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8.4 Agr CDBG Grant CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 3/15/99 4:00 P.M. AGENDA SECTION: ORIGINATING DEPARTMENT: APPROVED FOR NO. 8 AGENDA: PLANNING & DEVELOPMENT ITEM ROY DUDARK NO. 4 BY: ~ BY: '~'~ Item Consider resolutions approving a CDBG Economic Development Grant Agreement with the Kansas Department of Commerce and Housing and an associated Loan Agreement with A-Plus Galvanizing, Inc. Backeround On November 2, 1998, the City Commission authorized the filing of a CDBG Economic Development grant application to the Kansas Department of Commerce and Housing on behalf of A-Plus Galvanizing, Inc. On December 11, 1998 the grant was awarded. It consists of an outright grant of $250,000 and a loan of $250,000. The funds are awarded to the City and then granted/loaned to A-Plus Galvanizing. The funds must be used for infrastructure improvements to serve the new galvanizing plant. Grant Aereement The Grant Agreement is between the Kansas Department of Commerce and Housing and the City of Salina. Under the terms of the agreement, the City is agreeing to accept the following responsibilities: 1. Provide A-Plus Galvanizing a $250,000 grant and a $250,000, 10 year, 2% loan. 2. Collect the principal and interest on the loan and repay the amount to the State. 3. Create, through the efforts of A-Plus Galvanizing, at least 72 full-time permanent jobs, 51% or more of which shall be held by persons of low-and-moderate income. 4. Use the funds in accordance with the approved project application and budget. 5. Provide $9,000,000 in matching funds through sources provided by A-Plus Galvanizing. 6. Perform the activities within an 18 month period or by June 15, 2000. 7. Establish and maintain an effective system that assures control over all funds. 8. Monitor program activities and submit regular progress and financial reports. 9. Arrange for an annual financial/compliance audit of the grant project. ! 0. Retain all pertinent records for 3 years followin~ ~rant close-out. CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 3/15/99 4:00 P.M. AGENDA SECTION: ORIGINATING DEPARTMENT: APPROVED FOR NO. AGENDA: PLANNING & DEVELOPMENT ITEM ROY DUDARK NO. Page 2 BY: BY: It should be stated that nothing in the Grant Agreement imposes any direct obligation upon the City to be the guarantor of A-Plus Galvanizing's achievement of the project or obligates the City to refund the grant funds in the event of their default. However, the City will be expected to foreclose on any security and use its best efforts to collect any unpaid balance on the loan. Loan Aereement The Loan Agreement is between the City of Salina and A-Plus Galvanizing, Inc. Under the agreement, A-Plus Galvanizing is agreeing to accept the following responsibilities: 1. Repay the principal and interest due on the loan in a timely manner. 2. Secure repayment of the loan by suitable collateral. 3. Complete the project as described in the approved application and the grant agreement. 4. Hire 72 full-time permanent positions of whom 51% or more shall be low-and-moderate income. 5. Inject the necessary capital designated in the grant application. 6. Operate its facilities in compliance with applicable laws, ordinances and regulations. 7. Provide financial records and other reports pertaining to the project. 8. Comply with all other terms and conditions as set out in the loan agreement. An especially important requirement is job creation. If less than 51% of the new jobs are lot LMI then the entire $500,000 must be repaid because a National Objective would not have been achieved. If less than 72 jobs are created but they are 51% LMI then only a prorata amount of the $500,000 must be repaid. Once the project is complete and the plant is operational, then only the loan must be repaid. City Commission Action The Grant Agreement and the Loan Agreement are attached. If the City Commission wishes to enter into these agreements, the attached resolutions should be approved. Attachments: Resolution No. 99 - 5429 Grant Agreement Resolution No. 99 - 5430 Loan Agreement cc: Paul Mai STATE OF KANSAS ECONOMIC DEVELOPMENT GRANT AGREEMENT NO.98-IN-009 between the STATE OF KANSAS DEPARTMENT OF COMMERCE & HOUSING and the City of Salina I. Grant Agreement A. This Grant Agreement, hereinafter called "Agreement," is between the State of Kansas, Department of Commerce & Housing, hereinafter called "Department" and the City of Salina, Kansas, hereinafter called the "Grantee." This Agreement consists of the instrument and the following attachments which are incorporated herein: Attachment A SPECIAL CONDITIONS Attachment B ANTIDISPLACEMENT RESOLUTION Attachment C APPROVED PROJECT APPLICATION Attachment D - CONTRACT PROJECT BUDGET FORM Attachment E ATTORNEYS OPINION Attachment F - REPAYMENT SCHEDULE B. Together these documents embody the entire Agreement between the Department and Grantee with respect to this grant program. All prior agreements, representations, statements, negotiations, and understandings, either written or oral, with respect to this program are hereby superseded. II. Authority A. This Agreement is financed in part through a grant provided to the Department by the United States Department of Housing and Urban Development (HUD) under Title I of the Federal Housing and Community Development Act of 1974, as amended (42 USC 5301 et. seq.), hereinafter called "the Federal Act." As provided in the Federal Act, the State of Kansas, through the Department, has elected to administer the federal program of Small Cities Community Development Block Grants. B. The Department, in accordance with the provisions of K.S.A. 74-5001 