Chapter 1
THE FAMILY SELF-SUFFICIENCY PROGRAM
AND THE FSS ACTION PLAN
INTRODUCTION
This chapter provides an overview of the family self-sufficiency (FSS) program and FSS action plan, including the purpose, organization, and required contents of the FSS action plan.
Part I: The Family Self-Sufficiency (FSS) Program and FSS Action Plan: This part provides an overview of the family self-sufficiency program and the purpose of the FSS action plan.
Part II: Requirements of the FSS Action Plan: This part covers action plan requirements, including development, revision, and contents of the action plan. It also contains information on family demographics, which is part of the required contents of the action plan.
PART I: THE FAMILY SELF-SUFFICIENCY (FSS) PROGRAM
AND FSS ACTION PLAN
1-I.A. OVERVIEW OF THE FAMILY SELF-SUFFICIENCY PROGRAM
The origins of the FSS program are in two pilot projects implemented in 1986 and 1990, Project Self-Sufficiency and Operation Bootstrap, respectively. These projects were set up to test selfsufficiency programs for families with housing subsidies, and both demonstrated that families needed essential services to move toward economic self-sufficiency. These services include child care, transportation, medical care, and long-term education and training.
In the wake of the successful demonstration of these projects, family self-sufficiency became one of the initiatives under the Homeownership and Housing Opportunities for People Everywhere (HOPE) program enacted in 1990, and the FSS program was subsequently created under the National Affordable Housing Act the same year.
FSS built upon and refined both Project Self-Sufficiency and the Bootstrap program. It remained a voluntary program in 1991 and 1992 but became mandatory in 1993 for any new increments of funding issued to PHAs. The 1993 regulations were further modified by the Quality Housing and Work Responsibility Act of 1998 (QHWRA). In 2018, expansive changes were made to the FSS program by the Economic Growth, Regulatory Relief, and Consumer Protection Act known as “the Economic Growth Act” or “the Act.”
The purpose of the FSS program is to coordinate housing assistance with public and private resources to enable assisted families to achieve economic self-sufficiency. The purpose and basic requirements of the FSS program are further elaborated upon in Chapter 2.
This family self-sufficiency program is administered by the City of Oxnard Housing Authority for the jurisdiction of the City of Oxnard, in the County of Ventura. 493
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1-I.B. APPLICABLE REGULATIONS
Applicable regulations for Section 8 and public housing FSS programs include:
• 24 CFR Part 5: General Program Requirements
• 24 CFR Part 8: Nondiscrimination
• 24 CFR Part 902: Public Housing Assessment System
• 24 CFR Part 903: Public Housing Agency Plans
• 24 CFR Part 945: Designated Housing
• 24 CFR Part 960: Public Housing Admission and Occupancy Policies • 24 CFR Part 965: PHA-Owned or Leased Projects—General Provisions • 24 CFR Part 966: Public Housing Lease and Grievance Procedures • 24 CFR Part 982: Section 8 Tenant-Based Assistance: Housing Choice Voucher Program • 24 CFR Part 984: Section 8 and Public Housing Family Self-Sufficiency Program 1-I.C. THE FAMILY SELF-SUFFICIENCY ACTION PLAN
The family self-sufficiency (FSS) action plan is required by HUD. The purpose of the FSS action plan is to establish policies for conducting the family self-sufficiency program in a manner consistent with HUD requirements and local goals and objectives contained in the PHA’s Agency Plan. This FSS action plan is a supporting document to the PHA Agency Plan and is available for public review as required by 24 CFR Part 903.
This family self-sufficiency action plan is set forth to define the PHA’s local policies for operation of the program in the context of federal laws and regulations. All issues related to FSS not addressed in this document are governed by such federal regulations, HUD handbooks and guidebooks, notices, and other applicable laws. The policies in this FSS action plan have been designed to ensure compliance with the consolidated ACC and all HUD-approved applications for program funding.
The PHA is responsible for complying with all changes in HUD regulations pertaining to the FSS program. If such changes conflict with this plan, HUD regulations will take precedence.
Administration of the FSS program and the functions and responsibilities of PHA staff shall comply with the PHA’s personnel policy and HUD’s family self-sufficiency regulations, as well as all Section 8 and public housing regulations, in addition to federal, state, and local fair housing laws and regulations.
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PART II: REQUIREMENTS OF THE FSS ACTION PLAN
1-II.A. OVERVIEW
A PHA must have a HUD-approved action plan before implementing an FSS program, regardless of whether the FSS program is a mandatory or voluntary program. Further, this action plan must comply with the requirements specified for the plan in the regulations [24 CFR 984.201(a)].
The regulatory requirements dealing specifically with the FSS action plan itself largely involve the development, revision, and required contents of the action plan. This part covers those requirements.
1-II.B. HUD APPROACH TO POLICY DEVELOPMENT
In developing policy for the FSS action plan, PHAs need to be aware of the distinction HUD makes between mandatory and discretionary policies.
• Mandatory policies are those driven by legislation, regulations, current handbooks, notices, and legal opinions.
• Discretionary policies consist of those developed for areas in which the PHA has regulatory discretion, or regarding optional, nonbinding guidance including guidebooks, notices that have expired, and recommendations from individual HUD staff.
HUD expects PHAs to develop policies and procedures that are consistent with mandatory regulations and to make clear the optional policies the PHA has adopted. The PHA’s FSS action plan is the foundation of those policies and procedures for the FSS program. HUD’s directions require PHAs to make policy choices that provide guidance to staff and consistency to program applicants and participants.
Following HUD guidance, even though it is not mandatory, provides a PHA with a “safe harbor.” HUD has already determined that the recommendations and suggestions it makes are consistent with mandatory policies. If a PHA adopts an alternative strategy, it must make its own determination that the alternative approach is consistent with legislation, regulations, and other mandatory requirements. There may be very good reasons for adopting a policy or procedure that is different than HUD’s safe harbor, but PHAs should carefully consider those decisions. 495
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1-II.C. FSS ACTION PLAN DEVELOPMENT AND REVISION
Development of Action Plan [24 CFR 984.201(b) and (c)]
When developing an FSS action plan, a PHA must do so in consultation with the chief executive officer of the applicable unit of general local government and the program coordinating committee (PCC).
For all voluntary or mandatory FSS programs, the PHA must submit its action plan and obtain HUD approval of the plan before it can implement the FSS program. This includes a voluntary program established because the PHA chose to implement an FSS program that exceeds the minimum size for a mandatory program (see Section 2-II.A. for a discussion of mandatory versus voluntary FSS programs).
Single Action Plan [24 CFR 984.201(f)]
PHAs implementing both a Section 8 FSS program and a public or Indian housing FSS program may submit one action plan. In cases where the PHA decides to submit one plan for more than one program, the policies contained in the action plan would apply to both programs.
OHA Policy
The PHA is implementing both a public housing and Section 8 FSS program, which may include tenant-based and project-based Section 8, HCV Homeownership, Moderate Rehabilitation, Moderate Rehabilitation Single Room Occupancy, Family Unification Program (FUP), and Foster Youth to Independence Initiative (FYI). The PHA will submit one action plan, the policies in which apply to both programs.
Revision to the FSS Action Plan [24 CFR 984.201(c)(2)]
Following HUD’s initial approval of the action plan, no further approval of the action plan is required unless the PHA proposes to make policy changes to the action plan, increase the size of a voluntary program, or revise the FSS action plan as needed to comply with changes in HUD regulations. The PHA must submit any changes to the action plan to HUD for approval.
OHA Policy
The PHA will review and update the action plan at least once a year, and more often if needed, to reflect changes in regulations, PHA operations, or when needed to ensure staff consistency in operation.
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1-II.D. CONTENTS OF THE PLAN [24CFR 984.201(d)]
HUD regulations state that there are several components that must be included in the FSS action plan. At a minimum, the action plan must cover the policies and procedures of the PHA for operation of a local FSS program as follows:
• Family demographics, including a description of the number, size, characteristics, and other demographics such as racial and ethnic data, in addition to the supportive service needs of the families expected to participate in the program. (Chapter 1) • Estimate of participating families, which means the number of families which can reasonably be expected to receive supportive services under the FSS program. (Chapter 2)
• Eligible families from any other local self-sufficiency program who are expected to agree to executing an FSS contract of participation. (Chapter 2) • A statement of the PHA’s FSS family selection procedures, including a description of how the procedures ensure that families are selected without regard to race, color, religion, disability, sex, familial status, or national origin. (Chapter 4) • A description of the incentives that the PHA intends to offer to families to encourage participation in the FSS program (an incentives plan), including the establishment of the escrow account. (Chapter 4)
• Outreach efforts, which include a description of the PHA’s efforts to recruit eligible families, the actions the PHA will take to ensure that both minority and nonminority groups are informed about the FSS program, and how the PHA will make this information known. (Chapter 4)
• A description of the FSS activities and supportive services to be provided by both public and private resources to FSS families, and identification of these public and private resources. (Chapter 4)
• A description of the PHA’s method for identifying family support needs, including how the PHA will identify the needs and deliver the services. (Chapter 4) • A description of the PHA’s policies regarding program termination or withholding of services based on a family’s failure to comply with the FSS contract, and available grievance procedures. (Chapter 5)
• Assurances of noninterference with rights of non-participating families which state that a family’s election to not participate in the FSS program will not affect the family’s admission to the Section 8 or public housing program, nor will it affect their right to occupancy in accordance with its lease. (Chapter 4)
• A timetable for implementation of the FSS program, including the schedule for filling FSS slots with eligible FSS families. (Chapter 2)
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• A certification that development of the services and activities under the FSS program has been coordinated with programs under Title I of the Workforce Innovation and Opportunity Act, other relevant employment, childcare, transportation, training, education, and financial empowerment programs in the area, and will continue to be coordinated to avoid duplication of services and activities.
Optional Additional Information [24 CFR 984.201(d)(13)]. • HUD encourages additional information in the action plan that would help to determine the soundness of the PHAs proposed FSS program.
OHA Policy
The OHA will submit additional optional information in this action plan that will help HUD determine the soundness of the proposed FSS program.
This information includes:
Policies related to the modification of goals in the ITSP. (Chapter 5) Policies on the circumstances in which an extension of the contract of participation may be granted. (Chapter 5)
Policies on the interim disbursement of escrow, including any limitations on the use of the funds. (Chapter 6)
Policies regarding eligible uses of forfeited escrow funds by families in good standing. (Chapter 6)
Policies regarding the re-enrollment of previous FSS participants, including graduates and those who exited the program without graduating. (Chapter 4) Policies on requirements for documentation for goal completion. (Chapter 4) Policies on documentation of the household’s designation of the “head of FSS family.” (Chapter 4)
Policies for providing an FSS selection preference for porting families if the PHA elects to offer such a preference. (Chapter 7)
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1-II.E. FAMILY DEMOGRAPHICS [24 CFR 984.201(d)(1)]
As part of the required contents of the FSS action plan, family demographics of the Section 8 and public housing program participants serve to provide a description of the number, size, characteristics, and other descriptive data (including racial and ethnic data of those participants).
These data may later be used to help the housing authority and the program coordinating committee (PCC) to identify supportive service needs of the families expected to participate in the FSS program.
OHA Policy
Section 8 and Public Housing Total
Families
Percent
of Total
All Families
Single 1,516 .76
Female HOH 1,325 .67
Male HOH 663 .33
Race
White 1,808 .90
Black/African American 115 .06
American Indian/Alaska Native 35 .18
Asian 34 .17
Native Hawaiian/Other Pacific
Islander
13 <.01
Ethnicity
Hispanic or Latino 1,642 .83
Not Hispanic or Latino 346 .17
Income
Extremely Low-Income 1,316 .66
Very Low-Income 396 .20
Low-Income 147 .07
HOH Income from Wages 756 .38
HOH Income from TANF 69 .03
HOH Income from SSI 1,020 .51
Number of Children
0 1,152 .58
1-2 550 .28
3-4 247 .12
5 or more 39 .02
Total Number of Family Members
1-2 1,225 .62
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3-4 477 .24
5 or more 286 .14
Persons with Disabilities
HOH Person w/ Disabilities (HUD) 1,196 .60
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Chapter 2
PURPOSE, SCOPE, AND APPLICABILITY OF THE
FAMILY SELF-SUFFICIENCY PROGRAM
INTRODUCTION
This chapter contains information about the FSS program’s purpose, size, and measurable objectives as well as information on program operation. This includes potential participant demographics, the program timetable, the number of families to be served, and the size of the PHA’s voluntary FSS program. This chapter also contains definitions of the key terms in this FSS action plan.
Part I: The Purpose and Basic Requirements of the FSS program: This part includes a description of the purpose of the FSS program on a national level—its intent, goal, and major strategies.
Part II: The Scope of the FSS program: This part contains information about housing assistance programs eligible to participate in FSS, the size of the PHA’s FSS program, an estimate of participating families, eligible families from other self-sufficiency programs, and eligibility for combined FSS programs.
Part III: Program Operation: This part specifies the requirements for FSS program operation, including voluntary FSS program implementation.
Part IV: The Definitions of Terms Used in the PHA’s FSS program: This section contains both HUD and PHA definitions for terms used in this policy document. 501
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PART I: PURPOSE AND BASIC REQUIREMENTS OF THE FSS PROGRAM 2-I.A. PURPOSE
The purpose of the family self-sufficiency (FSS) program is to promote the development of local strategies to coordinate the use of Section 8 and public housing assistance programs with public and private resources enabling families eligible to receive assistance under these programs to achieve economic independence and self-sufficiency [984.101(a)(1)].
In addition to this broader national goal of the FSS program, the PHA also establishes a local goal consistent with the PHA’s mission statement to serve as a guide for establishing policy and implementing the FSS program.
OHA Policy
The OHA’s local goal in operating this FSS program is to match housing-assisted families with a broad range of highly collaborative existing community services to assist FSS families in progressing towards achieving economic self-sufficiency. Economic selfsufficiency is defined as having the sustainable skills necessary to maintain employment paying a “living wage.” This wage would pay for the family’s basic needs without the use of government subsidies.
2-I.B. PROGRAM OBJECTIVES [24 CFR 984.102]
In order to reach the FSS national program goal, HUD has defined its FSS program objective as to reduce the dependency of low-income families on welfare assistance and on housing subsidies. Under the FSS program, low-income families are provided opportunities for education, job training, counseling, and other forms of social service assistance while living in assisted housing so that they may obtain the education, employment, business and social skills necessary to achieve self-sufficiency. As with the goals of the program, FSS program objectives are defined on the national level through FSS regulation, and on the local level by PHA policy.
OHA Policy
On the local level, the OHA will achieve the national program objective by offering lowincome families a broad range of services through partnering with the program coordinating committee (PCC). These services will provide long-term education, job training, counseling, and other forms of social service assistance so that families may achieve economic self-sufficiency, as defined in Section 2-I.A. of this document. 2-I.C. BASIC REQUIREMENTS OF THE FSS PROGRAM [24 CFR 984.104] An FSS program established under 24 CFR Part 984 must operate in conformity with the regulations and this FSS action plan (as required in 24 CFR 984.201, provide comprehensive supportive services as defined in 24 CFR 984.103, and operate in compliance with nondiscrimination and equal opportunity requirements.
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PART II: SCOPE OF THE FSS PROGRAM
2-II.A. HOUSING-ASSISTED FAMILIES ELIGIBLE TO PARTICIPATE IN FSS The Section 8 and public housing programs through which families are eligible to participate in the FSS program was expanded by the 2018 Economic Growth Act to allow participants in HCV Homeownership, Moderate Rehabilitation, Moderate Rehabilitation Single Room Occupancy, and Family Unification Program (FUP), including the Foster Youth to Independence (FYI) Initiative.
2-II.B. PHAs REQUIRED TO OPERATE AN FSS PROGRAM
Each PHA that received funding for public housing units under the FY 1991 and FY 1992 FSS incentive award competitions must operate a public housing FSS program. Each PHA that received funding for Section 8 rental certificates or vouchers under the combined FY 1991/1992 FSS incentive award competition also must operate a Section 8 FSS program.
In addition, unless the PHA receives an exemption under 24 CFR 984.105, each PHA for which HUD reserved funding (budget authority) for additional rental certificates or vouchers in FY 1993 through October 20, 1998, must operate a Section 8 FSS program. Each PHA for which HUD reserved funding (budget authority) to acquire or construct additional public housing units in FY 1993 through October 20, 1998, must operate a public housing FSS program as well.
Every PHA that was required to administer an FSS program on May 24, 2018 (the enactment date of the Economic Growth, Regulatory Relief, and Consumer Protection Act) must continue to operate that FSS program for the total number of families determined by HUD on that date unless the PHA receives an exception as described in 24 CFR 984.105(d).
Mandatory Minimum Program Size (MMPS) [24 CFR 984.105]
PHAs that are required to operate an FSS program under 24 CFR 984.101 are subject to a minimum program size requirement.
OHA Minimum Program Size
As determined by HUD as of May 24, 2018, the PHA’s FSS MMPS is nineteen (19).
Maintaining Mandatory Minimum Program Size
Although the discretion to do so ultimately rests with the PHA, mandatory minimum program size can decrease as FSS participants successfully complete the program. Per the regulation, for each family that completes the program by fulfilling its FSS contract of participation on or after May 24, 2018, the mandatory minimum program size for a PHA’s FSS program is reduced by one slot. However, if an FSS slot is vacated by a family that has not completed its FSS contract of participation obligations, the slot must be filled by a replacement family which has been selected in accordance with the FSS family selection procedures [24 CFR 984.105(b)(2)].
OHA Policy
The OHA will reduce the FSS mandatory minimum program size by one for each family that completes the program by fulfilling its FSS contract of participation. 505
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Option to Operate Larger FSS Program
A PHA may choose to operate an FSS program of a larger size than the minimum required by HUD [24 CFR 984.105(a)(3)].
OHA Policy
The OHA may operate an FSS program of a larger size than its mandatory minimum program size subject to availability of resources and funding.
Exception to Program Operation [24 CFR 984.105(c)]
The requirement to establish and carry out an FSS program may be waived with approval from HUD. In order to waive the requirement, the PHA must provide a certification to HUD that the establishment and operation of an FSS program is not feasible because of a lack of accessible supportive services funding, a lack of the availability of programs under the Workforce Innovation and Opportunity Act, a lack of funding for reasonable administrative costs, a lack of cooperation by other units of state or local government, or a lack of interest in participating in the FSS program on the part of eligible families.
An exception will not be granted if HUD determines that local circumstances do not preclude the PHA from effectively operating an FSS program that is smaller than the minimum program size.
Reduction in Program Size
Rather than a full exception to program operation, a PHA may also be permitted to operate an FSS program that is smaller than the minimum program size. As with the full exception, HUD may grant the PHA such a partial exception if the PHA provides to HUD a certification that the operation of an FSS program of the minimum program size is not feasible because of a decrease in or lack of accessible supportive services [24 CFR 984.105(d)].
Expiration of Exception
The approval for a full or partial exception to the FSS minimum program size requirement expires five years from the date of HUD approval of the exception. If a PHA seeks to continue an exception after its expiration, the PHA must submit a new request and a new certification to HUD for consideration [24 CFR 984.105(e)].
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2-II.C. COOPERATIVE AGREEMENTS [24 CFR 984.106]
A PHA may enter into a Cooperative Agreement with one or more multifamily-assisted housing owners to voluntarily make the PHA’s FSS program available to the owner’s housing tenants.
The Cooperative Agreement must include all the requirements for such agreements found in 24 CFR 984.106 and 24 CFR 887.107.
2-II.D. ESTIMATE OF PARTICIPATING FAMILIES [24 CFR 984.201(d)(2)] The PHA must state the number of eligible FSS families who can reasonably be expected to receive supportive services under the FSS program based on available and anticipated federal, tribal, state, local, and private resources.
OHA Policy
Seventy-Five (75) eligible FSS families can reasonably be expected to receive supportive services under the FSS program, based on available and anticipated federal, tribal, state, local, and private resources.
2-II.E. ELIGIBLE FAMILIES FROM OTHER SELF-SUFFICIENCY PROGRAMS [24 CFR 984.201(d)(3)]
If applicable, the PHA must enter the number of families, by program type, who are participating in any other local housing self-sufficiency program who are expected to agree to execute an FSS contract of participation.
OHA Policy
The OHA does not operate other self-sufficiency programs and therefore no additional families from other programs are expected to execute an FSS contract of participation. 507
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2-II.F. ELIGIBILITY OF A COMBINED PROGRAM [24 CFR 984.201(e)] A PHA that wishes to operate a joint FSS program with other PHAs or owners of multifamilyassisted housing may combine its resources with one or more of these entities to deliver supportive services under a joint action plan that will provide for the establishment and operation of a combined FSS program that meets the requirements of this part.
OHA Policy
The OHA will not combine its resources with any other PHA to deliver support services, have a joint action plan, or establish or operate a combined FSS Program. 508
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PART III: PROGRAM OPERATION
2-III.A. OVERVIEW
Federal regulations specify requirements for FSS program operation regarding deadlines for program start-up and when the PHA is expected to have attained full enrollment. A timetable illustrating when the PHA intends to meet these deadlines is included as part of the required contents of the action plan.
2-III.B. PROGRAM IMPLEMENTATION DEADLINE
The deadlines for program implementation differ depending on whether the FSS program is voluntary or mandatory.
Voluntary Program [24 CFR 984.301(a)]
There is no deadline for implementation of a voluntary program. However, a voluntary program may not be implemented before the requirements specified in 24 CFR 984.201 have been satisfied (see Sections 1-II.A.–1-II.D.).
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2-III.C. TIMETABLE FOR PROGRAM IMPLEMENTATION [24 CFR 984.201(d)(13)] A timetable for implementation of the FSS program is part of the required contents of the FSS action plan.
OHA Policy
The OHA implemented an FSS program and will continue to fill the mandatory FSS slots effective May 24, 2018, as determined by the HUD field office. 510
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PART IV: DEFINITIONS
2-IV.A. DEFINITIONS [24 CFR 984.103]
The terms 1937 Act, fair market rent, HUD, low-income family, public housing, public housing agency (PHA), secretary, and Section 8, as used in this document are defined in the 24 CFR Part 5.
The term very low-income family is defined in 24 CFR 813.102 and 24 CFR 913.102.
The terms used in this document have the following definitions as defined by 24 CFR 984.103 and this family self-sufficiency action plan.
Baseline annual earned income means the FSS family’s total annual earned income from wages and business income (if any) as of the effective date of the FSS contract. When calculating baseline annual earned income, all applicable exclusions of income must be applied, except for any disregarded earned income or other adjustments associated with self-sufficiency incentives that may apply to the determination of annual income.
Baseline monthly rent means 1) the FSS family’s total tenant payment (TTP), as of the effective date of the FSS contract, for families paying an income-based rent as of the effective date of the FSS contract; or 2) the amount of the flat or ceiling rent (which includes the applicable utility allowance), and including any hardship discounts, as of the effective date of the FSS contract.
For families paying a flat or ceiling rent this is as of the effective date of the FSS contract.
OHA Policy
Benefits means a government benefit of money or monetary value given to an individual by a federal, state, or local government agency for purposes of financial assistance, including but not limited to, Medicaid, supplemental nutritional assistance program benefits and Social Security, Temporary Assistance for Needy Families, and unemployment compensation benefits.
OHA Policy
Benefits cliff means the sudden and often unexpected decrease in public benefits that can occur with a small increase in earnings. When income increases, families sometimes lose some or all economic supports.
OHA Policy
Certain interim goals means the family has met all its obligations under the CoP to date, including completion of the ITSP interim goals and tasks to date.
Certification means a written assertion based on supporting evidence, provided by the FSS family or the PHA or owner, which must be maintained by the PHA or owner in the case of the family’s certification, or by HUD in the case of the PHA’s or owner’s certification. These must be made available for inspection by HUD, the PHA or owner, and the public, when appropriate.
In addition, these will be considered accurate unless the Secretary or the PHA or owner, as applicable, determines otherwise after inspecting the evidence and providing due notice and opportunity for comment.
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Chief executive officer (CEO) means the CEO of a unit of general local government who is the elected official or the legally designated official having primary responsibility for the conduct of that entity’s governmental affairs.
Contract of participation (CoP) means a contract in a form approved by HUD, entered into between a participating FSS family and a PHA operating an FSS program that sets forth the terms and conditions governing participation in the FSS program. The contract of participation includes all individual training and services plans entered in between the PHA and all members of the family who will participate in the FSS program, and which plans are attached to the contract of participation as exhibits. For additional detail, see 24 CFR 984.303.
Current annual earned income means the FSS family’s total annual earned income from wages and business income (if any) as of the most recent reexamination of income, which occurs after the effective date of the FSS contract. When calculating current annual earned income, all applicable exclusions of income will apply, including any disregarded earned income and other adjustments associated with self-sufficiency incentives or other alternative rent structures that may be applicable to the determination of annual income.
Current monthly rent means either the FSS family’s TTP as of the most recent reexamination of income, which occurs after the effective date of the FSS contract, for families paying an incomebased rent as of the most recent reexamination of income; or the amount of the flat rent, including applicable utility allowance or ceiling rent. This amount must include any hardship discounts, as of the most recent reexamination of income, which occurs after the effective date of the FSS contract, for families paying a flat rent or ceiling rent as of the most recent reexamination of income.
Earned income means income or earnings included in annual income from wages, tips, salaries, other employee compensation, and self-employment. Earned income does not include any pension or annuity, transfer payments, any cash or in-kind benefits, or funds deposited in or accrued interest on the FSS escrow account established by a PHA on behalf of a participating family.
Effective date of contract of participation means the first day of the month following the month in which the FSS family and the PHA entered into the contract of participation.
Eligible families for the FSS program means current participants in Section 8, residents of public housing, or residents in multifamily-assisted housing if a Cooperative Agreement exists.
OHA Policy
Enhance the effectiveness of the FSS program means a demonstrable improvement in the quality of an FSS program in which the enrollment ratio, escrow balance average, and graduation rate is at or above the national average as measured in HUD’s Composite Scores in FR Notice 11/15/18.
Enrollment means the date that the FSS family entered the contract of participation with the PHA.
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Family self-sufficiency program or FSS program means the program established by a PHA within its jurisdiction to promote self-sufficiency among participating families, including the provision of supportive services to these families, as authorized by section 23 of the 1937 Act.
FSS escrow account means the FSS escrow account authorized by section 23 of the 1937 Act.
FSS escrow credit means the amount credited by the PHA to the participating family’s FSS account.
FSS family means a family that receives Section 8 assistance or resides in public housing (section 9), that elects to participate in the FSS program, and whose designated adult member (head of FSS family) has signed the CoP.
FSS family in good standing means an FSS family that is in compliance with their FSS CoP, has either satisfied or are current on any debts owed the PHA or owner, and is in compliance with the regulations in 24 CFR Part 5 regarding participation in the relevant rental assistance program.
FSS-related service program means any program, publicly or privately sponsored, that offers the kinds of supportive services described in the definition of supportive services.
FSS slots refer to the total number of public housing units or the total number of rental vouchers that comprise the minimum size of a PHA’s respective Section 8 and public housing FSS program.
FSS Program Coordinator means the person(s) who runs the FSS program. This may include (but is not limited to) performing outreach, recruitment, and retention of FSS participants; goal setting and case management/coaching of FSS participants; collaborating with the community and service partners; and tracking program performance.
FY means federal fiscal year (starting with October 1, and ending September 30, and designated by the calendar year in which it ends).
Head of FSS family means the designated adult family member of the FSS family who has signed the CoP. The head of FSS family may, but is not required to be, the head of the household for purposes of determining income eligibility and rent.
Individual Training and Services Plan (ITSP) means a written plan that is prepared by the PHA or owner in consultation with a participating FSS family member (the person with for and whom the ITSP is being developed), and which describes the final and interim goals for the participating FSS family member, the supportive services to be provided to the participating FSS family member, the activities to be completed by that family member, and the agreed upon completion dates for the goals, and activities. Each ITSP must be signed by the PHA or owner and the participating FSS family member and is attached to and incorporated as part of the CoP.
An ITSP must be prepared for each adult family member who elects to participate in the FSS program, including the head of FSS family who has signed the CoP. 513
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OHA Policy
Knowledgeable professional means a person who is knowledgeable about the situation, has training, education, certification, or licensure provided by recognized professional associations and institutions that legitimizes their professional opinion, is competent to render a professional opinion, and is not able to gain, monetarily or otherwise, from the PHA FSS program decision in the area to which they are certifying.
Multifamily-assisted housing, also known as project-based rental assistance (PBRA), means rental housing assisted by a Section 8 Housing Payments Program, pursuant to 24 CFR Parts 880, 881, 883, 884, and 886.
OHA Policy
Other costs related to achieving obligations in the contract of participation means any costs necessary to complete an interim goal, a final goal, or tasks related to such in the ITSP.
Owner means the owner of multifamily-assisted housing.
Participating family is defined as FSS family in this section.
Program coordinating committee (PCC) means the committee described in 24 CFR 984.202.
Public housing means housing assisted under the 1937 Act, excluding housing assisted under Section 8 of the 1937 Act.
Section 8 means assistance provided under Section 8 of the 1937 Act (42 U.S.C. 1437f).
Specifically, multifamily-assisted housing, as defined in this section; tenant-based and projectbased rental assistance under section 8(o) of the 1937 Act; the HCV homeownership option under section 8(y) of the 1937 Act; Family Unification Program (FUP) assistance under section 8(x) of the 1937 Act; and the Section 8 Moderate Rehabilitation (Mod Rehab) for low-income families and Moderate Rehabilitation Single Room Occupancy (Mod Rehab SRO) for homeless individuals under 24 CFR part 882.
Self-sufficiency means that an FSS family is no longer receiving Section 8, public housing assistance, or any federal, state, or local rent or homeownership subsidies or welfare assistance.
Achievement of self-sufficiency, although an FSS program objective, is not a condition for receipt of the FSS account funds.
OHA Policy
Supports means, but is not limited to, transportation, childcare, training, testing fees, employment preparation costs, other costs related to achieving obligations outlined in the CoP, and training for FSS Program Coordinator.
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Supportive services mean those appropriate services that a PHA will coordinate on behalf of an FSS family under a CoP. These may include child care of a type that provides sufficient hours of operation and serves an appropriate range of ages; transportation necessary to enable a participating family to receive available services or to commute to their places of employment; remedial education; education for completion of secondary or post-secondary schooling; job training, preparation, and counseling; job development and placement; follow-up assistance after job placement and completion of the contract of participation; substance/alcohol abuse treatment and counseling; training in homemaking and parenting skills; and personal welfare services that include substance/alcohol abuse treatment and counseling, and health, dental, mental health and health insurance services; household management; money management; counseling regarding homeownership or opportunities available for affordable rental and homeownership in the private housing market (including information on an individual’s rights under the Fair Housing Act) and financial empowerment that may include financial literacy, coaching, asset building, money management; and any other services and resources, including case management and reasonable accommodations for individuals with disabilities, that the PHA may determine to be appropriate in assisting FSS families to achieve economic independence and self-sufficiency.
