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Home My WebLink About04/19/2000 BAKERSFIELD Patricia J. DeMOnd, Chair Mike' Maggard Mark Salvaggio Staff: Darnell Haynes SPECIAL MEETING BUDGET AND FINANCE-COMMITTEE of the City Council - City of Bakersfield Wednesday, April 19, 2000 12:00 noon City Manager'S Conference Room, Suite 201 Second Floor- City Hall, 1501 Truxtun Avenue, Bakersfield, CA AG:EN DA 1. ROLL CALL 2. APPROVAL OF FEBRUARY 7, 2000 AGENDA SUMMARY REPORT 3. PUBLIC' STATEMENTS 4. DEFERRED BUSINESS A. Review and Committee recommendation on City Auditor Proposals - Klimko B. Discussion and Committee recommendation regarding the proposed Joshua Park project. - Ford C. Discussion and Committee recommendation regarding the Community Development Block Grant Five Year Consolidated Plan and Fiscal Year 2000-01 Annual Action Plan - Wager 5. NEW BUSINESS A. Audit Reports: 1. Discussion and recommendation regarding acceptance of the 1998,99 City of Bakersfield Transportation Development Act Funds Financial Statement - Rojas 2. Discussion and recommendation regarding acceptance of Independent Auditors' Report on Compliance with State .Local Transportation Partnership Program - Rojas 3. Discussion and recommendation regarding acceptance of the Independent Auditor's Report on Compliance with contractual requirements relative to the Bakersfield Subregional Wastewater Management Plan - Rojas B. Discussion and Committee recommendation regarding Community Development Block Grant Program Amendment to provide funding for southeast Bakersfield market site. -Wager C. Discussion and Committee recommendation regarding agreement with Affordable Homes Inc. regarding use of HOME / CHDO funds to purchase and rehabilitate HUD single family homes. - Wager D. Discussion and Committee recommendation regarding request by Bakersfield Senior Center ~ for senior housing project financial support. - Wager FILE COPY BAKERSFIELD ~ ~~ Patricia J. DeMond, Chair Alan Tandy, City ~[~nager Mike Maggard Staff: Darnell Haynes Mark Salvaggio AGENDA SUMMARY REPORT SPECIAL MEETING BUDGET AND FINANCE COMMITTEE Mofiday, February 7, 2000 12:00 p.m. City Manager's Conference Room 1. ROLL CALL Call to Order at 12:07 p.m. Present: Councilmembers: Patricia J. DeMond, Chair; Mark Salvaggio and Mike Maggard (left at 2:48 p.m. after Item 5C) 2. APPROVAL OF DECEMBER 20, 1999 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS None 4. DEFERRED BUSINESS A. UPDATE AND POSSIBLE COMMITTEE RECOMMENDATION REGARDING REQUEST FROM KERN COUNTY FOR AIRPORT TERMINAL FUNDING The Committee had requested additional information before evaluating the County's request for $3 million from the City to help finance the construction of a new air passenger terminal at Meadows Field. Information has been provided to the Council and includes a list of Citywide projects that need to be budgeted and information on funding sources including the tobacco settlement monies received bY the County. If the Committee recommends $1.5 million or less, staff proposed that we set aside cash on an annual basis and meet the obligation with cash paid over a three-year term. If the Committee decides to recommend $3 million,.budgeting set aside of that much cash in the short term is more difficult. On a yearly basis, $500,000 represents 25% of our average capital improvement program. The .list of the many Citywide capital improvement projects and services that need to be funded was reviewed. Committee member Maggard felt that although we do not want to sell short the services we are able to provide to City citizens, this is an DRAFT BUDGET AND FINANCE COMMITTEE Monday, February 7, 2000 Page -2- opportunity to do something positive for the long-term future of the community by participating in building the new air terminal. The City will 'be receiving $714,000 in booking fee reimbursement money. This source of funding is expected to be. more than one-time. The City did receive $512,000 in one~time ERAF money. At the last Council meeting these funds were allocated for an enhanced street resurfacing project in order to avoid the need for a loan that was built into the budget.. The County will receive $1.5 million in ERAF one-time money. Also, for this fiscal year-the County will receive $9.24 million from the Tobacco settlement and $8 million each year for the next 19 years. The tobacco funds are a new source of funds outside the current County budget. County Administrative Officer Scott Jones stated that the ERAF money is just a small share of funds compared to the amount of the property tax shift and was used to balance the current County budget. The Board has not decided how the Tobacco settlement money will be used. He shared information that the County does not receive the Proposition 10 money that was mentioned in a City memo as a possible source of funds. That money is paid to the Proposition 10 Commissi.on and is not in the Board's control or included in the County budget. City staff is recommending the transfer of the airpark (Bakersfield Municipal Airport) and its fund balance of $.5 million be part of the financial assistance given to the County. There is logic in · having one authority operating all of the air facilities as it makes financial planning sense. From an air traffic standpoint, County air traffic control could assure that aircraft are flying proper flight paths. The County already has people trained in airport operations as they manage four or five small airports/airparks around the County and they have more expertise than the City. Scott Jones responded that there has been no change in the position of the Board of Supervisors who are not in favor of accepting the City's airpark. The Committee discussed the issues about the administration of the airpark that are making the County hesitant, besides the fact that taking on the airpark would mean extra work for the County. There are some issues with the pilots that would need to be resolved. There was discussion regarding the fact that the County has not contributed to various ~mprovements of great benefit to metro and countywide residents, such as Centennial Garden and the Amtrak Station, while the City has contributed significant funds to County projects, such as the Beale Library and the Calloway Separation of Grade. The Committee agreed to support the County with financial assistance for the new terminal using one-time monies, but could not come to a consensus on the amount of funding. Committee Chair DeMond made a motion that the Committee submit two reports to the Council, a Majority Committee Report from her and Committee member Salvaggio, and a Minority Committee Report from Committee member Maggard. The Committee unanimously approved the motion. BUDGET AND FINANCE COMMITTEE Monday, February 7, 2000 Page -3- The Majodty Report recommended entedng into a memorandum of understanding with the County for a City contribution of $1.0 million over a two-year term with yearly payments, consisting of $.5 million per year to pay for waiting room areas. An additional $.5 million fund balance from the airpark (Bakersfield Municipal Airport) would also be transferred contingent upon the County agreeing to take over operation of the airpark. The agreement is to include a stipulation that the County formally agree to accept operation of [he airpark by June 30, 2001 in order to put a hold on the $.5 million airpark fund balance. The Minodty Report recommended entedng into a memorandum of understanding with the County for a City contribution of $2.5 million over a five-year term with yeady payments, consisting of $.5 million per year to pay for lobby, concessions, hold rooms and ticketing areas. An additional $.5 million fund balance from the airpark (Bakersfield Municipal Airport) would also be transferred contingent upon the County agreeing to take over operation of the airpark. The agreement is to include a stipulation that the County formally agree to accept operation of the airpark by June 30, 2001 in order to put a hold on the $.5 million'airpark fund balance. Committee member Maggard indicated the Minority Report should include the specific terminal components that the City contribution is paying for so that citizens could identify what the City contribution accomplished. Main Lobby $1,426,000 Hold Rooms 787,750 Ticketing 502,550 Concessions 270,000 The Committee directed staff to prepare the reports for the February 23~ Council meeting. B. DISCUSSION AND POSSIBLE RECOMMENDATION REGARDING PROPOSAL RECEIVED FROM DAVID TURCH AND ASSOCIATES, WASHINGTON D.C. LOBBYIST This item was deferred. 5. NEW BUSINESS A. DISCUSSION AND RECOMMENDATION REGARDING ACCEPTANCE OF THE 1998-99 CITY OF BAKERSFIELD TRANSPORTATION DEVELOPMENT ACT FUNDS FINANCIAL STATEMENT Councilmember Maggard asked staff to get a copy of the auditoCs management letter and any other correspondence, which was not included in the final audit report. This item was deferred. B. DISCUSSION REGARDING THE EQUIPMENT MANAGEMENT FUND This item was deferred. DRAFT BUDGET AND FINANCE COMMITTEE Monday, February 7, 2000 Page -4- C. DISCUSSION AND RECOMMENDATION OF FY 2000-01 CDBG, HOME AND EMERGENCY SHELTER GRANT (ESG) ANNUAL SPENDING PLAN Jake Wager gave an overview of the allocations and recommendations in the Action Plan information that was sent to 'the Council in the Budget and Finance Committee packet. The City's entitlements for FY 2000/01 include: CDBG (Community Development Block Grant) funding of $2,787,000 plus $100,000 of anticipated program income from repayment of loans, etc.; HOME funding of $1,193,000; and ESG (Emergency Shelter Grants) funding of $99,000. Staff provided information that should there be requests for assistance during the year especially by firms proposing to bdng in a large number of new jobs, this information will be brought to this Committee for consideration and funding recommendations to Council. City Council's approval of the submittal to HUD does not restrain the Council from later making budget adjustments by amendment and re-advertising under Federal Rules. The Committee discussed the types of activities being recommended for funding. Committee member Salvaggio requested that in future years staff make sewer projects a higher priority. Jim Goodgame, Superintendent, Greenfield Union School District, spoke in support of funds ior a health clinic and childcare facility in south Bakersfield as their request is not being recommended for funding. Committee member Salvaggio stated he would like staff to continue to work with the Greenfield Union School Distdct on how they could determine their eligibility for HUD funding on their project. Marvin Dean, Southeast Bakersfield Business and Property Owners Association, spoke in support of housing assistance and gave an update for information only regarding their goal of infill housing development on vacant lots and upgrading properties of existing homeowners. Bill Williams, Bakersfield Rescue Mission Board of Directors, spoke regarding the need for additional funding for the Rescue Mission. Jolene Billinger, Director; Bonnie Hulsey; and Frank Tripicchio, Valley Achievement Center, spoke regarding their request not being recommended for funding and the need for funding for the school and their work with autistic children. David Milts and David Goh, President, Bakersfield Garden Project, spoke regarding their project not being recommended for funding and the need for funds for rehabilitation of the YMCA building. Floyd Castillo, acting Director, Bethany Services, spoke regarding their work at the Homeless Center and the importance of their funding. Stella Casas, Greater Bakersfield Legal Assistance, spoke regarding their request not being recommended for funding. Staff will contact all the agencies that were not recommended for funding assistance to advise them of how the funding recommendations were reached. They also will work with the agencies on future grant applications. DRAFT BUDGET AND FINANCE COMMITTEE Monday, February 7, 2000 Page -5- The Committee voted unanimously to authorized staff to publish the public notice for the Action Plan as there is a time deadline. The FY 2000/01 Action Plan will be put on the City Council agenda for the April 26th meeting for CoUncil action and approval. The application must be submitted to HUD by May 16, 2000 for their approval. D. SET FUTURE MEETING DATES Meetings were set for April 17th, May 15th and June 19th.' 6. ADJOURNMENT The meeting adjourned at 2:55 p.m. Staff present: City Manager Alan Tandy; City Attorney Bart Thiltgen; Assistant City Manager John Stinson; Assistant to the City Manager Darnell Haynes; Public Works Director Raul Rojas; Economic Development Director Jake Wager; Community Development Coordinator George Gonzales; Finance Director G.regory Klimko; Public Works Engineering Manager Jack LaRochelle; Public Works Fleet Superintendent Ernie Medina; and Public Works Operations Manager Joe Lozano; Assistant to the Public Works Director Georgina Lorenzi; General Services Superintendent Brad Underwood; Police Chief Edc Matlock; Fire Chief Ron Fraze; Deputy Fire Chief Gary Hutton; and EDCD Business Manager David Chesney. Others present: Scott Jones, Kern County Administrative Officer; Ray Bishop, Director, Kern County Airport; Stella Casas, Greater Bakersfield Legal Assistance; David Milts and David Goh, Bakersfield Garden Project; Jim Goodgame, Greenfield Union School District; Bill Williams, Warren Plaskett and Curt Kennedy, Bakersfield Rescue Mission; Jena Nunez, Kern County Mental Health Association; Graham Kaye Eddie, Makabusi Inc.; James Burger, The Bakersfield Californian; Doug Minner, Larkin Hamilton; Bill Carter, Kern County Housing Authority; Jolene Billinger, Director; Bonnie Hulsey; and Frank Tripicchio, Valley Achievement Center; Ralph Martinez, KCEOC; Dave Cross, architect; Floyd Castillo, Bethany Services; Marvin Dean, Southeast Bakersfield Business and Property Owners Association; Norma Rojas-Mora; Floyd Steller; and Karen Dierks. cc: Honorable Mayor and City Council DWH:jp S:/DarnelllB F00feb07summary.wpd BAKERSFIELD CITY MANAGER'S OFFICE MEMORANDUM April 13, 2000 TO: Councilmember Patricia DeMond FROM: John W. Stinso~n,~s~sistant City Manager SUBJECT: Budget and Finance Committee - Scheduling of Agenda Items Due to the large number of agenda items which had been scheduled for the April 19, 2000 Budget and Finance Committee and the limited time available to adequately address all of the issues before the Committee it will be necessary to defer several agenda items to the next meeting in May or subsequent Committee meetings. Pursuant to our phone conversation, the following items will be deferred: · Discussion and possible recommendation regarding building relationships with our State and Federal Elected Officials to obtain additional project funding/lobbying efforts · Discussion regarding the Equipment Management Fund · Discussion and Committee recommendation regarding request from Image Bakersfield 2000 for City of Bakersfield sponsorship · Discussion and Committee recommendation for establishing procedures for evaluating ambulance service rates Staff will continue to prepare these items for presentation to the Committee on future agendas. cc. Alan Tandy, City Manager S 5JOHN~vlemo Template.wpd MEMORANDUM TO: Alan Tandy, City Manager , // FROM: Gregory J. Klimko, Finance Director/~¢//~ DATE: April 13, 2000 SUBJECT: AUDIT PROPOSAL Background Section 41 of the City's Charter provides that the City Council shall employ, at the beginning of each year, a certified public accountant. In order to keep the cost of this professional service competitive, the City has entered into initial one year contracts with four one year extensions. This has allowed the selected firm to spread their start up costs over several years. The firm currently known as Brown, Armstrong, Randall, Reyes CPA's completed their second five year engagement with an audit of the 1998-99 fiscal year. Request for Proposals (RFP) Process The Finance Department staff sent inquiries to approximately eighty (80) local CPA firms using the City's business license file and telephone book. Five (5) local firms responded to our initial contact. Subsequently, four local and two non-local firms attended a mandatory pre proposal meeting. The two non-local firms are associated with local firms. The attendees were as follows: 1) Artis, Hare & Co., Inc. of Visalia, associated with J. Steven Pressley of Bakersfield. 2) Brown, Armstrong, Randall, Reyes, Paulden & McCown of Bakersfield. 3) Conrad and Associates, L.L.P. of Irvine, associated with Carpenter, Kuhen and Sprayberry of Bakersfield. 4) Daniells, Phillips, Vaughan and Bock of Bakersfield. The City received two audit proposals. Enclosed are the proposals submitted by: 1) Brown, Armstrong, Randall, Reyes, Paulden & McCown. 2) Conrad and Associates in association with Carpenter, Kuhen and Sprayberry. ¢~- " City Manager- Audit Proposals April 11,2000 Page 2 Representatives of each firm will be available on Wednesday April 19, 2000 for a short introduction not to exceed five minutes, and to answer any committee concerns. During your evaluation, the Committee may want to consider the following areas: A. The size and structure of the firm. B. The firm's experience and performance as it relates to auditing governmental entities in general and specifically cities. C. The qualifications of the personnel assigned to the audit team and the firms management support. The typical audit team, at minimum, consists of: ,/ 1 Partner (report review) 1 Manager (fieldwork review) ,/ I Senior Accountant (directs fieldwork) ,/ Staff Accountants (perform fieldwork) D. The reasonableness of time estimates to perform the services required. E. The experience of the firm in assisting City staff in maintaining the ability to continue to achieve national (GFOA) and State (CSFMO) awards for high standards in financial reporting. F. The ability to provide support services and consult on: Debt Refinancing ,/ Arbitrage Calculations ,/ Actuarial Services New additional reporting requirements G. Potential conflicts of interest. H. Cost of services to be provided. The audit firm is chosen by and works directly for the City Council. The firm's primary goal is to express an opinion on the annual financial statements prepared by the City Finance Department. While cost is an important factor, it should not be the only factor when considering a professional service contract and appointment of the external audit firm. Staff will prepare a contract at the direction of the committee for consideration by the City Council. Attached is a comparative schedule, which may assist you in your analysis, along with a copy of the City's RFP and the proposals submitted by the CPA firms. S:\Darrin\GregoP/\Memo. Tandy - AuditPro~osal.wpd City of Bakersfield Proposals for Services Audit of 1999-00 FY Firm Size Brown Conrad Partners. '7 8 Managers 10 11 Seniors 8 17 Professional Staff · 22 25 Support Staff 16 4 Total Personnel 63 65 Reference page 5 page 1 Hours Detail Brown Conrad Partners 110 62 Senior Manager 132 Senior Auditor 290 193 Staff 500 388 Total Hours 900 775 Reference page 15 page 27 Alternate A Full Scope Audit "In Relation To" Quote Detail Brown Conrad Brown Conrad City of Bakersfield $27,600 $34,240 $21,600 $32,640 Bakersfield RDA 5,200 5,120 5,200 5,120 Bakersfield PFA 2,200 2,048 2,200 2,048 Single Audit 3,500 7,680 3,500 7,680 Wastewater Management Plan 1,000 512 1,000 512 Total Audit Services $ 39,500 $ 49,600 $ 33,500 $ 48,000 S:\Darrin\Gregory\Wksht - AuditProposalsAnalysis.qpw 0.t,'l 1i00 City of Bakersfield REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES March 1, 2000 1501 Truxtun Avenue Bakersfield, CA 93301 City of Bakersfield REQUEST FOR PROPOSAl TABLE OF CONTENTS I. INTRODUCTION A. General Information B. Term of Engagement C. Subcontracting II. NATURE OF SERVICES REQUIRED A. General B. Scope of Work to be Performed C.' Auditing Standards to be Followed D. Reports to be Issued E. Special Considerations F. Working Paper Retention and Access to Working Papers III.. DESCRIPTION OF THE GOVERNMENT A. Name and Telephone Number of Contact Persons/Organizational Chart'Location of Offices B. Background Information C. Fund Structure D. Budgetary Basis of Accounting E. Federal and State Awards F. Pension Plans G. Component Units H. Joint Ventures I. Magnitude of Finance Operations J. Computer Systems K. Internal Audit Function L. Availability of Prior Reports and Working Papers IV. TIME REQUIREMENTS A. Proposal Calendar B. Notification and Agreement Dates C. Date Audit May Commence D. Schedule for the 1999-2000 Fiscal Year Audit 1. Interim Work 2. Detail Audit Plan and Programs 3. Fieldwork 4. Draft Reports E. Entrance Conferences, Progress Reporting and Exit Conferences F. Date Final. Report is Due V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance B. Management Information Service (MIS) Assistance C. Statements and Schedules to be Prepared by the Staffofthe City of Bakersfield D. Work Area, Telephone, Photocopying and FAX Machines E. Report Preparation VI. PROPOSAL REQUIREMENTS A. General Requirements 1. Submission of Notification of Interest 2. Preproposal Conference and On-site Inspections 3. Inquiries 4. Submission of Proposals B. Technical Proposal I. General Requirements 2. Independence 3. License to Practice in California 4. Firm Qualifications and Experience 5. Partner, Supervisory and Staff Qualifications and Experience 6. Prior. Engagements with the City of Bakersfield 7. Similar Engagements. With Other Government Entities 8. Specific Audit Approach 9. Identification of Anticipated Potential Audit Problems 10. Report Format C. Sealed Dollar Cost Bid 1. Total All-Inclusive Maximum Price 2. , Rates by Partner, Specialist, Supervisory and Staff Level Times Hours Anticipated for Each 3. Out-of-pocket Expenses in the Total All-inclusive Maximum Price and Reimbursement Rates 4. Rates for Additional Professional Services 5. Manner of Payment VII. EVALUATION PROCEDURES A.. Audit Committee B. Review of Proposals C. Evaluation Criteria 1. Mandatory Elements 2. Technical Qualifications 3. Price D. Oral Presentations E. Final Selection F. Right to Reject Proposals A. Management Letter for June 30, 1999 audit B. Organizational Chart C. List of Key Personnel, Office Locations and Telephone Numbers D. Proposer Guarantees E. Proposer Warranties F. Format for Schedule of Professional Fees and Expenses to Support the Total All- Inclusive Maximum Price City of Bakersfield REQUEST FOR PROPOSALS I. INTRODUCTION A. General. Information The City of Bakersfield is requesting proposals from qualified firms of certified public accountants to audit its financial statements for the fiscal year ending June 30, 2000, with the option of auditing its financial statements for each of the four (4) subsequent fiscal years. These audits are to be performed in accordance with generally accepted auditing standards, the standards set forth for financial audits in the General Accounting Office's (GAO) Government Auditing Standards (1994), the provisions of the federal Single Audit Act of 1984 (as amended in 