et. seq., hereinafter called "the State Act," has approved the application of the Grantee and awarded funds for the purpose of supporting the Grantee's Community Development Program. C. In the event of changes in any applicable Federal regulations and/or law, this Agreement shall be deemed to be amended when required to comply with any regulation or law as amended. III. Description of Activities Grantee agrees to perform, or cause to be performed, the work specified in the APPROVED PROJECT APPLICATION (Attachment C). EDA 11/98 I The Loan and the Rate Subject to the terms and the conditions of this Agreement and the written approval of the Department, the Grantee hereby agrees to lend to A Plus Galvanizing Inc. hereinafter called the "Borrower" the amount of $ 250~000 hereinafter called the '*Loan, "at an interest rate of two percent (2%). The Term and the Repayment The term of the loan shall be te.__~n ( 10 ) years and zer..o. ( 0_ ) months. This term includes an eiehteen ( 18 ) month period during which principal repayment will be deferred, followed by an one hundred and two (!02) month period during which amortizing principal and interest will be paid in equal monthly installments. Interest will accrue and be paid monthly during the principal deferral period on any outstanding balance of funds drawn down. The £~rst monthly installment of principal and interest shall be due and payable on or before the 1st day of the nineteenth ( 19th ) month following execution of this Grant Agreement. Indicate the selection of either option (a) or (b). ( b ) (a) Proceeds from the payment of principal and interest on the loan made pursuant to this Agreement and the interest on such proceeds will be committed to a Local Revolving Loan account and will be used in a manner described in a Re-Use Plan and a Local Revolving Loan Fund Capacity Agreement, both approved by the Deparmient. Proceeds from the loan must be kept in a separate account for this specific grant. The determination of local reuse is made at close-out. (b) Proceeds from the payment of principal and interest on the loan made pursuant to this Agreement will be returned to the State. Job Creation and Retention The Grantee hereby commits and agrees to retain at least zero ( 0 ) full-time permanent positions and create at least seventy-two ( 72 ) full-time permanent positions, in addition to the base employment of zero (0) of the Borrower. Fifty-one percent (51%) or more of the aggregate number of jobs actually created and retained will be held by those whose household income was less than the Section 8 income levels issued prior to grant award date for Saline County, Kansas. For individuals filling created jobs, their household income will not include the wages or salary of the created jobs. The Grantee will require the Borrower to obtain an Employee Certificate Form from each new employee and/or each retained employee. The full-time permanent positions must be in place at the verification date. The verification date may be no more than 90 days before the close-out is received and certified as complete by the Department. Grantee Remedied Actions (a) In the event that jobs created or retained fall short of the number committed, repayment of the grant shall be equal to the proportion of jobs not created or retained to the total number committed. (b) In the event that fifty-one percent of the employees are not Low-Moderate-Income, the principal and accrued interest shall become due and payable immediately. (c) In the event that Borrower defaults during the term of the loan, then the Grantee must return to the State all recaptured principal, accrued interest and all funds captured through legal recourse against its secured position. (d) Failure of the Grantee or loan recipient to perform pursuant to (a), (b), or (c),the Grantee shall cause the deficiency to be corrected within 30 days. Grantee, at the direction of the Department, agrees to accelerate payment of Borrower's note, foreclose on any security provided and use its best efforts to collect any unpaid balance of the note, and to remit to the Department all funds so recovered after payment of reasonable recovery and collection costs and expenses. EDA 11/98 2 Nothing contained herein shall be construed as intending to impose any direct obligation to and upon Grantee, as a guarantor of Borrower's achievement of the project unless the Grantee has opted to do so in writing. Unless the Grantee has committed itself in writing, the taxing power of Grantee is not pledged to the refund of grants funds in the event of Borrower's default and the obligations of Grantee hereunder shall not be or constitute a general obligation of Grantee, nor shall it constitute an indebtedness of the Grantee within the meeting of any constitutional, statutory or charter provision, limitation or restriction. Change of Ownership The Grantee shall not permit, without the prior written permission of the Department, any material change in the ownership, structure, control, or operation of the Borrower including but not limited to i) merger into or consolidation with any other person, partnership, fn'm, or corporation; ii) significant issuance of any shares of its capital stock having ordinary voting power for the election of members of the Board of Directors or other governing body of the Borrower; iii) or any activity which would change the nature of its business as carded out at the date hereof; iv) substantial distribution, liquidation or other disposal of the Borrower's assets to the stockholders. In the event of a material change in the ownership, structure, control, or operation of the loan recipient, with or without knowledge of the Grantee, the