2006-295
S:IOurOocumentslOrdinances'DlWraimooreord0607.doc
ORDINANCE NO. 2006.295"'
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE CITY
MANAGER TO EXECUTE AN AGREEMENT BETWEEN THE CITY AND THE FRED
MOORE DAY NURSERY SCHOOL TO PROVIDE FOR IMPROVEMENTS TO THE
CHILDCARE FACILITY AT 821 CROSSTIMBER STREET, DENTON, TX 76205;
AUTHORIZING THE EXPENDITURE OF FUNDS THEREFORE, NOT TO EXCEED
$195,000; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City Council has approved the 2006 Action Plan for Housing and
Community Development which includes $195,000 for improvements to the Fred Moore Day
Nursery School located at 821 Crosstimber Street; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. The City Manager is hereby authorized to execute the attached Agreement
between the City of Denton and the Fred Moore Day Nursery School to provide for
improvements to the childcare facility noted therein.
SECTION 2. The City Council hereby authorizes the City Manager to expend funds in
the manner and amount specified in the Agreement, not to exceed $195,000 and to take any other
actions necessary to complete the City's obligations under the Agreement.
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the
3d day of tJetIJ6t.f'
,2006.
~f1!lflJ
PERR . McN ILL, MAYOR
ATTEST:
JENNIFER W ALTERS, CITY SECRET AR Y
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER ITY TORNEY
BY:
,
Form Letters1
2006-2007
AGREEMENT BETWEEN THE CITY OF DENTON
AND THE FRED MOORE DAY NURSERY SCHOOL
This Agreement is made and entered into by and between the City of Denton, a Texas
municipal corporation, acting by and through its City Manager, pursuant to ordinance, hereinaf-
ter referred to as CITY, and Fred Moore Day Nursery School, 821 Crosstimber Street, Denton
TX 76205, a Texas non-profit corporation, hereinafter referred to as SUBRECIPIENT.
WHEREAS, CITY has received certain funds from the U.S. Department of Housing and
Urban Development under Title I of the Housing and Community Development Act of 1974, as
amended, CDBG Program, CFDA Number 14-218; and
WHEREAS, CITY has adopted a budget for such funds and included therein an author-
ized budget for expenditure of funds for; and
WHEREAS, CITY has designated the Community Development Division as the division
responsible for the administration of this Agreement and all matters pertaining thereto; and
WHEREAS, CITY wishes to engage SUB RECIPIENT to carry out such project;
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.
TERM
This Agreement shall commence on or as of October 1, 2006, and shall terminate on Sep-
tember 30, 2016, unless sooner terminated in accordance with Section 26 "Termination".
2.
RESPONSmILITIES
SUBRECIPIENT hereby accepts the responsibility for the performance of all services
and activities described in the Scope of Services attached hereto as Attachment A, and incorpo-
rated herein by reference, in a satisfactory and efficient manner as determined by CITY, in ac-
cordance with the terms herein. CITY will consider SUBRECIPIENT's executive officer to be
SUBRECIPIENT's representative responsible for the management of all contractual matters per-
taining hereto, unless written notification to the contrary is received from SUBRECIPIENT, and
approved by CITY.
The CITY's Community Development Administrator will be CITY's representative re-
sponsible for the administration of this Agreement.
SUBRECIPIENT certifies that the activities carried out with Community Development
Block Grant funds shall meet the program's National Objective of benefit to low and moderate-
income persons. SUB RECIPIENT shall provide services to persons whose income is equal to or
lower than 80% of the median income of the Dallas standard metropolitan statistical area. To
accomplish this, the SUB RECIPIENT shall use the current applicable income limits published
by the Department of Housing and Urban Development for lower income housing assistance un-
der Section 8 of the United States Housing Act of 1937. Income eligibility shall be determined
by the sum of the gross income of all individuals residing in the household. Services must be
provided directly to or on behalf of specific identified eligible clients. Eligibility documentation
must be included in each client's file and updated annually or services must be provided to a cli-
entele that is within a "presumed benefit" category.
3.
CITY'S OBLIGATION
A. Limit of Liability. CITY will reimburse SUBRECIPIENT for expenses incurred pursu-
ant and in accordance with the project budget attached hereto as Attachment B and the
Scope of Services herein attached as Attachment A and incorporated herein by reference.
Notwithstanding any other provision of the Agreement, the total of all payments and
other obligations made or incurred by CITY hereunder shall not exceed the sum of
$195,000.
B. Measure of Liability. In consideration of full and satisfactory services and activities
hereunder by SUBRECIPIENT and receipt of a requisition for payment with appropriate
documentation of expenditures, CITY shall make payments to SUB RECIPIENT based on
the Budget attached hereto and incorporated herein for all purposes as Attachment B,
subject to the limitations and provisions set forth in this Section and Section 7 of this
Agreement. Payments may be contingent upon certification of the SUBRECIPIENT's fi-
nancial management system in accordance with the standards specified in OMB Circular
A-IIO.
(I) The parties expressly understand and agree that CITY's obligations under this
Section are contingent upon the actual receipt of adequate Community Develop-
ment Block Grant (CDBG) funds to meet CITY's liabilities under this Agreement.
If adequate funds are not available to make payments under this Agreement,
CITY shall notify SUB RECIPIENT in writing within a reasonable time after such
fact has been determined. CITY may, at its option, either reduce the amount of its
liability, as specified in Subsection A of this Section or terminate the Agreement.
If CDBG funds eligible for use for purposes of this Agreement are reduced, CITY
shall not be liable for further payments due to SUB RECIPIENT under this Agree-
ment.
(2) It is expressly understood that this Agreement in no way obligates the General
Fund or any other monies or credits of the City of Denton.
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(3) CITY shall not be liable for any cost or portion thereof which:
(a) has been paid, reimbursed or is subject to payment or reimbursement,
from any other source;
(b) was incurred prior to the beginning date, or after the ending date specified
in Section I;
(c) is not in strict accordance with the terms of this Agreement, including all
attachments attached hereto;
(d) has not been billed to CITY within 90 calendar days following billing to
SUB RECIPIENT, or termination of the Agreement, whichever date is ear-
lier; or
(e) is not an allowable cost as defined by Section II of this Agreement or the
project budget.
