20-715ORDINANCE NO. 20-715
AN ORDINANCE OF THE CITY OF DENTON, AUTHORIZING THE CITY MANAGER TO
EXECUTE A FUNDING AGREEMENT BETWEEN THE CITY AND F AIROAKS OF
DENTON INCORPORATED TO PROVIDE HOME INVESTMENT PARTNERSHIP
PROGRAM FUNDS FOR PUBLIC IMPROVEMENTS OF F AIROAKS SENIOR COMPLEX
COSTS FOR THE PURCHASE AND INSTALLATION 25 HVAC UNITS OF A
COMMUNITY VILLAGE IN DENTON, TEXAS; AUTHORIZING THE EXPENDITURE OF
FUNDS NOT TO EXCEED $105,338.00; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, The City Council of the City of Denton recognizes the need to assist low and
moderate-income families in securing safe, sanitary and decent housing; and
WHEREAS, the City has received funds from the U.S. Department of Housing and Urban
Development under the National Affordable Housing Act of 1990 as amended; and
WHEREAS, the City Council approved the 2018 Action Plan for Housing and
Community Development which includes an authorized budget expenditure of funds for public
improvement ofFairoaks Senior Complex; and
WHEREAS, the City has adopted a budget for such funds included therein an authorized
program budget for expenditure of funds, for operating costs and project :funding for the Fairoaks of
Denton Incorporated; and
WHEREAS, Fairoaks of Denton Incorporated provides housing to assist low income
seniors with affordable housing; and
WHEREAS, the City Council deems it in the public interest to enter into an agreement
for affordable housing to provide much needed services for Denton residents; NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings and recitations in the preamble of this ordinance are
incorporated herein by reference as true and as if fully set forth in the body of this ordinance.
SECTION 2. The City Manager is hereby authorized to execute the attached Agreement
between the City of Denton and Fairoaks of Denton Incorporated to provide affordable housing
noted therein.
SECTION 3. The City Council hereby authorizes the City Manager to expend funds in
the manner and amount specified in the Agreement, not to exceed $105,338.00, and to take any
other actions necessary to complete the City's obligations under the Agreement.
SECTION 4. This ordinance shall become effective immediately upon its passage and
approval.
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The motion to approve this ordinance was made by GeU/lP i/uDs;?erif and
seconded by ,;Jo fl:/\/ £y I'! N , the ordinance was passed and approved by
the following vote ~ -_a_]:
Aye Nay Abstain Absent
Mayor Chris Watts: I
Gerard Hudspeth, District 1: ✓
Keely G. Briggs, District 2: ✓
Jesse Davis, District 3: ✓
John Ryan, District 4: ✓
Deb Armintor, At Large Place 5 /
Paul Meltzer, At Large Place 6: ✓
PASSED AND APPROVED this the 1--t'f day of __ ~...=,=.....=.....c..-· ___ _,, 2020.
a~/
CHRIS WATTS, MAYOR
APPROVED AS TO LEGAL FORM:
AARON LEAL, CITY ATTO Y
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AGREEMENT BETWEEN THE CITY OF DENTON AND
AND FAIROAKS DENTON INC.
This HOME Agreement ("AGREEMENT") is made and entered into by and between the City of Denton,
a Texas municipal corporation ("CllY"}, acting by and through its City Manager, pursuant to ordinance,
and Fairoaks of Denton Incorporate~ a Texas non-it corporation, ("OWNER"), acting by and through
the Executive Director on this the~ day of~-~4-~"'-='---"4--' 2ojD_.
WHEREAS, CllY is the administrator of HOME Investment Part ership Program funds (HOME Funds)
received from the U. S. Department of Housing and Urban Development (HUD) under Title II of the
Cranston-Gonzalez National Affordable Housing Act of 1990, as amended (the Act); and
WHEREAS, the purpose of the HOME Investment Partnership Program (the HOME Program) is to
increase the supply of decent, safe, sanitary, and affordable housing for very low income, low income and
moderate-income households; and
WHEREAS, CllY has designated the Community Development Division as the City Department
responsible for the administration of this Agreement and all matters pertaining thereto; and
WHEREAS, proposes to use HOME funds for an eligible project under the HOME Regulations whereby
OWNER will rehab twenty-five (25} units elderly housing project in Denton, Texas, to be known as Fairoaks
Denton, in the City of Denton; and
WHEREAS, the CllY has recommended approval of a forgivable payment loan to OWNER subject to
the terms specified herein below, subject to the terms specified herein below; and
WHEREAS, CllY wishes to engage OWNER to carry out the project as specified in this Agreement;
NOW, THEREFORE, the parties hereto agree, and by the execution hereof are bound, to the mutual
obligations and to the performance and accomplishment of the conditions hereinafter described.
1. THE PROJECT
A. Project Description
1. The Project is a planned 25-unit rental rehab located in Denton, Texas at 1950 Lattimore, Denton,
TX 76209 and more particularly described in Exhibit A (the Property). The Project consists of seven
(7) one-story residential structures, each containing 2-3 units}. The overall unit breakdown
includes: Twenty-Five 1-bedroom units, that will be income and rent restricted at 50% AMI.
2. A summary of the Project, including unit breakdowns, unit and on-site amenities, and key
financing sources and terms, is attached as Exhibit B.
B. Tasks and Schedule
To ensure that the Project progresses adequately toward completion, OWNER must achieve the
following benchmarks.
1. Final Plans and Specifications: No later than March 12, 2020 and prior to initiating con struction
activity, OWNER must provide evidence to CITY that all Code and Physical Requirements will be
met (see Section 7 CONSTRUCTION, PROPERlY STANDARDS AND MANAGEMENT section below).
2. Construction: Unless otherwise extended by CllY, OWNER must begin construction on the Project
no later than March 15, 2020 and substantially complete construction within twelve (12) months.
Per the requirements of 24 CFR 92.2, in any event OWNER must begin construction no later than
twelve (12) months from the date of execution of AGREEMENT.
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3. Cost Certification: Within one hundred-twenty {120) days of completing construction, OWNER
must provide a cost certification prepared by an independent certified public accountant outlining
the final sources and uses of all funds or a summary and backup of bids.
4. Completion Report: Prior to final disbursement of funds, OWNER must provide CITY with
demographic data on the initial occupants of all HOME-assisted units in the Project in order to
complete the Project in HU D's IDIS system. If the Project is not completed in HU D's IDIS system
within twenty-four (24) months of the date of execution of AGREEMENT, CITY may cancel its
commitment of funding, and the OWNER shall repay any HOME funds previously advanced for
the Project. In any case, if the Project is not completed in HU D's IDIS system within four years of
the date of AGREEMENT, the Project will be considered terminated prior to completion and per
the requirements of 24 CFR 92.205(e), and all HOME funds must be repaid by the OWNER.
5. Absolute Lease-Up Deadline: All HOME units must be occupied within eighteen (18) months of
Project Completion, as defined in section 2.A. herein. Any HOME unit that is not occupied within
eighteen (18) months will be deemed ineligible pursuant to 24 CFR 92.252, and the OWNER will
repay any HOME funds attributable to those units based upon a revised cost allocation analysis
completed by CITY.
C. Budget
1. HOME Investment: Conditioned upon the availability of HOME Program Funds, and OWNER's
compliance with the conditions set out herein, CITY intends to provide up to $105,338.00 in HOME
funds to OWNER toward eligible project costs. In no case will CITY's funding of the Project be less
than $1,000 per HOME-assisted unit or more than the maximum per-unit subsidy allowed under
24 CFR 92.250(a).
2. The maximum subsidy limits are based on bedroom size (Amounts are effective 7 /1/2019.):
(a) 0-bedroom units are $142,4 11; and
(b) 1-bedroom units are $164,203; and
(c) 2-bedroom units are $198,034; and
(d) 3-bedroom units are $253,490; and
(e) 4-bedroom+ units are $282,398.
2. TERM
The term of AGREEMENT shall begin on the date represented by the date of the last signature of either
party executing AGREEMENT and shall expire upon completion of both the HOME Affordability Period and
Extended Use Period, as those terms are defined below.
The HOME Affordability Period, and the Covenant Running with the Land as outlined in section 5.A.4, shall
continue irrespective of any payment/payoff of the HOME Forgivable Payment Loan. Failure of the Project
to meet all applicable HOME requirements for the entire HOME Affordability Period will result in a
requirement that all HOME funds be repaid .
HOME Investment Partnership Program Affordability Period
HOME Activity HOME Investment Per Unit Length of Compliance /
Affordability Period
Homebuyer* and Rental housing Less than $15,000 5 years
$15,000 -$40,000 10 years acquisition and/or rehabilitation $40,000+ 15 years
New construction of rental housing Any$ 20 years
Refinancing of rental housing Any$ 15 years
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A. HOME Affordability Period: As a rehab rental project, the HOME Affordability Period during which
OWNER must maintain compliance with all applicable HOME rules shall begin with initial
occupancy of the Project and shall run for five (5) years following the date on which the Project
has met the requirements for Project Completion outlined in 24 CFR 92.2, which will require that
construction be complete, all HOME funds have been disbursed by CITY and drawn from the US
Treasury, and required completion data has been entered in HUD's IDIS system .
B. Establishment of Affordability Completion: Upon entering all required information in HU D's IDIS
system, CITY will notify OWNER of the actual date of Project Completion and the exact date of the
expiration of the HOME Affordability Period, which shall be calculated based on the date of
Project Completion. If necessary, OWNER shall execute an amendment to the Covenant Running
with the Land identifying the exact dates of expiration of the HOME Affordability Period and
Extended Use Period.
C. Extension of Agreement: Request for an extension must be in writ i ng and is to be submitted to
the Community Development Division, 601 E. Hickory Street, Denton TX 76205.
3. RESPONSIBILITIES
A. OWNER hereby accepts the responsibility for the performance of all services and activities, described
in the Work Statement attached hereto as Exhibit A and incorporated herein as if set forth at length,
in accordance with the Program Budget attached hereto as Exhibit Band incorporated herein as if set
forth at length, and as otherwise set forth herein, in a satisfactory and efficient manner as determined
by CITY, in accordance with the terms herein.
B. OWNER's executive director shall be OWNER's representative responsible for the management of all
contractual matters pertaining hereto, unless written notification to the contrary is received from
OWNER and approved by CITY.
C. The CITY's Housing Programs Manager will be CITY's representative responsible for the administration
of AGREEMENT.
D. OWNER shall comply with 2 CFR Part 200, Uniform Administrative Requirements, Cost Principals and
Audit Requirements for Federal Awards, Final Guidance, and the regulations found at 24 CFR Part 92.
E. OWNER shall not request disbursement of funds until they are needed for payment of eligible costs.
The amount of each request will be limited to the amount needed as per 24 CFR 92.504 (c)(3)(vHi).
F. OWNER understands that, in accordance with 2 CFR Part 200, suspension or termination may occur if
the OWNER materially fails to comply with any term of AGREEMENT. AGREEMENT may also be
terminated for convenience.
G. OWNER shal l not change the Program Budget without prior written approval from the CITY.
4. CITY'S & OWNER'S OBLIGATIONS
A. CITY shall provide funds in the amount of $105,338.00 or less in project funds to the OWNER for
specific housing projects and programs as described in the Work Statement, Exhibit A.
B. OWNER agrees to hold and save harmless the CITY, its officers and employees from any and all loss,
cost, or damage of every kind [including, property damage, bodily injury or death], nature or
description arising under AGREEMENT.
C. Environmental Review: CITY shall be responsible for performing an environmental review to insure
necessary compliances are met.
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1. HOME Funds will not be paid and costs cannot be incurred until CITY has conducted and
completed an environmental review and completed an Environmental Review Record as required
by 24 CFR Part 58.
2. The environmental review may result in a decision to proceed with, modify, or cancel the project.
Further, OWNER will not undertake or commit any funds to physical or choice limiting actions,
including if applicable, property acquisition, demolition, movement, rehabilitation, conversion,
repair or construction prior to the environmental clearance. Any violation of this section will:
(a) cause this AGREEMENT to terminate immediately;
(b) require OWNER to repay to CITY any HOME Funds received and forfeit any future payments
of HOME Funds; and
(c) OWNER must pay 10% of the HOME Funds to CITY as liquidated damages.
3. The Parties agree that CITY's actual damages in the event of OWNER violating this section are
uncertain and would be difficult to ascertain and may include a finding by HUD, a repayment of
funds to HUD by CITY or otherwise impact the CITY's HOME grant or other Federal grant funds.
Therefore, the Parties agree that payment of 10% of the Loan amount by OWNER to CITY under
this section is liquidated damages and not a penalty.
D. Mitigation. OWNER must take the mitigation actions if required. Failure to complete the required
mitigation action is an event of default under this AGREEMENT.
E. This AGREEMENT and the payments made hereunder are contingent upon receipt of U.S. Department
of Housing and Urban Development funds pursuant to the HOME Investment Partnerships Program,
and shall terminate immediately, notwithstanding the provisions of Article XIX hereof, should such
funds be discontinued for any reason.
F. Upon dissolution of the OWNER any remaining funds or assets derived from the expenditure of the
CITY's funds, hereinafter sometimes described as the CITY's HOME funds, proceeds or HOME-funded
projects, must be immediately reallocated to the CITY.