Department reserves the right to renegotiate this Agreement or make the entire unpaid principal of the Note, and the interest then accrued thereon, immediately due and payable upon written demand by the Department. Upon receipt of notice as referenced under the Termination-for-Cause provision, the Grantee has 30 days in which to correct the deficiencies. IV. Period of Performance The period of performance for all activities provided for by this Agreement shall commence on ~amm~ 15, 1998, hereinafter called the "Commencement Date," and shall be complete on June 15, 2000, hereinafter called the "Completion Date," except those activities required for close-out of the program such as the Final Program Report and the Final Audit Report. V. Compensation A. In consideration of the Grantee's performance of the work required under this Agreement and the Grantee's compliance with the terms and conditions of this Agreement, the Department shall provide the Grantee the total sum of $ 500,000 in Community Development Block Grant funds in addition to $ _0 in local Grantee Program Income. Such funds shall be used by the Grantee in accordance with the Activities listed and budgeted on the APPROVED PROJECT APPLICATION (Attachment C) and the CONTRACT PROJECT BUDGET FORM (Attachment D). B. In addition, the Grantee shall provide $ 0_ and A Plus Galvanizing Inc. shall provide $ 9 million in other sources of funds to this Economic Development project and such funds shall be used by the Grantee in accordance with the Activities and budget on the APPROVED PROJECT APPLICATION (Attachment C). C. It is expressly understood and agreed that in no event will the total program funds provided by the Department exceed the sum of $ 500,000. Any additional funds required to complete the program activities set forth in this Agreement will be the sole responsibility of the Grantee, and not the responsibility of the Department. D. The Grantee understands that this Agreement is funded in whole or in part by federal funds. In the unlikely event the federal funds supporting this Agreement become unavailable or are reduced, the Department may terminate or amend this Agreement and will not be obligated to pay the Grantee from State revenues. E. It is hereby agreed that funds committed to be provided by the Department are conditioned upon the availability and use of funds to be provided by the Grantee from other sources. In the event any portion of the funds required to be provided by the Grantee pursuant to subsection (B) of paragraph V are not made available or used for activities as listed and budgeted, the Department may, in its discretion, withdraw or reduce proportionately the funds to be provided to the Grantee pursuant to subsection (A) of paragraph V. It is understood that program income from any grant received from Department either presently open or closed shall be used in lieu of drawing-additional CDBG funds. F. The Grantee shall not anticipate future funding from the Department beyond the duration of this Agreement and in no event shall this Agreement be construed as a commitment by the Department to expend funds beyond the termination of this Agreement. EDA 11/98 3 VI. Indemnification The Grantee shall indemnify, defend, and hold harmless the State and its officers and employees from any liabilities, claims, suits, judgments, and damages arising as a result of the performance of the obligations under this Agreement by the Grantee or any subgrantee, contractor, subcontractor, or person. The liability of the Grantee under this Agreemem shall continue after the termination of the Agreemem with respect to any liabilities, claims, suits, judgments, and damages resulting from acts occurring prior to termination of this Agreement. VI. Obligations of Grantee A. Except as may otherwise be provided, the Grantee may subgrant, contract, or subcontract any of the work or services covered by this Agreement. B. All of the activities required by this Agreement shall be performed by personnel of the Grantee or by third parties (subgrantees, contractors, or subcontractors) under the direct supervision of the Grantee and in accordance with the terms of written contracts. All contracts are subject to review by the Department. For construction contracts Davis-Bacon requirements must be met. For Acquisition all requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 as amended, (Uniform Act) must be met. -- C. The Grantee shall not use funds that have been granted by HUD under the Federal Act, or which may have been accrued as a consequence of activities supported with such grant funds (program income), in whole or in part for the support of the Activities covered by this Grant Agreement without first having secured the express written approval of the Department. D. The Grantee shall remain fully obligated and liable under the provisions of this Agreement, notwithstanding its designation of any third party or parties for the undertaking of all or any of the program being assisted under this gram. E. The Grantee shall require any third party to comply with all lawful requirements necessary to insure that the program is carried out in accordance with this Agreemem. VIII. Program Costs A. The Grantee may only incur such costs as are reasonable and necessary to the Grantee's Program and as are allowable under the Department's Procedures (OMB Circular A-87). Cost items not specifically authorized may only be incurred after written approval by the Department. B. Cash and in-kind contributions made by the Grantee shall follow the criteria established by the Departments Procedures. C. The total "Small Cities CDBG Funds" expended for "Administration" shown in the