(4) CITY shall not be liable for any cost or portion thereof which is incurred with re-
spect to any activity of SUBRECIPIENT requiring prior written authorization
from CITY, or after CITY has requested that SUBRECIPIENT furnish data con-
cerning such action prior to proceeding further, unless and until CITY advises
SUBRECIPIENT to proceed.
(5) CITY shall not be obligated or liable under this Agreement to any party other than
SUBRECIPIENT for payment of any monies or provision of any goods or ser-
vices.
4.
COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS
A. SUBRECIPIENT understands that funds provided to it pursuant to this Agreement are
funds which have been made available to CITY by the Federal Government (U.S. Department of
Housing and Urban Development) under the Housing and Community Development Act of
1974, as amended, in accordance with an approved Grant Application and specific assurances.
Accordingly, SUBRECIPIENT assures and certifies that it will comply with the requirements of
the Housing and Community Development Act of 1974 (P.L. 93-383) as amended and with regu-
lations promulgated thereunder, and codified at 24 CFR 570. The foregoing is in no way meant
to constitute a complete compilation of all duties imposed upon SUBRECIPIENT by law or ad-
ministrative ruling, or to narrow the standards which SUB RECIPIENT must follow.
SUBRECIPIENT further accrues and certifies that if the regulations and issuances prom-
ulgated pursuant to the Act are amended or revised, it shall comply with them, or notify CITY, as
provided in Section 23 ofthis Agreement.
SUB RECIPIENT agrees to abide by the conditions of and comply with the requirements
of the Office of Management and Budget Circulars Nos. A-122, A-87, A-133 and the regulations
at 24 CFR Part 84 as applicable.
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B. SUB RECIPIENT shall comply with all applicable federal laws, laws of the State of
Texas and ordinances of the City of Denton.
C. SUBRECIPIENT is required to comply with the applicable uniform administrative re-
quirements as described in 24 CFR 570.502, 570.505 and 24 CFR 570 subpart K with the
exceptions noted below:
(1) SUBRECIPIENT does not assume CITY'S environmental responsibilities
described at CFR 570.604; and
(2) SUBRECIPIENT does not assume the CITY's responsibility for initiating
the review process under the provisions of24 CFR Part 52.
D. SUBRECIPIENT agrees to comply with the requirements of the Secretary of Labor in
accordance with the Davis-Bacon Act as amended, the provisions of the Contract Work
Hours Safety Standards Act, the Copeland "Anti-Kickback Act (40 U.S.c. 276a-276a-5;
40 USC 327 and 40 USC 276c) and all other applicable Federal, state and local laws and
regulations pertaining to labor standards and insofar as those acts apply to the perform-
ance of this contract. SUBRECIPIENT will work with CITY to obtain and maintain
documentation of compliance.
E. SUBRECIPIENT agrees to comply with the provisions of Section 3, the regulations set
forth in 24 CFR 135, and all applicable rules and orders issued hereunder prior to the
execution of this agreement, and shall also be binding on any of the SUBRECIPIENT'S
subcontractors. The SUBRECIPIENT certifies that no contractual or other disability ex-
ists which would prevent compliance with these requirements. SUB RECIPIENT further
agrees to include a statement in all subcontracts requiring compliance with Section 3 and
requiring subcontractors, to the greatest extent feasible, to provide opportunities for
training and employment to low and moderate-income individuals that are residents of
the project area.
F. CONTRACTOR certifies that it is not currently listed on the General Services Administra-
tion's List of Parties Excluded from Federal Procurement or Nonprocurement Programs in
accordance with Executive Orders 12549 and 12689 and will not enter into agreements to
expend Federal funds with contractors that are currently listed.
5.
REPRESENTATIONS
A. SUBRECIPIENT 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.
B. The person or persons signing and executing this Agreement on behalf of SUBRECIPI-
ENT, do hereby warrant and guarantee that he, she, or they have been fully authorized by
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SUBRECIPIENT to execute this Agreement on behalf of SUBRECIPIENT and to validly
and legally bind SUB RECIPIENT to all terms, performances and provisions herein set
forth.
C. 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 SUBRE-
CIPIENT or the person signing the Agreement to enter into this Agreement. SUBRE-
CIPIENT 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.
D. SUBRECIPIENT agrees that the funds and resources provided to SUBRECIPIENT 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, SUBRECIPIENT had this
Agreement not been executed.
6.
PERFORMANCEBYSUBREC~IENT
SUBRECIPIENT will provide, oversee, administer, and carry out all of the activities and
services set out in the Work Statement, attached hereto and incorporated herein for all purposes
as Attachment A, utilizing the funds described in Attachment B, attached hereto and incorpo-
rated herein for all purposes and deemed by both parties to be necessary and sufficient payment
for full and satisfactory performance of the program, as determined solely by CITY and in ac-
cordance with all other terms, provisions and requirements of this Agreement.
No modifications or alterations may be made in the Scope of Services without the prior
written approval of the City's Community Development Administrator.
7.
PAYMENTS TO SUBREC~IENT
A. The CITY shall pay to the SUBRECIPIENT a maximum amount of money totaling
$195,000 for activities carried out under this Agreement. CITY will pay these funds on a
reimbursement basis to the SUBRECIPIENT within twenty days after CITY has received
supporting documentation of eligible expenditures. SUBRECIPIENT's failure to request
reimbursement on a timely basis may jeopardize present or future funding.
Funds are to be used for the sole purpose of carrying out the activities described in the
Scope of Services herein attached as Attachment A and based on the budget herein at-
tached as Attachment B.
Page 5
B. Excess Payment. SUBRECIPIENT shall refund to CITY within ten working days of
CITY's request, any sum of money which has been paid by CITY and which CITY at any
time thereafter determines:
(I) has resulted in overpayment to SUBRECIPIENT; or
(2) has not been spent strictly in accordance with the terms of this Agreement; or
(3) is not supported by adequate documentation to fully justify the expenditure.