1996) and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations as well as the following additional requirements: 1. Guidelines for Compliance Audits of California Redevelopment Agencies prepared by the State Controller of the State of California. There is no expressed or implied obligation for the City of Bakersfield to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. A mandatory preproposal conference for all the firms interested in submitting a proposal will be held at 11:00 a.m. on Thursday, March 9, 2000 at 1501 Truxtun Avenue in the City Council Chambers to answer questions about the engagement. After this preproposal conference, any inquiries concerning the request for proposals should be addressed to Gregory J. Klimko. All interested audit firms must have a representative at the preproposal conference. To be considered, ten (10) copies of a proposal must be received by Gregory J. Klimko at 1501 Truxtun Avenue, Bakersfield, CA 93301 by 5:00 p.m. on March 27, 2000. The City of Bakersfield reserves the right to reject any or all proposals submitted. Proposals submitted will be evaluated by City staff with recommendation for the City Council. During the evaluation process, the Audit Committee and the City of Bakersfield reserve the right, where it may serve the City of Bakersfield's best interest, to request additional information or clarifications from proposers, or to allow corrections of errors or omissions. At the discretion of the City of Bakersfiel'd, firms submitting proposals may be requested to rriake oral presentations as part of the evaluation process. The City of Bakersfield reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposals, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City of Bakersfield and the firm selected. It is anticipated the selection of a firm will be completed by April 26, 2000. Following the notification of the selected firm it is expected a contract will be executed between both parties by May 10, 2000. B. Term of Engagement A five (5) year agreement is contemplated, subject to the annual review and recommendation of City staff, the satisfactory negotiation of terms (including a price acceptable to both the City of Bakersfield and the selected firm), the concurrence of the City Council and the annual availability of an appropriation. If any of the above criteria cannot be satisfied, the City retains the right to give a thirty (30) day cancellation notice. C. Subcontracting Firms submitting proposals are encouraged to consider subcontracting portions of the engagement to small audit firms or audit firms owned and controlled by socially and economically disadvantaged individuals. If this is to be done, that fact, and the name of the proposed subcontracting firms, must be clearly identified in the proposal. Following the award of the audit contract, no additional subcontracting will be allowed without the express prior written consent of the City of Bakersfield. II. NATURE OF SERVICES REQUIRED A. General The City of Bakersfield is soliciting the services of qualified firms of certified public accountants to audit its financial statements for the fiscal year ending June 30, 2000, with the option to audit the City of Bakersfield's financial statements for each of the four (4) subsequent fiscal years. These audits are to be performed in accordance with the provisions contained in this request for proposals. B. Scope of Work to be Performed The City of Bakersfield desires the auditor to express an opinion on the fair presentation of its general purpose financial statements in conformity with generally accepted accounting principles. In order to make a comprehensive decision regarding the scope of audit, the City will solicit individual prices on two (2) separate types of audit. The first type being a full scope audit, as described in the next paragraph. The second type referred to as "Alternate A' is an "in-relation-to" Full Scope: The City of Bakersfield desires the auditor to express an opinion on the fair presentation of its general purpose financial statements, as well as, its combining and individual fund and account group financial statements and schedules in conformity with generally accepted accounting principals. If applicable, the auditor is to provide an "in-relation-to" report on any supporting schedules based on the auditing procedures applied during the audit of the general purpose financial statements and the combining and individual fund financial statements and schedules. The auditor is not required to audit the statistical section of the report. Alternate A: This alternative requires the auditor to express an opinion on the fair presentation of its general purpose financial statements. The auditor is to provide an "in- relation-to" report on the combining and individual fund and account group financial statements and supporting schedules based on the auditing procedures applied during the audit of the general purpose financial statements. The auditor is not required to audit the statistical section of the report. C. Auditing Standards To Be Followed To meet the requirements of this request for proposals, the audit shall be performed in accordance with generally accepting auditin~g standards as set forth by the American Institute of Certified PUblic Accountants, the standards for financial audits set forth in the U.S. General Accounting Office's Government Auditing Standards (1994), the provisions of the Single Audit Act of 1984 (as amended in 1996) and the provisions of U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, Audits of State and Local Qovemments, and Guid~/lines for Compliance Audits of California Redevelopment Agencies (November, 1998 revised) prepared by the State Controller of the State of California. D. Reports to be Issued Following the completion of the audit of the fiscal year's financial statemen, ts, the auditor shall issue an independent auditors report to be included in the following financial reports: 1. Comprehensive Annual Financial Reports 2. Bakersfield Redevelopment Agency Annual Financial Report 3. Public Finance Authority Annual Financial Report In addition, the following compliance reports must be issued separately or in conjunction with the reports listed above: 1. Single Audit 2. Bakersfield Redevelopment Agency 3. Wastewater Management Plan 4. Appropriation Limit Also, the Auditor will be responsible for drafting the Notes to the General Purpose Financial Statements. As well as, submitting a Management Letter to the City Council. In the required report[s] on compliance and internal controls, the auditor shall communicate any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization's ability .to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. Reportable conditions that are also material weaknesses shall be identified as such in the report. Nonreportable conditions discovered by the auditors shall be reported in a separate letter to management, which shall be referred to in the report[s] on compliance and internal controls. The report on compliance and internal controls shall include all material instances of noncompliance. All nonmaterial instances of noncompliance shall be reported in a separate management letter, which shall be referred to in the report on compliance and internal controls. Irregularities and illegal acts. Auditors shall be required to make an immediate, .written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to the following parties: Alan E. Tandy, City Manager Bart Thiltgen, City Attorney Gregory J. Klimko, Finance Director Reporting to the audit committee. Auditors Shall assure themselves that the City of Bakersfield is informed of each of the following: 1. The auditor's responsibility under generally accepted auditing standards 2. Significant accounting policies 3. Management judgments and accounting estimates 4. Significant audit adjustments 5. Other information in documents containing audited financial statements 6. Disagreements with management 7. Management consultation with other accountants 8. Major issues discussed with management prior to retention 9. Difficulties encountered in performing the audit. E. Special Considerations 1. The City of Bakersfield will send its comprehensive annual financial report to the Government Finance Officers Association of the United States and Canada for review in their Certificate of Achievement for Excellence in Financial Reporting program. It is anticipated that the auditor will be required to provide special assistance to the City of Bakersfield to meet the requirements of that program. 2. The City of Bakersfield has determined that the State Controller's Office of the State of California will function as the cognizant agency in accordance with the provisions of the Single Audit Act of 1984 (as amended in 1996) and U.S. Office of Management and Budget (OMB) Circular A- 133~_A udits of States, Local Governments, and Non-Profit ' Organizations. 3. The City of.Bakersfield currently anticipates it will prepare one or more official statements in connection with the sale of debt securities which will contain the general purpose financial statements and the auditor's report thereon. The auditor shall be required, if requested by the fiscal advisor and/or the underwriter,-to issue a "consent and citation of expertise" as the auditor and any necessary "comfort letters." 4. The City may also require special consulting services such as federal tax advice regarding the payroll of the City. Any charge for such services should be listed separately. 5. The Schedule of Expenditures of Federal Awards and related auditor's report, as well as the reports on compliance and internal controls are not to be included in the comprehensive annual financial report, but are to be issued separately. 6. A list of findings and other weaknesses from the City of Bakersfield's most recent financial statement audit, as well as a list of findings from internal audits conducted during the most recent fiscal period to be audited, are attached to this document (Appendix A). 7. Difficulties are anticipated in implementing and complying with the following specific reporting requirements recently mandated by GASB 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments. The City must be in compliance for periods beginning after June 15, 2001. 'Using the new reporting model will be a very complex and complicated undertaking. Specific provisions that may cause difficulties will include researching and documenting infrastructure costs and developing and maintaining the additional information needed to prepare financial statements. The City of Bakersfield will require the auditor's assistance to be in compliance with these new reporting requirements for the 2001-02 Fiscal Year. F. Working Paper Retention and Access to Working Papers All working papers and reports must be retained, at the auditor's expense, for a minimum of five (5) years, unless the firm is notified in writing by the City of Bakersfield of the need to extend the retention period. The auditor will be required to make working papers available, only upon written request by the City's Finance Director. In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. III. DESCRIPTION OF THE GOVERNMENT A. Name and Telephone Number of Contact Persons/Organizational Chart/Location of Offices The auditor's principal contact with the City of Bakersfield will be Gregory J. Klimko, Finance Director, or a designated representative, who will coordinate the assistance to be provided by the City of Bakersfield to the auditor. An organizational chart (Appendix B) and a list of key personnel with the location of their principal offices (Appendix C) are attached. B. Background Information The City of Bakersfield serves an area of 114 square miles with a population of 230,771. The City of Bakersfieid's fiscal year begins on July I and ends on June 30. 6 The City of Bakersfield provides the following services to its citizens: 1. General Government. 2. Public Safety. 3. Public Works. 4. Development and Conservation. 5. Auditorium and Recreational. The City of Bakersfield has a total payroll of 54 million covering 1,180 employees. The City of Bakersfield operates under a Council-Manager form of government and is organized into nine (9) departments and agencies. The accounting and financial reporting functions of the City of Bakersfield are centralized. C. ~Fund Structure The City of Bakersfield currently uses the following fund types and account groups in its financial reporting: Number of Number. With Individual Legally Adopted Fund Type/Account Group Fund~ Annual Budgets General fund 1 1 Special revenue funds 7 7 Debt service funds 2 2 Capital projects funds 6 6 Enterprise funds 6 6 Internal service funds 2 2 Expendable trust funds 0 0 Nonexpendable trust funds 0 0 Pension trust funds 1 0 Agency funds 2 0 General fixed assets account group 2 NA General long-term debt account group 3 . NA D. Budgetary Basis of Accounting The City of Bakersfield prepares its budgets on a basis consistent with generally accepted accouriting principles. E. Federal and State Awards During the fiscal year to be audited, the City of Bakersfield received the following: CDFA Number U. S. Department of Housing and Urban Development: Direct Program - Community Development Block Grant . Entitlement 14.218 Emergency Shelter Grant 14.231 Home Program 14.239 U.S. Department of Transportation: Passed through California: Surface Transportation 20.205 Transportation Enhancement Act 20.205 Congestion Mitigation and Air Quality Program 20.205 Highway Bridge Replacement 20.205 Environmental Enhancement 20.205 Federal Emergency Management Agency: Public Assistance Grant 83.544 U.S. Department of Justice: Seized Asset Funds - Federal 16.579 Community Oriented Policing Services Universal Hiring Program 16.710 Local Law Enforcement Block Grant 16.592 F. Pension Plans The City of Bakersfield participates in the following pension plans: Multiple-Employer Single-Employer Cost- Defined Defined Plan Sharing Agent Benefit Contrib. State of California Public Retirement System (PERS) X Fireman's Relief & Pension Fund (FRPF) X Actuarial services for these plans are provided by State of California (PERS) and Peat Marwick Main and Company (FRPF). G. Component Units The City of Bakersfield is defined, for financial reporting purposes, in conformity with the Governmental Accounting Standards Board's Codification of Governmental Accounting and Financial Reporting Standards, Section 2100. Using these criteria, component units are included in the City of Bakersfield's financial statements. The management of the City of Bakersfield identified the following component units for inclusion in the City of Bakersfield's financial statements: 1. Bakersfield Redevelopment Agency a. Redevelopment within the following project areas: · Downtown Bakersfield · Old Town Kern-Pioneer · Southeast Bakersfield b. Fiscal year ending June 30, 2000 2. Public Finance Authority a. Financing of public improvements b. Refunding existing issues c. Fiscal year ending June 30, 2000 The successful audit firm will be expected to provide an opinion on each Component Unit Financial Statement, as well as Compliance Reports.. The component units are to be audited as part of the audit of the City of Bakersfield's financial statements. H. Joint Ventures The City of Bakersfield does participate in joint ventures with other governments. NAME OF NAME OF OTHER - TYPE OF JOINT VENTURE PARTICIPATING GOVERNMENT(S) SERVICES PROVIDED Authority for City of: Self Insurance for liability California Cities Anaheim and Joint Purchase for Excess Liability Modesto Workers Compensation (ACC EL) Monterey Insurance Mountain View Ontario Palo Alto Santa Barbara Santa Cruz Santa Monica Visalia I. Magnitude of Finance Operations The finance department is headed by Gregory J. Klimko, Finance Director and consists of thirty-one (3 I) employees. The principal functions performed and the number of employees assigned to each are as follows: Function Number of Employees Administration 2 Accounting 14 Treasury 9 Purchasing 4 Property Management 2 J. Computer Systems The City of Bakersfield maintains its major financial accounting systems on an IBM AS400 using HTE, Inc. software. The major financial applications include: General Ledger and BudgetaryAccountin~ - The City of Bakersfield maintains seventy-seven (75) independent funds which are combined manually to thirty-two (32) reporting funds. During the year, an estimated 6,500 journals will be processed from the following subsystems: 1. Payroll - The City of Bakersfield's payroll system maintains information on approximately 1,180 regular employees paid on a bi-weekly basis. The City of 10 Bakersfield will process approximately 14,000 paychecks and 22,000 direct deposits during the fiscal year. 2. Accounts Payable - The City of Bakersfield's accounts payable system is an automated vouchering system for vendor payments. At the present time, this system maintains a database for approximately 9,000 vendors. The City of Bakersfield will disburse approximately 26,000 accounts paYable checks during the fiscal year. 3. Accounts Receivable o The City of Bakersfield's accounts receivable system currently includes utility billing for commercial refuse collection and sewer surcharge ( 4200 monthly), outside City sewer usage (300 bi-monthly) and miscellaneous receivables (2500 monthly). K. Internal Audit Function The City of Bakersfield maintains an internal audit function that is primarily responsible for reconciliation of all the City of Bakersfield's bank accounts. The internal audit function reports to Bill Descary, City Treasurer and is staffed by one (1) employee. L. Availability of Prior Audit Reports and Working Pepers Interested proposers who wish to review prior years' audit reports and management letters should contact Gregory J. Klimko at (661) 326-3030. The City of Bakersfield will use its best efforts to make prior audit reports and supporting working papers available to proposers to aid their response to this request for proposals. IV. TIME REQUIREMENTS A. Proposal Calendar The following is a list of key dates up to and including the date proposals are due to be submitted: Request for proposal issued March 1,2000 Preproposal conference March 9, 2000 Due date for notification of interest March 17, 2000 Due date for proposals March 27, 2000 B. Notification and Agreement Dates Selected firm ~notified April 26, 2000 Agreement date May 10, 2000 C. Date Audit May Commence The City of Bakersfield will have all records ready for audit and all management personnel available to meet with the firm's personnel as of August 21, 2000. D. Schedule for the 1999-2000 Fiscal Year Audit (A similar time schedule will be developed for audits of future fiscal years if the City of Bakersfield exercises its option for additional audits). Each of the following should be completed by the auditor no later than the dates indicated. 1. Interim Work The auditor shall complete interim work. bY July 14, 2000. 2. Detailed Audit Plan The auditor shall provide City of Bakersfield by July 17, 2000 both a detailed audit plan and a list of all schedules to be prepared by the City of Bakersfield. 3. Fieldwork The auditor shall complete all fieldwork by October 6, 2000.' 4. Draft Reports The auditor shall have drafts of the audit report[s] and recommendations to management available for review by the Finance Director by October 24, 2000. E. Entrance Conferences, Progress Reporting and Exit Conferences (A similar time schedule will be developed for audits of future fiscal years if the City of Bakersfield exercises its option for additional audits). At a minimum, the following conferences should be held by the dates indicated on the schedule: Entrance conference with Finance Director May 31, 2000 Entrance conference with all key finance department personnel and department heads of key offices or programs May 31, 2000 - The purpose of this meeting will be to discuss prior audit problems and the interim work to be performed. This meeting will also be used to establish overall liaison for the audit and to make arrangements for work space and other needs of the auditor Progress conference with Finance Director and Assistant Finance Director July 14, 2000 The purpose of this meeting will be to summarize the results of the preliminary review and to identify the key internal controls or other matters to be tested Entrance conference with Finance Director to commence year-end audit work August 21, 2000 Exit conference with Finance Director and department heads of key offices or programs October 6, 2000 - The purpose of this meeting will be to summarize the results of the field work and to review significant findings In addition, the auditor shall provide written reports on the progress of the audit on the following dates: September 8, 2000 September 22, 2000 13 F. Date Final Report is Due (Comprehensive Annual Financial Report Only) The City Finance Department shall prepare draft financial statements and all required supplementary schedules (and statistical data) by October 16, 2000. The auditor shall provide the notes to the financial statements in addition to all recommendations, revisions and suggestions for improvement to the Finance Director by October 24, 2000. A final report will be delivered to the printer by October 31,2000. During the period of October 6, 2000 to October 24, 2000 the auditor should be available for any meetings that may be necessary to discuss the audit reports. Once all issued for discussion are resolved, the auditor will be given a final draft of the report. It is anticipated that this process will be completed and the final report delivered to the City Council by November 15, 2000. All other statements and reports are to be completed by December 29, 2000. V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance The finance department staff and responsible management personnel will be available during the audit to assist the firm by providing information, documentation and explanations. The preparation of confirmations will be the responsibility of the City of Bakersfield. City staff will prepare trial balances and other supporting schedules that are to remain the property of the City but will be available to auditors.' B. Management Information Services (MIS) Assistance The Management Information Services staff, equipment and generalized user software have not been used in the past for auditing purposes. However, the City is willing to commit a reasonable amount of computer time to assist an audit program. This assistance may vary depending on computer time available. MIS personnel will also be available to provide systems documentation and explanations. 