crl AGENDA ITEM IOctober 18, 2011, City Council Meetin~

Apprpved for Submittal ~Yi'V .~.,.~: / 0'))/ .' , \'." /' ",/t.,:. (AA~"ee) /·-{··LQ ~A"1 D~na ~higley, c~~y M';nagetJ (

To Be Presented By:

~- litiS?/~) < .......,/)S/ld/i/"[t4f/>?" .. _lA~'1/;n;;(lt>

/Juanita Barnett, City Clerk

To:

Through:

From:

Date:

Honorable Mayor and Members of the Anderson City Council

Dana Shigley, City Manager Telephone 378-6646

Juanita Barnett, City Clerk Telephone 378-6646

October 18, 2011

ISUBJECT

Community Development Block Grant (CDBG) Micro Enterprise Financial Assistance Program Guidelines and Subrecipient Agreement with Superior California Economic Development District

IRECOMMENDATION

The City Clerk recommends that the City Council:

1. Conduct a Public Hearing.

2. Subject to testimony received, adopt a resolution:

a. adopting the Microenterprise Financial Assistance Program Guidelines;

b. authorizing the City Manager to enter into a subrecipient agreement with Superior California Economic Development District (SCEDD) to administer CDBG Microenterprise Grant No. 10-EDEF-7251; and

c. directing the Finance Director to amend the 2011/2012 adopted budget.

ITEM 7.0 PAGEl 10/18/11

IFISCAL IMPACT

There is no anticipated fiscal impact from this grant. The proceeds from the grant will cover any costs we incur. No Program Income was committed to this grant and leveraged funds are covered through other agencies. The grant is for $215,000 of which we will receive $5,375 to cover administrative costs.

I DISCUSSION and BACKGROUND

On September 2, 2011, the City was awarded a Community Development Block Grant (CDBG) Economic Development Allocation, Microenterprise Training and Technical Assistance Grant in the amount of $215, 000. As part of the Special Conditions of the grant, a copy of our Microenterprise Financial Assistance Program Guidelines must be submitted to CDBG for approval. Currently, we do not have a set of Financial Assistance Program GUidelines. The purpose of this Public Hearing will be to consider the proposed guidelines for adoption. The Financial Assistance Program Guidelines describe how the Microenterprise Program will provide financial assistance to small businesses, who is eligible for assistance, how loans will be made, and what the funds may be used for.

Additionally, the Council is being asked to consider authorizing a subrecipient agreement with the Superior California Economic Development District (SCEDD) for administering the microenterprise grant. Under the subrecipient agreement, the SCEDD will monitor grant expenditures, assist in submitting required reports to the State, market the microenterprise programs, screen and qualify applicants for loans, and provide training and technical assistance to applicants.

The third item to be considered will be to amend the 2011/2012 adopted budget to include the $215,000 awarded for this grant.

I am recommending the Council, after receiving input from the public, approve a resolution adopting the Microenterprise Financial Assistance Program Guidelines (included as Exhibit A to the attached resolution), authorizing the City Manager to enter into a subrecipient agreement with Superior California Economic Development District (SCEDD) for administering Grant No. 10-EDEF-7251 for the City's Microenterprise Training and Technkal Assistance Program, and directing the Finance Director to amend the 2011/2012 budget to include the $215,000.

IATTACHMENT

1. Resolution with guidelines and Subrecipient Agreement

ITEM 7.0 PAGE 2 10/18/11

ATTACHMENT 1

RESOLUTION NO. 11-_

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANDERSON ADOPTING MICROENTERPRISE FINANCIAL ASSISTANCE

PROGRAM GUIDELINES AND AUTHORIZING A SUBRECIPIENT AGREEMENT FOR GRANT NO. 10-EDEF-7251

WHEREAS, the City Council held a duly noticed public hearing on October 18, 2011; and

WHEREAS, after consideration of testimony, the City Council wishes to adopt Microenterprise Financial Assistance Program Guidelines; and

WHEREAS, the City was awarded Grant No. 10-EDEF-7251 in the amount of $215,000 to fund a Microenterprise Training and Technical Assistance Program; and

WHEREAS, the City Council desires to have the Superior California Economic Development District (SCEDD) administer the City's Microenterprise Program; and

WHEREAS, the previously adopted 2011/2012 budget will need to be amended to include the awarded grant.

NOW THEREFORE BE IT RESOLVED that the City Council of the City of Anderson does hereby:

1. Adopt the Microenterprise Financial Assistance Program Guidelines attached hereto and incorporated herewith as "Exhibit A"

2. Authorize the City Manager to enter into a subrecipient agreement with Superior California Economic Development District to administer Grant No. 10-EDEF-7251 for the City's Microenterprise Training and Technical Assistance Program attached hereto and incorporated herewith as "Exhibit B."

3. Direct the Finance Director to amend the 2011/2012 adopted budget as follows:

Account Current Change New 133-0000-4633 Microenterprise Training

and Technical Assistance $0 $215,000 $215,000

133-5395-5400 CDBG Grant $0 $215,000 $215,000

PASSED AND ADOPTED this 18th day of October, 2011, by the following vote:

AYES: NOES: ABSTAIN: ABSENT:

Norma Comnick, Mayor ATTEST:

Juanita Barnett, City Clerk

EXHIBIT A

City of Anderson

Microenterprise Financial Assistance Program Guidelines

FUNDED BY A GRANT FROM THE

CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT

COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM

Adopted eOA : __

Approved HeD: __ Revision No.: __

TABLE OF CONTENTS

1. INTRODUCTION 1

2. MICROENTERPRISE PROGRAM OVERVIEW 1 1. Progran1 Administrator 1 2. Progran1 Service Area 1 3. Source of Grant Funds 1 4. Meeting CDBG Microenterprise Definition 2 5. Types of Microenterprise Businesses 2 6. Required Microenterprise Technical Assistance 2 7. Meeting CDBG Income Eligibility Requirement 3 8. Use of CDBG Funds 3 9. Ineligible Use of CDBG Funds 4 10. Other CDBG Requirements 4 11. Required Grant Review by Department Staff 5

3. PROGRAM OPERATIONS AND GRANT PROCESSING 5 1. Program Marketing and Outreach 5 2. Fair Lending Compliance 6 3. Grant Application Processing 6 4. Review and Approval of Grant Request 6 5. Grant Applicant Confidentiality 6 6. Dispute Resolution/Appeals Procedure 7 7. No Conflict of Interest Allowed 7 8. Exceptions / Special Circumstances 7

4. GRANT REQUIREMENTS 8 1. Grant Fees 8 2. Collateral and Security Requirements 8 3. Personal Financial Analysis 8 4. General Credit Requirements 8 5. Management and Capacity Requirements 8 6. Requirement for Third Party Cost Verification 9 7. Requirement for Technical Assistance 9 8. Requirement for Grant Disbursement 9

5. PROGRAM OVERSIGHT BY GRANTOR 9 Oversight of Program Administrator 9

ATTACHMENT A: ACRONYMS AND DEFINITIONS ATTACHMENT B: INCOME ELIGIBILITY CHART ATTACHMENT C: SAMPLE GRANT APPLICATION FORM ATTACHMENT D: SAMPLE GRANT PROPOSAL ATTACHMENT E: SAMPLE GRANT AGREEMENT

CITY OF ANDERSON COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM

MICROENTERPRISE FINANCIAL ASSISTANCE PROGRAM GUIDELINES

1.0 INTRODUCTION The City of Anderson hereafter called "Grantor" has established a microenterprise assistance grant program, hereafter called "the Program". The Program is designed to stimulate economic growth and create businesses and jobs that will improve the living conditions of residents in the community. The Program provides affordable financing to eligible businesses to start up or expand. The Program is useful for small start-up businesses as the underwriting standards and grant terms are flexible and can be tailored to the needs of the business. In addition, funds are available for technical assistance and capacity building of eligible businesses. These Program guidelines have been formally adopted by the Grantor and approved by the Department.

2.0 MICRO ENTERPRISE PROGRAM OVERVIEW

2.1 PROGRAM ADMINISTRATOR The Grantor will secure the services of a qualified program administrator here after called "the Administrator" who has experience in originating microenterprise business assistance grants and is familiar with CDBG requirements. The Administrator's detailed scope of services will be negotiated and included in a formal agreement for services executed between the Grantor and Administrator. In generat the Administrator will market the Program, accept and process applications, underwrite and recommend approval of grants, ensure proper grant closing and disbursement of funds, maintain grant files and fiscal records and support the Grantor's staff in administration of state grants and program income used to fund this program. The Administrator will follow and ensure compliance with these guidelines.

2.2 PROGRAM SERVICE AREA Financing under this Program is available to all eligible businesses located in the Grantor's jurisdiction. These CDBG funds may not be used in urban areas that receive CDBG funds annually from the federal Department of Housing and Urban Development (HUD) entitlement program.

2.3 SOURCE OF GRANT FUNDS The Program is capitalized with CDBG funds provided by HUD to the State of California Department of Housing and Community Development, hereafter called "the Department". CDBG funds are federal funds and as such have a number of federal requirements that must be met as described below. These CDBG funds come to the Grantor from two sources: 1) from state grant awards that are administered under a state grant contract; and 2) from grant repayments made by existing CDBG grants (called program income funds). Program income funds are administered locally by the Grantor under an adopted program income reuse plan approved by the Department.