Unit size or size of unit refers to the number of bedrooms in a dwelling unit.
Very low-income family is defined as set out in 24 CFR 813.102 .Welfare assistance means (for purposes of the FSS program only) income assistance from federal or state welfare programs and includes only cash maintenance payments designed to meet a family’s ongoing basic needs. Welfare assistance does not include nonrecurrent, short-term benefits that are designed to deal with a specific crisis situation or episode of need, or are not intended to meet recurrent or ongoing needs and will not extend beyond four months; work subsidies (i.e., payments to employers or third parties to help cover the costs of employee wages, benefits, supervision, and training); supportive services such as child care and transportation provided to families who are employed; refundable earned income tax credits; contributions to, and distributions from, individual development accounts under TANF; services such as counseling, case management, peer support, child care information and referral, transitional services, job retention, job advancement and other employment-related services that do not provide basic income support; transportation benefits provided under a Job Access or Reverse Commute project, pursuant to section 404(k) of the Social Security Act, to an individual who is not otherwise receiving assistance; amounts solely directed to meeting housing expenses; amounts for health care; food stamps and emergency rental and utilities assistance; and SSI, SSDI, or social security.
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Chapter 3
PROGRAM ADMINISTRATION
INTRODUCTION
This chapter discusses administrative policies and practices as they are relevant to the activities covered in this plan. The policies and practices are discussed in two parts:
Part I: Staffing, Fees and Costs, and On-Site Facilities: This part describes identifying appropriate staff and contractors to operate the FSS program and provide the necessary direct services to FSS families. In addition, it describes how administrative fees, costs, and supportive services will be funded, and defines the use of on-site facilities.
Part II: The Program Coordinating Committee: This part covers the establishment of a program coordinating committee (PCC), which is a regulatory requirement in all FSS programs other than multifamily housing assistance. It describes required and recommended PCC membership, in addition to the option for an alternative committee.
PART I: STAFFING, FEES AND COSTS, AND ON-SITE FACILITIES 3-I.A. OVERVIEW
Several functions of program administration are crucial to running an FSS program. A PHA may need to employ a program coordinator or decide to contract with another organization to administer the program. In addition to staffing issues, PHAs should understand how program funding and expenses work to keep the program running smoothly. Finally, PHAs need to sort out whether and how to make common areas or unoccupied units available to provide supportive services.
3-I.B. PROGRAM ADMINISTRATION STAFF AND CONTRACTORS
[24 CFR 984.301(b)]
PHAs have the choice between hiring their own staff and contracting with an outside organization to administer their FSS program. If the PHA should choose to employ its own staff, the staffing levels should be appropriate, and may include one or more FSS coordinators. If the PHA chooses to contract with an outside organization, the organization’s staffing levels must likewise be appropriate to establish and administer the FSS program, and whether the organization’s responsibilities would include managing the FSS account in accordance with federal regulations.
OHA Policy
The OHA will employ appropriate staff, including one or more FSS coordinators or program coordinators to administer its FSS program.
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3-I.C. FSS PROGRAM COORDINATOR RESPONSIBILTIES
Primary Role of the FSS Program Coordinator
The FSS Program Coordinator is responsible for building partnerships with service providers in the community, working with the Program Coordinating Committee (PCC) and local service providers to ensure that FSS program participants are linked to the supportive services they need to achieve self-sufficiency, preparing an Individual Training and Services Plan (ITSP) for the head of the FSS family and each adult member of the FSS family who elects to participate in the FSS program, making certain that the services included in the participants’ CoP are provided on a regular, ongoing, and satisfactory basis, ensuring FSS participants are fulfilling their responsibilities under the CoPs, monitoring progress of participants, and establishing and properly maintaining FSS escrow accounts for eligible families. FSS coordinators may also provide outreach, recruitment, goal setting, case management and coaching for FSS participants, and tracking of FSS program performance.
FSS Program Coordinators funded under the FSS Coordinator Notice of Funding Opportunity (NOFO) may not perform the routine public housing or Section 8 program functions of housing eligibility, leasing, rent calculation, and portability that are funded through Section 8 administrative fees or public housing operating funds unless doing so would enhance the effectiveness of the program. If conducting these functions would enhance the effectiveness of the FSS program, the PHA must seek prior approval from HUD of those enhancements to the FSS program and certify that doing so will neither interfere with the FSS Coordinator’s ability to fulfill their primary role nor be used to balance or fill in for gaps in traditional staffing.
Performance of routine Section 8 or public housing functions for non-FSS families does not enhance the effectiveness of the FSS program and is therefore an ineligible use of FSS funds [2021 FSS NOFO, p. 36].
OHA Policy
The OHA will require the FSS Program Coordinator (OHA must secure approval from HUD) to perform the routine Section 8 or public housing program functions of housing eligibility, leasing, rent calculation, and portability that are funded through Section 8 administrative fees or public housing operating funds.
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3-I.D. ADMINISTRATIVE FEES AND COSTS
The Consolidated Appropriations Act of 2014 combined funding streams for the Section 8 and public housing FSS programs. FSS funding is now awarded through one NOFO. Use of this funding is no longer restricted to the applicable program and funding now may be used to serve both Section 8 and public housing FSS participants. Funding for FSS Coordinators salary, benefits, and training as well as limited administrative costs is awarded through a Grant Agreement and disbursed through HUD’s Line of Credit Control System (LOCCS), rather than as an amendment to the PHA’s Annual Contributions Contract (ACC). These funds are separate from other available funds that may be used.
Section 8 FSS Program
In the Section 8 programs, administrative fees are paid to PHAs for HUD-approved costs associated with the operation of an FSS program. These administrative fees are established by Congress and subject to appropriations [24 CFR 984.302(b)].
In addition, administrative fees for HUD-approved costs not specifically related to the operation of the FSS program may be used to cover these costs associated with the administration of FSS [see Notice PIH 93-24 E-7 and E-8].
See 24 CFR 982.152 and PIH 2022-18 for details on the eligible use of administrative fees.
Public Housing FSS Program
For public housing FSS programs, the performance funding system (PFS), provided under section 9(a) of the 1937 Act, provides for the reasonable and eligible administrative costs that the PHA incurs in carrying out the program only when funds have been appropriated. However, a PHA may use other resources for this purpose [24 CFR 984.302(a)].
In other words, the PHA may fund reasonable and eligible administrative costs in the FSS program from the Operating Fund. However, these expenses will only be reimbursed in the operating subsidy when a current appropriations act allows it. In addition, the PHA may fund reasonable and eligible administrative costs from the Capital Fund. Administrative staffing costs may also be funded through HUD or other grant or foundation sources. This includes FSS Coordinator grants when available.
OHA Policy
The OHA may make Section 8 administrative fees and Public Housing operating funds available to provide administrative costs as needed. The entire value of the Family Self Sufficiency Program Grant will be made available for administrative costs. 519
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3-I.E. SUPPORTIVE SERVICES FEES AND COSTS
Section 8 FSS Supportive Services
In the Section 8 program, the PHA may fund reasonable and eligible FSS supportive service costs in the FSS program from unrestricted net position [see Notice PIH 93-24, E-3].
The PHA may seek additional funds from HUD through submitting grant applications or seek grants from other sources when available.
In addition to unrestricted net position and other grant sources, the FSS forfeited escrow account can fund FSS supportive services. See Section 6-I.E.for eligible supportive services costs.
Public Housing FSS Supportive Services
In public housing, the PHA may fund reasonable and eligible FSS supportive service costs in the FSS program from the Operating Fund. However, the costs of FSS supportive services are only reimbursed through the operating subsidy when appropriations allow it.
FSS public housing supportive services can also be funded through other HUD grants or related government and foundation grants, when available.
OHA Policy
The OHA may make Public Housing operating funds and Section 8 unrestricted net position funds available to provide supportive service costs and will make FSS forfeited escrow account funds available to provide supportive service costs. 520
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3-I.F. USE OF FORFEITED ESCROW ACCOUNTS FUNDS
In addition to Section 8 unrestricted net assets, public housing operating funds, and other grant sources, the FSS forfeited escrow account funds must be used for the benefit of FSS participants, which includes supports and other costs for FSS participants in good standing. HUD does not provide an exhaustive list of these supports. However, the supports include, but are not limited to, transportation, childcare, training, testing fees, employment preparation costs, and other costs related to achieving obligations outlined in the contract of participation as well as training for FSS Program Coordinators.
OHA Policy
The OHA will use forfeited escrow accounts for support and other costs for FSS participants in good standing when funds requested are needed to complete an interim goal or task in the ITSP and are not ongoing expenses or if the family can demonstrate that the need for one-time payment of otherwise ongoing expenses such as rent, utilities, telephone, cell phone, pager, car payments, car maintenance, insurance, or childcare is needed to complete an interim goal, a final goal, or a task related to such goals in the ITSP. The OHA will make payment directly to third party vendor The OHA will use forfeited escrow accounts for training provided to FSS Coordinators.
The OHA will define supports as defined in 24 CFR 984.305(f)(2)(i)(A) as transportation, childcare, training, testing fees, employment preparation costs, other costs related to achieving obligations outlined in the CoP, and training for FSS Program Coordinator(s)
The OHA will define other costs related to achieving obligations in the CoP as any costs necessary to complete an interim goal, a final goal, or tasks related to such in the ITSP as defined in 24 CFR 984.305(f)(2)(i)(A) as transportation, childcare, training, testing fees, employment preparation costs, other costs related to achieving obligations outlined in the CoP, and training for FSS Program Coordinator(s).
The OHA will define necessary to complete as meaning that no other resources are available in the community either because such a resource is non-existent or that resources are utilized above capacity and agencies cannot, for an indetermined period, provide such a resource.
The OHA will provide funds from the forfeited escrow account to FSS participants in good standing before requiring the participant to use an “interim” disbursement from their current escrow account so long as:
The funds requested are needed to complete an interim goal or task within the CoP and are not ongoing expenses; or
If the family has demonstrated that the need for one-time payment of otherwise ongoing expenses such as rent, utilities, telephone, cell phone, pager, car payments, car maintenance, insurance, or childcare is needed to complete an interim goal, a final goal, or a task related to such goals. 521
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The OHA will prioritize requests for funds from forfeited escrow accounts initially on a first come first served basis based on the date and time of the request. After that order is established, while still preserving the first come first served basis, the OHA will apply the following priorities based on an assessment by a knowledgeable professional (See page 2-14 for definition):
Priority 1: Funds to meet a goal in the ITSP that is necessary to ensure the safety and wellbeing of victims of domestic violence, dating violence, sexual assault, and stalking as defined in the OHA’s Section 8 Administrative Plan and public housing Admissions and Continued Occupancy Policy regarding VAWA.
Priority 2: Funds to meet a goal in the ITSP that is necessary to stabilize health, safety, and welfare of the FSS participant or family that if left unattended would jeopardize education, training, or employment.
Priority 3: Funds to meet a goal in the ITSP that is necessary to further education, training, and employment goals in the ITSP including childcare, transportation, and medical costs if the lack of any of these prevents completion of the education, training, and employment.
Priority 4: Funds to meet a goal in the ITSP that is necessary to further any other goal or tasks.
3-I.G. ON-SITE FACILITIES
Each PHA may, subject to the approval of HUD, make available and utilize common areas or unoccupied dwelling units in public housing projects to provide supportive services under an FSS program. This includes using such areas for participants in a Section 8 FSS program. 522
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PART II: PROGRAM COORDINATING COMMITTEE
3-II.A. OVERVIEW
As another integral part of FSS program administration, each participating PHA must establish a program coordinating committee (PCC) whose functions will be to assist the PHA in securing commitments of public and private resources for the operation of the FSS program within the PHA's jurisdiction, including assistance in developing the action plan and in implementing the program [24 CFR 984.202(a)].
The PCC must consist of specific members, which are dependent upon whether the PHA is operating Section 8, public housing, or multifamily assisted housing FSS programs. In addition to these required members, the PCC may also include additional members recommended by regulation.
3-II.B. PROGRAM COORDINATING COMMITTEE MEMBERSHIP
Required PCC Membership [24 CFR 984.202(b)(1)]
The PCC required members consist of representatives of the PHA, including at least one FSS Program Coordinator, and one or more participants from each HUD rental assistance program (Section 8, public housing, or multifamily assisted housing) served by the PHA’s FSS program.
OHA Policy
The OHA’s representatives to the program coordinating committee will be at least one FSS Program Coordinator and one or more participants from each of the housing programs in which there is an FSS program: Section 8, public housing, and multifamily assisted housing, as applicable.
Assistance in Identifying Potential PCC Members [24 CFR 984.202(b)(1)] The PHA may seek assistance from area-wide, city-wide, or development-based resident councils, the resident management corporation, or the Resident Advisory Board, in identifying potential PCC members.
OHA Policy
The OHA may seek assistance in identifying potential members of the PCC from areawide, city-wide, and development-based resident councils, the resident management corporation, or the Resident Advisory Board.
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Recommended PCC Membership [24 CFR 984.202(b)(2)]
Membership on the PCC also may include representatives of the unit of general local government served by the PHA, local agencies (if any) responsible for carrying out employment training programs or programs funded under the Workforce Innovation and Investment Act, and other organizations, such as other state, local, or tribal welfare and employment agencies, public and private education or training institutions, child care providers, nonprofit service providers, private business, and any other public and private service providers with resources to assist the FSS program.
OHA Policy
The OHA’s FSS program coordinating committee membership will include, but is not limited to, the following organizations:
• Ventura County Community Development Corporation
• County of Ventura PSSA GAIN/JOBS Program
• Oxnard College/CalWORKS Program
• County of Ventura Public Social Services Agency
• Employment Development Department (EDD) State of California • Ventura County Public Health
• Ventura County Behavioral Health
• Child Development Resources
• Women’s Economic Ventures
• Family Investment Center
• Housing Resident Services Program
• Colonia Village Tenants Association
• Pleasant Valley Village Tenants Association
• California State University at Channel Islands
• Oxnard Adult Education
• Center for Employment Training (C.E.T.)
3-II.C. ALTERNATIVE PCC COMMITTEE [24 CFR 984.202(c)]
It is also possible for the PHA, in consultation with the chief executive officer of the unit of general local government served by the PHA, to use an existing entity as the PCC, if the membership of the existing entity consists or will consist of the individuals required by regulation (See section 3-II.B. above).
OHA Policy
The OHA will not utilize an existing entity as its program coordinating committee. 524
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Chapter 4
SELECTING AND SERVING FSS FAMILIES
INTRODUCTION
FSS regulations require that the PHA include in its action plan a statement indicating how it will select families for participation in the FSS program. This includes outreach, waiting list management, and other selection procedures. When followed, the PHA’s selection procedures ensure that families will be selected without regard to race, color, religion, sex, handicap, familial status, or national origin.
Once selected for participation in the FSS program, families are to be provided various activities and supportive services so that they may obtain the education, employment, business, and social skills necessary to achieve self-sufficiency. A description of such activities and supportive services is also a requirement of the FSS action plan.
This chapter contains three parts:
Part I: Incentives, Outreach, and Assurance of Noninterference: This part describes the incentives the PHA will offer and the outreach efforts the PHA will use to encourage participation and recruit eligible families for the FSS program and contains the required assurance of noninterference with the rights of nonparticipating families.
Part II: Family Selection: This part covers whether the PHA will use preferences for family selection and which preferences the PHA will employ if they choose to do so. In addition, this part describes the selection factors the PHA will use in screening families for participation in the FSS program.
Part III: Activities and Support Services: This part lists the activities and supportive services to be provided to families through both public and private resources, describes the method the PHA will use to identify family support needs, and covers the required certification of coordination.
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PART I: INCENTIVES, OUTREACH, AND ASSURANCE OF NONINTERFERENCE 4-I.A. OVERVIEW
The FSS program offers incentives such as the FSS escrow account, case management, coaching, and other supportive services that not only encourage participation, but also help families achieve self-sufficiency. In addition to encouraging program participation through such incentives, PHAs also conduct outreach to recruit FSS participants from among eligible families.
As part of this process, families need to know that their choice as to whether to participate in the FSS program will not affect their admission to the Section 8 or public housing programs, nor will it affect their right to occupancy. This part describes the PHA’s policies regarding these issues, all of which are required aspects of the FSS action plan. 528
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4-I.B. INCENTIVES FOR PARTICIPATION [24 984.201(d)(5)]
By regulation, the FSS action plan must include a PHA’s incentives plan—a description of the incentives that the PHA intends to offer eligible families to encourage their participation in the FSS program. The incentives plan provides for the establishment of the FSS escrow account and any other incentives designed by the PHA.
OHA Policy
The OHA will offer the following services, as needed to complete obligations in the contract, to its FSS participants as incentives to participate in FSS.
Incentive Provided By Description
Case management/Coaching OHA FSS Program and
OHA Resident Services
Resident Services Coordinator
and Resident Opportunities and
Self- Sufficiency Coordinator
provide case management to
program participants
Child care Child Development
Resources
Child care services
Education Oxnard College EOPS
and Dream Resource
Center/California State
University Channel
Islands/Oxnard Adult
School
Higher education, ESL classes,
GED, career technical education,
and career management
Employment preparation Center for Employment
Training /Oxnard
College/CalWorks
Program/State of CA
Employment
Development Dept./
Employment information,
training, placement, job search,
resume building, career guidance,
interview techniques
FSS escrow account OHA FSS Program An interest-bearing escrow account is established by the OHA
for each participating family.
Homeownership Counseling Ventura County
Community Development
Corporation
Homeownership education and
financial counseling
Job training and employment counseling Center for Employment Training/County of
Ventura America’s Job
Center of California/
Women’s Economic
Ventures
Job training, job search assistance,
resume building, career guidance,
interviewing techniques, business
training and consulting services
Resident Engagement Colonia Village Tenant
Association/Pleasant
Valley Tenant Association
Resident education and advocacy
efforts
Resource referral OHA Resident Services Information and referrals to 529
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service providers
Substance/alcohol abuse treatment or
counseling
Ventura County
Behavioral Health
Evaluation and treatment for
substance abuse
Supportive Services Ventura County Public
Health
Health, nutrition, and wellness
programs/services
Supportive Services County of Ventura
Human Services Agency
Protective services for child,
elder, and dependent adults
Unemployment Services Employment
Development Department
State of California
Unemployment assistance, and
job search support
4-I.C. OUTREACH EFFORTS [24 CFR 984.201(d)(6)(i)(ii)]
In addition to offering incentives for FSS participation, PHAs also conduct outreach to recruit more FSS participants from eligible families. The FSS action plan must include a description of these efforts to recruit FSS participants, including notification and outreach, the actions the PHA will take to assure that both minority and nonminority groups are informed about the FSS program, and how the PHA will make this information known.
OHA Policy
The OHA will notify eligible families about the FSS program using the following outreach locations, activities, methods, and languages, where appropriate. These points of contact and methods have been selected to ensure that both minority and nonminority groups are informed about the FSS program.
Location/Activity Staff/Partner Method Language
Briefings/Orientations FSS Coordinator/PHA Staff
Specialist
Flyer
Presentation
English/Spanish
Interims/Recertifications OHA Staff
Specialist
Flyer
Referral Form
English/Spanish
Lobby OHA Staff
Receptionist
Flyer
Referral Form
English/Spanish
PHA Website OHA Staff Webpage
Flyer
English/Spanish
On-line Outreach FSS Coordinator / PHA Staff Mass Emails Newsletter
English/Spanish
Direct door to door outreach FSS Coordinator/Service
Providers/OHA Office Assistant
Flyers English/Spanish
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4-I.D. ASSURANCE OF NONINTERFERENCE WITH THE RIGHTS OF
NONPARTICIPATING FAMILIES [24 CFR 984.201(d)(10)]
A family’s housing assistance or admission into assisted housing should never depend on whether they choose to participate in the FSS program, and PHAs need to make this known as part of the recruitment process. For this reason, the PHA’s action plan must include an assurance that a family’s decision to not participate in the FSS program will not affect the family’s admission to the Section 8 or public housing programs, nor will it affect the family’s right to occupancy in accordance with the lease.
OHA Policy
Participation in the FSS program is strictly voluntary. Section 8 participants and public housing residents will be notified in all literature and media presentations related to the FSS program that should they decide not to participate in the FSS program, it will not affect their Section 8 or public housing. This material will also specify that the family will retain the right to occupancy according to their lease and family obligations contract. 531
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PART II: FAMILY SELECTION
4-II.A. OVERIVEW
The FSS action plan is required to contain a statement indicating the procedures for selecting families for FSS program participation, including a description of how the PHA will do so without regard to race, color, religion, sex (including actual or perceived gender identity), familial status, or national origin. This part describes these procedures, considering whether the PHA will use preferences for family selection and which preferences the PHA will employ if they choose to do so, in addition to defining the factors the PHA will use in screening families for program participation.
4-II.B. FSS SELECTION PREFERENCES
As part of the process for selecting families for participation in the FSS program, the PHA may choose whether to employ the use of preferences. If the PHA so chooses, it has the option of giving a selection preference for up to 50 percent of its FSS program slots to eligible families who have one or more family members currently enrolled in an FSS-related service program or who are on the waiting list for such a program. Such a preference may be further limited to participants in and applicants for one or more specific eligible FSS-related service programs.
Should the PHA choose to adopt such a preference, it would need to include the following information in its action plan:
• The percentage of FSS slots, not to exceed 50 percent of the total number of FSS slots for each of its FSS programs, for which it will give a selection preference • The FSS related service programs to which it will give a selection preference to the programs’ participants and applicants
• The method of outreach to and selection of families with one or more members participating in the identified programs [24 CFR 984.203(a)]
A PHA may wish to adopt additional selection preferences as well [Notice PIH 93-24].
OHA Policy
The OHA has not adopted the use of any other preferences when selecting families for participation in the FSS program.
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The PHA may use either of the following to select among applicants on the FSS waiting list with the same preference status [24 CFR 984.203(b)]:
• Date and time of application to the FSS program; or
• A drawing or other random choice technique.
OHA Policy
The OHA will use the date the family expressed an interest in participating in the FSS program to fill the FSS slots.
4-II.C. SELECTION FACTORS
Many factors contribute to whether a PHA may choose to select a family for participation in the FSS program. These selection factors can help the PHA screen families for admission, and ultimately contribute to the PHA’s decision to either allow or deny a family’s admission into the FSS program.
Motivation Selection Factors [24 CFR 984.203(d)(1)]
A PHA may screen families for interest and motivation to participate in the FSS program provided that the factors utilized by the PHA are those which solely measure the family’s interest and motivation to participate in the FSS program. For this reason, PHAs must only apply motivational screening factors that are permissible under the regulations.
Permissible Motivation Selection Factors
Permitted motivational factors include requiring attendance at FSS orientation sessions or preselection interviews or assigning certain tasks indicating the family’s willingness to undertake the obligations that may be imposed by the FSS contract of participation. However, any tasks assigned should be readily accomplishable by the family based on the family members’ educational level, abilities, or disabilities, if any. Reasonable accommodations must be made for individuals whose disability (mobility, manual, sensory, speech impairments, mental, or developmental disabilities) creates a barrier to accomplishing the tasks [24 CFR 984.203(d)(2)].
OHA Policy
The OHA will screen families for interest and motivation to participate in the FSS program by assigning a meeting or workshop which is the same type of meeting or workshop for each family. The OHA will only use the fact that the family attended as a screening factor, even if tasks or exercises are not completed in the meeting. In addition, if the family needs either childcare or transportation to be able to attend, or requests an accommodation for a disability, the OHA will either refer the family to available services or exempt the family from this screening factor.
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Prohibited Motivation Selection Factors
Prohibited motivational screening factors include the family’s educational level, educational or standardized motivational test results, previous job history or job performance, credit rating, marital status, number of children, or other factors, such as sensory or manual skills, and any factors which may result in discriminatory practices or treatment toward individuals with disabilities or minority or nonminority groups [24 CFR 984.203(d)(3)].
Other Selection Factors
In addition to motivational screening, the PHA may also wish to screen families for the following additional factors.
PHA Debt Selection Factor
The PHA may deny FSS participation to a family if the family owes the PHA, or another PHA, money in connection with Section 8 or public housing assistance [Notice PIH 93-24, B-18].
OHA Policy
The OHA will deny FSS participation to a family if the family owes the OHA, or another PHA, money in connection with Section 8 or public housing assistance. Families that owe money to a PHA who have entered into a repayment agreement and are current on that repayment agreement will not be denied FSS participation.
Unavailable Support Services Selection Factor
If the PHA determines, after consulting with the family, that a missing service is essential to the family’s needs, the PHA may skip that family (and other similar families) and offer the FSS slot to the next family for which there are available services [Notice PIH 93-24, B-8].
OHA Policy
If the OHA determines, after consulting with the family, that a missing service is essential to the family’s needs, the OHA will present the family’s case before the Program Coordinating Committee to allow consideration of other options and further case evaluation. If it is determined that the essential service is not available and the lack of it places the family in a situation where they do not have the necessary resources available to succeed, the OHA will skip the family (and other similar families) and offer the FSS slot to the next family for which there are available services.
Previous Participation Selection Factor
A PHA may refuse to select a family for participation in the FSS program a second time if that family previously participated unsuccessfully (i.e., the family participated, did not meet its FSS obligations, and was terminated from the FSS program) [Notice PIH 93-24, B-14].
OHA Policy
The OHA will consider a family’s request to re-enroll in the FSS Program if they did not complete the program and did not receive any escrow savings. The following conditions must be met in order for a family to be considered for re-enrollment:
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• The family is in good standing with regards to its Public Housing or Section 8 Program responsibilities;
• The family was not terminated initially from the FSS Program due to fraud; • The family must wait for a period of six (6) months for re-enrollment in the program after the initial FSS Contract was terminated;
• The OHA will screen the family to measure the family’s interest and motivation to participate in the FSS program in accordance with 24 CFR 984.203(d)(1) and 24 CFR 984.203(d)(2).
The OHA will not enroll a family for participation in the FSS program a second time if that family previously participated, completed the COP, and received a final distribution of their escrow account if their employment skills or wages are below the level needed to achieve economic self-sufficiency (a wage that pays for basic needs without the use of subsidies).
4-II.D. SELECTION OF HEAD OF HOUSEHOLD
Each eligible family that is selected to participate in an FSS program must enter a contract of participation with the PHA. There will be no more than one contract at any time for each family.
There may be an ITSP for as many members of the family who wish to participate. The contract shall be signed by a representative of the PHA and the head of FSS family, as designated by the family. This head of FSS family does not have to be the same as the official head of household for rental assistance purposes [24 CFR 984.303(a)].
OHA Policy
The OHA will meet with the family and detail the obligations, rights, and privileges that pertain to the FSS head of household and require each adult family member to certify their agreement as to their designated head of the FSS family. These certifications will be a permanent part of the FSS family’s record and will be updated with each change of head of household.
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PART III: ACTIVITIES AND SUPPORT SERVICES
4-III.A. OVERVIEW
Once families are admitted to the FSS program, the PHA becomes responsible for making sure these families are adequately served. The purpose of the family self-sufficiency (FSS) program is to promote the development of local strategies to coordinate the use of Section 8 and public housing assistance programs with public and private resources, to enable families eligible to receive assistance under these programs to achieve economic independence and self-sufficiency.
As such, upon selection, families are matched with the appropriate activities and supportive services so that they may obtain the education, employment, and business and social skills necessary to achieve self-sufficiency. This is a vital element of the FSS program. The PHA must make a good faith effort to replace the obtained services from another agency. 4-III.B. METHOD OF IDENTIFYING FAMILY SUPPORT NEEDS
[24 CFR 984.201(d)(8)]
Before a PHA can determine the services and activities it will provide to FSS families, it must identify the services and activities appropriate to each family. The action plan must contain a description of how the program will identify the needs of FSS families and deliver the services and activities according to these needs.
OHA Policy
Supportive services needs will be identified by completion of an informal needs assessment with the FSS coordinator or case manager or coach before completion of the initial individual training and services plan and signing of the contract of participation. 536
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4-III.C. FSS ACTIVITIES AND SUPPORT SERVICES DESCRIPTION [24 CFR 984.201(d)(7)]
As part of the required contents of the action plan, PHAs must both describe the activities and supportive services to be provided by public and private resources to FSS families and identify the public and private resources that are expected to provide the supportive services.
Of course, this task assumes that the PHA has first identified the needed activities and supportive services.
OHA Policy
The OHA’s FSS program, through its partners on the program coordinating committee and community partners, will provide the following activities and support services to FSS families:
Support Service General Support Service Specific Source/Partner Assessment
Vocational Assessment
Educational Assessment
Vocational Planning
Educational Planning
Disability Assessment
Disability Vocational
Assessment/Planning
Disability Educational
Assessment/Planning
Drug/Alcohol Assessment
Drug/Alcohol Planning
Adult Basic Education
Career Center
Community College
Community Based Organizations
Career Center
Community College
Vocational Rehabilitation
Health Department
Career Center
Community-based Organizations
Education
High School
English as a Second Language
GED
Post-secondary
College
High School Adult Basic
Education
Community College
University
Training
Skills Training
Emerging Technologies
Training
Biomedical Training
On-the-Job Training
Functional Context Training
Adult Basic Education
Community College
University
Community-based Organizations
Workforce Innovation/American
Job Centers
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Support Service General Support Service Specific Source/Partner Job Search Assistance
Resume Preparation
Interviewing Skills
Dress for Success
Workplace Skills
Job Development
Job Placement
Adult Basic Education
Community College
University
Community-based Organizations
Workforce Innovation/American
Job Centers
Transportation Bus Gold Coast Transit
Health Care
Alcohol and Drug Prevention
Alcohol and Drug Treatment
HMO
Health Department
Community Clinic
General Hospital
Child Care
Infant Care
Toddler Care
Preschool Care
Afterschool Care
Homework Assistance
Child Care Resource
The Boys & Girls Clubs of
Greater Oxnard and Port
Hueneme
Financial Literacy
Financial Education
Financial Coaching
Debt Resolution
Credit Repair
Adult Basic Education
Community College
University
Community-based Organizations
Legal Services
Representation
Document Review
Counsel or Advice
California Rural Legal
Assistance
Housing Rights Center
Ventura County Legal Aid
Child/Adult Protective
Services
Needs Assessment
Case Planning
Information Referral
Crisis Management
Senior Services
Adult Services
In-home Support Services
Adult/Child Abuse Hotline
Foster Care
Adoption Services
Crisis Services
Crisis Assessment
Crisis Intervention
Crisis Management
Crisis Resolution
Crisis Team
Senior Crisis Team
Poison Center
Domestic Violence Shelter
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Support Service General Support Service Specific Source/Partner Micro and Small
Business Development
Training
Planning
Technical Assistance
Mentoring
Microbusiness Assistance
Program
Small Business Administration
Homeownership
Training
Planning
Debt Resolution
Public Housing Authority
Housing Counseling
Organization
Community-based Organizations
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4-III.D. CERTIFICATION OF COORDINATION [24 CFR 984.201(D)(12)] The FSS action plan is required to contain a certification that the development of the activities and services under the FSS program has been coordinated with the JOBS program (now Welfare to Work under TANF), the programs under title I of the Workforce Innovation and Opportunity Act,, and any other relevant employment, child care, transportation, training, and education programs in the applicable area. The implementation of the FSS program’s activities and services must continue to be coordinated as such to avoid duplication of activities and services.