APPROVED PROJECT APPLICATION (Attachment C) shall not exceed the lesser of the established maximum cost or ten (10) percent of the total funds received from the Department. D. Except as provided in subsection (E) of paragraph VIII., the Grantee shall not incur costs on any program activity until the Environmental Review required by 24 CFR 58 has been completed and the Department has issued the "Notice of Release of Funds." E. The Notification of Award for the grant under this Agreement is dated December 11, 1998 at which date the Grantee may begin to incur reasonable costs for Environmental Studies, Planning, Administrative Costs, Program Engineering and Design, and Public Information; to the extent they are applicable to the program and after project commencement date. However, except as may be otherwise agreed to in writing by the Department, Grantee reimbursement will not exceed ten (10) percent of the total grant amount for costs incurred or monies spent prior to the successful resolution of all issues arising from the environmental-related local and State public comment periods. EDA 11/98 4 F. Any program activities performed by the Grantee in the period between notification of award and execution of this Agreement shall be performed at the sole risk of the Grantee. In the event this agreement should not become effective, the Department shall be under no obligation to pay the Grantee for any costs incurred or monies spent in connection with program activities, or to otherwise pay for any activities performed during such period. However, upon execution of this Agreement, all Program Costs incurred in connection with approved activities performed during this period shall be reimbursed in accordance with the terms and conditions of this Agreement. G. Grant funds may not, without prior written approval by the Department, be obligated after the Completion Date except for those activities required for close-out. Obligations incurred prior to and still outstanding as of the Completion Date shall be liquidated within sixty (60) days. H. At any time during the period of performance under this Agreement, and upon receipt of the progress and financial reports and the close-out documents, the Department may review all Program Costs incurred by the Grantee and all payments made to date. Upon such review the Department shall disallow any items of expense which are determined to not be allowable or are determined to be in excess of approved expenditures; shall by written notice specifying the disallowed expenditures and inform the Grantee of any such disallowance. I. If the Department disallows costs for which payment has not yet been made, it shall refuse to pay such costs. If payment has been made with respect to costs which are subsequently disallowed, the Department may deduct the amount of disallowed costs from any future payments under this Agreement or require that the Grantee refund the amount of the disallowed costs. IX. Requisition of Grant Funds A. The Grantee shall be entitled to receive requisitioned funds from the Department only in accordance with its actual and immediate cash requirements and only when the total of federal funds remaining on hand in the depository account does not exceed $5,000 and is insufficient to meet immediate disbursement needs. B. A Request for Funds submitted by the Grantee shall include as part of the request a summary listing of invoice numbers and dates, payroll references, check numbers/dates/amounts, and other such information to substantiate use of Federal funds and Local funds by Source. C. Requisitions for cash advances shall be made on official forms and shall not ordinarily be made more frequently than twice a month or in amounts less than $3,000, and in no cases more than $200,000 unless prior written permission has been obtained from the Department. D. The Grantee shall establish procedures to insure that any amounts of cash in excess of the limits set forth in (A) above shall be expended within three (3) days of receipt of the funds in the depository account. E. Cash advances made by the Grantee to subgrantees shall conform to the same standards of timing and of amount as apply to the Grantee under this Agreement. F. Amounts withheld from contractor to assure satisfactory completion of work shall not be paid until the Grantee has received a final payment request from the contractor and has certified the work is complete and satisfactory. G. The Department may terminate advance £mancing and require the Grantee to finance its operations with its own working capital should it be determined by the Department that the Grantee is unwilling or unable to establish procedures to minimize the time lapsing between cash advances and disbursement. Payments to the Grantee should be made only as reimbursement for actual cash disbursements. EDA 11/98 5 X. Depositories for Program Funds A. The Grantee shall maintain a separate record for money received under the Kansas Economic Development Program. Into this fund shall be deposited: 1. Moneys received from the Department. 