14 C. Statements and Schedules to be Prepared by the Staffofthe City of Bakersfield The staff of City of Bakersfield will prepare the following statements and schedules for the auditor by the dates indicated: Statement or Schedule Date Trial Balance: General Fund August 21 Special Revenue Funds August 21 Debt Service Funds August 21 Capitol Project Funds August 28 Enterprise Funds September 1 Internal Service Funds September 1 Trust and Agency Funds September 1 General Fixed Assets Group August 21 General Long-Term Debt Group August 21 Accounts Payable Reconciliation September 8 Property Tax Reconciliation September 15 Compensated Absences September 1 Federal Financial Assistance September 15 Interest Allocation August 21 Bank Transfers August 21 Appropriations Reconciliation August 21 Statistical Schedules October 6 D. Work Area, Telephones, Photocopying and FAX Machines The City of Bakersfield will provide the auditor with reasonable work space, desks and chairs. The City Finance Department uses a "flex-time" schedule for its employees; therefore, the Finance offices may be available for 9 72 hour workdays. The auditor will also be provided with access to telephone lines, photocopying facilities and FAX machines subject to the following .restrictions: 1. All long distance phone calls are to be reimbursed to the City of Bakersfield. E. Report Preparation Financial statement preparation and printing shall be the responsibility of the City of Bakersfield. The auditor will be responsible for preparing the Notes to the General Purpose Financial Statements, as well as editing and proofing the final draft. VI. '15 PROPOSAL REQUIREMENTS A. General Requirements 1. Submission of Notification of Interest Firms interested in submitting a proposal must submit by March 17, 2000 their "Notification of Interest" in the format attached to the letter transmitting this Request for Proposal. Failure to do so will disqualify firms from submitting a proposal. 2. Preproposal Conference and On-site Inspections A conference for firms interested in submitting proposals will be held at 11 a.m., March 9, 2000 in the City Council Chambers at City Hall, 1501 Truxtun Avenue. Both verbal and written questions will be accepted during the conference. All audit firms interested in submitting a proposal must attend 3. Inquiries Inquiries concerning the request for proposals and the subject of the request for proPosals must be made to: 'Gregory J. Klirnko, Finance Director 1501 Truxtun Avenue Bakersfield, CA 93301 (661) 326-3740 CONTACT WITH PERSONNEL FO THE CITY OF BAKERSFIELD OTHER THAN GREGORY J. KLIMKO REGARDING THIS REQUEST FOR PROPOSALS MAY BE GROUNDS FOR ELIMINATION FROM THE SELECTION PROCESS. 4. Submission of Proposals The following material is required to be received by March 3 I, 2000 for, a proposing firm to be considered: a. A master copy (so marked) of a Technical Proposal and six (6) copies to include the following: i. Title Page Title page showing the request for proposals subject; the firm's name; the name, address and telephone number of the contact person; and the date of the proposal. ].6 ii. Table of Contents iii. Transmittal Letter A signed, letter of transmittal briefly stating the proposer's understanding of the work to be done, the commitment to perform the work within the time period, a statement why the firm believes itself to be best qualified to perform the engagement and a statement that the proposal is a firm and irrevocable offer for one hundred and twenty days (120) days. iv. Detailed Proposal The detailed proposal should follow the order set forth in Section VI B of this request for proposals. v. Executed copies of Proposer Guarantees and Proposer Warranties, attached to this request for proposal (Appendix D and Appendix E) b. The proposer shall submit an original and 1 (one) copy of a dollar cost bid in a separate sealed envelope marked as follows: SEALED DOLLAR COST BID PROPOSAL FOR City of Bakersfield FOR PROFESSIONAL AUDITING SERVICES 1999-2000 c. Proposers should send the completed proposal consisting of the two separate envelopes to the following address: Gregory J. Klimko 1501 Truxtun Avenue Bakersfield, CA 93301 B. Technical Proposal 1. General Requirements The purpose of the Technical Proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the City of Bakersfield in conformity with the requirements of this request for proposals. As such, the substance of proposals will carry more weight than their form or manner of 1'7 presentation. The Technical Proposal should demonstrate the qualifications of the firm and of the particular staff to be assigned to this engagement. It should also specify an audit approach that will meet the request for proposals requirements. THERE'SHOULD BE NO DOLLAR UNITS OR TOTAL COSTS INCLUDED IN THE TECHNICAL PROPOSAL DOCUMENT. The Technical Proposal should address all the points outlined in the request for proposals (excluding any cost information which should only be included in the sealed dollar cost bid). The Proposal should be prepared simply and economically, providing a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the request for proposals. While additional data may be presented, the following subjects, items Nos. 2 through 10, must be included. They represent the criteria against which the proposal will be evaluated. 2. Independence The firm should provide an affirmative statement that is independent of the City of Bakersfield as defined by the U.S. General Accounting Office's Government Auditing Standards (I 994)] The firm also should provide an affirmative statement that it is independent of all of the component units of the City of Bakersfield as defined by those same standards. The firm should also list. and describe the firm's (or proposed subcontractors') professional relationships involving the City of Bakersfield or any of its component units or primary government for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit. In addition, the firm shall give the City of Bakersfield written notice of any professional relationships entered into during the period of this agreement. ( 3. License to Practice in California An affirmative statement should be included that the firm and all assigned key. professional staff are properly licensed to practice in California. 4. Firm Qualifications and Experience The proposer should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed and the number and nature of the '18 professional staff to be employed in this engagement on a full-time basis and the number and nature.of the staff to be so employed on a part-time basis. If the proposer is a joint venture or consortium, the qualifications of each firm comprising the joint venture or consortium should be separately identified and the firm that is to serve as the principal auditor should be noted, if applicable. The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements. The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations. 5. Partner, Supervisory and Staff Qualifications and Experience Identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement. Indicate whether each such person is registered or licensed to practice as a certified public accountant in California. Provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit. Provide as much information as possible regarding the number, qualifications, 'experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. Indicate how the quality of staff over' the term of the agreement will be assured. The proposer should identify the extent to which staff to be assigned to the audit reflect the City of Bakersfield's commitment to Affirmative Action. Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm, are promoted or are assigned to another office. These personnel may also be changed for other reasons with the express prior written permission of the City of Bakersfield. However, in either case, the City of Bakersfield retains the right to approve or reject replacements. Consultants and firm specialists mentioned in response to this request for proposal can only be changed with the express prior written permission of the City of Bakersfield, which retains the right to approve or reject replacements. Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. 6. Prior Engagements with the City of Bakersfield~ List separately all engagements within the last five years, ranked on the basis of total staff hours, for the City of Bakersfield by type.of engagement (i.e., audit, management advisory services, other). Indicate the scope of work, date, engagement partners, total hours, the location of the firm's office fiom which the engagement was perfOrmed, and the name and telephone number of the principal client contact. 7. Similar Engagements With Other Government Entities For the firm's office that will be assigned responsibility for the audit, list the most significant engagements (maximum - 5) performed in the last five years that are similar to the engagement described in this request for proposal. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. 8. Specific Audit Approach The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in Section II of this request for proposal. In developing the work plan, reference should be made to such sources of information as City of Bakersfield's budget and related materials, organizational charts, manuals and programs, and financial and other management information systems. Proposers will be required to provide the following information on their audit approach: a. Proposed segmentation of the engagement b. Level of staff and number of hours to be assigned to each proposed segment of the engagement NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL 20 c. Sample size and the extent to which statistical sampling is to be used in the engagement d. Extent of use of EDP software in the engagement e. Type and extent of analytical procedures to be used in the engagement f. Approach to be taken to gain and document an understanding of the City of Bakersfield's internal control structure g. Approach to be taken in determining laws and regulations that .will. be subject to audit test work h. Approach to be taken in drawing audit samples for purposes of tests of compliance 9. Identification of Anticipated Potential Audit Problems The proposal should identify and describe any anticipated potential audit problems, the firm's approach to resolving these problem and any special assistance that will be requested from the City of Bakersfield. 10. Report Format The proposal should include sample formats for required reports. NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL PROPOSAL C. Sealed Dollar Cost Bid 1. Total All-Inclusive Maximum Price The sealed dollar cost bid should contain all pricing information relative to performing the audit engagement as described in this request for proposal. The total all-inclusive maximum price to be bid is to contain all direct and indirect costs including all OUt-of-pocket expenses. The City of Bakersfield will not be responsible for expenses incurred in preparing and submitting the technical proposal or the sealed dollar cost bid. Such costs should not be included in the proposal. 21 The first page of the sealed dollar cost bid should include the following information: a. Name of Firm b. · Certification that the person signing the proposal is entitled to represent the firm, empowered to submit the bid, and authorized to sign an agreement with the City of Bakersfield. c. A Total All-Inclusive Maximum Price for the 2000 engagement. Alternate A Financial Statements Full Scope See page 3 City of Bakersfield - Comprehensive Annual Financial Report and Management Letter $ $ Bakersfield Redevelopment Agency o Annual Financial Report $ $ Public Finance Authority - Annual Financial Report $ $ Compliance Report Single Audit $ $ Redevelopment Agency $ $ Wastewater Management Plan $ $ 2. Rates by Partner, Specialist, Supervisory and Staff Level Times Hours Anticipated for Each The second page of the sealed dollar cost bid should include a schedule of professional fees and expenses, presented in the format provided in the attachment (Appendix F), that supports the total all-inclusive maximum price. The cost of special services described in Section II E of this request for proposal should be disclosed as separate components of the total all- inclusive maximum price. 3. Out-of-pocket Expenses Included in the Total All-inclusive Maximum Price and Reimbursement Rates 22 All estimated out-of-pocket expenses to be reimbursed should be presented on the second page of the sealed dollar cost bid in the format provided in the attachment (Appendix F). All expense reimbursements will be charged against the total all-inclusive maximum price submitted by the firm. 4. Rates for Additional Professional Services If it should become necessary for City of Bakersfield to request the auditor to render any additional services to either supplement the services requested in this RFP or to perform additional work as a result of the specific recommendations included in any report issued on this engagement, then such additional work shall be performed only if set forth in an addendum to the agreement between City of Bakersfield and the firm. Any such additional work agreed to between City of Bakersfield and the firm shall be performed at the same rates set forth in the schedule of fees and expenses included in the sealed dollar cost bid. 5. Manner of Payment Progress payments will be made on the basis of hours of work completed during the course of the engagement and out-of-pocket expenses incurred in accordance with the firm's dollar cost bid proposal. Interim billing shall cover a period of not less than a calendar month. Ten percent (10%) will be withheld from each billing pending delivery of the firm's final reports. VII. EVALUATION PROCEDURES A. Audit Committee Proposals submitted will be evaluated by the Finance Director and Assistant Finance Director. B. Review of Proposals A point formula will be used during the review process to score proposals. A firm with an unacceptably low technical score will be eliminated from further consideration. After the composite technical score for each firm has been established, the sealed dollar cost bid will be opened and additional points will be added to the technical score based on the price bid. The maximum score for price will be assigned to the firm offering the lowest total all-inclusive maximum price. Appropriate fractional scores will be assigned to other proposers. The City of Bakersfield reserves the right to retain all proposals submitted and use any idea in a proposal regardless of whether that proposal is selected. 23 C. Evaluation Criteria Proposals will be evaluated using three sets of criteria. Firms meeting the mandatory criteria will have their proposals evaluated and scored for both technical qualifications and price. The following represent the principal selection criteria which will be considered during the'evaluation process. 1. Mandatory Elements a. The audit firm is independent and licensed to practice in California b. The firm has no conflict of interest with regard to any other work performed by the firm for the City of Bakersfield c. .The firm adheres to the instructions in this request for proposal' on preparing and submitting the proposal d. The firm submits a copy of its last external qualitY control review report and the firm has a record of quality audit work. e. The audit firm's professional personnel have received adequate continuing professional education within the preceding two years. 2. Technical Quality: (Maximum Points - 70) a. Expertise and Experience (Maximum Points - 40) (1) The firm's past experience and performance on comparable government engagements (with special emphasis on City audits). (2) The quality of the firm's professional personnel to be assigned to the engagement and the quality of the firm's management support personnel to be available for technical consultation (3) Support services available (i.e. actuarial, bond arbitrage, refinancing, etc.) b. Audit Approach (Maximum Points - 30) (1) Adequacy of proposed staffing plan for various segments of the engagement (2) Adequacy of sampling techniques (3) Adequacy of analytical procedures 3. Price: (Maximum Points - 30) COST WILL NOT BE THE PRIMARY FACTOR IN THE SELECTION OF AN AUDIT FIRM D. Oral Presentations During the evaluation process, the Audit. Committee may, at its discretion, request any one or all firms to make oral presentations. Such presentations will provide firms with an opportunity to answer any questions the Audit Committee may have on a firm's proposal. Not all firms may be asked to make such oral presentations. E. Final SelectiOn The city Council will select a firm based upon the recommendation of City Staff. It is anticipated that a firm will be selected by April 26 2000. Following notification of the firm selected, it is expected an agreement will be executed between both parties by May 10, 2000. F. Right to Reject Proposals Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposal unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City of Bakersfield and the firm selected. The City of Bakersfield reserves the right without prejudice to reject any or all proposals. APPENDICES A. Findings from Recent External and Internal Audits B. Organizational Chart C. List of Key Officials, Office Locations and Telephone Numbers D. Proposer Guarantees E. Proposer Warranties F. Format for Schedule of Professional Fees and Expenses to Support the Total All- inclusive Maximum Price 25 APPENDIX A Page 1 FINDINGS FROM RECENT EXTERNAL AND INTERNAL AUDITS ..-. . ~.-.......- ..... '~.~.~ .. ... · ' . ~ . '~ '-'~ . '-,~ ' '... :..-.. . ,; '~,. '.. ... '.;~' To the ~onor~ble ~yor ~d ~embers o~ ~he City Council In pt~n~n~ ~nd pe~o~n~ o~ ~t o~ ~e ~ener~ pu~o~ fin~nc~ ~emems ~ ~.,~.,~d..,~.~'a of the City ofB~field, C~ifo~a (Ci~) for ~e y~ end~ June 30, 1~, we consider~ its ~t~ ~ntrol ~e in order w d~e~ne ~a~.cP.~ procedures for ~e pu~ of ~re~g o~ op~on on ~e ~ pu~ ~,~,~.cP.~ financi~ stat~en~ ~d not w pw~de ~ on ~e inte~l ~n~! ~e. ~,.~.c~x ~r ~ideration of ~e inte~ ~n~ol s~e wo~d not n~es~ly di~lo~ ~.L~i~ C'P~ all ma~ers in the ~te~ control ~re ~t ~t be mat~ ~m~.cP~ under stmd~ds e~ablished by ~e ~efi~n Institute of Ce~ifi~ ~blic Account~ts. A material w~ne~ is a condition in w~ch the d~ign or ope~i°n L ~. CPA of one or more of the internal ~n~oi ~m~re ellen,s do~ not ~,~. c~'~ i el~fively low level ~e ~sk t~t e~ors or i~e~t~ties ~n ~mo~ms t~t would be ~.~. c~ m~te~l ~n rel~6on to ~e fin~nci~ ~tements beinB audit~ m~y occ~ ~ not be ~.,.c,~ deteaed ~n a timely ~fi~ by employes in the no~al cou~ of ~do~ng e~.x,,.cPa their ~ign~ britons. How~, we noted no ~uers hvolv~ng the ~nt~l control ~t~re ~d its opermion that we ~mider ~ be matefi~ w~e~s defined above. This repo~ is intend~ ~lely for the l~o~afion ~d u~ of the Audit Co~ee, C~ty Council, m~agement, ~d o~er authored re~lato~ agencies. However, th~s report h a ma~er of public r~r~ md its di~fibution is not l~mit~. B~O~ ~S~ONG ~L ~S PA~ & McCO~ ACCO~CY CO,OPTION B~ersfield, Califo~a ~ O~ober 8.19~ 26 APPENDIX A Page 4 FINDINGS FROM RE(~ENT EXTERNAL AND INTERNAL AUDITS Issues Discussed Pdor tO Retention of Inde~)endent Auditors We generally discuss a vadety of matters, including the apl~tication of accounting pdndples and auditing standa~s, with management each year prior to retention as the City of Bakers§eld's auditors. However. these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Difficulties Encountered in Perf0rmino the Audit We encountered no significant difficulties in dealing with management in performing our audit. This'information is intended solely for the use of the City of Bake~fiek:l and management of the City of Bakersfield and is not intended to be and should not be used by anyone other than these specified pa~ies. BROWN ARMSTRONG RANDALl. RE-YES PAULDEN & McCOWN ACCOUNTANCY CORPORATION ORGANIZATIONAL CHART CITY OF BAKERSFIELD ORGANIZATIONAL CHART Citizens of ] Bakersfield t_ Mayor Central District i- -t~a~ds and ; Development Commissions I -City Attorney I [ City Manager '1 I t.-i~g~. ~o se~rces ] xix 30 LIST OF KEY PERSONNEL. OFFICE LOCATIONS AND TELEPHONE NUMBER Gregory J. Klimko, Finance Director 326-3030 Sandra Jimenez, Assistant Finance Director (Acting) 326-3740 Bill Descary, Treasurer 326-3032 Darlene Wisham, Purchasing Officer 326-3745 Vicky Morillo, Internal Auditor 326-3093 Don Anderson, Property Management 326-3061 PROPOSER GUARANTEES I. The proposer certifies it can' and will provide and make available, as a minimum, all services set forth in Section II, Nature of Services Required. Signature of Official: Name (typed): Title:' Firm: Date: 32 pROPOSER WARRANTIES A. Proposer warrants that it is willing and able to comply with State Of California laws with respect to foreign (non-state of California) corporations. B. Proposer warrants that it is willing and able to obtain an errors and omissions insurance policy providing a prudent amount ofcoverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof. C. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the prior written permission of the City of Bakersfield. D. Proposer warrants that all information provided by it in connection with this proposal is true and accurate. Signature of Official: Name (typed): Title: Firm: Date: 33 Page 1 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999o00 FINANCIAL STATEMENTS Standard Quoted Hourly Hourly Hours Rat¢~ Rat;s Total Partners Managers Supervisory staff Staff Other (specify): Subtotal Total for services Described in Section II E of the RFP (Detail on subsequent pages) Out-of-pocket expenses: Meals and lodging Transportation Other (specify): Total all-inclusive maximum price for 2000 audit Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price. Page 2 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-00 FINANCIAL STATEMENTS: COMBINING SCHEDULE - ALL SERVICES DESCRIBED IN RFP SECTION II E Nature of Service To Be provided Schedul~ Total Price EACH SERVICE DESCRIBED IN RFP SECTION II E SHOULD BE SUPPORTED BY AN INDIVIDUAL SCHEDULE IN THE FORMAT pROVIDED ON PAGE 3 OF THIS APPENDIX. 35 Appendix F Page 3 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-0.0 FINANCIAL STATEMENTS: SUPPORTING SCHEDULE FOR [NAME OF SERVICE] Standard Quoted Hourly Hourly Hours Rat¢~ Rates Total Partners Managers Supervisory staff Staff Other (specify): ~ Subtotal Out-of-pocket expenses: Meals and lodging Transportation Other (specify): Total price for [NAME OF SERVICE] Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price 36 DOLLAR COST BID CITY OF BAKERSFIELD. CALIFORNIA March 27. 