2.4 MEETING CDBG MICRO ENTERPRISE DEFINITION Grant applicants for this Program must meet the CDBG definition of a microenterprise business. The CDBG definition is a business having five (5) or fewer employees, including the owner(s). All employees, part time and full time, on the business payroll at the time of grant application will be counted. The term "employee" includes all owners ofthe business on the payroll, even if

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the owner's "salary draws" are not done on a regular basis. The Administrator will require the business to provide third party records documenting the current number of employees on the payroll, including owners of the business.

2.5 TYPES OF MICROENTERPRISE BUSINESSES An applicant may be an existing microenterprise business that needs funds to stay in business or expand. Existing micro business applicants include private business concerns, corporations, partnerships, and sole proprietorships that are legal, properly licensed and operating. Non­profits are not microenterprises.

Applicants can also be individuals who wish to start a business but have not taken all the proper steps to set their business up. A condition of funding for these persons will be to have the business development process completed, such that they can be recognized and operate as a legal business.

2.6 REQUIRED MICROENTERPRISE TECHNICAL ASSISTANCE For all applicants under this program, the Grantor will require attendance at one or more technical assistance classes given by the Anderson Microenterprise Development Program, local Small Business Development Center (SBDC) or other local business development agency approved by the Grantor. Each applicant must have a letter of recommendation from the local business development agency that shows the applicant has completed or updated a proper business plan, has proper management capacity in place and has proper financial capacity in place to become or continue to be a successful business operator. The local business development agency will confirm that the applicant for this Program is at a point where CDBG financial assistance will support and assist the business toward future success.

It is anticipated that most of the applicants for this program will be referred by local business development agencies after completion of proper business development workshops and one­on-one business counseling. Regardless of a microenterprise applicant's status, a start-up or existing business wanting to expand or an existing business struggling to survive, the proper business development workshops are needed to ensure the financial assistance provided gives the applicant the best chance to succeed. The Administrator will review each applicant individually in conjunction with the local microenterprise technical assistance staff at the local business development agency and process grant requests based on the compliance with these guidelines and the applicant's ability to use the grant funds for business expansion, retention, or start-up activities.

2.7 MEETING CDBG INCOME ELIGIBILITY REQUIREMENT Under federal regulations, use of CDBG funds for assistance to microenterprise businesses must go toward meeting the national objective of low income benefit. Furthermore, the Department requires that CDBG economic development funds for microenterprise only be used for businesses that qualify as a microenterprise as described above AND when the business owners meet HUD criteria as an income qualified low-moderate income household. Microenterprise income eligibility must be documented prior to any approval of financial assistance. The owners of the business being reviewed for funding must have a household income at or below current published HUD income limits for the county, adjusted for household size. At initial grant application stage, the business owners will complete the Program's application and income self-certification form (Attachment C).

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The Grantor will use the current State Income Determination Manual for Federal Programs (Manual) to verify the micro business owner's income eligibility. The Manual is based on determination of "household income," as calculated in accordance with the regulations at 24 CFR 5.611 (Part 5). Each applicant must provide proper third party documentation that confirms the family's current size and income level. This is compared to the current HUD published rate for eighty percent (80%) of median income adjusted for family size, to determine if the person meets HUD's definition of low-moderate income. See Attachment B for current HUD published limits for the County. The chart will be updated annually with new HUD published limits obtained from: http://www.hcd.ca.govjhpd/hrc/rep/state/incNote.html

The income limits published at the time of grant approval will apply when determining income eligibility. All persons in the residence are considered household members for purposes of income eligibility. Income eligibility for a microenterprise business is good for three (3) years from date of certification.

2.8 USE OF CDBG FUNDS Funds under this Program are typically provided to eligible microenterprise businesses as small grants. Program grants are normally up to $5,000 on a one-time basis. See Sections 3.0, 4.0 and 5.0 for description of grant processing and grant requirements.

Funds under this program are restricted to certain eligible costs. The Anderson Financial Assistance Grant Program will be used primarily for funding business marketing and advertising costs. Requests for the use of grant funds for other CDBG eligible purposes will be considered on a case-by-case basis. Examples of other eligible costs may include 1) financial management and financial services (e.g. installation of a bookkeeping system such as QuickBooks); 2) a cash register for inventory control; and 3) payment of operating licenses, permits or fees. The Administrator will review the scope of work proposed by the business applicant and the proposed use of CDBG funds to verify that they are necessary for success of the business, reasonable in amount, and conform to the eligible use of CDBG funds under this Grant program not to exceed $5,000.

2.9 INELIGIBLE USE OF CDBG FUNDS Funds under this Program will not pay for reimbursement of expenses incurred prior to grant approval. Program funds will not be used to payoff personal debt of owners not associated with the business. Grant funds cannot be shifted from one approved type of cost to another, (e.g., from FF&E to working capital) without resubmitting the grant for Grantors approval. Funds cannot be used to support other businesses the borrower may have a financial interest in. Nonprofits are not eligible for assistance.

2.10 OTHER CDBG REQUIREMENTS There are a number of other federal laws and state requirements that are triggered by use of CDBG funding. The Grantor and Administrator will take the lead and ensure compliance with these other CDBG regulations. Any impacts of these federal regulations on a proposed project being funded will be explained at the time of grant application screening so the borrower knows and understands how the project will be impacted by these CDBG federal regulations.

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Prior to award or approval of funds, federal environmental reviews are required by HUD for each business funded with CDBG monies (24 CFR 58). The environmental review must comply with HUD's regulations regarding the National Environmental Policy Act (NEPA). The Grantor is required to complete and certify the proper NEPA review along with any State environmental review under California's Environmental Quality Act (CEQA). The level of environmental review is based on the type of project proposed and activities to be completed. Applicant will be informed of any additional time required for grant processing due to the NEPA review. No costs will be charged to the borrower for the NEPA.

Compliance with Davis Bacon and related Acts is required when CDBG funding is used to pay for construction costs. This will add additional costs to projects that require CDBG funds to pay for construction. In addition, state prevailing wage may be triggered when CDBG funding is used. Grant processing ~taff will work with businesses to ensure that funded business projects are in compliance with the state and federal prevailing wage laws. Applicants will be informed of any additional time or costs or administrative work required due to the prevailing wage regulations. Any additional costs resulting from this regulation will be incorporated into the business grant.

Acquisition and Relocation laws may be triggered when using CDBG funds (24 CFR 570.606). Acquisition laws, both federal and state, must be followed when CDBG funds are used to assist in the purchase of real property. In the same way, federal and state relocation laws apply whenever there may be displacement of a person or business because of the use of CDBG funding. Grant processing staff will work with grant applicants to ensure the business is in compliance with any state or federal acquisition/relocation laws triggered by the project. Applicants will be informed of any additional time or costs or administrative work required due to acquisition or relocation regulations.

Using CDBG program income (PI) first is required when the Grantor is operating a grant program activity under an open grant that is the same as an existing PI activity. The Grantor must always use the local PIon hand first, prior to drawing down funds from a state open grant.

All businesses who wish to receive funds under this Program will be required to obtain a DATA UNIVERSAL NUMBER SYSTEM (DUNS) number. The DUNS number is a unique nine-digit identification number provided by Dun & Bradstreet (D&B) that can be obtained for free on line. A copy of the web site page with the confirmation of a D&B assigned DUNS number will be placed in the grant file and used in reports to the Department.

The Administrator will check the federal debarred status of each business and borrower(s) prior to funding. A copy of the web site search will be printed out and will be placed in the grant file to confirm the business is not on the federal debarred contractors list.

HUD also requires that the Department and the Grantor collect certain income and demographic data from the business and any new hires resulting from the investment of CDBG funds using Department approved forms. Applicants will be required to obtain all proper licenses and insurance to operate legally in the community.

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2.11 REQUIRED GRANT REVIEW BY DEPARTMENT STAFF Department staff must review each business assistance grant for procedural compliance with federal regulations and these adopted program guidelines. Upon review and approval of a grant package submitteG by the Grantor, a formal written approval letter will be issued by the Department.

3.0 PROGRAM OPERATIONS AND GRANT PROCESSING

3.1 PROGRAM MARKETING AND OUTREACH Program marketing will be conducted by the Administrator with assistance from the Grantor. Administrator staff will arrange local media coverage with ads in local papers. Marketing brochures will be distributed to local chambers of commerce, SBDC, local economic and business development, and business networking organizations. Presentations will be scheduled for these groups as well as real estate groups and local commercial banks and Grantors. A local U.S. SBA administered Small Business Development Center (SBDC) will be used as a referral agency.

3.2 FAIR LENDING COMPLIANCE This program will be implemented in ways consistent with the Grantor's commitment to state and federal fair lending laws. No person or business shall be excluded from participation in, denied the benefit of, or be subjected to discrimination under any program or activity funded in whole or in part with CDBG program funds on the basis of his or her religion or religious affiliation, age, race, color, ancestry, national origin, sex, marital status, familial status (number or ages of children), physical or mental disability, sexual orientation, or other arbitrary cause.

3.3 GRANT APPLICATION PROCESS Grant applications will be processed on a first come first served basis. See Attachment C for sample application form. The Administrator will accept grant applications and review them for initial eligibility. Applicants that do not meet basic requirements of the program will be returned with an explanation of requirements needing to be met. The Administrator will interview the business owners and review the application for funding and the Program guidelines and conduct a site visit if it is an existing business in operation.