2. Program income earned through program activities. B. Any interest earned, prior to disbursement, on advances of grant funds shall be remitted to the State for subsequent return to the United States Treasury. XI. Financial Management A. Grantees shall establish and maintain a system which assures effective control over and accountability for all funds, property and other assets used in the Economic Development Program. B. Grantees shall either adopt the system recommended by the Department or certify to the Department, in writing, prior to making the first requisition of funds that the alternative system proposed for use shall meet the following standards: I. Maintenance of separate accounting records and source documentation for the Economic Development Program; 2. Provision for accurate, current and complete disclosure of the financial status of the Program; 3. Establishment of records of budgets and expenditures for each approved activity; 4. Demonstration of the sequence and status of receipts, obligations, disbursements and fund balance; 5. Provision of financial status reports in the form specified by the Department; 6. Compliance with the Department's audit requirements (ONM Circular A-133); and 7. Consistency with generally accepted accounting principles as specified by the Kamas Department of Administration. XII. Monitoring and Reporting A. The Grantee shall monitor the activities of the Economic Development Program, including those of contractors and subcontractors, to assure that all program requirements are being met. B. The Grantee shall submit progress and financial reports to the Depmtment in accordance with the schedule set forth in SPECIAL CONDITIONS (Attachment A). These reports shall be in a format prescribed by the Department. C. The Grantee shall submit a Final Program Report with the close-out no later than ninety (90) days following the Completion Date specified in paragraph IV. D. From time to time, as requested in writing by the Department, the Grantee shall submit such data and other information as the Department may require. E. Failure on the part of a Grantee, its subgrantee, or the loan recipient to report as required or respond to requests for data or information shall be grounds for suspension or termination of the Grant. EDA 11/98 6 XIII. Procurement Procedures A. The Grantee shall use established procurement procedures which reflect applicable State and local laws and regulations and the Department's Procedures for the establishment of procurement systems. B. These procurement standards do not relieve the Grantee of any contractual responsibilities under its contracts. The Grantee is responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements entered into in support of a grant. These include, but are not limited to, source evaluation, protests, disputes, and claims. XIV. Bonding and Insurance A. When administering federal grants and subgrants, a Grantee may follow its own requirements and practices with respect to: (1) bonding of employees and contractors, and (2) insurance. Federal grantor agencies are not permitted to impose requirements beyond those listed below. The government-wide grants management common rule, "Uniform Administrative Requirements for Grants to State and Local Governments," contains bonding requirements only for circumstances when a grantee contracts for construction or facility improvement (including alteration and renovation) and the bids and contracts exceed $10,000. The following types of bonds are required in the "Procurement" section of the common rule: · A 100 percent "performance bond" on the part of the contractor to secure fulfillment of all of the contractor's obligations under the contract; and · A 100 percent "payment bond" on the part of the contractor to assure payment, as required by law, of '-- all persons supplying labor and materials as part of work provided under the contract. B. The Depa,hnent reserves the fight to promulgate and enforce bonding procedures and requirements applicable to any project. C. All bonds shall be procured from a surety company registered and licensed to do business in the State of Kansas and countersigned by its Kansas resident agent. XV. Program Income A. Program Income, as defined in the Consolidated Plan means gross income earned by the Grantee from activities supported by grants made by the Department under the provisions of the Federal Act, or as otherwise defined by the Department. 1. Program income includes, but is not limited to: (a) Proceeds from the disposition by sale or long term lease of real property purchased with CDBG funds; (b) Income from the temporary use of leasing of properties acquired with CDBG fimds pending the disposition or use for which the property acquired; (c) Recapture of Principal and Interest from loans made with grant or revolving loan fund proceeds. 2. Program income: (a) shall be used prior to drawdown of additional grant funds. (b) of closed grants shall be treated as program income of an active grant and shall be used prior to drawdown of additional grant funds. (c) shall be subject to the requirements of a local reuse plan submitted by the local government and approved in writing by the Department. (d) shall be used in accordance with requirements of Title I of the Housing and Community Development Act, if applicable. (e) shall not be used to increase the amount approved as necessary or appropriate for assistance to a for-profit entity. Local Income and Program Income, though required to be used first, will not be included in determining the required minimum injection to any other project. 3. All Program Income from a project funded by this Agreement and received prior to the program's close-out being accepted by Department and not used to reduce the grant drawdowns shall be returned to the Department. EDA 11/98 7 4. Program income does not include interest earned on cash advances from the Kansas Department of Commerce & Housing. Such interest shall be remitted to the U.S. Treasury. 5. It is understood that this Agreement does not provide the Grantee the right to keep program income for the purpose of a Local Revolving Loan Fund. 6. To be considered for a Local Revolving Loan Fund, the Grantee shall submit and have approved by the Department a Program Re-use Plan and a Local Revolving Loan Fund Capacity Agreement. The Department reserves the right to allow local reuse. 