OHA Policy
The OHA certifies that its FSS program has developed its services and activities in coordination with programs under Title I of the Workforce Innovation and Opportunity Act, Workforce Investment Board and American Job Centers (also known as Workforce Centers or One Stop Career Centers), and any other relevant employment, child care, transportation, training, and education programs in the applicable area. The implementation of these activities and services will continue to be coordinated in this manner to avoid duplication of activities and services. 540
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Chapter 5
CONTRACT OF PARTICIPATION
INTRODUCTION
Each family that is selected to participate in an FSS program must enter into a contract of participation with the PHA. This contract, which is signed by the head of the FSS family, sets forth the principal terms and conditions governing participation in the FSS program, including the rights and responsibilities of the FSS family and of the PHA, the services to be provided to the head of the FSS family and each adult member of the family who elects to participate in the program, and the activities to be completed by them. The contract also incorporates the individual training and services plan [24 CFR 984.303].
This chapter contains two parts:
Part I: Overview and Family Obligations: This part provides an overview of the form and content of the contract of participation and describes what the contract requires of FSS families.
Part II: Contract Specifications: This part explains the specifications of the contract, including terms and conditions, contract modification, contract terminations, and grievance procedures.
PART I: OVERVIEW AND FAMILY OBLIGATIONS
5-I.A. OVERVIEW
The purpose of the FSS contract of participation is to set forth the principal terms and conditions governing participation in the FSS program, including the incorporation of the individual training and services plan (ITSP) as part of the contract’s required contents. The ITSP is meant to establish goals the FSS family will meet along the family’s way to completing the contract and becoming self-sufficient. In addition to the goals specified in the ITSP, the contract also lists the responsibilities of the family and the PHA. This part covers the ITSP as part of the required contents of the contract of participation, and the family’s obligations under the contract. 541
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5-I.B. CONTENTS OF THE CONTRACT OF PARTICIPATION
Individual Training and Services Plan
There will only ever be one FSS contract of participation (CoP) at any time for each FSS family.
As part of the required contents of the FSS contract of participation (CoP), the individual training and services plan (ITSP) establishes specific interim and final goals by which the PHA and the family measure the family’s progress toward fulfilling its obligations under the contract of participation and becoming self-sufficient. Interim and final goals will differ depending on the family’s individual needs. Regulations require the establishment of a final goal that includes both employment for the head of the FSS family and independence from welfare assistance for all family members regardless of age.
Interim Goals [24 CFR 984.303(b)(2)]
PHAs must work with each participant to establish realistic and individualized goals and may not include additional mandatory goals or mandatory modifications of the two mandatory goals.
Individual Training and Service Plans for Other than FSS Head [24 CFR 984.103] An individual training and services plan is required for the head of the FSS family and all adults choosing to participate. ITSPs must be prepared for each adult family member participating.
ITSPs are prepared by the PHA, in consultation with the participating family member [Notice PIH 93-24, G-16.
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5-I.C. FAMILY OBLIGATIONS
Compliance with Lease Terms [24 CFR 984.303(b)(3)]
One of the obligations of the FSS family according to the contract of participation is to comply with the terms and conditions of the Section 8 or public housing lease.
Inability to comply with the lease represents an inability to comply with the contract, therefore regulations regarding noncompliance with the FSS contract apply [see 24 CFR 984.303(b)(5)]. It is up to the PHA to determine the plan of action for FSS families found in noncompliance with the lease and how the PHA will precisely define the term comply with the lease. All considerations allowed for other assisted residents regarding violations of the lease, must also be allowed for FSS participants.
OHA Policy
The OHA will define comply with the lease to mean the FSS family has not been evicted for repeated or serious violations of the lease as defined in the Section 8 Administrative Plan and public housing Admissions and Continued Occupancy Policy; or if they have been evicted for repeated and serious violations of the lease, the family has pursued their right to grieve, and the family has prevailed in either the grievance hearing or the informal hearing process.
The OHA’s FSS program will terminate the FSS contract of participation for failure to comply with the terms of the lease.
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Employment Obligation [24 CFR 984.303 (b)(4)]
Another obligation set forth by the contract of participation is for the head of the FSS family to seek and maintain suitable employment during the term of the contract and any extension.
Although other members of the FSS family may seek and maintain suitable employment during the term of the contract, it is only a requirement for the head of the FSS family.
The obligation for the head of the FSS family to seek employment is defined in the regulatory language as meaning that the head of the FSS family has searched for jobs, applied for employment, attended job interviews, and has otherwise followed through on employment opportunities. However, this definition still leaves room for policy decisions on the part of the PHA because it does not define the level of activity involved in “seeking.” There is no regulatory definition of maintain suitable employment. For this reason, it is up to the PHA to define the term. However, there can be no minimum period of time that the head of the FSS family must work.
With the agreement of the FSS family member, the PHA makes a determination of what it means to maintain suitable employment based on the skills, education, and job training of the FSS head of household, receipt of other benefits of the family member, and the available job opportunities within the jurisdiction served by the PHA. This means that the PHA must consult with the family member and agreement must be reached as to what maintain suitable employment is for that family member [24 CFR 984.303 (b)(4), Notice PIH 93-24, G-3].
OHA Policy
For purposes of the OHA’s FSS program, seek employment means the head of household has applied for employment, attended job interviews, and otherwise followed through on employment opportunities as outlined in the individual training and services plan of their contract of participation.
Maintain suitable employment is employment, on the last day of the contract, that is outlined in the individual training and service plan and is based on the skills, education, job training, and receipt of other benefits of the head of the FSS family. The OHA will require verification of this employment or enrollment.
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5-I.D. CONSEQUENCES OF NONCOMPLIANCE WITH THE CONTRACT
Consequences apply for families who do not meet the terms and conditions of the contract. The regulations require that the contract of participation specify that if the FSS family fails to comply, without good cause, with the terms and conditions of the contract (including compliance with the Section 8 or public housing lease), the PHA may:
• Withhold supportive services
• Terminate the family's participation in the FSS program PHAs are not permitted to terminate a family’s housing assistance due to the family’s failure to meet its obligations under the contract of participation [24 CFR 984.101(d)].
OHA Policy
The contract of participation (CoP) will be terminated before the expiration of the contract term if the participant fails to meet, without “good cause,” their obligations as outlined in the CoP. If the participant fails to meet its obligations outlined in the CoP, the FSS coordinator, or their designee, will first meet with the family to reassess the need for supportive services or a change in the individual training and services plan (ITSP).
If a reassessment of supportive services and a change in the ITSP is not successful in bringing the family in to compliance, the FSS coordinator will reassess the need for, and availability of, supportive services and refer the participant to a knowledgeable professional for a formal assessment of the challenges leading to the noncompliance.
The FSS Coordinator will use this formal assessment to identify and refer to resources that remove the challenge so the participant is able to meet their obligations outlined in the CoP.
Finally, if neither of these alternatives is successful, the FSS coordinator will terminate the CoP for failure to complete the tasks, interim goals, or final goals of the ITSP in a timely manner, and thus failure to complete the obligations outlined in the CoP.
The FSS coordinator will make an exception to the actions in terminating the CoP if the participant can, with the assistance of the FSS Coordinator, demonstrate “good cause” for the failure to meet its obligations as outlined in the CoP. 545
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For purposes of the OHA FSS program, good cause includes circumstances beyond the control of the FSS family:
Family circumstances
Death in the family
Serious illness
Medical emergency
Mandatory court appearances
Involuntary loss of employment
Loss of head of household through death, incarceration, or removal from lease
Change in the ITSP improving progress toward economic self-sufficiency Community circumstances
Significant reduction in workforce (over 20 percent reduction in employment field)
Significant interruption in service delivery (over 3 months interruption) Provider noncompliance with regulation
Provider unable or unwilling to provide service
Provider offering inferior service
Active pursuit of a current or additional self-sufficiency goal Resolution of a barrier to employment
Completion of a college degree or technical training
Completion of a work-related certification
Credit repair towards homeownership readiness
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PART II: CONTRACT SPECIFICATIONS
5-II.A. OVERIVEW
In addition to making clear the family’s obligations under the program, the contract of participation contains specific terms and conditions, including those governing contract modifications, terminations, and grievance procedures. This part describes those specifications and associated policy.
5-II.B. CONTRACT TERM [24 CFR 984.303(c)]
The contract term is five years. This means that the family has no more than five years from the effective date of the contract of participation (CoP) to fulfill their obligations as specified in the contract. This five year term requirement will be specified in the CoP.
Contract Extension [24 CFR 984.303(d)]
While the term set forth in the contract of participation is for five years, contract extensions are available. According to regulation, PHAs must for “good cause” extend the term of the contract for a period not to exceed two years for any FSS family that requests an extension of the contract in writing or verbally. The family’s written or verbal (documented by the FSS Coordinator) request for an extension must include a description of the need for the extension. Good cause means circumstances beyond the control of the FSS family, as determined by the PHA, such as a serious illness or involuntary loss of employment (further defined by PHA policy in Section 5-I.D.). Extension of the contract of participation will entitle the FSS family to continue to have amounts credited to the family’s FSS account.
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5-II.C. MODIFICATION OF THE CONTRACT
The contract of participation (CoP) may be modified, as long as the PHA and the FSS family mutually agree to modify it. This includes modifications in writing with respect to the individual training and services plans (ITSPs), the contract term (See Section 5-II.B. above), and designation of the head of the family [24 CFR 984.303(f)]. The conditions under which the PHA will modify the contract are set forth in the policy below.
OHA Policy
In the OHA’s FSS program, the CoP will be modified by mutual agreement between the PHA and the FSS head of household:
When modifications to the ITSP improve the participant’s ability to complete their obligations in the CoP or progress toward economic self- sufficiency.
When the actual end date of the CoP is determined by the effective date of the FSS family’s first reexamination changes the end date of the CoP.
When the designated head of the FSS family ceases to reside with other family members in the assisted unit, and the remaining family members, , designate another family member to be the FSS head of household and receive escrow funds.
When an FSS family moves to the jurisdiction of a receiving PHA that does not have an FSS program and the family may not continue participation in the FSS program, and modification of the FSS contract will allow the family to complete the contract and receive an escrow disbursement or terminate the contract with escrow disbursement.
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5-II.D. COMPLETION OF THE CONTRACT
By regulation, the contract of participation is considered to be completed when the head of household is employed and the FSS family has fulfilled all of its obligations under the contract of participation, including all family members’ ITSPs, on or before the expiration of the contract term, including any extension thereof.
Policies on verifying completion of the contract of participation can be found in Section 6-I.C. of this action plan.
5-II.E. TRANSITIONAL SUPPORTIVE SERVICE ASSISTANCE
Even after a family has completed the contract of participation, a PHA may continue to offer appropriate FSS supportive services to a former completed FSS family. If the family still resides in Section 8 or public housing, these supportive services would be offered for becoming selfsufficient. If the family no longer resides in Section 8 or public housing, these supportive services would be offered for becoming self-sufficient or remaining self-sufficient. Transitional services for families who no longer reside in Section 8 or public housing, may only be offered using sources that are not HUD funds or HUD restricted funds [24 CFR 984.303(j)].
OHA Policy
The OHA will not continue to offer supportive services to a former FSS family who has completed its contract of participation.
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5-II.F. TERMINATION OF THE CONTRACT
Termination of the Contract with Escrow Distribution [24 CFR 984.303(k)] The contract of participation will be terminated with escrow distribution before the expiration of the contract term, during any extension of the contract, or at end of the term of the contract if all obligations under such have not been met, when:
• Services that the PHA and the FSS family have agreed are integral to the FSS family’s advancement towards self-sufficiency are unavailable, as described in Section 5-II.H. of this Action Plan. This type of termination is also referred to as “nullification” in the FSS regulations at 24 CFR 984.
• The head of the FSS family becomes permanently disabled and unable to work during the period of the contract, unless the PHA and the FSS family determine that it is possible to modify the contract to designate a new head of the FSS family; or • An FSS family in good standing moves outside the jurisdiction of the PHA (in accordance with portability requirements at 24 CFR 982.353) for good cause and continuation of the CoP after the move or completion of the CoP prior to the move is not possible. PHAs must be consistent in their determinations of whether a family has good cause for a termination with FSS escrow disbursement.
Termination of the Contract without Escrow Distribution [24 CFR 984.303(h)] The contract of participation may be terminated before the expiration of the contract term and any extension of the contract by the following:
• Mutual consent of the parties
• Failure of the FSS family to meet its obligations under the contract of participation without good cause, including in a Section 8 FSS program the failure to comply with the contract requirements because the family has moved outside the jurisdiction of the PHA • The family’s withdrawal from the FSS program
• Such other act as is deemed inconsistent with the purpose of the FSS program • Operation of law
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OHA Policy
The CoP will be terminated before the expiration of the contract term, and any extension thereof, for any of the following reasons
Mutual consent of the parties.
Family’s withdrawal from the FSS program.
Failure of the FSS family to meet its obligations under the contract of participation without good cause. Good cause for the purposes of the FSS program is also defined in Section 5-I.D. of this Action Plan.
Such other act as is deemed inconsistent with the purpose of the FSS program.
Operation of law.
If the FSS family faces termination due to failing to meet, without good cause, its obligations under the CoP, the OHA will follow the relevant policy specified in Section 5-I.D. of this action plan.
Note: If the family is unable to meet the requirements of the contract of participation because essential services are not available, the contract tis nullified, not terminated.
In addition, the` contract of participation is automatically terminated if the family’s Section 8 assistance is terminated in accordance with HUD requirements [24 CFR 984.303(h)]. 551
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5-II.G. OPTION TO WITHHOLD SUPPORTIVE SERVICE [24 CFR 984.303(b)(5)(i)] As touched upon in Section 5-I.D. of this action plan, the PHA has the option to withhold supportive services or the FSS family’s participation in the FSS program if the PHA determines that the FSS family has failed to comply without good cause with the requirements of the contract of participation.
PHAs are not permitted to terminate Section 8 assistance to a family due to the family’s failure to meet its obligations under the contract of participation [24 CFR 984.101(d)]. 5-II.H. PHA OBLIGATION TO MAKE GOOD FAITH EFFORT TO REPLACE UNAVAILABLE SUPPORT SERVICES [24 CFR 984.303(e)]
PHA s must make an extensive good faith effort to replace services that community agencies either cannot or will not provide. If all of the steps below are exhausted without the provision of an integral service, the contract of participation can be ended ahead of time as a result. This, however, should only occur as a last resort. The PHAs good faith effort must be demonstrated by taking the following steps:
• If a social service agency fails to deliver the supportive services pledged under an FSS family member’s individual training and services plan (ITSP), the PHA must make a good faith effort to obtain these services from another agency.
• If the PHA is unable to obtain the services from another agency, the PHA must reassess the family member’s needs and determine whether other available services would achieve the same purpose.
• If other available services would not achieve the same purpose, the PHA shall determine whether the unavailable services are integral to the FSS family’s advancement or progress toward self-sufficiency.
• If the unavailable services are not integral to the FSS family’s advancement toward selfsufficiency, the PHA must revise the ITSP, delete these services, and modify the contract of participation to remove any obligation on the part of the FSS family to accept the unavailable services.
• If the unavailable services are determined to be integral to the FSS family’s advancement toward self-sufficiency (which may be the case if the affected family member is the head of the FSS family), the PHA shall terminate the contract of participation and follow the requirements in Section 5-II.F. of this Action Plan.
Termination of the contract of participation based on unavailability of supportive services shall never be grounds for termination of Section 8 or public housing assistance. 552
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5-II.I. GRIEVANCE PROCEDURES
When adverse action is taken by the PHA against a family, the PHA is required to provide a grievance hearing in the public housing program, or an informal hearing in the Section 8 program [24 CFR 966 subpart B, 24 CFR 982.554].
According to regulatory requirements, the FSS action plan must contain the grievance and hearing procedures available for FSS families against whom the PHA has taken adverse action with regards to FSS [24 CFR 984.201(d)(9)].
OHA Policy
The grievance and informal hearing procedures for the FSS program will be the same as the grievance and hearing procedures adopted for the Section 8 (See Chapter 16, Part III of the Administrative Plan) and public housing programs (See Chapter 14 of Admissions and Continued Occupancy Policy Plan), respectively.
Adverse actions taken within the FSS program include:
Denial of admission into the FSS program
Denial of request for supportive services
Denial of request to change the ITSP
Denial of request to change the head of household
Denial of request for interim disbursement of the escrow account Denial of request to complete the CoP
Denial of a request for extension to the FSS CoP
Denial of request for either interim or final distribution of escrow account Withholding of support services
Termination of the FSS CoP
Denial of request for termination with escrow
Denial of transitional services
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Chapter 6
ESCROW ACCOUNT
INTRODUCTION
The establishment of an escrow account is offered as a support and financial incentive to families for participation in the FSS program. Generally, under this incentive, the amount of an increase in family rent resulting from an increase in earned income is escrowed. That is, usually a family’s rent or share of the rent goes up when the family experiences an increase in earned income. In the FSS program, this is still the case, and the part of the rent representing the increase is deposited into an account as an escrow credit. The funds from this escrow account then become available to FSS families upon successful completion of their contracts of participation and may become available earlier at the housing authority’s option.
This chapter explains how the FSS escrow account works, including calculating the amount of the escrow credit, disbursing the funds, and the proper way for the PHA to manage and report on the account.
This chapter contains two parts:
Part I: The Escrow Account: This part provides an overview of how the escrow account works, including calculating the escrow credit and disbursing the funds upon completion of the contract of participation.
Part II: Escrow Fund Accounting and Reporting: This part describes the requirements for managing the escrow account, including both accounting and reporting requirements.
PART I: THE ESCROW ACCOUNT
6-I.A. OVERVIEW
As an integral incentive to the FSS program, it is especially important to have clear-cut policy spelling out how the escrow account works. This includes policy regarding the calculation of the FSS credit amount, the disbursement of FSS account funds, the use of account funds for homeownership, and forfeiture of the FSS escrow account. 554
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6-I.B. CALCULATING THE FSS CREDIT AMOUNT
Determination of Baseline Annual Earned Income and Baseline Monthly Rent When determining the family’s baseline annual earned income and the baseline monthly rent amounts for purposes of computing the FSS escrow credit, the PHA must use the amounts on the family’s most recent income reexamination in effect.
For purposes of determining the FSS credit, baseline monthly rent for families paying an income-based rent is the family’s Total Tenant Payment (TTP) as of the most recent reexamination of income, which occurs after the effective date of the FSS contract.
For families in public housing who are paying either flat or ceiling rent, family rent is the amount of the flat rent (including the applicable utility allowance) or ceiling rent (including any hardship discounts) as of the most recent reexamination of income, which occurs after the effective date of the FSS contract [24 CFR 984.103(b)].
Determination of the Escrow Credit
To calculate the FSS credit, the PHA must accurately determine the family’s baseline earned income and baseline monthly rent and compare those figures with the family’s current earned income and current monthly rent. The FSS credit is the lesser of 30 percent of one-twelfth or 2.5 percent of the amount by which the family’s current annual earned income exceeds the family’s baseline annual earned income; or the increase in the family’s monthly rent. The increase in the family’s monthly rent is the lower of either the amount by which the family’s current monthly rent exceeds the family’s baseline monthly rent, or for Section 8 families, the difference between the baseline monthly rent and the current gross rent (i.e., rent to owner plus any utility allowance) or the payment standard, whichever is lower [24 CFR 984.305(b)(2)].
Determination of Escrow Credit for Families Who Are Not Low Income FSS families who are not low-income families are not entitled to any FSS credit [24 CFR 984.305(b)(2)].
Increases in FSS Family Income [24 CFR 984.304]
As described in the FSS credit calculations above, any increases in family earned income resulting in increases in family rent are deposited in the escrow account. For this reason, and because of the nature of the FSS account, any increase in the earned income of an FSS family during its participation in an FSS program may not be considered as income or an asset for purposes of eligibility of the FSS family for other benefits, or amount of benefits payable to the FSS family, under any other program administered by HUD.
Cessation of FSS Credit [24 CFR 984.305(b)(4)]
The PHA will not make any additional credits to the FSS family’s FSS account when the family has completed the contract of participation, when the contract of participation is terminated, when the family is not low-income, or during the time a Section 8 family is in the process of moving to a new unit.
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6-I.C. DISBURSEMENT OF FSS ACCOUNT FUNDS
Disbursement Before Completion of Contract
The PHA may at its sole option disburse FSS account funds before completion of the contract if the family needs a portion of the funds for purposes consistent with the contract of participation and the PHA determines that the FSS family has fulfilled certain interim goals established in the contract of participation. These interim disbursements could include using the funds to assist the family in meeting expenses related to completion of higher education (e.g., college, graduate school) or job training, or to meet start-up expenses involved in creation of a small business [24 984.305(c)(2)(ii)].
OHA Policy
The OHA will disburse a portion of the FSS escrow account funds before completion of the CoP when the family has met certain interim goals, which means the family has met all its obligations under the CoP to date, including completion of the ITSP interim goals and tasks to date, and:
Requested funds are needed to complete an interim goal or task within the CoP and are not ongoing expenses.
OR
The family has demonstrated that the need for one-time payment of otherwise ongoing expenses such as rent, utilities, telephone, cell phone, pager, car payments, car maintenance, insurance, or childcare is needed to complete an interim goal, a final goal, or a task related to such goals.
Disbursement at Completion of Contract [24 CFR 984.305(c)(1) and 24 984.305(c)(2)(i)] When the contract has been completed, at or before the expiration date, according to regulation, the amount in the FSS account in excess of any amount the FSS family owes to the PHA under the lease will be paid to the head of the FSS family. To receive the disbursement, the head of the FSS family must submit a certification (as defined in 24 CFR 984.103) to the PHA at the time of contract completion that, to the best of his or her knowledge and belief, no member of the FSS family is a recipient of welfare assistance.
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Disbursement at Contract Termination [24 CFR 984.305(c)(3)] The PHA must disburse to the family its FSS escrow account funds in excess of any amount owed to the PHA under the lease when the contract has been terminated in certain circumstances.
These circumstances include services are not available to the family that the PHA and the FSS family have agreed are integral to the FSS family’s advancement towards self-sufficiency, when the head of the FSS family becomes permanently disabled and unable to work during the period of the contract (unless the PHA and the FSS family determine that it is possible to modify the contract to designate a new head of the FSS family), or when an FSS family moves outside the jurisdiction of the PHA and continuation of the CoP after the move is not possible according to the regulations. In circumstances where a family is not able to continue in FSS after the move, it is also possible for the PHA and the family to determine if the contract can be modified to make completion and receipt of the escrow monies, possible. PHAs must be consistent in their determinations of whether a family has good cause for a termination with FSS escrow disbursement.
Verification of Family Certification at Disbursement
The PHA must verify that the family has met the requirements of either interim, final, or termination of contract with escrow. Interim disbursement may only occur after the family has completed certain interim goals and funds are needed to complete other interim goals. Final disbursement can only occur after the family has completed the contract of participation and all members are welfare-free as defined by regulation. Disbursement at contract termination only occurs if the family circumstances involve an integral missing service, the disability of the FSS head of household, or an FSS family porting out of the jurisdiction of the PHA and HUD regulations do not allow continuation of the FSS contract. In each of these circumstances, it follows that the PHA may require verification for the completion of interim goals or the contract of participation.
At interim disbursement and before final disbursement of the FSS account funds to the family, the PHA must verify that the FSS family is no longer a recipient of welfare assistance by requesting copies of any documents which may indicate whether the family is receiving any welfare assistance, and by contacting welfare agencies [24 CFR 984.305(c)(4)].
HUD provides verification guidance in Notice PIH 2018-18. This guidance is mandatory for the Section 8 and public housing programs. The PHA’s Administrative Plan or ACOP must contain verification policies following the hierarchy in this notice. The policies contained in the PHA’s ACOP and Administrative Plan cover verification policies related to the FSS program in general.
However, determining the need for interim disbursements may require more clarification as to what constitutes an acceptable third-party source.
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OHA Policy
The PHA will require verification that the FSS family has completed certain interim goals, has completed the contract of participation, has met the requirements for termination with disbursement of escrow and that the FSS family is no longer a recipient of welfare assistance, as relevant, before making interim and final disbursements.
The OHA will follow HUD’s verification hierarchy set forth in Notice PIH 2018-18 to make these verifications, including the guidance therein regarding documentation.
However, the OHA will use a knowledgeable professional as a third-party source to verify the need for interim disbursements.
Succession to FSS Account [24 CFR 984.305(d)]
FSS account funds should be disbursed to the head of the FSS family. However, if the head of the FSS family no longer resides with the other family members in Section 8 or public housing, the remaining members of the FSS family, after consultation with the PHA, have the right to designate another family member to receive the funds.
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6-I.D. USE OF FSS ACCOUNT FUNDS FOR HOMEOWNERSHIP
According to regulation, a Section 8 or public housing FSS family may use their the final distribution of FSS account funds for the purchase of a home, including the purchase of a home under one of HUD’s homeownership programs, or other federal, state, or local homeownership programs, unless the use is prohibited by the statute or regulations governing the particular homeownership program [24 CFR 984.305(e)].
Homeownership is just one option for use of the FSS account funds. PHAs may not restrict the use of escrow funds at contract completion [Notice PIH 93-24, C-13]. 6-I.E. USE OF FORFEITURE OF FSS ACCOUNT FUNDS
Amounts in the FSS account will be forfeited when the contract of participation is terminated without escrow disbursement, or when the contract of participation is completed by the family (see Section 5-II.D. of this action plan) but the FSS family is receiving welfare assistance at the time of expiration of the term of the contract of participation, including any contract extension [24 CFR 984.305(f)(1)].
Use of forfeited escrow accounts is also described in Section 3-I.F. of this FSS Action Plan.
OHA Policy
The OHA will use forfeited escrow accounts for support and other costs for FSS participants in good standing when funds requested are needed to complete an interim goal or task in the ITSP and are not ongoing expenses or if the family can demonstrate that the need for one-time payment of otherwise ongoing expenses such as rent, utilities, telephone, cell phone, pager, car payments, car maintenance, insurance, or childcare is needed to complete an interim goal, a final goal, or a task related to such goals in the ITSP. The OHA will make payment directly to third party vendor The OHA will use forfeited escrow accounts for training provided to FSS Coordinators.
The OHA will define supports as defined in 24 CFR 984.305(f)(2)(i)(A) as transportation, childcare, training, testing fees, employment preparation costs, other costs related to achieving obligations outlined in the CoP, and training for FSS Program Coordinator(s)
The OHA will define other costs related to achieving obligations in the CoP as any costs necessary to complete an interim goal, a final goal, or tasks related to such in the ITSP as defined in 24 CFR 984.305(f)(2)(i)(A) as transportation, childcare, training, testing fees, employment preparation costs, other costs related to achieving obligations outlined in the CoP, and training for FSS Program Coordinator(s).
The OHA will define necessary to complete as meaning that no other resources are available in the community either because such a resource is non-existent or that resources are utilized above capacity and agencies cannot, for an in determined period, provide such a resource.
The OHA will provide funds from the forfeited escrow account to FSS participants in good standing before requiring the participant to use an “interim” disbursement from their current escrow account so long as:
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The funds requested are needed to complete an interim goal or task within the CoP and are not ongoing expenses; or
If the family has demonstrated that the need for one-time payment of otherwise ongoing expenses such as rent, utilities, telephone, cell phone, pager, car payments, car maintenance, insurance, or childcare is needed to complete an interim goal, a final goal, or a task related to such goals.
The OHA will prioritize requests for funds from forfeited escrow accounts initially on a first come first served basis based on the date and time of the request. After that order is established, while still preserving the first come first served basis, the OHA will apply the following priorities based on an assessment by a knowledgeable professional (See page 2-14 for definition):
Priority 1: Funds to meet a goal in the ITSP that is necessary to ensure the safety and wellbeing of victims of domestic violence, dating violence, sexual assault, and stalking as defined in the OHA’s Section 8 Administrative Plan and public housing Admissions and Continued Occupancy Policy regarding VAWA.
Priority 2: Funds to meet a goal in the ITSP that is necessary to stabilize health, safety, and welfare of the FSS participant or family that if left unattended would jeopardize education, training, or employment.
Priority 3: Funds to meet a goal in the ITSP that is necessary to further education, training, and employment goals in the ITSP including childcare, transportation, and medical costs if the lack of any of these prevents completion of the education, training, and employment.
Priority 4: Funds to meet a goal in the ITSP that is necessary to further any other goal or tasks.
Treatment of Forfeited FSS Account Funds
FSS escrow account funds forfeited by the FSS family must be used by the PHA for the benefit of the FSS participants. These funds may only be used for support for FSS participants in good standing. These supports include transportation, childcare, training, testing fees, employment preparation costs, and other costs related to achieving obligations outlined in the CoP; or training for FSS Program Coordinator(s). Forfeited FSS escrow accounts may not be used for salary and fringe benefits of FSS Program Coordinators, general administrative costs of the FSS program, for housing assistance payments (HAP) expenses or public housing operating funds. 560
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PART II: ESCROW FUND ACCOUNTING AND REPORTING
6-II.A. OVERVIEW
Regulations set forth specific requirements involving the accounting and reporting for the FSS escrow account. This part describes those requirements and the PHA policy necessary for managing the account from the PHA perspective.
6-II.B. ACCOUNTING FOR FSS ACCOUNT FUNDS
When establishing FSS escrow accounts, the PHA must deposit the FSS account funds of all families participating in the PHA’s FSS program into a single depository account for each (Section 8 or public housing) program. These funds are determined at each reexamination after the effective date of the contract and must be deposited each month to each family’s subsidiary line item in the PHAs escrow account. In addition, the funds held in this account must be invested in one or more of the HUD-approved investments [24 CFR 984.305].
Crediting the Escrow Account [24 CFR 984.305(a)(2)(i)]
The total of the combined FSS account funds will be supported in the PHA accounting records by a subsidiary ledger showing the balance applicable to each FSS family. During the term of the contract of participation, the PHA must credit the amount of the FSS credit (see Section 6-I.B.) to each family’s FSS account every month.
Proration of Investment Income [24 CFR 984.305(a)(2)(ii)] Because the FSS account funds are to be invested, the investment income for those funds in the FSS account will also need to be credited to each family’s account subsidiary line item. By regulation, these funds are to be prorated and credited to each family’s FSS account based on the balance in each family’s FSS account at the end of the period for which the investment income is credited.
OHA Policy
Each quarter the full amount of the investment income for funds in the public housing and Section 8 FSS account will be prorated and credited to each family’s subsidiary line item.