C. Disallowed Costs. Upon termination of this Agreement, should any expense or change
for which payment has been made be subsequently disallowed or disapproved as a result
of any auditing or monitoring by CITY, the Department of Housing and Urban Develop-
ment, or any other Federal agency, SUBRECIPIENT will refund such amount to CITY
within ten working days of a written notice to SUBRECIPIENT, which specifies the
amount disallowed. Refunds of disallowed costs may not be made from these or any
funds received from or through CITY
D. Reversion of Assets. SUBRECIPIENT, upon expiration of this Agreement shall transfer
to the CITY any CDBG funds on hand at the time of expiration and any accounts receiv-
able attributable to the use of CDBG funds. If CITY finds that SUBRECIPIENT is un-
willing and/or unable to comply with any of the terms of this Contract, CITY may require
a refund of any and all money expended pursuant to this Contract by SUBRECIPIENT,
as well as any remaining unexpended funds which shall be refunded to CITY within ten
working days of a written notice to SUB RECIPIENT to revert these financial assets. The
revision of these financial assets shall be in addition to any other remedy available to
CITY either at law or in equity for breach of this Contract.
D. Obligation of Funds. In the event that actual expenditure rates deviate from SUBRE-
CIPIENT's provision of a corresponding level of performance, as specified in Attach-
ment A, CITY hereby reserves the right to reappropriate or recapture any such underex-
pended funds.
E. Contract Close Out. SUBRECIPIENT shall submit the Agreement close out package to
CITY, together with a final expenditure report, for the time period covered by the last in-
voice requesting reimbursement of funds under this Agreement, within 15 working days
following the close of the Agreement period. SUBRECIPIENT shall utilize the form
agreed upon by CITY and SUBRECIPIENT.
8.
WARRANTIES
SUB RECIPIENT represents and warrants that:
A. All information, reports and data heretofore or hereafter requested by CITY and fur-
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nished 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
CITY, are complete, accurate and fairly reflect the financial condition of SUBRECIPI-
ENT on the date shown on said report, and the results of the operation for the period cov-
ered by the report, and that since said date, there has been no material change, adverse or
otherwise, in the financial condition of SUBRECIPIENT.
C. No litigation or legal proceedings are presently pending or threatened against SUBRE-
CIPIENT.
D. None of the provisions herein contravene or are in conflict with the authority under which
SUBRECIPIENT is doing business or with the provisions of any existing indenture or
agreement of SUBRECIPIENT.
E. SUB RECIPIENT has the power to enter into this Agreement and accept payments here-
under, and has taken all necessary action to authorize such acceptance under the terms
and conditions of this Agreement.
F. None of the assets of SUB RECIPIENT is subject to any lien or encumbrance of any char-
acter, except for current taxes not delinquent, except as shown in the financial statements
furnished by SUB RECIPIENT 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.
9.
COVENANTS
A. During the period of time that payment may be made hereunder and so long as any pay-
ments remain unliquidated, SUBRECIPIENT shall not, without the prior written consent
of the Community Development Administrator or her authorized representative:
(I) Mortgage, pledge, or otherwise encumber or suffer to be encumbered, any of the
assets of SUB RECIPIENT 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 SUBRECIPIENT which are allocated to the performance of this
Agreement and with respect to which CITY has ownership hereunder.
Page 7
(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, en-
tity or corporation as guarantor, surety, or accommodation endorser.
(4) Sell, donate, loan or transfer any equipment or item of personal property pur-
chased with funds paid to SUBRECIPIENT by CITY, unless CITY authorizes
such transfer.
(5) Enter into any subcontracts with any agency or individual in the performance of
this contract without the written consent of the Grantee prior to the execution of
such an agreement.
B. SUBRECIPIENT agrees, upon written request by CITY, to require its employees to at-
tend training sessions sponsored by the Community Development Division.
10.
ALLOWABLE COSTS
A. Costs shall be considered allowable only if incurred directly and specifically in the per-
formance of and in compliance with this Agreement and in conformance with the stan-
dards and provisions of Attachments A and B.
B. Approval of SUBRECIPIENT's budget, Attachment B, does not constitute prior written
approval, even though certain items may appear herein. CITY's prior written authoriza-
tion is required in order for the following to be considered allowable costs:
(1) CITY shall not be obligated to any third parties, including any contractors of
SUBRECIPIENT, and CITY funds shall not be used to pay for any contract ser-
vice extending beyond the expiration of this Agreement.
Written requests for prior approval are SUBRECIPIENT's responsibility and shall be
made within sufficient time to permit a thorough review by CITY. SUBRECIPIENT
must obtain written approval by CITY prior to the commencement of procedures to so-
licit or purchase services, equipment, or real or personal property. Any procurement or
purchase which may be approved under the terms of this Agreement must be conducted
in its entirety in accordance with the provisions of this Agreement.
11.
PROGRAM INCOME
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A. For purposes of this Agreement, program income means earnings of SUBRECIPIENT
realized from activities resulting from this Agreement or from SUBRECIPIENT's man-
agement of funding provided or received hereunder. Such earnings include, but are not
limited to, income from interest, usage or rental or lease fees, income produced from con-
tract-supported services of individuals or employees or from the use or sale of equipment
or facilities of SUBRECIPIENT provided as a result of this Agreement, and payments
from clients or third parties for services rendered by SUB RECIPIENT under this Agree-
ment.
B. SUBRECIPIENT shall maintain records of the receipt and disposition of program income
in the same manner as required for other contract funds, and reported to CITY in the for-
mat prescribed by CITY. CITY and SUBRECIPIENT agree, that any fees collected for
services perfonned by SUBRECIPIENT shall be used for payment of costs associated
with service provision. Revenue remaining after payment of all program expenses for
service provision shall be considered Program Income and shall be subject to all the re-
quirements of this Agreement and the regulations found at CFR, Section 570.504.
