judgement.
0
General Conditions - Page 5
24. Project Termination.
It shall be a policy of the County that any project funded in any way
through the Community Development Program that is cancelled, abandoned or
fails during the contract period or is otherwise completed, all remaining
funds allocated shall be immediately returned to the County. Property
acquired with the use of federal funds, in whole or in part, under the
Community Development Program that falls to disuse, is abandoned or is no
longer needed for the original intended purpose within 20 years of
acquisition, will be disposed of in accordance with OMB Circular A-102,
Attachment N. with prior written approval-> and coordination with County
staff.
25. Real Property Acquisition.
The Contractor shall in all cases coordinate with County staff prior to
initiating any written agreement or binding negotiations for the
acquisition of real property. All acquisitions will be conducted in
accordance with 49 CFR Part 24 Uniform Relocation Assistance and Real
Property Acquisition Regulations for Federally Assisted Programs, as
amended.
The Contractor shall deliver to the County a Deed of Development Rights, in
the form prescribed by the County, concurrently with taking title to
property acquired with Community Development Block Grant funds. Prior to
making an offer for the property, the Contractor shall advise the Owner
that it is unable to acquire the property in the event negotiations fail to
result in an amicalbe agreement, and the Contractor shall inform the owner
in writing what it believes to be the fair market value of the property.
a:forms/jb/gencond.dw4
COMNIiJNITY DEVELOPMENT BLOCK GRANT
GRAN= CERTIFICATIONS
In accordance with the Housing and Community Development Act of 1974, as
amended, and with 24 CFR 570.303 of the Community Development Block Grant
regulations, the grantee certifies that:
(a) It possesses legal authority to make a grant submission and to execute a
community development and housing programs;
(b) Its governing body has duly adopted or passed as an official act a
resolution, motion or similar action authorizing the person identified as
the official representative of the grantee to submit the final statement
and amendments thereto and all understandings and assurances contained
therein, and directing and authorizing the person identified as the
official representative of the grantee to act in connection with the
submission of the final statement and to provide such additional
information as may be required;
(c) Prior to submission of its final statement to HUD, the grantee has:
1. Met the citizen participation requirements of 24CFR570.301(b) ;
2. Prepared its final statement of c=munity development objectives and
projected use of funds in accordance with 24CFR570.301 (c) and made
the final statement available to the public;
(d) It is following a detailed citizen participation plan which:
1. Provides for and encourages citizen participation, with particular
emphasis on participation by persons of low and moderate income who
are residents of slum and blighted areas and of areas in which funds
are proposed to be used, and provides for participation of residents
in low and moderate income neighborhoods as defined by the local
jurisdiction;
2. Provides citizens with reasonable and timely access to local meetings,
information, and records relating to the grantee's proposed use of
funds, as required by the regulations of the Secretary, and relating
to the actual use of funds under the Act;
3. Provides for technical assistance to groups representative of persons
of low arra moderate income that request such assistance in developing
proposals with the level and type of assistance to be determined by
the grantee;
4. Provides for public hearings to obtain citizen views and to respond to
proposals and questions at all stages of the cvmmmity development
program, including at least the development of needs, the review of
proposed activities, and review of program performance, which hearings
shall be held after adequate notice, at times and locations convenient
to potential or actual beneficiaries, and with accommodation for the
ham ;
5. Provides for a timely written answer to written complaints and
grievances, within 15 working days where practicable; and
6. Identifies how the needs of non-English speaking residents will be met
in the case of public hearings where a significant number of non-
English speaking residents can be reasonably expected to participate;
(e) The grant will be conducted and administered in compliance with:
1. Title VI of the Civil Rights Act of 1964 (Public law 88-352, 42 U.S.C.
2000d et sea.) ; and
2. The Fair Housing Act (42 U.S.C. 3601-20) ;
14
(f) It will affirmatively further fair housing;
(g) It has developed its final statement of projected use of funds so as to
give maximum feasible priority to activities which benefit low and
moderate income families or aid in the prevention or elimination of slums
or blight; (the final statement of projected use of funds may also include
activities which the grantee certifies are designed to meet other
community development needs having a particular urgency because existing
conditions pose a serious and immediate threat to the health or welfare of
the community, and other financial resources are not available) ; except
that the aggregate use of CDBG funds received under section 106 of the
Act, and if applicable, under section 108 of the Act, during the 1990 or
subsequent program year(s) (a period specified by the grantee consisting
of one, two, or three consecutive years) , shall principally benefit
persons of low and moderate income in a manner that ensures that not less
than 60 percent of such funds are used for activities that benefit such
person during such period;
(h) It has developed a community development plan, for the period specified in
paragraph (g) above, that identifies community development and housing
needs and specifies both short and long-term community development
objectives that have been developed in accordance with the primary
objective and requirements of the Act;
(i) It is following a current housing assistance plan which has been approved
by HUD;
(j) It will not attempt to recover any capital costs of public improvements
assisted in whole or in part with funds provided under section 106 of the
Act or with amounts resulting from a guarantee under section 108 of the Act
by assessing any amount against properties owned and occupied by persons of
low and moderate income, including any fee charged or assessment made as a
condition of obtaining access to such public improvements, unless;
1. Funds received under section 106 of the Act are used to pay the
proportion of such fee or assessment that relates to the capital costs
of such public improvements that are financed frm revenue sources
other than under Title I of the Act; or
2. For purposes of assessing any amount against properties owned and
occupied by person of moderate income, the grantee certifies to the
Secretary that it lacks sufficient funds received under section 106 of
the Act to comply with the requirements of subparagraph (1) above;
(k) Its notification, inspection, testing and abatement procedures concerning
lead-based paint will comply with 24CFR570.608;
(1) It will comply with the acquisition and relocation requirements of the
Uniform Relocation Assistance and Real Property Acquisition Policies Act of
1970 as required under 24CFR570.606(a) and Federal implementing regulations; the
requirements in 24CFR570.606(b) governing the residential antidisplacement and
relocation assistance plan under section 104(d) of the Act (including a
certification that the grantee is following such a plan) ; the relocation
requirements of 24CFR570.606(c) governing displacement subject to section
104(k) of the Act; and the relocation requirements of 24CFR570.606(d)
governing optional relocation assistance under section 105(a) (11) of the
Act; and
(m) It will comply with the other provisions of the Act and with other
applicable laws.
(n) "In accordance with Section 519 of Public Law 101-144, the 1990 HUD
Appropriation Act, Contra Costa County certifies that: it has adopted and
is enforcing a policy prohibiting the use of excessive force by law
enforcement agencies within its jurisdiction against any individuals,
engaged in non-violent civil rights demonstration.
(o) The Grantee certifies, to the best of his or her knowledge and belief,
that:
(1) No Federal appropriated funds have been paid or will be paid, by or on
behalf of the undersigned, to any person for influencing or attempting to
15
v
influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress in
connection with the awarding of any Federal contract, the making of any
Federal grant, the making of any. Federal loan, the entering into of any
cooperative agreement, and the extension, continuation, renewal, amendment,
or modification of any Federal contract, grant, loan, or cooperative
agreement.
(2) If any funds other than Federal appropriated funds have bee paid or
will be paid to any person for influencing or attempting to influence an
officer or employee of any agency, a Member of Congress, an officer or
employee of Congress, or an employee of a Member of Congress in connection
with this Federal contract, grant, loan, or cooperative agreement, the
undersigned shall ccuplete arra submit Standard' Form-LLL, "Disclosure Form
to Report Lobbying, It in acconlance with its instructions.
(3) The undersigned shall require that the language of this certification
be included in the award documents for all subawards at all tiers (inclu-
ding subcontracts, subgrants, and contracts under grants, loans, and
cooperative agreements) and that all subrecipients shall certify and
disclose accordingly.