The program grant approval checklist showing required documentation will be provided to the business so proper financial information is made available. Sample sources and uses forms and profit and loss statements and pro forma spreadsheets can be made available so that the business or their financial representative can input the proper financial figures. Proper financial history of the business and future financial projections can be developed with the help of the local business development agency.

3.4 REVIEW AND APPROVAL OF GRANT REQUEST A complete review of the grant request will take place at the Program Administrator level and at the Grantor level for each grant prior to funding. The Program Administrator will be responsible for obtaining all application documentation and completing a grant write-up. The grant write-up will be forwarded to HCD for review and approval. When grant approval has been received from HCD, the Program Administrator will submit the application package and recommendation to Grantor staff for final written approval. Grantor staff may choose to request additional information and/or require contingencies prior to approval. If significant

5

changes to terms and conditions are requested by the Grantor, the revised grant write-up will be resubmitted to HCD staff before final approval and funding.

See Attachment D for a sample grant proposal and approval memo.

3.5 GRANT APPLICANT CONFIDENTIALITY Persons serving as the Administrator and Grantor for this Program will not disclose any of the Borrower(s) personal confidential information as part of the grant approval process. All confidential information of businesses will only be disclosed to persons required to view the information as part of grant review and approval. All personal and business confidential information of grant applicants will be kept in a locked secured storage facility and not be available to persons outside of the program. If the Grantor or Administrator or Department gets a request for public records for a grant applicant, then only non-confidential information, as verified by legal counsel, will be provided.

3.6 DISPUTE RESOLUTION/APPEALS PROCEDURE Any person applying for a business assistance grant through the CDBG program has the right to appeal if their application is denied. The appeal must be made in writing to the Administrator and the Grantor. The Administrator and the Grantor will schedule a meeting for the appeal to be heard. If the application is denied a second time, the person may ask to have their appeal presented to the Grantor's governing body for a final decision.

The Administrator is responsible to the Grantor to assure that the Program is implemented in compliance with state and federal regulations. In addition, grants must be underwritten in accordance with proper program guidelines in a timely and responsible manner. This includes developing accurate and professional files, work write-ups and contract documents. The Administrator will ensure that each funded business is eligible, the project costs are eligible and each grant is underwritten in compliance with these guidelines.

3.7 NO CONFLICT OF INTEREST ALLOWED In accordance with Title 24, Section 570.611 of the code of Federal Regulations, no member of the governing body and no official, employee or agent of the local government, nor any other person who exercises policy or decision-making responsibilities (including members of the grant committee and officers, employees, and agents of the grant committee, the administrative agent, contractors and similar agencies) in connection with the planning and implementation of the CDBG program shall directly or indirectly be eligible for this program. Exceptions to this policy can be made only after public disclosure and formal approval by the governing body and authorized in writing by Grantor's legal counsel. In the event representatives from the financial community serving in an advisory capacity have a separate financial interest (excluding regular checking and savings accounts) in a grant applicant, such member will not participate in grant deliberations.

3.8 EXCEPTIONS / SPECIAL CIRCUMSTANCES Exceptions are defined as any action, which would depart from policy and procedures stated in the guidelines. For example, the Grantor can, on a case-by-case basis, accept a partially secured grant. The Grantor or Administrator may initiate consideration of an exceptional/special circumstance. A summary of the proposed exception will be prepared. This report shall contain a narrative, including staffs recommended course of action and any written or verbal

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information supplied by the applicant. The Administrator/Grantor shall make a determination ofthe exceptional/special circumstances request at a regular or special meeting.

4.0 GRANT REQUIREMENTS

4.1 GRANT FEES There are no fees associated with these grants.

4,2 COLLATERAL AND SECURITY REQUIREMENTS Grants will not require collateral or security.

4,3 PERSONAL FINANCIAL ANALYSIS The business owners must show that they have sufficient personal financial stability as to not cause undue financial strain on the business. To that end, a financial analysis or underwriting will be provided during the technical assistance part of the program and will be then summarized in the grant proposal write-up.

4.4 GENERAL CREDIT REQUIREMENTS Credit worthiness of the applicant(s) will be reviewed as part of the personal financial analysis referred to above. Good credit will not be a requirement for a grant but will be factored into the stability of the applicant and business.

4.5 BUSINESS MANAGEMENT AND FINANCIAL CAPACITY REQUIREMENTS A Grant applicant will be reviewed for their ability to manage their proposed (startup) or existing business. As part of providing the initial technical assistance to applicants, the Program Administrator will evaluate and work to increase any management weaknesses of the business before grant funds are awarded.

The Grant Applicant should: • Show ability to operate a business successfully. • Show the business has enough borrowing ability or equity to operate, with the grant, on

a sound financial basis. • Show the proposed grant is of sound value and provides for the current and future

needs of the business. • Show that the past earning records and future prospects of the business indicate ability

to repay existing, new or other fixed debt, if any, out of the profits. • Show financial capacity to cover combined business and personal financial obligations

and sufficient cash flow to cover personal living expenses.

The business owner must show capacity for operating the business and managing future growth. This can be done by showing past experience of the owner or using experienced hired staff or by attending microenterprise technical assistance classes. By completing the proper business training classes, the business owner will develop the skills and business plan and financial projects needed to document that the project is eligible for the Program.

4.6 REQUIREMENT FOR THIRD-PARTY COST VERIFICATION The Program Administrator must receive third-party cost estimates of the grant eligible costs being requested to confirm that the costs are eligible and reasonable. Typically, necessary

7

materials and costs of activities for future growth of the business will be determined during the evaluation and technical assistance part of the program.

4.7 REQUIREMENT FOR TECHNICAL ASSISTANCE The Grantor may make small grants of up to $5,000 on a one time basis to eligible existing micro businesses. The micro business must be participating in the Grantor's technical assistance program and grant funds may be provided upon completion of technical assistance activities.

The grants are to be used to complement work started under the technical assistance activities provided by the Grantor and their agents. The Grantor's technical assistance activities focus primarily on development of business and marketing plans and financial management capacity building. As such, examples of complementing grant activities are: paying for marketing costs such as business cards, logo/branding design and development, flyers and publications/ advertisements, web site enhancement or development. Other costs related to the business may also include 1) financial management and financial services (e.g., installation of an accounting system such as QuickBooks); 2) purchase of a cash register for inventory control; and 3) payment of operating licenses, permits or fees that may be required.

The Program Administrator will provide documentation that the grant funded activities will have a positive impact on the future profitability and sustainability of the company. This will be done through analysis of financial projections /preformats for the business that include the impact of the grant funded activities.

4.8 REQUIREMENT FOR GRANT DISBURSMENT Grant funds may be paid to the business for reimbursement of costs upon providing copies of receipts of eligible costs. Grant funds may be paid directly to third party vendors. Grantees will be required to sign a grant agreement that stipulates eligible costs, payment process and reporting on any future job creation activities resulting from grant funds.

5.0 PROGRAM OVERSIGHT BY GRANTOR

OVERSIGHT OF PROGRAM ADMINISTRATOR The Grantor's staff will serve as the primary contact with the Department CDBG Program representative. Grantor's staff will be responsible for securing services of a qualified Administrator for implementation of this Program. The Administrator can be secured via a proper CDBG procurement or with a Subrecipient Agreement or Non-profit Development Organization Agreement.

The Administrator will follow these adopted program guidelines. The Grantor's staff will work directly with the Administrator and be kept informed of all marketing efforts and outreach. The Administrator will provide a monthly tracking sheet to the Grantor's staff that shows all applications received, technical assistance provided to each applicant and when applicants are ready for receiving grant funds or have dropped out of the program.

As per the agreement between the Grantor and Administrator, all required reports for the Program will be reviewed and approved by the Grantor's staff prior to any signatures. For financial reporting, the Grantor's staff will ask for the Grantor's fiscal staff to review and

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approve each fiscal report. Grant servicing staff will complete all required quarterly and annual program income reports for review, approval, signature and submittal by the Grantor to the Department CDBG Program representative.

Once a grant is able to be approved, the Grantor's staff will review the grant package and coordinate submittal to the Department for review and approval. When Department written approval is given, then the Grantor's staff will schedule a meeting for final grant approval.

The Grantor's staff will ensure all grant documents are properly reviewed by legal staff and meet CDBG requirements prior to signing by the borrower.

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ATTACHMENT A

ACRONYMS, ABBREVIATIONS, & DEFINITIONS

Administrator Local Program Operator

CDBG Community Development Block Grant

HCD jDepartment State: California Department of Housing and Community Development

FF&E ................................................................................. Furniture, Fixtures, and Equipment

HUD ............................. Federal: U.S. Department of Housing and Urban Development

Grantor ..................................................................................................................... Local Jurisdiction

MDP ......................................................................... Microenterprise Development Program

PI ............................................. Program Income (income from existing CDBG grants)

Program ............................................................................ CDBG Microenterprise Grant Program

RLA ................................................ PI Revolving Grant Account under CDBG Reuse Plan

SBA .......................................................Federal: U.S. Small Business Administration

SBDC ...................................................................Small Business Development Center

TIG Targeted Income Group (Department term equal to HUD lowjmoderate income)

A-I

ATTACHMENT B INCOME ELIGIBILITY CHART

Income eligibility must be established prior to receiving any micro business assistance. The Program Administrator will use the most recent copy of the State's Federal Program Guide to Income Eligibility when doing verification of income for applicants to this program. This State income calculation will then be compared to the current income limits and, based on family size, income eligibility will be certified. The Department term "Targeted Income Group (TIG)" is used interchangeably with the HUD term "low jmoderate income".