Reduction of Amounts Due by FSS Family [24 CFR 984.305(a)(2)(iii)] At Completion Monies Owed
If the FSS family has not paid the family contribution towards rent, or other amounts, if any, due under the public housing or Section 8 lease, the balance in the family’s FSS account shall be reduced by that amount (as reported by the owner to the PHA in the Section 8 FSS program) at the time of final disbursement of FSS escrow funds.
Before Completion Underreported Income
After Baseline (Family is already a participant in the FSS Program) 561
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If the FSS family has underreported income after the baseline annual income is set, the amount credited to the FSS account will be based on the income amounts originally reported by the FSS family.
At Baseline (When the Family joins the FSS program)
If the FSS family is found to have under-reported income in the reexamination used to set the baseline, the escrow for the entire period of the CoP will be recalculated using the correct income to set the baseline and then calculate subsequent escrow amounts. 562
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6-II.C. REPORTING ON THE FSS ACCOUNT
Each PHA must make a report, at least once annually, to each FSS family on the status of the family’s FSS account.
At a minimum, the report must include [24 CFR 984.305(a)(3)]:
• The balance at the beginning of the reporting period
• The amount of the family’s rent payment that was credited to the FSS account, during the reporting period
• Any deductions made from the account for amounts due the PHA before interest is distributed
• The amount of interest earned on the account during the year • The total in the account at the end of the reporting period OHA Policy
The OHA will provide FSS participants an annual statement on the status of their FSS escrow account.
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Chapter 7
PORTABILITY IN SECTION 8 FSS PROGRAMS
INTRODUCTION
PHAs operating Section 8 FSS programs must be familiar with the rules and regulations regarding portability under the Section 8 program. As with the case of portability in the Section 8 program in general, the FSS family may move outside the initial PHA jurisdiction under portability procedures after the first 12 months of the FSS contract of participation [24 CFR 984.306].
In the event that an FSS family chooses to exercise portability, certain special requirements regarding the FSS program would apply. This chapter describes the obligations of the initial PHA, the receiving PHA, and the FSS family under portability, in addition to any special stipulations regarding portability in the FSS context.
This chapter contains two parts:
Part I: Portability in the FSS Program: This part provides a general overview of portability in the FSS program, including the residency requirements for FSS portability and management of the contract of participation when a family moves into or from another PHA’s jurisdiction.
Part II: The Effects of Portability on FSS Regulations and Policy: This part describes the specific ways in which portability affects different aspects of the FSS program, including the escrow account, program termination, loss of the FSS account, and termination of Section 8 program assistance.
PART I: PORTABILITY IN THE FSS PROGRAM
7-I.A. OVERVIEW
Portability is a statutory feature of the Section 8 program—it is included in the law. As such, PHAs operating an Section 8 FSS program need to understand the effects that portability will have on Section 8 FSS families and program operation. This part provides a general overview of portability in the FSS program, including the residency requirements for FSS portability and management of the contract of participation when a family moves into or from another PHA’s jurisdiction.
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7-I.B. DEFINITIONS
For the purposes of portability with regards to the FSS program, the following definitions will be used [24 CFR 982.4, 24 CFR 984.306].
• Initial PHA means both:
1. A PHA that originally selected a family that later decides to move out of the jurisdiction of the selecting PHA; and
2. A PHA that absorbed a family that later decides to move out of the jurisdiction of the absorbing PHA.
• Receiving PHA means a PHA that receives a family selected for participation in the tenantbased program of another PHA. The receiving PHA either absorbs the family into its program, including issuing a voucher and providing rental assistance to the family, or bills the initial PHA for the family’s housing assistance payments and the fees for administering the family’s voucher.
• Relocating FSS Family refers to an FSS family that moves from the jurisdiction of a PHA at least 12 months after signing its contract of participation. 7-I.C. RESIDENCY REQUIREMENTS
Families participating in a Section 8 FSS program are required to lease an assisted unit within the jurisdiction of the PHA that selected the family for the FSS program for a minimum period of 12 months after the effective date of the contract of participation. However, the initial PHA may approve a family’s request to move outside its jurisdiction under portability during this period if the move is in accordance with the regulations at 24 CFR 982.353 [24 CFR 984.306(a)(1)].
OHA Policy
The OHA will approve a family’s request to move outside its jurisdiction under portability during the first 12 months after the effective date of the contract of participation if the move is in accordance with the regulations for such moves at 24 CFR 982.353.
After the first 12 months of the FSS contract of participation, the FSS family may move outside the initial PHA jurisdiction under portability procedures regardless of PHA approval [24 CFR 984.306(a)(2)].
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7-I.D. PORTABILITY REQUIREMENTS FOR FSS PARTICIPANTS
Receiving PHA Administers an FSS Program [24 CFR 984.306(b)] Whether the receiving PHA bills the initial PHA or absorbs the FSS family into its Section 8 program, the receiving PHA must enroll an FSS family in good standing in its FSS program.
However, if the receiving PHA is already serving the number of FSS families identified in its FSS Action Plan and determines that it does not have the resources to manage the FSS contract or the receiving PHA, the initial PHA may agree to the FSS family’s continued participation in the initial PHA’s FSS program. Prior to the PHAs agreeing to the continued participation, the initial PHA must determine that the relocating FSS family has demonstrated that, notwithstanding the move, it will be able to fulfill its responsibilities under the initial or a modified contract at its new place of residence.
OHA Policy
The OHA, as the initial housing authority, will agree to the participant’s continued participation in their FSS program so long as the relocating family has demonstrated, with the assistance of the FSS Coordinator, that it will be able to fulfill its responsibilities under the initial or a modified contract at its new place of residence.
Where continued FSS participation is not possible, the initial PHA must clearly discuss the options that may be available to the family. Depending on the family’s specific circumstances, these options include modification of the FSS contract, locating a receiving housing authority that has the capacity to enroll the family in its FSS program, termination with FSS escrow disbursement in accordance with 24 CFR 984.303(k)(1)(iii), or termination of the FSS contract and forfeiture of escrow.
OHA Policy
The OHA will clearly discuss the options that are available to the family where continued FSS participation is not possible. Depending on the family’s specific circumstances, these options include modification of the FSS contract, locating a receiving housing authority that has the capacity to enroll the family in its FSS program, termination with FSS escrow disbursement, or termination of the FSS contract and forfeiture of escrow. 566
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Receiving PHA Does Not Administer an FSS Program [24 CFR 984.306(c)] If the receiving PHA does not administer an FSS program and the receiving PHA is absorbing the voucherthe FSS family may not continue participation in the FSS program. The initial PHA must clearly discuss the options that may be available to the family. These may include, but are not limited to, modification of the FSS contract, locating a receiving PHA that administers an FSS program, termination of the FSS contract with FSS escrow disbursement, or termination of the FSS contract and forfeiture of escrow.
OHA Policy
The OHA will, as stated above, clearly discuss the options that may be available to the family where continued FSS participation is not possible. Depending on the family’s contract specific circumstances, these options include modification of the FSS contract, locating a receiving housing authority that has the capacity to enroll the family in its FSS program, termination with FSS escrow disbursement in accordance with 24 CFR 984.303(k)(1)(iii), or termination of the FSS contract and forfeiture of escrow.
If the receiving PHA does not administer an FSS program and the RHA is administering the voucher, the FSS family may continue participation in the FSS program. The initial PHA must clearly discuss the options that may be available to the family. These may include, but are not limited to, modification of the FSS contract, locating a receiving PHA that administers an FSS program, termination of the FSS contract with FSS escrow disbursement, or termination of the FSS contract and forfeiture of escrow.
PHA Policy
The PHA, as the initial housing authority, will agree to the participant’s continued participation in their FSS program so long as the relocating family has demonstrated, with the assistance of the FSS Coordinator, that it will be able to fulfill its responsibilities under the initial or a modified contract at its new place of residence.
Single Contract of Participation
If the FSS family enrolls in the receiving PHA’s FSS program, the receiving PHA will enter a new contract with the FSS family for the term remaining on the contract with the initial PHA.
The initial PHA will end its contract with the family.
If the FSS family remains in the FSS program of the initial PHA, pursuant to this section, the contract executed by the initial PHA will remain as the contract in place.
Termination of FSS contract and Forfeiture of Escrow Account [984.306(e)] If an FSS family relocates to another jurisdiction and is unable to fulfill its obligations under the contract, including any modifications, the PHA, which is a party to the contract, must terminate the FSS family from the FSS program. The family’s FSS escrow account will be forfeited.
Termination of FSS program participation and forfeiture of FSS escrow must be used only as a last resort after the PHA determines, in consultation with the family, that the family would be unable to fulfill its obligations under the contract after the move, that locating another receiving housing authority with a FSS program is not possible, that the current contract cannot be 567
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modified to allow for completion prior to porting, and that the current contract cannot be terminated with FSS escrow disbursement. When termination is the only option, the PHA must clearly notify the family that the move will result in the loss of escrow funds. The PHA must follow its policy for clearly notifying the FSS family of the forfeiture. 568
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7-I.E. NEW FSS ENROLLMENT INTO RECEIVING PHA’S FSS PROGRAM Administering and Billing of the Voucher
If the receiving PHA has an FSS program and bills the initial PHA, the receiving PHA may, consistent with the receiving PHA’s FSS enrollment policies, enroll a family that was not an FSS participant at the initial PHA into its FSS program, but only if the initial PHA manages an FSS program and agrees to such enrollment. If the receiving PHA bills the initial PHA, but the initial PHA does not manage an FSS program, the family may not enroll in the receiving PHA’s FSS program.
OHA Policy
The OHA, as receiving PHA, will clearly discuss the options that are available to the family where continued FSS participation is not possible. Depending on the family’s specific circumstances, these options include modification of the FSS contract, locating a receiving housing authority that has the capacity to enroll the family in its FSS program, termination with FSS escrow disbursement, or termination of the FSS contract and forfeiture of escrow.
Absorption of the Voucher
If the receiving PHA absorbs the family into its Section 8 program, the receiving PHA may, consistent with the receiving PHA’s FSS enrollment policies, enroll a family that was not an FSS participant at the initial PHA into its FSS program.
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© Copyright 2022 by Nan McKay & Associates City of Oxnard Housing Authority Unlimited copies may be made for internal use. FSS Action Plan 7/1/22
PART II: REPORTING
7-II.A. OVERVIEW
Each PHA that carries out an FSS program shall submit to HUD, in the form prescribed by HUD, a report regarding its FSS program.
7-II.B. CONTENTS OF THE FSS REPORT [24 CFR 984.401]
The report submitted to HUD must include a description of the activities carried out in the FSS program; a description of the effectiveness of the program in assisting families to achieve economic independence and self-sufficiency, including the number of families enrolled and graduated and the number of established escrow accounts and positive escrow balances; a description of the effectiveness of the program in coordinating resources of communities to assist families to achieve economic independence and self-sufficiency; and any recommendations by the PHA or the appropriate local Program Coordinating Committee for legislative or administrative action that would improve the FSS program and ensure the effectiveness of the program.
7-II.C. FAMILY SELF-SUFFICIENCY GRANT PROGRAM REVIEW PHA
SELF-ASSESSMENT
HUD provides a detailed checklist for PHAs to conduct their own self-assessment of their FSS program. The form is administered by the local field office and allows each PHA to gather concrete and comprehensive data covering aspects of the program from FSS Action Plans and Composite Scores through FSS program size, participants, and graduations to reductions in FSS grants and current Memoranda of Agreement with community partners. The detailed example of the FSS Self-Assessment is available at HUD’s FSS Resource page, which can be located by searching “HUD FSS” on any browser.
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© Copyright 2022 by Nan McKay & Associates City of Oxnard Housing Authority Unlimited copies may be made for internal use. FSS Action Plan 7/1/22 Page7-9
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HOUSING AUTHORITY OF THE CITY OF OXNARD
RESOLUTION NO. ________________
RESOLUTION APPROVING THE FAMILY SELF-SUFFICIENCY ACTION PLAN AND
AUTHORIZING THE HOUSING DIRECTOR TO SUBMIT THE PLAN
WHEREAS, the Housing Authority of the City of Oxnard is required by the United States Department of Housing and Urban Development to develop and adopt a Family-Self Sufficiency Action Plan for review and approval in order to be eligible to operate the Family Self-Sufficiency Program; and WHEREAS, the Housing Authority of the City of Oxnard has an existing implemented and adopted a Family Self Sufficiency Action Plan.
WHEREAS, on September 6, 2022, the Housing Authority of the City of Oxnard conducted a public hearing on the proposed revised Family Self-Sufficiency Action Plan.
WHEREAS, the Housing Authority of the City of Oxnard wishes to adopt its Family SelfSufficiency Action Plan.
NOW THEREFORE, the Board of Commissioners of the Housing Authority of the City of Oxnard resolves as follows:
1. The Board hereby approves the Family Self-Sufficiency Action Plan, as presented to the Board on September 6, 2022; and
2. The Board authorizes the Housing Director to execute and submit all reports and documents required to comply with United States Department of Housing and Urban Development’s policies and procedures regarding the Family Self-Sufficiency Action Plan.
APROVED AND ADOPTED THIS ______ DAY OF_____________ 2022 BY THE FOLLOWING VOTE:
AYES:
NOES:
ABSENT:
John C. Zaragoza, Chairman
Attest:
Rose Chaparro, Secretary-Designate
Approved as to form:
Stephen M. Fischer, General Counsel
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FAMILY SELF-SUFFICIENCY
ACTION PLAN
Emilio Ramirez, Director
Housing Department
City Council
September 6, 2022
574
Family Self-Sufficiency (FSS) Action Plan
The Family Self-Sufficiency program combines public and private resources to provide case management and an escrow account to participating families with the goal of making progress towards achieving economic stability. The program is available for families participating in both the Public Housing and Housing Choice Voucher program.
• The action plan establishes policies to ensure that the Family Self-Sufficiency program is operated in a manner that is consistent with federal regulations. • The Department of Housing and Urban Development (HUD) published a final rule effective June 16, 2022, which requires significant revisions to the existing action plan. Compliance is required by November 14, 2022. • On July 20 2022, a model action plan and corresponding training became available. In addition, HUD announced that all action plans must be approved before the November compliance date, therefore; they must be submitted by September 30, 2022. The Oxnard Housing Authority drafted and published the proposed revised plan on July 28, 2022.
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Proposed Changes
Proposed Amendments to the Family Self-Sufficiency Action Plan include:
(existing participants will have the option to be enrolled under the new regulations and benefit from these new changes)
1. Updating mandatory size of program
2. Updating the definition of eligible families
3. Designation of head of household
4. Amending the definition of supportive services
5. Term of the contract of participation
6. Management of escrow funds
7. Reporting requirements
The revised Oxnard Housing Authority FSS Action Plan was published for comment period beginning on July 28, 2022. It was also submitted to the Resident Advisory Board and a public meeting was held. No written comments were received.
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Recommendation
That the Board of Commissioners
1. Hold a public hearing to receive comments concerning the Oxnard Housing Authority Family Self-Sufficiency Action Plan; and
2. Adopt a resolution approving the Oxnard Housing Authority Family Self-Sufficiency Action Plan and authorizing the Housing Director to execute and submit all reports and documents required to comply with federal policies and procedures regarding the Family Self-Sufficiency Action Plan.
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CITY COUNCIL AGENDA REPORT
REPORTS
AGENDA ITEM NO. N.1
DATE: September 6, 2022
TO: City Council
FROM: Betsy George, Chief Financial Officer, (805) 200-5400, [email protected] SUBJECT: Authorize Execution and Delivery of Schedule of Property to the Banc of America Master Equipment Lease/Purchase Agreement A-7667 for the Financing, and Leasing of Certain Equipment. (10/5/5)
RECOMMENDATION
That the City Council:
1. Adopt a resolution, approving and authorizing the execution of Equipment Schedule No. 26 to Agreement A-7667 Master Equipment Lease/Purchase Agreement with Banc of America Public Capital Corp. in an amount not to exceed $1.4 million to reimburse the City for the purchase of eight Fire Battalion Chief vehicle chassis and provide financing for the upfitting cost of the eight chassis, authorizing the execution and delivery of other documents required in connection therewith, and authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by the resolution; and
2. Approve the additional proceeds of $366,000 to 8 Command Vehicles Project 222202, for the total costs of $1,326,000 of acquisition and upfitting costs of the eight chassis. (Finance and Governance Committee approved 3-0.)
Presentation will be live upon Consultant's request.
BACKGROUND
City Council ratified the authorization of the Mayor to purchase eight fire battalion chief command vehicle chassis from National Auto Fleet at the City Council meeting on January 4, 2022. The total approved purchase order amount for the 8 chassis was $419,673.90. Once the chassis are delivered, the City will be sending them to another vendor, Stonewell Bodies, to upfit the eight chassis. The additional upfitting costs are expected to be $108,704.00 per vehicle. The upfit costs include the fabrication of the body of the truck, fabrication and installation of equipment storage shelving within the body of the truck, procurement and installation of fire fighting equipment mounts, fabrication and installation of the communications center console in the driver area, fabrication and installation of a command center workstation at the rear of the truck body with work lighting and electrical power, installation of radios, radio antennas and radio chargers, installation of the mobile data computers, installation of an EMTRAC emergency traffic preemption device, procurement and installation of emergency lighting and siren package.
The Stonewell body is unique from other command vehicle builds in that it can be removed and placed on another chassis should the vehicle need to be replaced due to damage or age. This feature of the Stonewell custom body serves well in providing a longer service life for the major component of the command vehicles, in addition to the reduction of future costs when the command vehicle requires refurbishment. City staff have found Stonewell Bodies to be the only vendor that constructs this particular specification.
Combined, the total expected cost of purchasing the eight chassis and upfitting them into usable vehicles is $1,289,306. 578
The 2022 Budget identified an expenditure of $960,000 for the purchase and upfitting of these eight vehicles. However, due to inflationary pressures, including a 400% increase in the cost of aluminum over the last 18 months, the actual amount is expected to exceed the budgeted amount by $329,306.
It is staff’s intention to finance the chassis purchase and upfitting costs for these vehicles. Staff brought a reimbursement resolution before the Finance and Governance Committee on July 26th and is bringing the reimbursement resolution before Council at this meeting (Item No. N-1).
The City has a positive prior relationship with Banc of America, the provider for the Master Equipment Lease Agreement A-7667 originally executed on June 17, 2014. Banc of America Public Capital Corp has approved the attached Master Equipment Lease Purchase Agreement (“Master Lease”) with the City, which operates similar to a line of credit. Each equipment purchase functions like a draw on the line of credit and is authorized through Equipment Schedules. The current draw for the eight fire battalion chief command vehicles is Equipment Schedule No. 26. Staff anticipates that funds will be drawn from Equipment Schedule No. 26 beginning in October 2022. Consistent with the City’s other equipment leases, staff will submit reimbursement requests to draw down from the escrow for the Equipment Schedule No. 26 when the authorized equipment have been purchased, delivered, and paid for.
Banc of America has provided a locked, 10-year fixed interest rate of 3.14%. Locking the interest rate removes the risk that interest rates go up between now and the end of September when the financing is expected to close.
STRATEGIC PRIORITIES
This agenda item supports Public Safety strategy. The purpose of the Public Safety strategy is to restore and modernize the delivery of public safety services to provide for the safety of our neighborhoods and health of our community.
FINANCIAL IMPACT
Equipment leases provide an option for the City to make critical equipment purchases under favorable financing conditions. In addition, this lease allows the City to finance equipment over the expected life of the equipment rather than fronting the cost.
Based on the locked, fixed 10-year interest rate of 3.14% for the financing, there will be $80,500 combined principal and interest payments every 6 months ($161,000 per fiscal year) through the final maturity of December 1, 2031.
Council has previously appropriate $960,000 of Equipment Lease proceeds in anticipation of the Equipment Schedule No. 26 issuance. The additional $366,000 will be recognized and appropriated with the budget appropriation attached, for a total of $1,326,000 for the total costs of acquisition and upfitting of the eight chassis.
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to Equipment Schedule No. 26 in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by the Municipal Advisor as of August 18, 2022.
Principal Amount. The Municipal Advisor has informed the City that, based on the City’s purchase agreements, financing plan, and current market conditions, its good faith estimate of the aggregate principal amount of Equipment Schedule No. 26 is $1,324,306, (the “Estimated Principal Amount”).
True Interest Cost of Equipment Schedule No. 26. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of Equipment Schedule No. 26, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of Equipment Schedule No. 26 is 3.14%.
Finance Charge of Equipment Schedule No. 26. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of Equipment Schedule No. 26, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for Equipment Schedule No. 26, which means the sum of all fees and charges paid to third parties (or costs associated with Equipment Schedule No. 26), is $35,000. 579
Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of Equipment Schedule No. 26, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for Equipment Schedule No. 26 is $1,289,306.
Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of Equipment Schedule No. 26 , and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on Equipment Schedule No. 26 is $1,526,035, which excludes any reserves or capitalized interest paid or funded with proceeds of Equipment Schedule No. 26 (which may offset such total payment amount).
The foregoing estimates constitute good faith estimates only as of August 18, 2022, and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of Equipment Schedule No. 26, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual closing date of Equipment Schedule No. 26 being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Equipment Schedule No. 26 being different from the Estimated Principal Amount, (c) the actual amortization of Equipment Schedule No. 26 being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of funding of Equipment Schedule No. 26 being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City’s financing plan, or a combination of such factors. The actual date of closing of Equipment Schedule No. 26 and the actual principal amount of Equipment Schedule No. 26 will be determined by the City based on the timing of the need for proceeds of the Equipment Schedule No. 26 and other factors. The actual interest rates borne by Equipment Schedule No. 26 will depend on market interest rates at the time of closing thereof. The actual amortization of Equipment Schedule No. 26 will also depend, in part, on market interest rates at the time of closing thereof. Market interest rates are affected by economic, national, international and other factors beyond the control of the City, or the Municipal Advisor.
COMMITTEE OUTCOME
The Finance and Governance Committee approved 3-0 on July 26, 2022, to approve the staff recommendation and to forward the item for Council approval.
Prepared by: NHA Advisors
ATTACHMENTS
1. Oxnard Resolution - Equipment Schedule No. 26 (MELPA)
2. Budget Appropriation - Fire BofA Equipment Lease 26
3. Oxnard A7667-Master Lease Agreement
4. Escrow Agreement - Schedule 26
5. Schedule of Property 26
6. Oxnard CC Equipment Lease Presentation
580
CITY COUNCIL OF THE CITY OF OXNARD
RESOLUTION NO.
AUTHORIZING RESOLUTION (LEASE)
A RESOLUTION OF THE GOVERNING BODY OF THE CITY OF OXNARD,
CALIFORNIA, AUTHORIZING THE EXECUTION AND DELIVERY OF
SCHEDULE(S) OF PROPERTY TO THE MASTER EQUIPMENT
LEASE/PURCHASE AGREEMENT FOR THE ACQUISITION, FINANCING
AND LEASING OF CERTAIN EQUIPMENT FOR THE PUBLIC BENEFIT WITHIN THE TERMS PROVIDED HEREIN; AUTHORIZING THE
EXECUTION AND DELIVERY OF OTHER DOCUMENTS REQUIRED IN
CONNECTION THEREWITH; AND AUTHORIZING THE TAKING OF ALL
OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION.
WHEREAS, the City of Oxnard (the “Lessee”), a City duly organized and existing as a political subdivision, municipal corporation or similar public entity of the State of California is authorized by the laws of the State of California to acquire, finance and lease personal property (tangible and intangible) for the benefit of the Lessee and its inhabitants and to enter into contracts with respect thereto; and
WHEREAS, the governing body of the Lessee (the “Board”) has determined that a need exists for the acquisition, financing and leasing of certain equipment with a cost not to exceed $1,400,000 and consisting of fire battalion chief vehicles, which constitutes personal property necessary for the Lessee to perform essential governmental functions (collectively, the “Equipment”) on the terms herein provided;
WHEREAS, the Board has previously approved a reimbursement resolution detailing the City’s intention to pay certain capital expenditures in connection with the Equipment prior to the issuance of one or more series of tax-exempt obligations and the City reasonably expects that certain of the proceeds of indebtedness will be used to reimburse the City for the Equipment; and WHEREAS, in order to reimburse the City for the cost of acquiring such Equipment, the Lessee proposes to enter into those certain Schedule(s) of Property (the “Equipment Schedule(s)”) with Banc of America Public Capital Corp (or one of its affiliates), as lessor (the “Lessor”), substantially in the proposed form presented to the Board at this meeting, which Equipment Schedule incorporates by reference the terms and provisions of that certain Master Equipment Lease/Purchase Agreement dated as of April 8, 2014, by and between Lessor and Lessee (the “Agreement”); and
WHEREAS, the Board deems it for the benefit of the Lessee and for the efficient and effective administration thereof to enter into the Equipment Schedule and the other documentation relating to the acquisition, financing and leasing of the Equipment to be therein described on the terms and conditions therein and herein provided; 581
NOW, THEREFORE, BE IT AND IT IS HEREBY RESOLVED by the governing body of the Lessee as follows:
Section 1. Findings and Determinations. It is hereby found and determined that the terms of the Equipment Schedule(s) and the form of Rental Payment Schedule(s), in the form presented to the Board at this meeting, are in the best interests of the Lessee for the acquisition financing and leasing of the Equipment.
Section 2. Approval of Documents. The form, terms and provisions of the Equipment Schedule(s) and Rental Payment Schedule(s) are hereby approved in substantially the forms presented at this meeting, with such insertions, omissions and changes as shall be approved by City Manager or Chief Financial Officer of the Lessee or other members of the governing body of the Lessee (the “Authorized Officials”) executing the same, the execution of such documents being conclusive evidence of such approval. The Authorized Officials are each hereby authorized and directed to sign and deliver on behalf of the Lessee the Equipment Schedule(s) under which a separate Lease (as defined in the Agreement) is created, the Rental Payment Schedule attached thereto, the Escrow Agreement and any related exhibits attached thereto.
Section 3. Other Actions Authorized. The officers and employees of the Lessee shall take all action necessary or reasonably required by the parties to the Lease to carry out, give effect to and consummate the transactions contemplated thereby (including the execution and delivery of a final Acceptance Certificate, the Escrow Agreement, Disbursement Requests and any tax certificate and agreement, as contemplated in the Agreement) and to take all action necessary in conformity therewith, including, without limitation, the execution and delivery of any closing and other documents required to be delivered in connection with the Lease.
Section 4. No General Liability. Nothing contained in this Resolution, the Lease, the Escrow Agreement nor any other instrument shall be construed with respect to the Lessee as incurring a pecuniary liability or charge upon the general credit of the Lessee or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the Lease, the Escrow Agreement or any other instrument or document executed in connection therewith impose any pecuniary liability upon the Lessee or any charge upon its general credit or against its taxing power, except to the extent that the Rental Payments payable under the Lease entered into pursuant to the Agreement are limited obligations of the Lessee, subject to annual appropriation, as provided in the Agreement.
Section 5. Appointment of Authorized Lessee Representatives. The City Manager and Chief Financial Officer of the Lessee are each hereby designated to act as authorized representatives of the Lessee for purposes of the Lease and the Escrow Agreement until such time as the governing body of the Lessee shall designate any other or different authorized representative for purposes of the Lease or the Escrow Agreement.
Section 6. Severability. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution.
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Section 7. Repealer. All bylaws, orders and resolutions or parts thereof, inconsistent herewith, are hereby repealed to the extent only of such inconsistency with respect to this Resolution. This repealer shall not be construed as reviving any bylaw, order, resolution or ordinance or part thereof.
Section 8. Effective Date. This Resolution shall be effective immediately upon its approval and adoption.
ADOPTED AND APPROVED by the governing body of the Lessee this 6th day of September, 2022.
City of Oxnard, CA
as lessee
[SEAL]
By:____________________________________
Printed Name: ___________________________
Title: __________________________________
ATTEST:
By:_________________________________
Printed: Name: _______________________
Title: _______________________________
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The undersigned, a duly elected or appointed and acting City Clerk of the Lessee identified in the above Resolution No. _____ (the “Resolution”), hereby certifies that the Resolution is a full, true and correct copy of such Resolution as adopted by the governing body of the Lessee on September 6, 2022. The Resolution is in full force and effect on the date hereof and has not been amended, modified or otherwise changed by the governing body of the Lessee since the date of adoption of the Resolution.
DATED this ____ day of ____________, 20__.
_______________________________________
Name:_________________________________
Title:__________________________________
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Department: Date:
Project/Program
Manager: Phone:
Reason for Appropriation:
Accounts and Descriptions AMOUNT
Fund:
Revenues/Transfers In
366,000
Sub-total Revenues 366,000
Expenditures/Transfers Out
366,000
Sub-total Expenditures 366,000
Net Change to Fund Balance 0
Net Appropriation Change 366,000
Approvals
Department Director
Chief Financial Officer
City Manager
313-2260-826.86-06 CAPITAL OUTLAY / MACHINERY AND EQUIPT.-NEW
REQUEST FOR BUDGET APPROPRIATION
Recognize and appropriate lease proceeds from BoA Equipment Lease Draw#26, to fully fund acquisition of eight (8) command vehicles in total amount of $1.326M
September 6, 2022
805-385-7700
Fire
Alexander Hamilton
313-2009 LEASE PURCHASE EQUIP
NON-DEPARTMENTAL (1001)
313-1001-712.79-52 PROCEEDS FROM BORROWING/LINE OF CREDIT FINANCING COMMAND VEHICLES-8 (Project 222202)
REQUIRES CITY COUNCIL AUTHORIZATION
BA# (Finance Use Only)______________
BA Doc# (Finance Use Only)___________
Revised : 2/23/2012
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MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
This Master Equipment Lease/Purchase Agreement (the "Agreement") dated as of April 8, 2014, and entered into between Banc of America Public Capital Corp., a Kansas corporation ("Lessor"), and City of Oxnard, California, a municipal corporation existing under the laws of the State of California ("Lessee").
WITNESSETH:
WHEREAS, Lessee desires to lease and acquire from Lessor certain Equipment described in each Schedule (as each such term is defined herein), subject to the terms and conditions of and for the purposes set forth in each Lease; and in the event of a conflict the terms of a Schedule prevail; and
WHEREAS, the relationship between the parties shall be a continuing one and items of equipment may be added to the Equipment from time to time by execution of additional Schedules by the parties hereto and as otherwise provided herein; and WHEREAS, Lessee is authorized under the constitution and laws of the State to enter into this Agreement and the Schedules hereto for the purposes set forth herein; and Now, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and in consideration of the premises hereinafter contained, the parties hereby agree as follows:
ARTICLE I
Section 1.01. Definitions. The following terms will have the meanings indicated below unless the context clearly requires otherwise:
"Acquisition Amount" means the amount specified in each Lease and represented by Lessee to be sufficient to acquire the Equipment listed in such Lease. "Acquisition Fund" means, with respect to any Lease, the fund established and held by the Acquisition Fund Custodian pursuant to the related Acquisition Fund Agreement, if any. "Acquisition Fund Agreement" means, with respect to any Lease, an Acquisition Fund and Account Control Agreement, substantially in the form of Exhibit A attached hereto, in form and substance acceptable to and executed by Lessee, Lessor and the Acquisition Fund Custodian, pursuant to which an Acquisition Fund is established and administered. "Acquisition Fund Custodian" means the Acquisition Fund Custodian identified in any Acquisition Fund Agreement, and its successors and assigns. "Acquisition Period" means, with respect to each Lease, that period stated in the Schedule to such Lease during which the Lease Proceeds attributable to such Lease may be expended on Equipment Costs.