C. SUBRECIPIENT shall include this Section in its entirety in all of its contracts which in-
volve other income-producing services or activities.
D. It is SUBRECIPIENT's responsibility to obtain from CITY a prior determination as to
whether or not income arising directly or indirectly from this Agreement, or the perfonn-
ance thereof, constitutes program income. SUB RECIPIENT is responsible to CITY for
the repayment of any and all amounts detennined by CITY to be program income, unless
otherwise approved in writing by CITY.
12.
NVUNTENANCE OF RECORDS
A. SUB RECIPIENT agrees to maintain records that will provide accurate, current, separate,
and complete disclosure of the status of the funds received under this Agreement, in
compliance with the provisions of Attachment B, attached hereto, and with any other ap-
plicable Federal and State regulations establishing standards for financial management
including OMB Circulars A-87, A-I22, A-B3 and the regulations at 24 CFR Part 84 as
applicable; Title 24 CFR Section 570.502 (b); Title 24 CFR Sections 570.504 and
570.506 as they pertain to costs incurred, audits, program income, administration and
other activities and functions. SUB RECIPIENT' s record system shall contain sufficient
documentation to provide in detail full support and justification for each expenditure.
Nothing in this Section shall be construed to relieve SUBRECIPIENT of fiscal account-
ability and liability under any other provision of this Agreement or any applicable law.
SUBRECIPIENT shall include the substance of this provision in all subcontracts.
B. SUBRECIPIENT agrees to retain all books, records, documents, reports, and written ac-
counting procedures pertaining to the operation of programs and expenditures of funds
under this Agreement for five years.
Page 9
C. Nothing in the above subsections shall be construed to relieve SUBRECIPIENT of re-
sponsibility for retaining accurate and current records, which clearly reflect the level and
benefit of services provided under this Agreement.
D. At any reasonable time and as often as CITY may deem necessary, the SUBRECIPIENT
shall make available to CITY, HUD, or any of their authorized representatives, all of its
records and shall permit CITY, HUD, or any of their 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 requested by said representatives.
13.
REPORTS AND INFORMATION
At such times and in such form as CITY may require, SUBRECIPIENT shall furnish
such statements, records, data and information as CITY may request and deem pertinent to mat-
ters covered by this Agreement.
SUBRECIPIENT shall submit quarterly beneficiary and financial reports to CITY no less
than once each three months. The beneficiary report shall detail client information, including
race, income, female head of household and other statistics required by CITY. The financial re-
port shall include information and data relative to all programmatic and financial reporting as of
the beginning date specified in Section I of this Agreement. Beneficiary and financial reports
shall be due to City within IS working days after the completion of each quarter.
Unless the CITY has granted a written exemption, SUBRECIPIENT shall submit an audit
conducted by independent examiners in accordance with Generally Accepted Accounting Princi-
ples. If the SUBRECIPIENT receives and/or expends more than $500,000 in federal funding,
the audit must be conducted in accordance with OMB Circular A-B3 as applicable within thirty
days after receipt of such audit.
14.
MONITORING AND EVALUATION
A. CITY shall perform on-site monitoring of SUBRECIPIENT's performances under this
Agreement.
B. SUBRECIPIENT agrees that CITY may carry out monitoring and evaluation activities to
ensure adherence by SUBRECIPIENT to the Scope of Services, and Program Goals and
Objectives, which are attached hereto as Attachment A, as well as other provisions ofthis
Agreement.
C. SUBRECIPIENT agrees to cooperate fully with CITY in the development, implementa-
tion and maintenance of record-keeping systems and to provide data determined by CITY
Page I 0
to be necessary for CITY to effectively fulfill its monitoring and evaluation responsibili-
ties.
D. SUBRECIPIENT 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 to coordinate the monitoring process
as requested by CITY staff.
G. After each official monitoring visit, CITY shall provide SUBRECIPIENT with a written
report of monitoring findings documenting findings and concerns that will require a writ-
ten response to the City. An acceptable response must be received by the City within 60
days from the SUBRECIPIENT's receipt of the monitoring report or audit review letter.
Future contract payments can be withheld for SUBRECIPIENT's failure to submit a re-
sponse within 60 days.
H. SUB RECIPIENT shall submit copies of any fiscal, management, or audit reports by any
of SUBRECIPIENT's funding or regulatory bodies to CITY within five working days of
receipt by SUBRECIPIENT.
1. SUBRECIPIENT will monitor all subcontracted services on a regular basis to assure
contract compliance. Results of monitoring efforts shall be summarized in written re-
ports and supported with documented evidence of follow-up actions taken to correct ar-
eas of noncompliance.
15.
DIRECTORS' MEETINGS
During the terms of this Agreement, SUBRECIPIENT shall cause to be delivered to
CITY copies of all notices of meetings of its Board of Directors, setting forth the time and place
thereof. Such notice shall be delivered to CITY in a timely manner to give adequate notice, and
shall include an agenda and a brief description of the matters to be discussed. SUBRECIPIENT
understands and agrees that CITY representatives shall be afforded access to all of the Board of
Directors' meetings.
Minutes of all meetings of SUB RECIPIENT's governing body shall be available to CITY
within ten days after Board approval.
16.
INSURANCE
A. SUBRECIPIENT 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 Attachment A are conducted,
and the employees conducting these activities, shall be covered by premise liability in-
Page II
surance, commonly referred to as "Owner/Tenant" coverage with CITY named as an ad-
ditional insured. Upon request of SUBRECIPIENT, CITY may, at its sole discretion, ap-
prove alternate insurance coverage arrangements.
C. SUBRECIPIENT will comply with applicable workers' compensation statues and will
obtain employers' liability coverage where available and other appropriate liability cov-
erage for program participants, if applicable.
D. SUB RECIPIENT will maintain adequate and continuous liability insurance on all vehi-
cles owned, leased or operated by SUBRECIPIENT. All employees of SUBRECIPIENT
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 ofa valid license and insurance must be maintained
on a current basis in SUBRECIPIENT'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 SUBRECIPIENT.