2000 DOLLAR COST BID CITY OF BAKERSFIELD, CALIFORNIA March 27, 2000 Name of Firm: Brown Armstrong Randall Reyes Paulden & McCown Accountancy Corporation Certification: We certify that Andrew J. paUlden is entitled to represent our firm and.is empowered to submit our bid and is authorized to sign a~eements with the City of Bakersfield. Price: Financial Statements Full Scope Alternate A 'City of Bakersfield; Comprehensive Annual Financial Report and Management Letter $ 27,600 $ 21,600 Bakersfield Redevelopment Agency - Annual Financial Report 4,000 4,000 Public Finance Authority - Annual Financial Report 2,200 2,200 Compliance Reports Single Audit 3,500 3,500 Redevelopment Agency 1,200 1,200 Wastewater Management Plan 1,000 1,000 Out-of-Pocket Expense $ 39,500 $ 33.500 Authorized Signature: ~. . CITY OF BAKERSFIELD, CALIFORNIA- SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-2000 FINANCIAL STATEMENTS Standard Quoted Hourly Hourly Hours Rates Rates Total Partners 1 l0 $140 105 $ 11,550 Senior 290 80 60 17,400 Staff 50Q 50 37 18,500 Subtotal 900 47,500 Discount <7,950> Total Audit'Services 39,500 Total for services described in Section II E of the request for proposals (detail in subsequent schedules) 11700 Out-of-pocket expenses: Meals and lodging _ Transportation . Other (specify): . Total alMnclusive maximum price for 199%2000 audit $ 41,200 CITY OF BAKERSFIELD, CALIFORNIA SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-2000 FINANCIAL STATEMENTS: COMBINING SCHEDULE - ALL SERVICES DESCRIBED IN THE REQUEST FOR PROPOSALS SECTION II E Total Nature of Service to be Performed Price 1. GFOA Financial reporting Program (Note 1) $ 2. Interaction with State Controller's Office (Note 1) 3. Consent and Citation of Expertise 510 4. Comfort letter 954 5. Schedule of exPenditures of Federal Awards (Note 2) _ 6. Consulting - payroll, etc. 236 Total $ 1,700 Note I - Brown Armstrong will perform these services free of charge. Note 2 - Included in our annual fee. CITY OF BAKERSFIELD, CALIFORNIA SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-2000 FINANCIAL STATEMENTS: SUPPORTING SCHEDULE FOR CITY OF BAKERSFIELD CONSENT AND CITATION OF EXPERTISE Standard Quoted Hourly Hourly Hours Rates .. Rates Total Partners 3 $140 90 $ 270 Senior 5 80 48 240 Staff Subtotal 8 510 Out-of-pocket expenses: Meals and lodging Transportation Other (specify): Total price for City of Bakersfield .$ 510 CITY OF BAKERSFIELD, CALIFORNIA SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-2000 FINANCIAL STATEMENTS: SUPPORTLNG SCHEDULE FOR CITY OF BAKERSFIELD COMFORT LETTER Standard Quoted Hourly Hourly Hours Rates Rates Total Partners 1 $140 90 $ 90 Senior 18 80 48 864 Staff . Subtotal 19 954 Out-of-pocket expenses: Meals and lodging , Transportation Other (specify): Total price for City of Bakersfield CITY OF BAKERSFIELD, CALIFORNIA SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 1999-2000 FINANCIAL STATEMENTS: SUPPORTING SCHEDULE FOR CITY OF BAKERSFIELD CONSULTING - PAYROLL, ETC. Standard Quoted Hourly Hourly Hours Rates Rates Total Panners 1 $140 90 $ 90 Senior 3 80 48 146 Staff - Subtotal 4 . 236 Out-of-pocket expenses: Meals and lodging - Transportation _ Other (specify): _ Total price for City of Bakersfield $ 236 PROPOSAL OF AUDIT SERVICES .3 TO THE I' CITY OF BAKERSFIELD (Cost Proposal) Submitted by: CONRAD AND ASSOCIATES,. L.L.P. 1100 Main Street, Suite C Irvine, California 92614 March 22, 2000 ' CONTACT PERSON - MICHAEL A. HARRISON, PARTNER PHONE NO. (949) 474-2020, EXT. 230 FAX NO. (949) 263-5520 CONRAD AND ASSOCIATES, L.L.P. CALIFORNIA LICENSE NO. PAR 6454 CONRAD AND ASSOCIATES, L.L.P. FEDERAL IDENTIFICATION NO. 33-0843820 CONF D ^c. ASSOGIA'i'ES ' 1100 ~IN STRE~, SUITE C ~ L.L.R IRVINE, ~LIFORNIA 92614 (949) 474-2020 Fax (949) 263-5520 March 22, 2000 Gregory J. Klimko, Finance Director City of Bakersfield 1501 Truxton Ave. Bakersfield, Ca 93301 Dear Mr. Klirnko: Enclosed you will find Section I of our Proposal for Audit Services which includes "Our Hourly Rates and Maximum Fees to Perform this Engagement." We look forward to serving the City of Glendora. Sincerely, CONRAD AND ASSOCIATES, L.L.P. Michael A. Harrison, C.P.A. Partner MAH:kac Enclosure MEMBERS OF AICPA AND CALIFORNIA SOCIE'I~ OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION SECTION I ' OUR HOURLY RATES AND MAXIMUM FEE TO PERFORM THIS ENGAGEMENT The following is a breakdown of the total cost of services including out of pocket expenses for the City of Bakersfield for the year ended June 30, 2000. Description of Services Hours Full Scope Alternate A 1. City of Bakersfield CAFR, Management letter and Agreed-Upon Procedures Letter - Gann limit 535 $34,240 32,640 2. Bakersfield Redevelopment Agency - Financial and Compliance Reports. 80 5,120 5,120 3. Financial audit- Bakersfield Public Financing Auihority 32 2,048 2,048 4. A-133 Single Audit of Federal Grant Programs 120 7,680 7,680 5. Compliance Procedures and Report on Wastewater Management Plan 8 512 512 775. $49,600 $48,000 Hourly rates in effect for services that would be performed outside the scope of the annual audits which would be agreed to by the City in advance would be as follows: For the Fiscal Year Ended June 30, 2000 Hourly Rate Classification Partners $165 Senior Managers 105 Manager 95 Supervisor 85 Senior Auditors 72 Staff Auditors 62 SECTION I, (CONTINUED) Our fees contemplate conditions satisfactory for the performance of the audit, including the City providing at the start of the audit, trial balances reflecting year. end adjustments, necessary subsidiary schedules supporting asset and liability balances, all necessary reconciliations in agreement with general ledger balances, and customary supporting analyses and schedules normally maintained by the Finance Department. The City will type confirmation requests and pull supporting documentation. Additionally, City Finance staff will prepare the individual combining and combined financial statements to be included in the CAFR and RDA Reports. If there are changes in the scope of the audit (additional major federal grant programs, sUbstantial additional debt issues, added project areas, added enterprise activity, additional component units, changes in the financial reporting model), we would like to discuss these changes with the Finance Director and the effect of these changes on the professional audit hours and costs of the engagement. BUSINESS OEflCE ;'~:' YOUIH 2010 "0" Slreet ~.:/~,i~;::i~.~:i"iL [.: C:,'i'( CL.:...~.i'{ FACILIIY Bakers[ield, CA 93301 900 22"a Street PHONE (661) 324-0162 Bakersfield, CA 93301 FAX (661)323-5836 PHONE (661)323-8311 March 8, 2000 Council Person David Couch 1501 Truxton Ave. Bakersfield, CA 93301 Dear Council Person David Couch, I was afforded the privilege of seeing first hand the complexity of issues that face the City Council as l attended the budget meeting on February 7a'. The expertise and commitment required of the City Council Persons and staffthat was evidenced in this meeting is a model of civic contribution that serves our city well. I would like to reiterate my appreciation for the high level of service that we have received from the city staff in our submission ora request for Community Development Funds. As you may be aware, our project was not recommended for funding at the above referenced budget meeting. You may not be aware that several substantial changes have occurred since the submission of our project that I believe significantly strengthen our project. In addition, we have not had an opportunity to present our project. I had hoped for this opportunity at the February 7th budget meeting. On behalf of the Bakersfield Garden Community's Board of Directors, I would like to request a presentation opportunity in a forum that you would find appropriate. Once again, your efforts in building a better Bakersfield are deeply appreciated. Best Wishes, ...ve Director (Interim) BAKERSFIELD PUBLIC WORKS DEPARTMENT MEM.ORANDUM TO: Alan Tandy, City Manager FROM' Raul Rojas, i~ublic Works Director DATE: February 23, 2000 SUBJECT: Transportation Development Act (TDA) Audit- June 30, 1999 and .1998 This memo addresses agenda item 5A of the Budget and Finance Committee Meeting of February 7, 2000. Kern Cog contracted with the accounting firm of Brown, Armstrong, Randall, Reyes, Paulden and McCown (BARRPM) to conduct a TDA audit for its member agencies for the years ended June 30, 1999 and 1998. The resulting audit report for the City of Bakersfield was submitted to Council at its January 26, 2000 meeting and was referred to Budget and Finance. Councilmember Maggard requested a copy of the Auditor's Management Letter and any other correspondence relative to the TDA Audit which was not included in the final audit report. My staff contacted Ben Reyes of BARRPM to obtain copies of any correspondence/reports not included in the final TDA Report. He stated no Management Letter was issued on the TDA audit. He also indicated the submitted audit report contains all correspondence/reports on this TDA Audit. G:\GROUPDATWlemo~000\TDA Audit June 30-1999-1998.wpd '":i'RANDALL REYES PAULOEN &-McCows. '4zoo : ,~}~... C~RTIFIED PUBLIC ACCOUNTANTS-:~,':' ' ~::Z,'..:~ lei -:. ': ~':~,_' ::":.',.fax 80LIN.4991 Peter C. Brown, CPA Burton H Armsm~m' CPA INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH ..e~,?~.~,~,~,~,,,~.~,'.~¥ STm~ LOCAL T~NSPOaT~T~ON ~ARTNeRSH~P ~RO$~. RECEIVED Beni~mi:~ ~ Peres, CPA " Andrew .L Paulden, CPA Mr. Rau~ M. Rojas ~ ..... '~ Public Works Dire~or ,, Y MANAGEW$ Andrea Rutherford-Hill, CPA City of Bakersfield FE~ ~ 1 ZOO[] Steven R. Starbuck, CPA 1501 Tru~un Avenue Aileen Keeter, CPA Bakersfield, California 93301 ; IRLiC.W:"'p:c¢,,,,~`,,, :"-" ~ ~ ~' ~ Lynn R. Krausse, CPA s~,~,, L. ~Va[~s, C~.~ We have audited the City of Bakemfield's Public Works Depadment (City) compliance with the following requirements, which are identified in the instructions of the State of Chris M. Thornbur~h, CPA California Depadment of Transpodation. ~acqueline L. An/on, CPA JoanM. Anderson. CPA · The reimbumement claim submitted to the State of California Depadment of Transpo~ation for the reconstruction and widening proje~ (Projed Number ~ad~y x~. H,~n~,C~.~ SB97-5109 (005)) and bridge widening proje~ (Proje~ Number SB98-5109 r,,i~,~,,, v s,~,,.,.~,r, c~A (001)) are supposed by payment vouchem and canceled checks. E~cH.X~,C~.~ · The charges for the various categories for eligible costs incurred by the City are fully suppoded. · Ineligible costs were not claimed as reimbursable on the project. · Local matching funds are from an approved source. Such requirements are applicable to the City's reimbumement claim to the State Local Transpodation Padnemhip Program (Program). The management of the City is responsible for the C~y's compliance with .those requirements. Our responsibilffy is to express an opinion on compliance wffh those requirements based on our audit. We conducted our audit in a~ordance with generally accepted auditing standards and Govemment Auditing Standards issued by the Comptroller General of the United States, and the instructions of the State of California Depadment of Transpodation. Those standards and instructions require the we plan and peffo~ the audit to obtain reasonable assurance about-whether the final Repeal of ~penditures and Ce~ification is free of material noncompliance with the requirements referred to above. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion. M[MB~R of S[£ Pradice Sedion of the American Instifute o{ Cerfi[Jed Public Accountants The results of our audit procedures did not disclose any matedal or immaterial instances of noncompliance with the requirements referred to above. In our opinion, the City complied, in all matedal respects, with the requirements referred to in the first paragraph of this report that are applicable to its reimbursement claim under the program as of January 25, 2000. This report is intended for the information of the City and the State of California Department of Transportation. This restriction is not intended to limit the distribution of this report, which is a matter of public record. BROWN ARMSTRONG RANDALL REYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, California January 28, 2000 ' Q ADMINISTRATIVE REPORT MEETING DATE: April 12, 2000 AGENDA SECTION: Consent Calendar ITEM: 8. ]. TO: Honorable Mayor and City Council APPROVED FROM: Rojas, Public Works Director DEPARTMENT HEAD. ~'?t~, Raul DATE: March 21, 2000 CITY ATTORNEY ~ CITY MANAGER ~ SUBJECT: Independent Auditors' Report on Compliance with Contractual Requirements relative to the Bakersfield Subregional Wastewater Management Plan. RECOMMENDATION: Staff recommends the report be received and referred to the Budget & Finance Committee. BACKGROUND: Contract requirements contained in City of Bakersfield Agreement 76-153 as amended by Agreements 76-153(4), 77-44, 85-197 and 92-106 apply to operation of the Bakersfield Subregional Wastewater Management Plan. The City's compliance with contract requirements is audited on an annual basis. ~ The current Compliance Report, issued by the outside auditors, indicates that the City complied, in all material respects, with the program's guidelines. No other reports were issued by the accounting firm in regards to this Compliance Report. PW-GL:mrp March 23. 2000. 11:06AM RANDALL REYES PAULDEN' CERIIflEB PUBLIC ACCOUHIANIS ? .-. · ... lei 805:324:~9H : f~ 805324.4997 e-mail: barrlnfoObarrcpo.com · ~:..~,. ~. M~c,~.,. c:.~ of the 8~rsfiMd Subre~on~ W~tewater M~a[ement PI~ the Ci~ of B~¢rsfeld, ~:~:,, R~t~,o~.~::: CZ~ C~o~ the Kern S~tation Authofi~, ~..~.e~ K~tec CPA We have applied the procedures enumerated below to dete~ne the CiW of Bakersfield's compH~ce ~th cem~n proMsions of contra~M requirements ~ :~::~ ~.t mo~ ::.~ specified in Ci~ of Bakersfield A~eement 76-153, as ~ended by A~eements 76- ~;'.'..~,~,.;;.~ Wastewater M~agement Pi~. These procedures, wMch were a~eed to by the ~: ,. ~,~ ::~ Tec~c~ Ad~so~ Co~ee, were performed ~lely to assi~ you in meeting the · ~.: ..... : s~,,,.¢, ct:. r~ukements of Ciw of B~ersfield A~eement 76-153, as mended by A~eements !::~ x:,.cp~ 7~153(4), 77 q4, 85-197, ~d 92-106. TNs repo~ is intended for the igomation of the Tec~cM Ad~Sso~ Comuee of the B~ersfield Subre~onM 'Wastewater Management PI~ m~agement, appropriate re~lato~ agencies, ~d the Ci~ Co~ of~e Ciw of B~ersfield, CMifo~a. TNs restriction is not intended to ~Mt the distribution of tNs report, wNch is a matter of public record. We re~few~ <d tested the City of B~ersfield's comp~ce Mth ce~n pro~sions of~n=~ r~ements as specZed in Ci~ ofB~ersfield A~eement 76-153, ~ mended by A~eements 76-153(4), 7744, 85-197, ~d 92-1~. These pr0c~ures resulted in no cu=ent ye~ ~ding ~d reco~endation. .~E.~BE,R of SEC P.'~c: ce Sec~:on of :he A.,"e' ":.~ Insfitule of r. er:,lied Public Accounm,vs Status of Prior Year Finding with Current Year Status Prior Year Finding - A~eement Number 76-153, Section 12 - Estimation and Payment of Cos-ts The original agreement states that by March 1 a tenta.tive capital-related and operations and maintenance budget must be submitted to the Technical Advisory Committee and each User Agency. The City Council of' the City of Bakersfield must consider the budget at a public meeting by April. A budget must be adopted and the User Agencies notified of' the budget and the allocated costs thereof by May 15. The budget for the year ended June 30, 1997 was not formally reviewed by tl~e Technical Advisory Committee by March 1, and the budget was not adopted by May 15. Agreement 76-153(4) dated May 27, 1997 was approved during the fiscal year and in part amends Agreement 76-153 regarding due dates for the submitted and approved budget. Agreement 76,153(4) calls for the tentative budget to be submitted to the Technical Advisory Committee on or before March 1, and specifies adoption of the budget by the Bakersfield City Council no later than July 1. It was noted that the Fiscal Year 1998-99 tentative budget was reviewed the Technical Advisory Committee during their meeting on March 4, 1998, three days alter the established deadline of March 1, 1998. Recommendation We recommend compliance with the budget submission and approval dates as specified in Agreement 76-153(4). Response In the future, the Technical Advisory Committee will meet each year on the last Wednesday of ~ February to review the tentative budget. Current Year Status The recommendation has been implemented. These agreed-upon procedures are substantially less in scope than an audit, the objective of which is the expression of an opinion on the City of Bakersfield's compliance with certain provisions of contractual requirements as specified in City of Bakersfield Agreement 76-153, as amended by Agreements 76-153(4), 77 44, 85-197, and 92-106. Accordingly, we do not express such an opinion. Based on the application of the procedures referred to above, nothing came to our attention that caused us to believe that the City of Bakersfield had not complied with certain provisions of contractual requirements as specified in City of Bakersfield Agreement 76-153, as amended by Agreements 76-153(4), 77 ~?,, 85-197, and 92-106. Had we performed additional procedures or had we made an audit of the City of Bakersfield's compliance with certain provisions of contractual 'requirements as specified in City of Bakersfield Agreement 76-153, as amended by Agreements 76- 153(4), 77-44, 85-197, and 92-106, matters might have come to our attention that would have been reported to you. BROWN ARMSTRONG RANDALL R.EYES PAULDEN & McCOWN ACCOUNTANCY CORPORATION Bakersfield, California September 20, 1999 BAKERSFIELD Economic and Community Development Department MEMORANDUM April 14, 2000 TO: Alan Tandy, City Manager ~ FROM: Jake Wager, Economic Development Direct~ SUBJECT: Meeting with Greenfield Union School District concerning eligibility for CDBG assistance. As part of the FY 2000/01 Public Facilities - Non-Profits submission for CDBG assistance, the Greenfield Union School District (GUSD) requested $1,127,000 for the construction of a 7,800 square foot multi-purpose facility to house health care, child care, recreation, and education programs. GUSD identified the service area of the multi-purpose facility as the entire school district boundaries. According to the 1990 census information, this area includes approximately 30,000 individuals of which 37% are Iow-income (using HUD income guidelines). In order to qualify for HUD eligibility, 51% of the population must be below the HUD Iow-income limits. Recognizing that the area did not qualify under the area benefit test, GUSD proposed eligibility be considered utilizing the USDA Free and Reduced Lunch Program, since those income limits are less than that of the HUD Iow- income limits. GUSD has identified that 74% of the students attending the district's schools are enrolled in this program. Since the project and the services are not limited to the school population and their families, HUD has indicated that the USDA Free and Reduced Lunch Program would not qualify this activity for CDBG assistance. On April 13, 2000, staff invited GUSD representatives, the County Community Development staff to meet with a HUD official to resolve the eligibility of the multi-purpose facility using the USDA - reduced lunch data. Those in attendance were: Arnold Sison, Community Planning and Development Specialist from HUD-LA; Jim Goodgame, GUSD; Cyndee Zandes, GUSD; Heather West, GUSD; Wendy Wayne, Kern County Superintendent of Schools; Gil Garcia, Consultant, GUSD; Steve Schilling, Clinica Sierra Vista; Bill Mungary, County Community Development; Barry Jung, County Community Development; and City Community Development staff. dlk:c:\W1NDOWS\TEMP\GREENF~I .WPD Mr. Sison stated that HUD has two methods to qualify projects for CDBG eligibility: Area Benefit, where an area is identified from the 1990 census data that has 51% or more of the population under the HUD Iow-income limits. Low/Moderate Income Limited Clientele, where an activity proposed provides benefit to a specific group of persons rather than everyone in an area. However, 100% of these clients benefitting from the activity must be under the HUD Iow-income limit. If the Iow/moderate income limited clientele activity did not achieve 100% benefit, the "City" would be required to repay any HUD funds provided for the project from non-HUD (general funds) funds. Mr. Sison also stated that absent of current census data (1990' census) an area could be surveyed to achieve "area benefit" designation with City and HUD concurrence. No further eligibility requirement of the client would be need under an area benefit designation. Staff suggested that the applicant may wish to consider undertaking this task and that City staff would provide technical assistance in preparing a survey instrument and a plan on the methodology of how the survey would be conducted. All parties agreed that this would be a difficult and expensive process. Mr. Sison stated that the only other way to qualify GUSD's project, as originally submitted, as an "area benefit" activity would be to wait for the final 2000 census data and only if that information determined that 51% of the service area meets the HUD Iow-income limits. However, it is estimated that the 2000 census data would only become available by the Summer of 2002. Mr. Sison agreed that short of such an income survey acceptable to HUD, the project as proposed was not eligible for HUD-CDBG funding assistance. At the conclusion of the meeting Mr. Goodgame and the other supporters of the GUSD project agreed that their application for the multi-purpose facility, as submitted did not meet the HUD eligibility guidelines and that they would investigate the possibility of conducting an income survey to document eligibility for future submission of their project or modify their application and re-submitting it during the next funding cycle. dlk:c:\WlN DOWS\TEMP\GREENF~I .WPD ADMINISTRATIVE REPORT MEETING DATE: April 12, 2000 I AGENDA SECTION: Consent Calendar I ITEM NO: 8. i. TO: Honorable Mayor and City Council ~PPR~O~'~\ FROM: Jake Wager, Economic Development Director DEPARTMENT HEA DATE: March 31, 2000 CITY ATTORNEY~ ~ CITY MANAGER ~/'~~ SUBJECT: Agreement with Affordable Homes, .Inc. for $195,000.00 of HOME Investment Partnership Program Funds to purchase existing single-family homes for rehabilitation and resale to qualified homebuyers. (City-Wide) RECOMMENDATION: Staff recommends approval. BACKGROUND: Affordable Homes, Inc. (AHI) a non-profit public benefit corporation has requested HOME Investment Partnership Program (HOME) funds to purchase existing single-family homes, for rehabilitation and resale to qualified homebuyers. Incorporated in 1994, AHI was organized to expand the opportunities to residents and groups to obtain adequate Iow-cost housing accommodations by constructing, rehabilitating, and providing decent, safe and sanitary housing. Since its inception, AHI has developed both single-family and multi-family rehabilitation projects in Los Angles, Fresno, Lemoore, San Luis Obispo County, Phoenix, and Bakersfield. In the last three years, AHI has acquired and rehabilitated a total of 85 single-family units and 154 multi-family units, seven of which are located in the City of Bakersfield. AHI has been certified as a Community Housing Development Organization (CHDO) by the State of California which then allows AHI to access CHDO funds throughout the State. The HOME Program statutes and regulations offer very specific guidance to assure that CHDO's are: · Legally recognized not-for-profit corporations. · Organizations controlled by, and in service to, Iow-income communities, and · Organizations committed to, and capable of engaging in the development of affordable housing. DIk:A:~,HI Agreement.wpd March 31, 2000, 9:28AM AGREEMENT NO. ,HOME Investment Partnerships Program AFFORDABLE HOMES, INC. THIS AGREEMENT is made and entered on ., by and between the CITY OF BAKERSFIELD, a charter city and municipal corporation ("CITY" herein), and AFFORDABLE HOMES, INC., a California non-profit, public-benefit corporation ("AHI" herein). RECITALS WHEREAS, the Congress of the United States has enacted the "HOME Investment Partnerships" Act ("the Program" herein) at 42 USC 12741 et. seq. of the Cranston- Gonzalez "National Affordable Housing Act and amendments ("the Act" herein); and WHEREAS, CITY has submitted certain documents to the Department of Housing and Urban Development ("HUD" herein) hoping to receive funds pursuant to the Program; and WHEREAS, CITY is empowered, under the Program, to administer funds received and to enter into agreements with nonprofit organizations; and WHEREAS, AHI has asked CITY for help in acquiring the Program funds to pay eligible costs to purchase .existing single-family homes in order to rehabilitate them and resell them to qualified eligible Homebuyers; and WHEREAS, CITY desires to assist AHI by granting to it, funds from the Program, to be used to construct residential property or acquire residential property for rehabilitation within the .incorporated portion of Metropolitan Bakersfield. The residential property is to be built, purchased, rehabilitated and occupied in accordance with the Program requirements. NOW, THEREFORE, incorporating the foregoing recitals herein, CITY and AHI mutually agree as follows: 1. DEFINITIONS. Except to the extent modified or supplemented by any agreement between CITY and HUD, any term defined in the Act or the Program, shall have the same meaning when used herein. A. "Project" means AHI's construction, or Purchase and rehabilitation, or resale to an eligible Homebuyer under this Agreement, of residential properties ("Project Properties" herein). HOME Investment Partnership Programs 0~m~,6,,~(8:2.