6 DATE:' GENOA#
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"Agreement" means this Master Equipment Lease/Purchase Agreement, including the exhibits hereto, together with any amendments and modifications to the Agreement pursuant to Section 13.05.
"Code" means the Internal Revenue Code of 1986, as amended. Each reference to a Section of the Code herein shall be deemed to include the United States Treasury Regulations proposed or in effect thereunder.
"Commencement Date" means, for each Lease, the date when Lessee's obligation to pay rent commences under such Lease, which date shall be the earlier of (i) the date on which the Equipment listed in such Lease is accepted by Lessee in the manner described in Section 5.01, and (ii) the date on which sufficient moneys to purchase the Equipment listed in such Lease are deposited for that purpose with an Acquisition Fund Custodian. "Contract Rate" means the rate identified as such in the applicable Schedule. "Equipment" means the property listed in each of the Leases and all replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to Section 8.01 or Article V. Whenever reference is made in this Agreement to Equipment listed in a Lease, such reference shall be deemed to include all such replacements, repairs, restorations, modifications and improvements of or to such Equipment. "Equipment Costs" means the total cost of the Equipment listed in each Lease, including soft costs such as freight, installation and taxes paid up front by Lessor and all capitalizable consulting and training fees approved by Lessor, legal fees, financing costs, and other costs necessary to vest full, clear legal title to the Equipment in Lessee, subject to the security interest granted to and retained by Lessor as set forth in each Lease, and otherwise incurred in connection with the financing provided by the lease-purchase of the Equipment as provided in each Lease; provided that (i) any such soft costs on a cumulative basis shall not exceed a percentage of the Maximum Equipment Cost approved by Lessor and (ii) in no event shall capitalizable delivery charges, installation charges, taxes and similar capitalizable soft costs relating to such Equipment be included without Lessor's prior consent. "Event of Default" means an Event of Default described in Section 12.01. "Lease" means a Schedule and the terms of this Agreement which are incorporated by reference into such Schedule. Each Schedule shall constitute a separate and independent Lease. "Lease Proceeds" means, with respect to each Lease, the total amount of money to be paid by Lessor to the Acquisition Fund Custodian for deposit and application in accordance with such Lease and the Acquisition Fund Agreement.
"Lease Term" for each Lease means the Original Term and all Renewal Terms therein provided and for this Agreement means the period from the date hereof until this Agreement is terminated.
"Lessee" means the entity referred to as Lessee in the first paragraph of this Agreement. 587
"Lessor" means (a) the entity referred to as Lessor in the first paragraph of this Agreement or (b) any assignee or transferee of any right, title or interest of Lessor in and to the Equipment under a Lease or any Lease (including Rental Payments thereunder) pursuant to Section 11.01, but does not include any entity solely by reason of that entity retaining or assuming any obligation of Lessor to perform under a Lease. "Material Adverse Change" means (a) prior to the Utilization Period Expiration, a downgrade in Lessee's external debt rating of two or more subgrades by either Moody's Investors Service, Inc, or Standard & Poor' s Ratings Group or any equivalent successor credit rating agency, or any downgrade by either such agency that would cause Lessee's credit rating to be below investment grade, and (b) thereafter, any change in Lessee's creditworthiness that could have a material adverse effect on (i) the financial condition or operations of Lessee and its subsidiaries taken as a whole, or (ii) Lessee's ability to perform its obligations under this Agreement or any Lease.
.. "Maximum Equipment Cost" means the cumulative amount specified m the latest Schedule executed under this Agreement.
"Original Term" means the period from the Commencement Date for each Lease until the end of the fiscal year of Lessee in effect at such Commencement Date. "Purchase Price" means, with respect to the Equipment listed on a Lease, the amount that Lessee may pay to Lessor to purchase such Equipment as provided in such Lease. "Renewal Terms" means the renewal terms of each Lease, each having a duration of one year and a term coextensive with Lessee's fiscal year, as specified in the Schedule applicable thereto.
"Rental Payments" means the basic rental payments payable by Lessee under each Lease pursuant to Section 4.01, in each case consisting of a principal component and an interest component.
"Schedule" means each separately numbered Schedule of Property substantially in the form of Exhibit B-1 hereto together with a Rental Payment Schedule attached thereto substantially in the form of Exhibit B-2 hereto.
"State" means the State of California.
"Utilization Period Expiration" means the date, with respect to each Lease not funded under an Acquisition Fund Agreement, by which Lessee must deliver an Acceptance Certificate for the Equipment under such Lease as indicated in Section 3. 04(b ). "Vendor" means the manufacturer or supplier of the Equipment or any other person as well as the agents or dealers of the manufacturer or supplier with whom Lessor arranged Lessee's acquisition and financing of the Equipment pursuant to the applicable Lease. 588
ARTICLE II
Section 2. 0 I. Representations and Covenants of Lessee. Lessee represents, covenants and warrants for the benefit of Lessor on the date hereof and as of the Commencement Date of each Lease as follows:
(a) Lessee is a political subdivision of the State within the meaning of Section 103(c) of the Code, duly organized and existing under the constitution and laws of the State, with full power and authority to enter into this Agreement and each Lease and the transactions contemplated hereby and to perform all of its obligations hereunder and under each Lease. (b) Lessee has duly authorized the execution and delivery of this Agreement and each Lease by proper action of its governing body at a meeting duly called, regularly convened and attended throughout by the requisite quorum of the members thereof, or by other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and enforceability of this Agreement and each Lease. (c) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default exists at the date hereof. ( d) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body corporate and politic. ( e) Lessee has complied with such public bidding requirements as may be applicable to this Agreement and each Lease and the acquisition by Lessee of the Equipment as provided in each Lease.
(f) During the Lease Term, the Equipment will be used by Lessee only for the purpose of performing essential governmental or proprietary functions of Lessee consistent with the permissible scope of Lessee's authority. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last Rental Payment (including all Renewal Terms) scheduled to be paid under each Lease.
(g) Lessee has kept, and throughout the Lease Term of any Lease shall keep, its books and records in accordance with generally accepted accounting principles and practices consistently applied, and shall deliver to Lessor (i) annual audited financial statements (including (1) a balance sheet, (2) statement of revenues, expenses and changes in fund balances for budget and actual, (3) statement of cash flows and notes, and (4) schedules and attachments to the financial statements) within 270 days of its fiscal year end, (ii) such other financial statements and information as Lessor may reasonably request, and (iii) its annual budget for the following fiscal year when approved but not later than 30 days prior to its current fiscal year end. The financial statements described in subsection (i) shall be accompanied by an unqualified opinion of Lessee's auditor. Credit information relating to Lessee may be disseminated among Lessor and any of its affiliates and any of their respective successors and assigns. (h) Lessee has an immediate need for the Equipment listed on each Schedule and expects to make immediate use of the Equipment listed on each Schedule. Lessee's need for the 589
Equipment is not temporary and Lessee does not expect the need for any item of the Equipment to diminish during the Lease Term to such item.
(i) The payment of the Rental Payments or any portion thereof is not (under the terms of any Lease or any underlying arrangement) directly or indirectly (x) secured by any interest in property used or to be used in any activity carried on by any person other than a state or local governmental unit or payments in respect of such property; or (y) on a present value basis, derived from payments (whether or not to Lessee) in respect of property, or borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental unit. The Equipment will not be used, directly or indirectly, in any activity carried on by any person other than a state or local governmental unit. No portion of the Equipment Costs for the Equipment will be used, directly or indirectly, to make or finance loans to any person other than Lessee. Lessee has not entered into any management or other service contract with respect to the use and operation of the Equipment. (i) There is no pending litigation, tax claim, proceeding or dispute that may adversely affect Lessee's financial condition or impairs its ability to perform its obligations hereunder.
Lessee will, at its expense, maintain its legal existence in good standing and do any further act and execute, acknowledge, deliver, file, register and record any further documents Lessor may reasonably request in order to protect Lessor's security interest in the Equipment and Lessor's rights and benefits under this Lease.
ARTICLE Ill
Section 3.01. Lease of Equipment. Subject to the terms of this Master Lease, Lessor agrees to provide the funds specified in each Lease to be provided by it to acquire the Equipment, up to an amount equal to the Maximum Equipment Cost. Upon the execution of each Lease, Lessor demises, leases, transfers and lets to Lessee, and Lessee acquires, rents and leases from Lessor, the Equipment as set forth in such Lease and in accordance with the terms thereof. The Lease Term for each Lease may be continued, solely at the option of Lessee, at the end of the Original Term or any Renewal Term for the next succeeding Renewal Term up to the maximum Lease Term set forth in such Lease. At the end of the Original Term and at the end of each Renewal Term until the maximum Lease Term has been completed, Lessee shall be deemed to have exercised its option to continue each Lease for the next Renewal Term unless Lessee shall have terminated such Lease pursuant to Section 3.03 or Section 10.01. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term, except that the Rental Payments shall be as provided in the applicable Lease.
Section 3. 02. Continuation of Lease Term. Lessee intends, subject to Section 3.03, to continue the Lease Term of each Lease through the Original Term and all Renewal Terms and to pay the Rental Payments thereunder. Lessee affirms that sufficient funds are available for the current fiscal year, and Lessee reasonably believes that an amount sufficient to make all Rental Payments during the entire Lease Term of each Lease can be obtained from legally available funds of Lessee. Lessee further intends to do all things lawfully within its power to obtain and maintain funds sufficient and available to discharge its obligation to make Rental Payments due hereunder, including making provision for such payments to the extent necessary in each budget or appropriation request submitted and adopted in accordance with applicable provisions of law, 590
to have such portion of the budget or appropriation request approved and to exhaust all available reviews and appeals in the event such portion of the budget or appropriation request is not approved.
Section 3. 03. Nonappropriation. Lessee is obligated only to pay such Rental Payments under each Lease as may lawfully be made from funds budgeted and appropriated for that purpose during Lessee's then current fiscal year. Should Lessee fail to budget, appropriate or otherwise make available funds to pay Rental Payments under any Lease following the then current Original Term or Renewal Term, such Lease or Leases shall be deemed terminated at the end of the then current Original Term or Renewal Term. Lessee agrees to deliver notice to Lessor of such termination promptly after any decision to non-appropriate is made, but failure to give such notice shall not extend the term beyond such Original Term or Renewal Term. If any Lease is terminated in accordance with this Section, Lessee agrees to peaceably deliver the Equipment to Lessor at the location(s) to be specified by Lessor.
Section 3.04. Conditions to Lessor's Performance.
(a) As a prerequisite to the performance by Lessor of any of its obligations pursuant to any Lease, Lessee shall deliver to Lessor the following:
(i) A fully completed Schedule, executed by Lessee;
(ii) An Acquisition Fund Agreement, executed by Lessee and the Acquisition Fund Custodian, unless Lessor pays 100% of the Acquisition Amount directly to the Vendor upon execution of the Lease;
(iii) A Certificate executed by the Clerk or Secretary or other comparable officer of Lessee, in substantially the form attached hereto as Exhibit C, completed to the satisfaction of Lessor;
(iv) A certified copy of a resolution, ordinance or other official action of Lessee's governing body authorizing the execution and delivery of this Lease and performance by Lessee of its obligations hereunder;
(v) An opinion of counsel to Lessee in substantially the form attached hereto as Exhibit D respecting such Lease and otherwise satisfactory to Lessor; (vi) Evidence of insurance as required by Section 7.02 hereof; (vii) All documents, including financing statements, affidavits, notices and similar instruments, in form satisfactory to Lessor, which Lessor deems necessary or appropriate at that time pursuant to Section 6.02;
(viii) A copy of a fully completed and executed Form 8038-G; (ix) If any Equipment units are motor vehicles, properly completed certificates of title for such vehicles; and
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(x) Such other items, if any, as are set forth in such Lease or are reasonably required by Lessor.
(b) In addition, the performance by Lessor of any of its obligations pursuant to any Lease shall be subject to: (i) no material adverse change in the financial condition of Lessee since the date of this Lease, (ii) no Event of Default having occurred, and (iii) if no Acquisition Fund has been established, the Equipment must be accepted by Lessee no later than the date listed as the Utilization Period Expiration in the applicable Schedule. ( c) Subject to satisfaction of the foregoing, Lessor will pay the Acquisition Amount for Equipment described in a Schedule to the Vendor or, if authorized by Lessee's governing body, will reimburse Lessee for the prior payment of any such Acquisition Amounts by Lessee to the Vendor, upon receipt of the documents described in Sections 5.0l(a) and (b); or if an Acquisition Fund has been established pursuant to an Acquisition Fund Agreement, Lessor will deposit the Acquisition Amount for Equipment described in the Schedule with the Acquisition Fund Custodian.
( d) This Agreement is not a commitment by Lessor to enter into any Lease not currently in existence, and nothing in this Agreement shall be construed to impose any obligation upon Lessor to enter into any proposed Lease, it being understood that whether Lessor enters into any proposed Lease shall be a decision solely within Lessor's discretion. ( e) Lessee will cooperate with Lessor in Lessor's review of any proposed Lease.
Without limiting the foregoing, Lessee will provide Lessor with any documentation or information Lessor may request in connection with Lessor's review of any proposed Lease.
Such documentation may include, without limitation, documentation concerning the Equipment and its contemplated use and location and documentation or information concerning the financial status of Lessee and other matters related to Lessee.
ARTICLE IV
Section 4. 01. Rental Payments. Subject to Section 3.03, Lessee shall promptly pay Rental Payments, in lawful money of the United States of America, to Lessor on the dates and in such amounts as provided in each Lease. Lessee shall pay Lessor a charge on any Rental Payment not paid on the date such payment is due at a rate equal to the Contract Rate plus 5% per annum or the maximum amount permitted by law, whichever is less, from such date. Lessee shall not permit the federal government to guarantee any Rental Payments under any Lease.
Rental Payments consist of principal and interest payments as more fully detailed on each Schedule, the interest on which begins to accrue as of the Commencement Date for each such Schedule.
Section 4. 02. Interest and Principal Components. A portion of each Rental Payment is paid as, and represents payment of, interest, and the Balance of each Rental Payment is paid as, and represents payment of, principal. Each Lease shall set forth the principal and interest components of each Rental Payment payable thereunder during the Lease Term.
Section 4. 03. Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments under each 592
Lease shall constitute a current expense of Lessee payable solely from its general fund or other funds that are legally available for that purpose and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein or in a Lease constitute a pledge of the general tax revenues, funds or moneys of Lessee.
Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.03, the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in each Lease shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense, for any reason, including without limitation any failure of the Equipment, after it has been accepted by Lessee, any defects, malfunctions, breakdowns or infirmities in the Equipment or any accident, condemnation or unforeseen circumstances.
Section 4. 05. Tax Covenants.
(a) Lessee agrees that it will not take any action that would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes, nor will it omit to take or cause to be taken, in timely manner, any action, which omission would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes.
(b) In the event that Lessee does not spend the moneys in the Acquisition Fund within six (6) months of the date the deposit is made pursuant to Section 3.04(c), Lessee will, ifrequired by section 148(f) of the Code to pay rebate: (i) establish a Rebate Account and deposit the Rebate Amount (as defined in Section 1.148-3(b) of the Federal Income Tax Regulations) not less frequently than once per year after the applicable Commencement Date; and (ii) rebate to the United States, not less frequently than once every five (5) years after the applicable Commencement Date, an amount equal to at least 90% of the Rebate Amount and within 60 days after payment of all Rental Payments or the Purchase Price as provided in Section 10.0l(a) hereof, 100% of the Rebate Amount, as required by the Code and any regulations promulgated thereunder. Lessee shall determine the Rebate Amount, if any, at least every year and upon payment of all Rental Payments or the Purchase Price and shall maintain such determination, together with any supporting documentation required to calculate the Rebate Amount, until six ( 6) years after the date of the final payment of the Rental Payments or the Purchase Price.
Section 4. 06. Event of Taxability. Upon the occurrence of an Event of Taxability, the interest component shall be at a Taxable Rate retroactive to the date as of which the interest component is determined by the Internal Revenue Service to be includible in the gross income of the owner or owners thereof for federal income tax purposes, and Lessee will pay such additional amount as will result in the owner receiving the interest component at the Taxable Rate identified in the related Lease.
For purposes of this Section, "Event of Taxability" means a determination that the interest component is includible for federal income tax purposes in the gross income of the owner thereof due to Lessee's action or failure to take any action. 593
Section 4. 07. Mandatory Prepayment. If the Lease Proceeds are deposited into an Acquisition Fund, any funds remaining in the Acquisition Fund on or after the Acquisition Period and not applied to Equipment Costs, shall be applied by Lessor on the next Rental Payment date, pro rata to the prepayment of the principal component of the outstanding Rental Payments due under the applicable Schedule.
ARTICLEV
Section 5.01. Delivery, Installation and Acceptance of Equipment. (a) Lessee shall order the Equipment, cause the Equipment to be delivered and installed at the location specified in the Leases and pay any and all delivery and installation costs and other Equipment Costs in connection therewith. When the Equipment listed in any Lease has been delivered and installed, Lessee shall promptly accept such Equipment and evidence said acceptance by executing and delivering to Lessor an Acceptance Certificate in the form attached hereto as Exhibit E.
(b) Lessee shall deliver to Lessor original invoices and bills of sale (if title to such Equipment has passed to Lessee) relating to each item of Equipment accepted by Lessee. With respect to Equipment not purchased through an Acquisition Fund, Lessor shall, upon receipt of an Acceptance Certificate from Lessee, prepare a Schedule of Property and Rental Payment Schedule in the forms attached hereto as Exhibits B-1 and B-2. Lessee shall execute and deliver such Schedules to Lessor within 5 business days of receipt.
Section 5. 02. Quiet Enjoyment of Equipment. So long as Lessee is not in default under the related Lease, neither Lessor nor any entity claiming by, through or under Lessor, shall interfere with Lessee's quiet use and enjoyment of the Equipment during the Lease Term.
Section 5. 03. Location; Inspection. Once installed, no item of the Equipment will be relocated from the base location specified for it in the Lease on which such item is listed without Lessor's consent, which consent shall not be unreasonably withheld. Lessor shall have the right at all reasonable times during regular business hours to enter into and upon the property of Lessee for the purpose of inspecting the Equipment.
Section 5. 04. Use and Maintenance of the Equipment. Lessee will not install, use, operate, or maintain the Equipment improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by the related Lease. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Equipment. In addition, Lessee agrees to comply in all respects with all applicable laws, regulations and rulings of any legislative, executive, administrative, or judicial body; provided that Lessee may contest in good faith the validity or application of any such law, regulation or ruling in any reasonable manner that does not, in the opinion of Lessor, adversely affect the interest (including the reversionary interest) of Lessor in and to the Equipment or its interest or rights under the Lease.
Lessee agrees that it will maintain, preserve, and keep the Equipment in good repair and working order, in a condition comparable to that recommended by the manufacturer. Lessor shall have no responsibility to maintain, repair or make improvements or additions to the Equipment. In all cases, Lessee agrees to pay any costs necessary for the manufacturer to re594 certify the Equipment as eligible for manufacturer's maintenance upon the return of the Equipment to Lessor as provided for herein.
Lessee shall not alter any item of Equipment or install any accessory, equipment or device on an item of Equipment if that would impair any applicable warranty, the originally intended function or the value of that Equipment. All repairs, parts, accessories, equipment and devices furnished, affixed to or installed on any Equipment, excluding temporary replacements, shall thereupon become subject to the security interest of Lessor.
ARTICLE VI
Section 6.01. Title to the Equipment. During each Lease Term, and so long as Lessee is not in default under Article XII hereof, all right, title and interest in and to each item of the Equipment shall be vested in Lessee immediately upon its acceptance of each item of Equipment, subject to the terms and conditions of the applicable Lease. Lessee shall at all times protect and defend, at its own cost and expense, its title in and to the Equipment from and against all claims, liens and legal processes of its creditors, and keep all Equipment free and clear of all such claims, liens and processes. Upon the occurrence of an Event of Default or upon termination of a Lease pursuant to Section 3.03 hereof, full and unencumbered legal title to the Equipment shall pass to Lessor, and Lessee shall have no further interest therein. In addition, upon the occurrence of such an Event of Default or such termination, Lessee shall execute and deliver to Lessor such documents as Lessor may request to evidence the passage of such legal title to Lessor and the termination of Lessee's interest therein, and upon request by Lessor shall deliver possession of the Equipment to Lessor in accordance with Section 12.02. Upon purchase of the Equipment under a Lease by Lessee pursuant to Section 10.01, Lessor's security interest or other interest in the Equipment shall terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may request to evidence the termination of Lessor's security interest in the Equipment subject to the related Lease.
Section 6. 02. Security Interest. To secure the payment of all of Lessee's obligations under each Lease, upon the execution of such Lease, Lessee grants to Lessor a security interest constituting a first lien on (a) the Equipment applicable to such Lease, (b) moneys and investments held from time to time in the Acquisition Fund and ( c) any and all proceeds of any of the foregoing. Lessee agrees to execute and authorizes Lessor to file such notices of assignment, chattel mortgages, financing statements and other documents, in form satisfactory to Lessor, which Lessor deems necessary or appropriate to establish and maintain Lessor's security interest in the Equipment, the Acquisition Fund and the proceeds thereof.
Section 6. 03. Personal Property. The Equipment is and will remain personal property and will not be deemed to be affixed to or a part of the real estate on which it may be situated, notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner physically affixed or attached to real estate or any building thereon. Upon the request of Lessor, Lessee will, at Lessee's expense, furnish a waiver of any interest in the Equipment from any party having an interest in any such real estate or building. 595
ARTICLE VII
Section 7. OJ. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee shall keep the Equipment free of all levies, liens, and encumbrances except those created by each Lease. The parties to this Agreement contemplate that the Equipment will be used for a governmental or proprietary purpose of Lessee and that the Equipment will therefore be exempt from all property taxes. If the use, possession or acquisition of any Equipment is nevertheless determined to be subject to taxation, Lessee shall pay when due all taxes and governmental charges lawfully assessed or levied against or with respect to such Equipment. Lessee shall pay all utility and other charges incurred in the use and maintenance of the Equipment. Lessee shall pay such taxes or charges as the same may become due; provided that, with respect to any such taxes or charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue during each Lease Term.
Section 7.02. Insurance. Lessee shall during each Lease Term maintain or cause to be maintained (a) casualty insurance naming Lessor and its assigns as loss payee and insuring the Equipment against loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the State, and any other risks reasonably required by Lessor, in an amount at least equal to the then applicable Purchase Price of the Equipment; (b) liability insurance naming Lessor as additional insured that protects Lessor from liability in all events in form and amount satisfactory to Lessor; and (c) worker's compensation coverage as required by the laws of the State; provided that, with Lessor's prior written consent, Lessee may self-insure against the risks described in clause (a). Lessee shall furnish to Lessor evidence of such insurance or self-insurance coverage throughout each Lease Term. Lessee shall not cancel or modify such insurance or self-insurance coverage in any way that would affect the interests of Lessor without first giving written notice thereof to Lessor at least 30 days in advance of such cancellation or modification.
Section 7. 03. Risk of Loss. Whether or not covered by insurance or self-insurance, Lessee hereby assumes all risk of loss of, or damage to and liability related to injury or damage to any persons or property arising from the Equipment from any cause whatsoever, and no such loss of or damage to or liability arising from the Equipment shall relieve Lessee of the obligation to make the Rental Payments or to perform any other obligation under this Lease. Whether or not covered by insurance or self-insurance, Lessee hereby agrees to reimburse Lessor (to the fullest extent permitted by applicable law, but only from legally available funds) for any and all liabilities, obligations, losses, costs, claims, taxes or damages suffered or incurred by Lessor, regardless of the cause thereof and all expenses incurred in connection therewith (including, without limitation, counsel fees and expenses, and penalties connected therewith imposed on interest received) arising out of or as a result of (a) entering into of this Agreement or any of the transactions contemplated hereby, (b) the ordering, acquisition, ownership use, operation, condition, purchase, delivery, acceptance, rejection, storage or return of any item the Equipment, ( c) any accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment resulting in damage to property or injury to or death to any person, and/or ( d) the breach of any covenant of Lessee in connection with a Lease or any material misrepresentation provided by Lessee in connection with a Lease. The provisions of this paragraph shall continue in full force and effect notwithstanding the full payment of all 596
obligations under all Leases or the termination of the Lease Term under any Lease for any reason.
Section 7. 04. Advances, In the event Lessee shall fail to keep the Equipment in good repair and working order, Lessor may, but shall be under no obligation to, maintain and repair the Equipment and pay the cost thereof. All amounts so advanced by Lessor shall constitute additional rent for the then current Original Term or Renewal Term and Lessee covenants and agrees to pay such amounts so advanced by Lessor with interest thereon from the due date until paid at a rate equal to the Contract Rate plus 5% per annum or the maximum amount permitted by law, whichever is less.
ARTICLE VIII
Section 8.01. Damage, Destruction and Condemnation. Unless Lessee shall have exercised its option to purchase the Equipment by making payment of the Purchase Price as provided in the related Lease, if, prior to the termination of the applicable Lease Term, (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any governmental body or by any person, firm or corporation acting pursuant to governmental authority, Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award or sale under threat of condemnation to be applied to the prompt replacement, repair, restoration, modification or improvement of the Equipment. Any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee.
If Lessee elects to replace any item of the Equipment (the "Replaced Equipment") pursuant to this Section, the replacement equipment (the "Replacement Equipment") shall be of similar type, utility and condition to the Replaced Equipment and shall be of equal or greater value than the Replaced Equipment. Lessor shall receive a first priority security interest in any such Replacement Equipment. Lessee shall represent, warrant and covenant to Lessor that each item of Replacement Equipment is free and clear of all claims, liens, security interests and encumbrances, excepting only those liens created by or through Lessor, and shall provide to Lessor any and all documents as Lessor may reasonably request in connection with the replacement, including, but not limited to, documentation in form and substance satisfactory to Lessor evidencing Lessor's security interest in the Replacement Equipment. Lessor and Lessee hereby acknowledge and agree that any Replacement Equipment acquired pursuant to this paragraph shall constitute "Equipment" for purposes of this Agreement and the related Lease.
Lessee shall complete the documentation of Replacement Equipment on or before the next Rental Payment date after the occurrence of a casualty event, or be required to exercise the Purchase Option with respect to the damaged equipment.
For purposes of this Article, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys' fees, incurred in the collection thereof.
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Section 8. 02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 8.01, Lessee shall either (a) complete such replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of the amount of the Net Proceeds, or (b) pay or cause to be paid to Lessor the amount of the then applicable Purchase Price for the Equipment, and, upon such payment, the applicable Lease Term shall terminate and Lessor's security interest in the Equipment shall terminate as provided in Section 6.01 hereof. The amount of the Net Proceeds, if any, remaining after completing such repair, restoration, modification or improvement or after purchasing such Equipment and such other Equipment shall be retained by Lessee. If Lessee shall make any payments pursuant to this Section, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article IV.
ARTICLE IX
Section 9. 01. Disclaimer of Warranties. Lessor makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for use of the Equipment, or any other warranty or representation, express or implied, with respect thereto and, as to Lessor, Lessee's acquisition of the Equipment shall be on an "as is" basis. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement, any Lease, the Equipment or the existence, furnishing, functioning or Lessee's use of any item, product or service provided for in this Agreement or any Lease.
Section 9. 02. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and attorney-in-fact during each Lease Term, so long as Lessee shall not be in default under the related Lease, to assert from time to time whatever claims and rights (including without limitation warranties) relating to the Equipment that Lessor may have against Vendor. Lessee's sole remedy for the breach of such warranty, indemnification or representation shall be against Vendor of the Equipment, and not against Lessor. Any such matter shall not have any effect whatsoever on the rights and obligations of Lessor with respect to any Lease, including the right to receive full and timely payments under a Lease. Lessee expressly acknowledges that Lessor makes, and has made, no representations or warranties whatsoever as to the existence or the availability of such warranties relating to the Equipment.
ARTICLEX
Section 10.01. Purchase Option. Lessee shall have the option to purchase all of the Equipment listed in a Lease, at the following times and upon the following terms:
(a) From and after the date specified in the related Schedule (the "Purchase Option Commencement Date"), on the Rental Payment dates specified in each Lease, upon not less than 30 days' prior written notice, and upon payment in full of the Rental Payments then due under such Lease plus the then applicable Purchase Price, which may include a prepayment premium on the unpaid balance as set forth in the applicable Schedule; or 598
(b) In the event of substantial damage to or destruction or condemnation of substantially all of the Equipment listed in a Lease, on the day specified in Lessee's notice to Lessor of its exercise of the purchase option (which shall be the earlier of the next Rental Payment date or 60 days after the casualty event) upon payment in full to Lessor of the Rental Payments then due under such Lease plus the then applicable Purchase Price; or ( c) Upon the expiration of the Lease Term, upon payment in full of all Rental Payments then due and all other amounts then owing under the Lease, and the payment of $1. 00 to Lessor.
After payment of the applicable Purchase Price, Lessee will own the related Equipment, and Lessor's security interests in and to such Equipment will be terminated.
ARTICLE XI
Section 11.01. Assignment by Lessor.