Income eligibility status is good for three years from certification date. All income documentation must be in the participant's file and kept confidential.

INCOME ELIGIBILITY LIMITS BASED ON HOUSEHOLD SIZE

City of Anderson 2011 Income Limits Effective July 13, 2011*

Household Size 1 2 3 4 5 6 7 8

Maximum Annual Income 32,C!::;0 36/)00 41,200 4~;,750 4·9,4S0 ~')3,100 S6)~)0 60,4·00

*Income guidelines will be updated annually with the current HUD published limits obtained from http://www.hcd.ca.gov Ihpdjhrc/rep Istate lineNote.html

The State Income Calculation and Determination Guide for Federal Programs may be obtained at www.hcd.ca.gov/fa/cdbg/GuideFedPrograms.html.

A-2

ATTACHMENT C

SAMPLE SELF-CERTIFICATION FORM

DEPAR-rMEN-Y C>F HOUSING.AND COfVIlVIUNITY DEVELOPMEN, DIVISION OF FINANCIAL ASSISTANCE

C::oQn~rnLl,...,.it:y O~'Vc-lc>prTIG'.... t 61<:><::1" Gra .... t: Sect,oon (COBei)

INCOME SELF-CERTIFICATION FOR NIICRO-ENTEFtP'RISE TECHNICAL ASSISTANCE & SUPPOR, sERVices

Cl Mic:re>_Suppoort Serv;c: __ s

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Stat.... Gra.nt NLJrnbeor: _ Or Prc:>grarn l .... cc:>rTloe -,2",O"-1"-"O--,t,,,~,--,,2-,,O,--- _

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BL.Jsin ..~$s No.rne:

leertll'y th('~t the IrJj'orr,-,atlc>r7 giver. Or, c~.ls I'orn-. Is tr~Je cu-.d.accLJrate t~ the best orrny kr-.o..-vledge. Ic~rtlty that the a'n~~Jnt

~r o RiC:JSS Income listed .al-,~ve InclLJdes tIre IrJco,.n,,~ ("lncILJdi,-.g i,rcorrJe rron-. assets) 01' nIl ad~Jlts ..-vlthl,-. the ~'OIJseh~/d. 100Jr,-, avvnrC t~'8t '~.<;.re nre penultles I'~r ..-villrLJlly nr.d kno..-vlr.gly glvl,-.g raIse Ir.r~rr,-,ntlon ~n nn applicotlo,-. r~r J=ederul ~r State '-LJnds. Penalties r~r rasll'ylng ir,'-~r,.r'<".Itlo'-' ,-nuy Inc/(Jde in-.n-.edlate repO'Jy",ent 01' all Feder,.1 or State '-LJnds received Dnd/or prosec~Jrlton (Jnder tIre 10"". ILJr.clersta,-.d C~"J' C~,,,. I""'-<orrnat/~,-. ~n thIs '-orn7 Is sLJbJect to verlrlcatlon.

Hand of Household Sil-,nature

HUD DErvlOGRAPHIC: AN D PERFORrvlANCE OATA. (To be. c:~n.... ple.l:e.d by PnO'gran.. Oporator")

Yo... No

VVIII Mlc,o E;:nle'p,lso C,oat"" No"" Jobs? ~ N ..... n-.b"" __ VVIIJ MI<;:,o BlIsh~ess P ..ovlde

BJacklArrlcan .o.n-.erocBn

A.slBn

H ..oIU~ Benenls?

VV",s Micro ncY-' ,·,1 ..", p ....vlousiy

.o..-nodclEln Indl .."IAIBskan N ... t1ve on L1n",'..,-,ploym .."t?

N<.>l 1--10""."II",nIOtl-."", Paclne. 151 A.-n IndlFOn/AI .. skan NOI & VVI-,Ilo

A'Sloll & VVI-.1l0

BlecklAfrlco01 A',-,,,,,rlc,,,,-. 8. VVI-,It""

Ar,-, IneJlOllIAI0skon & Blel<IArrcn GtIJ,,,,, 1'V'I~,II,_R£.Iel.<:>J

=mc'.," & Man"g.~~ professionals

e'en ~mkms ,""'od' ~ Ope,,,,tl"""" ("'<3,..,-,I_",klllo<;1)

Tcel,,·,lclal'''' Lobc>rars (r..,nSkIJla"J)

Sales Sorvlce VVo,k..-.,s

orneo "'I'd Clerlc",1

PART H'; ELIGIBIL,ITY CERTIFiCATION C,'.:> bo c~mple.ted and Signed by Prograrn Operator)

3 I 4 I 8 I a ! 7 E;:><t,emely La",", (30'K,) $15.250 $·16.900 $18.300 $19.650 $21000 $

R~spc.>nsible age.ncy st.aff must circle the. IncOme- 1e." .... 1 o~ the- P_rson·s ~amily bas_cl on ~Qmily size. and in como certi~iecl On a .... ~rI_. -Currant income. Je."e-Is m .... st be. ~btaoi.,ed at t-iCO's vvebsite NOT ....tUO·s vve.bsitoe.

Position: P .... ..-tlclp ........ t Mo.,.t", HUe> dc1"lnlt:Jon 01" 10""" I ..... co.-n'" bn ..od on b""l ..... '" bolo"",, eurr... "tc I"co.-ne II.-nltc,. .. dJu",",od 1"or 1"Dn-.lly ... I",e Ves__

Signature.:

Ab~ve- c11eol7t I"r,eer= t/~e CDI3G Ir'c~'TJe- 11,.,.,lt.s LJ,..,de-r tl-.oe progna,,..,·s LO\IV/lt/fod II~cCJ,ne LI,.,~/t= ("80% It/fedlar, II")co,,,,,o) as ~, the- d.;ate noted~b~v<?(cerl"'c.atl<:Jl-' g<:J~d '~r three yeaJr.s).

Note OI,e completed certlncatlon ,..,.,~,sl ~~e m",I"t".."ed I" lI~e r",,,t fIle fo' ,<9""'''''''' at 11,..,-,,,, of ,..,-,onltorln

A-3

---------

SAMPLE GRANT APPLICATION FORM

Anderson Microenterprise Financial Assistance Progran1 APPLICATION FOR FINANCIAL ASSISTANCE GRANT

Business Name: Duns # ---- ­

Business Startup date: _ Number of Employees

Applicant(s) Name: _

Business Address: _

Contact Phone: Email: _

Please indicate what you wish to use grant funds for:

o Marketing Plan Development

o Advertising/Marketing Campaign Implementation

o Website Development/Improvement

Please indicate approximate amount to be used for each activity:

Marketing Plan Consultant: $ _

Advertising: $ _

Marketing Materials (Brochures/Catalogs): $ _

Website Development: $ _

Other $ _

Total: $ _

Please provide a short description of your goals for this plan:

Applicant Signature: Date: _

A-4

ATTACHMENT D

City of Anderson MICROENTERPRISE FINANCIAL ASSISTANCE PROGRAM GRANT PROPOSAL

CDBG Grant # _

GAC REVIEW DATE:

HCD/CDBG REVIEW DATE:

APPLICANT / OWNER(S): ----/------ ­

NAME OF BUSINESS:

TYPE OF BUSINESS:

ADDRESS OF BUSINESS:

CDBG AMOUNT REQUESTED: $ Marketing Micro-Grant

CDBG MICROENTERPRISE PROJECT ELIGIBILITY:

Verification of Income Eligibility for Business Owner(s):

The Applicant and Business Owner is . (His/Her) family resides in , CA. Currently __ people live in the household. Persons with countable incomes are 1]. , has an annual income of $ 2J. , has an annual income of $ ",,-3,L!.J. _I I

has an annual income of $ , Total adjusted Household Income is $ _

Income Assets for the family are as follows: Business Property and Equipment and checking and savings accounts, as shown in the income summary form.

Program operator obtained proper income verification information on the owner of this business and used the State HCD Federal Programs income determination method to analyze income sources and assets to get a total gross household income for the owner. The gross annual income of the household was determined to be $ . The maximum income for a household of in ___ City/County, based on current HUD published limits, is $ . The adjusted gross income of the business owner's household is less than HUD limits published annually.

A-5

Verification of Business Employees:

The business employs _worker(s), Payroll documents were obtained and are on file to show that these workers are in place, The business has _ owner(s), The number of employees plus owners totals __' This number is less than five (5) which is the maximum workers plus owners a business can have and still qualify for micro eligibility status.

DETAILED PROJECT SCOPE OF WORK (includes work with all funding):

SOURCES AND USES:

Activity Cost Client CDBG Total

0

0

0

0

0

Total Project Costs $0 $0 $0 0

Percentages 100% 100% 100%

(DBG FEDERAL OVERLAY REQUIREMENTS:

Environmental Review: Based on the aggregate scope of work described above, the level of review required under the National Environmental Policy Act (NEPA) is: Categorically Excluded Subject to 58.5 statutes, The NEPA review has been submitted for approval by the state,

Acquisition and Relocation Review: Based on the aggregate scope of work, there is no procurement of real property required, The scope of the project does not involve displacing any "persons" from the project site for completion of these activities,

Davis Bacon and Prevailing Wage Review: Based on the use of CDBG funds in the scope of work, CDBG funds will not be used for construction and Davis Bacon will not be triggered,

A-6

CDBG HUD PROGRAM ELIGIBILITY AND LOAN UNDERWRITING (Based on Lender Adopted Guidelines and HUD Part 570)

Appropriate HUn Underwriting Analysis

1. Reasonableness of Project Costs - The costs for the project's scope of work have been verified using third party estimates. The costs are felt to be legitimate and reasonable. All project items in the scope of work are necessary to assist the business implement its marketing plans.