5. FORM OF FINANCING AND DISBURSEMENTS
A. Form -and Terms of Assistance
1. HOME Forgivable Payment Loan: CITY will provide HOME funding as a construction to permanent
forgivable payment loan to the Project. The term of the HOME Forgivable Payment Loan will
commence at execution of the Mortgage and Note and continue for a term of five (5) years from
the date of Project Completion as outlined in 24 CFR 92.2, which will require that construction be
complete, all HOME funds have been disbursed by CITY and drawn from the US Treasury, and
required completion data has bee n entered i n HUD's IDIS system.
The HOME Forgivable Payment Loan will carry (0%) interest (provided there is no default) and
shall be forgiven following expiration of the HUD-mandated minimum affordability period of five
(5) years, to commence on the date of project completion in described herein.
2. Security: The HOME Forgivable Payment Loan must be secured by a promissory note, a first-
position mortgage on the Property.
Owner agrees to execute any and all notes, security agreements, financing statements,
affordability covenants, builder's and mechanic's liens and deeds of trust and any other
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documents or amendments that are consistent with this AGREEMENT and are reasonably
necessary for perfection of City's lien or lien interests in the form submitted by Counsel for the
City. Borrower further agrees to cooperate with the City in re-signing any documents to correct
errors or omissions, if any, in any form or legal document required by the City or HUD.
3. Title Search/Insurance: Prior to the start of project, CITY will perform a preliminary title search.
Should any items on the search arise, OWNER shall provide a title insurance policy insuring the
Property. OWNER shall provide a title insurance policy insuring the Property in standard form
issued by a-title company authorized to do business in the State of Texas and acceptable to CITY.
The name of the insured shall be City of Denton, a Texas municipal corporation. The policy shall
show fee simple title to the Property in OWNER, subject only to such exceptions as CITY may
approve, be in the full amount of CITY's loan, contain a comprehensive coverage endorsement
and such other endorsements as CITY may require and shall insure that the mortgage constitutes
a valid {insert priority i.e first, second, etc.}-position lien on the Property, and that the Property
is free of all liens, encumbrances, restrictions or other matters of any kind whatsoever, with only
such exceptions from coverage as are satisfactory to CITY.
4. Covenant Running with the Land: OWNER must record a covenant running with the land, in form
satisfactory to CITY, that provides a means for enforcement of the affordability restrictions of 24
CFR 92.252. CITY's covenant running with the land must be enforceable against all successors in
interest to OWNER.
5. Reserved
CITY will require guarantees from the underlying corporate and individual OWNERs of the general
partner(s) of the OWNER, the individual OWNERs of any "shell entities" engaged in the ownership
of the OWNER and general partner(s), and from any other guarantors required by the other
financing sources investing in the Project, without limitation.
Guarantees shall include, at a minimum, the following terms:
(a) A guarantee of completion, ensuring that OWNER will construct, equip, and complete the
Project free and clear of liens substantially in accordance with the plans and specifications by
the date called for in section 1.8.2. Failure to complete the Project under these terms will
result in OWNER's and Guarantors' obligation to:
(i) pay all costs and expenses incurred in completing any unfulfilled obligations; and
(ii) pay to or reimburse CITY for all expenses incurred by CITY with respect to its carrying out
any of OWNER's unfulfilled obligations. This guarantee will expire upon CITY's final
inspection and approval ofthe Project's construction.
(b) An ongoing guarantee of performance, ensuring that the Project will be operated in
compliance with all applicable federal, state, and local laws or ordinances or regulations,
including but not limited to HOME regulations and fair housing laws. During the HOME
Affordability Period, failure to maintain the Project in compliance with all applicable laws, or
the inability to correct instances of noncompliance, will result in a requirement that the
OWNER and Guarantors satisfy any repayment obligation to HUD incurred by CITY under 24
CFR 92.503(b).
(c) A guarantee of annual deposits to a Replacement Reserve for the Project in an amount
consistent with the Loan Documents.
6. Ownership Entity: CITY's willingness to make the HOME Forgivable Payment Loan as anticipated
herein is contingent upon and made with specific reliance on the evaluation of the specific
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individuals and entities making up the OWNER. OWNER agrees that no sale or transfer of general
or limited partnership interests in the OWNER will be made without the prior written consent of
CITY.
B. Disbursement
1. CITY's HOME Loan is intended as construction financing. OWNER may request disbursements no
more than monthly and not less than quarterly from CITY during the construction period in
accordance with the terms set forth in this section.
2. Notwithstanding anything herein, CITY will draw HOME funds as needed to directly reimburse
itself for certain project-related soft costs applicable to the Project. These include but may not be
limited to costs incurred by CITY in the underwriting, review, and oversight of the Project prior to
completion and will include internal costs of CITY staff and external costs of CITY consultants. All
CITY project-related soft costs will be included in the total HOME investment and incorporated
into the HOME Forgivable Payment Loan.
3. Further, CITY shall retain the right to review and approve all draws for the Project, regardless of
whether the HOME Forgivable Payment Loan will be used to fund any given draw. For draws being
funded by other construction or permanent funding sources, CITY shall be provided with the draw
not less than 10 days prior to any monthly inspection and provided with the opportunity to
approve or object to the draw prior to payment by any funding source.
4. Conditions of Construction Draws: Proceeds of the HOME Loan will only be released to OWNER
for actually incurred HOME-eligible project costs. The obligation of CITY to approve any draw or
to make any disbursement of HOME funds is subject to the satisfaction of the following conditions
at the time of making such disbursement:
(a) OWNER shall not be in default under the terms of this Agreement or of any of the Loan
Documents, and no event shall exist, which by notice, passage of time, or otherwise would
constitute an event of default under this Agreement or any of the Loan Documents.
(b) The Project shall not have been materially damaged by fire or other casualty.
(c) CITY shall have received evidence satisfactory to CITY that all work and improvements
requiring inspection by any governmental authority having jurisdiction have been inspected
and approved by such authorities and by any other persons or entities having the right to
inspect and approve construction.
(d) OWNER shall have submitted at least ten (10) days prior to the date a disbursement is desired
a completed disbursement and such other appropriate source documentation as may be
required by CITY including, without limitation, the following:
i. Statements identifying all contractors, subcontractors and suppliers along with their
addresses, and identifying all labor and materials furnished to date along with the
amounts paid to date and the balances due and any change orders, as well as sworn
lien waivers executed by the contractors, subcontractors, and/or suppliers covering
all labor and materials identified in the prior request for disbursement approved by
CITY, said sworn statements and sworn lien waivers to be dated no less than five (5)
days prior to the date of the requested disbursement, or such other documentation
or supporting evidence as shall enable the Title Company to issue an endorsement to
the title policy, including receipts or other vouchers showing payments for labor,
payments to subcontractors and payments to material suppliers.
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ii. Evidence satisfactory to CITY that the Project and the contemplated use thereof are
permitted by and comply with all applicable use or other restrictions and
requirements in prior conveyances, zoning ordinances, or regulations that have been
duly approved by the municipal or other governmental authorities having jurisdiction;
that the required building permits and other permits have been obtained as required;
and that no environmental impact statement is required or that such environmental
impact statement has been properly filed and approved.
iii. Appropriate certifications of compliance in all respects with labor standards and
prevailing wage requirements applicable under federal law.
iv. Such other supporting evidence as may be requested by CITY or its agent to
substantiate all payments which are to be made out of the relevant disbursement
and/or to substantiate all payments then made with respect to the Project.
(e) CITY shall have determined that all HOME requirements pertaining to the disbursement of
funds have been met, including but not limited to monitoring of Davis Bacon compliance.
(f) An inspection of work completed will need to be completed by Community Development
Division staff prior to request for reimbursement.
(g) No determination shall have been made by CITY that the undisbursed amount of the loan is
less than the amount received to pay all costs and expenses of any kind that reasonably may
be anticipated in connection with the completion of the Project.
5. Conditions of Final Disbursement: In addition to the requirements set forth in section S.B.1, CITY
shall require the following prior to the final disbursement of funds, the request for which shall not
be submitted before completion of the Project, including all landscape reqµirements and offsite
utilities and streets and correction of defects in workmanship and/or materials:
(a) Evidence satisfactory to CITY that the Project has been completed lien-free and substantially
in accordance with the plans and specifications;
(b) Review and final settlement of the cost certification described below.
(c) Such other supporting evidence as may be requested by CITY or its agent to substantiate all
payments which are to be made out of the final disbursement and/or to substantiate all payments
then made with respect to the Project.
6. Limitation on Draw Requests.
(a) In all cases, OWNER may not request disbursement of HOME funds until funds are needed for
the payment of eligible costs, and all d,sbursement requests must be limited to the amount
needed at the time of the request.
(b) Notwithstanding anything herein to the contrary, no disbursements for materials stored will
be made by CITY unless OWNER shall advise CITY of its intention to so store materials prior to
their delivery. It is specifically agreed that the propriety of disbursements for materials stored
shall be determined in CITY's sole discretion.
(c) In addition to any other requirements CITY may impose, any disbursement for materials
stored will require, at minimum:
i. Certification from the General Contractor (and, as applicable, any subcontractors) that:
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o The materials for which payment is requested are consistent with the Project's plans
and specification and have been purchased specifically for incorporation into the
Project;
o The Contractor (or subcontractor as applicable) is in actual possession of and has
clear, marketable title to the materials and that such materials are not subject to any
lien by the supplier or manufacturer; and
o The materials are appropriately stored on-site and fully insured against theft,
damage, or other loss OR that materials stored off-site are located in a licensed,
bonded, and insured warehouse where they are fully insured against theft, damage,
or other loss.
ii. Submission of documentation (such as invoices, receipts, shipping manifests, or
insurance policies) satisfactory to CITY supporting the certifications;
iii. That any disbursement for materials stored are otherwise subject to the contract's
standard retainage provisions;
(d) The parties covenant and agree that in the event that CITY discovers a misstatement i n any
affidavit, statement, or certificate furnished pursuant to this Agreement, it shall make no
further disbursements until such misstatement has been corrected; that CITY assumes no
liability to the OWNER for mechanic's lien claims; that if at any time during the course of
construction, the total of the unpaid disclosed cost of construction, as indicated by the column
totals on the general contractor's sworn statement, exceeds the amount of the undisbursed
development sources, CITY shall not be under obligation to make further disbursement under
the terms of the Agreement until the OWNER has deposited with CITY the sum necessary to
make the available funds equal to the unpaid disclosed cost of construction; and that if, after
the first disbursement, a further title search reveals a subsequently arising exception over
which the title insurance company is unwilling to insure, CITY shall discontinue disbursement
until the exception has been disposed of to the CITY's satisfaction.
7. Withholding Payment: CITY SHALL WITHHOLD PAYMENT ON ANY REIMBURSEMENT REQUEST
THAT DOES NOT INCLUDE THE REQUIRED COMPLETE DOCUMENTATION.
8. Disbursement of OWNER's Funds: If CITY shall at any time in good faith determine that the
undisbursed amount of available financing is less than the amount required to pay all costs and
expenses of any kind which reasonably may be anticipated in connection with the completion of
the Project and shall thereupon send written notice thereof to OWNER specifying the amount
required to be deposited by OWNER with CITY or its agent to provide sufficient funds to complete
the Project, the OWNER agrees that it will, within five (S) calendar days of receipt of any such
notice, deposit with CITY or its agent, in a noninterest bearing account, the amount of funds
specified in the Lender's notice. OWNER agrees that any such funds depos ited with CITY or its
agent may be disbursed by CITY or its agent,. before any further disbursement of loan proceeds
from CITY, to pay any and all costs and expenses of any kind in connection with completion of the
Project.
C. Reserves and Other Accounts.
For Existing Rental Units:
Replacement Reserve Account Operating Reserve Account
Per HUD's Section 202 Per HUD's Section 202 Supportive
Existing Rental Units: Supportive Housing for the Housing for the Elderly Program
Elderly Program
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D. Occupant Security Deposits.
1. The OWNER is further required to segregate or cause to be segregated:
(a) all occupant security deposits, to be held in an interest-bearing depository account
(hereinafter referred to as the "Security Depository Account"), and
(b) an amount equal of the aggregate of all special funds required by CITY to be maintained by
or with respect to the Project.
6. HOME PROGRAM REQUIREMENTS
A. Affordability Period Requirements.
The Project must comply with all requirements of 24 CFR 92.252, in particular requiring the HOME-
assisted units be income and rent restricted for the duration of the Project's HOME Affordability
Period. The Project must also maintain compliance with the physical standards of 92.251 and be
operated consistent with applicable tenant protection, affirmative marketing, and fair housing
requirements of Subpart F of 24 CFR 92.
B.. Designation of HOME Units.
1. Twenty-Five (25) units will be designated as HOME-assisted. The restrictions of this section shall
apply throughout the term of this Agreement. The CITY reserves the right to adjust the number
of HOME-assisted units if the sources and uses of funds change during development of the
Project. The HOME units will be Fixed Units as defined in 24 CFR Part 92.252.
2. Twenty-Five {25) units will be designated per HUD's Section 202 Supportive Housing for Elderly
rent requirements.