~.) Page 1 of 17 Pages S:V~3reement~ahifn'thversion.v4:x:l B. ·Eligible Homebuyers" means Iow-income people who qualify Under the guidelines set forth at 24 CFR 92.2. C. "Period of Affordability" means a five- or twenty-year time period, beginning at Project Completion, during which period each Project Property must be affordable to eligible Homebuyers in accordance with 24-CFR 92.254. The affordability period shall be twenty (20) years for any new construction. Rehabilitated properties need only be affordable for five (5) years. D. "Project Completion" shall have the meaning set forth at 24 CFR 92.2, the definition of which is attached hereto as Exhibit "A". E. "Project Properties" means more than one parcel or all parcels of real property purchased pursuant to this Agreement. F. "Project Property" means any single parcel of real property purchased pursuant to this Agreement. G. "Grant" means CITY's grant'of the .Program funds to AHI to purchase Project Properties. 2. CONDITIONS OF THE GRANT B.' Purpose: The grant is intended to provide money, in the amount set forth in paragraph 3, below, to apply toward the cost of purchasing each Project Property and to pay eligible pre-construction costs. .. B. Terms of Grant: Subject to the terms and conditions of this Agreement, CITY agrees to grant to AHI, and AHI agrees to receive from CITY, the amount of money set forth in Paragraph 3A. HOME Investment Partnership Programs ~.~,6. ,~(6:2,,~ Page 2 of 17 Pages 3. FUNDS AVAILABLE AND METHOD OF DISBURSEMENT A. Amount of Grant: CITY shall grant, and AHI shall receive no more than ONE HUNDRED NINETY-FIVE THOUSAND AND 00/100 DOLLARS ($195,000.00) for ' the purchase of Project Properties, including escrow costs and other costs related to the acquisition of each Project-Property,' as well as pre-construction costs for new cOnstruction. No more than FIFTEEN THOUSAND AND 00/100 DOLLARS ($15,000.00) (including escrow- related costs or.eligible pre-construction costs) may be spent on any one Project Property. B. DiSbursements of Grant Funds: When AHI locates a property that it desires to purchase, it shall notify CITY of the address. CITY will then begin the envir°nmental review as required by 24 CFR 92.352. AHI will then provide CITY with a preliminary title, report from a title company satisfactory to CITY, a termite clearance report and an appraisal by a FHA approved and State licensed real property appraiser satisfactory to CITY, Such appraiser shall follow the Uniform Standards of Professional Appraisal Practice (USPAP). All appraisals must be current (dated no earlier than six 6 months prior to close of escrow). Additionally, AHI shall provide CITY with an itemized list of costs associated with the above reports as well as documentation of the amount of HOME funds needed to assist in the acquisition of the Project Property and to close escrow. Upon completion of the environmental review, CITY shall .deposit the · 'funds needed into escrow with an escrow company satisfactory to CITY. C. Term and Repayment: AHI will receive ·purchase money from CITY as a grant. After rehabilitation is completed and upon resale of each Project Property to an eligible Homebuyer,. AHI, as a Community Housing Development Organization (CHDO), shall use any net income from the resale in accordance with the regulations of HUD and all applicable statutes. AHI shall be solely responsible for such use. AHI shall not close escrow on the initial purchase of a Project Property until CITY conducts the environmental review pursuant to 24 CFR 92.$52. HOME Inveslrnen/Partnership Programs o~. ,~(8:24,~) Page 3 of 17 Pages S:V~greement~ahir~hver$ion.wlxl CITY shall not be obligated to disburse, or pay to, AHI, any funds until and after CITY receives HOME Program funds, allocated for this Project, from the Federal Government. If CITY does not receive such funds CITY, at its sole option, may terminate or suspend this Agreement, without any liability to AHI, until CITY receives such funds. AHI shall not be entitled to any damages from CITY if CITY refuses to disburse funds until CITY receives funds, even if AHI has detrimentally relied upon this Agreement. This Agreement shall terminate June 30, 2004 unless terminated sooner pursuant to the terms herein. The affordability requirements and record-keeping responsibilities will surviVe termination of this Agreement. If AHI fails to comply with any terms of this Agreement after having received notice and an opportunity to comply, CITY may terminate this Agreement and AHI must repay all funds granted to AHI. Any funds which were used for a specific Project Property need not be repaid if that Project Property has been purchased by an eligible Homebuyer and that Homebuyer has executed a note and deed of trust in favor of the City of Bakersfield regarding those funds. 4. AHI's OBLIGATIONS A. Applicable Regulations: AHI shall comply with all applicable local, state, and federal regulations. B. Cooperation: AHI shall cooperate fully with CITY in completing the Project competently and professionally. C. Pre-Closing Obligations: Before close of any escrow by which AHI will take title to a Project Property, AHI shall: 1. Provide CI.TY, and its designees, reasonable access to all portions of the Project Property/Properties; 2. Execute a Deed of Trust for each -Project Property in the form attached as Exhibit "B"-and incorporated herein by reference; 3. Execute for recordation the Deed Restrictions in the form attached as EXhibit "C" and incorporated herein by reference. HOME Investment Partne~p Programs ~,-,~,6.,~(8:=,,~) Page 4 of 17 Pages Such Deed Rest?ictions must be recorded on every Project Property acquired by-AHI with assistance of HOME funds; 4. Provide a preliminary title report, from a title company satisfactory to CITY; a termite clearance.report; and an appraisal by a FHA approved real property appraiser satisfactory to CITY; and 5. Pay all costs other than those CITY agrees to pay. D. Marketing: Prior to and during the 'Period of Affordability AHI shall: -. 1. Before initially marketing the first Project Property and taking any purchase applications from any person, deliver to CITY, for review, comment, and approval or disapproval, a copy of the marketing plan AHI intends to use to market, and select buyers of, the Project Property; AHI shall change the marketing plan in response to CITY's comments and shall resubmit the marketing plan for CITY review and approval which shall not be unreasonably withheld; AHI shall follow the marketing.plan apProved by CITY. CITY acknowledges AHI's proven marketing expertise and will not impose any marketing plan not originated by AHI. 2. Allow CITY, HUD, their agents and designee(s), access to all portions of each ,Project Property at all reasonable times. If AHI fails to comply with the provisions of this Section (Marketing), and upon written notice to AHI from CITY listing areas of noncompliance, failS to initiate corrective action within thirty (30) days from date of notice, AHI shall be in d,efault. CITY shall thereupon have the right to repayment from AHI for the total amount granted to AHI up to-the date of the default. Any funds which were used for a specific Project Property need not be repaid if that Project Prsperty has.been purchased by an eligible Homebuyer and that Homebuyer has executed a note and deed of trust regarding those funds. E. Sale to Eligible Homebuyers When an eligible Homebuyer agrees to purchase a Project Property, AHI shall ensure that such Homeowner executes a-Promissory Note and Deed of Trust on the Project Property in favor of the City of Bakersfield for the total amount of HOME funds expended .on that HOME Invesblle~t Partnership Programs o.~m. 6, ~<6:24~ Page 5 of 17 Pages $:V~greemeflflahirrlthversio~.wpd Project Property. The Promissory Note and Deed of Trust shall be in a form acceptable to CITY.. Such purchase shall take place via an escrow. Subsequent to the close of escrow with the eligible purchaser, CITY shall reconvey the Deed of Trust executed by AHI at AHI's expense, if any. 5. CITY's OBLIGATIONS. CITY will .make available to AHI a copy of any regulation CITY proposes to enact to facilitate administration of the prOgram prior to such enaction or hearing to consider the same, and shall give due and reasonable consideration to AHI's comments. 6. LAWS AND REGULATIONS A. Federal Law: AHI shall conform to the Act (and any amendments to it), federal regulations and guidelines now existing or hereafter enacted pursuant to the Act, terms of the HOME Program Agreement between HUD and CITY now or hereafter in effect, and regulations now or hereafter enacted by CITY to facilitate its administration of the HOME Program, and any other statute, regulation or guideline applicable to the HOME Program. AHI shall become familiar with the appropriate statutes, · regulations, and guidelines governing the HOME Program. B. California Law: AHI shall comply with all provisions of California law applicable to public contracts insofar as such laws shall be applicable to nonprofit organizations and not in conflict with HOME regulations. C. Home Program Regulations: AHI shall comply with all applicable provisions of the HOME Program regulations including, but not limited to, the following: 1. The affordability requirements of 24 CFR 92.254, for a period of five (5) years or twenty (20) years (new construction) after Project Completion. If CITY determines the housing does not meet the affordability requirements, AHI shall immediately pay to CITY all the HOME Program funds CITY has granted .to AHI under this Agreement. Any funds which were. used for a specific Project Property need not be repaid if that Project Property as been purchased by an eligible Homebuyer and HOME Inve$1men! Partne~t~P Programs ~.~,s, ~(8:24~) Page 6 of 17 Pages S:V~'eement~ahir~'we~sim. wl~d that Homebuyer has executed a note and deed of trust regarding those funds. 2. Housing Quality Standards, state and local housing code requirements, covering each Project Property. 3. The requirements of 24 CFR 92.254 (Qualification as Affordable Housing and Homeownership). D. Marketing Targets: AHI shall market each Project Property only to income eligible persons. The Client Population, however, may not be obtained exclusively through referrals from a single social service agency. AHI shall not give preference or priority to individuals who are referred by specific agencies. AHI shall make a good faith effort to solicit buyers from .throughout the City of Bakersfield. AHI shall not deny access to the Project on the basis of race, ethnicity, gender, sexual orientation or age, except for senior projects as to age. 7. RECORDS AND AUDITS. AHI shall maintain records sufficient to show it has reasonably complied with all applicable provisions and requirements of this Agreement. A. Records and Reports: AHI shall create and retain accurate records of AHl's efforts to market each Project Property and results of those efforts. At least annually, but more often if requested by CITY, AHI will deliver to CITY, a report which includes, at a minimum, the following: 1. A description of marketing and outreach AHI carried out during the reporting period, including such items as clipped notices, flyers, advert, isements, and letters; 2. Identification of each applicant's referral source; 3. Race or ethnicity, and gender of applicant; and 4. Family income, family size, race or ethnicity, and gender of each purchaser. HOME Irwe$1menl Partnership Programs o.~,6.,~8:=4~1 Page 7 of 17 Pages S:V~greement~.tififfhversi~.v4~d B. Audits: ("' AHI shall arrange, at its own expense, for the performance of a "Single Audit" of its entire operations by an independent auditor in accordance with Public Law 98-502 and OMB Circular A-133. C. Delivery of Audit Results to CITY:' The auditor shall deliver results of said audit to CITY within thirty (30) days of the audit's cOmpletion. CITY's acceptance of AHI's audit reports does not prohibit CITY from performing any additional audit work CITY deems to be necessary or as necessary for CITY to comply with any administrative or audit requirements imposed by the federal or state government. D. Record Retention: As a condition of receiving federal financial assistance under this Agreement, AHI shall comply with 24 CFR 85.42, "Retention and Access Requirements for Records." Any agreement between AHI and its independent auditor shall provide for access, during normal business hours, to the independent auditor's work papers, by federal, state, and CITY auditors, or their authorized agent6. AHI's independent auditor shall retain, for review purposes, audit work papers for three years from date of audit completion, or until three years after all audit-related issues are resolved, whichever occurs later. E. Financial-Management System: AHI shall maintain a financial-management system which complies with' 24 CFR 85.20, "Standards for financial management systems," except paragraph (1) thereof. F. Procurement and Allowable Costs: AHI shall comply with the requirements and standards of 24 CFR 85.36, "Procurement" - [except paragraph (a)], and 24 CFR 85.22, "Allowable Costs." G. Subawards and Monitoring: AHI shall comply with the standards and requirements of 24 CFR 85.35, "Subawards to Debarred and Suspended Parties"; and 24 CFR HOME Investmenl Partnership Programs ~=..~6. ,~(8:2.,.) Page 8 of 17 Pages S:V~r eemem~ahif~,~ve~smn.wpd 85.40, "Monitoring and Reporting Program Performance" [except paragraphs (b) through (d) and paragraph (f)]. CITY has the right, but not the obligation, to monitor and supervise the administration and implementation of' the Project to insure compliance with the , requirements of the Act as it now exists or hereinafter amended, the federal regulations as now exist or hereafter promulgated pursuant to the Act, or guidelines developed by the federal government for administering or implementing the project, or any other statute, rule, regulation, or guideline applicable to the administration or implementation of the HOME Program. H. Enforcement: AHI shall comply with the standards and requirements of 24 CFR 85.43, "Enforcement," and 24 CFR 85.44, "Termination for Convenience." I. Disallowances and Adjustments: AHI shall account to CITY for any and all Program funds expended by AHI or its officers, employees, agents, or representatives, whether or not such officers, employees, agents or representatives were acting within the scope of his or her employment. AHI Shall repay CITY, on · demand, the full amount of any improperly-expended HOME Program funds, and shall comply with requirements of 24 CFR 85.51, "Later Disallowances and Adjustment." CITY may retain any funds of AHI in CITY's possession to liquidate (in whole or in .part) the debt resulting from any such improper expenditure. J. CITY Withholding of .Funds: CITY may withhold funds from AHI if AHI is not complying with the Act, federal regulations thereunder, terms of the HOME Program from the federal government to the CITY, regulations of CITY to facilitate the administration of the HOME Program, the terms of this Agreement, or any other statute or regulation applicable to the HOME Program or administration. Should CITY become subject to any penalties because failure by AHI, or AHI's agent, to comply with all applicable federal, state, and local laws and regulations, AHI shall be solely liable to the extent of its culpability for any such penalties and shall fully reimburse CITY for any payments made or funding lost as a result. HOME Investment Pmlne~ship Programs ~-~ 6, ~(6:2~,,~) Page 9 of 17 Pages S:~Agreement~ahif'~hve~Smn. wpd 8. POLITICAL ACTIVITY. AHI shall expend no HOME Program funds, to finance any political activity in contravention of the Hatch Act (Chapter 15 of Title 5 of the United States Code). 9. LOBBYING. AHI certifies, to the best of its knowledge and belief, no federally-appropriated funds have been paid or will be paid, by or on behalf of AHI, 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. If funds, other than federally-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, AHI shall complete and submit, in accordance with its instructions, Standard Form-LLL, "Disclosure Form to Report Lobbying," Exhibit "D." AHI shall require the language of this certification to be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and all subrecipients shall so c~rtify and disclose accordingly. 10. FUNDS FOR RELIGIOUS PURPOSF. AHI shall permit no HOME Program funds to .be expended for the design, construction, operation, or maintenance of any facility to be used for sectarian instruction or as a place for religious worship, except in situations where such use .is incidental and does not favor one religious group over another. 11. PROHIBITED INTEREST OF OFFICIALS AND EMPLOYEE~. No member of or delegate to the Congress of the United States, and no resident commissioner, shall be admitted to any share or part of. this Agreement or to any benefit to arise from it. No member, officer or employee of AHI, or its designees or agents, no member of CITY's Council or any other public official who exercises any functions or responsibilities with respect to the HOME Program during his tenure, or for one year thereafter, shall have any interest, direct or .indirect, in any contract or subcontract, or the proceeds thereof, for.work to be performed pursuant to this Agreement. AHI shall incorporate or cause to be incorporated, a provision prohibiting such interest in all contracts or subcontracts, relating in any manner to this Agreement. 12. EQUAL EMPLOYMENT OPPORTUNITY {NON-DISCRIMINATIOf' CLAUSE'). AHI shall not discriminate against any employee, or applicant for employment, because of race, color, religion, sex, national origin, age, disability, or sexual orientation. HOME Inveslmen/Partnership Programs 0~.,m~,6. ,~(8:2.^M) Page 10 of 17 Pages S:~Agreement~al'iir~hversion,wpd AHI shall take affirmative action to insure that applicants for employment and employees are treated during employment, without regard to race, color, religion, sex, national origin, age, disability, or sexual orientation. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. AHI shall post in conspicuous places, available to employees and applicants for employment, notices to be provided by CITY or HUD setting forth the provisions of this nondiscrimination clause. AHI shall state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, national origin, age, disability, or sexual orientation. AHl'shall be bound by the equal opportunity clause set out in Exhibit "E," attached, with respect to its own employment practices when it participates in federally- assisted construction work; provided, however, the clause is not applicable to any agency, instrumentality, or subdivision of AHI which does not participate in work on or under the contract. t 3. NON-DISCRIMINATION REQUIREMENTS. Under any related agreements or contracts, AHI shall provide that no person, on the grounds of race, color, national origin, religion, or sex, shall be excluded from participation in, be denied the' benefits of, or be subjected to discrimination under any program' or activity funded in whole or in part with HOME Program funds. In addition, HOME Program funds must be made available in accordance with the following: A. The requirements of the Fair Housing Act and implementing regulations at 24 CFR 100. B. Executive Order 11063 (Equal Opportunity in Housing). C. Title VI of the Civil Rights Act of 1964 (PL 88-352) and Title VIII of the Civil Rights Act of 1968 (PL 90-284 nondiscrimination and fair housing on federally assisted programs). In addition to the foregoing, AH I will comply with the nondiscrimination clause listed in Exhibit"F", attached hereto and incorporated herein by this,reference as if set forth in full. 14. REHABILITATION ACT OF 1973 AND AMERICANS WITH DISABILITIES ACT. This Agreement is subject to the provisions of Section 503 and. 504 of the Rehabilitation Act of 1973 (PL 930112), 29 USC 706, and attendant regulations at 24 CFR', Part 8, which provide that no otherwise qualified, handicapped individual shall, solely by reason of his handicap, be excluded from participation in, be denied the benefits of or be subjected to discrimination under any program or activity receiving federal financial assistance. AHI shall cause or require to be inserted in full, in all contracts subject to such HOME Investmefll Partne~'st~,p Programs 0.~n~6,,~<8:2.~) Page 1 1 of 17 Pages S:~Agreemenl~ahifif~ve~on. wl3d regulations, the clause, or any modification thereof, set out in Exhibit "G," attached hereto and herein incorporated by this reference as if set out in full. This Agreement is also subject to The Americans with Disabilities Actof 1990 (amended), 42 USC 12101, et. seq. 15. NON-DISCRIMINATION BECAUSE OF AG~. This Agreement is subject to the Age Discrimination Act of 1975, as amended, (Title III of Public Law 94-135) and attendant Code of Federal Regulations at 48 CFR, Part 22, Subpart 22.9. That Act sets forth'that, except as otherwise provided, no person in the United States shall, on the basis of age, be excluded from participatiOn in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance. 16. "SECTION 3" TRAINING, EMPLOYMENT, AND BUSINESS OPPORTUNITIES. This Agreement is subject to the requirements of Section 3 of the Housing and 'Urban Development Act of 1968 (12 USC 1701u) as amended, HUD regulations issued pursuant thereto at 24 CFR .135, and any applicable rules and orders of HUD issuedthereunder. AHI shall cause, or require to be inserted in full in all contracts and subcontracts for work financed, in whole or in part, with assistance provided under this Agreement, the Section 3 clause set forth in Exhibit "H", attached. 