7. A Local Revolving Loan Fund Capacity Agreement between the Department and the Grantee shall be entered into prior to the close-out of the Grant. 8. Local governments shall report the receipt and expenditure of program income to the Department for the six (6) month period ending June 30 and December 31 of each year. Reports are due within 30 days following the end of the reporting period. XVI. Pro~ram Close-out Procedures A. Program close-out is the process by which the Department determines that all applicable administrative and f'mancial actions and all required work of the program, including audit and resolution of audit £mdings, have been completed or that there are no additional benefits likely to occur by the continuation of program activities or costs. All findings from Department monitoring visits must be cleared by Grantee prior to close-out certification. B. The Completion Date is the date specified in Section IV., Period of Performance, of this Agreement or amendments thereto, on which assistance ends for all program activities, except those required to complete the close-out or the date on which the Grant is terminated. C. The Grantee shall submit to the Department close-out documents covering the entire program within ninety (90) days of completion date. One copy of the documents must be placed where other program documents are available for public review and at least one copy must remain in the Grantee's files. The Department may grant extensions in writing to the time for submission of these documents when so requested by the Grantee in writing. D. Incomplete or incorrect close-out documentation will be returned to the Grantee by the Department. The Grantee shall have 30 days to return the close-out documentation corrected. If close-out documentation is not corrected within 30 days the Grantee surrenders any capacity for local reuse. E. The Department reserves the right to recover amounts of unobligated program funds. F. The Grantee shall account for any property acquired with grant funds, or received from the federal or state government in accordance with the Departments property management procedures. X¥II. Suspension The Department may suspend the grant, in whole or in part, at any time during the Grant Period, and upon reasonable notice to the Grantee withhold further payments or prohibit the Grantee from incurring additional obligations of grant funds when it is determined that the Grantee has failed to substantially comply with the conditions of this Agreement. This will be done pending corrective action by the Grantee or a decision by the Department to terminate the grant. The Department shall allow all necessary and proper costs which the Grantee could not reasonably avoid during the period of suspension. EDA 11/98 8 XVII. Termination for Convenience A. The Department or Grantee may terminate the grant in whole, or in part, when both parties agree that the continuation of the program would not produce beneficial results commensurate with the further expenditure of funds. B. The two parties shall agree upon the termination conditions, including the effective date and, in the case of partial terminations, the portion to be terminated. C. The Grantee shall not incur new obligations for the terminated portion after the effective date, and shall cancel as many outstanding obligations as possible. The Grantee shall be allowed full credit for noncancelable obligations properly incurred prior to termination. XIX. Termination-for-Cause A. The Department, after reasonable notice, may terminate the grant in whole or in part, at any time during the Grant Period when it is determined that the Grantee has failed to substantially comply with the conditions of this Agreement. The Department shall notify the Grantee in writing of the determination and the reasons for the termination, together with the effective date and may initiate procedures to recapture all funds advanced to Grantee. B. Payments made to the Grantee or recoveries by the Department under grants which have been suspended or terminated for cause shall be in accordance with the legal rights and liabilities of the parties. XX. Audit Requirements A. The Grantee shall arrange for the performance of annual financial/compliance audits of the grant project. All audits must be performed by an independent qualified auditor. The audit period is identical with the Grantee's regular fiscal year. The audit(s) will be conducted in accordance with the requirements set forth in the audit section of the Kansas CDBG Handbook, which are based on the amendments to the U.S. Single Audit Act of 1996 and Office of Management and Budget (OMB) Circular A-133. 1. If the grantee expends $300,000 or more of federal financial assistance from all sources during the local fiscal year, an A-133 audit is required. An A-133 audit covers the Grantee's entire operation, not just the grant project. 