(a) Lessor's right, title and interest in and to Rental Payments and any other amounts payable by Lessee under any and all of the Leases, its security interest in the Equipment subject to each such Lease, and all proceeds therefrom may be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessor, without the necessity of obtaining the consent of Lessee; provided, that any such assignment, transfer or conveyance to a trustee for the benefit of owners of certificates of participation shall be made in a manner that conforms to any applicable State law. Nothing in this Section 11.01 shall be construed, however, to prevent Lessor from executing any such assignment, transfer or conveyance that does not involve funding through the use of certificates of participation within the meaning of applicable State law, including any such assignment, transfer or conveyance as part of a multiple asset pool to a partnership or trust; provided such certificates are sold only on a private placement basis ( and not pursuant to any "public offering") to a purchaser(s) who represent that (i) such purchaser has sufficient knowledge and experience in financial and business matters to be able to evaluate the risks and merits of the investment, (ii) such purchaser understands neither the Lease nor certificates will be registered under the Securities Act of 1933, (iii) such purchaser is either an "accredited investor" within the meaning of Regulation D under the Securities Act of 1933, or a qualified institutional buyer within the meaning of Rule 144A, and (iv) it is the intention of such purchaser to acquire such certificates (A) for investment for its own account or (B) for resale in a transaction exempt from registration under the Securities Act of 193 3; provided further, that in any event, Lessee shall not be required to make Rental Payments, to send notices or to otherwise deal with respect to matters arising under a Lease with or to more than one individual or entity. (b) Unless to an affiliate controlling, controlled by or under common control with Lessor, no assignment, transfer or conveyance permitted by this Section 11.01 shall be effective until Lessee shall have received a written notice of assignment that discloses the name and address of each such assignee; provided, that if such assignment is made to a bank or trust company as trustee or paying agent for owners of certificates of participation, trust certificates or partnership interests with respect to the Rental Payments payable under a Lease, it shall thereafter be sufficient that Lessee receives notice of the name and address of the bank or trust company as trustee or paying agent. During each Lease Term, Lessee shall keep, or cause to be 599
kept, a complete and accurate record of all such assignments in form necessary to comply with Section 149 of the Code. Lessee shall retain all such notices as a register of all assignees and shall make all payments to the assignee or assignees designated in such register. Lessee shall not have the right to and shall not assert against any assignee any claim, counterclaim or other right Lessee may have against Lessor or the Vendor. Assignments in part may include without limitation assignment of all of Lessor's security interest in and to the Equipment listed in a particular Lease and all rights in, to and under the Lease related to such Equipment. The option granted in this Section may be separately exercised from time to time with respect to the Equipment listed in each Lease, but such option does not permit the assignment of less than all of Lessor's interests in the Equipment listed in a single Lease. ( c) If Lessor notifies Lessee of its intent to assign the Lease, Lessee agrees that it shall execute and deliver to Lessor a Notice and Acknowledgement of Assignment substantially in the form of Exhibit F attached to this Lease within five (5) business days after its receipt of such request.
Section 11.02. Assignment and Subleasing by Lessee. None of Lessee's right, title, and interest in, to and under any Lease or any portion of the Equipment may be assigned or encumbered by Lessee for any reason.
ARTICLE XII
Section 12. 0 I. Events of Default Defined. Any of the following events shall constitute an "Event of Default" under a Lease:
(a) Failure by Lessee to pay any Rental Payment or other payment required to be paid under any Lease within 10 days of the date when due as specified herein; (b) Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in subparagraph (a) above, for a period of 30 days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided that, if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected;
( c) Any statement, representation or warranty made by Lessee in or pursuant to any Lease or its execution, delivery or performance shall prove to have been false, incorrect, misleading, or breached in any material respect on the date when made; (d) Any default occurs under any other agreement for borrowing money, lease financing of property or otherwise receiving credit under which Lessee is an obligor under which there is outstanding, owing or committed an aggregate amount of at least 10% of Lessee's aggregate current long- and short-term indebtedness, if such default consists of (i) the failure to pay any indebtedness when due or (ii) the failure to perform any other obligation thereunder and gives the holder of the indebtedness the right to accelerate the indebtedness; 600
( e) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of Lessee, or of all or a substantial part of the assets of Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, reorganization or insolvency proceeding; or (f) An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator or Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent, and such order, judgment or decree shall continue unstayed and in effect for any period of 30 consecutive days.
Section 12. 02. Remedies on Default. Whenever any Event of Default exists, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps:
(a) By written notice to Lessee, Lessor may declare all Rental Payments payable by Lessee pursuant to such Lease and other amounts payable by Lessee under such Lease to the end of the then current Original Term or Renewal Term to be due; (b) With or without terminating the Lease Term under such Lease, Lessor may enter the premises where the Equipment listed in such Lease is located and retake possession of such Equipment or require Lessee at Lessee's expense to promptly return any or all of such Equipment to the possession of Lessor at such place within the United States as Lessor shall specify, and sell or lease such Equipment or, for the account of Lessee, sublease such Equipment, continuing to hold Lessee liable, but solely from legally available funds, for the difference between (i) the Rental Payments payable by Lessee pursuant to such Lease and other amounts related to such Lease or the Equipment listed therein that are payable by Lessee to the end of the then current Original Term or Renewal Term, as the case may be, and (ii) the net proceeds of any such sale, leasing or subleasing (after deducting all expenses of Lessor in exercising its remedies under such Lease, including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing such Equipment and all brokerage, auctioneer's and attorney's fees), subject, however, to the provisions of Section 3.03. The exercise of any such remedies respecting any such Event of Default shall not relieve Lessee of any other liabilities under any other Lease or the Equipment listed therein; and ( c) Lessor may take whatever action at law or in equity may appear necessary or desirable to enforce its rights under such Lease or as a secured party in any or all of the Equipment subject to such Lease.
Section 12.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under a Lease now or hereafter existing at law or in equity.
No delay or omission to exercise any right or power accruing upon any default shall impair any 601
such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article it shall not be necessary to give any notice other than such notice as may be required in this Article.
Section 12. 04. Application of Moneys. Any net proceeds from the exercise of any remedy under this Agreement, including the application specified in Section 12.02(b)(ii) (after deducting all expenses of Lessor in exercising such remedies including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing Equipment and all brokerage, auctioneer's or attorney's fees), shall be applied as follows:
(a) If such remedy is exercised solely with respect to a single Lease, Equipment listed in such Lease or rights thereunder, then to amounts due pursuant to such Lease and other amounts related to such Lease or such Equipment.
(b) If such remedy is exercised with respect to more than one Lease, Equipment listed in more than one Lease or rights under more than one Lease, then to amounts due pursuant to such Leases pro rata.
ARTICLE XIII
Section 13. 01. Notices. All notices, certificates or other communications under any Lease shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile transmission (with electronic confirmation) to the parties hereto at the addresses immediately after the signatures to this Agreement ( or at such other address as either party hereto shall designate in writing to the other for notices to such party) and to any assignee at its address as it appears on the registration books maintained by Lessee.
Section 13. 02. Binding Effect. Each Lease shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns.
Section 13. 03. Severability. In the event any provision of any Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.
Section 13. 04. Amendments, Changes and Modifications. This Agreement and each Lease may only be amended by Lessor and Lessee in writing.
Section 13. 05. Execution in Counterparts. This Agreement and each Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 13. 06. Applicable Law. This Agreement and each Lease shall be governed by and construed in accordance with the laws of the State. 602
Section 13. 07. Captions. The captions or headings in this Agreement and in each Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement or any Lease.
603
IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives as of the date first above written.
LESSOR:
Banc of America Public Capital Corp~
555 California Street, 4th Floor
San Francisco, California 94104
Attention: Contract Administration
Fax No.: (415) 765-7373
By:
Name:-U~.,,_:
Title:
LESSEE:
City of Oxnard, California
300 West Third Street, Suite 302
Oxnard, California 93030
Attention: Rena Bassett
Fax No.:
By:
Name: ------------- Title:
(Seal)
Attest:
By:
Name: ------------- Title:
List of Exhibits
Exhibit A --
Exhibit B-1 --
Exhibit B-2 --
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Acquisition Fund and Account Control Agreement
Schedule of Property
Rental Payment Schedule
Certificate
Opinion of Counsel Form
Acceptance Certificate
Notice and Acknowledgement of Assignment
604
IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives as of the date first above written.
LESSOR:
Banc of America Public Capital Corp.
555 California Street, 4th Floor
San Francisco, California 94104
Attention: Contract Administration
Fax No.: (415) 765-7373
By:
Name: -------------- Title:
LESSEE:
City of Oxnard, California
300 West Third Street, Suite 302
Oxnard, California 93030
Attention: Rena Bassett
Fax No.:
By:
Name: Carmen Ramirez,
Title: Mayor Pro Tem
(Seal)
Attest:
/J
By: (~:JW4-r1~~
Name: ~·~1a_:=e=s~C=am=e=r~o~n~------
Title: Chief Financial Officer
List of Exhibits
Exhibit A --
Exhibit B-1 --
Exhibit B-2 --
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Acquisition Fund and Account Control Agreement
Schedule of Property
Rental Payment Schedule
Certificate
Opinion of Counsel Form
Acceptance Certificate
Notice and Acknowledgement of Assignment
605
EXHIBIT A
ACQUISITION FUND AND ACCOUNT CONTROL AGREEMENT
(Will be provided upon request)
#765386vlA (BAPCC/Gov't Entity Master Lease) A-1
606
EXHIBITB-1
SCHEDULE OF PROPERTY No.
Re: Master Equipment Lease/Purchase Agreement, dated as of April 8, 2014, between Banc of America Public Capital Corp., as Lessor, and City of Oxnard, California, as Lessee
l. Defined Terms. All terms used herein have the meanings ascribed to them in the above-referenced Master Equipment Lease/Purchase Agreement (the "Master Equipment Lease").
2. Equipment. The following items of Equipment are hereby included under this Schedule of the Master Equipment Lease.
Quantity Description Serial No. Model No. Location
3. Payment Schedule.
(a) Rental Payments. The Rental Payments shall be in such amounts and payable on such dates as set forth in the Rental Payment Schedule attached to this Schedule as Exhibit __ . Rental Payments shall commence on the date on which the Equipment listed in this Schedule is accepted by Lessee, as indicated in an Acceptance Certificate substantially in the form of Exhibit E to the Master Equipment Lease or the date on which sufficient moneys to purchase the Equipment are deposited for that purpose with an Acquisition Fund Custodian, whichever is earlier.
(b) Purchase Price Schedule. The Purchase Price on each Rental Payment date for the Equipment listed in this Schedule shall be the amount set forth for such Rental Payment date in the "Purchase Price" column of the Rental Payment Schedule attached to this Schedule. The Purchase Price is in addition to all Rental Payments then due under this Schedule (including the Rental Payment shown on the same line in the Rental Payment Schedule).
4. Representations, Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Master Equipment Lease are true and correct as though made on the date of commencement of Rental Payments on this Schedule. Lessee further represents and warrants that (a) no material adverse change in Lessee's financial condition has occurred since the date of the Master Equipment Lease; (b) the governing body of Lessee has authorized the execution and delivery of this #765386v1A (BAPCC/Gov't Entity Master Lease) B-1-1
607
Agreement and the Leases pursuant to [Resolution No. [Ordinance No. ------~' approved on , 20 __ ; ( c) the Equipment described in the Agreement referenced above is essential to the functions of Lessee or to the services Lessee provides its citizens; ( d) lessee has an immediate need for, and expects to make immediate use of, substantially all such Equipment, which will be used by Lessee only for the purpose of performing one or more of Lessee's governmental or proprietary functions consistent with the permissible scope of its authority; and (f) Lessee expects and anticipates adequate funds to be available for all future payments or rent due after the current budgetary period.
5. The Lease. The terms and provisions of the Master Equipment Lease (other than to the extent that they relate solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated into this Schedule by reference and made a part hereof. [OPTION: IF ACQUISITION FUND AGREEMENT IS USED:
6. Lease Proceeds. The Lease Proceeds which Lessor shall pay to the Acquisition Fund Custodian in connection with this Schedule is $ , of which $ ----- is for deposit to the Expense Fund and the balance is for deposit to the Acquisition Fund. It is expected that by [six (6)] [twelve (12)] [eighteen (18)] months from the date of this Schedule No. _____ , Lessee will have taken possession of all items of Equipment shown above and that a Lessee's Acceptance Certificate, or Acceptance Certificates, will be signed by Lessee and delivered to Lessor on or before [six (6)] [twelve (12)] [eighteen (18)] months from the date of this Schedule No. ----
OR IF VENDOR PAID DIRECTLY USE:
6. Acquisition Amount. The Acquisition Amount for the Equipment described in this Schedule to be paid to the Vendor is $ . ]
[OPTION: IF ACQUISITION FUND AGREEMENT IS USED:
7. Acquisition Period. The Acquisition Period applicable to this Schedule shall end at the conclusion of the month following the date hereof.] [7][8]. Lease Term. The Lease Term shall consist of the Original Term and __ consecutive Renewal Terms, with the final Renewal Term ending on ____ _ [8][9]. Purchase Option Commencement Date. For purposes of Section 10.01 of the Lease, the Purchase Option Commencement Date is ______ _ [OPTION: IF NO ACQUISITION FUND AGREEMENT IS USED:
[9][10]. Utilization Period Expiration. The Utilization Period Expiration 1s _______ .]
[10][1 l]. Maximum Equipment Cost. The Maximum Equipment Cost approved on a cumulative basis under the Lease for this Schedule and all previous Schedules is $ --------
[11 ][12]. Contract Rate. The Contract Rate for this Sch.edule is ____ %. #765386vlA (BAPCC/Gov't Entity Master Lease) B-1-2
608
[OPTION: IF MOTOR VEHICLES ARE BEING FINANCED:
[12][13]. Registration. Any Equipment that is a motor vehicle is to be registered and titled as follows:
Any Equipment that is a motor vehicle is to be registered and titled as follows:
(a) Registered Owner: City of Oxnard, California
(b) Lienholder: Banc of America Public Capital Corp.
555 California Street, 4th Floor
Mail Code CA5-705-04-01
San Francisco, California 94104
Lessee shall be responsible for the correct titling of all Equipment leased hereunder.
Lessee will cause the original Certificates of Title to be delivered to Lessor for retention in Lessor's files throughout the term of the Lease.
Dated: -------------
LESSOR:
Banc of America Public Capital Corp.
555 California Street, 4th Floor
San Francisco, California 94104
Attention: Contract Administration
By:
Name: ------------- Title:
LESSEE:
City of Oxnard, California
300 West Third Street, Suite 302
Oxnard, California 93030
Attention: Rena Bassett
EXHIBIT ONLY-DO NOT EXECUTE
By:
Name:
Title:
(Seal)
Attest:
By:
Name:
Title:
-------------
-------------
Counterpart No. __ of __ manually executed and serially numbered counterparts.
To the extent that this Lease constitutes chattel paper (as defined in the Uniform Commercial Code), no security interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1.
#765386vlA (BAPCC/Gov't Entity Master Lease) B-1-3
609
EXHIBITB-2
RENT ALP A YMENT SCHEDULE
Purchase
Rental Rental Interest Principal Outstanding Price
Payment Payment Portion Portion Balance [excluding
Date Amount Prepayment
Premium]
Prepayment Premium for purposes of Section 10.0l(a) is __ _.[=in=s=ert:...c....=-.fo=r=m=u=la=] __ _ For purposes of this Lease, "Taxable Rate," with respect to the interest component of Rental Payments, means an annual rate of interest equal to __ %. #765386v1A (BAPCC/Gov't Entity Master Lease) B-2-1
LESSEE:
City of Oxnard, California
EXHIBIT ONLY-DO NOT EXECUTE
By:
Name: ------------- Title:
610
EXHIBITC
CERTIFICATE
The undersigned, a duly elected and acting _______ _ [Secretary] [City Clerk] of City of Oxnard, California ("Lessee") certifies as follows:
A. The following listed persons are duly elected and acting officials of Lessee (the "Officials") in the capacity set forth opposite their respective names below and that the facsimile signatures are true and correct as of the date hereof;
B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute and deliver the Master Equipment Lease/Purchase Agreement dated as of April 8, 2014 and the Schedule(s) thereunder and all future Schedule(s) (the "Agreements") by and between Lessee and Banc of America Public Capital Corp., and these Agreements are binding and authorized Agreements of Lessee, enforceable in all respects in accordance with their terms.
Name of Official Title
Dated:-------------
Signature
EXHIBIT ONLY-DO NOT EXECUTE
By:
Name: ------------- Title:
(The signer certifying this Certificate cannot be listed above as authorized to execute the Agreements.)
#765386vlA (BAPCC/Gov't Entity Master Lease) C-1
611
EXHIBITD
OPINION OF COUNSEL TO LESSEE
(to be typed on letterhead of counsel)
Banc of America Public Capital Corp.
555 California Street, 4th Floor
San Francisco, California 94104
Re: Schedule of Property No. , dated , to Master
Equipment Lease/Purchase Agreement, dated as of April 8, 2014, between Banc of America Public Capital Corp., as Lessor, and City of Oxnard, California, as Lessee
Ladies and Gentlemen:
As legal counsel to City of Oxnard, California ("Lessee"), I have examined (a) an executed counterpart of a certain Master Equipment Lease/Purchase Agreement, dated as of April 8, 2014, and Exhibits thereto by and between Banc of America Public Capital Corp . . ("Lessor") and Lessee (the "Agreement") and an executed counterpart of Schedule of Property No. , dated , by and between Lessor and Lessee (the
"Schedule"), which, among other things, provides for the lease of certain property listed in the Schedule (the "Equipment") and a certain Acquisition Fund and Account Control Agreement among Lessor, Lessee, and as Acquisition Fund
Custodian, dated , (b) an executed counterpart of the ordinances or resolutions of Lessee which, among other things, authorize Lessee to execute the Agreement and the Schedule and ( c) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. The Schedule and the terms and provisions of the Agreement incorporated therein by reference together with the Rental Payment Schedule attached to the Schedule are herein referred to collectively as the "Lease", and the Lease and the Acquisition Fund and Account Control Agreement are referred to collectively as the "Transaction Documents."
Based on the foregoing, I am of the following opinions:
1. Lessee is a public body corporate and politic, duly organized and existing under the laws of the State, and [has a substantial amount of the following sovereign powers: (a) the power to tax, (b) the power of eminent domain, and ( c) police power] [is a political subdivision of a state within the meaning of Section 103( c) of the Internal Revenue Code of 1986, as amended (the "Code") and the obligations of Lessee under the Agreement will constitute an obligation of Lessee within the meaning of Section I03(a) of the Code, notwithstanding Section 103(b) of the Code].
2. Lessee has the requisite power and authority to lease and acquire the Equipment and to execute and deliver the Transaction Documents and to perform its obligations under the Lease.
#765386vlA (BAPCC/Gov't Entity Master Lease) D-1
612
3. The Lease has been duly authorized, approved, executed and delivered by and on behalf of Lessee and the Transaction Documents are valid and binding obligations of Lessee enforceable in accordance with their respective terms.
4. The authorization, approval, execution and delivery of the Transaction Documents and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, public bidding laws and all other applicable state or federal laws; and
5. There is no proceeding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely determined, would adversely affect the transactions contemplated by the Transaction Documents or the security interest of Lessor or its assigns, as the case may be, in the Equipment or other collateral thereunder.
[6. The portion of rentals designated as and constituting interest paid by Lessee and received by Lessor is excluded from Lessor's gross income for federal income tax purposes under Section 103 of the Code and is exempt from State of personal income taxes; and such interest is not a specific item of tax preference or other collateral for purposes of the federal individual or corporate alternative minimum taxes.] All capitalized terms herein shall have the same meanings as in the Transaction Documents unless otherwise provided herein. Lessor and its successors and assigns, and any counsel rendering an opinion on the tax-exempt status of the interest components of the Rental Payments, are entitled to rely on this opinion.
Printed Name: Signature:
Firm: Dated:
Address:
Telephone No.:
#765386vlA (BAPCC/Gov't Entity Master Lease) D-2
613
EXHIBITE
ACCEPTANCE CERTIFICATE
Banc of America Public Capital Corp.
555 California Street, 4th Floor
San Francisco, California 94104
Re: Schedule of Property No. , dated , to
Master Equipment Lease/Purchase Agreement, dated as of April 8, 2014, between Banc of America Public Capital Corp., as Lessor, and City of Oxnard, California, as Lessee
Ladies and Gentlemen:
In accordance with the Master Equipment Lease/Purchase Agreement (the "Agreement"), the undersigned Lessee hereby certifies and represents to, and agrees with Lessor as follows:
1. All of the Equipment (as such term is defined in the Agreement) listed in the above-referenced Schedule of Property (the "Schedule") has been delivered, installed and accepted on the date hereof.
2. Lessee has conducted such inspection and/or testing of the Equipment listed in the Schedule as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes.
3. Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement.
4. No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default (as defined in the Agreement) exists at the date hereof.
Date: -------------
(Seal)
#765386vlA (BAPCC/Gov't Entity Master Lease) E-1
LESSEE:
City of Oxnard, California
EXHIBIT ONLY-DO NOT EXECUTE
By:
Name: ------------- Title:
614
EXHIBITF
NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT
DATED ---------
BANC OF AMERICA PUBLIC CAPITAL CORP. ("Assignor") hereby gives notice that it has assigned and sold to ("Assignee") all of Assignor's right, title and interest in, to and under [Schedule of Property] No. [ ), dated ~-------~ (the "Lease") to the Master Equipment Lease/Purchase Agreement ( "Equipment Lease") dated as of , between Assignor and ----------("Lessee").
For purposes of this Notice and Acknowledgment of Assignment (the "Acknowledgment"), "Lease" means collectively the Lease identified above, together with all exhibits, schedules, addenda and attachments related thereto, and all certifications and other documents delivered in connection therewith. The term "Lease" specifically excludes all other [Schedules of Property] entered into under the Equipment Lease and rental payments other than with respect to the [Schedule of Property] identified above. Each capitalized term used but not defined herein has the meaning set forth in the Equipment Lease described above.
1. Pursuant to the authority of Resolution adopted on
_________ , Lessee hereby acknowledges the effect of the assignment of the Lease and absolutely and unconditionally agrees to deliver to Assignee all rental payments and other amounts coming due under the Lease in accordance with the terms thereof on and after the date of this Acknowledgment.
2. Lessee hereby agrees that: (i) Assignee shall have all the rights of Lessor under the Lease and all related documents, including, but not limited to, the rights to issue or receive all notices and reports, to give all consents or agreements to modifications thereto, to receive title to the equipment in accordance with the terms of the Lease, to declare a default and to exercise all remedies thereunder; and (ii) except as provided in Section [ I of the Lease, the obligations of Lessee to make rental payments and to perform and observe the other covenants and agreements contained in the Lease shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense.
3. Lessee agrees that, as of the date of this Acknowledgment, the following information about the Lease is true, accurate and complete:
Number of Rental Payments Remaining -
Amount of Each Rental Payment
Total Amount of Rents Remaining
Frequency of Rental Payments
#765386v1A (BAPCC/Gov't Entity Master Lease) F-1
$ ______ _
$
-------
615
Next Rental Payment Due
Funds Remaining in Escrow Fund $ ___ _
4. The Lease remains in full force and effect, has not been amended and no nonappropriation or event of default ( or event which with the passage of time or the giving of notice or both would constitute a default) has occurred thereunder.
5. Any inquiries of Lessee related to the Lease and any requests for escrow disbursements, if applicable, and all rental payments and other amounts coming due pursuant to the Lease on and after the date of this Acknowledgment should be remitted to Assignee at the following address ( or such other address as provided to Lessee in writing from time to time by Assignee):
ACKNOWLEDGED AND AGREED:
LESSEE:
[FOR EXHIBIT PURPOSES ONLY]
By:
Name:-------------
Title:
ASSIGNOR: BANC OF AMERICA PUBLIC CAPITAL CORP.
[FOR EXHIBIT PURPOSES ONLY]
By:
Name:-------------
Title:
#765386v1A (BAPCC/Gov't Entity Master Lease) F-2
616
1 EXHIBIT I
Escrow Agreement
This Escrow Agreement (this “Agreement”) dated as of _________ by and among Banc of America Public Capital Corp, a Kansas corporation (together with its successors and assigns, hereinafter referred to as “Lessor”), the City of Oxnard, California, a municipal corporation organized and existing under the laws of the State of California (hereinafter referred to as “Lessee”) and Computershare Trust Company, N.A., a national banking association organized under the laws of the United States (hereinafter referred to as “Escrow Agent”).
Reference is made to that certain Master Equipment Lease/Purchase Agreement dated as of April 8, 2014 between Lessor and Lessee (hereinafter referred to as the “Lease”), covering the acquisition and lease of certain Equipment described therein (the “Equipment”). It is a requirement of the Lease that the Acquisition Amount $___________ be deposited into a segregated escrow account under terms satisfactory to Lessor, for the purpose of fully funding the Lease, and providing a mechanism for the application of such amounts to the purchase of and payment for the Equipment. The Parties acknowledge that the Escrow Agent is not a party to, is not bound by, and has no duties or obligations under the Lease, that all references in this Agreement to the Lease are for convenience, and that the Escrow Agent shall have no implied duties beyond the express duties set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Creation of Escrow Account.
(a) There is hereby created an escrow fund to be known as the “Oxnard Equipment Escrow Account Schedule 26” (the “Escrow Account”) to be held by the Escrow Agent for the purposes stated herein, for the benefit of Lessor and Lessee, to be held, disbursed, and returned in accordance with the terms hereof. Following execution hereof, the Acquisition Amount of $ in immediately available funds shall be wired by the Lessor to the Escrow Agent in order to be deposited and held in the Escrow Account. (b) The Escrow Agent is authorized and directed to deposit, transfer, hold and invest the Escrow Account and any investment income thereon as set forth in Exhibit B hereto or as set forth in any subsequent written instruction signed by Lessee. All funds invested by Escrow Agent at the direction of Lessee shall be deemed to be part of the Escrow Account and subject to all the terms and conditions of this Agreement. If any additional cash is received by the Escrow Agent for the Escrow Account after the cut-off time for the designated investment vehicle, the Escrow Agent shall hold such cash uninvested until the next Business Day. In the absence of written instructions from Lessee designating an investment of cash in the Escrow Account, cash in the Escrow Account shall remain uninvested and it shall not be collateralized.
Escrow Agent shall have no obligation to pay interest on cash in respect of any period during which it remains uninvested. Lessee shall be solely responsible for ascertaining that all proposed 617
2 investments and reinvestments are Qualified Investments and that they comply with federal, state and local laws, regulations and ordinances governing investment of such funds and for providing appropriate notice to the Escrow Agent for the reinvestment of any maturing investment.
Accordingly, neither the Escrow Agent nor Lessor shall be responsible for any liability, cost, expense, loss or claim of any kind, directly or indirectly arising out of or related to the investment or reinvestment of all or any portion of the moneys on deposit in the Escrow Account, and Lessee agrees to and does hereby release the Escrow Agent and Lessor from any such liability, cost, expenses, loss or claim. Interest earned on the Escrow Account shall become part of the Escrow Account, and gains and losses on the investment of the moneys on deposit in the Escrow Account shall be borne by the Lessee. The Escrow Agent shall have no discretion whatsoever with respect to the management, disposition or investment of the Escrow Account.
The Escrow Agent shall not be responsible for any market decline in the value of the Escrow Account and has no obligation to notify Lessor and Lessee of any such decline or take any action with respect to the Escrow Account, except upon specific written instructions stated herein. For purposes of this Agreement, “Qualified Investments” means any investments which meet the requirements of California State law. The Escrow Agent shall have no responsibility or liability for any loss which may result from any investment or sale of investment made pursuant to this Agreement. Lessee acknowledges that the Escrow Agent is not providing investment supervision, recommendations, or advice. Lessee agrees that confirmations of permitted investments are not required to be issued by the Escrow Agent for each month in which a monthly statement is rendered. No investment statement need be rendered for any fund or account if no activity occurred in such fund or account during such month. (c) Unless the Escrow Account is earlier terminated in accordance with the provisions of paragraph (d) below, amounts in the Escrow Account shall be disbursed by the Escrow Agent in payment of amounts described in Section 2 hereof upon receipt of written instruction(s) from Lessor, as is more fully described in Section 2 hereof. If the amounts in the Escrow Account are insufficient to pay such amounts, Lessee shall deposit into the Escrow Account any funds needed to complete the acquisition of the Equipment. Any moneys remaining in the Escrow Account on or after the earlier of (i) the expiration of the Acquisition Period or (ii) the date on which Lessee executes an Acceptance Certificate shall be applied as provided in Section 4 hereof.
(d) The Escrow Account shall be terminated at the earliest of (i) the final distribution of amounts in the Escrow Account, (ii) the date on which Lessee executes a Final Acceptance Certificate or (iii) written notice given by Lessor of the occurrence of an Event of Default under the Lease or termination of the Lease due to an Event of Non-appropriation.
Notwithstanding the foregoing, this Agreement shall not terminate nor shall the Escrow Account be closed until all funds deposited hereunder have been disbursed. (e) Lessor and Lessee each respectively represent and warrant that each person signing this Agreement are duly authorized and has legal capacity to execute and deliver this Escrow Agreement, along with each exhibit, agreement, document, and instrument to be executed and delivered by the Parties to this Agreement. The Escrow Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine and may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument. The Escrow Agent shall not be liable in any manner for the sufficiency or 618
3 correctness as to form, manner of execution, or validity of any instrument nor as to the identity, authority, or right of any person executing the same; and its duties hereunder shall be limited to the receipt of such moneys, instruments or other documents received by it as the Escrow Agent, and for the disposition of the same in accordance herewith. Notwithstanding and without limiting the generality of the foregoing, concurrent with the execution of this Agreement, Lessee and Lessor, respectively, shall deliver to the Escrow Agent an authorized signers form in the form of Exhibit A-1 (Lessee) and Exhibit A-2 (Lessor) attached hereto. Notwithstanding the foregoing sentence, the Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent or given by the parties or by a person or persons authorized by the parties. The Escrow Agent specifically allows for receiving direction by written or electronic transmission from an authorized representative with the following caveat, Lessee and Lessor agree to indemnify and hold harmless the Escrow Agent against any and all claims, losses, damages, liabilities, judgments, costs and expenses (including reasonable attorneys' fees) (collectively, "Losses") incurred or sustained by the Escrow Agent as a result of or in connection with the Escrow Agent’s reliance upon and compliance with instructions or directions given by written or electronic transmission given by each, respectively, provided, however, that such Losses have not arisen from the gross negligence or willful misconduct of the Escrow Agent, it being understood that forbearance on the part of the Escrow Agent to verify or confirm that the person giving the instructions or directions, is, in fact, an authorized person shall not be deemed to constitute gross negligence or willful misconduct.
In the event conflicting instructions as to the disposition of all or any portion of the Escrow Account are at any time given by Lessor and Lessee, the Escrow Agent shall abide by the instructions or entitlement orders given by Lessor without consent of the Lessee. (f) Unless the Escrow Agent is guilty of gross negligence or willful misconduct with regard to its duties hereunder, to the extent permitted by law, Lessee agrees to and does hereby release and indemnify the Escrow Agent and hold it harmless from any and all claims, liabilities, losses, actions, suits or proceedings at law or in equity, or any other expense, fees or charges of any character or nature, which it may incur or with which it may be threatened by reason of its acting as Escrow Agent under this Agreement; and in connection therewith, does to the extent permitted by law indemnify the Escrow Agent against any and all expenses; including reasonable attorneys’ fees and the cost of defending any action, suit or proceeding or resisting any claim.