17. WOMEN AND MINORITY-OWNED BUSINESS ENTERPRISES. AHI agrees to abide by the requirements of Executive Orders 11625, 12432 and 12138, the HUD regulations issued pursuant thereto at 41 CFR Part 24, 41 CFR Subpart 1-1.13, and any applicable rules and orders of HUD. The foregoing require the maximum practicable opportunity to participate, in contracts funded 'in whole or in part with federal funds, be provided to women--and minority-owned business enterprises, as subcontractors and suppliers to contractors performing work, or rendering services as prime contractors or subcontractors, under federally-funded procurement contracts. AHI shall include the Utilization of Minority Business Enterprises clause set forth in Exhibit"l", attached, in all contracts in amounts which may exceed $10,000 (except for contracts for services which are ,personal in nature). 18. AFFIRMATIVE ACTION 'FOR THE VIETNAM-ERA VETERANS. AHI shall comply with 48 CFR, Chapter 1, Subpart 22.13 and shall take affirmative action to employ, advance in employment, and otherwise treat qualified disabled veterans and veterans of the.Vietnam Era without discrimination based on disability or veteran's status in all employment practices such as employment, upgrading, demotion, transfer, recruitment, advertising, layoff, or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. In all contracts or agreements of $10,000 or more relating to this Agreement, AHI shall include, or cause to be included, the "Affirmative Action .for Special Disabled and the Vietnam Veterans Provisions" clause set out in Exhibit "J", attached. HOME Investment Parb~ership Programs D~m~, 6. ,~ ~6:2,,,~) Page 12 of 17 Pages S:~greemenltahififthver s~On.wixI 19.. RELOCATION ASSISTANCE AND ACQUISITION POLIClEC. ThiS Agreement is subject to the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 USC 4601), and the HUD imPlementing regulations. · 20. LEAD-BASED PAINT. This Agreement is subject to the Lead-Based Paint Poisoning Prevention Act .(42 USC 4821 et. seq.) and its implementing regulations at 24 CFR Part 35. ' 21. INSURANCE. In addition to any other insurance or bond required under this Agreement, AH I shall procure and maintain for the duration of this Agreement the following types and limits of insurance ("basic insurance'requirements" herein): 21.1 Automobile liability insurance, providing coverage on an occurrence basis for bodily injury, including death, of one or more persons, property damage and personal injury, with limits of not less than One Million Dollars ($1,000,000) per occurrence; and the policy shall: 21.2.1 Provide coverage for owned, non-owned and hired autos. 21.2.2 Contain an additional insured endorsement in favor of HUD, the CITY, its mayor, council, officers, agents and employees. 21.3 Broad form commerCial general liability insuranco, lSO form CG00 01 11 85 or 88 providing coverage on an occurrence basis for bodily injury, including death, of one or more persons, property damage and personal injury, with limits of not less than One Million Dollars ($1,000,000) per occurrence; and the policy shall: 21.3.1 Provide contractual liability coverage for the terms of this Agreement. 21.3.2 Contain an additional insured endorsement in favor of'HUD, the CITY, its mayor, council, officers, agents, employees and designated volunteers. 21.4 Workers' compensation insurance with statutory limits and employer's liability insurance with limits of .not less than One Million Dollars .($1,000,000) per occurrence; and the policy shall contain a waiver of subrogation endorsement in favor of HUD, the CITY, its mayor,' council, officers, agents, employees and designated volunteers. HOME Investment Partnership Programs o-=~,6. ~(8:2,~) Page 13 of 17 'Pages S:V~gr eement~ahirh'thver sion.wl:~d 2'1.$ All policies required of AHI shall be primary insurance as to the CITY, its mayor, council, officers, agents, employees, or designated volunteers and any insurance or self-insurance maintained by the CITY, its mayor, council, officers, agents, employees, and designated volunteers shall be excess of AHI's insurance and shall not contribute with it. Additional insured endorsement shall use ISO form CG20 10 11 85 (in no event with an edition date later than 1990). 2'1.$ Insurance is to be placed with insurers with a Bests' rating of no less than A:VII. Any deductibles, self-insured retentions or insurance in lesser amounts, or lack of certain types of insurance otherwise required by this Agreement, or insurance rated below Bests' A:VII, must be declared prior to execution.of this Agreement and approved by the CITY in writing. 21.7 All policies shall contain an endorsement providing the CITY with thirty (30) days written notice of cancellation or material change in policy language or terms. All policies shall provide that there shall be continuing liability thereon, notwithstanding any recovery on any policy. 2'1;8 The insurance required hereunder shall be maintained until ail work required to be performed by this Agreement is satisfactorily completed as evidenced by written acceptance by the CITY. 2'1.9 AHI shall furnish the City Risk Manager with a certificate of insurance and required endorsements evidencing the insurance required. The CITY may withdraw its offer of contract or cancel this contract if certificates of insurance and endorsements required have not been provided ..prior to the eXecution of this Agreement. 21 ;`10 Full compensation for all premiums which AHI is required to pay on all the insurance described herein shall be considered as included in the prices paid for the variousitems of work to be performed under the Agreement, 'and no additional allowance will be made therefor or for additional premiums which may be required by extensions of the policies of insurance. 2'1;11 It is further understood and agreed by AHI that its liability.to the CITY shall not in any way be limited to or affected by the amount of insurance obtained and carried by AHI in connection with this Agreement. 21.12 Unless otherwise approved by the CITY, if ar~y part of the work under this Agreement is subcontracted, the "basic insurance requirements" set forth above.shall be provided by, or on behalf of, all subcontractors even if the CITY has approved lesser insurance requirements for AHI. 21.13 Dwelling Fire Special Form Insurance policy in 'an amount sufficient to cover all Project Property, and expressly naming CITY as additional loss payee. HOME Inves~mem Par~sr~p Programs O~m,,6.,~<8:2,~) Page 14 of 17 Pages 22. INDEMNITY. AHI shall indemnify, defend, and hold harmless HUD, CITY, its officers, agents and employees against any and all liability, claims, actions, causes of action or demands whatsoever against them, or any of them, before administrative or judicial tribunals of any kind whatsoever, arising'out of, connected with, or caused by AHI, AHI's employees, agents, independent contractors, companies, or subcontractors in the performance of this Agreement. 23. ASSIGNMENT. Neither this Agreement, nor any interest in it, may be assigned or transferred by any party without the prior written consent'of all the parties. Any such assignment will be subject to such terms and conditions as CITY may chooSe to impose. 24. BINDING EFFECT. The rights and obligations of this Agreement shall inure to the benefit of, and be binding upon, the parties to the Agreement and their heirs', administrators, executors, personal representatives, successors and assigns. 25. REMEDIES. The remedies provided in this Agreement are cumulative and are in addition to any other remedies in law or equity which may be available ~to CITY. The election of one. or more remedies shall not bar the use' of other remedies unless the circumstances make the remedies incompatible. 26. NON WAIVER OF DEFAULT. The failure of any party to enforce against another a provision of this Agreement shall not constitute a waiver of that party's right to enforce such a provision at a later time, and shall not serve to vary the terms of this Agreement. 27. MERGER AND MODIFICATION. This Agreement sets forth the entire Agreement between the parties and supersedes all other oral or written representations. This Agreement may be modified only in a writing approved by the City Council and signed by all the.parties. 28. SEVERABILITY AND PARAGRAPH HEADINGS. The invalidity of any provision of this Agreement, as determined by a court of competent'jurisdiction, shall in no way effect the validity of any other provision hereof. If any term, provision, or condition of this Agreement is determined, by a court of competent jurisdiction, to be void, invalid, or unenforceable, the parties intend the remainder to continue in full force. The parties intend interpretation of the remainder to be as if the parties negotiated this Agreement without the void, invalid, or unenforceable terms, provisions, or conditions. The "headings" or "titles" of paragraphs (or sections) of this Agreement are for convenience only, and are not to-be considered part of the Agreement. HOME Investment Partners~nip prOgrams December 6, 1999 (8:24AM) Page 15 of 17 Pages S:~Agreement~ahififthversion,wl;x:l 29. INDEPENDENT CONTRACTOR. This Agreement calls for the performance of the services of AHI as an independent contractor. AHI is not an agent or employee of the CITY for any purpose and is .not entitled to any of the benefits provided by CITY to its employees. This Agreement shall not be construed as forming a partnership or any other association with AHI other than that of an independent contractor. 30. FORUM. Any lawsuit pertaining to any matter arising under, or growing out of, this Agreement shall be instituted in Kern County, California. 31. CORPORATE AUTHORITY. Each individual signing this Agreement on behalf of entities represent and Warrant that they are, respectively, duly authoriZed to sign on behalf of the entities and to bind the entities fully to each and all of the obligations set forth in this Agreement. 32. TERMINATION OF AGREEMENT. This Agreement may be terminated by any party upon thirty (30) days written notice, served by mail or personal service, to all other parties. 33. THIS AGREEMENT SURVIVES CLOSE OF ESCROW. This Agreement, and all of its terms and conditions, shall survive the close of any of the escrows. 34. EXECUTION. This Agreement is effective upon execution. It .is the product of negotiation and all parties are equally responsible for authorship of this Agreement. Section 1654 of the California Civil Code shall not apply to the interpretation of this Agreement. 35. NOTICES. All notices relative to this Agreement shall be given in writing and shall be personally served or sent by certified or registered mail and be effective upon actual personal service or .depositing in the United States mail. The parties shall be addressed as follows, or at any other address designated 'by notice: CITY: City of Bakersfield City Hall 1501 Truxtun Avenue Bakersfield, California 93301 HOME Investmen! Palnership Programs' 0~.,,,6. ,~(8:2,,~) Page 16 of 17 Pages S:~r~t~hir~v~si~.~ AHI: Executive Director .. Affordable Homes, Inc. P O Box. 900 Avila Beach. California 93424 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed ti~e day and year first above written. "CITY" "AHI" CITY OF BAKERSFIELD AFFORDABLE HOMES, INC. By. By ~ BOB PRICE I-I[A'~' ROSEN Mayor Executive Director .APPROVED AS TO CONTENT: By_. JOHN F. WAGER, JR. Economic Development Director APPROVED AS TO FORM: ' BART J. THILTGEN City Attorney By JANICE SCANLAN Deputy.-City Attorney COUNTERSIGNED: By GREGORY J. KLIMKO Finance Director HOME Investment Partnership Programs December 6, 1999 (8:24AM) S:'~,--,.n,,,h,,,~ve,s,~,.,,¢ Page 17 of 17 Pages EXHIBIT "A" PROJECT COMPLETION PROJECTION COMPLETION means that ail necessary title transfer requirements and construction work have been performed and the project in HUD's judgement complies with the requirements of this part; the final drawdown has been disbursed for the project; and a Project Completion Report has been submitted and processed in the Cash and Information System as prescribed by HUD. For'tenant-based rental assistance, the final drawdown has been disbursed for the projectand the final payment certification has been submitted and processed in the Cash and Management Information SYstem as prescribed by HUD. HOME Investment Partnership Programs o.am.,6, ~(8:24~) -- Page A-1 - I S:~,greemennah~n'tt~m'sion.w~l EXHIBIT "B" RECORDING REQUESTED BY, AND WHEN RECORDED, RETURN TO: City of Bakersfield 1501 Truxtun Avenue Bakersfield, CA 93301 Free Recording in Accordance With Section 6103 of the California Government Code SECOND DEED OF TRUST THIS SECOND DEED OF TRUST ("Security Instrument") is made on The trustor is AFFORDABLE HOMES, INC., a California non-profit, public- benefit corporation ("Borrower"). The trustee is ("Trustee"). The beneficiary is THE CITY OF BAKERSFIELD, A MUNICIPAL CORPORATION, and whose address is 1501 TRUXTUN AVENUE, BAKERSFIELD, CALIFORNIA 93301 ("City"). Borrower owes City the principal sum of DOLLARS (U.S. $ ). This debt is evidenced by City of Bakersfield Agreement NO. dated ("the Agreement"). This Security Instrument secures to City: (a) the repayment of the debt under certain circumstances, (b) the Payment of all other sums, with interest, advanced under paragraph 5 to protect the security of this Security Instrument; and (c) the performance of Borrower's covenants and agreements'under this Security Instrument and the Agreement. For. this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in Kern County, California ("the Property"). SEE ATTACHED LEGAL DESCRIPTION which has the address of , Bakersfield, California 933 ("Property Address"). TOGETHER WITH all the improvements now or hereafter erected on the Property, and all easements, appurtenances, and fixtures now or hereafter a part of the Property. All replacements and additions shall also be covered by this Security Instruments. HOME Investmer~ Pa~ershlp Programs o~.~6, ,~(.:2.~) -- Page B-1 S:~gr~n~if~versi~.~ ~ BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the property and that the Property is unencumbered, except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record. Borrower and City covenant and agree as follows: 1. Payment of Principal. Borrower shall promptly pay when due the principal of the debt evidenced by the Agreement. 2. Subordination. This Second Deed of Trust is subordinate to that the Deed of Trust recorded the same date as this Second -Deed of Trust, securing a loan on' the Property with as Trustee and as Beneficiary. 3. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines and impositions attributable to the Property which may attain priority over this Security Instrument, and leasehold payments or ground rents, if any. Borrower shall pay these obligations on time directly to the person owed-payment. Borrower shall promptly furnish to City all notices of amounts to be paid under this paragraph. If Borrower makes these payments directly, Borrower 'shall promptly furnish to City receipts evidencing the payments. Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to City, (b) contests in good faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the City's opinion operate to prevent the enforcement of the lien; or (c) secures from the holder of the lien an agreement satisfactory to City subordinating the lien to this Security Instrument. If City determines that any part of the Property is subject to a lien which may attain priority over this Security Instrument, City may give Borrower a notice identifying the lien. Borrower shall satisfy the hen or take one or-more of the actions set forth above within 10 days of the giving of notice. 4. Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements now-existing or hereafter erected on the Property against any hazards, casualties and contingencies, including floods and fire. This insurance shall be maintained in the amounts and for the period that City requires~ The insurance carrier providing the insurance shall be chosen by Borrower subject to City's approval which shall not be unreasonably wlthheld. If Borrower fails to maintain coverage described above, City may, at City's option, obtain coverage to protect City's rights in the Property in accordance with paragraph 5. HOME Investment Partne~st~p Programs o,,~,,~,,6. ,~9~6:2.~ -- Page B-2 -- I S.~Agreement~ahififthvets~on wpd All insurance policies and renewals .shall be acceptable to City and shall include a standard mortgage clause. City shall have the right to hold the policies and renewals: If City requires, Borrower shall promptly give to City all receipts of paid premiums and renewal notices. In the event of loss, Borrower shall give prompt notice to the insurance carrier.and City. City may make proof of loss if not made promptly by Borrower. 5. Preservation, Maintenance and Protection of the Property. Borrower shall not destroy, damage or impair the Property, allow the Property to deteriorate, or commit waste on the Property. Borrower shall be in default if any forfeiture action or proceeding, whether civil or criminal, is begun that in City's good faith judgment could result in forfeiture of the Property or otherwise materially impair the lien created by this Security Instrument or City's security interest. Borrower may cure such a default and reinstate, as provided in paragraph 10, by causing the action or proceeding, to be dismissed With a ruling that, in City's good faith determination, precludes forfeiture of the Borrower;,s interest in the Property or other material impairment of the lien.created-by this Security Instrument or City's security interest. 6; Borrowers Compliance; Protection of City's Rights in the-Property. Borrower shall comply with a Program requirements of the "HOME Investment Partnerships Act at 42 USC 12741 et. seq. of the Cranston-Gonzalez National Affordable Housing Act (24 CFR Part 92) and amendments, including but not limited to the following: Period ofaffordability. The Property shall meetthe HOME Program "affordability' requirements for a period of five/twenty years from the date of recordation of this Security ... Instrument. This provision shall terminate upon payment in full of the grant amount or upon expiration of the Period of Affordability. If Borrower fails to perform the covenants and agreements contained in this Security Instrument or the Agreement, or there is a legal proceeding that may significantly affect City's rights in the Property (such as a proceeding, in bankruptcy, probate, for condemnation or forfeiture or to enforce laws or regulations), then City may do and pay for whatever is necessary to protect the value of the Property and City's rights in the Property. 'City's actions may include paying any sums secured by a lien which has priority over this Security Instrument, appearing .in court, paying reasonable attorneys' fees and entering on the Property to make repairs. Although City may take action under this paragraph, City does not have to do so. Any amounts disbursed by City under this paragraph shall become additional debt of Borrower secured by this Security Instrument. 7. Condemnation. After satisfaction of any claim by a senior lienh01der, the proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of any part of the Property, or for conveyance in place of condemnation, are hereby assigned and shall be paid to City to the extent of the full HOME Investmen! Partnecs~p Programs December 6, 1999 (8:24AM) amount of the indebtedness that remains unpaid under the Agreement and this Security Instrument. Any excess proceeds Over an,amount required to pay all .outstanding indebtedness under the Agreement and this Security Instrument shall be paid to the entity legally entitled thereto. 8. Inspection. City or its agent may make reasonable entries upon and inspections of the Property. City shall give Borrower notice at the time of or prior to an inspection specifying reasonable cause for the inspection. 9. Grounds for Acceleration of Debt. (a) Default. City may, require immediate payment in full of all sums secured by this Security Instrument if: (i) Borrower defaults by failing, for a period of thirty days, after having been given written notice, to perform any other obligations contained in this Security Instrument. (ii) Borrower defaults by failing, for a period of thirty days, after having been given written notice, to perform any other obligations contained in the. Agreement. (b) Transfer of the Property or a Beneficial Interest in Borrower. If all or any part of the Property orany interest in it is sold or transferred (or ifa beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) to a person or entity not authorized by the Agreement, without City's prior written consent, City may, at its option, require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by City if exercise is prohibited by federal law as of the date of this Security Instrument. In the event that, via a deed of trust recorded prior to this deed of trust, title to Property is acquired by a mortgagee or the Department of Housing and Urban Development by a deed in lieu of foreclosure, and assignment of the mortgage to the Department of Housing and Urban Development, the restrictions on sale or transfer shall terminate and have no further force and effect. If City exercises this option, City shall give .Borrower notice of acceleration. The notice shall provide a period of not less than thirty (30) days from the date the notice is delivered or mailed within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior.to the expiration of this period, City may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 10. Borrower's Right to Reinstate. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earlier of- (a) 5 days (or such other period as HOME Jnvestmen! Partnership Pro.ams December 6, 1999 (8:24AM) S:~,,.m~,,~.h~r~,,~o,.,~ -- Page B-4 -- applicable law may specify for reinstatement) before sale of the Property pursuant to any'- -~' power of sale 'contained in this Security Instrument; or (b) entry of a judgment enforcing ~ this Security Instrument. Those conditions are that Borrower: (a) pays City all sums which then would be due under this Security Instrument and the Agreement as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including,, but not limited to, reasonable attorneys' fees; and (d) takes such action as City may reasonably require to assure that the lien of this Security Instrument, City's rights in the Property and Borrower's obligation to pay the sums secured by this Security Instrument shall continue unchanged. Upon reinstatement by Borrower, this Security Instrument and the obligations secured hereby shall remain fully effective as if no aCceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under paragraph .8(b). 