2. If the grantee expends less then $300,000 or more in total federal financial assistance in a fiscal year, it will be the option of the department to require an audit of the grantee. If such audit is required, the department will pay for and procure the auditor. B. Grantees are required to submit one copy of a fiscal year audit report covering the program. The audit reports shall be sent within 30 days after the completion of the audit, but no later than one year after the end of the audit period unless agreed to by the Department. C. If any expenditures are disallowed as a result of the Final Audit Report, the obligation for reimbursement to the Kansas Small Cities Community Development Block Grant Program shall rest with the Grantee. XXI. Retention of and Access to Records A. Financial records, supporting documents, statistical records, and all other records pertinent to this program shall be retained in accordance with the Department's Procedures. B. Authorized representatives of the Department the Secretary of HUD, the Inspector General of the United States, or the U.S. General Accounting Office shall have access to all books, accounts, records, reports, files, papers, things, or property belonging to, or in use by, the Grantee and/or loan recipient pertaining to the administration of this grant and the receipt of assistance under the Small Cities CDBG program as may be necessary to make audits, examinations, excerpts, and transcripts for a period of three years subsequent to a grant close-out. -- _ _ C. Any contract entered into by the Grantee shall contain language comparable to Paragraph (B) so as to assure access by authorized parties to the pertinent records of any subgrantee, contractor, or subcontractor. EDA 11/98 9 D. Failure on the part of a Grantee or a loan recipient to allow said access shall be cause for the Department to initiate suspension procedures. XXII. Conflict of Interest A. In the procurement of supplies, equipment, construction and services by Grantees and subgrantees, the conflict of interest provisions of the Kansas Department of Commerce & Housing, as provided at CFR 570.611 shall apply. B. No member of the Governing Body, officer or employee of the Grantee, or its designees or agents, or any other person who exercises any functions or responsibilities with respect to the program assisted by this Agreement during his/her tenure or for one year thereafter, shall have any direct interest in any contract or subcontract, or the proceeds thereof, for the work to be performed in connection with the program. C. The Grantee shall incorporate, or cause to be incorporated, in all contracts a provision prohibiting such interest pursuant to the intent of this Section. D. The Grantee shall not employ, nor shall permit any third party to employ any employee of the Department. XX/II. Equal Opportunity In-addition to all equal opportunity provisions and the Assurances incorporated by reference herein, the Grantee agrees to comply with all of the requirements of the Kansas Acts Against Discrimination relating to fair employment practices to the extent applicable and shall cause the foregoing provisions to be inserted in all contracts with third parties for any work covered by this Agreement so that such provisions will be binding upon such third parties. Grantee will conduct and administer the grant in conformity with Title VI of the Civil Rights Act of 1964 (42 USC 200d et seq., as amended) and the Fair Housing Act (42 USC 3601-20) and will affirmatively further fair housing. XXIV. Waiver of Enforcement A waiver by the Department of the right to enforce any provision of this Agreement shall not be deemed a waiver of the right to enforce each and all of the provisions herein. XXV. Revisions, Amendments and Approvals A. The Grantee may revise the amounts listed in the "Total" column in the CONTRACT PROJECT BUDGET FORM (Attachment D) of the APPROVED PROJECT APPLICATION (Attachment C); provided that: 1. the cumulative effect of the revision(s) is not to increase or decrease the total amount(s) budgeted for any Activity by more than ten (10) percent of the total grant, or $10,000, whichever is less, and the "Total Program Budget" is not changed; 2. the revision does not increase any professional services of the CDBG approved budget; 3. the revision will not significantly change the scope, location or objectives of the approved activities; and 4. the Department is provided written notification of the revision(s). B. The Grantee shall notify the Department if, through the use of other funds, there is an intention to expand, enhance, or add to the scope of the program covered by the Agreement or there is a proposal to undertake activities that will have an impact upon the buildings, areas, or activities of this program. The Department must approve in writing any such proposed change of scope in the project. C. Any other changes to this Agreement shall constitute an amendment, including time extensions. EDA 11/98 10 D. Amendments to the terms and conditions of this Agreement shall not become effective unless submitted on the program's approved amendment form. The amendment form shall be submitted in duplicate, numbered, passed by Resolution of the governing body, and contain two original signatures of the duly authorized representative of the Grantee. The Grantee will be returned an executed form by the Community Division Director, if the amendment is approved. E. This Agreement shall be construed in accordance with the laws of Kansas. F. We, the undersigned, have read and understood the above document and hereby agree to the terms and conditions contained herein. This Agreement is binding and legally enforceable on all heirs, successors, and assigns. Dated by the Department this __ day of , 19 STATE OF KANSAS DEPARTMENT OF COMMERCE & HOUSING By: Community Development Division Director For the Kansas Department of Commerce & Housing By: Notary Public, State of Kansas City of Salina, Kansas (Grantee) By: (Name) (Title) (SEAL) ATTEST: (For the Grantee) EDA 11/98 11 SPECIAL CONDITIONS In addition to the general terms and conditions of this Agreement, thc Grantee and the Department hereby agree to the following Special Conditions: 1. As provided in Section VIII., Program Costs, E., the Notification of Award for the grant under this Agreement is dated December 11~ 1998. 