3. Income Restrictions: HOME requires that all HOME units must be offered for occupancy
exclusively to tenants with household incomes at or below 50% of the Area Median Income (AMI)
as adjusted for household size. The most current income chart must be used when determining
eligibility for a prospective tenant or determining the income at recertification for in-place
tenants.
(a) The project will be subject to HU D's Section 202 Supportive Housing for Elderly.
4. Income Verification.
(a) OWNER must use the definition per HU D's Section 202 Supportive Housing for Elderly.
(b) OWNER shall use the most current HUD Income Guidelines.
(c) OW NER must verify that.all tenants.of HOME Units are HUD'sSection 202-Supportive Housing.
for Elderly Eligible Households with full Tenant Documentation at the time the initial lease for
a HOME Unit is executed. Tenants must certify the number of people in tenant's household
along with such person's names and ages.
(d) OWNER shall obtain financial information on all members of a tenant's household.
(e) OWNER must verify the income of the tenants of the HOME Units annually after the initial
lease is executed but may use a CITY-approved tenant self-certification form as Tenant
Documentation.
(f) Notwithstanding the foregoing, OWNER must verify the income eligibility of all HOME Eligible
Households with full Tenant Documentation every 6th year of the Affordability Period.
(g) OWNER must maintain copies of Tenant Documentation as required under this AGREEMENT.
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(h) CITY will review Tenant Documentation during the Affordability Period as part of its
monitoring.
5. Rent Restrictions: The gross rent for each HOME unit may not exceed the HUD's Section 202
Supportive Housing for Elderly rent, as adjusted for unit size published annually by HUD. The gross
rent for each HOME unit may not exceed the HUD's Section 202 Supportive Housing for Elderly
rent, as adjusted for unit size and published annually by HUD. The Section 202 program helps
expand the supply of affordable housing with supportive services for the elderly. It provides very
low-income elderly with options that allow them to live independently butin an environment that
provides support activities such as cleaning, cooking, transportation, etc. The program is similar
to Supportive Housing for Persons with Disabilities (Section 811)
The HU D's Section 202 Supportive Housing for Elderly rent limit is a gross rent limit. An allowance
for any tenant paid utilities must be made to ensure that the combination of rent paid to OWNER
and the allowance for tenant:-paid utilities does not exceed the applicable HUD's Section 2.02.
Supportive Housing for Elderly rent requirement
6. Re-verifying Incomes: OWNER shall re-verify the income of in-place tenants using at least two
months of source documentation not less than every 6th year of the HOME Affordability Period.
In years when source documentation is required, all in-place tenants must be re-verified
regardless of how long they have been in place.
7. Treatment of Over-Income Tenants: In the event an in-place tenant, upon re-verification of the
tenant's income, has a household income above the applicable HUD's Section 202 Supportive
Housing for Elderly Income Limit for HOME unit tenants, the OWNER shall take the following
actions:
(a) If the HOME unit tenant's income increases at re-verification to greater than 50% AMI but less
than or equal to 80% AMI, then the OWNER will first substitute another unit that is
comparable or larger by either:
i. designating another unit in the Project occupied by an eligible HUD's Section 202
Supportive Housing for Elderly tenant; or
ii. renting the next available unit as a HOME unit.
(b) After substituting another HOME unit, the OWNER may raise the rent for the over-income
tenant to the lesser of:
i. 30% of the over-income tenant's adjusted income; or
ii. the applicable High-HOME rent for such unit. Such an increase in rent shall be subject
to the terms of the lease and the provisions of section C.1 below.
8. CITY Approval of Rent, Utility Allowances, and Fees: Pursuant to the requirements of HUD's
Section 202 Supportive Housing for Elderly and CITY must approve the rents and utility allowances
applied to the Project on an annual basis. The OWNER may not increase the rents of HOME-units
without prior approval of CITY.
Additionally, the OWNER shall provide a fee schedule, consistent with requirements of section
6.C.2 below for review and approval by CITY on an annual basis. Any mandatory tenant fees not
otherwjse approved by CITY shall be considered rent and are subject to the grass rent limits
outlined herein.
C. Project Requirements: OWNER must operate the Project in compliance with the requirements of
Subpart F of 24 CFR 92
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1. Lease: OWNER must have a written lease with each tenant of a HOME-assisted unit, in a form
acceptable to CITY. If directed by CITY, OWNER shall include CITY's HOME Lease Addendum, as
may be updated from time to time, on all HOME leases. The lease must, at a minimum, provide
all HOME tenants with at least 30 days written notice prior to:
(a) increasing the rent; or
(b) terminating or refusing to renew the lease.
2. All tenants must be offered leases with a minimum period of one (l) year. OWNER cannot
terminate or refuse to renew the lease of any tenant for other than good cause. In particular,
good cause does not include an increase in a tenant's income or a tenant's failure to accept or
participate in supportive services being offered now or in the future to residents of the Project.
3. Good cause for terminating or refusing to renew the lease shall include material violations of the
lease or violations of applicable federal, state, or local laws .
4. The lease may not include any provisions prohibited by 24 CFR 92.253(b):
(a) Lease may not include agreement by tenant to allow landlord to take, hold or sell tenant's
personal property without notice and a court decision on the rights of the parties.
(b) Lease may not include agreement by the tenant to excuse owner or owner's agents from
responsibility for any action or failure to act, whether intentional or negligent acts.
(c) Lease may not authorize landlord to institute a lawsuit without notice to the tenant.
(d) Lease may not include agreement by tenant to waive a jury trial or right of appeal.
(e) Lease may not include an agreement by tenant to pay legal costs of court proceeding even if
the tenant prevails in those proceedings regardless of outcome.
(f) Lease may not include an agreement by the tenant to be sued, to admit guilt or to a judgment
in favor of the owner in a lawsuit brought in conne cti on with the lease.
(g) Lease may not include an agreement by the tenant that the owner may evict the tenant or
household members without instituting civil court proceedings in which the tenant has the
opportunity to present a defense, or before a court decision on the rights of the parties.
(h) Lease may not include an agreement by the tenant to waive the tenant's right to appeal or
otherwise challenge in court a court decision in connection with the lease.
(i) Lease may not include an agreement by the tenant to accept supportive services that are
offered.
5. Rev ised Lease Forms.
OWNER shall provide CITY copies of revised lease forms within 30 days of any change to its lease
form. All changes to OWNER's lease form shall comply with this agreement.
6. Prohibition on Certain Fees to Tenants: OWNER shall not charge tenants fees to cover operating
costs of the Project or administrative costs related to complying with the HOME program.
Specifically, rental project OWNERs may not charge tenants fees that are not customarily charged
to tenants of rental housing (e.g., laundry room access fees). However, OWNER may charge fees
approved by CITY for the following:
(a) Reasonable application fees to prospective tenants;
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(b) Fees or penalties related to the late payment of rent, non-sufficient funds or returned checks,
or the like provided such fees are determined by CITY to be customary for rental housing
projects in the area and not excessive;
(c) Parking fees to tenants only if such fees are determined by CITY to be customary for rental
housing projects in the neighborhood and not excessive; and
(d) Fees for services such as bus transportation or meals, as long as the services are voluntary
and fees are charged only for services provided.
7. Voluntary Services: OWNER must ensure that any supportive services being offered to tenants of
the Project are voluntary. Tenants may not, as a condition of their initial lease or continued
occupancy, be required to accept, participate in, or comply with the requirements of any
supportive services program.
8. Tenant Selection Plan: OWNER must develop a tenant selection plan meeting the requirements
of 24 CFR 92.253{d). OWNER cannot refuse to lease to a-holder of a-Section 8 Housing Choice
Voucher, recipient of HOME Tenant Based Rental Assistance, or a prospective tenant receiving
similar assistance under another federal, state, or local program solely because of the tenant or
prospective tenant's participation in such program. The tenant selection plan will be subject to
review and approval by CITY both prior to initial occupancy of the HOME-assisted units and during
the term of this Agreement.
(a) The tenant selection policy must be consistent with the purpose of providing housing for
very low and low-income persons. The tenant selection policy must provide for:
i. Selection of tenants from a written waiting list in the chronological order of their
application, insofar as is practicable;
ii. Prompt written notification to any rejected applicant of the grounds for such
rejection; and
iii. Bi-lingual leasing and management assistance.
iv. Holders of rental assistance subsidies (such as HUD's Housing Choice Voucher or
similar subsidy) must not be excluded -from renting a unit in the project.
v. The tenant selection policy must address non-discrimination and affirmative
marketing as discussed in section 8.E.
(b) OWNER must market Accessible Units in the following order:
i. Within the project to persons requiring an accessible unit.
ii. To persons on the waiting list requiring an accessible unit.
iii. To the general community for persons requiring accessible unit.
iv. To persons that do not require an accessible unit.
(c) The tenant selection policy must (a) address the lease requirements described in this
agreement that address managing HOME Unit requirements and must comply with state
and local tenant/landlord laws.
9. Faith-Based Organizations.
(a) Conditions for Faith-Based Organizations: Faith-based organizations are eligible to
participate in the HOME program on the same basis as any other organization but must
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comply with the requirements of 24 CFR 92.257. Among other requirements, OWNER may
not engage in inherently religious activities such as worship, religious instruction, or
proselytization, as part of the Project. If OWNER does engage in such religious activities, those
activities must be offered separately from the HOME-assisted housing, and participation by
tenants of the Project must be voluntary. Additionally, OWNER shall not discriminate against
a tenant or prospective tenant on the basis of religion or religious belief.
(b) Separation of Explicitly Religious Activities: OWNER retains its independence and may
continue to carry out its mission, including the definition, development practice, and
expression of its religious beliefs, provided that it does not use HOME Funds to support or
engage in any explicitly religious activities (including activities that involve overt religious
content such as worship, religious instruction, or proselytization), or in any other manner
prohibited by law.
(c) Explicitly Religious Activities: If OWNER engages in explicitly religious activities (including
activities that involve overt religious content such as worship, religious instruction, or
proselytization), the. explicitly religious activities must be offered separately, in time or
location, from the programs or activities supported by HOME Funds and participation must
be voluntary for tenants of a HOME-funded unit.
7. CONSTRUCTION, PROPERTY STANDARDS AND MANAGEMENT
A. Construction Schedule-.
OWNER will construct the improvements in accordance with the schedule set forth in the attached
Exhibit A. OWNER shall not begin construction until CITY sends a Notice to Proceed. OWNER's failure
to meet the Construction Schedule or the Completion Deadline shall be an event of default. OWNER
may not change the Construction Schedule without the CITY's prior written approval, which approval
shall be in the CITY's reasonable discretion.
l. Written Cost Estlmates, Construction Contracts and Construction Documents.
OWNER shall furnish CITY with the written cost estimates, construction contracts and
construction documents (collectively, the "Construction Documents") all of which shall describe
the construction of the Required Improvements in sufficient detail so that CITY can perform
inspections. CITY shall review and approve written cost estimates and determine that costs are
reasonable prior to the commencement of construction.
2. Construction Inspections.
CITY will conduct progress and final inspections of constructio n of the project to ensure that the
work is done in accordance with the applicable building codes and the Construction Documents.
The construction of the project must pass a HUD Compliance Inspection Report and any other
applicable HUD-required inspections during the construction period, along with any applicable
final inspection approval from the CITY building inspectors at the completion of the construction
of the project.
B. Property Standards .
l. OWNER shall comply with the following as applicable during the construction of the Required
Improvements:
(a) the Property Standards in 24 CFR Part 92.251(a);
(b) accessibility standards under 24 CFR Part 92.251(a)(2)(i),
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(c) any City property standards, and
(d) all other applicable accessibility standards for the project.
2. The Project must be maintained in compliance with the requirements of 24 CFR 92.251.
C. Construction Codes.
1. The Plans and construction for the Required Improvements shall
(a) conform to all applicable Federal, state, city and other local laws, ordinances, codes, rules and
regulations, including the HOME Regulations;
(b) meet all City building codes;
(c) meet the Energy Conservation requirements as required by the State of Texas in Chapter 11
of the International Building Code;
(d) if new construction, must conform to the Model Energy Code published by the Council of
American Building Officials; and
(e) must pass a HUD Compliance Inspection Report and inspection by City's inspectors.
D. Lead-Based Paint Requirements.
OWNER will comply with any applicable Federal lead-based paint requirements including lead
screening in buildings built prior to 1978 in accordance with 24 CFR Part 92.355 and 24 CFR Part 35,
subparts A, B, J, K, M, and R, and the Lead: Renovation, Repair and Painting Program Final Rule, 40
CFR Part 745, in the construction and/or rehabilitation of the Required Improvements.
E. Review, Acceptance, or Approval of Construction Plans and Specifications by CITY Not Release of
Responsibility.
1. Review, acceptance, or approval ofthe plans by CITY shall not constitute or be deemed
(a) to be a release of the responsibility or liability of OWNER or any of its contractors or
subcontractors, or their respective officers, agents, employees and lower tier subcontractors,
for the accuracy or the competency of the Plans or the Construction Documents, including,
but not limited to, any related investigations, surveys, designs, working drawings and
specifications or other documents; or
(b) an assumption of any responsibility or liability by CITY for any negligent act, error or omission
in the conduct or preparation of any investigation, surveys, designs, working drawings and
specifications or other documents by OWNER or any of its architects, contractors or
subcontractors, and their respective officers, agents, employees and lower tier
subcontractors.