This certification is a material representation of fact upon which reliance
was placed when this transaction was made or entered into. Submission of
this certification is a prerequisite for making or entering into this
transaction imposed by section 1352, title 31, U.S. Code. Any person who
fails to file the required certification shall be subject to a civil
penalty of not less than $10,000 and not more than $100,000 for each such
failure.
16
C=FICATION REGARDING DRLvrF JE E WORKPLACE REQUEUMUTM
'Ihe certification set out below is a material representation upon which reliance
is placed by the U.S. Department of Housing and Urban Development in awarding
the grant. If it is later determined that the grantee knowingly rendered a
false certification, or otherwise violates the requirements of the Drug-Free
Workplace Act, the U.S. Department of Housing and Urban Development, in addition
to any other remedies available to the Federal Government, may take action
authorized under the Drug-Free Workplace Act.
C2RTIF ICA'I'ION
A. The grantee certifies that it will provide a drug-free workplace by:
(a) Publishing a statement notifying employees that the unlawful
manufacture, distribution, dispensing, possession or use of a
controlled substance is prohibited in the grantee's workplace and
specifying the actions that will be taken against employees for
violation of such prohibition;
(b) Establishing a drug-free awareness program to inform employees about -
(1) The dangers of drug abuse in the workplace;
(2) The grantee's policy of maintaining a drug-free workplace;
(3) Any available drug counseling, rehabilitation, and employee
assistance programs; and
(4) The penalties that may be imposed upon employees for drug abuse
violations occurring in the workplace;
(c) Making it a requirement that each employee to be engaged in the
performance of the grant be given a copy of the statement required by
Paragraph (a) ;
(d) Notifying the employee in the statement required by paragraph (a)
that, as a condition of employment under the grant, the employee will
(1) Abide by the terms of the statement; and
(2) Notify the employer of any criminal drug statute conviction for a
violation occurring in the workplace no later than five days
after such conviction;
(e) Notifying the U.S. Department of Housing and Urban Development within
ten days after receiving notice under subparagraph (d) (2) from an
employee or otherwise receiving actual notice of such conviction;
(f) Taking one of the following actions, within 30 days of receiving
notice under subparagraph (d) (2) , with respect to any employee who is
so convicted -
(1) Taking appropriate personnel action against such an employee, up
to and including termination; or
(2) Requiring such employee to participate satisfactorily in a drug
abuse assistance or rehabilitation program approved for such
purposes by a Federal, State, or local health, law enforcement,
or other appropriate agency;
(g) Making a good faith effort to continue to maintain a drug-free work-
place through implementation of paragraphs (a) , (b) , (c) , (d) , (e) and
(f) .
B. The grantee shall -insert in the space provided on the attached "Place of
Performance" form the site(s) for the performance of work to be carried out
with the grant funds (including street address, city, county, state, and
zip code) . The grantee further certifies that, if it is subsequently
determined that additional sites will be used for the performance of work
under the grant, it shall notify the U.S. Department of Housing and Urban
Development immediately upon the decision to use such additional sites by
suh mitting a revised "Place of Performance" form.
17
Appendix A to Certificatign
Certification fcr Contracts. Grants, Loans. and Cooperative
The mlersigned certifies, to the best of his or her knowledge and belief, that:
(1) No Federal appropriated funds have been paid or will be paid by or on
behalf of the undersigned, to any person for influencing or attempting to
influence an officer or employee of any agency, a Member of Congress, an officer
or employee of Congress, or an employee of a Member of Congress in connection
with the awarding of any Federal contract, the making of any Federal grant, the
making of any Federal loan, the entering into of any cooperative agreement, and
the extension, continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.
(2) If any funds other than Federal appropriated funds have been paid or will
be paid to any person for influencing or attempting to influence an officer or
employee of Congress, or an employee of a Member of Congress in connection with
this Federal contract, grant, loan, or cooperative agreement, the undersigned
shall complete and submit Standard Form-LLL, "Disclosure Form to Report
Lobbying," in accordance with its instructions.