11. Successors and Assigns Bound; Joint and Several Liability; Co- signers. The covenants and agreements of this Security Instrument shall bind and benefit the successors and assigns of City and Borrower, subject to the provisions of paragraph '9(b). Borrower's covenants and agreements shall be joint and several. Any Borrower who co-signs this Security Instrument: (a) is co-signing this Security Interest only to mortgage, grant and convey that Borrower's interest in the Property under the terms'of this Security Instrument; (b) is not personally obligated to pay the sums security by this Security Instrument; and (c) agrees that City and any Other Borrower may agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Agreement withOut that Borrower's consent. 12. Notices. Any notice to Borrower provided for in this Security Instrument shall be given by delivering it or by mailing it by first class mail unless applicable law requires use of another~method. The notice shall be directed to Borrower at: P.O. Box 900, Avila Beach, California 93424. Any notice to City shall be given by'first class mail to City's address stated herein or any other address City designates by notice to Borrower. Any notice provided for in this Security Instrument shall be deemed to have been given to Borrower or City when given as provided in this paragraph. 13. GOverning Law; Severability. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. In the event that any provision or clause of this Security Instrument or the Agreement conflicts with applicable law, such conflict shall not affect other provisions of this Security Instrument or the Agreement which can be given effect without the conflicting proviSion. To this end · the 'provisions of this Security instrument and the Agreement are declared to be severable. 14. Borrower's Copy. Borrower shall 'be given one conformed copy of the Agreement and of this Security Instrument. HOME Inveslment Partnership Programs Deceml:~er 6, 1999 (8:24AM) L s~,-~.,,~.,~,,,,o,,,o,.w~ -- Page B-5 -- 15. Hazardous Substances. Borrower shall not cause or permit the presence, use, disposal, storage, Or release of any Hazardous Substances on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property that is in violation of any Environmental Law. The preceding two sentences, shall not apply to the presence, use, or storage on the Property of small quantities of 'Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property. Borrower shall promptly give City written notice of any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge. If Borrower learns, or is notified by any governmental or regulatory authority, that any removal or other remediation of any Hazardous Substance affecting the Property is-necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. As used in this paragraph, "Hazardous Substances" are those substances defined as toxic or hazardous substances by Environmental. Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials. As used in this paragraph, "Environmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection. 16. Assignment of Rents. Subordinate to the rights of any senior lienholder, Borrower unconditionally assigns and transfers to City all the rents and revenues of the Property. Borrower authorizes City or City's agent to collect the rents and revenues and hereby directs each tenant of the Property to pay the rents to City or City's agents. However, prior to City's notice to Borrower of Borrower's breach of any covenant or agreement in the Security Instrument, Borrower shall collect and receive all rents and revenues of the PrOperty as trustee for the benefit of City and Borrower. This assignment of rents constitutes an absolute assignment and not an assignment for additional security only. If City gives notice of breach to Borrower: (a) all rents received by Borrower shall be held by Borrower as trustee for benefit of City, only to'be applied to the sums secured by this Security Instrument, (b) City shall .be entitled to collect and .receive all of the rents of the Property; and (c) each tenant of the Property shall pay. all rents due and unpaid to City or City's agent on City's .written demand to the tenant. City shall not be required to enter upon, take control of or maintain the Property before or after giving notice of breach to Borrower. However, City or a judicially appointed receiver may do so at any time there is breach. Any application of rents shall not cure or HOME Investment Partnership Programs °'~' '~(~:~"~) -- Page B-6 -- S:~gr~menl~hif~v~si~.~ waive any default or invalidate any other right Or remedy of City. This assignment of rents of the Property shall terminate when the debt secured by this Security Instrument is paid in full. ' 17. Foreclosure Procedure. If City requires immediate payment in full under paragraph 8, City may invoke the power of sale and any other remedies permitted by applicable law. City shall be entitled to collect all expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorneys' fees and costs of title evidence. If City invokes the power of sale, City shall execute or cause Trustee to execUte a written notice of the occurrence of an event of default and of City's election to cause the Property t be sold. Trustee shall cause this notice to be ~ecorded in each county in which any part of the Property is located. City or Trustee. shall mail copies of the notice as prescribed by applicable law to.Borrower and to other.persons prescribed by applicable law. Trustee shall give public notice of sale to the persons and in the manner prescribed by applicabh; law. After the time required by applicable law, Trustee, without demand on Borrower, shall .sell the prOperty at'public auction to the h',ighest bidder at the time and place and under the terms designated in the notice ofsale in one or more parcels and in any order Trustee determines. Trustee may postpone sale of all or any parcel: of the ,Property by public announcement at the time and place of any previously scheduled Sale. City or its designee may purchase the Property at any sale. Trustee shall deliver to the purchase Trustee's deed-conveying the Property without any covenant or warranty, express or implied. The recitals in the Trustee~s deed shall be prima facie evidence of the truth of the statements-made therein. Trustee-shall apply the proceeds Of the sale in the following order; (a) to all exPenses of the sale, including, but not limited to, reasonable Trustee's and attorneys' fees; (b) to all sums secured by this SecUrity Instrument; and (c) any excess to the person or persons legally entitled to it. 18. Reconveyance. Upon payment of.all sums secured by this Security Instrument, City shall request Trustee to reconvey the Property and shall surrender this Security instrument and all agreements evidencing debt secured by this Security Instrument to Trustee, Trustee shall 'reconvey the Property without warranty and without charge to the person or persons legally entitled to it. Such person or persons shall pay any recordation costs. 19. Substitute Trustee. City, at its option, may from time t:o time appoint a successor trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by City and recorded in the office of the Recorder of the county in which the Property is' located. The instrument shall contain the name of the original City, Trustee and Borrower, the book and page where this Security Instrument is recorded and HOME Investment Partnership Pregrams 0~..m.,6, ,~(6:2.~) --' Page B-7 -- S:~Agreemenl~ahififthvef sion.wlxl the name and address of the successor trustee. Without conveyance of the Property, the. successor trustee shall succeed to all the title, power and 'duties conferred upon the Trustee herein and by applicable law. This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution. · 20. Request for Notices. Borrower requests that copies of the notices of default and sale be sent to Borrower's address which is P.O. Box 900, Avila Beach, California 93424. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and recorded with it. (Borrower) NOTARY INFORMATION HOME Investment Par~ership Pro.'ams 0~,,,6. ~(6:24~) - Page B-8 - S: ~gr eement~ahif~,hvecsion.w~l EXHIBIT "C" RECORDING REQUESTED BY, AND WHEN RECORDED, RETURN TO: City of Bakersfield 1501 Truxtun Avenue Bakersfield, CA 93301 Free Recording in Accordance With Section 6103 of the California Government Code DECLARATION OF RESTRICTIONS RECITALS This Declaration of Restrictions is made and entered into on , by AFFORDABL. E HOMES, INC., a California non-profit, public-benefit corporation ("AHl" herein). This Declaration is an exhibit to that certain "HOME Investment Partnerships Program" agreement between AHI arid .the City of Bakersfield, a municipal corporation. Said agreement is "Agreement No. "in the files of City's Clerk. This Declaration of Restrictions affects that certain land (hereina~fter called "Project Property") in the City of Bakersfield, Kern 'County, California, having 'the following legal description: SEE LEGAL DESCRIPTION OF PROJECT PROPERTY ATTACHED This Declaration of Restrictions shall be, and is intended to be effective for a period of five/twenty years from the date of Project Completion as that term is defined herein ("Period of Affordability"). After the Period of Affordability has expired, the Project Property shall expire and become extinguished. NOW, THEREFORE, for value received, AH I, on behalf of itSelf and its successors HOME Investment Pa~'tne~s~ip Programs o,~,,6. ,~t,:2,~) -- Page C-1 - S:~gmef~t~aj~f~thv m s~on..~.,1:x:l . and assigns, hereby declares and adopts the following restrictions as to the Project Property, for the benefit of the Project Property, and acknowledge and assert that said restrictions touch and concern the Project Property: Section 1. 'Definitions (a) For purposes of this Declaration, the "Kern County.median income" shall be determined pursuant to the regulations published by the United States Department of Housing and Urban Development ("HUD") or its successor. (b) For purposes of this Declaration, the term "Low-Income Homebuyer" means persons or families whose annual incomes do not exceed 80 percent of the Kern County median income. (c) For the purposes of this Declaration, !'Period of Affordability" means the five or twenty-year period during which the Project Property must remain affordable to Low Income Homebuyers and during which time the Low-Income Homebuyers will occupy the Project Property as the principal residence. (d) For the purposes of this Declaration, "Principal Residence" means the address where the Low-Income Hornebuyer resides more than six (6) months of the calendar year. (e) For the purposes of this Declaration, "ProjeCt Completion" means that all necessary title transfer requirements and construction work have been performed; the project complies with the requirements of 24 CFR 92; the final drawdown has been disbursed for the project; and the project completion information has been entered in the disbursement and information system established by HUD. Section2. Project Property Shall Remain Affordable to Low-lncome Homebuyers The Project Property will be affordable to-Low-Income Homebuyers throughout the Period of Affordability. If at any time during the Period of Affordability, the Project Property fails to be affordable to Low-Income Persons, the owner of the Property Property shall repay the City of Bakersfield all HOME Program funds expended on the Project Property pursuant to Agreement No. Section 3. Occupied as Principal Residence AHI ~vill only convey the Project Property to a Low-Income Homebuyer who will occupy the Project Property as the Principal Residence. If this subsequent owner fails to occupy the Project Property as the Principal Residence, the subsequent owner will either repay the City of Bakersfield all HOME Program funds expended on the Project Property pursuant to Agreement No. , or resell the Project Property to another HOME Investment Partnership Programs o~,.~6, ~ (8:24~) -- Page C'2 - S:V&greemenl~al~ififfhversion. vcpd and assigns, hereby declares and adopts the following restriction.,; as to the Project ~.'"' Property, for the benefit of the Project Property, and acknowledge and assert that said restrictions touch and concern the Project Property: Section 1. Definitions (a) For purposes of this Declaration, the "Kern County median income" shall be determined pursuant to the regulations published by the United Sta~tes Department of Housing and Urban Development ("HUD") or its successor. (b) For.purposes of this Declaration, the term "Low-Income Homebuyer" means persons or families whose annual incomes do not exceed 80 percent of the Kern County median income. (c) For the' purposes of this Declaration, "Period of Affordability" means the five or twenty-year period during which the Project Property must remain affordable to Low Income Homebuyers and during which time the Low-Income Homebuyers will occuPy the Project Property as the principal residence. (d) For the purposes of this Declaration, "Principal Residence" means the address where the Low-Income Homebuyer resides more than six (6) months of the calendar year. (e) For the purposes of this Declaration, "Project Completion" means that all necessary title transfer requirements and construction work have been performed; the project complies with the ~ requirements of 24 CFR 92; the final drawdown has been disbursed for the. project; and the project completion information has been entered in the disbursement and information syStem established by HUD. Section 2. Project Property Shall Remain Affordable to Low-Income Homebuyers , The' Project Property will be affordable to Low-Income Homebuyers throughout the Period of Affordability. If at any time during the Period of Affordability, the Project Property fails to be affordable to Low-Income Persohs, the owner of the Property Property shall repay the City of Bakersfield all HOME Program funds expended on the Project Property pursuant to Agreement No. Section 3. Occupied as Principal Residence AHI will only convey the Project Property to a Low-Income Homebuyer who will occupy the Project .Property as the Principal Residence. If this subsequent owner fails to occupy the Project Property as the Principal Residence, the subsequent owner will either repay the City of Bakersfield all HOME Program funds expended on the Project Property pursuant to Agreement No. , or resell the Project Property to another HOME Investmenl Pmtnership Pro,rams December 6, 1999 (8:24AM) $;V~greemenl~ah~fthver$ion.wpd -- Page C-2 -- eligible Low-Income Homebuyer. Section 4. Record Keeping AHI shall obtain; complete, and maintain on file, an "income certification," dated immediately before their initial sale of the Project Property. Section 5. Independent and Severable Provisions If a court of competent jurisdiction should hold any part of this Declaration to be unenforceable or invalid, such 'holding shall not render any other part unenforceable or invalid. Each part of this Declaration is severable and independently enforceable to the fullest extent permitted by law. Section 6. Nondiscrimination. AHI and all subsequent owners shall not discriminate against or segregate.any person, or group of persons, on the basis of race, color, religion, national origin, sex, sexual orientation, AIDS, AIDS-related condition, age, marital status, disability or handicap, or Vietnam Era veteran status, in the sale, transfer, use, occupancy or enjoyment of the Project Property. AFFORDABLE HOMES, INC. By. Hal Rosen, President s:~ed~b<j~agrs~mercy.exi ATTEST HOME Investment Partners~nip Program~ o~r6. ,~ (6:2~,,,~ -- Page C-3 -- S:Wgreement~ahifif~version.wpd EXHIBIT "D" CERTIFICATION REGARDING LOBBYING The undersigned certifies, to the best of his or her knowledge and belief, that: (1) No federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. (2) If any!funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosur. e Form to Report Lobbying," in accordance with its instructions... (3) The undersigned shall require that the language of this certification be inclUded in the award documents for all sub-awards at all tiers (including subcontractors, sub-grants, and contracts under grants, loans, and cooperative agreements) and that all sub-recipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. Date Executive Director HOME Investment Parlnership Programs O~m~. ,~(8~2.~) -- Page D-1 S :~-g re~ me n t~a hif'n't hver$ion, wpd -- INSTRUCTIONS FOR C~MPLETION OF SF-LLL DISCLOSURE OF LOBBYING ACTIVITIES. This disclosure form shall be completed by the reporting entity, whether subawardee or prime Federal recipient, at the Initiation or receipt of a covered Federal action, or a material change to a previous filling, pursuant to title 31 U.S.C. seCtion 1352. The filling of a form is required for each payment or agreement to make payment to any lobbying entity for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer of employee of Congress, or an employee of a member of Congress in connection with a covered Federal action. Use the SF-LLL-A Continuation Sheet for additional information if the space on the form is adequate. Complete all items that apply for both the initial filing and material change report. Refer to the implementing guidance published by the Office of Management and Budget for additional information. 1. Identify the type of covered Federal action for which lobbying activity is and/or has secured to influence the outcome of covered Federal action. 2. Identify the status of the covered Federal action. 3. Identify the appropriate classification on this report. If this is a follow-up report caused by a matedal change to the information previously reported, enter the year and quarter in which the change occurred. Enter the date of the last previously submitted report by this reporting entity for this covered Federal aCtion. 4. Enter the full name, address, city, state and zip code of the reporting entity, Include'Congressional DistriCt, if known. Check the appropriate classification of the reporting entity that designates if it is, or expeCts to be, a pdme or subaward recipient. Identity the tier of the subawardee, e.g., the first subawardee of the pdme is the 1st their. Subawards include but are not limited to subcontraCtors, subgrants and contraCt awards under grants. 5. If the organization filling the report in item 4 checks "Subawardee," then enter the full name, address, city, state and zip code of the prime Federal recipient. Include Congressional District, if known. 6. Enter the name of the Federal agency making the award or loan commitment. Include at least one organizational level below agency name, if known. For example, Department of Transportation, United States Coast Guard. 7. Enter the Federal program name or description for the covered Federal action (item 1). If known, enter the full Catalog of Federal Domestic Assistance (CFDA) number for grants, cooperative agreements, loans, and loan commitments. 8. Enter the most appropriate Federal identifying number available for the Federal action identified in item 1 (e.g., Request for Proposal (RFP) number, invitation for Bid (IFB) number, grant announcement, number, the contract, grant, or loan award number, the application/proposal control number assigned by the Federal agency). Include prefixes, e.g., "RFP-DE-90-001." 9. For a covered Federal action where there has been an award or loan commitment by the Federal agency, enter the Federal amount to the award/loan commitment for the pdme entity identified in Item 4 or 5. 10. (a) Enter the full name, address, city, state and zip code of the lobbying entity engaged by the reporting entity identified in item 4 to influence the covered Federal aCtion. (2) Enter the full names of the individual(s) performing services, and include full address if different from 19(a). Enter Last Name, First Name, and Middle Initial (M). 11. Enter the amount of compensation paid or reasonably to be paid by the reporting entity (item ~4) to the lobbying entity (item 10). Indicate whether the payment has been made (actual) or will be made (planned).' Check all boxes that apply. If this is a material change report, enter the cumulative amount of payment made or planned to be made. 12. Check the appropriate box(es). Check all boxes that apply. If payment is made through an in-kind contribution, specify the nature and value of the in-kind payment. 13. Check the appropriate box(es)'. Check all boxes that apply. If other, specify nature. 14. Provide a specific and detailed description of the services that the lobbyist has performed, or will be expeCted to perform, and the date(s) of any services rendered. Include all preparatory and related aCtivity, not just HOME Investment Parln~'ship Programs S:~,greement~ahif~thvmsion.w~xt time spent in actual contract with Federal officials. Identify the Federal official(s) or employee(s) contacted or the officer(s), employee(s), or Member(s) or Congress that were contacted. ~' 15. Check whether or not a SF-LLL-A Continuation Sheet(s) is attached. 16. The certifying official shall sign and date the form, print his/her name, title and telephone number. jreviewing Instructions searching existing data sources, gathering and maintaining the data needed, and completing and |reviewing the collection of information. Send comments regarding the burden estimate or any other aspect o~'this collection of Jinformation, including suggestions for reducing this burden, to the Office of Management and Budget. [Pape~ork Reduction ~Project (0348-0046) Washington, D.C. 20503. HOME Investment Partnership Program,, ~:,,.~6, ~(.:=4,~) -- Page D-3 S:W. gr eement~ahif'ffthver sion,wpd '' DISCLOSURE OF LOBBYING ACTIVITIES Complete this form to disclose Lobbying activities pursuant to 31 U.S.C. 1352 1. Type of Federal Action: 2. Status of Federal Action: 3. Report Type: ~3 contract ~3 bid/offer/application ~I initial ~3 grant ~3 initial award ~3 matedal change '~ cooperative agreement ~3 post award ~l loan ~3 loan guarantee For Material Change Only: i~ loan insurance year .quarter date of last report 4. Name and Address of Reporting Entity: ri 5. ,,,epor, ng Enti,~,n No. 4 is Subawarded, ~3 Prime ~ Subawardee & tier Enter Name and Address of Prime: Congressional District Congressional District: 6. Federal DepartrnentJAgency: Il" Federa' Pr°"ram Name'Oescr'pt'°n: CFDA Number 8. Federal Action Number: 9. Award Amount: 10a. Name and Address of Lobbying Entity: 10b. Individual(s) Performing Services: (If individual, last name, first name, MI) (Includes address if different from No. 10a.) 11. Amount of Payment 13. Type of payment: (check all that apply) O retainer $ I~ actual ~3 ~ one-time fee planned ~1 commission [~ contingent fee 12. Form of Payment: ~ deferred ~ other, specify: ~ Cash nature ~3 In-kind, specify value 14. Brief Description of Services Performed or to be performed and Date(s) of Service, including officer(s), employee(s), or member(s) contacted, for Payment indicated in item '11: ;15. Continuation Sheet(s) attached: (3 Yes O No (Attach Continuation Sheet(s) if necessary) HOME Investment Partnership programs Oececnbe¢ 6. 