F. Contractor, Subcontractor and Vendor Requirements.
1. OWNER will use commercially reasonable efforts to ensure that all contractors or vendors utilized
by OWN.ER or subcontractors utilized by OWN.ER'sgeneral contractor are appropriately licensed
and such licenses are maintained throughout the construction of the Required Improvements and
the operation of the project when applicable.
2. OWNER shall ensure that all contractors utilized by OWNER, subcontractors utilized by OWNER's
general contractor in the construction of the Required Improvements, or vendors utilized by
OWNER in the operation of the project are not debarred or suspended from performing the
contractor's, subcontractor's or vendor's work by the City, the State of Texas, or the Federal
government.
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(a) For purposes of this AGREEMENT, the term "vendors" does not include suppliers or
material men.
(b) OWNER acknowledges that 2 CFR Part 200 forbids OWNER from hiring or continuing to
employ any contractor, subcontractor or vendor that is listed on the Federal System for Award
Management, www.sam.gov ("SAM").
(c) OWNER must confirm by search of SAM that all contractors, subcontractors or vendors are
not listed by SAM as being debarred, both prior to hiring and prior to submitting a
Reimbursement Request which includes invoic.es from any suc.h c.ontractor, subcontrac.tor, or
vendor.
(d) Failure to submit such proofs of search shall be an event of default, if not cured within any
applicable notice or cure period.
(e) In the event that CITY determines that any contractor, subcontractor or vendor has been
debarred, suspended, or is not properly licensed, OWNER or OWNER's general contractor
shall immediately cause such contractor, subcontractor or vendor to immediately stop work
on the project and OWNER shall not be reimbursed for any work performed by such
contractor, subcontractor or vendor.
(f) This section should not be construed to be an assumption of any responsibility or liability by
CITY for the determination of the legitimacy, quality, ability, or good standing of any
contractor, subcontractor or vendor.
G. Ongoing Maintenance of the Project.
1. OWNER must maintain the Project in compliance with all applicable state and local codes and
ordinances throughout the term of this Agreement.
2. CITY has determined that Chapter 17 of the City of Denton Code of Ordinances applies to the
ongoing occupancy and maintenance of the Project:
3. OWNER must maintain the Project in compliance with the Housing Quality Standards (HQS) in 24
CFR 982.401. In the event of a conflict between state and local codes . and HQS, the stricter
standard will apply.
H. Property Management.
CITY must approve any professional property management company employed by OWNER for the
project. Property is managed by Plano Community Homes staff.
8. COMPLIANCE WITH OTHER FEDERAL REQUIREMENTS, APPLICABLE LAWS AND
REGULATIONS.
A. The CITY and OWNER agree to perform their duties arising pursuant to the Agreement in compliance
with the U.S. Department of Housing and Urban Development HOME Investment Partnerships
Program regulations at 24 CFR 92 and 2 CFR Part 200.
B. Other Federal Requirements.
OWNER agrees to develop and operate the Project in full compliance with other related federal
requirements.
C. Compliance with All Applicable Laws and Regulations.
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OWNER agrees to comply fully with all applicable laws and regulations that are currently in effect or
that are hereafter amended during the performance of this AGREEMENT. These laws include, but are
not limited to:
1. HOME Investment Partnerships Act as set out above
2. Title VI of the Civil Rights Act of 1964 (42 U.S.C. Sections 2000d et seq.) including provisions
requiring recipients of federal assistance to ensure meaningful access by person of limited English
proficiency
3. The Fair Housing Act, Title VIII of the Civil Rights Act of 1968 {42 U.S.C. Sections 3601 et seq.)
4. Executive Orders 11063, 11246 as amended by 11375 and 12086 and as supplemented by
Department of Labor regulations 41 CFR, Part 60
5. The Age Discrimination in Employment Act of 1967
6. The Age Discrimination Act of 1975 (42 U.S .C. Sections 6101 et seq.)
7. The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C.
Sections 4601 et seq. and 49 CFR Part 24) ("URA")
8. Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. Sections 794 et seq.) and 24 CFR Part 8
where app licable
9. National Environmental Policy Act of 1969, as amended, 42 U.S.C. sections 4321 et seq. ("NEPA")
and the related authorities listed in 24 CFR Part 58.
10. The Clean Air Act, as amended, (42 U.S.C. Sections 1251 et seq.) and the Clean Water Act of 1977,
as amended (33 U.S.C. Sections 1251 et seq.), related Executive Order 11738 and Environmental
Protection Agency Regulations at 40 CFR Part 15. In no event shall any amount of the assistance
provided under this AGREEMENT be utilized with respect to a facility that has given rise to a
conviction under the Clean Air Act or the Clean Water Act.
11. Immigration Reform and Control Act of 1986 (8 U.S.C. Sections 1101 et seq.) specifically including
the provisions requiring employer: verifications of legal status of its employees
12. The Americans with Disabilities Act of 1990 (42 U.S.C. Sections 12101 et seq.), the Architectural
Barriers Act of 1968 as amended (42 U.S.C. sections 4151 et seq.) and the Uniform Federal
Accessibility Standards, 24 CFR Part 40, Appendix A
13. Regulations at 24 CFR Part 87 related to lobbying, including the requirement that certifications
and disclosures be obtained from all covered persons
14. Drug Free Workplace Act of 1988 (41 U.S.C. Sections 701 et seq.) and 24 CFR Part 23, Subpart F
15. Executive Order 12549 and 24 CFR Part 5.105(c) pertaining to restrictions on participation by
ineligible, debarred or suspended persons or entities
16. Regulations at 24 CFR Part 882.708(c) pertaining to site and neighborhood standards for new
construction projects
17. Regulations at 24 CFR Part 983.6 for Site and Neighborhood Standards Review
18. Section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act
19. Guidelines of the Environmental Protection Agency at 40 CFR Part 247
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20. For contracts and subgrants for construction or repair, Copeland "Anti-Kickback" Act (18 U.S.C.
874) as supplemented in 29 CFR Part 5
21. For construction contracts in excess of $2,000, and in excess of $2,500 for other contracts which
involve the employment of mechanics or laborers, Sections 103 and 107 of the Contract Work
Hours and Safety Standards Act (40 U.S.C. 327A 300) as supplemented by 29 CFR Part 5
22. Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4801 et seq.), as amended by the Residential
Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851 et seq.) and implementing
regulations at 24 CFR Part 35, subparts A, B, M, and R
23. Regulations at 24 CFR Part 92, Home Investment Partnerships Program Final Rule
24. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards, 2 CFR Part 200 et seq.
25. Federal Funding Accountability and Transparency Act of 2006, (Pub.L. 109-282, as amended by
Section 6205(a) of Pub.L. 110-252 and Section 3 of Pub.L. 113-101)
26. Federal Whistleblower Regulations, 10 U.S.C. 2409, 41 U.S.C. 4712, 10 U.S.C. 2324, 41 U.S .C. 4304
and 41 U.S.C. 4310.
D. Agreement Not Constituting Commitment of Funds.
Notwithstanding any provision of this AGREEMENT, the Parties agree and acknowledge that this
AGREEMENT does not constitute a commitment of HOME Funds, and that such commitment or
approval may occur only upon satisfactory completion of environmental review and receipt by CITY
of an authorization to use grant funds from HUD under 24 CFR Part 58.
E. Affirmative Marketing.
1. OWNER must adopt and implement affirmative marketing procedures for the Project consistent
with the requirements of 24 CFR 92.351. OWNER must submit an Affirmative Fair Housing
Marketing Plan (AFHMP), using form HUD-935.2A, or on another such form as CITY may
reasonably require, for CITY review prior to marketing and leasing the HOME-assisted units.
2. The procedures and requirements must include methods for informing the public, owners and
potential tenants about fair housing laws and policies so as to ensure that all individuals are given
an equal opportunity to participate in the project without regard to sex, age, race, color, creed,
nationality, national origin, religion, handicap status, disability, familial status, sexual orientation,
gender identity, gender expression or transgender. The procedures shall include methods to be
used by OWNER to inform and solicit applications for tenancy from person in the housing market
area who are not likely to apply for the housing without special outreach (e.g., through the use of
community organizations, places of worship, employment centers, fair housing groups, or housing
counseling agencies.) The procedures and requirements must designate an individual who will be
responsible for marketing the project and must establish a clear application screening plan.
OWNER's affirmative marketing procedures must be submitted to CITY for approval prior to
implementation; provided however, CITY shall have no responsibility for affirmative marketing of
the project.
3. CITY reserves the right to require OWNER to update the Project's AFHMP from time to time to
ensure it remains appropriate given potentially changing demographic characteristics of the
market area and is updated based on the operational experience with the Project.
4. OWNER shall keep records describing actions taken to affirmatively market the HOME Units and
the project sufficient to enable CITY to assess the results of the affirmative marketing.
17
F. Compliance with the Uniform Relocation Act: Displacement, Relocation, and Acquisition.
OWNER shall comply with the Uniform Administrative Requirements, Cost Principals and Audit
Requirements for Federal Awards, Final Guidance as described in 2 CFR Part 200. OWNER will take all
reasonable steps to minimize the displacement of persons (families, individuals, businesses, nonprofit
organizations, and farms) as a result of the Project. Additionally, OWNER will assure compliance with
appropriate relocation and real property acquisition requirements as provided in 24 CFR 92.353.
G. Labor Standards -Compliance with Davis-Bacon Act.
1. The Project is subject to the requirements 24 CFR 92.354. Because there are more than eleven
(11) HOME -assisted housing units, the prevailing wage standards of the Davis-Bacon Act do apply.
2. As applicable, OWNER will ensure that its contracts for construction contain a provision requiring
that not less than the wages prevailing in the locality, as predetermined by the Secretary of Labor
pursuant to the Davis-Bacon Act (40 USC 276a ~S ), will be paid to all . laborers. and mechanics
employed in the development of affordable housing involved. OWNER furth er will ensure that
such agreements must also be subject to the overtime provisions, as applicable, of the Work
Hours and Safety Standards Act (40 USC 327-332).
3. OWNER shall comply with regulations issued under these Acts and with other federal laws and
regulations pertaining to labor standards and HUD Handbook 1344.1 (Federal Labor Standards
Compliance in Housing and Community Development Programs), as applicable. CITY shall require
certification as to compliance with the provisions of this section and will monitor the Project and
its records for such compliance before making any payment under this Agreement.
H. Use of Contractors and Subcontractors
1. OWNER will ensure and maintain reco r ds demonstrating that none of the contractors or
subcontractors involved in the development of the Project are suspended, debarred, or otherwise
prohibited from participating in federally-assisted contracts. OWNER will further ensure that its
contractors include parallel provisions in their subcontracts, provide and maintain records
showing that subcontractors are not suspended, debarred, or otherwise prohibited from
participating in federally-assisted contracts.
2. OWNER understands and agrees that all terms of this AGREEMENT, whether regulatory or
otherwise, shall apply to any and all contractors, subcontractors and vendors of OWNER which
are in any way paid with HOME Funds or who perform any work in connection with the project.
OWNER shall cause all applicable provisions of this AGREEMENTto be included in and made a part
of any contract or subcontract executed in the performance of its obligations hereunder, including
its obligations regarding the Affordability Requirements and the HOME Regulations during the
Affordability Period. OWNER shall monitor the services and work performed by its contractors,
subcontractors and vendors on a regular basis for compliance with the Affordability
Requirements, the HOME Regulations and Agreement provisions. OWNER is responsible to cure
all violations of the HOME Regulations committed by its contractors, subcontractors or vendors.
CITY maintains the right to insist on OWNER's full compliance with the terms of this AGREEMENT
and the HOME Regulations and OWNER is responsible for such compliance regardless of whether
actions to fulfill the requirements of this AGREEMENT or the HOME Regulations are taken by
OWNER or by OWNER's contractors, subcontractors or vendors. OWNER acknowledges that the
provisions of this section shall survive the earlier termination or expiration of this AGREEMENT
and be applicable for the length of the Affordability Period and for 5 years thereafter.
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3. OWNER shall, at a minimum, search at www.sam.gov to verify that each contractor and
subcontractor is not listed as an excluded party.
I. Certification Regarding Lobbying.
OWNER certifies that it will not and, to the best of its knowledge, has not used Federally appropriated
funds to pay any person or organization for influencing or attempting to influence an officer or
employee of any Federal agency, a member of Congress, officer or employee of Congress, or an
employee of a member of Congress in connection with obtaining any Federal contract, grant or any
other award. OWNER further agrees that it shall disclose any lobbying with non-Federal funds that
takes place in connection with obtaining any Federal award.
J. OWNER Procurement Standards.
OWNER shall ensure that procurement of materials and services is done in a cost-effective manner.
OWNER shall comply with all applicable federal, state and local laws, regulations, and ordinances for
making procurements under this AGREEMENT. OWNER shall establish written procurement
procedures to ensure that materials and services are obtained in a cost-effective ma nner
K. Cost Principles/Cost Reasonableness.
The eligibility of costs incurred for performance rendered shall be determined in accordance 2 CFR
Part 200.402 through 2 CFR Part 200.405, as applicable, regarding cost reasonableness and
allocability.