(3) The undersigned shall require that the language,of this certification be
included in the award doc=ents for all subawards at all tiers (including
subcontracts, subgrants, and contracts under grants, loans, and cooperative
agreements) and that all subrecipients shall certify and disclose accordingly.
This certification is a material representation of fact upon which reliance was
placed when this transaction was made or entered into. Submission of this
certification is a prerequisite for making or entering into this transaction
imposed by section 1352, title 31, U.S. Code. Any person who fails to file the
required certification shall be subject to a civil penalty of not less than
$10,000 for each such failure.
Statement for Loan Guarantees and Loan Insurance °
the undersigned states, to the best of his or knowledge and belief, that:
If any funds have been paid or will be paid to any person for influencing or
atteapting to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member of
Congress in connection with this commitment providing for the United States to
insure or guarantee a loan, the undersigned shall complete and submit Standard
Form-LLS, "Disclosure Form to Report Lobbying," in accordance with its
instructions.
Submission of this statement is a prerequisite for making or entering into this
transaction imposed by section 1352, title 31, U.S. Code. Any person who fails
to file the required statement shall be subject to a civil penalty of not less
than $10,000 and not more than $100,000 for each such failure.
c/mb/gencond.doc
18
ATTACEMENr A
SSB OF CCNDOCT
CDBGMCIPIENTS
IntroducticKi
Elected officials, employees of Ccamminity Development Block Grant recipients and
contractors are those responsible for administering the entitlement program and
are also responsible for the programs integrity. Following sound business prac-
tices, prescribed standards of conduct and HUD requirements will not only pro-
tect HUD dant funds but also those who administer the program.
Purpose
This notice provides information on specific activities that you must avoid and
identifies key HUD requirements that must be met. The prohibited activities
listed here reflect problem areas that have gotten block grant recipients into
trouble in the past. The purpose of this flyer is to prevent fraud and program
abuse by alerting key officials to these problems ahead of time.
771►iiTt-t,nri ties
The pertinent laws and regulations that apply to the CABG Entitlement program
that you should have copies of are:
- Housing and Comimmity Development Act of 1974 as amended in 1983.
- Cam wn.ity Development Block Cant Regulations (24CFR Part 570) .
a
If you do not have copies of these requirements or need further information,
contact your local HUD office.*
Program I and Prohibited Act:Lv:Lt jes;
1. Conflict of Interest
CDBG Regulations (24CFR, Part 570.611) prohibit conflicts of interest. For
any CABG activities under your control or influence you ICY NOT:
a. Obtain personal or financial interest or benefits including money,
favors, gratuities, entertainment or anything of value that might be
interpreted as conflict of interest.
b. Obtain a direct or indirect interest in any contract, subcontract or
agreement for any CDBG activity. his prohibition extends to
contracts in which your spouse, minor child, dependent or business
associate may have personal or financial interest. Mus prohibition
extends for a period of one year after you leave your position with a
CABG activity or program.
C. HUD may grant an exception to this conflict of interest provision if
it determines that such an exception will enhance the effectiveness of
the CDBG project. Requests for such exceptions must be made in
writing to the local HUD office.
2. Procurement and Contractincr
OMB Circular A-102, Uniform Requirements for Assistance to State and Focal
Goverrments, Attachment O, applies to the CDBG program. It provides that
you VAY NOT engage. in any of the following practices in your procurement
and contract administration:
a. Circumvent competitive bidding requirements by:
- failing to advertise for sealed bids or soliciting proposals arra
engaging in noncmVetitive negotiation;
5
failing to use established evaluation criteria in negotiations;
splitting bids by breaking down contracts into small parts so
that purchase order procedures can be used except to meet
Minority/Women Business Enterprise goals;
favoring or providing a competitive advantage to any one firm or
individual;
identifying the names of those invited to bid; and
preparing fictitious bids to simulate ccmpetition.
b. Fail to adhere to contract award requirements by:
- allowing excessive price charges;
- awarding contracts to other than the low bidder without adequate
justifica tion; and
- accepting a bid that does not contain a price for all items or
services included in the I.naitation to Bid form.