F. The policy or policies of insurance shall contain a clause which requires that CITY and
SUBRECIPIENT be notified in writing of any cancellation of change in the policy at
least 30 days prior to such change or cancellation.
17.
CIVIL RIGHTS I EQUAL OPPORTUNITY
A. SUB RECIPIENT shall comply with all applicable equal employment opportunity and
affirmative action laws or regulations. The SUBRECIPIENT shall not discriminate
against any employee or applicant for employment because of race, color, creed, religion,
national origin, gender, age or disability. The SUBRECIPIENT will take affirmative ac-
tion to insure that all employment practices are free from such discrimination. Such em-
ployment practices include but are not limited to the following: hiring, upgrading, demo-
tion, transfer, recruitment or recruitment advertising, layoff, termination, rates of payor
other forms of compensation and selection for training, including apprenticeship..
B. The SUBRECIPIENT agrees to comply with Title VI of the Civil Rights Act of 1964 as
amended, Title VIII of the Civil Rights Act of 1968 as amended, Section 104(b) and Sec-
tion 109 of Title I of the Housing and Community Development Act of 1974 as
amended, Section 504 of the Rehabilitation Act of 1973, the Americans with Disabilities
Act of 1990, the Age Discrimination Act of 1975, Executive Order 11063 and Executive
Order 11246 as amended by Executive Orders 11375 and 12086.
C. SUBRECIPIENT will furnish all information and reports requested by the CITY, and
will permit access to its books, records, and accounts for purposes of investigation to as-
certain compliance with local, state and Federal rules and regulations.
Page 12
D. In the event of SUBRECIPIENT's non-compliance with the non-discrimination require-
ments, CITY may cancel or terminate the Agreement in whole or in part, and SUBRE-
CIPIENT may be barred from further contracts with CITY.
18.
PERSONNEL POLICIES
Personnel policies shall be established by SUBRECIPIENT and shall be available for ex-
amination. Such personnel policies shall:
A. Be no more liberal than CITY's personnel policies, procedures, and practices, including
policies with respect to employment, salary and wage rates, working hours and holidays,
fringe benefits, vacation and sick leave privileges, and travel; and
B. Be in writing and shall be approved by the governing body of SUB RECIPIENT and by
CITY.
19.
CONFLICT OF INTEREST
A. SUBRECIPIENT covenants that neither it nor any member of its governing body pres-
ently 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.
SUBRECIPIENT 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.
B. SUBRECIPIENT further covenants that no member of its governing body or its staff,
contractors or employees shall possess any interest in or use his position for a purpose
that is or gives the appearance of being motivated by desire for private gain for himself,
or others, particularly those with which he has 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 or her personal interest or the interest in any corporation, partnership, or
association in which he or she has a direct or indirect interest.
20.
NEPOTISM
SUBRECIPIENT 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 SUBRECIPIENT, or is a
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member of SUBRECIPIENT's governing board. The term "member of immediate family" in-
cludes: wife, husband, son, daughter, mother, father, brother, sister, in-laws, aunt, uncle, nephew,
niece, step-parent, step-child, half-brother and half-sister.
21.
POLmCAL OR SECTARIAN ACTIVITY
A. Neither the funds advanced pursuant to this Agreement, nor any personnel which may be
employed by the SUBRECIPIENT with funds advanced pursuant to this Agreement shall be in
any way or to any extent engaged in any conduct or political activity in contravention of Chapter
IS of Title 5 ofthe United States Code.
B. The SUBRECIPIENT is prohibited from using funds provided herein or personnel em-
ployed in the administration of the program for: political activities; sectarian or religious activi-
ties, lobbying, political patronage or nepotism activities.
C. The SUBRECIPIENT agrees that none of the funds or services provided directly or indi-
rectly under this Agreement shall be used for any partisan political activity or to further the elec-
tion of defeat of any candidate for public office, or for publicity, lobbying and/or propaganda
purposes designed to support or defeat pending legislation. Employees of the SUBRECIPIENT
connected with any activity that is funded in whole or in part by funds provided to SUBRECIPI-
ENT under this Agreement may not under the term of this Agreement:
I. Use their official position or influence to affect the outcome of an election or nomi-
nation.
2. solicit contributions for political purposes; or
3. take an active part in political management or in political campaigns.
SUBRECIPIENT hereby agrees to sign a Certification Regarding Lobbying included herein as
Attachment "C" and if necessary, the Disclosure of Lobbying Activities provided by the CITY.
22.
PUBLICITY
A. Where such action is appropriate, SUBRECIPIENT shall publicize the activities con-
ducted by SUB RECIPIENT under this Agreement. In any news release, sign, brochure,
or other advertising medium, disseminating information prepared or distributed by or for
SUBRECIPIENT, the advertising medium shall state that the U.S. Department of Hous-
ing and Urban Development's Community Development Block Grant Program funding
through the City of Denton has made the project possible.
B. All published material and written reports submitted under this project must be originally
developed material unless otherwise specifically provided in this Agreement. When ma-
terial not originally developed is included in a report, the report shall identify the source
in the body of the report or by footnote. This provision is applicable when the material is
Page 14
in a verbatim or extensive paraphrase format.
All published material submitted under this project shall include the following reference
on the front cover or title page:
This document is prepared in accordance with the City of Denton's Com-
munity Development Block Grant Program, with funding received from
the United States Department of Housing and Urban Development.
C. All reports, documents, studies, charts, schedules, or other appended documentation to
any proposal, content of basic proposal, or contracts and any responses, inquiries, corre-
spondence and related material submitted by SUB RECIPIENT shall become the property
of CITY upon receipt.
23.
CHANGES AND AMENDMENTS
A. Any alterations, additions, or deletions to the terms of this Agreement shall be by written
amendment executed by both parties, except when the terms of this Agreement expressly
provide that another method shall be used.
B. SUBRECIPIENT may not make transfers between or among approved line items within
budget categories set forth in Attachment B without prior written approval of CITY.