2. Commitment of Other Sources of Funds - County CDBG funding is the sole source of funding.

3. Non-Substitution of CDBG Funds for Private Funds - No private funding is available for this project because the business cannot afford additional debt.

4. Financial Feasibility of the Project - Based on the analysis in the following pages the business has been determined to be financially feasible. The micro business is currently breaking even and generating minimal cash; however, additional family income allows the family to service their debt and living expenses.

5. Return on Equity Investment - The planned marketing directly benefits the business. By injecting CDBG funds as a marketing grant, the owner will be able to advertise the business and attract additional customers. The calculation of ROI with and without CDBG funds shows that no undue enrichment will take place because of the use of these funds.

6. Pro Rata Fund Disbursement - CDBG grant funds will be disbursed on an as needed basis with purchase orders or invoices being paid directly to vendors or client will be reimbursed for costs paid directly by them after the approval date ofthe grant.

7. Meeting Other CDBG Federal Overlays- City is verifying compliance with other federal overlays by submitting a completed State CDBG Micro Loan Checklist.

A-7

SITE OWNERSHIP:

Business site is owned by the client.

BACKGROUND OF BUSINESS AND FUTURE PLANS:

Describe micro TA services provided to date: has been working with the _ Microenterprise Development Program since They have developed an effective business and marketing plan of which this marketing grant is a key component.

Description of additional TA:

Please see the attached letter of recommendation from Superior California Economic Development, the operator of the Microenterprise Development Program.

Business Description

(Short Description of the business. Can be cut and pasted from Business/Marketing Plan.)

The Business History:

(Short story of the history of the business. Can be cut and pasted from Business/Marketing Plan.)

MunagclnentjExperience

(Can be cut and pasted from Business/Marketing Plan.)

Credit History

Enter brief credit review report.

A-8

HISTORIC FINANCIAL SUMMARY:

Business Historic Income and Expenses

Business Name: 20

Total Sales

$

Cost of Goods Sold

Gross Profit

Operating Expenses

Net Profit

Adjust for Depreciation

Cash Flow Before Principal Payment

20--

0 0

- $ ­

0 0

2 yr av~%

#DIV/O!

#DIV/O!

Historical Personal CASH FLOW

20 20 Cash In

Wages a a Interest Income a Schedule C - business 1 Schedule C - Business 2

Schedule E - Rental Property

Other Income, SSI Non Taxable

Total Cash In a a Cash Out

Health Savings Account a a Self-Employment Taxes & Other a Self-Employment Health Insurance a a Home Mortgage Payment

Comercial Property (principal)

Comercial Property (principal)

Credit Card (Rule of thumb avg - 5% of Outstanding Balance)

Total Cash Out o o Net Personal Cash Flow available for living expense a o

A-9

FUTURE FINANCIAL SUMMARY:

Business Income and Expense Projections

Projected increase in Sales ?? %

Total Sales

Cost of Goods Sold

Gross Profit

Operating Expenses

Net Profit Adjust for Depreciation

Projected Net Cash Flow

20-

0

0

0

$ ­

0

20-

00% 0%

0

0%

$

0

-

0

0%

PERSONAL FINANCIAL STATEMENT, YEAR TO DATE _

Real Estate (Primary Residence)

Real Estate (Primary Residence)

Commercial Property 1 Commercial Property 1

Commercial Property 2 Commercial Property 2

Other Personal Assets Other Liabilities

Total Assets 0 Total Liabilities 0

Net Worth 0

STRENGTHS OF BUSINESS AND BORROWER:

• Strength l. • Strength 2. • Strength 3. • Strength 4. • Strength 5.

WEAKNESSES OF BUSINESS AND BORROWER:

• Weakness 1 • Weakness 2

A-IO

FINANCIAL ASSISTANCE CONDITIONS:

1. Participation in Microenterprise Development Program 2. Conditions for Disbursements: The Grantee will obtain at least two (2) cost estimates for

each of the grant eligible costs being requested, in order to confirm that the costs are eligible and reasonable. Grant funds will be paid directly to third party vendors. Funds under this Program will not pay for reimbursement of expenses incurred prior to grant approval.

RECOMMENDATION:

Approval is recommended subject to the above terms and conditions.

OTHER CDBG APPROPRIATE DETERMINATIONS:

National Flood Insurance Program: This project is not located in an area that has been identified by the Director of the Federal Emergency Management Agency as an area having special flood hazards.

Conflict of Interest: Lender verified that there was no conflict of interest between the borrower or business owner and city or other program operators involved in loan.

SCED Staff Recommendation: Date: _

Robert Nash, Chief Executive Officer

Grant Approved-City of Anderson: _ Date: _ Dana Shigley, City Manager

A-II

ATTACHMENT E

Anderson Microenterprise Financial Assistnace Program GRANT AGREEMENT

THIS AGREEMENT is made and entered into this __ day of , 20_, by and between the City of Anderson, hereinafter referred to as "City" and , hereinafter referred to as "Applicant."

The Applicant and the City certify and agree to the terms and conditions as set forth below:

1. The Applicant is the owner in good standing of a certain business named and located at in the City of Anderson, California, hereinafter referred to as the "Business."

2. The Business is used for for-profit purposes and Applicant's proposed improvements to the Business fall within the Anderson Microenterprise Financial Assistance Program Guidelines. The Business must meet all eligibility standards of said GUidelines.

3. All activities to be undertaken will be consistent with the City's CDBG Microenterprise Development Program (MDP) as administered by Superior California Economic Development (SCED) and the Microenterprise Grant Proposal (MGP) as submitted to MDP.

4. Only the expenditures agreed to by the City and the applicant, as outlined in the formal written Microenterprise Grant Proposal, will be eligible for funding. Any changes to the project that are not approved by the City in writing will not be eligible for funding. Expenditures by the Applicant that occur prior to the execution of this agreement will not

be eligible for funding.

5. Disbursement of CDBG grant funds will be disbursed on an as needed basis with purchase orders or invoices being paid directly to vendors or client will be reimbursed for approved costs paid directly by them after the approval date of the grant.

6. The Applicant has thirty (30) days from the date that the City signs the Agreement to begin activities outlined in the MGP. If applicant has not started to implement stated activities within ninety (90) days, the City has the right to terminate the Agreement and utilize the

reserved grant/loan funds for other applicants who are ready to proceed. Extensions, if warranted, may be granted at the sole discretion of the City.

A-12

7. Applicant understands and agrees that the City, their officers, agents, sub-contractors and

employees shall have no responsibility or liability of any failure or inadequacy of

performance in regard to the agreed-upon activities. Applicant shall indemnify, release,

defend and hold the City, their officers, agents, sub-contractors and employees harmless

from all claims, losses, liabilities, damages, suits, actions or proceedings by any person

including Business Owner(s), Applicant(s), its employees and agency from personal injury,

death or property damage from any cause whatsoever in whole or in part arising out of this

Agreement or the activities completed hereunder by this indemnification shall not include

the sale negligence or willful misconduct of the City, their officers, agents, sub-contractors

and employees.

8. This Agreement incorporates the following documents as fully a part of this Agreement as if

herein repeated:

MDP Application

MDP Grant Application

MDP Grant Proposal

City of Anderson Microenterprise Financial Assistance Program Guidelines

This Agreement shall inure and be binding upon the successors and assigns to the parties hereto.

Executed this __ day of , 20_

City of Anderson Business Name

Dana Shigley Business OwnerIApplicant City Manager

A-13

EXHIBI'l' B

AGREEMENT BETWEEN CITY OF ANDERSON AND

SUPERIOR CALIFORNIA ECONOMIC DEVELOPMENT FORA

MICROENTERPRISE TRAINING & TECHNICAL ASSISTANCE PROGRAM

THIS AGREEMENT is entered into this day of October, 2011 by and between the City of Anderson (herein called the "Grantee") and Superior California Economic Development, Inc. (herein called the "Subrecipient").

WHEREAS, the Grantee has applied for and received funds from the State of California, Department of Housing and Community Development, State Community Development Block Grant Program ("the Department") originating from the United States Government under Title I of the Housing and Community Development Act of 1974, as amended (HCD Act), Public Law 93-383; and

WHEREAS, the Grantee wishes to engage the Subrecipient to assist the Grantee in utilizing such funds;

NOW, THEREFORE, it is agreed between the parties hereto that;

SCOPE OF SERVICE

A. Activities

The Subrecipient will be responsible for administering CDBG Grant 10-EDEF-7251, l\t1icroenterprise Development Program, in a manner satisfactory to the Grantee and consistent with any standards required as a condition of providing these funds. Such program will include the following activities eligible under the Community Development Block Grant program:

Program Delivery

Activity #1: Assessment

Determine TIG eligibility and assess readiness of TIG participants to enter a business development program.

Activity #2: Business Training & Technical Assistance

Provide business training and technical assistance for TIG participants through one­on-one counseling, classroom training and referral to outside resources.

Activity #3: Marketing Assistance

Assist TIG participants in developing a marketing strategy and preparing grant requests.