C. Fail to verify contractual and programmatic compliance by contractors
by:
- authorizing payment for work not completed;
- falsifying inspection reports;
- altering contractor invoices; and
- misusing modification or change orders.
CABG regulations state that you MIST NOT:
Use firms and individuals on HUD's Consolidated List of Debarred, Suspended and
ineligible Contractors and Grantees.
3. Financial Manaaement and Recording Sistems
You MOST comply with the following requirements of CMB Circular A-102,
Attachments C, G, and CDBG regulations.
You IST:
a. Establish a special ledger account for all CABG monies.
b. Establish a special ledger account for all CABG monies.
C. Maintain financial records including:
- a register of cash receipts and d is pursements;
- a record of all noncash transactions;
- general ledger to show the status of each CABG account;
- a fixed account ledger, and
- a record of lump-sum drawdowns, Treasury checks received and
balances of Federal funds.
d. Ensure that you maintain financial records. Financial records and
files must bema?*+ta;*ed for three years.
e. Use income generated from grant activities for other eligible
activities.
f. Use program income before drawing additional grant funds to pay for
allowable program expenses.
You NET NOT draw down more funds than are needed for your CDBG activities and
those of subgrantees. .
4. Cost Allowability
You MSP comply with CMB Circular A-87, Cost principles for State and Local
Goverrm*ents. You HAY NUT spend CABG funds on °ineligible activities
including:
a. aq)enses required to carry out the regular responsibilities of the
general local government.
6
b. Partisan political activities (e.g., contributions toward political
campaigns, voter registration or candidate forums) .
CABG regulations state that you MM NO
Use CDBG funds to assist buildings used for the general conduct of
government (e.g. , city halls, county administration buildings, etc.) .
5. Program Monitoring
CRIB Circular A-102, Attachment 1, States that you FWT constantly monitor
the performance of grant-supported activities to assure that time schedules
are being met, projected work units by time periods are being accomplish,
and other performance goals are being achieved.
LEM suggests that you:
a. Keep records of your on-site visits to subgrantees and contractors.
b. Place special emphasis on your monitoring of the highest risk
subrecipients and contractors.
7
PAYMENT PRC7MIMS
1. Payment Basis. County shall in no event pay to the Contractor a stun in
excess of the total amount specified in the Payment Limit of this
Agreement. Subject to the Payment Limit, it is the intent of the parties
hereto that the total payment to Contractor for all services provided for
County under this Agreement shall be only for costs that are allowable
costs (see Paragraph 3 below) and are actually incurred in the performance
of Contractor's obligations under this Agreement. All payments made under
this Agreement shall be from Federal funds only. No general County funds
shall be expended under this Agreement. If, for any reasons whatsoever,
County does not receive such Federal funds, Contractor agrees that County
shall have no payment obligation hereunder.
2. Payment Amouumts. Subject to later ad-lustments in total rayments in
accordance with the below provisions for Cost Report and Settlement,
Audits, arra Audit Exceptions, • and subject to the Payment Limit of this
Agreement, County will pay Contractor an amount equal to Contractor's
allowable costs that are actually incurred, but subject to to "Budget of
Estimated Program E}cpendituresll contained in the Project Work Program.
3. AUnwable Costs. Contractor's allowable costs are only those which are
determined in accordance with all Federal regulations, guidelines,
bulletins, and circulars pursuant to Title I of the Housing and Community
Development Act of 1974, as published in the Federal Register, Volume 39,
No. 220, Wednesday, November 13, 1974, as may be revised and amended. All
of the aforesaid documents are by this reference incorporated herein.
Costs inured in carrying out the project, whether charged to the project
on a direct or an indirect basis, must be in conformance with the
requirements of OMB Circular A-87, "Cost Principles for Stats and Local
Governments", CMB Circular A-122, "Cost Principles for Non-Profit
Organizations", and C1B Circular A-110, "Grants and Agreements with
Institutions of Higher Education, Hospitals, and Other Non-Profit
Organizations", except to the extent inconsistent with the aforesaid
documents.