1999 (8:24AM) S:~greement~ahififfhv.$~on.w~l -- Page D-4 -- 4. Name and Address of Reporting Entity: 5. If Reporting Entity in No. 4 is Subawarded, O Prime O Subawardee & tier Enter Name and Address of PHme: Congressional District Congressional District: ..... This disclosure is required pursuant to Title 31 United States Code Section 1352. This disclosure of lobbying activities is a material representation of fact upon 16. Signature: which reliance was placed the tier above when this transaction was made or entered into. This information will be reported to the Congress semi-annually and will Print Name: be available for public inspection. Any person who fails to file the required disclosure shall be subject to a civil penalty of not less than $10,000 and not more Title: than $100,000 for each failure. Telephone No.: Date: Federal Use Only: Form LLL Standard HOME Investment PalJ~r-J~ip Programs D~,.~6. ~(8:2,.~) -- Page D-5 -- S:~r~n~~.~ EXHIBIT "E" EQUAL OPPORTUNITY (48 CFR 52.22-26) (April 1984) (a) If, during any 12-month period (including the 12 months preceding the award of this contract), the Contractor has been or is awarded nonexempt Federal contracts and/or subcontracts that have an aggregate value in excess of $10,000, the Contractor shall comply with subparagraphs (b)(1) throUgh (11) below. Upon request, the Contractor shall provide information necessary to determine the applicability of this clause. (b) During performing this contract, the Contractor agrees as follows: 1. The Contractor shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. 2. The Contractor shall .take affirmative action t° ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin. This shall include, but not be limited to (i) employment, (ii) upgrading, (iii) demolition, (iv) transfer, (v) recruitment or recruitment advertising, (vi) layoff compensation, and (viii) selection for training, including apprenticeship. 3. The Contractor shall post in conspicuous places available to employees and applicants for employment the notices to be provided by the Contracting Officer that explain this clause. 4. The Contractor shall, in all solicitations or advertisement for employees placed by or on behalf of the Contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or natiOnal origin. 5. The Contractor shall send, to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, the notice to be provided by the Contracting Officer advising the labor union or workers' representative of.the Contractor's commitments under this clause, and post copies of .the notice in conspicuous places available to employees and applicants for employment. 6. The Contractor shall comply with Executive Order 11246, as amended, and the rules, regulations, and orders of the Secretary of Labor. 7. The Contractor shall furnish to the contracting agency all information required by Executive Order 11246, as amended, and by the rules, regulations, and HOME Investmenl Partnership Programs o~,,~b. 6. ,~(6:2.~,,) -- Page E-1 -- S:~gr eemen l~3hif~hv er sion.w!c~d T orders of the Secretary of Labor. Standard Form 100 (EEO-l), or any successor form, is the Prescribed form to be filed within 30 days following the award,, unless.filed within 12 months preceding the date of award. 8. The Contractor shall permit access to its books., records, and accounts by the contracting agency of the Office of Federal Contract Compliance Programs (OFCCP) for the purposed of investigation to ascertain the Contractor's compliance with the applicable rules regulations, and orders. " 9. If the OFCCP determines that the Contractor is, not in compliance with this clause or any rule, regulation, or order of the Secretary of i_abor, this contract may be canceled, terminated, or suspended in whole or in part and the Contractor may be declared ineligible for further Government contracts, Under the prOcedures authorized in Executive Order 11246, as amended. In addition, sanctions may be imposed and remedies invoked against the Contractor as provided in Executive Order 11246, as amended, the rules, regulations, and orders of the Secretary of Labor, or as otherwise provided by law. 10. The Contractor 'shall include the terms and conditions of subparagraph (b)(1) through (11) of this clause in every subcontract, or purchase order that is not exempted by the rules, regulations, or orders of the Secretary of Labor issued under Executive order 11246, as amended, so that these items and conditions will be binding upon each subcontractor or vendor. 11. The Contractor shall take such action with respect to any subcontraCt or purchase order as the contracting agency may direct as a means of enforcing these terms and conditions, including sanctions for noncornpliance; provided, that if the Contractor becomes involVed in, or is threatened with, litigation with a subcontractor or vendor as a result of any direction, the Contractor may request the United States to enter into the litigation to protect the interests of the: United States. HOME Investment Partn~s~ip Programs EXHIBIT "F" NONDISCRIMINATION IN FEDERALLY ASSISTED PROGRAMS OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (24 CFR, Subtitle A, Part 1, Section 1.5 Assurances Required) 1.5 Assurances Required (a) General (1) Every contract for Federal financial assistance to carry out a program or activity to which this Part 1 applies, executed on or after January 3, 1965, and every application for such Federal financial assistance submitted on or after January 3, 1965, shall, as a condition to its approval 'and the extension of an Federal financial assistance pursuant to such contract or application, contain or be conducted and the housing, accommodations, facilities, services, financial aid, or other benefits to be provided will be operated and administered in compliance with all requirements imposed .by or pursuant to this Part 1. In the case of a contract or application where the Federal financial assistance is to provide or is in the form of personal property or real property or interest therein structures thereon, the assurance shall obligate the recipient or, in the case of a subsequent transfer, the transferee, for the period during which the property is used for a purpose.for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits, or for as long as the recipient retains ownership or possession of the property, whichever is longer. In all other cases the assurance shall obligate the recipient for the period during which .Federal financial assistance is extended pursuant to the contract or application. The responsible Department official shall specify the form of the foregoing assurance for such program or activity, and the extent to which like assuranCes will be required of subgrantees, contractors and subcontractors, transferees, successors in Interest, and other participants of the program or activity. Any such assurance shall include provisions which give the United States a right to seek its judicial enforcement. (2) In the case of real property, structures or improvements thereon, or interests therein, acquired through a program of Federal financial assistance the instrument effecting any disposition by the recipient of such real prOperty, structures or improvements thereon, or interests therein, shall contain a covenant running with the land assuring nondiscrimination for the period during which the real property is used for a purpose for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. In the case where Federal financial assistance is provided in the form of a transfer of real property or interests therein from the Federal Government, the instrument effecting or recording the transfer shall contain' such a covenant. (3) In program receiving Federal financial assistance in the form, or for the acquisition, of real property or an interest in real property, to the extent that rights to space on, over, or under any such property are included as part of the program receiving HOME Investmen! Partnership Programs o~,,~,, 6. ,~ (8~2,,.,,) -- Page F-.1 -- S:'~eement~ahif~Jlv er sio~. w1:x~ such assistance, the nondiscrimination requirements of this Part 1 :shall extend to any facility located wholly or in part in such space. (b) Pre-existing contracts - funds not disbursed. In any case where a contract for Federal financial assistance, to carry out a program or activity to which this Part 1 applies, has been executed prior to January 3, 1965, and the funds have not been fully disbursed by the Department, the responsible Department official shall, where necessary to effectuate the purposes of this Part 1, require an assurance similar to that provided in paragraph (a) of this section as a condition to the disbursement of furthE;r funds. (c) Pre-existing contract - periodic payments. In any case where a contract for Federal financial assistance, to carry out a program or activity to which this. Part 1 applies, has been executed prior to'January 3, 1965, and Provides for periodic payments for the continuation of the program or activity, the recipient shall, in connection with the first application for such periodic payments on or after January 3, 1965: (~) Submit a statement that the program or activity, is being conducted in compliance with all requirements imposed by or pursuant to this Par[ 1; and (2) The assurance required with respect to an institution of higher education, hospital, or any other institution, insofar as the assurance relates to the institution's practices with respect to admission or other treatment of persons as students, patients, or clients of the institution or to the opportunity to participate, in the provision of services or other benefits to such persons, shall be applicable to the entire institution unless the applicant establishes, to the satisfaction of the responsible I')epartment official, that the institution's practices in designated parts or programs of the institution will in no way affect .its practices tin the program of the institution for which Federal financial ~" assistance is sought, or the beneficiaries of or participants in such program. If in any such case the assistance sought is for the construction-of a facility or part of a facility, the assurance shall in any event extend to the entire facility and to'facilities operated in connection therewith. (e) Elementary and secondary schools. The requirements of this section with respect to any elementary or secondary school or school system shall-be deemed to be satisfied or such school or school system (1) is subject to a final order of a court of the United States for the desegregation of such school or school system, and provides an assurance that it will comPly with such order, including .any future modification of such order, or (2) submits a plan for the desegregation of such school or school system which the responsible official of the Department of Health and Human-Services determines is adequate to accomplish the purposes of the Act and this Part 1 within the earliest practicable time, and provides reas°nable assurance that it will carry out such plan. HOME Investmen! Partnership Programs S:~Agreement~,ahif'dthver $ion.wixi -- EXHIBIT "G" HOME Inve$1meflt Partnership Programs ~=~r~,6, ~(,:2,~) -- Page G-1 - S:~,,gr eement~ahiffi~we~'~x~.wl~d · EXHIBIT "H" SECTION 3 TRAINING EMPLOYMENT AND BUSINESS OPPORTUNITY " A. The work to be performed under this contract is on a project assisted under a program providing direct Federal financial assistance from the Department of Housing and Urban Development and is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u. Section 3 requires that to the greatest extent feasible opportunities for training and employment be given to lower income persons residing within the unit of local government or the metropolitan area (or non-metropolitan County), as determined .by the Secretary of l.abor, in which the project is located and contracts for work in connection with the project be awarded to business concerns residing in the same metropolitan area (or non-metropolitan County) as the project. B. The parties to this contract will comply with the provisions of said Section 3 and the :regulations issued pursuant thereto by the Secretary of Housing and Urban Development set forth in 24 CFR 135, and all applicable rules and orders of the Department issued thereunder ·prior to the execution of this contract. The parties to this contract certify and agree that they are under no contractual or other disability which would prevent them from complying with these requirements. C. The contractor will send to each labor organization or representative of workers with whiCh he has a collective bargaining agreement or other contract or understanding, if any, a notice advising the said labor organiz~ation or workers' representative of his commitments under this Section 3 clause and slhall post copies of the notice in .conspicuous places available to employees and applicants for employment or training. D. The contractor will include this Section 3 clause in every subcontract fOr work-in connection with the project and will, at the direction of the applicant for Or recipient of Federal Financial assistance, take appropriate action pursuant to the subcontract upon a finding that the subcontractor is in violation of regulations issued by the Secretary of Housing and Urban Development, 24 CFR 135. The contractor will not subcontract with any subcontractor where it has notice or knowledge that the latter has been found in violation of regulations under 24 CFR 135 and will not let any subcontract unless the subcontractor has first provided it with a preliminary statement of ability, to comply with the requirements of these regulations. · E. Compliance with the provisions of Section 3, the regulations set fOrth in 24 CFR 135, and all applicable rules and orders of the .Department issued thereunder prior to the execution of the contract, shall be a condition of the federal financial assistance provided to the project, binding upon the applicant or recipient for such assistance, its successors, and assigns. Failure to fulfill these requirements shall subject the applicant or recipient, its contractors and subcontractors, it successors, and assigns to those sanctions specified by the grant or loan agreement or contract through which Federal HOME Investmenl Partnership Programs o.~.~,~. ~<~:~.~) -- Page H-1 -- S:t.~greernenflahififthver sion. w13d assistance is provided, and to such sanctions as are specified by 24 CFR 135. HOME Investment PaC, ner~i¢ I~. De~m~3er6, 1999(8:24AM) --Page H-2-- S:Wgr eeme~ah~rc~e~.~d EXHIBIT "1" UTILIZATION OF WOMEN AND MINORITY BUSINESS ENTERPRISES (a) It is the policy of the Government that women and minority' owned business enterprises shall have the maximum practicable opportunity to participate in the performance of Government contracts. (b) The Contractor agrees to use his/her best efforts to carry out this policy in the aWard of. subcontracts to the fullest extent consistent with the efficient performance of this contract. As used in this contract, the term "minority business enterprise" means a business, at least 50 percent of which is owned by minority group members-or, in case of publicly owned businesses, at least 5t percent of the stock of whiclh is owned by women or minority group members. For the purposes of this definition, minority group members are Negroes, Spanish-speaking American persons, American-Oriental, American Indians, American-Eskimos, and American Aleuts. Contracto~rs may rely on written representations by subcontractors regarding their status as minority business enterprises in lieu of an independent investigation. HOME Investment Partnership Programs December 6, .1999 (8:24AM) --P'age I-1 -- S:~Agr eeme~ehif'~we~sio~.wpd EXHIBIT "J" AFFIRMATIVE ACTION. FOR SPECIAL DISABLED AND THE VIETNAM ERA VETERANS PROVISIONS (48 CFR 52.222-35) (October 1985) (A) Definitions. "Appropriate office of the State employment service system," as used in this clause, means the lOcal office of the Federal-State national system of public employment offices assigned to serve the area where the employment opening is to be filled, including the District of Columbia, Guam, Puerto Rico, Virgin Islands, American Samoa, and the Trust Territory of the Pacific Islands. Opening that the contractor proposed to fill from within its own organization," as used in this clause, means employment openings for which no one outside of the Contractor's organization (including any affiliates, subsidiaries, and the parent companies) will be considered and includes any openings that the Contractor proposed to fill from regularly established "recall" lists. "Openings that the Contractor proposes to fill under a customary and traditional employer-union hiring arrangement," as used in this clause, means employment openings that the Contractor proposes to fill from union halls, under their customary and traditional employer-union hiring relationship. "Suitable employment openings," as used in this clause - (1) includes, but is not limited to, openings that occur in jobs 'categorized:' (i) Production and nonproduction; (ii) Plant and office; (iii) Laborers and mechanics; .- (iv) Supervisory and nonsupervisory; (v) Technical; and (vi) Executive, administrative and professional positions compensation on a salary basis of less than $25,000 a year; and (2) Includes full-time employment, temporary employment, but not openings that the Contractor proposes to fill from within its own organization or under a customary and traditional employer-union hiring arrangement, nor openings in an educational institution that re restricted to students of-that institution. The Contractor agrees as follows: (b) General HOME Invesb, ne~t Pm'tnership Programs o.~m.,6, ,~(.:2.,~) - Page J-1 -- S :~Ag r eement~at3if~d3ver sion.wpd The Contractor shall not discriminate against any employee or applicant for employment because the individual is a special disabled or Vietnam Era veteran. The Contractor agrees to take affirmative action to employee, advance in employment, and~ otherwise treat qualified 'special disabled veterans and Vietnam Era veterans without discrimination based upon their disability or veterans status in all employrnent practices such as: (i) Employment; (ii) Upgrading; (iii) Demotion or transfer; (iv) Recruitment; (v) Advertising; (vi) Layoff or termination; (vii) Rates of pay or other forms of compensation; and (viii)Selection for training, including apprenticeship. (2) The Contractor agrees-to comply with the rules, regulations, and relevant orders of the Secretary of Labor (Secretary) issued under' the Vietnam Era Veterans' Readjustment Assistance Act of 1972 (the Act), as amended. (c) Listing Openings. (1) The Contractor agrees to list all suitable employment openings existing at contract award or occurring during contract performance, at an appropriate office of the State employment service system in the locality where the opening occurs, these openings include those occurring at any Contractor facility, including one not connected with performing this contract. An independent corporate affiliate is exempt from this requirement. (2) State and local government agencies holding Federal contract of $10.000 or more have also list all their suitable openings with the appropriate office of the State employment service. .. (3) The listing of suitable employment openings with the State employment service system is required at least concurrently with using any other recruitment source or effort and involves the obligations or placing a bona fide job order, including accepting referrals of veterans and nonveterans, this listing does not require hiring any particular job applicant or'hiring from any particular group of job .applicants and~ is not intended to relieve the Contractor from any requirements of Executive orders of regulations concerning nondiscrimination to employment. (4) Whenever the Contractor becomes contractually bond to the listing terms of this clause, it shall advise the State employment service system, in -each State where it has establishments, of the name and location of each hiring location in the State. As long as the Contractor is contractually bound to these terms and has so advised the State system, it need not advise the State system of subsequent contracts. The HOME Investment Pm'~n~'~hip Programs D~m~.,6. ,~(6:~.~,) -- Page J-2 - S :~Agr eemenl~ahif~d~ve~i~ .wlxl Contractor may advise the State system when it is no longer bound by this contract clause. · (5) Under the most compelling circumstances, an employment opening may not be suitable for listing, including situations when (i) the Government's need cannot reasonably be supplied, (ii) listing would be contrary to national security, or (iii) the requirement of listing would not be in the Government's interest. (d) Applicability. (1) This clause.does not apply to the listing of employment openings which occur and are filled outside the 50 states, the District of Columbia, Puerto Rico, Guam, Virgin Islands, American Samoa, and the Trust Territory of the Pacific Islands. (2) The terms of paragraph (c) above of this clause do not apply to openings that the Contractor proposes to fill from within its own organization or under a customary and traditional employer-union hiring arrangement. This exclusion does not apply to a particular opening once an employer decides to consider applicants outside of its own organization or employer-union arrangement for that opening. (e) Positions (1) The Contractor agrees to post employment notices stating (i) the contractor's obligation under the law to take affirmative action to employ and advance in employment qualified special disabled veterans and veterans of the Vietnam Era, and (ii) the rights of applicants and employees. (2) These notices shall be posted in conspicuous places tat are available to employees and applicants for employment. They shall be in a form prescribed by the Director, Office of Federal Contract Compliance Program, Department of Labor (Director), and provided by or through the Contracting Officer. (3) The Contractor shall notify each labor union or representative or workers with which it has a collective bargaining agreement or other contract understanding, that the Contractor is bound by the -terms of the Act, and is committed to take affirmative action to employ, and advance in employment, qualified special disabled and Vietnam Era veterans. (f) Noncompliance. If the Contractor does not comply with the requirements of this clause, appropriate actions may be taken under the rules, regulations, and relevant orders of the Secretary issued pursuant to the Act. (g) Subcontracts. The Contractor shall include the terms of this clause in every subcontract HOME Investment Partnership Programs o.~.~,,6. ,~(6:24,,,) -- Page J-3 S:~reemenl~hififthve~si .on.wpd -' or purchase order of $10,000 or more unless exempted by rules,, re~lulations; or orders of the Secretary. The Contractor shall act as specified by the Director to enforce the terms, including action for noncompliance. HOME Investment Partnership Prograr~ o~..~6, ~(6~2~,~) -- Page J-4 -