SUBRECIPIENT shall request, in writing, the budget revision in a form prescribed by
CITY, and such request for revision shall not increase the total monetary obligation of
CITY under this Agreement. In addition, budget revisions cannot significantly change the
nature, intent, or scope of the program funded under this Agreement.
C. SUBRECIPIENT will submit revised budget and program information, whenever the
level of funding for SUBRECIPIENT or the program(s) described herein is altered ac-
cording to the total levels contained in any portion of Attachment B.
D. It is understood and agreed by the parties hereto that changes in the State, Federal or local
laws or regulations pursuant hereto may occur during the term of this Agreement. Any
such modifications are to be automatically incorporated into this Agreement without writ-
ten amendment hereto, and shall become a part of the Agreement on the effective date
specified by the law or regulation.
E. CITY may, from time to time during the term of the Agreement, request changes in At-
tachment A, which may include an increase or decreased in the amount of SUBRECIPI-
ENT's compensation. Such changes shall be incorporated in a written amendment hereto,
as provided in Subsection A of this Section.
Page 15
F. Any alterations, deletion, or additions to the Contract Budget Detail incorporated in At-
tachment B shall require the prior written approval of CITY.
G. SUBRECIPIENT agrees to notifY CITY of any proposed change in physical location for
work performed under this Agreement at least 30 calendar days in advance of the change.
H. SUBRECIPIENT shall notifY CITY of any changes in personnel or governing board
composition.
I. It is expressly understood that neither the performance of Attachment A for any program
contracted hereunder nor the transfer of funds between or among said programs will be
permitted.
24.
SUSPENSION OF FUNDING
Upon determination by CITY of SUBRECIPIENT's failure to timely and properly per-
form each of the requirements, time conditions and duties provided herein, CITY, without limit-
ing any rights it may otherwise have, may, at its discretion, and upon ten working days written
notice to SUBRECIPIENT, withhold further payments to SUB RECIPIENT. Such notice may be
given by mail to the Executive Officer and the Board of Directors of SUB RECIPIENT. The no-
tice shall set forth the default or failure alleged, and the action required for cure.
The period of such suspension shall be of such duration as is appropriate to accomplish
corrective action, but in no event shall it exceed 30 calendar days. At the end of the suspension
period, if CITY determines the default or deficiency has been satisfied, SUBRECIPIENT may be
restored to full compliance status and paid all eligible funds withheld or impounded during the
suspension period. If however, CITY determines that SUB RECIPIENT has not come into com-
pliance, the provisions of Section 26 may be effectuated.
25.
TERMINATION
A. CITY may terminate this Agreement for cause under any of the following reasons or for
other reasons not specifically enumerated in this paragraph:
(1) SUBRECIPIENT's failure to attain compliance during any prescribed period of sus-
pension as provided in Section 24.
(2) SUBRECIPIENT's failure to materially comply with any of the terms of this Agree-
ment.
(3) SUBRECIPIENT's violation of covenants, agreements or guarantees of this Agree-
ment.
Page 16
(4) Termination or reduction of funding by the United States Department of Housing and
Urban Development.
(5) Finding by CITY that SUB RECIPIENT:
(a) is in such unsatisfactory financial condition as to endanger performance
under this Agreement;
(b) has allocated inventory to this Agreement substantially exceeding reason-
able requirements;
(c) is delinquent in payment of taxes, or of costs of performance of this
Agreement in the ordinary course of business.
(6) Appointment of a trustee, receiver or liquidator for all or substantial part of SUBRE-
CIPIENT's property, or institution of bankruptcy, reorganization, rearrangement of or
liquidation proceedings by or against SUBRECIPIENT.
(7) SUBRECIPIENT's inability to conform to changes required by Federal, State and 10-
callaws or regulations as provided in Section 4, and Section 2 of this Agreement.
(8) The commission of an act of bankruptcy.
(9) SUBRECIPIENT's violation of any law or regulation to which SUBRECIPIENT is
bound or shall be bound under the terms of the Agreement.
CITY shall promptly notifY SUBRECIPIENT in writing of the decision to terminate and
the effective date of termination. Simultaneous notice of pending termination maybe made to
other funding source specified in Attachment B.
B. CITY may terminate this Agreement for convenience at any time. If CITY terminates this
Agreement for convenience, SUBRECIPIENT will be paid an amount not to exceed the
total of accrued expenditures as of the effective date of termination. In no event will this
compensation exceed an amount which bears the same ratio to the total compensation as
the services actually performed bears to the total services of SUBRECIPIENT covered by
the Agreement, less payments previously made.
C. SUB RECIPIENT may terminate this Agreement in whole or in part by written notice to
CITY, if a termination of outside funding occurs upon which SUBRECIPIENT depends
for performance hereunder. SUBRECIPIENT may opt, within the limitations of this
Agreement, to seek an alternative funding source, with the approval of CITY, provided
the termination by the outside funding source was not occasioned by a breach of contract
as defmed herein or as defined in a contract between SUB RECIPIENT and the funding
source in question.
Page I 7
SUB RECIPIENT may terminate this Agreement upon the dissolution of SUBRECIPI-
ENT's organization not occasioned by a breach ofthis Agreement.
D. Upon receipt of notice to terminate, SUBRECIPIENT shall cancel, withdraw or other-
wise terminate any outstanding orders or subcontracts, which relate to the performance of
this Agreement. CITY shall not be liable to SUBRECIPIENT or SUBRECIPIENT's
creditors for any expenses, encumbrances or obligations whatsoever incurred after the
termination date listed on the notice to terminate referred to in this paragraph.
E. Notwithstanding any exercise by CITY of its right of suspension or termination,
SUBRECIPIENT shall not be relieved of liability to CITY for damages sustained by
CITY by virtue of any breach of the Agreement by SUB RECIPIENT, and CITY may
withhold any reimbursement to SUBRECIPIENT until such time as the exact amount of
damages due to CITY from SUB RECIPIENT is agreed upon or otherwise determined.
26.