4. Payment Demands. Contractor shall submit written demands for payment in
accordance with the above. Said demands shall be made on County Demand
Form D-15 and in the manner and form prescribed by County. Contractor
shall submit said demands for payment for services rendered no later than
60 days from the end of the month in which said services are actually
rendered. Upon approval of said payment demands by the head of the County
Department for which this Agreement is made or his designee, County will
make payments as specified above.
5. Right to Witbbold. County has the right to withhold payment to the
Contractor by County notifying Contractor in writing if (a) the Contractor
has failed to perform its duties under this Agreement, or has insuffi-
ciently documented same, or (b) the Contractor has neglected, failed or
refused to furnish information or to cooperate with any inspection, review
or audit of its program, work or records, or (c) Contractor has failed to
sufficiently itemize or document its demands for payment. .
6. Payment Adjustments. If any funds are expended by the Contractor in
violation of any of the terms and conditions of this Agreement, Canty may
make necessary adjustments in payments to Contractor on account of such
unauthorized or illegal expenditure. No such action taken by County shall
entitle Contractor to reduce salaries, wages, or supportive services for
any participant or to expend less during the effective period of this
Agreement than those sums called for in the Project Work Program. Any such
reduction in expenditures may be deemed sufficient cause for termination.
Contractor shall reimburse County for any allocated monies which are
expended in violation of this Agreement or used for unauthorized or illegal
expenditures.
7. Cost P4port and Set}ice. No later than sixty (60) days following the
termination of this Agreement, Contractor shall submit to Canty a cost re-
port in the form required by County, showing the allowable costs that have
actually been incurred by Contractor under this Agreement. If said cost
report shows that the allowable costs that have actually be i nm=red by
Contractor under this Agreement exceed the payments made by County pursuant
8
to Paragraph 2 (Payment Amounts) above, County will remit any such excess
amount to Contractor, but subject to Payment Limit of this Agreement. If
said cost report shows that the payments made by County pursuant to
Paragraph 2 (Payment Amounts) above exceed the allowable costs that have
actually been incurred by Contractor under this Agreement, Contractor shall
remit any such excess amount to County.
The Contractor shall provide County with a Certification of its Cost Report
required under this Contract. Said Certification shall provide a full,
true, and accurate accounting of the actual cost of services under this
Contract, including all applicable expenditures, revenues, and indirect
cost allocations, and any other pertinent allocations which are in
connection with Contractor's operations that are not a part of this
Contract.
8. Audis. The records of the Contractor may be audited by the County, State
or United States government, in addition to any certified cost report or
audit required by Paragraph 7 (Cost Report and Settlement) . Any certified
cost report or audit required by Paragraph 7 shall be submitted to County
by Contractor within such period of time as may be expressed by applicable
State or Federal regulations, policies or contracts, but in no event later
than 18 months from the termination date of this Agreement. If such
audit(s) show that the payments made by County pursuant to Paragraph 2
(Payment Amounts) above exceed the allowable costs that have actually been
incurred by Contractor under this Agreement, including any adjustments made
pursuant to Paragraph 7 (Cost Report and Settlement) above, then Contractor
agrees to pay to County within 30 days of demand by County any such excess
amount. If such audit(s) show that the allowable costs that have actually
been incurred by Contractor under this Agreement exceed the payments made
by County pursuant to Paragraph 2 (Payment Amounts) above, including any
adjustments made pursuant to Paragraph 7 (Cost Report and Settlement)
above, then County agrees to pay to Contractor any such excess amount, but
subject to Payment Limit of this Agreement.
9. Audit otu ns. In addition to its obligations under Paragraph 8
(Audits) above, Contractor agrees to accept responsibility for receiving,
replying to and/or complying with any audit exceptions by appropriate
County, State or Federal audit agencies occurring as a result of its
performance of this Agreement. Contractor also agrees to pay to the County
within 30 days of demand by County the full amount of the County's
liability, if any, to the State and/or Federal government resulting from
any audit exceptions, to the extend such are attributable to the
Contractor's failure to perform property any of its obligations under this
Agreement.