L. Financial Management Standards .
OWNER agrees to adhere to the accounting principles and procedures required in 2 CFR Part 200, as
applicable, utilize adequate internal controls, and maintain necessary supporting and back-up
documentation for all costs incurred in accordance with 2 CFR Part 200.302 and Part 200.303.
M. Uniform Administrative Requirements.
OWNER will comply with the Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards in 2 CFR Part 200, as applicable, or any reasonably equivalent
procedures and requirements that CITY may require .
N. Compliance with FFATA and Whistleblower Protections.
l. OWNER shall provide CITY w.ith . all necessary information for CITY to comply with the
requirements of 2 CFR 300{b), including provisions of the Federal Funding Accountability and
Transparency Act ("FFATA") governing requirements on executive compensation and provisions
governing whistleblower protections contained in 10 U.S .C. 2409, 41 U.S .C.. 4712, 10 U.S.C. 2324,
41 U.S.C. 4304 and 41 U.S.C. 4310.
2. OWNER shall provide CITY its DUNS number prior to the payment of any HOME Funds .
O. Internal Controls.
In compliance with the requirements of 2 CFR 200.303, OWNER shall:
1. Establish and maintain effective internal control over the HOME Funds that provides reasonable
assurance that OWNER is managing the HOME Funds in compliance with federal statutes,
regulations, and the terms and conditions of this AGREEMENT. These internal controls shall be in
compliance with guidance in "Standards for Internal Control in the Federal Government" issued
by the Comptroller General of the United States or the "Internal Control lntegrated Framework";
19
2. Comply with federal statutes, regulations, and the terms and conditions of this AGREEMENT;
3. Evaluate and monitor OWNER's compliance with statutes, regulations and the terms and
conditions of this AGREEMENT;
4. Take prompt action when instances of noncompliance are identified including noncompliance
identified in audit findings; and
5. Take reasonable measures to safeguard protected personally identifiable information and other
information that HUD or CITY designates as sensitive or OWNER considers sensitive consistent
with applicable federal, state, local and tribal laws regarding privacy and obligations of
confidentiality.
P. Copyright and Patent Rights.
No reports, maps, or other documents produced in whole or in part under this AGREEMENT shall be
the subject of an application for copyright by or on behalf of OWNER. HUD and CITY shall possess all
rights to invention or discovery, as well as rights in data which may arise as a result of OWNER's
performance under this AGREEMENT.
Q. OWNER agrees to ensure that all HOME-assisted housing or housing identified as match for the HOME
program meets all affordability requirements identified in 24 CFR 92 Subpart Fas -applicable.
R. If it is determined that the use of the funding provided by the CITY does not meet the requirements
of the U.S. Department of Housing and Urban Development HOME Investment Partnerships Program,
the OWNER shall reimburse the CITY for the costs determined to be disallowed under the U.S.
Department of Housing and Urban Development HOME Investment Partnership Program regulations .
S. OWNER shall comply with all applicable Federal laws and regulations at 24 CFR 92 subpart H. Subpart
H prescribes procedures for compliance in the following areas: nondiscrimination and equal
opportunity, affirmative marketing, displacement and relocation, labor relations and conflict of
interest.
T. OWNER agrees that all housing assisted under this agreement will meet the property standards
requirements in 24 CFR 92.251 and the lead-based paint requirements in 24 CFR 92.355 upon project
completion.
U. OWNER agrees to comply with all project requirements in 24 CFR Part 92, Subpart F.
V. OWNER certifies that it is not currently listed on the General Services Administration's List of Parties
Excluded from Federal Procurement or Non-procurement Programs in accordance with Executive
Orders 12549 and 12689 and will not enter into agreements to expend Federal funds with OWNERs
that are currently listed.
W. OWNER agrees to comply with the maximum per unit subsidy limits, underwriting requirements and
subsidy layering limits in 24 CFR 92.250.
X. OWNER agrees to comply with all applicable Federal laws, laws of the State of Texas and ordinances
of the City of Denton.
9. REPRESENTATIONS
A. The CITY is providing funding to the OWNER in order to promote the development of affordable
housing for low-income households. Use of funds for programming will meet this stated goal.
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B. The CITY is the only agent authorized to designate changes to the Program Budget or to approve
specific projects and programs authorized pursuant to the non-administration portion of the Program
Budget .
C. OWNER assures and guarantees that it possesses the legal authority, pursuant to any proper,
appropriate and official motion, resolution or action passed or taken, to enter into this Agreement.
D. The person or persons signing and executing this Agreement on behalf of OWNER, do hereby warrant
and guarantee that he, she, or they have been fully authorized by OWNER to execute this Agreement
on behalf of OWNER and to validly and legally bind OWNER to all terms, performances and provisions
herein setforth.
E. CITY shall have the right, at its option, to either temporarily suspend or permanently terminate this
Agreement if there is a dispute as to the legal authority of either OWNER or the person signing the
Agreement to enter into this Agreement. OWNER is liable to CITY for any money it has received from
CITY for performance of the provisions of this Agreement if CITY has suspended or terminated this
Agreement for the reasons enumerated in this section.
F. OWNER agrees that the funds and resources provided OWNER under the terms of this Agreement will
in no way be substituted for funds and resources from other sources, nor in any way serve to reduce
the resources, services, or other benefits which would have been available to, or provided through,
OWNER had this Agreement not been executed .
10. PROGRAM INCOME
A. HOME program income is defined as all fees and interest payments on HOME-assisted units/projects
and any interest income on deposited HOME funds or program proceeds collected by the OWNER.
Program income may be retained by the OWNER to be used for HOME-eligible activities included in
the Work Statement included herein as Exhibit B.
B. Any income generated from the use of HOME funds, proceeds, or any income generated through
subsequent use of these funds shall continue to be used by the OWN.ER for HOME-eligible activities
included in the Work Statement in the City of Denton. Use ofthe funds on projects or programs other
than those identified in this Agreement, must be approved in writing by the CITY. Any income retained
and used by the OWNER must be available to the CITY as a matching contribution for the HOME
program. Upon request, OWNER will approve appropriate certifications stating that funding is
available as a HOME program match to the CITY.
11. MAINTENANCE OF RECORDS
A. OWNER agrees to maintain records that will pr:ovide accurate, cur:rent, separate, and complete
disclosure of the status of the funds received pursuant to this Agreement and pursuant to any other
applicable Federal and/or State regulations establishing standards for financial detailed support and
justification for each expenditure. Nothing in this section shall be construed to relieve OWN.ER of fiscal
accountability and liability under any other provision of this Agreement or any applicable law. OWNER
shall include the substance of this provision in all subcontracts.
B. OWNER agrees to retain all books, records, documents, reports, and written accounting policies and
procedures pertaining to the operation of programs and expenditures of funds pursuant to this
Agreement for the period of time and under the conditions specified by CITY.
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C. Nothing in the above subsections shall be construed to relieve OWNER of responsibility for retaining
accurate and current records, which clearly reflect the level and benefit of services, provided pursuant
to this Agreement.
D. At any reasonable time and as often as CITY may deem necessary, the OWNER shall make available to
CITY, or any of its authorized representatives, all of its records and shall permit CITY, or any of its
authorized representatives to audit, examine, make excerpts and copies of such records, and to
conduct audits of all contracts, invoices, materials, payrolls, records of personnel, conditions or
employment and all other data relating to the program requested by said representatives.
E. The OWNER shall give the City of Denton, the U.S. Department of Housing and Urban Development,
or any of their duly authorized representatives, access to and the right to examine all books, accounts,
records, reports, files and other papers belonging to or in use by the OWNER pertaining to this
Agreement. Such rights to access shall continue as long as the OWNER is required to retain the
records.
12. REPORTS AND INFORMATION
A. OWNER shall provide quarterly financial and beneficiary reports that shall contain such records, data
and information as CITY may request and deem pertinent to matters covered by this Agreement.
OWNER shall provide any additional information as requested by the CITY within 10 days.
B. An audit must be conducted in accordance with 2 CPR Part 200 as applicable. OWNER shall submit a
copy of said audit to the Community Development Division within thirty days of receipt of the
completed report.
C. General Requirements.
OWNER agrees to provide reports to CITY and to maintain records documenting compliance with this
Agreement, the loan documents and regulatory agreements, the HOME rule, and all other applicable
federal, state, and local laws and regulations. OWNER also agrees to provide CITY, HUD, HUD's Office
of Inspector General, the Comptroller General of the United States (aka the U.S. Government
Accountability Office or "GAO"), or their representatives access to the Project and its records for the
purpose of monitoring OWNER's compliance with applicable requirements.
D. Reports
OWNER shall submit periodic reports to CITY on the progress and performance of the Project. CITY
reserves the right to unilaterally alter, supplement, or otherwise modify the frequency or content of
required reports as needed to maintain adequate oversight of the Project, address changes to HOME
regulations, or to address findings related to noncompliance by the Project.
Initially, CITY may require reports as follows:
1. Prior to the commencement of construction, OWNER shall report not less than quarterly on
progress toward commencement of construction. Quarterly reports will be due on the 15th of the
month following the end of the prior quarter (e.g. by April 15th reports on the first quarter are
due); 7.2.2 During the construction period, OWNER shall report monthly on progress, submit
invoices being paid, and provide evidence of appropriate lien waivers to CITY regardless of
whether OWNER is requesting a disbursement from CITY during that month;
2. Upon reaching Stabilized Occupancy, OWNER shall report on the occupancy and financial status
of the Project not less than annually.
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Annual reports shall include a HOME Rental Project Compliance Report, utility allowance
documentation, an Affirmative Fair Housing Marketing Plan, Tenant Selection Policy, and a copy
of the Lease Agreement. Additionally, OWNER shall submit copies of its annual project audit,
prepared by an independent certified public accountant, within one hundred-twenty (120) days
of the end of its fiscal year.
All reports pertaining to leasing and occupancy shall include, but will not be limited to, a statistical
report reflecting the actual number of persons served, the types of services provided and the
actual number of persons receiving those services, and a narrative description of assistance
provided, in addition to the aforementioned statistics, that includes a statement regarding the
progress made toward meeting performance goals.
E. Change in Reporting Requirements and Forms.
CITY retains the right to change reporting requirements and for.ms at its reasonable discretion. CITY
will notify OWNER in writing at least 30 days prior to the effective date of such change, and the Parties
shall execute an amendment to the Agreement reflecting such change if necessary.
f. Recordkeeping and Inspections
1. OWNER shall maintain detailed records of all persons served pursuant to this Agreement.
Representatives of CITY, HUD, or their designees may examine any records or. information
accumulated pursuant to this Agreement.
2. During the Period of Affordability, CITY will conduct on-site inspections to verify compliance with
24 CFR 92.252 as required by 24 CFR 504. All confidential information shall be treated as such by
all aforementioned CllY or HUD representatives or designees.
3. OWNER shall maintain administrative and financial records as required by 24 CFR 92.508,
applicable to the activities to be carried out under this agreement, including but not necessarily
limited to:
(a) Property description and location;
(b) Records regarding project requirements that applies for the duration of the period of
affordability (all of Subpart F of 24 CFR);
(c) Documentation that the amount of investment in each housing unit is in compliance with the
requirements in 24 CFR 92.205(c) and maximum subsidy limits in 24 CFR 92.250;
(d) Information about contractors, vendors and other lenders to include but not necessarily be
limited to verification of non-debarment and suspension, verification of qualifications and
experience, legally binding contracts and agreements, invoices and payment records and
related correspondence. (See: 24 CFR Part 24);
(e) Financial information including, but not necessarily limited to, audits and related
correspondence, accounting and financial records, indirect cost analyses, and operating
budgets;
(f) Project records in accordance with 24 CFR 92.508(a)(3) that demonstrate that each HOME
assisted renter and each housing unit leased meets the requirements of the HOME program.
(g) Other records that include documentation of compliance with other federal requirements in
accordance with 24 CFR 92.508 that includes the following requirements to the extent
applicable to the funded activity:
i. Documentation of efforts to affirmatively further fair housing;
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ii. If applicable, records documenting compliance with federal law regarding
displacement, relocation and property acquisition in accordance with the URA;
iii. Records demonstrating compliance with labor requirements set out in 24 CFR 92.354,
including contract provisions and payroll records (as applicable);
iv. Records concerning lead-based paint set out in 24 CFR Part 35;
v. Records supporting requests for waivers of the conflict of interest prohibition set out
in 24 CRF 92 .356 (if applicable);
vi. Records demonstrating compliance with flood insurance requirements under 24 CFR
92.352.
(h) Records related to any decision to terminate the lease of a tenant or refuse to renew the lease
of a tenant, including documentation of the specific lease violations leading to termination or
non-renewal.
G. Records Retention
OWNER shall retain all applicable administrative and project records and records pertinent to other
federal requirements, as specified in Section 92.508 of the HOME Final Rule, for a period of five (5)
years after the termination of all activities funded under this agreement. In this context funded
activities extend throughout the period of affordability as stipulated in 24 CFR 92.252 and 92.508.
Records for non-expendable property acquired with HOME Program Funds shall be retained for five
(5) years after the period of affordability.