(g) If Lessee and Lessor shall be in disagreement about the interpretation of the Lease, or about the rights and obligations, or the propriety of any action contemplated by the Escrow Agent hereunder, the Escrow Agent may, but shall not be required to, file an appropriate civil action including an interpleader action to resolve the disagreement. The Escrow Agent shall be reimbursed by Lessee for all costs, including reasonable attorneys’ fees, in connection with such civil action, and shall be fully protected in suspending all or part of its activities under the Lease until a final judgment in such action is received. (h) The Escrow Agent may consult with counsel of its own choice and shall have full and complete authorization and protection with the opinion of such counsel. The Escrow Agent shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind unless caused by its gross negligence or willful misconduct. 619
4 (i) Lessee shall reimburse the Escrow Agent for all reasonable costs and expenses, including those of the Escrow Agent’s attorneys, agents and employees incurred for non-routine administration of the Escrow Account and the performance of the Escrow Agent’s powers and duties hereunder in connection with any Event of Default under the Lease, any termination of the Lease due to an Event of Non-appropriation or in connection with any dispute between Lessor and Lessee concerning the Escrow Account. (j) The Escrow Agent or any successor may at any time resign by giving mailed notice to Lessee and Lessor of its intention to resign and of the proposed date of resignation (the “Effective Date”), which shall be a date not less than 60 days after such notice is delivered to an express carrier, charges prepaid, unless an earlier resignation date and the appointment of a successor shall have been approved by the Lessee and Lessor. After the Effective Date, the Escrow Agent shall be under no further obligation except to hold the Escrow Account in accordance with the terms of this Agreement, pending receipt of written instructions from Lessor regarding further disposition of the Escrow Account. (k) The Escrow Agent shall have no responsibilities, obligations or duties other than those expressly set forth in this Agreement and no implied duties responsibilities or obligations shall be read into this Agreement. The Escrow Agent is obligated only to perform the duties specifically set forth in this Agreement, which shall be deemed purely ministerial in nature. Under no circumstance will the Escrow Agent be deemed to be a fiduciary to any Party or any other person under this Agreement. The Escrow Agent will not be responsible or liable for the failure of any Party to perform in accordance with this Agreement. This Agreement sets forth all matters pertinent to the Escrow Account contemplated hereunder, and no additional obligations of the Escrow Agent shall be inferred or implied from the terms of this Agreement or the Lease. The permissive rights of the Escrow Agent to do things enumerated in this Agreement shall not be construed as duties. No provision of this Agreement shall require the Escrow Agent to risk or advance its own funds or otherwise incur any financial liability or potential financial liability in the performance of its duties or the exercise of its rights under this Agreement.
(l) The Escrow Agent shall not be liable, directly or indirectly, for any (i) damages, losses or expenses arising out of the services provided hereunder, other than damages, losses or expenses which have resulted from the Escrow Agent’s gross negligence or willful misconduct, or (ii) special, indirect, punitive, or consequential damages or losses of any kind whatsoever (including without limitation lost profits), even if the Escrow Agent has been advised of the possibility of such losses or damages and regardless of the form of action. (m) Lessor and Lessee are aware that under applicable state law, property which is presumed abandoned may under certain circumstances escheat to the applicable state.
The Escrow Agent shall have no liability to the Lessor or Lessee, their respective heirs, legal representatives, successors and assigns, or any other party, should any or all of the Escrow Account escheat by operation of law.
(n) The Escrow Agent shall be entitled to compensation for its services as stated in the fee schedule attached hereto as Exhibit C, which compensation shall be paid by Lessee on the date hereof. The fee agreed upon for the services rendered hereunder is intended as 620
5 full compensation for the Escrow Agent's services as contemplated by this Agreement; provided, however, that in the event that the conditions for the disbursement of funds under this Agreement are not fulfilled, or the Escrow Agent renders any service not contemplated in this Agreement, or there is any assignment of interest in the subject matter of this Agreement, or any material modification hereof, or if any material controversy arises hereunder, or the Escrow Agent is made a party to any litigation pertaining to this Agreement or the subject matter hereof, then the Escrow Agent shall be compensated for such extraordinary services and reimbursed for all costs and expenses, including reasonable attorneys’ fees and expenses, occasioned by any such delay, controversy, litigation or event. If any amount due to the Escrow Agent hereunder is not paid within thirty (30) calendar days of the date due, the Escrow Agent in its sole discretion may charge interest on such amount up to the highest rate permitted by applicable law. (0) In the event that any Acquisition Amount shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or entered by any court order affecting the Acquisition Amount, the Escrow Agent is hereby expressly authorized, in its sole discretion, to respond as it deems appropriate or to comply with all writs, orders or decrees so entered or issued, or which it is advised by legal counsel of its own choosing is binding upon it, whether with or without jurisdiction. In the event that the Escrow Agent obeys or complies with any such writ, order or decree it shall not be liable to any of the Parties or to any other person, firm or corporation, should, by reason of such compliance notwithstanding, such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated. The Escrow Agent shall further have no obligation to pursue any action that is not in accordance with applicable law.
2. Acquisition of Property.
(a) Acquisition Contracts. Lessee will arrange for, supervise and provide for, or cause to be supervised and provided for, the acquisition of the Equipment, with moneys available in the Escrow Account. Lessee represents the estimated costs of the Equipment are within the funds estimated to be available therefor, and Lessor makes no warranty or representation with respect thereto. Lessor shall have no liability under any of the acquisition or construction contracts. Lessee shall obtain all necessary permits and approvals, if any, for the acquisition, equipping and installation of the Equipment, and the operation and maintenance thereof. Escrow Agent shall have no duty to monitor or enforce Lessee’s compliance with the foregoing covenant.
(b) Authorized Escrow Account Disbursements. It is agreed as between Lessee, Lessor and Escrow Agent that disbursements from the Escrow Account shall be made for the purpose of paying (including the reimbursement to Lessee for advances from its own funds to accomplish the purposes hereinafter described) the cost of acquiring the Equipment and to pay a portion of the City’s costs of issuance.
(c) Requisition Procedure. No disbursement from the Escrow Account shall be made unless and until Lessor has approved such requisition. Prior to disbursement from the Escrow Account there shall be filed with the Escrow Agent a requisition for such payment in the form of Disbursement Request attached hereto as Schedule 1, stating each amount to be paid and the name of the person, firm or corporation to whom payment thereof is due. All disbursements 621
6 shall be made by wire transfer. The Escrow Agent is authorized to obtain and rely on confirmation of such Disbursement Request and payment instructions by telephone call-back to the person or persons designated for verifying such requests on Exhibit A-2 (such person verifying the request shall be different than the person initiating the request). The Lessor and Lessee hereby confirm that any call-back performed by Escrow Agent to verify a disbursement instruction pursuant to a Disbursement Request submitted pursuant to this Section 2(c) before release, shall be made to Lessor only and Escrow Agent shall have no obligation to call-back Lessee.
Each such Disbursement Request shall be signed by an authorized representative of Lessee (an “Authorized Representative”) and by Lessor, and shall be subject to the following conditions, which Escrow Agent shall conclusively presume have been satisfied at such time as a requisition executed by Lessee and Lessor is delivered to it:
1. Delivery to Lessor of an executed Disbursement Request in the form attached hereto as Schedule 1; and
2. Delivery to Lessor of copies of invoices (and proofs of payment of such invoices, if Lessee seeks reimbursement) and bills of sale (if title to such Equipment has passed to Lessee) therefor as required by Section 3.04 of the Lease and any additional documentation reasonably requested by Lessor.
Lessee and Lessor agree that their execution of the form attached hereto as Schedule 1 and delivery of the executed form to Escrow Agent confirms that all of the requirements and conditions with respect to disbursements set forth in this Section 2 have been satisfied. Absent gross negligence or willful misconduct on the part of the Escrow Agent, the Escrow Agent shall not be liable for any action taken or not taken by it in accordance with an executed Disbursement Request.
3. Deposit to Escrow Account. Upon satisfaction of the conditions specified in Section 3.04 of the Lease, Lessor will cause the Acquisition Amount to be deposited in the Escrow Account. Lessee agrees to pay any costs with respect to the Equipment in excess of amounts available therefor in the Escrow Account.
4. Excessive Escrow Account. Upon receipt of written instructions from Lessor including a representation that one of the following conditions has been satisfied (upon which representation Escrow Agent shall conclusively rely), any funds remaining in the Escrow Account on or after the earlier of (a) the expiration of the Acquisition Period or (b) the date on which Lessee executes an Acceptance Certificate, or upon a termination of the Escrow Account as otherwise provided herein, shall be distributed by the Escrow Agent to the Lessor in order for the Lessor to apply such funds to amounts owed by Lessee under the Lease in accordance with Section 4.07 of the Lease.
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7 5. Security Interest. The Escrow Agent and Lessee acknowledge and agree that the Escrow Account and all proceeds thereof are being held by Escrow Agent for disbursement or return as set forth herein. Lessee hereby grants to Lessor a first priority perfected security interest in the Escrow Account, and all proceeds thereof, and all investments made with any amounts in the Escrow Account. If the Escrow Account, or any part thereof, is converted to investments as set forth in this Agreement, such investments shall be made in the name of Escrow Agent and the Escrow Agent hereby agrees to hold such investments as bailee for Lessor so that Lessor is deemed to have possession of such investments for the purpose of perfecting its security interest.
6. Control of Escrow Account. In order to perfect Lessor’s security interest by means of control in (i) the Escrow Account established hereunder, (ii) all securities entitlements, investment property and other financial assets now or hereafter credited to the Escrow Account, (iii) all of Lessee’s rights in respect of the Escrow Account, such securities entitlements, investment property and other financial assets, and (iv) all products, proceeds and revenues of and from any of the foregoing personal property (collectively, the “Collateral”), Lessor, Lessee and Escrow Agent further agree as follows:
(a) All terms used in this Section 6 which are defined in the Commercial Code of the State of California (“Commercial Code”) but are not otherwise defined herein shall have the meanings assigned to such terms in the Commercial Code, as in effect on the date of this Agreement.
(b) Escrow Agent will comply with all entitlement orders originated by Lessor with respect to the Collateral, or any portion of the Collateral, without further consent by Lessee. (c) Provided that account investments shall be held in the name of the Escrow Agent, Escrow Agent hereby represents and warrants (a) that the records of Escrow Agent show that Lessee is the sole owner of the Collateral, (b) that Escrow Agent has not been notified or has not been served with any notice of levy or received any notice of any security interest in or other claim to the Collateral, or any portion of the Collateral, other than Lessor’s claim pursuant to this Agreement, and (c) that Escrow Agent is not presently obligated to accept any entitlement order from any person with respect to the Collateral, except for entitlement orders that Escrow Agent is obligated to accept from Lessor under this Agreement and entitlement orders that Escrow Agent, subject to the provisions of paragraph (e) below, is obligated to accept from Lessee. (d) Without the prior written consent of Lessor, Escrow Agent will not enter into any agreement by which Escrow Agent agrees to comply with any entitlement order of any person other than Lessor or, subject to the provisions of paragraph (e) below, Lessee, with respect to any portion or all of the Collateral. Escrow Agent shall promptly notify Lessor if any person requests Escrow Agent to enter into any such agreement or otherwise asserts or seeks to assert a lien, encumbrance or adverse claim against any portion or all of the Collateral. (e) Except as otherwise provided in this paragraph (e) and subject to Section 1(b) hereof, Lessee may effect sales, trades, transfers and exchanges of Collateral within the Escrow Account, but will not, without the prior written consent of Lessor, withdraw any Collateral from the Escrow Account. Escrow Agent acknowledges that Lessor reserves the right, 623
8 by delivery of written notice to Escrow Agent, to prohibit Lessee from effecting any withdrawals (including withdrawals of ordinary cash dividends and interest income), sales, trades, transfers or exchanges of any Collateral held in the Escrow Account. Further, Escrow Agent hereby agrees to comply with any and all written instructions delivered by Lessor to Escrow Agent (once it has had a reasonable opportunity to comply therewith) and has no obligation to, and will not, investigate the reason for any action taken by Lessor, the amount of any obligations of Lessee to Lessor, the validity of any of Lessor’s claims against or agreements with Lessee, the existence of any defaults under such agreements, or any other matter. (f) Lessee hereby irrevocably authorizes Escrow Agent to comply with all instructions and entitlement orders delivered by Lessor to Escrow Agent. (g) Escrow Agent will not attempt to assert control, and does not claim and will not accept any security or other interest in, any part of the Collateral, and Escrow Agent will not exercise, enforce or attempt to enforce any right of setoff against the Collateral, or otherwise charge or deduct from the Collateral any amount whatsoever. (h) Escrow Agent and Lessee hereby agree that any property held in the Escrow Account shall be treated as a financial asset under such section of the Commercial Code as corresponds with Section 8-102 of the Uniform Commercial Code, notwithstanding any contrary provision of any other agreement to which Escrow Agent may be a party. (i) Escrow Agent is hereby authorized and instructed, and hereby agrees, to send to Lessor at its address set forth in Section 8 below, concurrently with the sending thereof to Lessee, duplicate copies of any and all monthly Escrow Account statements or reports issued or sent to Lessee with respect to the Escrow Account.
7. Information Required Under USA PATRIOT ACT. The parties acknowledge that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to Federal regulations that became effective on October 1, 2003 (Section 326 of the USA PATRIOT Act) all financial institutions are required to obtain, verify, record and update information that identifies each person establishing a relationship or opening an account. The parties to this Agreement agree that they will provide to the Escrow Agent such information as it may request, from time to time, in order for the Escrow Agent to satisfy the requirements of the USA PATRIOT Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided.
8. Miscellaneous. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease, provided however, the Escrow Agent will not be responsible to determine or to make inquiry into any term, capitalized, or otherwise, not defined herein. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original instrument and each shall have the force and effect of an original and all of which together constitute, and shall be deemed to constitute, one and the same instrument.
Notices hereunder shall be made in writing and shall be deemed to have been duly given when personally delivered or when deposited in the mail, first class postage prepaid, or delivered to an 624
9 express carrier, charges prepaid, or sent by facsimile with electronic confirmation, addressed to each party at its address below.
Notices and other communications hereunder may be delivered or furnished by electronic mail provided that any formal notice be attached to an email message in PDF format and provided further that any notice or other communication sent to an e-mail address shall be deemed received upon and only upon the sender’s receipt of affirmative acknowledgement or receipt from the intended recipient. For purposes hereof no acknowledgement of receipt generated on an automated basis shall be deemed sufficient for any purpose hereunder or admissible as evidence of receipt.
If to Lessor: Banc of America Public Capital Corp
11333 McCormick Road
Mail Code: MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
Fax: (443) 541-3057
If to Lessee: City of Oxnard, California
300 W. Third Street, Third Floor
Oxnard, CA 93030
Attn: Betsy George, CFO
Email: [email protected]
If to Escrow Agent Computershare Trust Company, N.A.
CTSO Mail Operations
Attn: Christine Magnuson, Corporate Trust Services
MAC: N9300-070
600 South 4th Street, 7th Floor
Minneapolis, MN 55415
Telephone: (612) 667-6759
E-mail: [email protected]
9. Lessee and Lessor understand and agree that they are required to provide the Escrow Agent with a properly completed and signed Tax Certification (as defined below) and that the Escrow Agent may not perform its duties hereunder without having been provided with such Tax Certification. As used herein “Tax Certification” shall mean an IRS form W-9 or W-8 as described above. The Escrow Agent will comply with any U.S. tax withholding or backup withholding and reporting requirements that are required by law. With respect to earnings allocable to a foreign person, the Escrow Agent will withhold U.S. tax as required by law and report such earnings and taxes withheld, if any, for the benefit of such foreign person on IRS Form 1042-S (or any other required form), unless such earnings and withheld taxes are exempt from reporting under Treasury Regulation Section 1.1461-1(c)(2)(ii) or under other applicable 625
10 law. With respect to earnings allocable to a United States person, the Escrow Agent will report such income, if required, on IRS Form 1099 or any other form required by law. The IRS Forms 1099 and/or 1042-S shall show the Escrow Agent as payor and Lessee as payee. Escrow Agent shall recognize Lessee as the designated party for regulatory reporting purposes.
Lessee and Lessor agree that they are not relieved of their respective obligations, if any, to prepare and file information reports under Code Section 6041, and the Treasury regulations thereunder, with respect to amounts of imputed interest income, as determined pursuant to Code Sections 483 or 1272. The Escrow Agent shall not be responsible for determining or reporting such imputed interest.
10. This Agreement shall be governed by and construed in accordance with the laws of the State of California and the parties hereto consent to jurisdiction in the State of California and venue in any state or Federal court located in the County of Ventura. EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY TO THE
EXTENT PERMITTED BY LAW IN ANY LITIGATION, ACTION, PROCEEDING IN ANY
COURT ARISING OUT OF, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT.
11. Any bank or corporation into which the Escrow Agent may be merged or with which it may be consolidated, or any bank or corporation to whom the Escrow Agent may transfer a substantial amount of its escrow business, shall be the successor to the Escrow Agent without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding. Any bank or corporation into which the Lessor may be merged or with which it may be consolidated, or any bank or corporation to whom the Lessor may transfer a substantial amount of its business, shall be the successor to the Lessor without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding.
12. This Agreement may be amended, modified, and/or supplemented only by an instrument in writing executed by all parties hereto.
13. The Parties and Escrow Agent represent and warrant that the execution and delivery of this Agreement and the performance of such party’s obligations hereunder have been duly authorized and that the Agreement is a valid and legal agreement binding on such party and enforceable in accordance with its terms. This Agreement shall be binding on and inure to the benefit of the Parties and the Escrow Agent and their respective successors and permitted assigns. No other persons shall have any rights under this Agreement. No assignment of the interest of any of the Parties shall be binding unless and until written notice of such assignment shall be delivered to the other Party and the Escrow Agent. No party hereto shall assign its rights hereunder until its assignee has submitted to the Escrow Agent (i) Patriot Act disclosure materials and the Escrow Agent has determined that on the basis of such materials it may accept such assignee as a customer and (ii) assignee has delivered an IRS Form W-8 or W-9, as appropriate, to the Escrow Agent which the Escrow Agent has determined to have been properly signed and completed.
626
11 14. Escrow Agent will treat information related to this Agreement as confidential but, unless prohibited by law, Lessee and Lessor authorize the transfer or disclosure of any information relating to the Agreement to and between the subsidiaries, officers, affiliates and other representatives and advisors of Escrow Agent and third parties selected by any of them, wherever situated, for confidential use in the ordinary course of business, and further acknowledge that Escrow Agent and any such subsidiary, officer, affiliate or third party may transfer or disclose any such information as required by any law, court, regulator or legal process.
Lessor will treat information related to this Agreement as confidential but, unless prohibited by law, Escrow Agent and Lessee authorize the transfer or disclosure of any information relating to the Agreement to and between the subsidiaries, officers, affiliates, other representatives and advisors of Lessor and debt and equity sources and third parties selected by any of them, and to their prospective assignees wherever situated, for confidential use in the ordinary course of business, and further acknowledge that Lessor and any such subsidiary, officer, affiliate, debt and equity source or third party or prospective assignee may transfer or disclose any such information as required by any law, court, regulator or legal process.
Lessee will treat the terms of this Agreement as confidential except on a "need to know" basis to persons within or outside Lessee’s organization (including affiliates of such party), such as attorneys, accountants, bankers, financial advisors, auditors and other consultants of such party and its affiliates, except as required by any law, court, regulator or legal process and except pursuant to the express prior written consent of the other parties, which consent shall not be unreasonably withheld.
15. The failure of any party to this Agreement to any time or times to require performance of any provision under this Agreement shall in no manner affect the right at a later time to enforce the same performance. A waiver by any party to this Agreement of any such condition or breach of any term, covenant, representation, or warranty contained in this Agreement, in any one or more instances, shall neither be construed as a further or continuing waiver of any such condition or breach nor a waiver of any other condition or breach of any other term, covenant, representation, or warranty contained in this Agreement. 627
12 In Witness Whereof, the parties have executed this Agreement as of the date first above written.
Banc of America Public Capital Corp City of Oxnard, California as Lessor as Lessee
By: By:
Name: Name:
Title: Title:
Computershare Trust Company, N.A.,
as Escrow Agent
By:
Name:
Title:
628
SCHEDULE 1
to the Escrow Agreement
FORM OF DISBURSEMENT REQUEST
Re: Master Equipment Lease/Purchase Agreement dated as of April 8, 2014 by and between Banc of America Public Capital Corp, as Lessor, and City of Oxnard, California, as Lessee (the “Lease”) (Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease.) In accordance with the terms of the Escrow Agreement, dated as of _____________ (the “Escrow Agreement”) by and among Banc of America Public Capital Corp (“Lessor”), the City of Oxnard, California (“Lessee”) and ______________, (the “Escrow Agent”), the undersigned hereby requests the Escrow Agent pay the following persons the following amounts from the Escrow Account created under the Escrow Agreement for the following purposes:
Disbursement Amounts:
Payee’s Name and Address Invoice Number Dollar Amount Purpose <invoice list OR “see
attached” with a
spreadsheet>
<invoice list OR “see
attached” with a
spreadsheet>
Lessee hereby represents, covenants and warrants for the benefit of Lessor on the date hereof as follows:
(i) (a) Each obligation specified in the table herein titled as “Disbursement Amounts” has been incurred by Lessee in the stated amount, (b) the same is a proper charge against the Escrow Account for costs relating to the Equipment identified in the Lease, and (c) has not been paid (or has been paid by Lessee and Lessee requests reimbursement thereof).
(ii) Each item of Equipment relating to an obligation specified in the table herein titled as “Disbursement Amounts” has been delivered, installed and accepted by Lessee. Attached hereto is a copy of the invoice with respect to such obligation.
(iii) The undersigned, as Authorized Representative, has no notice of any vendor’s, mechanic’s or other liens or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made.
(iv) This requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date hereof, entitled to retain (except to the extent such amounts represent a reimbursement to Lessee).
(v) The Equipment is insured in accordance with the Lease. 629
(vi) No Event of Default, and no event which with notice or lapse of time, or both, would become an Event of Default, under the Lease has occurred and is continuing at the date hereof. No Event of Non-appropriation has occurred or is threatened with respect to the Lease. (vii) The disbursement shall occur during the Acquisition Period. (viii) The representations, warranties and covenants of Lessee set forth in the Lease are true and correct as of the date hereof.
(ix) No Material Adverse Change has occurred since the date of the execution and delivery of the Lease.
(x) The information in this Disbursement Request regarding each Payee, including their respective name, address and wiring instructions, (collectively, the “Payee Information”) is true and correct, such Payee Information has been verified and confirmed by Lessee and the Lessor can rely on Lessee’s verification and confirmation of the accuracy of such Payee Information. Lessee hereby acknowledges and agrees that any call-back performed by Lessor to verify the disbursement instructions pursuant to this Disbursement Request shall be made to Lessee only and Lessor shall have no obligation to call-back any Payee listed above.
Dated: __________________
CITY OF OXNARD, CALIFORNIA
By:
Name: ______________________________
Title: _______________________________
Disbursement of funds from the Escrow
Account in accordance with the foregoing
Disbursement Request hereby is authorized
BANC OF AMERICA PUBLIC CAPITAL CORP
as Lessor under the Lease
By:
Name:
Title:
630
[AN “EXHIBIT A-1” MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT] EXHIBIT A-1
FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE
The undersigned, a duly elected or appointed and acting __________________ [Secretary] [City Clerk] [County Clerk] of _______________________________ (“Lessee”) certifies as follows:
A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute and deliver the Equipment Lease/Purchase Agreement dated as of ____________________ by and between Lessee and Banc of America Leasing & Capital, LLC (“Lessor”), the Escrow and Account Control Agreement dated as of __________________ by and among Lessor, Lessee and Computershare Trust Company, N.A., as Escrow Agent, all documents related thereto and delivered in connection therewith, and any future modification(s) or amendments thereof (collectively, the “Operative Agreements”), and the Operative Agreements each are the binding and authorized agreements of Lessee, enforceable in all respects in accordance with their respective terms.
Name of Official Title Signature
_____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ Dated: By:
Name:
Title:
(The signer of this Certificate cannot be listed above as authorized to execute the Agreements.) 631
[AN “EXHIBIT A-2” MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT] EXHIBIT A-2
Escrow and Account Control Agreement dated as of ______________ by and among Banc of America Leasing & Capital, LLC, as Lessor, ________________________, as Lessee and Computershare Trust Company, N.A., as Escrow Agent
Certificate of Authorized Representatives – [Lessor]
Name: Terri Preston Name: Nancy Nusenko
Title: Senior Vice President Title: Vice President
Phone: 443-541-3642 Phone: 443-541-3646
Facsimile: 443-541-3057 Facsimile: 443-541-3057
E-mail: [email protected] E-mail: [email protected] Signature: Signature:
Fund Transfer / Disbursement Authority Level: Fund Transfer / Disbursement Authority Level:
Initiate Initiate
Verify transactions initiated by others Verify transactions initiated by others Name: Nancy K. Hepner Name: Arlene Sobieck
Title: Senior Operations Consultant Title: Assistant Vice President Phone: 443-541-3645 Phone: 443-541-3643
Facsimile: 804-553-2407 Facsimile: 443-541-3057
E-mail: [email protected] E-mail: [email protected] Signature: Signature:
Fund Transfer / Disbursement Authority Level: Fund Transfer / Disbursement Authority Level:
Initiate Initiate
Verify transactions initiated by others Verify transactions initiated by others The Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent or given by the person or persons identified above including without limitation, to initiate and verify funds transfers as indicated.
Banc of America Leasing & Capital, LLC
By: ____________________________
Name:
Title:
Date: ______________
632
EXHIBIT B
Investment Direction to be attached.
633
SCHEDULE OF PROPERTY NO. 26
Re: Master Equipment Lease/Purchase Agreement, dated as of April 8, 2014, between Banc of America Public Capital Corp, as Lessor, and City of Oxnard, California, as Lessee
1. Defined Terms. All terms used herein have the meanings ascribed to them in the above-referenced Master Equipment Lease/Purchase Agreement (the “Master Equipment Lease”). For purposes of this Schedule the following defined terms in the Master Equipment Lease shall be defined as the following:
a. The Acquisition Fund shall be deemed the Oxnard Escrow Account created under the Acquisition Fund Agreement.
b. The Acquisition Fund Agreement shall be deemed that certain Escrow Agreement, dated as of September 20, 2022, by and among Lessor, Lessee and the Acquisition Fund Custodian. c. The Acquisition Fund Custodian shall be deemed Computershare Trust Company, N.A., a national banking association, as Escrow Agent under Escrow Agreement, dated as of September 20, 2022, by and among Lessor, Lessee and Computershare Trust Company, N.A.
2. Equipment. The following items of Equipment are hereby included under this Schedule of the Master Equipment Lease.
Eight (8) Battalion Chassis as further described in each Disbursement Request under the Escrow Agreement, together with all attachments, additions, accessions, parts, repairs, improvements, replacements, and substitutions thereto as provided in the Agreement
3. Payment Schedule.
(a) Rental Payments. The Rental Payments shall be in such amounts and payable on such dates as set forth in the Rental Payment Schedule attached to this Schedule as Exhibit B. Rental Payments shall commence on the date on which the Equipment listed in this Schedule is accepted by Lessee, as indicated in an Acceptance Certificate substantially in the form of Exhibit E to the Master Equipment Lease or the date on which sufficient moneys to purchase the Equipment are deposited for that purpose with an Acquisition Fund Custodian, whichever is earlier.
(b) Purchase Price Schedule. The Purchase Price on each Rental Payment date for the Equipment listed in this Schedule shall be the amount set forth for such Rental Payment date in the “Purchase Price” column of the Rental Payment Schedule attached to this Schedule.
The Purchase Price is in addition to all Rental Payments then due under this Schedule (including the Rental Payment shown on the same line in the Rental Payment Schedule).
4. Representations, Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Master Equipment Lease are true and correct as though made on the date of commencement of Rental Payments on 634
this Schedule. Lessee further represents and warrants that (a) no material adverse change in Lessee’s financial condition has occurred since the date of the Master Equipment Lease; (b) the governing body of Lessee has authorized the execution and delivery of this Agreement and the Leases pursuant to Agenda Item No. _______________, approved on ____________________, 2022; (c) the Equipment described in the Agreement referenced above is essential to the functions of Lessee or to the services Lessee provides its citizens; (d) lessee has an immediate need for, and expects to make immediate use of, substantially all such Equipment, which will be used by Lessee only for the purpose of performing one or more of Lessee’s governmental or proprietary functions consistent with the permissible scope of its authority; and (f) Lessee expects and anticipates adequate funds to be available for all future payments or rent due after the current budgetary period.
5. The Lease. The terms and provisions of the Master Equipment Lease (other than to the extent that they relate solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated into this Schedule by reference and made a part hereof.
6. Lease Proceeds. The Lease Proceeds which Lessor shall pay to the Acquisition Fund Custodian in connection with this Schedule is $1,326,000.00, of which $1,326,000.00 is for deposit to the Acquisition Fund. It is expected that by eighteen (18) months from the date of this Schedule of Property No. 26, Lessee will have taken possession of all items of Equipment shown above and that a Lessee’s Acceptance Certificate, or Acceptance Certificates, will be signed by Lessee and delivered to Lessor on or eighteen (18) months from the date of this Schedule of Property No. 26.
7. Acquisition Period. The Acquisition Period applicable to this Schedule shall end at the conclusion of the 18th month following the date hereof.
8. Lease Term. The Lease Term shall consist of the Original Term and (10) Ten consecutive Renewal Terms, with the final Renewal Term ending on December 1, 2031.
9. Purchase Option Commencement Date. For purposes of Section 10.01 of the Lease, the Purchase Option Commencement Date is December 1, 2027.
10. Maximum Equipment Cost. The Maximum Equipment Cost approved on a cumulative basis under the Lease for this Schedule and all previous Schedules is $24,881,000.00.
11. Contract Rate. The Contract Rate for this Schedule is 3.1399%.
12. Registration. Any Equipment that is a motor vehicle is to be registered and titled as follows:
(a) Registered Owner: City of Oxnard, California
(b) Lienholder: Banc of America Public Capital Corp
Bank of America Plaza
600 Peachtree Street, NE, 11th Floor
Atlanta, GA 30308-2265
635
Lessee shall be responsible for the correct titling of all Equipment leased hereunder. Lessee will cause the original Certificates of Title to be delivered to Lessor for retention in Lessor’s files throughout the term of the Lease.
[Remainder of page intentionally left blank; signature page follows] 636
Dated: September 20, 2022
LESSOR:
Banc of America Public Capital Corp
555 California Street, 6th Floor
San Francisco, California 94104
Attention: Contract Administration
By:
Name:
Title:
LESSEE:
City of Oxnard, California
300 West Third Street, Suite 302
Oxnard, California 93030
Attention: Rovee Oera
By:
Name:
Title:
(Seal)
Attest:
By:
Name:
Title:
Counterpart No. _____ of _____ manually executed and serially numbered counterparts.
To the extent that this Lease constitutes chattel paper (as defined in the Uniform Commercial Code), no security interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1.