10. Required Audit Departs. If the contractor recieves $25,000 or more in
Federal funds in any fiscal year through the County, Contractor shall
provide to the County an audit conforming to the requirements set forth in
the most current version of office and Management Circular A-133. If
Contractor receives $25,000 to $100,000 in Federal funds in any fiscal year
through the County, this audit shall be conducted by contractor and
recieved by the County every two years. If the Contractor receives
$100,000 or more in Federal funds in any fiscal year through the County,
this audit shall be conducted by the Contractor and received by the County
every year. The County may withhold the estimated cost of the audit Erten
Contractor until the audit is recieved by the County.
0
9
ATTACBMERr KB"
IUD03RDS TO BE MINIAINED
I. For each activity determined to benefit low and moderate income persons
based on the creation of jobs, SUB GRANTEE shall provide or cause to be
provided the documentation described in either (A) or (B) below.
A. Where the SUB-GRANTEE chooses to document that at least 51 percent of
the jobs will be available to low arra moderate income persons,
documentation for each assisted business shall include:
1. A copy of an employment containing:
'a. A ca mitment by the business that it will make at least 51
percent of the job available to law and moderate income persons
and will provide training for any of those jobs required special
skills of education;
b. A listing by job title of the permanent jobs to be created
indicating which jobs will be available to low and moderate
income persons, which jobs require special skills or education,
s and which jobs are part-time, if any; and
C. A description of actions to be taken by the recipient and
business to ensure that low and moderate income persons receive
first consideration for those jobs; and
2. A listing by job title of the permanent jobs filled, and which jobs of
those were available to low and moderate incoam persons, and
description of how first consideration was given to such persons for
those jobs. The description shall include what hiring process was
used; which low and moderate income persons were interviewed for a
particular job; and which low and moderate income persons were hired.
B. Where the SUB-GRANTEE chooses to document that at least 51 percent of
the jobs will be held by low and moderate inane persons,
documentation for each assisted business shall include:
1. A copy of an employment plan containing:
a. A commitment by the businesses that at least 51 percent of the
jobs, on a full-time equivalent basis, will be held- by low and
moderate income persons; and
10
NCO
EUMOWC
"Necessary or Appropriate" Determination
A "necessary or appropriate" determination must be made by the SUB-GRANTEE when
CDBG assistance is provided to a private, for-profit entity for economic
development activities. This attachment provides guidance on making and
documenting that determination when financial assistance is provided directly to
private, for-profits. This guidance does not apply to technical assistance
provided to such entities.
The SUB-GRANTEE'S files are expected to contain documentation of the financial
analysis of the business' need for assistance, as well as public benefit factors
that were considered in making the determination that the assistance is necessary
or appropriate. As circumstances' warrant, it may be appropriate for the
SUB-GRANTEE'S files to include additional documentation, such as a market and/or
feasibility study or a management assessment background. HUD will review this
documentation to assure that the SUB-GRANTEE has conducted the analysis, that
the decision to fund the activity is. defensible, and that the amount of
assistance is reasonable in relation to the public benefit to be achieved. HUD
will accept the SUB'S determination unless the amount of assistance
provided is clearly unreasonable taking into account both the actual needs of
the business in making the project financially feasible and the extent of public
benefit the SUB-GRANTEE expected to be derived.
Public Benefit Determination
For the public benefit portion, the type of factors considered might include:
the number and types of jobs to be created or retained; the other development
which is likely to be stimulated in the area by the activity; increases to the
tax base including property, sales and income taxes in the area; or increases in
needed services which result from the activity. This list is not exclusive, but
in any case the is expected to provide clear documentation on the
nature and amount of the public benefit to be achieved.