Notwithstanding the above, if there are litigation, claims, audits, negotiations or other actions that
involve any of the records cited and that have commenced before the expiration of the five (5) year
period, such records must be retained until completion of the actions and resolution of all issues, or
the expiration of the five (5) year period, whichever occurs later.
H. Inspections
OWNER will provide CllY, applicable federal authorities, and their representatives with access to the
Project for the purposes of conducting physical inspections, including individual apartments, common
spaces, and the gr:ounds. CllY will conduct periodic physical inspections during construction to ensure
the Project is progressing and construction activity meets applicable property standards. After
construction completion, CllY will inspect the Project annually or on another schedule it determines
to ensure that the Project is being maintained in compliance with all appropriate property standards.
I. CITY Reserves the Right to Audit.
CllY reserves the right to perform an audit of OWNER's project operations and finances at any time
during the term of this AGREEMENT and during the Affordability Period and for 5 years thereafter, if
CllY determines that such audit is necessary for CllY's compliance with the HOME Regulations or
other CITY policies, and OWNER agrees to allow access to all pertinent materials as described herein.
If such audit reveals a questioned practice or expenditure, such questions must be resolved within 15
business days after notice to OWNER of such questioned practice or expenditure. If questions are not
resolved within this period, CllY reserves the right to withhold further funding under this and/or other
Agreement(s) with OWNER. IF AS A RESULT OF ANY AUDIT IT IS DETERMINED THAT OWNER HAS
FALSIFIED ANY DOCUMENTATION OR MISUSED, MISAPPLIED OR MISAPPROPRIATED HOME FUNDS OR
SPENT HOME FUNDS ON ANY INELIGIBLE ACTIVITIES, OWNER AGREES TO REIMBURSE CllY THE
AMOUNT OF SUCH MONIES PLUS THE AMOUNT OF ANY SANCTIONS, PENALlY OR OTHER CHARGE
LEVIED AGAINST CllY BY HUD BECAUSE OF SUCH ACTIONS.
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13. INSURANCE
A. OWNER shall observe sound business practices with respect to providing such bonding and insurance
as would provide adequate coverage for services offered under this Agreement.
B. The premises on and in which the activities described in Exhibit A are conducted, and the employees
conducting these activities, shall be covered by premise liability insurance, commonly referred to as
"Owner/Tenant" coverage with CITY named as an additional insured. Upon request of OWNER, CITY
may, at its sole discretion, approve alternate insurance coverage arrangements.
C. OWNER will comply with applicable workers' compensation statutes and will obtain employers'
liability coverage where available and other appropriate liability coverage for program participants, if
applicable.
D. OWNER will maintain adequate and continuous liability insurance on all vehicles owned, leased or
operated by OWNER. All employees of OWNER who are required to drive a vehicle in the normal scope
and course of their employment must possess a valid Texas driver's license and automobile liability
insurance. Evidence of the employee's current possession of a valid license and insurance must be
maintained on a current basis in OWNER's files.
E. Actual losses not covered by insurance as required by this section are not allowable costs under this
Agreement and remain the sole responsibility of OWNER .
F. The policy or policies of insurance shall contain a clause which requires that CITY and OWNER be
notified in writing of any cancellation or change in the policy at least thirty (30) days prior to such
change or cancellation.
G. Insurance will be carried on all housing units under construction and until such time as the new
homeowner takes possession and obtains homeowner insurance.
14. EQUAL OPPORTUNITY
A. During the performance of this Agreement, the OWNER is subject to Executive Order 11246,. as
amended, and, therefore, agrees to the following:
(1) The OWNER will not discriminate against any employee or applicant for employment because of
race, color, religion, sex, national origin, or familial status. The OWNER will take affirmative action
to ensure that applicants who are employed are treated during employment without regard to
their race, color, religion, sex, national origin, or familial status, concerning such employment,
upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination;
rates of pay or their apprenticeship. The OWNER agrees to post in conspicuous places, available
to both employees and applicants for employment, notices to be provided by the CITY setting
forth provisions of this nondiscrimination clause.
(2) The OWNER, in all solicitations or advertisements for employees placed by national origin, or
familial status.
B. In accordance with Sections 24 CFR 92.350 and 92 .351 of the HOME regulations, except for specific
exceptions allowing elderly designated projects to apply age restrictions, no person shall on the
ground of race, color, religion, sex, disability, familial status, national origin, or age be excluded from
participation in, be denied the benefits of, or be subjected to discrimination under any program
activity funded in whole or in part from HOME funds. In addition, OWNER shall develop, operate, and
maintain the Project in accordance with the following:
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1. The requirements of the Fair Housing Act (42 U.S.C. 3601-20) and implementing regulations at 24
CFR Part 100; Executive Order 11063, as amended by Executive Order 12259 (3 CFR 1958 B1963
Comp., P. 652 and 3 CFR1980 Comp., P. 307) (Equal Opportunity in Housing) and implementing
regulations at 24 CFR Part 107; and of the Civil Rights Act of 1964 (42 U.S. C. 2000d)
(Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24
CFR Part 1;
2. The prohibitions against discrimination on the basis of age under the Age Discrimination Act of
1975 (42 U.S.C. 6101-07) and implementing Regulations at 24 CFR Part 146, and the prohibitions
against discrimination against handicapped. individuals under Section . 504 of the Rehabilitation
Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR Part 8;
3. The requirements of 24 CFR 5.105(a)(2) requiring that HUD-assisted housing be made available
without regard to actual or perceived sexual orientation, gender identity, or marital status and
prohibiting OWNERs (or their agents) from inquiring about the sexual orientation or gender
identity of an applicant for, or occupant of, HUD-assisted housing for the purpose of determining
eligibility for the housing or otherwise making such housing available. This prohibitio n on inquiries
regarding sexual orientation or gender identity does not prohibit any individual from voluntarily
self-identifying sexual orientation or gender identity;
4. The requirements of Executive Order 11246 (3 CFR 1964-65, Comp., p. 339) (Equal Employment
Opportunity) and the implementing regulations issued at 41 CFR Chapter 60; The
nondiscrimination requirements of section 282 of the HOME Investment Partnerships Act at title
II of the Cranston-Gonzales National Affordable Housing Act, as amended;
5. The requirements of Section 3 of the Housing and Urban Development Act of 1968 (U.S.C. 1701u)
as evidenced by submission of Form HUD-60002 which the OWNER shall complete and return to
CITY within ninety days of the date of this agreement, that:
(a) To the greatest extent feasible, opportunities for training and employment arising in
connection with the planning and carrying out of any project assisted with HOME funds be
given to low-income persons residing within the unit of general local government or the
metropolitan area as determined by HUD, in which the project is located; and
(b) To the greatest extent feasible, contracts for work to be performed in connection with any
such project be awarded to business concerns, including but not limited to individuals or firms
doing business in the field of planning, consulting, design, architecture, building construction,
rehabilitation, maintenance, or repair, which are located in or owned in substantial part by
persons residing in the same metropolitan area as the project.
i. 14.11.2 OWNER Responsibilities for Section 3 Requirements.
CITY and OWNER understand and agree that compliance with the provisions of Section 3,
the regulations set forth in 24 CFR Part 135, and all applicable rules and orders of HUD
shall be a condition of the federal financial assistance provided to. the project binding
upon CITY and OWNER, and their respective successors, assigns, contractors and
subcontractors. Failure to fulfill these requirements shall subject OWNER and its
contractors and subcontractors and their respective successors and assjgns to those
sanctions specified by the grant agreement through which federal assistance is provided
and to such sanctions as are specified by 24 CFR Part 135. OWNER's responsibilities
include:
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ii. Implementing procedures to notify Section 3 residents and business co ncerns about
training, employment, and contracting opportunities generated by Section 3 covered
assistance;
iii. Notifying potential contractors working on Section 3 covered projects of their
responsibilities;
iv. Facilitating the training and employment of Section 3 residents and the award of contracts
to Section 3 business concerns;
v. Assisting and actively cooperating with the Neighborhood Services Department in making
contractors and subcontractors comply;
vi. Refraining from entering into contracts with contractors that are in violation of Section 3
regulations;
vii. Documenting actions taken to comply with Section 3; and
viii. Submitting Section 3 Annual Summary Reports (form HUD-60002) in accordance with 24
CFR Part 135.90.
ix. Section 3 Reporting Requirements.
In order to comply with the Section 3 requirements, OWNER must submit the forms
Section 3 Reporting Forms and take the following actions:
• Report to the CITY all applicants for employment, and all applicants for employment
by contractors and any subcontractors on a quarterly basis. This shall include name,
address, zip code, date of application, and status (hired/not-hired) as of the date of
the report.
• Advertise available positions to the public for open competition and provide
documentation to CITY with the quarterly report that demonstrates such open
advertisement, in the form of printout of Texas Workforce Commission posting, copy
of newspaper advertisement, copy of flyers and listing of locations where flyers were
distributed, and the like.
• Report to the CllY all contracts awarded by contractors and any subcontractors o n a
qu arterly basis. This shall include name of contractor and/or subcontractor, address,
zip code, and amount of award as of the date of the report.
6. Subcontracting with Small and Minority Firms, Women's Business Enterprises: The
requirements of Executive Orders 11625 and 12432 (concerning Minority Business Enterprise),
and 12138 (concerning Women's Business Enterprise). OWNER must make efforts to encourage
the use of minority and women's business enterprises in connection with HOME-funded activities.
OWNER will cooperate with CITY in its minority outreach program to ensure the inclusion, to the
maximum extent possible, of minorities and women, and entities owned by minorities and
women, in the procurement of property and services including; without limitation, real estate
firms, construction firms, financial institutions, investment banking firms, underwriters,
accountants, and providers of legal services.
(a) In order to comply with the reporting requirements of 24 CFR Part 92.508 (a)(7)(ii), OWNER
must submit the form Contract and Subcontract Activity Reporting Form for each contract or
subcontract with a value of $10,000 or more paid, or to be paid, with HOME funds. This form
shall be submitted with the final Reimbursement Request.
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7. The nondiscrimination requirements of Section 282 of the HOME Investment Partnerships Act at
title II of the Cranston-Gonzales National Affordable Housing Act, as amended.
(b) No Discrimination in Employment during the Performance of this AGREEMENT.
(c) OWNER agrees to post notices containing this policy against discrimination in conspicuous
places available to applicants for employment and employees. All solicitations or
advertisements for employees, placed by or on the behalf of the OWNER, shall state that all
qualified applicants will receive consideration for employment without regard to race, color,
national origin, religion, or sex.
(d) During the performance of this AGREEMENT OWNER agrees to the following provision, and
will require that its contractors, subcontractors and vendors also comply with such provision
by including it in all contracts with its contractors and vendors:
i. [Contractor's, Subcontractor's or Vendor's Name] will not unlawfully discriminate
against any employee or applicants for employment because of race, color, sex, gender,
religion, national origin, familial status, disability or perceived disability, sexual
orientation, gender identity, gender expression or transgender.
ii. [Contractor's, Subcontractor's or Vendor's Name] will take affirmative action to ensure
that applicants are hired without regard to race, color, sex, gender, religion, national
origin, familial status, disability or perceived disability, sexual orientation, gender
identity, gender expression or transgender and that employees are treated fairly during
employment without regard to their race, color, sex, gender, religion, national origin,
familial status, disability or perceived disability, sexual orientation, gender identity,
gender expression or transgender. Such action shall include, but not be limited to, the
following: employment, upgrading, demotion or transfer, recruitment or recruitment
advertising, layoff or termination, rates of pay or other forms of compensation, and
selection for training, including apprenticeship.
8. OWNER's Contractors and ADA.
In accordance with the provisions of the Americans With Disabilities Act of 1990 ("ADA"), OWNER
warrants that it will not unlawfully discriminate on the basis of disability in the provision of
services to the general public, nor in the availability, terms and/or conditions of employment for
applicants for employment with, or employees of OWNER. OWNER WARRANTS IT WILL FULLY
COMPLY WITH ADA'S PROVISIONS AND ANY OTHER APPLICABLE FEDERAL, STATE AND LOCAL
LAWS CONCERNING DISABILITY AND WILL DEFEND, INDEMNIFY AND HOLD CITY HARMLESS
AGAINST ANY CLAIMS OR ALLEGATIONS ASSERTED BY THIRD PARTIES, CONTRACTORS,
SUBCONTRACTORS OR VENDORS AGAINST CITY ARISING OUT OF OWNER'S AND/OR ITS
CONTRACTORS', SUBCONTRACTORS', VENDORS', AGENTS' OR EMPLOYEES' ALLEGED FAILURE TO
COMPLY WITH THE ABOVE-REFERENCED LAWS CONCERNING DISABILITY DISCRIMINATION IN THE
PERFORMANCE OF THIS AGREEMENT.
15. CONFLICT OF INTEREST AND VIOLATIONS OF CRIMINAL LAW
A. OWNER covenants that neither it no r any member of its governing body presently has any. interest,
direct or indirect, which would conflict in any manner or degree with the performance of services
required to be performed under this Agreement. OWNER further covenants that in the performance
of this Agreement, no person having such interest shall be employed or appointed as a member of its
governing body.
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B. OWNER further covenants that no member of its governing body or its staff, OWNERs or employees
shall possess any interest in or use this position for a purpose that is or gives the appearance of being
motivated by desire for private gain for themselves, or others, particularly those with which they have
family, business, or other ties.