Activity #4: Financing

Assist in preparing microloan package for SCED Business Development Loan Program where requested and appropriate.

General Administration

The Subrecipient will be responsible for the following General Administration services:

1. Draft General Program Guidelines and Financial Assistance Program Guidelines, and have approved by CDBG.

2. Work with City and CDBG to clear General and Special Conditions. 3. Monitor grant expenditures and achievement of goals. 4. Oversee program implementation and activities. 5. Generate program section of Financial and Accomplishment Report, Economic

Development Progress Report, and Grantee Performance Reports. 6. Report on progress to Grantee and governing body.

B. National Objectives

The Subrecipient certifies that the activity(ies) carried out under this Agreement will meet the l\Jational Objective of benefitting low- and moderate-income persons by providing microenterprise training and technical assistance to TIG-eligible individuals.

C. Levels of Accomplishment - Goals and Performance Measures

The Subrecipient agrees to provide the following levels of program services:

Activity

Microenterprise Eligibility, Training & Technical Assistance

Marketing Strategy & Financing Jobs Created/Retained

D. Staffing

Number per Grant Period

30 TIG participants 10 grants 13 Jobs

Staff Member Activity Time

Committed

Special Projects Manager

Program administration, eligibility, technical assistance, outreach

50%

Training/Business Development Specialist

Training, technical assistance, outreach

25%

Administrative Staff Fiscal & administrative oversight

5%

E. Performance Monitoring

The Grantee will monitor the performance of the Subrecipient against goals and performance standards as stated above. Substandard performance as determined by the Grantee will constitute noncompliance with this Agreement. If action to correct such substandard performance is not taken by the Subrecipient within a reasonable period of time after being notified by the Grantee, contract suspension or termination procedures will be initiated.

II. TIME OF PERFORMANCE

Services of the Subrecipient shall start upon approval of this agreement and end on the 30th day of I\lovember, 2014. The term of this Agreement and the provisions herein shall be extended to cover any additional time period during which the Subrecipient remains in control of CDBG funds or other CDBG assets, including program income.

II. BUDGET

Line Item Amount

Salaries $ 100,000 Fringe 32,000 Office Space (Program only) 8,000 UtiIities/Communications 2,000 Reproduction/Printing 500 Supplies and Materials 2,000 Mileage 1,600 Accounting/Audit 2,500 Microenterprise Marketing Financing 50,000 Other: Supportive Services, 11,025 Marketing, Insurance, Postage, Travel Computer Expense, Outside Services, Other Miscellaneous

TOTAL $ 209,625

Any indirect costs charged must be consistent with the conditions of Paragraph VIII (C)(2) of this Agreement. Any amendments to the budget must be approved in writing by both the Grantee and the Subrecipient.

IV. PAYMENT

It is expressly agreed and understood that the total amount to be paid by the Grantee under this Agreement shall not exceed $209,625. Drawdowns for the payment of eligible expenses shall be made against the line item budgets specified in Paragraph III herein and in accordance with performance. Expenses for general administration shall also be paid against the line item budgets specified in Paragraph III and in accordance with performance.

V. NOTICES

Notices required by this Agreement shall be in writing and delivered via mail (postage prepaid), commercial courier, or personal delivery or sent by facsimile or other electronic means. Any notice delivered or sent as aforesaid shall be effective on the date of delivery or sending. All notices and other written communications under this Agreement shall be addressed to the individuals in the capacities indicated below, unless otherwise modified by subsequent written notice.

Communication and details concerning this contract shall be directed to the following contract representatives:

Grantee Subrecipient

Dana Shigley, City Manager Robert Nash, Chief Executive Officer 1887 Howard Street 499 Hemsted Drive, Suite A Anderson, CA 96007 Redding, CA 96001 (530) 378-6646 (530) 225-2760 Fax: (530) 378-6648 Fax: (530) 225-2769

VI. SPECIAL CONDITIONS

Subrecipient will submit l\Ilicroenterprise Program Guidelines and Microenterprise Financial AssistancE' Program Guidelines to HCD for review prior to implementation.

VII. GENERAL CONDITIONS

A. General Compliance

The Subrecipient agrees to comply with the requirements of Title 24 of the Code of Federal Regulations, Part 570 (the U.S. Housing and Urban Development regulations concerning Community Development Block Grants (CDBG)) including subpart K of these regulations, except that (1) the Subrecipient does not assume the recipient's environmental responsibilities described in 24 CFR 570.604 and (2) the Subrecipient does not assume the recipient's responsibility for initiating the review process under the provisions of 24 CFR Part 52. The Subrecipient also agrees to comply with all other applicable Federal, State and local laws, regulations, and policies governing the funds provided under this contract. The Subrecipient further agrees to utilize funds available under this Agreement to supplement rather than supplant funds otherwise available.

B. "Independent Contractor"

Nothing contained in this Agreement is intended to, or shall be construed in any manner, as creating or establishing the relationship of employer/employee between the parties. The Subrecipient shall at all times remain an "independent contractor" with respect to the services to be performed under this Agreement. The Grantee shall be exempt from payment of all Unemployment Compensation, FICA, retirement, life and/or medical insurance and Workers' Compensation Insurance, as the Subrecipient is an independent contractor.

C. Hold Harmless

The Subrecipient shall hold harmless, defend and indemnify the Grantee from any and all claims, actions, suits, charges and judgments whatsoever that arise out of the Subrecipient's performance or nonperformance of the services or subject matter called for in this Agreement.

D. Workers' Compensation

The Subrecipient shall provide Workers' Compensation Insurance coverage for all of its employees involved in the performance of this Agreement.

E. Insurance & Bonding

The Subrecipient shall carry sufficient insurance coverage to protect contract assets from loss due to theft, fraud and/or undue physical damage.

The Subrecipient shall comply with the bonding and insurance requirements of 24 CFR 84.31 and 84.48, Bonding and Insurance.

F. Grantee Recognition

The Subrecipient shall insure recognition of the role of the Grantee in providing services through this Agreement. All activities, facilities and items utilized pursuant to this Agreement shall be prominently labeled as to funding source. In addition, the Subrecipient will include a reference to the support provided herein in all publications made possible with funds made available under this Agreement.

G. Amendments

The Grantee or Subrecipient may amend this Agreement at any time provided that such amendments make specific reference to this Agreement, and are executed in writing, signed by a duly authorized representative of each organization, and approved by the Grantee's governing body. Such amendments shall not invalidate this Agreement, nor relieve or release the Grantee or Subrecipient from its obligations under this Agreement.

The Grantee may, in its discretion, amend this Agreement to conform with Federal, state or local governmental guidelines, policies and available funding amounts, or for other reasons. If such amendments result in a change in the funding, the scope of services, or schedule of the activities to be undertaken as part of this Agreement, such modifications will be incorporated only by written amendment signed by both Grantee and Subrecipient.

H. Suspension or Termination

In accordance with 24 CFR 85.43, the Grantee may suspend or terminate this Agreement if the Subrecipient materially fails to comply with any terms of this Agreement, which include, but are not limited to, the following:

1. Failure to comply with any of the rules, regulations or provisions referred to herein, or such statutes, regulations, executive orders, and HLiD guidelines, policies or directives as may become applicable at any time;

2. Failure, for any reason, of the Subrecipient to fulfill in a timely and proper manner its obligations under this Agreement;

3. Ineffective or improper use of funds provided under this Agreement; or

4. Submission by the Subrecipient to the Grantee reports that are incorrect or incomplete in any material respect.

In accordance with 24 CFR 85.44, this Agreement may also be terminated for convenience by either the Grantee or the Subrecipient, in whole or in part, by setting forth the reasons for such termination, the effective date, and, in the case of partial termination, the portion to be terminated. However, if in the case of a partial termination, the Grantee determines that the remaining portion of the award will not accomplish the purpose for which the award was made, the Grantee may terminate the award in its entirety.

VIII. ADMINISTRATIVE REQUIREMENTS

A. Financial Management

1. Accounting Standards

The Subrecipient agrees to comply with 24 CFR 84.21-28 and agrees to adhere to the accounting principles and procedures required therein, utilize adequate internal controls, and maintain necessary source documentation for all costs incurred.

2. Cost Principles

The Subrecipient shall administer its program in conformance with OMB Circulars A-122, "Cost Principles for Non-Profit Organizations," or A-21, "Cost Principles for Educational Institutions," as applicable. These principles shall be applied for all costs incurred whether charged on a direct or indirect basis.

B. Documentation and Record Keeping

1. Records to be Maintained

The Subrecipient shall maintain all records required by the Federal regulations specified in 24 CFR 570.506 that are pertinent to the activities to be funded under this Agreement. Such records shall include but not be limited to:

a) Records providing a full description of each activity undertaken; b) Records demonstrating that each activity undertaken meets one of the

National Objectives of the CDBG program; c) Records required to determine the eligibility of activities;

d) Records required to document the acquisition, improvement, use or disposition of real property acquired or improved with CDBG assistance;

e) Records documenting compliance with the fair housing and equal opportunity components of the CDBG program;

f) Financial records as required by 24 CFR 570.502, and 24 CFR 84.21-28; and

g. Other records necessary to document compliance with Subpart K of 24 CFR Part 570.