2. As provided in Section XII., Monitoring and Reporting, B., the Grantee shall submit Quarterly Progress and Financial Reports to the Department. Thc reporting periods consist of January/February/March, April/May/June, July/August/September and October/November/December. Quarterly Progress and Financial Reports are to be submitted to the Department on or before ten (10) days after the end of each quarter (April 10, July 10, October 10, and January 10). A Quarterly Progress and Financial Report shall be submitted for each quarter, or portion thereof, during the Period of Performance as provided in Section IV. Any extension of time approved by the Department will require additional Quarterly Progress and Financial Reports to be submitted in accordance with the above-referenced schedule. 3. As provided in Section IV., Period of Performance, all activities assisted by this Agreement shall be completed on June 15, 2000, except for those activities required to close out the program, such as the Final Program Report and thc Final Audit Report. 4. As provided in Section XII., Monitoring and Reporting, C., the Grantee shall submit close-out documents to the Department on or before September 15, 2000. $. The Grantee shall not use funds that have been granted by HUD under the Federal Act, or which may have been accrued as a consequence of activities supported with such grant funds (program income), in whole or in part for the support of the Activities covered by this Grant Agreement without first having secured the express written approval of HUD. 6. The Grantee shall be permitted to satisfy the program audit requirements of Section XX., Audit Requirements, by conducting a single municipal government-wide £mancial audit at the time of an annual audit provided for by Kansas law. Said audit will be completed on or before July 1, 2001. Grantees receiving federal assistance in any fiscal year must have an audit made in accordance with the amendment to the Single Audit Act of 1996 (OMB Circular A-133) for such fiscal year unless exempted under OMB Circular A-133. Those Grantees having expended $300,000 or more of total federal funds from all sources must have an annual audit. 7. The Grantee shall submit a completed CONTRACT PROJECT BUDGET FORM and attach said form to thc APPROVED PROJECT APPLICATION (Attachment C). The CONTRACT PROJECT BUDGET FORM shall fully account for all funds as stated in Section V., Compensation, A. and B. 8. An Economic Development grant loaned to a business entity for job creation or retention will be repayable to the Department upon termination of grant agreement in the event that jobs created or retained fall short of thc number committed to be created or retained in the grant application (Attachment C). Any accelerated portion of grant repayment under this provision will be an amount equal to the proportion of jobs not created or retained to the total number committed, except all grant monies will be immediately repaid if at least 51% of jobs actually created and retained do not meet CDBG program low-and-moderate income requirements. Exceptions will be granted only on a case by case basis when extraordinary circumstances, as documented by the grantee, are judged to exist by thc Department. The decision of the Department shall be final. 9. Will require each unit of local government to be distributed Title I funds to adopt and enforce a policy prohibiting the use of excessive force by law enforcement agencies within its juris.diction against any individuals engaged in nonviolent civil rights demonstrations in accordance with Section 519 of Public Law 101-144, (the 1990 HUD Appropriations Act), and prohibiting the barring of entrance or exit to any facility or location which is thc subject of such demonstration (Cranston-Gonzales National Affordable Housing Act). 10. In addition to the above certifications, the undersigned will also make the certification required which is attached regarding Lobbying. EDA 11/98 12 CERTIFICATION REGARDING GOVERNMENT-WIDE RESTRICTION ON LOBBYING (FOR CONTRACTS OVER $100,000) 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 ~vith the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. 2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of 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, "Disclosure Form to Report Lobbying," in accordance with its instructions. 3. The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, cooperative agreements), over $100,000 and that all subrecipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. Date (Principal) EDA 11/98 13 ECONOMIC DEVELOPMENT CONTRACT PROJECT BUDGET FORM GRANTEE NAME: City of Sal±na, Kansas GRANTNO.: 98-IN-009 BUSINESS NAME: A-Plus Galvan±zing, Inc. LOCAL/OTHER ACTIVITY CDBG FUNDS FUNDS TOTAL COST 1. ADMINISTRATION $ $ $ 10 , 000 80 , 000 90 , 000 2. AUDIT 3. SITE CLEARANCE/DEMOLITION/IMPROVEMENTS 30,000 30,000 4. HOUSING REHABILITATION a. DIRECT GRANTS b. DIRECT LOANS 5. HOUSING WRITE-UPS/INSPECTION 6. ACQUISITION OF REAL PROPERTY 7. RELOCATION ASSISTANCE 8. PUBLIC FACILITIES/CONSTRUCTION a. WATER/WELLS/LINES/TREATMENT 100,000 20,000 120,000 b. SEWER/LINES/TREATMENT 20,000 20,000 co STREET IMPROVEMENTS 120.000 30.000 150.000 d. DRAINAGE/FLOOD 120,000 120,000 e. CENTER/FACILITY f. OTHER (Identify) Rail Spur 120,000 L20,000 9. a. NEW CONSTRUCTION - Industrial/Commercial 4,500,000 4,500,000 b. MACHINERY AND EQUIPMENT 3,870,000 3,870,000 c. WORKING CAPITAL 200,000 200,000 d. OTHER (Identify) 10. a. ENGINEERING DESIGN 10,000 250,000 260,000 b. ENGINEERING SERVICES 10.000 10.000 c. ARCHITECTURAL SERVICES d. OTHER PROFESSIONAL SERVICES 10,000 10,000 11. TOTALS $ $ $ 500,000 9,000,000 9.500.000 ED-B01 10/96 (Rev) EDA 11/98