C. No officer, member, or employee of CITY and no member of its governing body who exercises any
function or responsibilities in the review or approval of the undertaking or carrying out of this
Agreement shall participate in any decision relating to the Agreement which affects his/her personal
interest or the interest in any corporation, partnership, or association in which he/she has direct or:
indirect interest.
D. No officer, employee, agent, or consultant of OWN.ER (known as covered persons) may occupy a
HOME-assisted affordable housing unit in the Project. However, this provision does not apply to an
employee or agent of OWNER who occupies a housing unit in the Project as a project manager or
maintena nce worker.
CITY may approve a waiver to allow a covered person to occupy a unit in the Project based on a written
request from OWNER if, in CITY's sole discretion, a waiver would be appropriate under the provisions
of 24 CFR 92.356(f)(2).
While the conflict of interest provisions in 24 CFR 92.356 do not technically apply to OWNER's
procurement of goods and services associated with the development or operation of the Project,
OWNER agrees to notify CITY in writing and seek CITY approval prior to entering into any contract with
an entity owned in whole or in part by a covered person or an entity owned or controlled in whole or
in part by OWNER, the General Partner, any of the underlying individual OWNERs of the General
Partner, or any of the Guarantors. CITY will review the proposed contract to ensure that the contractor
is qualified and that the costs are reasonable. Approval of an identity of interest contract will be in
CITY's sole discretion.
1. OWNER shall establish conflict of interest policies for Federal Awards and shall provide such
policies in writing to CITY in accordance with the requirements of 2 CFR Part 200.112.
2. Disclosure of Conflicts of Interest. In compliance with 2 CFR Part 200.112, OWNER is required to
timely disclose to CITY in writing any potential conflict of interest, as described in this section.
3. Disclosure ofTexas Penal Code Violations. OWNER affirms that it will adhere to the provisions of
the Texas Penal Code which prohibits bribery and gifts to public servants.
4. Disclosure of Federal Criminal Law Violations. In compliance with 2 CFR Part 200.113, OWNER is
req ui red to timely disclose to CITY all violations of federal criminal law involving fraud, bribery
or gratuicy violations potentially affecting this AGREEMENT.
16. POLITICAL OR SECTARIAN ACTIVITY
A. None of the performance rendered hereunder shall involve any political activity (including,. but not
li mited to, any activity to further the election or defeat of any candidate for public office) or any
activjty undertaken to influence the passage, defeat or final content of legislation.
B. None of the performance rendered hereunder shall involve or benefit in any, manner any sectarian
or religious activity.
17. WARRANTIES
OWNER represents and warrants that:
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A. All information, reports and data heretofore or hereafter requested by CITY and furnished to CITY, are
complete and accurate as of the date shown on the information, data, or report, and, since that date,
have not undergone any significant change without written notice to CITY.
B. Any supporting financial statements heretofore requested by CITY and furnished to that since said
date, there has been no material change, adverse or otherwise, in the financial condition of OWNER.
C. No litigation or legal proceedings are presently pending or threatened against OWNER.
D. None of the provisions herein contravenes or is in conflict with the authority under which OWNER is
doing business or with the provisions of any existing indenture or agreement of OWNER.
E. OWNER has the power to enter into this AGREEMENT and accept payments hereunder, and has taken
all necessary action to authorize such acceptance under the terms and conditions of this AGREEMENT.
F. None of the assets of OWNER is subject to any lien or encumbrance of any character, except for
current taxes not delinquent, except as shown in the financial statements furnished by OWNER to
CITY.
G. Each of these representations and warranties shall be continuing and shall be deemed to have been
repeated by the submission of each request for payment.
18. COVENANTS
A. OWNER agrees to take appropriate measures to enforce the affordability requirements on property
assisted with HOME funds. Property liens or other forms of enforcement, with the City of Denton as
Trustee, must remain with the property for the required afford ab ility period.
B. During the period of time that payment may be made hereunder and so long as any payments remain
unliquidated, OWNER shall not, without the prior written consent of the Housing Programs Manager
or his/her authorized representative:
1. Mortgage, pledge, or otherwise encumber or suffer to be encumbered, any of the assets of
OWNER now owned or hereafter acquired by it, or permit any pre-existing mortgages, liens, or
other encumbrances to remain on,.or attached to, any assets of OWNER which are allocated to
the performance of this AGREEMENT and with respect to which CITY has ownership hereunder.
2. Sell, assign, pledge, transfer or otherwise dispose of accounts receivables, notes or claims for
money due or to become due.
3. Sell, convey, or lease all or substantial part of its assets.
4. Make any advance or loan to, or incur any liability for any other firm, person, entity or corporation
as guarantor, surety, or accommodation endorser.
5. Sell, donate, loan or transfer any equipment or item of personal property purchased with funds
paid to OWNER by CITY, unless CITY authorizes such transfer.
C. OWNER agrees, upon written request by CITY, to require its employees to attend training sessions
sponsored by the Community Development Division.
19. MONITORING AND EVALUATION
A. CITY shall perform on-site monitoring of OWNER's performance under this AGREEMENT.
B. OWNER understands and agrees that it will be subject to monitoring by CITY for compliance with the
HOME Regulations, the terms of this AGREEMENT and the Loan Documents during the Affordability
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Period. OWNER will provide reports and access to project files as requested by CITY during the
Affordability Period and for 5 years after it ends.
C. OWNER agrees to cooperate fully with CITY in the development, implementation and maintenance of
record-keeping systems and to provide data determined by CITY to be necessary for CITY to effectively
fulfill its monitoring and evaluation responsibilities.
0. OWNER agrees to cooperate in such a way so as not to obstruct or delay CITY in such monitoring and
to designate one of its staff members to coordinate the monitoring process as requested by CITY staff.
E. CITY shall provide a written evaluation of contract performance to the OWNER within 30 days of the
monitoring.
F. Within 60 days of notification by the CITY, the OWNER shall provide complete responses include a
statement acknowledging any corrective action required to be taken due to City of Denton monitoring
findings and concerns.
G. OWNER shall submit copies of any fiscal, management, or audit reports by any of OWNER's funding
or regulatory bodies to CITY within five (5) working days of receipt by OWNER.
H. Representatives of CITY, HUD, HUD Office of the Inspector General, and the United States Comptroller
General shall have access during regular business hours, upon at least 48 hours prior notice, to
OWNER's offices and records and. to OWNER's officers and. agents that are related. to the use of the
HOME Funds and the requirements of the HOME Regulations during the Affordability Period, and to
OWNER's officers, agents, employees, contractors, subcontractors and vendors for the purpose of
such monitoring
I. In addition to other provisions of this AGREEMENT regarding frequency of monitoring, CITY reserves
the right to perform desk reviews or on-site monitoring of OWNER's compliance with the terms and
conditions of this AGREEMENT and the Loan. After each monitoring.visit, CITY shall provide OWNER
with a written report of the monitor's findings. If the monitoring report notes deficiencies in OWNER's
performance, the report shall include requirements for the timely correction of said deficiencies by
OWNER. Failure by OWNER to take the action specified in the monitoring report may be cause for
suspension or termination of this AGREEMENT as provided herein, or CITY may take all actions allowed
in the Loan Documents.
J. OWNER shall annually provide to CITY the results of any state or federal monitoring related to the
project including any monitoring by TDHCA. Such results shall be submitted annually to CITY with the
submission of its annual audit and financial statements.
K. This shall be applicable for the duration of the Affordability Period and shall survive the earlier
termination or expiration of this AGREEMENT.
20. DIRECTORS' MEETINGS
A. OWNER shall ensure that the CITY is notified of all meetings, regular and spe cial caJledr of the board
of directors. Notice should be received by the CITY at least 72 hours prior to the meeting. Such notice
shall include an agenda and a brief description of the matters to be discussed.
B. OWNER understands and agrees that CITY representatives shall be afforded access to all of the Board
of Directors' meetings.
C. Minutes of all meetings of OWNER's governing body shall be available to CITY within ten (10) working
days of approval.
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21. NEPOTISM
OWNER shall not employ in any. paid capacity any person who is a member of the immediate family of any
person who is currently employed by OWNER, or is a member of OWNER's governing board. The term
"member of immediate family" includes: wife, husband, son, daughter, mother, father, brother, sister, in-
laws, aunt, uncle, nephew, niece, step-parent, step~child, half-brother and half-sister.
22. SUSPENSION OF FUNDING
A. Upon determination by CITY of OWNER's -failure to timely and properly perform each of the
requirements, time conditions and duties provided herein, CITY, without limiting any rights it may
otherwise have, may, at its discretion, and upon ten (10) working days written notice to OWNER,
withhold further payments to OWNER. Such notice may be given by mail to the Executive Officer and
the Board of Directors of OWNER. The notice shall set forth the default or failure alleged, and the
action required for cure.
B. The period of such suspension shall be of such duration as is appropriate to accomplish corrective
action, but in no event shall it exceed thirty (30) calendar days. At the end of the suspension period,
if CITY determines the default or deficiency has been satisfied, OWNER may be restored to full
compliance status and paid all eligible funds withheld or impounded during the suspension period. If,
however, CITY determines that OWNER has not come into compliance, this AGREEMENT may be
terminated under section 23 of this AGREEMENT.
23. TERMINATION
A. The CITY shall have the right to terminate this AGREEMENT, in whole or in part, at any time whenever
the CITY determines that the OWNER has failed to comply with any term of this AGREEMENT. The
CITY shall notify the OWNER in writing thirty (30) days prior to the date of termination, the effective
date of such termination, and in the case of partial termination, the portion of the AGREEMENT to be
terminated. Property shall be subject to disposition.
B. The CITY shall have the right to terminate this AGREEMENT for convenience, in whole or in part by
written notification to the OWNER which shall include the reason for such termination, the effective
date and the portion to be terminated.
C. The OWNER shall have the right to terminate this AGREEMENT for convenience, in whole or in part,
by written notification to the CITY, which shall include the reason for such termination, the effective
date and the portion to be terminated.
D. If, in the case of a partial termination, it is the determination of CITY that the remaining portion of the
award is not sufficient to accomplish the project as described in the Work Statement, CITY may require
thatthe entire grant be terminated.
E. Default.
The actions noted below shall constitute an event of default by OWNER hereunder. CITY may give
written notice of default to the OWNER, by registered or certified mail, addressed to the address
stated in this AGREEMENT, or such other address as may subsequently, upon appropriate written
notice thereof to CITY, be designated by the OWNER as its legal busi ness address.:
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1. Failure to comply with the terms and conditions hereof;
2. Failure to comply with HOME Program regulations, fair housing laws, and other federal
requirements related to the Project;
3. A default by OWNER under any other of the Loan Documents; and
4. Any event of fraud, misrepresentation, gross negligence, or willful misconduct by OWNER in the
execution or performance of this AGREEMENT or in its application for participation in the HOME
Program.
F. Remedies.
In the event of default by OWNER hereunder, which is not cured within thirty (30) days ofthe mailing
of written notice by CITY as described in section 23.E, CITY may seek any combination of the following
remedies:
1. Withhold any further payments to be made under this AGREEMENT until such time as OWNER's
breach has been cured in accordance with the terms and conditions of any cure period provided
by CITY (but CITY may, in its sole discretion, make disbursement after the occurrence of an Event
of Default without thereby waiving its rights and remedies hereunder);
2. Apply to any appropriate court, State or Federal, for specific performance, in whole or in part, of
the covenants and agreements contained herein, or for an injunction against any violation of such
covenants and agreements;
3. Enter upon the Property and take possession thereof, together with the Project then in the course
of construction, and proceed either in its own name or in the name of the OWNER, as the
attorney-in-fact of the OWNER (which authority is coupled with an interest and is irrevocable by
the OWNER), to complete or cause to be completed the Project, at the cost and expense of the
OWNER;
4. Require the use of or change in professional property management;
5. Require the replacement of the General Partner of OWNER;
6. Pursue the appointment of a receiver to collect rents and profits or to take possession of the
Project;
7. Declare immediately due and payable all unpaid principal, accrued interest and annual fees on
the Note, together with all other sums payable thereunder and the same shall thereupon be
immediately due and payable without presentment or other demand, protest, notice of dishonor
or any other notice of any kind, all of which are hereby expressly waived;
8. Apply sanctions set forth in 24 CFR 92, if determined by CITY to be applicable;
9. Apply to any appropriate court, State or Federal, for such other relief as may be appropriate and
allowed by law, since the injury to CITY arising from a default under any of the terms of this
AGREEMENT would be irreparable and the amount of damage would be difficult to ascertain; and
10. Terminate this AGREEMENT by giving written notice to OWNER of such termination and specifying
the effective date of such termination. If the AGREEMENT is terminated by CITY as provided
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herein, OWNER shall have no claim of payment or claim of benefit for any incomplete project
activities undertaken under this AGREEMENT.
G. Termination for Convenience.
In addition to the termination provision, this AGREEMENT may be terminated by CITY upon thirty (30)
days written notice. In the event of termination under this section, OWNER shall have no claim of
payment or claim of benefit for any incomplete project activities undertaken under this AGREEMENT
and shall. not be entitled to, and. hereby waives, all claims for lost profits and all other damages.and.
expenses.