Financial Analysis
Documentation should consist of a financial analysis of the business entities'
needs using the following steps. Also, included as an attachment is a list of
publications which provide "industry standards" which may be useful in
conducting this analysis.
a. Determination Project T'ype. There are two basic types of projects: "real
estate" projects and "user" projects. Determining the project type is
important since each is evaluated differently.
i. In a real project, the private developer buys/builds/renovates a piece
of real property with the goal of leasing that property to another
party for a rent in excess of expenses and department service.
Typical projects of this type are hotels, office buildings and
shopping centers.
ii. In a user project, the entity seeking the .assistance is also the
owner/lessee and the occupant/user of the property. Typically user
projects involve the construction of or an addition to an industrial
or ccumercial facility, the procurement of equipment or the user of
working capital.
iii. There may also be hybrid projects. An example is the manufacturing
company which. creates a subsidiary or independent entity to build and
own a facility which the manufacturing ca pany leases. In such
situations the analysis must discover which entity/transaction is in
need of CDBG assistance, for, as detailed below, user and real estate
projects should be evaluated by different criteria.
Suhni.ssion by the applicant of cash flow proformas, projected balance sheets and
profit and loss statements are necessary for evaluating both real estate and
user types of projects.
11
b. Evaluate Proposed Project Costs (the uses of funds to complete the
project) . Crosscheck costs with appropriate industry standards. The goal
is to conclude that all costs are reasonable. Crosschecking should include
hard and soft costs, particularly developer's fees.
C. Verify and Maximize Private Sources of Funding (the sources of funds
necessary to complete the project) . Both private debt and equity must be
verified. Verification means ascertaining that: the source of funds is
ccmunitted; that the terms and conditions of the committed funds are known;
and the source has the capacity to deliver. All private sources should be
maximized for the given project. No CDBG funds should substitute for
available private funds.
d. Determine Reason for the Need for CDBG Assistance to Complete the Project.
There are three general, justifiable reasons for CDBG assistance to both
real estate and user projects.
i. Financing Gap. The private sector can maximally raise only a portion
of the debt and equity funds necessary to complete the project. A gap
between sources and uses exists and CDBG fills the gap.
ii. Rate of Return. The private sector can raise sufficient debt and
equity to cmplete the project, but the returns to the developer/user
are inadequate to motivate an "economic person" to proceed with the
project. That is, project risks outweigh rewards. Evaluation of the
rate of return argument is made differently for real estate and user
projects-
For real estate projects, the rate of return is usually measured by one or
more of the following:
*
Equity Return Rate = annual cash flow (income after debt expenses and
service) divided by cash equity. Also referred to as: cash-on-cash
return, or return on equity/investment (ROI) .
* Going-In Capitalization Rate = annual net operating income divided by
present value of project income or purchase price of the project.
For user projects, the measurement of the rate of return is more varied due
to the trams difference among industries with respect to accounting
and historical returns. Typically, user projects profits can be measured
by operating rations such as:
* profit before taxes/tangible networth (expressed as a percent)
* profit before taxes/total assets (expressed as a percent)
* sales/net fixed assets
* sales/total assets
other important underwriting issues to consider in user projects include
officers' compensation and ratios of liquidity to coverage which help to measure
an industrial ccmpany's health. Liq idity is a measure of the quality and
adequacy of current assets to meet current obligations as they come due.
Coverage ratios measure a firm's ability to service debt.
iii. loccational. For either a real estate or user project in its most
simplified version, the private sector entity is deciding between Site
A and Site B for it's project. The CDBG grantor wants the project at
Site A; but the private entity argues that the project will cost less
at Site B and will require subsidy to equalize the costs in order to
locate at Site A. The reasons for the cost differential are varied and
must be evaluated on a case by case basis. Most common reasons are:
on-site costs (e.g., soil conditions) , prices of land (downtown vs.
suburban) , distance to markets, and special off-site costs (e.g.,
road, sewers, etc.) . The objective here is to quantify the cost
differential to the extent possible between Site A and B, so that the
financial needs of the business may be judged in relationship to the
public benefit and avoid an undue enrichment of the business.
12