2. Retention

The Subrecipient shall retain all financial records, supporting documents, statistical records, and all other records pertinent to the Agreement for a period of four (4) years. The retention period begins on the date of the submission of the Grantee's annual performance and evaluation report to HUD in which the activities assisted under the Agreement are reported on for the final time. Notwithstanding the above, if there is litigation, claims, audits, negotiations or other actions that involve any of the records cited and that have started before the expiration of the four-year period, then such records must be retained until completion of the actions and resolution of all issues, or the expiration of the four-year period, whichever occurs later.

3. Client Data

The Subrecipient shall maintain client data demonstrating client eligibility for services provided. Such data shall include, but not be limited to, client name, address, income level or other basis for determining eligibility, and description of service provided. Such information shall be made available to Grantee monitors or their designees for review upon request.

4. Disclosure

The Subrecipient understands that client information collected under this contract is private and the use or disclosure of such information, when not directly connected with the administration of the Grantee's or Subrecipient's responsibilities with respect to services provided under this contract, is prohibited unless written consent is obtained from such person receiving service and, in the case of a minor, that of a responsible parent/guardian.

5. Closeouts

The Subrecipient's obligation to the Grantee shall not end until all close-out requirements are completed. Activities during this close-out period shall include, but are not limited to: making final payments, disposing of program assets, program income balances, and accounts receivable to the Grantee, and determining the custodianship of records. Notwithstanding the foregoing, the terms of this Agreement shall remain in effect during any period that the Subrecipient has control over CDBG funds, including program income.

6. Audits & Inspections

All Subrecipient records with respect to any matters covered by this Agreement shall be made available to the Grantee, grantor agency, and the Comptroller General of the United States or any of their authorized representatives, at any time during normal business hours, as often as deemed necessary, to audit, examine, and make excerpts or transcripts of all relevant data. Any deficiencies noted in audit reports must be fully cleared by the Subrecipient within 30 days after receipt by the Subrecipient. Failure of the Subrecipient to comply with the above audit requirements will constitute a violation of this contract and may result in the withholding of future payments. The Subrecipient hereby agrees to have an annual agency audit conducted in accordance with current Grantee policy concerning subrecipient audits and OMB Circular A-133.

C. Reporting and Payment Procedures

1. Program Income

The Subrecipient shall report all program income as defined at 24 CFR 570.500(a) generated by activities carried out with CDBG funds made available under this contract. The use of program income by the Subrecipient shall comply with the requirements set forth at 24 CFR 570.504. By way of further limitations, the Subrecipient may use such income during the contract period for activities permitted under this contract and shall reduce requests for additional funds by the amount of any such program income balances on hand. All unexpended program income shall be returned to the Grantee at the end of the contract period. Any interest earned on cash advances from the U.S. Treasury and from funds held in a revolving fund account is not program income and shall be remitted promptly to the Grantee.

2. Indirect Costs

If indirect costs are charged, the Subrecipient will develop an indirect cost allocation plan for determining the appropriate Subrecipient's share of administrative costs and shall submit such plan to the Grantee.

3. Payment Procedures

The Grantee will pay to the Subrecipient funds available under this Agreement based upon information submitted by the Subrecipient and consistent with any approved budget and Grantee policy concerning payments. With the exception of certain advances, payments will be made for eligible expenses actually incurred by the Subrecipient, and not to exceed actual cash requirements. Payments will be adjusted by the Grantee in accordance with advance fund and program income balances available in Subrecipient accounts. In addition, the Grantee reserves the right to liquidate funds available under this contract for costs incurred by the Grantee on behalf of the Subrecipient.

4. Prog ress Reports

The Subrecipient shall submit regular Progress Reports to the Grantee in the form, content, and frequency as required by the Grantee.

D. Procurement

1. Compliance

The Subrecipient shall comply with current Grantee policy concerning the purchase of equipment and shall maintain inventory records of all non­expendable personal property as defined by such policy as may be procured with funds provided herein. All program assets (unexpended program income, property, equipment, etc.) shall revert to the Grantee upon termination of this Agreement.

2. OMB Standards

Unless specified otherwise within this agreement, the Subrecipient shall procure all materials, property, or services in accordance with the requirements of 24 CFR 84.40-48.

3. Travel

The Subrecipient shall maintain travel records and will document for Grantee review any travel outside Superior California Economic Development District boundaries with funds provided under this Agreement.

E. Use and Reversion of Assets

The use and disposition of real property and equipment under this Agreement shall be in compliance with the requirements of 24 CFR Part 84 and 24 CFR 570.502, 570.503, and 570.504, as applicable, which include but are not limited to the following:

1. The Subrecipient shall transfer to the Grantee any CDBG funds on hand and any accounts receivable attributable to the use of funds under this Agreement at the time of expiration, cancellation, or termination.

2. Real property under the Subrecipient's control that was acquired or improved, in whole or in part, with funds under this Agreement in excess of $25,000 shall be used to meet one of the CDBG National Objectives pursuant to 24 CFR 570.208 until five (5) years after expiration of this Agreement. If the Subrecipient fails to use CDBG-assisted real property in a manner that meets a CDBG National Objective for the prescribed period of time, the Subrecipient shall pay the Grantee an amount equal to 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. Such payment shall constitute program income to the Grantee. The Subrecipient may retain real property acquired or improved under this Agreement after the expiration of the five-year period.

3. In all cases in which equipment acquired, in whole or in part, with funds under this Agreement is sold, the proceeds shall be program income (prorated to reflect the extent to that funds received under this Agreement were used to acquire the equipment). Equipment not needed by the Subrecipient for activities under this Agreement shall be (a) transferred to the Grantee for the CDBG program or (b) retained after compensating the Grantee an amount equal to the current fair market value of the equipment less the percentage of non-CDBG funds used to acquire the equipment.

IX. RELOCATION, REAL PROPERTY ACQUISITION AND ONE-FOR-ONE HOUSING REPLACEMENT

It is not anticipated that any relocation activities will occur under this agreement.

X. PERSONNEL & PARTICIPANT CONDITIONS

A. Civil Rights

1. Compliance

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 Section 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, 11478, 12107 and 12086.

2. Nondiscrimination

The Subrecipient agrees to comply with the non-discrimination in employment and contracting opportunities laws, regulations, and executive orders referenced in 24 CFR 570.607, as revised by Executive Order 13279. The applicable non-discrimination provisions in Section 109 of the HCDA are still applicable.

4. Section 504

The Subrecipient agrees to comply with all Federal regulations issued pursuant to compliance with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), which prohibits discrimination against the individuals with disabilities or handicaps in any Federally assisted program. The Grantee shall provide the Subrecipient with any guidelines necessary for compliance with that portion of the regulations in force during the term of this Agreement.

B. Affirmative Action

1. Approved Plan

The Subrecipient agrees that it shall be committed to carry out pursuant to the Grantee's specifications an Affirmative Action Program in keeping with the

principles as provided in President's Executive Order 11246 of September 24, 1966.

2. Women- and Minority-Owned Businesses (W/MBE)

The Subrecipient will use its best efforts to afford small businesses, minority business enterprises, and women's business enterprises the maximum practicable opportunity to participate in the performance of this contract. As used in this contract, the terms "small business" means a business that meets the criteria set forth in section 3(a) of the Small Business Act, as amended (15 U.S.C. 632), and "minority and women's business enterprise" means a business at least fifty-one (51) percent owned and controlled by minority group members or women. For the purpose of this definition, "minority group members" are Afro-Americans, Spanish-speaking, Spanish surnamed or Spanish-heritage Americans, Asian-Americans, and American Indians. The Subrecipient may rely on written representations by businesses regarding their status as minority and female business enterprises in lieu of an independent investigation.

3. Access to Records

The Subrecipient shall furnish and cause each of its own subrecipients or subcontractors to furnish all information and reports required hereunder and will permit access to its books, records and accounts by the Grantee, HUD or its agent, or other authorized Federal officials for purposes of investigation to ascertain compliance with the rules, regulations and provisions stated herein.

4. Notifications

The Subrecipient will send to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer, advising the labor union or worker's representative of the Subrecipient's commitments hereunder, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

5. Equal Employment Opportunity and Affirmative Action (EEO/AA) Statement

The Subrecipient will, in all solicitations or advertisements for employees placed by or on behalf of the Subrecipient, state that it is an Equal Opportunity or Affirmative Action employer.

6. Subcontract Provisions

The Subrecipient will include the provisions of Paragraphs X.A, Civil Rights, and B, Affirmative Action, in every subcontract or purchase order, specifically or by reference, so that such provisions will be binding upon each of its own subrecipients or subcontractors.

C. Employment Restrictions

1. Prohibited Activity

The Subrecipient is prohibited from using funds provided herein or personnel employed in the administration of the program for: political activities; inherently religious activities; lobbying; political patronage; and nepotism activities.

2. Labor Standards

The Subrecipient agrees to comply with the requirements of the Secretary of Labor in accordance with the Davis-Bacon Act as amended, the provisions of Contract Work Hours and Safety Standards Act (40 U.S.C. 327 et seq.) and all other applicable Federal, State and local laws and regulations pertaining to labor standards insofar as those acts apply to the performance of this Agreement. The Subrecipient agrees to comply with the Copeland Anti-Kick Back Act (18 U.S.C. 874 et seq.) and its implementing regulations of the U.S. Department of Labor at 29 CFR Part 5. The Subrecipient shall maintain documentation that demonstrates compliance with hour and wage requirements of this part. Such documentation shall be made available to the Grantee for review upon request.