NOTIFICATION OF ACTION BROUGHT
In the event that any claim, demand, suit or other action is made or brought by any per-
sones), firm corporation or other entity against SUBRECIPIENT, SUBRECIPIENT shall give
written notice thereof to CITY within two working days after being notified of such claim, de-
mand, suit or other action. Such notice shall state the date and hour of notification of any such
claim, demand, suit or other action; the names and addresses of the person(s), firm, corporation
or other entity making such claim, or that instituted or threatened to institute any type of action
or proceeding; the basis of such claim, action or proceeding; and the name of any person(s)
against whom such claim is being made or threatened. Such written notice shall be delivered ei-
ther personally or by mail.
27.
INDEMNIFICATION
A. It is expressly understood and agreed by both parties hereto that CITY is contract-
ing with SUBRECIPIENT as an independent SUBRECIPIENT and that as such,
SUBRECIPIENT shaD save and hold CITY, its officers, agents and employees
harmless from aU 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 omis-
sion of any employee, agent or representative of SUBRECIPIENT.
B. SUBRECIPIENT agrees to provide the defense for, and to indemnify and hold
harmless CITY its agents, employees, or SUBRECIPIENTs from any and aD claims,
suits, causes of action, demands, damages, losses, attorney fees, expenses, and liabil-
ity arising out of the use of these contracted funds and program administration and
Page 18
implementation except to the extent caused by the wilHul act or omission of CITY,
its agents, employees, or SUBRECIPIENTs.
28.
NON-RELIGIOUS ACTMTES
The SUBRECIPIENT will provide all services under this Agreement in a manner that is exclu-
sively non-religious in nature and scope. There shall be no religious services, proselytizing, in-
struction or any other religious preference, influence or discrimination in connection with pro-
viding the services hereunder.
29.
MISCELLANEOUS
A. SUB RECIPIENT shall not transfer, pledge or otherwise assign this Agreement or any
interest therein, or any claim arising thereunder, to any party or parties, bank, trust com-
pany or other financial institution without the prior written approval of CITY.
B. If any provision of this Agreement is held to be invalid, illegal, or unenforceable, the re-
maining provisions shall remain in full force and effect and continue to conform to the
original intent of both parties hereto.
C. In no event shall any payment to SUBRECIPIENT hereunder, or any other act or failure
of CITY to insist in anyone or more instances upon the terms and conditions of this
Agreement constitute or be construed in any way to be a waiver by CITY of any breach
of covenant or default which may then or subsequently be committed by SUBRECIPI-
ENT. Neither shall such payment, act, or ornission in any manner impair or prejudice any
right, power, privilege, or remedy available to CITY to enforce its rights hereunder,
which rights, powers, privileges, or remedies are always specifically preserved. No repre-
sentative or agent of CITY may waive the effect of this provision.
D. This Agreement, together with referenced attachments, constitutes the entire agreement
between the parties hereto, and any prior agreement, assertion, statement, understanding
or other commitment antecedent to this Agreement, whether written or oral, shall have no
force or effect whatsoever; nor shall an agreement, assertion, statement, understanding, or
other commitment occurring during the term of this Agreement, or subsequent thereto,
have any legal force or effect whatsoever, unless properly executed in writing, and if ap-
propriate, recorded as an amendment of this Agreement.
E. In the event any disagreement or dispute should arise between the parties hereto pertain-
ing to the interpretation or meaning of any part of this Agreement or its governing rules,
codes, laws, ordinances or regulations, CITY as the party ultimately responsible to HUD
for matters of compliance, will have the final authority to render or to secure an interpre-
tation.
Page 19
F. For purposes of this Agreement, all official communications and notices among the par-
ties shall be deemed made if sent postage paid to the parties and address set forth below:
TO CITY:
City Manager
City of Denton
215 E. McKinney
Denton, Texas 76201
TO SUBRECIPIENT:
Executive Director
Fred Moore Day Nursery School
821 Cross Timber Street
Denton, Texas 76205
G.
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 competent jurisdic-
tion sitting in Denton County, Texas.
IN.>>'hbSS OF WHICH this Agreement has been executed on this the 31!!! day
ve "f) e, ,2006.
of
CITY OF DENTON
BY: ~D4\/1f~~
HOWARD MARTIN \
INTERIM CITY MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO L GAL FORM:
EDWIN M. SN ER ITY ATTORNEY
BY:
Page 20
FRED MOORE DAY NURSERY
BY ~aM fl r.1lJ:M) ,;~
LAURA WI LIAMS
EXECUTIVE DIRECTOR
ATTEST:
Page 21
ATIACHMENT"A"
SCOPE OF SERVICES
Description of Improvements to be Completed
Improvements include the following:
1. Construction of two additional classrooms - one infant and one toddler.
2. Move the office to an alternate location.
3. Construct a gymnasium
4. Construct and pave a new parking lot and drive approach
Total CDBG Project Budget
$195,000
Description of Services to be Provided
. Provide a safe, healthy environment that will meet the development needs of the child.
Activities will be designed for each age group to meet the individual and group needs.
The curriculum will include education emphasizing effective earning skills, creative arts,
motor skills, physical development, speech development, personal hygiene and manners.
. Provide breakfast, lunch, and an afternoon snack for each child. All meals will meet the
USDA and Texas Department of Human Services Special Nutrition food requirements
for children in childcare.
. Must be licensed by the Texas Department of Protective and Regulatory Services.
. Must meet or exceed the Texas Department of Human Services minimum standards for
Day Care Centers.
. Must be a North Central Texas Childcare Services designated vendor.
. Provide operation hours from 7:00 a.m. to 6:00 p.m. Monday through Friday.
Page 22
ATTACHMENT "B"
BUDGET
Construction costs related to building improvements, parking lot and gymnasium. $195,000
Please note: Prior to the start of construction for any portion of the project, Fred Moore Day
Nursery School shall provide the Community Development Division with a total project
budget, documentation of all funding sources and commitments, and a project planning and
construction schedule.