637
EXHIBIT B
RENTAL PAYMENT SCHEDULE
RENTAL
PAYMENT
DATE
RENTAL
PAYMENT
AMOUNT
INTEREST
PORTION
PRINCIPAL
PORTION
OUTSTANDING
BALANCE
PURCHASE
PRICE
9/20/2022 $0.00 $0.00 $0.00 $1,326,000.00 N/A
12/1/2022 $80,497.62 $8,211.62 $72,286.00 $1,253,714.00 N/A 6/1/2023 $80,497.31 $19,683.31 $60,814.00 $1,192,900.00 N/A 12/1/2023 $80,497.53 $18,728.53 $61,769.00 $1,131,131.00 N/A 6/1/2024 $80,496.76 $17,758.76 $62,738.00 $1,068,393.00 N/A 12/1/2024 $80,496.77 $16,773.77 $63,723.00 $1,004,670.00 N/A 6/1/2025 $80,497.32 $15,773.32 $64,724.00 $939,946.00 N/A 12/1/2025 $80,497.15 $14,757.15 $65,740.00 $874,206.00 N/A 6/1/2026 $80,497.03 $13,725.03 $66,772.00 $807,434.00 N/A 12/1/2026 $80,496.71 $12,676.71 $67,820.00 $739,614.00 N/A 6/1/2027 $80,496.94 $11,611.94 $68,885.00 $670,729.00 N/A 12/1/2027 $80,497.45 $10,530.45 $69,967.00 $600,762.00 $600,762.00 6/1/2028 $80,496.96 $9,431.96 $71,065.00 $529,697.00 $529,697.00 12/1/2028 $80,497.24 $8,316.24 $72,181.00 $457,516.00 $457,516.00 638
6/1/2029 $80,497.00 $7,183.00 $73,314.00 $384,202.00 $384,202.00 12/1/2029 $80,496.97 $6,031.97 $74,465.00 $309,737.00 $309,737.00 6/1/2030 $80,496.87 $4,862.87 $75,634.00 $234,103.00 $234,103.00 12/1/2030 $80,497.42 $3,675.42 $76,822.00 $157,281.00 $157,281.00 6/1/2031 $80,497.31 $2,469.31 $78,028.00 $79,253.00 $79,253.00 12/1/2031 $80,497.27 $1,244.27 $79,253.00 $0.00 $0.00
TOTAL $1,529,445.63 $203,445.63 $1,326,000.00
Prepayment Premium for purposes of Section 10.01(a) is 0.00%.
For purposes of this Lease, “Taxable Rate,” with respect to the interest component of Rental Payments, means an annual rate of interest equal to 4.0077%.
LESSEE:
City of Oxnard, California
By:
Name:
Title:
639
City of Oxnard
Equipment Lease Schedule No. 26
(Fire Battalion Chief Vehicles)
PRESENTATION TO CITY COUNCIL
SEPTEMBER 6, 2022
640
Recommendation
That the City Council:
1) Adopt a resolution, approving and authorizing the execution of Equipment Schedule No. 26 to Agreement A-7667 Master Equipment Lease/Purchase Agreement with Banc of America Public Capital Corp. in an amount not to exceed $1.4 million to reimburse the City for the purchase of eight Fire Battalion Chief vehicle chassis and provide financing for the upfitting cost of the eight chassis, authorizing the execution and delivery of other documents required in connection therewith, and authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by the resolution.
2) Approve the additional proceeds of $366,000 to 8 Command Vehicles Project 222202, for the total costs of $1,326,000 of acquisition and upfitting costs for the eight chassis.
2 641
Background and Vehicle Needs Oxnard Fire Department needs 8 new fire battalion chief vehicles Purchase of the 8 chassis from National Auto Fleet was approved at the January 4, 2022
Once the chassis are delivered, the City will
send them over to another vendor (Stonewell
Bodies) to upfit them into usable vehicles
City staff plan to bring the upfitting costs
before Council at the September 6th meeting
Total cost to purchase chassis and upfit
them is expected to be $1,289,306
Cost of vehicles is higher than originally
anticipated primarily due to inflationary
pressures 400% increase in aluminum cost over the last 18 months
3 642
Financing Overview
City plans to utilize the existing line of
credit with Bank of America (BofA) to
reimburse City for the purchase price of
the chassis and finance the upfitting
costs
Current agreement has been in place since
2014 and has been used several times to
finance equipment
Current draw is Schedule No. 26; will have
a 10-year term (final payment 12/1/2031)
Amount borrowed expected to be $1.33
million
Locked, fixed 10-year interest rate of
3.14%
Subject to change until the rate is locked or
the loan funds and closes
Semi-Annual debt service payments of
$80,500
Annual payments of $161,000
4 0
50,000
100,000
150,000
200,000
Oxnard Eqpt. Schedule No. 26
Anticipated Lease Payment Schedule
643
Summary of Legal Documents
Authorizing Resolution
•Authorize legal documents and
authorize City staff to execute
documents
•Identifies not-to-exceed amounts
related to the Equipment Schedule No.
26 Master Equipment
Lease/Purchase Agreement
•Approved and executed back in 2014
•Provides for the ongoing line of credit
relationship with Bank of America
•Governs all outstanding equipment
schedules
Equipment Schedule No. 26
• Identifies terms related to specific
equipment financing (fire battalion
chief vehicles)
• Includes the amortization/repayment
schedule
Escrow and Account Control
Agreement
• Agreement between the City and
Escrow Agent (Computershare)
governing the process by which funds
are withdrawn from the escrow to pay
for the vehicles
5 644
Anticipated Timing
Mid July:
Lock Interest
rate
July 26, 2022:
Finance and
Governance
Committee
August:
Finalize
structure of the
Equipment
Lease
September 6,
2022: City
Council
considers
Equipment
Lease
Late
September:
Closing and
funding of
equipment
lease
6 645
Recommendation
That the City Council:
1) Adopt a resolution, approving and authorizing the execution of Equipment Schedule No. 26 to Agreement A-7667 Master Equipment Lease/Purchase Agreement with Banc of America Public Capital Corp. in an amount not to exceed $1.4 million to reimburse the City for the purchase of eight Fire Battalion Chief vehicle chassis and provide financing for the upfitting cost of the eight chassis, authorizing the execution and delivery of other documents required in connection therewith, and authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by the resolution.
2) Approve the additional proceeds of $366,000 to 8 Command Vehicles Project 222202, for the total costs of $1,326,000 of acquisition and upfitting costs for the eight chassis.
7 646
Questions?
8 647
CITY COUNCIL AGENDA REPORT
REPORTS
AGENDA ITEM NO. N.2
DATE: September 6, 2022
TO: City Council
FROM: Michael Wolfe, Public Works Director, (805) 385-8055, [email protected] SUBJECT: Grant Resolution for Caltrans Highway Safety Improvement Program, U.S. Department of Transportation Reconnecting Communities Planning Grant Projects, and Ventura County Transportation Commission Call for Projects. (0/5/5)
RECOMMENDATION
That the City Council adopt a resolution authorizing the City Manager to submit grant applications and execute grant agreements, if awarded, for the Highway Safety Improvement Program for an amount not to exceed $20,000,000 for two grants, Reconnecting Communities Pilot Program for an amount not to exceed $2,000,000, and Ventura County Transportation Commission Call for Projects for an amount not to exceed $5,000,000, and authorizing the Finance Director to submit financial reports and claims for the use of the grant funds, and authorizing the Public Works Director or designee to submit non-financial reports.
(This item did not originate in Committee.)
Please click the following link to view the required Measure M pre-recorded presentation video:
https://youtu.be/CfyJYXF0sB4
BACKGROUND
In 2021, the Infrastructure Investment and Jobs Act (also known as the bipartisan infrastructure law) was signed into law, allocating funding to establish new discretionary grant programs and to provide additional funding to existing grant programs related to transportation infrastructure. The funding is now starting to be released through various grant solicitations. City staff have been tracking the implementation of the law, and recommends that the City applies to three programs that currently have applications due in September and October of 2022.
City staff recommend prioritizing projects that match the most competitive projects to the specific grant opportunities described below. The project concepts originate from the City’s forthcoming Local Road Safety Plan (LRSP) and forthcoming Sustainable Transportation Plan (STP) that are in draft form and expect to be adopted in December 2022 and February 2023 respectively.
DISCUSSION
To maximize staffing availability and ensure realistic delivery of projects based upon staffing levels and existing project workload, the following grant applications are recommended:
Highway Safety Improvement Program
The Caltrans Highway Safety Improvement Program (HSIP) funds local highway safety projects that achieve a significant reduction in traffic fatalities and serious injuries. The maximum grant award for a single HSIP project is $10 648
million. The local match will vary depending upon the project’s safety countermeasure, typically there is a 10% local match. HSIP applications are due September 12, 2022.
Staff recommend submitting two applications. The final scope may vary depending upon which countermeasures produce the highest Benefit Cost Ratio, which is a requirement of the application.
1. Ventura Road Corridor Enhancements (Teal Club Road to Wooley Road). The proposed project will design and construct new signal heads, signal timing, video detection, retroreflective backplates, advance stop bars, high visibility crosswalks, bike/pedestrian warning signage for turning vehicles, and green bike conflict striping.
2. Bard Road Corridor Enhancements (Saviers Road to Pleasant Valley Road). The proposed project will design and construct green bike conflict striping, larger stop signs with flashing LED lights, intersection lighting, high visibility crosswalks, advance stop bars at intersections, video detection, curb extensions, and leading pedestrian interval timing.
Reconnecting Communities Planning Grant
The U.S. Department of Transportation Reconnecting Communities Pilot (RCP) program funds planning and construction projects that reconnect communities by removing, retrofitting, or mitigating highways or other transportation facilities that create barriers to community connectivity, including to mobility, access, or economic development. The maximum grant award for a planning grant is $2 million, and requires a 20% local match. RCP Applications are due October 13, 2022.
Staff recommend applying for one Planning Grant:
1. Oxnard Boulevard (old State Route 1)/Channel Islands Interchange. The proposed project will complete a feasibility study plan of retrofitting the old State Route 1 (Oxnard Boulevard) interchange to replace the circuitous and non-pedestrian/bike friendly 2-lane Channel Islands bridge.
Ventura County Transportation Commission Call for Projects The Ventura County Transportation Commission (VCTC) Call for Projects (CFP) will fund projects that mitigate congestion and reduce vehicle emissions using the federal Congestion Mitigation and Air Quality (CMAQ) program, and/or foster an increase in transit ridership, bicycling, or walking using the regional Transportation Development Act (TDA) Article 3 Bicycle and Pedestrian program. These programs are a combination of federal and regional funding, which will be administered by Caltrans and VCTC. There is no maximum grant award and no local match requirement.
CFP Applications are due September 23, 2022.
Staff recommends submitting one application:
1. Accessible Pedestrian Enhancements. The proposed project will design and construct Accessible Pedestrian Signals (APS) push buttons, ADA ramp upgrades, and high intensity crosswalks markings at signalized intersections citywide (specific locations are TBD).
STRATEGIC PRIORITIES
This agenda item supports the Infrastructure and Natural Resources strategy. The purpose of the Infrastructure and Natural Resources strategy is to preserve and improve our roads, utilities, parks, trees, water supply and natural resources through effective planning, prioritization, and an equitable and efficient use of available funding.
FINANCIAL IMPACT
There is no direct financial impact for this recommendation action. Upon notification of successful award(s), City staff will return to Council to recognize and appropriate grant awards and identify required local fund amounts and sources.
Successful grant projects are not expected to begin incurring charges until FY 2023-24. 649
The table below provides the maximum grant amounts. Total project costs may not reach the maximum amounts.
Grant/Project Total Max
Project Cost
Max City Local Match Max Grant
Amount
HSIP/Ventura Road Corridor Enhancements $11,111,111 $1,111,111 (10% of total project costs)
$10,000,000
HSIP/Bard Road Corridor Enhancements $11,111,111 $1,111,111 (10% of total project costs)
$10,000,000
RCP/Oxnard Boulevard (old State Route
1)/Channel Islands Interchange
$2,500,000 $500,000 (20% of total
project costs)
$2,000,000
VCTC/Accessible Pedestrian Enhancements $5,000,000 No match required $5,000,000
COMMITTEE OUTCOME
This item did not originate in Committee.
Prepared by: Eric Humel, Grants Specialist, Debbie O'Leary, Transportation Planner, Tatiana Arnaout, City Engineer
ATTACHMENTS
1. Resolution
2. Presentation
650
CITY COUNCIL OF THE CITY OF
OXNARD RESOLUTION NO. _____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
OXNARD APPROVING THE SUBMITTAL OF FOUR GRANT
APPLICATIONS FOR TRANSPORTATION RELATED GRANT
FUNDS
WHEREAS, City Council Resolution No.12,053 sets out the procedure by which City staff may submit grant applications, following approval by resolution of the City Council; and
WHEREAS, the Public Works Department has requested that City Council approve the submittal of two grant applications to the California Department of Transportation for an amount not to exceed $10,000,000 for each application in Highway Safety Improvement Program funds to be used for the Ventura Road Corridor Enhancements Project and the Bard Road Corridor Enhancements, one grant application to the Department of Transportation for an amount not to exceed $2,000,000 in Reconnecting Communities Pilot Program funds to be used for the Oxnard Boulevard (former State Route 1) and Channel Islands Intersection project, and one grant application to the Ventura County Transportation Commission for an amount not to exceed $5,000,000 in Congestion Mitigation and Air Quality (CMAQ) funds and/or Transportation Development Act (TDA) Article 3 Bicycle and Pedestrian funds to be used for Accessible Pedestrian Enhancements.
NOW, THEREFORE, the City Council of the City of Oxnard resolves to approve the submittal of grant applications by the City Manager to the California Department of Transportation for the purpose of obtaining grant funding for Ventura Road Corridor Enhancements and Bard Road Corridor Enhancements, to the U.S. Department of Transportation for the purpose of obtaining grant funding for the Oxnard Boulevard (former State Route 1) and Channel Islands Intersection project, and to the Ventura County Transportation Commission for the purpose of obtaining grant funding for Accessible Pedestrian Enhancements. The City Council further resolves that the City Manager or designee is authorized to execute grant agreements; the Finance Director or designee is authorized to submit financial reports and grant claims and approve special budget appropriations for the use of grant funds; and the Director of Public Works or his or her designee is authorized to submit non-financial reports. 651
PASSED AND ADOPTED THIS 6th Day of September, 2022, by the following vote:
AYES:
NOES:
ABSENT:
__________________________________
John C. Zaragoza
Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ __________________________________ Rose Chaparro Stephen M. Fischer
City Clerk City Attorney
652
Grant Resolution for Caltrans Highway Safety
Improvement Program, U.S. Department of
Transportation Reconnecting Communities Planning
Grant Projects, and Ventura County Transportation
Commission Call for Projects
City Council
September 6, 2022
Tatiana Arnaout
City Engineer
653
That the City Council adopt a resolution authorizing the City Manager to submit grant applications and execute grant agreements, if awarded, for the Highway Safety Improvement Program for an amount not to exceed $20,000,000 for two grants, Reconnecting Communities Pilot Program in an amount not to exceed
$2,000,000, and Ventura County Transportation Commission Call for Projects for an amount not to exceed $5,000,000, and authorizing the Finance Director to submit financial reports and claims for the use of the grant funds, and authorizing the Public Works Director or designee to submit non-financial reports.
RECOMMENDATION 2
654
• Discretionary grant programs funded by the Infrastructure, Investment and Jobs Act have begun to be opened
• City staff recommend that the City applies to three programs that currently have applications due in September and October of 2022
• The project concepts originate from the City’s forthcoming Local Road Safety Plan (LRSP) and forthcoming Sustainable Transportation Plan (STP)
BACKGROUND 3
655
To maximize staffing availability and ensure realistic delivery of projects based upon staffing levels and existing project workload, the following grant applications are recommended:
1. Highway Safety Improvement Program (HSIP) (2 applications)
2. Reconnecting Communities Planning Grant (RCP)
3. Ventura County Transportation Commission Call for Projects (VCTC CFP)
DISCUSSION 4
656
Highway Safety Improvement Program - Ventura Road
Corridor Enhancements (Teal Club Road to Wooley Road)
DISCUSSION - HSIP 5
MN DOT
657
DISCUSSION - HSIP 6
MN DOT
Highway Safety Improvement Program - Ventura Road
Corridor Enhancements (Teal Club Road to Wooley Road)
658
Highway Safety Improvement Program - Bard Road
Corridor Enhancements (Saviers Road to Pleasant Valley Road) DISCUSSION - HSIP 7
MN DOT
659
DISCUSSION - HSIP 8
MN DOT
Highway Safety Improvement Program - Bard Road
Corridor Enhancements (Saviers Road to Pleasant Valley Road) 660
Reconnecting Communities Planning Grant - Oxnard Boulevard (old State Route 1)/Channel Islands Interchange
DISCUSSION - RCP 9
The Lemonwood neighborhood does
not have direct access to College Park,
Channel Islands High School, or areas
west and south of Oxnard Boulevard.
This project will study alternatives to
the current configuration.
661
Ventura County Transportation Commission Call for Projects • Accessible Pedestrian Enhancements
DISCUSSION - VCTC CFP 10
662
Ventura County Transportation Commission Call for Projects • Accessible Pedestrian Enhancements
DISCUSSION - VCTC CFP 11
Wooley Road east of G Street
663
There is no direct financial impact for this recommendation action.
Upon notification of successful award(s), City staff
will return to Council to recognize and appropriate grant awards and identify required local fund amounts and sources.
Successful grant projects are not expected to begin incurring charges until FY 2023-24.
FINANCIAL IMPACT 12
664
QUESTIONS
13 665
CITY COUNCIL AGENDA REPORT
REPORTS
AGENDA ITEM NO. N.3
DATE: September 6, 2022
TO: City Council
FROM: Ashley Golden, Assistant City Manager, (805) 385-7478, [email protected] SUBJECT: Approve the Conceptual Design for South Oxnard Aquatics Center. (15/10/10)
RECOMMENDATION
That the City Council approve the conceptual design, Recommended Option, for the South Oxnard Aquatics Center Improvement Project (Project No. 225502). The Aquatics Center will be located within College Park. (This item did not originate in Committee as this is a capital improvement project specifically listed in the Capital Improvement Program budget, which was previously approved by the City Council.) Presentation will be live upon consultant’s request.
BACKGROUND
On July 30, 2021, the City, with the assistance of State Senator Monique Limón, was awarded $5,000,000 from the State of California (State) to design and construct the South Oxnard Aquatics Center within 7 acres of currently vacant Cityowned property within College Park. The grant funds allowed the City to conduct community outreach and the architectural/engineering design of the aquatics center.
Following the grant award, the City surveyed residents in order to determine the types of aquatics activities the community is interested in having at the new aquatics center. This occurred during a community meeting on December 11, 2021 as well as during afterschool programs across 20 of Oxnard’s primary and secondary schools.
On May 5, 2022, the Department of Public Works, Engineering & Transportation Mobility issued a Notice to Proceed to ELS to conduct additional public outreach and participatory community design, cost analysis, architectural and engineering design, and preparation of plans and specifications for the South Oxnard Aquatics Center Improvement Project (Project No. 225502).
Capital Improvement Project (CIP) Reference: Project No. 225502 – Oxnard Aquatic Center - CIP 2021-2026 - Adopted May 18, 2021 – Page 51.
DISCUSSION
The proposed South Oxnard Aquatics Center (SOAC) will service the City’s youth, adults, and seniors and provide for expansion of recreation, water fitness, and competitive aquatics opportunities. The SOAC will equip the residents of Oxnard, a coastal community, with water safety knowledge and provide a family-friendly environment for the residents of Oxnard.
The primary goal is to design and construct a community-based aquatics center that provides an opportunity for water safety by teaching the community of all ages to swim. Secondary to that goal, the SOAC is intended to create a love of 666
the water through active and passive recreational opportunities for Oxnard youth and seniors, families, swimming groups and swim teams.
ELS, using the community feedback from 2021, prepared three concept site plan designs that conformed with the City’s programming goals and needs. These site plan designs were shared and further refined based on community input at two community engagement meetings held on June 29th & August 1st, 2022. The meetings resulted in unanimous support for Concept Plan No. C is (Aspirational Plan).
That Aspirational Plan includes a 6-lane lessons pool, 50 meter stretch deep water pool, splash pad, fun pool, lazy river, double slide, bleacher seating, and a picnic area with decking. Interior spaces include administrative offices, lifeguard office, first aid room, training room, multi-use space, concessions, locker rooms, equipment and program storage, as well as the required mechanical and chemical storage areas.
The assigned budgeted in the FY 21/22 City Council approved CIP budget for the SOAC was $40,000,000. Based on total Rough Order of Magnitude (ROM) project cost estimates, the community’s Aspirational Plan option is now estimated at $67,162,500 over $27,000,000 over the budgeted amount. The total estimated ROM Project Cost include Construction Cost, Construction Contingency, Project/Construction Management, Inspection, Testing, Permit Fees, Art Fees, Furniture, Fixtures, Equipment and other miscellaneous Costs. There are several factors that can be attributed to the latest ROM cost. Some of the increased cost of construction can be attributed to items such as price increases on all building materials as a result of inflation, ongoing supply chain issues, and labor shortages in the construction industry.
Additionally, there is a large influx of federal and state funding and as such, this typically leads to increased construction costs since there is an abundance of construction work available. Furthermore, since there is higher than normal inflation occurring, the ROM cost estimate needs to include that as a possible trend moving forward into the anticipated midpoint of construction, which is about 24 months from now.
Due to the higher-than-anticipated ROM construction cost estimate, City staff requested that ELS provide the City with a range of options that meet the goals of the SOAC project - to teach residents to swim and water safety while expanding recreational opportunities. With this core focus in mind, ELS provided seven (7) design alternatives ranging in estimated ROM construction costs of $37,330,000 to $49,750,000. Each of these options have varying water feature options and a wide variety of programming opportunities to service the seniors, youth, families, special populations, and swim and water polo teams.
DESIGN ALTERNATIVES AND ESTIMATED TOTAL PROJECT COSTS
In addition to ROM estimated construction costs, the total estimated project cost also needs to include Construction Contingency, Design and Engineering Consulting Fees, Project/Construction Management, Inspection, Testing and Indirect Costs (collectively “Soft Costs”). A breakdown of these additional costs is included below:
• Construction Contingency ~10%
• Design and Engineering Consultant Fees ~10%
• Estimated Project/Construction Management ~7%
• Estimated Inspection ~5.5%
• Estimated Indirect Costs (Public Art & Permits, Furniture, Fixture, Equipment & IT) ~2.5% Total Estimated Soft Cost Increase ~35%
The total estimated Soft Costs (35%) is applied to each alternative design option and a breakdown of the ROM project cost estimate is provided in the table below:
Design Option (ROM)
Construction Cost
Estimate from
ELS
Total Soft Cost
including Construction
Contingency (35%)
Total (ROM) Project Cost
(including 35% for Soft
Costs)
Aspirational $49,750,000 $17,412,500 $67,162,500
667
Recommended Option $39,850,000 $13,947,500 $53,797,500
Other Alternatives Explored
Alt. A $44,080,000 $15,428,000 $59,508,000
Alt. B $43,930,000 $15,375,500 $59,305,500
Alt. C $39,900,000 $13,996,500 $53,986,500
Alt. D $39,080,000 $13,678,000 $52,758,000
Alt. E $37,330,000 $13,065,500 $50,395,500
The staff recommended option closely aligns with the Aspirational Plan and provides learn-to-swim activities for all ages, splash pads that engage those who might be new to water activities among many others, and a fun pool with beach entries, slides, and lazy rivers. These amenities allow for the development of a safe loving relationship with being in the water which can develop the confidence to move towards swimming in larger and deeper pools, and possibly even competition swimming.
It should be noted that the project is still in the preliminary planning phase. As such, no detailed design work (architectural and engineering) has been completed. This means that information being presented now, inclusive of the ROM and estimated Total Project Costs is subject to change as more details are vetted, reviewed, and revised. It is also possible the changes may include different sized amenities and elements to areas such as the deep water pool, splash pad, fun pool, and interior spaces. The balancing point is to provide a place that allows all Oxnard residents to gain water safety skills and recreational opportunities, accounting for the community input received, while also being financially responsible for the many needs of the City, today and into the future. This balancing point includes ensuring that what is ultimately constructed can be well maintained, staffed, and managed into the future from an operating budget standpoint.
COMMUNITY OUTREACH TO DATE
December 11, 2021 – Community Engagement at College Park June 29, 2022 – Community Workshop 1
August 1, 2022 – Community Workshop 2
August 24, 2022 - Parks, Recreation and Community Services Commission (PRCSC).
The conceptual design was presented to the PRCSC as informational. The four Commissioners present at the August 24th meeting all expressed support to include a 50m pool in the final design.
NEXT STEPS
An economic analysis for both programming scope and an operation & maintenance plan is underway. Once the economics analysis, the schematic design and the construction cost estimate are complete, staff will review and refine the project concept prior to proceeding to the Design Development stage of the project.
PROJECT SCHEDULE
The project schedule is as follows and contingent upon environmental clearance as well as securing funding:
Design & Permits * Spring 2023
Construction Start ** Fall 2023
Construction Complete** July 2025
*Contingent upon environmental clearance
**Contingent upon successful construction award
STRATEGIC PRIORITIES
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This agenda item supports the Quality of Life strategy. The purpose of the Quality of Life strategy is to restore and increase quality services and programs that enrich Oxnard's diverse community, promotes safe neighborhoods, encourages community engagement, and supports our residents in their efforts to improve their quality of life.
FINANCIAL IMPACT
The design and engineering services are contracted with ELS for an approved amount not to exceed $3,900,057. There is sufficient funding available from an existing appropriation of $5M in State grant funds (Fund 219) in the South Oxnard Aquatic Center Improvement Project (Project No. 225502) for this phase of the project.
The current CIP Budget (FY 22/23 and 23/24) approved by the City Council has identified a future General Fund Secured Bond issuance of $30 M for construction of the South Oxnard Aquatics Center. As noted above, the current cost estimate is greater than what is identified in the CIP budget. As such, the bond issuance amount, subject to the City Council’s subsequent review and approval, will be net of total project cost after applying any grant amount available for the project. From a bond capacity, it should be noted that changes or higher construction project cost for South Oxnard Aquatic Center will limit future financing affordability of other City projects (e.g., aquatic center, fire stations, senior center, seawall, etc).
COMMITTEE OUTCOME
This item did not originate in Committee as this is a capital improvement project specifically listed in the Capital Improvement Program budget, which was previously approved by the City Council.
Prepared by: Tatiana Arnaout, City Engineer, Julie Estrada, Recreation Coordinator
ATTACHMENTS
1. Conceptual Design Options
2. Aquatics Center Amenities and Program Comparison Chart 08.2022 669
Aquatics Center
South Oxnard
Budget Alternates: A - E
1 670
Aspirational
$67.2MM
ASPIRATIONAL 2
671
30m Pool
PROGRAMMING
NOT INCLUDED
- Long Course
AMENITIES
NOT INCLUDED
- Plaza Fountain
- Picnic Deck
- Training Room
REDUCED
- Administration
- Site Development
- Softscape
- Hardscape
- 30m in lieu of 50m
30m Pool
Recommended
$53.8MM
RECOMMENDED3
672
A.
$59.5MM
PROGRAMMING
No exclusions or reductions
AMENITIES
NOT INCLUDED
- Plaza Fountain
- Picnic Deck
REDUCED
- Administration
- Site Development
- Softscape
- Hardscape
- Reduced 50m/no bulkhead
ALTERNATE 4
673
B.
$59.3MM
PROGRAMMING
No exclusions or reductions
AMENITIES
NOT INCLUDED
- Plaza Fountain
- Picnic Deck
REDUCED
- Administration
- Site Development
- Softscape
- Hardscape
- Spray Ground
ALTERNATE 5
674
C.
$53.9MM
PROGRAMMING
No Exclusions or Reductions
AMENITIES
NOT INCLUDED
- Plaza Fountain
- Picnic Deck
- Training Room
- Lessons Pool
REDUCED
- Administration
- Site Development
- Softscape
- Hardscape
- 50m with Shallow End
- Spray Ground combined w/
Fun Pool
50m Pool
ALTERNATE 6
675
D.
$52.7MM
PROGRAMMING
NOT INCLUDED
- Long Course
AMENITIES
NOT INCLUDED
- Plaza Fountain
- Picnic Deck
- Training Room
REDUCED
- Administration
- Site Development
- Softscape
- Hardscape
- 30m in lieu of 50m
- Spray Ground combined w/
Fun Pool
30m Pool
ALTERNATE 7
676
E.
$50.4 MM
PROGRAMMING
NOT INCLUDED
- Long Course
AMENITIES
NOT INCLUDED
- Plaza Fountain
- Picnic Deck
- Training Room
REDUCED
- Administration
- Site Development
- Softscape
- Hardscape
- 25m in lieu of 50m
- Spray Ground combined w/
Fun Pool
25m Pool
ALTERNATE 8
677
Aspirational Recommended Design Concept A Design Concept B Design Concept C Design Concept D Design Concept E Amenities
Site Work
Entry Plaza (Hardscape)
Plaza Fountain
Unenclosed Softscape
Reduced Unenclosed Softscape
Parking
Built-in Bleachers
Reduced Built-in Bleachers
Pool Decking (Hardscape)
Reduced Pool Decking (Hardscape)
Enclosed Softscape
Reduced enclosed Softscape
Picnic Area on Decking
Picnic Area not Decking
Building
Administration (Offices)
Reduced Administration (Offices)
Training Room
Multi-Use Room
Concessions
Locker Rooms
Reduced Locker Rooms
Maintenance/Back of House
Reduced Maintenance/Back of House
Wet Storage
Reduced Wet Storage
Pools
50m x 25yard
30m x 25yard
25m x 25yard
Lessons Pool
Separate Sprayground
Sprayground within the Fun Water Pool
Fun Water Pool (Zero Beach + Lazy River)
Double Slide
678
Aspirational Recommended Design Concept A Design Concept B Design Concept C Design Concept D Design Concept E Programs
Youth
Parent & Me Swim
Toddler Time at the Splash Pad (without entering a pool) Toddler Time at the Splash Pad (in the pool)
Learn to Swim
Swim Team short course
Swim Team long course
Diving
Water Polo
Jr. Lifeguards
Summer Camps
Adults
Lap Swim
Adult Swim Classes
Aqua Yoga
Ahi Chi
Aqua Spin
Deep Water Running
Shallow Water Running
Aqua Fitness/Water Aerobics
Seniors and Individuals with Mobility Limitations
Ahi Chi
Aqua Spin
Shallow Water Running
Aqua Fitness/Water Aerobics
Summer Walking Club (Lazy River)
Special Populations
Partner Swim
Sensory Sensitivity in the Fun Water
Water Fun at the Splash Pad (without entering a pool)
Water Fun at the Splash Pad (in the pool)
Learn to Swim
Challenger Swim Team
Competitions & Clubs
Swim Competition (incl. Relay) Short Course
Swim Competition (incl. Relay) Long Course
Dive Team Competition
Water Polo (All Gender 20m x 20m Course)
FINA Regulated MENS Course (Olympic Course)
Artistic Swimming (Formerly known as Synchonized Swim)
679