The Subrecipient agrees that, except with respect to the rehabilitation or construction of residential property containing less than eight (8) units, all contractors engaged under contracts in excess of $2,000.00 for construction, renovation or repair work financed in whole or in part with assistance provided under this contract, shall comply with Federal requirements adopted by the Grantee pertaining to such contracts and with the applicable requirements of the regulations of the Department of Labor, under 29 CFR Parts 1, 3, 5 and 7 governing the payment of wages and ratio of apprentices and trainees to journey workers; provided that, if wage rates higher than those required under the regulations are imposed by state or local law, nothing hereunder is intended to relieve the Subrecipient of its obligation, if any, to require payment of the higher wage. The Subrecipient shall cause or require to be inserted in full, in all such contracts subject to such regulations, provisions meeting the requirements of this paragraph.

"Section 3" Clause

a) Compliance: Compliance with the provisions of Section 3 of the HUD Act of 1968, as amended, and as implemented by the regulations set forth in 24 CFR 135, and all applicable rules and orders issued hereunder prior to the execution of this contract, shall be a condition of the Federal financial assistance provided under this contract and binding upon the Grantee, the Subrecipient and any of the Subrecipient's subrecipients and subcontractors. Failure to fulfill these requirements shall subject the Grantee, the Subrecipient and any of the Subrecipient's subrecipients and subcontractors, their successors and assigns, to those sanctions specified by the Agreement through which Federal assistance is provided. The Subrecipient certifies and agrees that no contractual or

other disability exists that would prevent compliance with these requirements.

The Subrecipient further agrees to comply with these "Section 3" requirements and to include the following language in all subcontracts executed under this Agreement:

"The work to be performed under this Agreement is a project assisted under a program providing direct Federal financial assistance from HUD and is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended (12 U.S.C. 1701). Section 3 requires that to the greatest extent feasible opportunities for training and employment be given to low­and very low-income residents of the project area, and that contracts for work in connection with the project be awarded to business concerns that provide economic opportunities for low- and very low-income persons residing in the metropolitan area in which the project is located."

The Subrecipient further agrees to ensure that opportunities for training and employment arising in connection with a housing rehabilitation (including reduction and abatement of lead-based paint hazards), housing construction, or other public construction project are given to low- and very low-income persons residing within the metropolitan area in which the CDBG-funded project is located; where feasible, priority should be given to low- and very low-income persons within the service area of the project or the neighborhood in which the project is located, and to low- and very low-income participants in other HUD programs; and award contracts for work undertaken in connection with a housing rehabilitation (including reduction and abatement of lead-based paint hazards), housing construction, or other public construction project to business concerns that provide economic opportunities for low- and very low­income persons residing within the metropolitan area in which the CDBG­funded project is located; where feasible, priority should be given to business concerns that provide economic opportunities to low- and very low-income residents within the service area or the neighborhood in which the project is located, and to low- and very low-income participants in other HUD programs.

The Subrecipient certifies and agrees that no contractual or other legal incapacity exists that would prevent compliance with these requirements.

b) Notifications: The Subrecipient agrees to send to each labor organization or representative of workers with which it has a collective bargaining agreement or other contract or understanding, if any, a notice advising said labor organization or worker's representative of its commitments under this Section 3 clause and shall post copies of the notice in conspicuous places available to employees and applicants for employment or training.

c) Subcontracts: The Subrecipient will include this Section 3 clause in every subcontract and will take appropriate action pursuant to the subcontract upon a finding that the subcontractor is in violation of regulations issued by the grantor agency. The Subrecipient will not subcontract with any entity where it has notice or knowledge that the latter has been found in violation of regulations under 24 CFR Part 135 and will not let any subcontract unless the entity has first provided it with a preliminary statement of ability to comply with the requirements of these regulations.

D. Conduct

1. Assignability

The Subrecipient shall not assign or transfer any interest in this Agreement without the prior written consent of the Grantee thereto; provided, however, that claims for money due or to become due to the Subrecipient from the Grantee under this contract may be assigned to a bank, trust company, or other financial institution without such approval. Notice of any such assignment or transfer shall be furnished promptly to the Grantee.

2. Subcontracts

a) Approvals: The Subrecipient shall not 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 agreement.

b) Monitoring: The Subrecipient will monitor all subcontracted services on a regular basis to assure contract compliance. Results of monitoring efforts shall be summarized in written reports and supported with documented evidence of follow-up actions taken to correct areas of noncompliance.

c) Content: The Subrecipient shall cause all of the provisions of this contract in its entirety to be included in and made a part of any subcontract executed in the performance of this Agreement.

d) Selection Process: The Subrecipient shall undertake to insure that all subcontracts let in the performance of this Agreement shall be awarded on a fair and open competition basis in accordance with applicable procurement requirements. Executed copies of all subcontracts shall be forwarded to the Grantee along with documentation concerning the selection process.

3. Hatch Act

The Subrecipient agrees that no funds provided, nor personnel employed under this Agreement, shall be in any way or to any extent engaged in the conduct of political activities in violation of Chapter 15 of Title V of the U.S.C.

4. Conflict of Interest

The Grantee and Subrecipient and their officers and employees shall not have a financial interest, or acquire any financial interest, direct or indirect, in any business, property or source of income which could be financially affected by or otherwise conflict in any manner or degree with the performance of services required under this agreement.

5. Lobbying

The Subrecipient hereby certifies that:

a) l\Jo Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement;

b) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions; and

c) It will require that the language of paragraph (d) of this certification be included in the award documents for all sub awards at all tiers (including subcontracts, sub grants, and contracts under grants, loans, and cooperative agreements) and that all Subrecipients shall certify and disclose accordingly:

d) Lobbving Certification

This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S.C. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

6. Copyright

If this contract results in any copyrightable material or inventions, the Grantee and/or grantor agency reserves the right to royalty-free, non-exclusive and irrevocable license to reproduce, publish or otherwise use and to authorize others to use, the work or materials for governmental purposes.

7. Religious Activities

The Subrecipient agrees that funds provided under this Agreement will not be utilized for inherently religious activities prohibited by 24 CFR 570.200U), such as worship, religious instruction, or proselytization.

XI. ENVIRONMENTAL CONDITIONS

A. Air and Water

The Subrecipient agrees to comply with the following requirements insofar as they apply to the performance of this Agreement:

It Clean Air Act, 42 U.S.C. , 7401, et seq.;

It Federal Water Pollution Control Act, as amended, 33 U.S.C., 1251, et seq., as amended, 1318 relating to inspection, monitoring, entry, reports, and information, as well as other requirements specified in said Section 114 and Section 308, and all regulations and guidelines issued thereunder;

It Environmental Protection Agency (EPA) regulations pursuant to 40 CFR Part 50, as amended.

B. Flood Disaster Protection

In accordance with the requirements of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4001), the Subrecipient shall assure that for activities located in an area identified by the Federal Emergency Management Agency (FEMA) as having special flood hazards, flood insurance under the National Flood Insurance Program is obtained and maintained as a condition of financial assistance for acquisition or construction purposes (including rehabilitation).

C. Lead-Based Paint

The Subrecipient agrees that any construction or rehabilitation of residential structures with assistance provided under this Agreement shall be subject to HLiD Lead-Based Paint Regulations at 24 CFR 570.608, and 24 CFR Part 35, Subpart B. Such regulations pertain to all CDBG-assisted housing and require that all owners, prospective owners, and tenants of properties constructed prior to 1978 be properly notified that such properties may include lead-based paint. Such notification shall point out the hazards of lead-based paint and explain the symptoms, treatment and precautions that should be taken when dealing with lead-based paint poisoning and the advisability and availability of blood lead level screening for children under seven. The notice should also point out that if lead-based paint is found on the property, abatement measures may be undertaken. The regulations further require that, depending on the amount of Federal funds applied to a property, paint testing, risk assessment, treatment and/or abatement may be conducted.

D. Historic Preservation

The Subrecipient agrees to comply with the Historic Preservation requirements set forth in the National Historic Preservation Act of 1966, as amended (16 U.S.C. 470) and the procedures set forth in 36 CFR Part 800, Advisory Council on Historic Preservation Procedures for Protection of Historic Properties, insofar as they apply to the performance of this agreement.

In general, this requires concurrence from the State Historic Preservation Officer for all rehabilitation and demolition of historic properties that are fifty years old or older or that are included on a Federal, state, or local historic property list.

XII. SEVERABILITY

If any provision of this Agreement is held invalid, the remainder of the Agreement shall not be affected thereby and all other parts of this Agreement shall nevertheless be in full force and effect.

XIII. SECTION HEADINGS AND SUBHEADINGS

The section headings and subheadings contained in this Agreement are included for convenience only and shall not limit or otherwise affect the terms of this Agreement.

XIV. WAIVER

The Grantee's failure to act with respect to a breach by the Subrecipient does not waive its right to act with respect to subsequent or similar breaches. The failure of the Grantee to exercise or enforce any right or provision shall not constitute a waiver of such right or provision.

XV. ENTIRE AGREEMENT

This agreement constitutes the entire agreement between the Grantee and the Subrecipient for the use of funds received under this Agreement and it supersedes all prior or contemporaneous communications and proposals, whether electronic, oral, or written between the Grantee and the Subrecipient with respect to this Agreement.

October ,2011

IN WITNESS WHEREOF, the Parties have executed this contract as of the date first written above.

City of Anderson Superior California Economic Development

By _ By _ Dana Shigley, City Manager Robert Nash, Chief Executive Officer