Page 23
ATTACHMENT "C"
24 CFR 9 570.505
The standards described in this section apply to real property within the recipient's control which
was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These
standards shall apply from the date CDBG funds are fIrst spent for the property until fIve years after
closeout of an entitlement recipient's participation in the entitlement CDBG program or, with
respect to other recipients, until fIve years after the closeout of the grant from which the assistance
to the property was provided.
(a) A recipient may not change the use or planned use of any such property (including
the benefIciaries of such use) from that for which the acquisition or improvement was made
unless the recipient provides affected citizens with reasonable notice of, and opportunity to
comment on, any proposed change, and either:
(I) The new use of such property qualifIes as meeting one of the national
objectives in Section 570.208 and is not a building for the general conduct of
goverrunent; or
(2) The requirements in paragraph (b) of this section are met.
(b) If the recipient determines, after consultation with affected citizens, that it is
appropriate to change the use of the property to a use which does not qualify under
paragraph (a)(l) of this section, it may retain or dispose of the property for the changed use
if the recipient's CDBG program is reimbursed in the amount of the current fair market
value of the property, less any portion of the value attributable to expenditures of non-
CDBG funds for acquisition of, and improvements to, the property.
(c) If the change of use occurs after closeout, the provisions governing income from the
disposition of the real property in Section 570.504(b) (4) or (5), as applicable, shall apply to
the use of funds reimbursed.
(d) Following the reimbursement of the CDBG program in accordance with paragraph
(b) of this section, the property no longer will be subject to any CDBG requirements.
Page 24
ATTACHMENT "D"
24 CFR S 570.503
(a) Before disbursing any CDBG funds to a subrecipient, the recipient shall sign a written
agreement with the subrecipient. The agreement shall remain in effect during any period
that the subrecipient has control over CDBG funds, including program income.
(b) At a minimum, the written agreement with the subrecipient shall include
provisions concerning the following items:
(I) Statement of Work. The agreement shall include a description of the
work to be performed, a schedule for completing the work, and a budget. These
items shall be in sufficient detail to provide a sound basis for the recipient
effectively to monitor performance under the agreement.
(2) Records and Reports. The recipient shall specify in the agreement the
particular records the subrecipient must maintain and the particular reports the
subrecipient must submit in order to assist the recipient in meeting its
recordkeeping and reporting requirements.
(3) Program Income. The agreement shall include the program income
requirements set forth in Section 570.504(c).
(4) Uniform Administrative Requirements. The agreement shall require the
subrecipient to comply with applicable uniform administrative requirements, as
described in Section 570.502.
(5) Other Program Requirements. The agreement shall require the
subrecipient to carry out each activity in compliance with all Federal laws and
regulations described in subpart K of these regulations, except that:
(i) The subrecipient does not assume the recipient's environmental
responsibilities described at Section 570. 604; and
(ii) The subrecipient does not assume the recipient's responsibility
for initiating the review process under the provisions of 24 CFR Part 52.
(6) Conditions for Religious Organizations. Where applicable, the conditions
prescribed by HUB for the use of CDBG funds by religious organizations shall
be included in the agreement.
(7) Suspension and Termination. The agreement shall specify that, in
accordance with 24 CFR 85.43, suspension or termination may occur if the
Page 25
subrecipient materially fails to comply with any term of the award, and that the
award may be terminated for convenience in accordance with 24 CFR 85.44.
(8) Reversion of Assets. The agreement shall specifY that upon its expiration
the subrecipient shall transfer to the recipient any CDBG funds on hand at the
time of expiration and any accounts receivable attributable to the use of CDBG
funds. It shall also include provisions to the use of CDBG funds. It shall also
include provisions designed to ensure that any real property under the
subrecipient's control that was acquired or improved in whole or in part with
CDBG funds in excess of $25,000 is either:
(i) Used to meet one of the national objectives in Section 570.208
until five years after expiration of the agreement, or for such longer
period of time as determined to be appropriate by the recipient; or
(ii) Disposed of in a manner that results in the recipient's being
reimbursed in the amount of the current fair market value of the property
less any portion of the value attributable to expenditures of non-CDBG
funds for acquisition of, or improvement to, the property.
(Reimbursement is not required after the period of time specified in
paragraph (b) (8) (I) of this section.)
Page 26
ATIACHMENT "D"
24 CFR S 570.504
(a) Recording Program Income. The receipt and expenditure of program income as
defined in Section 570.500(a) shall be recorded as part of the financial transactions of the
grant program.
(b) Disposition of Program Income Received bv Recipients.
(I) Program income received before grant closeout may be retained by the
recipient if the income is treated as additional CDBG funds subject to all
applicable requirements governing the use of CDBG funds.
(2) If the recipient chooses to retain program income, that income shall affect
withdrawals of grant funds from the U.S. Treasury as follows:
(i) Program income in the form of repayments to, or interest
earned on, a revolving fund as defmed in Section 570.500(b) shall be
substantially disbursed from the fund before additional cash withdrawals
are made from the U.S. Treasury for the same activity. (This rule does
not prevent a lump sum disbursement to fmance the rehabilitation of
privately owned properties as provided for in Section 570.513.)
(ii) Substantially all other program income shall be disbursed for
eligible activities before additional cash withdrawals are made from the
U.S. Treasury.
(3) Program income on hand at the time of closeout shall continue to be
subject to the eligibility requirements in Subpart C and all other applicable
provisions of this part until it is expended.
(4) Unless otherwise provided in any grant closeout agreement, and subject
to the requirements of paragraph (b) (5) of this section, income received after
closeout shall not be governed by the provisions of this part, except that, if at the
time of closeout the recipient has another ongoing CDBG grant received directly
from ffiJD, funds received after closeout shall be treated as program income of
the ongoing grant program.
(5) If the recipient does not have another ongoing grant received directly
from ffiJD at the time of closeout, income received after closeout from the
disposition of real property or from loans outstanding at the time of closeout shall
not be governed by the provisions of this part, except that such income shall be
used for activities that meet one of the national objectives in Section 570.208 and
the eligibility requirements described in Section 105 of the Act.
Page 27