In terminating in accordance with 2 CFR 200, Appendix II, this AGREEMENT may be terminated in
whole or in part only as follows:
1. By CITY with the consent of OWNER in which case the Parties shall agree upon the termination
conditions, including the effective date and in the case of partial termination, the portion to be
terminated; or
2. By OWNER upon written notification to CITY setting forth the reasons for such termination, the
effective date, and in the case of partial termination, the portion to be terminated. In the case of
a partial termination, CITY may terminate the Contract in its entirety if CITY determines in its sole
discretion that the remaining portion of the Contract to be performed or HOME Funds to be spent
will not accomplish the purposes for which this AGREEMENT was made.
H. Failure to Submit Required Reports and Documentation During Affordability Period.
If OWNER fails to maintain all records and documentation as required in section 12, or fails to submit
any report or documentation required by this AGREEMENT after the Required Improvements are
completed, or if the submitted report or documentation is not in compliance with this AGREEMENT
or the HOME Regulations as determined by CITY, CITY will notify OWNER in writing and the OWNER
will have 30 calendar days from the date of the written notice to obtain or recreate the missing records
or documentation, or submit or resubmit any such report or documentation to CITY. If OWNER fails
to maintain the required reports or documentation or submit or resubmit any such report or
documentation within such time, CITY shall have the right to terminate this AGREEMENT effective
immediately upon written notice of such intent with no penalty or liability to CITY. In the event of
termination under this Section 11.3, any HOME Funds paid to OWNER must be repaid to CITY within
30 days of termination. Failure to repay such HOME Funds will result in CITY exercising all legal
remedies available to CITY under this AGREEMENT and the Loan Documents.
I. In General.
1. Subject to Section 8, and unless specifically provided otherwise in this AGREEMENT, OWNER shall
be in default if OWNER breaches any term or condition of this AGREEMENT. In the event that
such a breach remains uncured after 30 calendar days following written notice by CITY (or such
other notice period as may be specified herein), or if OWNER has diligently and continuously
attempted to cure following receipt of such written notice but reasonably required more than 30
calendar days to cure, as determined by both Parties mutually and in good faith, CITY shall have
the right to elect, in CITY's sole discretion, to:
(a) extend OWNER's time to cure;
(b) terminate this AGREEMENT effective immediately upon written notice of such intent to
OWNER; or
(c) pursue any other legal remedies available to CITY.
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2. CITY's remedies may include:
(a) Direct OWNER to. prepare and follow a. schedule of actions for carrying out the affected
activities, consisting of schedules, timetables and milestones necessary to implement the
affected activities, including extending the Affordability Period .
(b) Direct OWNER to establish and follow a management plan that assigns responsibilities for
carrying out the remedial activities.
(c) Cancel or revise activities likely to be affected by the performance deficiency, before
expending HOME Funds for the activities .
(d) Reprogram HOME Funds that have not yet been expended from affected activities to other
eligible activities or withhold HOME Funds.
(e) Direct OWNER to reimburse CITY in any amount of HOME Funds not used in accordance with
the HOME Regulations.
(f) Suspend reimbursement of HOME Funds for affected activities.
(g) Any other appropriate action including but not limited to any remedial action legally available
such as declaratory judgment, specific performance, damages, temporary or permanent
injunctions, termination of this AGREEMENT or any other contracts with OWNER, and any
other available remedies.
(h) In the event of termination under this Section 8.5, all HOME Funds awarded but unpaid to
OWNER pursuant to this AGREEMENT shall be immediately rescinded and OWNER shall have
no further right to such funds and any HOME Funds already paid to OWNER must be repaid
to CITY within 30 days of termination. Failure to repay such HOME Funds will result in CITY
exercising all legal remedies available to CITY under this AGREEMENT or the Loan Documents.
J. No Funds Disbursed while in Breach.
OWNER understands and agrees that no HOME Funds will be paid to OWNER until alf defaults are
cured to CITY's satisfaction.
K~ No.Compensation After Date of. Termination.
In the event of termination, OWNER shall not receive any HOME Funds in compensation for work
undertaken after the date of termination.
L. Rights of CITY Not Affected.
Termination shall not affect or terminate any of the existing rights of CITY against OWNER, or which
may thereafter accrue because of such default, and this provision shall be in addition to any and all
other rights and remedies available to CITY under the law and Loan Documents including, but not
limited to, compelling OWNER to complete the Required Improvements in accordance with the terms
of the Contract. Such termination does not terminate any applicable provisions of this AGREEMENT
that have been expressly noted as surviving the term or termination of this AG REEM ENT. No delay or
omission by CITY in exercising any right or remedy available to it under this AGREEMENT shall impair
any such right or remedy or constitute a waiver or acquiescence in any OWNER default.
M. Waiver of Breach Not Waiver of Subsequent Breach.
The waiver of a breach of any term, covenant, or condition of this AGREEMENT shall not operate as a
waiver of any subsequent breach of the same or any other term, covenant or condition hereof.
N. Civil, Criminal. and Administrative Penalties.
35
Failure to perform all the Contract terms may result in civil, criminal or administrative penalties,
including, but not limited to those set out in this AGREEMENT.
O. Termination for Cause.
1. CITY may terminate this AGREEMENT in the event of OWNER's default, inability, or failure to
perform, subject to notice, grace and cure periods. In the event CITY terminates this AGREEMENT
for cause, all HOME Funds awarded but unpaid to OWNER pursuant to this AGREEMENT shall be
immediately rescinded and OWNER shall have no further right to such funds and any HOME Funds
already paid to OWNER must be repaid to CITY within 30 calendar days of termination. Failure to
repay such HOME Funds will result in CITY exercising all legal remedies available to CITY under
this AGREEMENT or the Loan Documents. OWNER ACKNOWLEDGES AND AGREES THAT IF CITY
TERMINATES THIS AGREEMENT FOR CAUSE, NEITHER OWNER NOR ANY AFFILIATES OF OWNER
SHALL BE CONSIDERED FOR ANY OTHER CITY CONTRACT FOR HOME FUNDS FOR A MINIMUM OF
S YEARS FROM THE DATE OF TERMINATION. This provision shall not apply to the Investor.
2. OWNER may terminate this AGREEMENT if CITY does not provide the HOME Funds substantially
in accordance with this AGREEMENT. In such event, the termination of the Contract shall have
the effect of returning the Parties to their respective circumstances as existed prior to the
execution of this AGREEMENT, and no terms or obligations shall survive the date of termination,
including but not limited to, reporting, inspections or the Affordability Period.
3. CITY may terminate this AGREEMENT if OWNER defaults on the FWHFC Loan.
P. Dissolution of OWNER Terminates Contract.
In the event OWNER is dissolved or ceases to exist, this AGREEMENT shall terminate. In the event of
termination under this Section, all HOME Funds are subject to repayment and/or CITY may exercise
all of its remedies under this AGREEMENT and the Loan Docum ents.
Q. Reversion of Assets.
In the event this AGREEMENT is terminated with or without cause, all tangible personal property
owned by OWNER that was acquired or improved with the HOME Funds shall belong to CITY and shall
automatically transfer to CITY or to such assignees as CITY may designate.
R~ Notice of Termination under Subordination Agreements.
CITY shall not terminate this AGREEMENT without first giving notice and opportunity to cure as
required in the Subordination Agreements.
S. Notice to Investor of Default.
CITY shall furnish Investor with notice of any default under this AGREEMENT at the address shown
below.
24. INDEMNIFICATION
A. It is expressly. understood.and . agreed by both parties hereto that CITY is contracting with OWNER as
an independent OWNER and that as such, OWNER shall save and hold CITY, its officers, agents and
employees harmless from all liability of any nature or kind, including costs and expenses for, or on
account of, any claims, audit exceptions, demands, suits or damages of any character whatsoever
resulting in whole or in part from the performance or omission of any employee, agent or
representative of OWNER.
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B. OWNER agrees to provide the defense for, and to indemnify and hold harmless CITY its agents,
employees, or OWNERs from any and all claims, suits, causes of action, demands, damages, losses,
attorney's fees, expenses, and liability arising out of the use of these contracted funds and. program
administration and implementation except to the extent caused by the willful act or omission of CITY,
its agents, employees, or OWNERs.
C. OWNER hereby agrees to reimburse, indemnify and save and hold CITY and its successors and assigns
harmless from and against any damage, liability, loss, penalty, charge, cost or deficiency, including but
not limited to any repayment oblig~tion to HUD incurred by CITY under 24 CFR 92.503(1:>), reasonable
attorney's fees, and other costs and expenses incident to monitoring, remedial actions, proceedings
or investigations and the defense of any claim, arising out of, resulting from or related to, and to pay
to CITY or its successor in interest, on demand, the full amount of any sum which CITY or its successor
has paid or becomes obligated to pay on account of:
1. Any misrepresentation, omission, or the breach of any representation or warranty of the OWNER
under the Loan Documents;
2. Any failure of the OWNER to fully perform or observe or cause to be performed or observed any
term, provision, covenant, or agreement to be performed or observed by the OWNER, or after an
assumption, by a subsequent OWNER, pursuant to the loan Documents;
3. Any claims, assessments, or liabilities for charges, penalties, liens, taxes, or deficiencies arising
from or relating to the use and operation by the OWNER, or after an assumption, OWNER's
successors to the Property or Project; or
4. The manufacture, generation, storage, use, treatment, transportation, or disposal of solid waste,
or any toxic or hazardous materials, substances, or pollutants either directly or indirectly by the
OWNER or any of their past or present affiliates on the Property described on Exhibit A, which
occurs prior to possession passing from the OWNER pursuant to a Sheriff's Deed upon completion
of a foreclosure or upon acceptance of a Deed in lieu of Foreclosure.
D. The provisions of this section shall survive the termination of this HOME AGREEMENT, the other loan
Documents, the payment of CITY Deferred Payment loan, and the liabilities and the exercise of any
right or remedy under the Loan Documents.
25. IMMIGRATION NATIONALITY ACT.
CITY actively supports. the Immigration. & Nationality Act (INA) which includes provisions. addressing
employment eligibility, employment verification, and nondiscrimination. OWNER shall verify the identity
and employment eligibility of all employees who perform work under this AGREEMENT. OWNER shall
complete the Employment Elig~bUity Verification Form (1-9), maintain photocopies of all supporting
employment eligibility and identity documentation for all employees, and upon request, provide CITY with
copies of all 1-9 forms and supporting eligibility documentation for each employee who performs work
under this AGREEMENT .. OWNER shaJI. establish appropriate procedures and controls. so that no services.
will be performed by any employee who is not legally eligible to perform such services. OWNER shall
provide CITY with a certification letter that it has complied with the verification requirements required by
this AGREEMENT. OWNER shall indemnify CITY from any penalties or liabilities due to violations of this
provision. CITY shall have the right to immediately terminate this AGREEMENT for violations of this
provision by OWNER.
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26. NOTICE
For purposes of this Agreement, all official communications and-notices among the parties -shall be
deemed made as of the date mailed if sent postage paid to the parties and address set for below:
TO CITY:
Housing Programs Manager
City of Denton
601-E. Hickory Street
Denton, Texas 76205
TOOWNER:
Executive Director
Fairoaks of Denton, Inc.
1950 Lattimore
Denton, Texas 76205
27. VENUE
This AGREEMENT shall be interpreted in accordance with the laws of the State of Texas and venue of
any litigation concerning this AGREEMENT shall be in a court of competent jurisdiction sitting in Denton
County, Texas.
IN WITNESS OF WHICH this Agreement has been executed on this the 1£lday of ~
20 ~/).
CITYJENmN
BY: oLl
C
TODD HILEMAN, CITY MANAGER
ATTEST:
ROSA RIOS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
FAIROAKS OF DENTON, INC.
B~~~
LE NNHuBANKs, PRESIDENTATT£ST
ATTEST:
BOARD SECRETARY FAIROAKS OF DENTON, INC.
3-8
THIS AGREEMENT HAS BEEN
BOTH REVIEWED AND APPROVED
as to financial and operational
obligations and business terms
0~~
Community Development Manager
Title
Community Development
Department
Date Signed: _o......;;z+/2:;_q~}...,.2 .... ,i.l/C..1P=-----,
39-
tXHIBIT A
WORK STATEMENT
Description of improvements: HOME funds will be used to pay costs associated with improvements to
the senior housing facility. The following improvements will be completed, based on cost and funding
availability:
• Replacement of HVAC units of housing units at Fairoaks of Denton, Incorporated, 1950 Lattimore
Street, Denton, Texas 762091ncludes the following units: 1B, 1D, 2A, 2B, 3A, 3E, 4A, 4B, 4C, 4E,
4F,SA,5B,SC,5D,SE,SF,6A,6D,6E, 7A, 7B, 7C, 7E, 7F
40
Construction costs: $105,338.00
EXHIBITB
BUDGET
Please note: If other funding sources and improvements are included in the project, Fairoaks of Denton,
Incorporated, prior to the start of construction, shall provide the Community Development Division with
a total project budget, documentation of all funding sources and commitments, and a project
planning/construction schedule.
HOME FUNDS BUDGET
I HVAC Replacement I $105,338.00
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