City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-00988 May 24, 2022 Consent Item 09
Title: Choice Neighborhood Implementation (CNI) Grant Agreement Amendment and Addendum and Indemnity Agreement Amendment
Location: River District-Railyards, District 3
Recommendation: Pass a Motion authorizing the City Manager or the City Manager’s designee to: 1) execute the First Amendment to City Agreement 2015-2230, the Choice Neighborhood Implementation Grant Agreement with the Housing Authority of the County of Sacramento and the U.S. Department of Housing and Urban Development (CNI Grant Agreement), extending the period of performance from September 30, 2022, to September 30, 2023; 2) execute the Addendum to the CNI Grant Agreement authorizing the Housing Authority of the County of Sacramento to establish and administer the Endowment Trust Account; 3) execute the First Amendment to City Agreement 2015-2231, the Indemnity Agreement with the Housing Authority of the County of Sacramento, to expand the Housing Authority’s indemnity obligation; and 4) execute all CNI Grant Agreement-related contracts and amendments, subject to the City Attorney’s approval as to form.
Contact: Amanda Wallace, Development Project Manager, (916) 808-5453, [email protected]
; and Denise Malvetti, Deputy Director, (916) 808-7064, [email protected], City Manager’s Office of Innovation and Economic Development
Presenter: None
Attachments:
1-Description/Analysis
2-First Amendment to the 2014-2015 Choice Neighborhood Implementation Grant Agreement 3-Addendum to the Choice Neighborhood Implementation Grant Agreement (Endowment Trust)
4-First Amendment to Indemnity Agreement
Description/Analysis
Issue Detail: On September 28, 2015, the U.S. Department of Housing and Urban Development (HUD) awarded the City of Sacramento and the Housing Authority of the County of Sacramento (Housing Authority), as co-grantees with the Housing Authority serving as the lead grantee, a $30 million Choice Neighborhoods Implementation (CNI) Grant. These funds support ongoing implementation of the River District-Railyards Neighborhood Transformation Plan (NTP) to redevelop Mirasol Village (formerly Twin Rivers Public Housing Project), provide support services for residents, and revitalize the surrounding neighborhood.
This staff report seeks authority for the City Manager or City Manager’s designee to execute three agreements related to the CNI Grant.
First Amendment to the 2014-2015 Choice Neighborhood Implementation Grant Agreement The City of Sacramento and the Housing Authority entered into Choice Neighborhoods Implementation Grant Agreement (City Agreement 2015-2230) with HUD and the Housing Authority on January 25, 2016. The Grant Agreement specifies a performance period ending on September 30, 2022. With the passage of the Federal Consolidated Appropriations Act, 2022, Congress extended the CNI Grant performance period to September 30, 2023. The First Amendment to the 2014-2015 Choice Neighborhood Implementation Grant Agreement (Attachment 1) will extend the Grant Agreement performance period from September 30, 2022, to September 30, 2023, in accordance with the Consolidated Appropriations Act, 2022.
Addendum to the CNI Grant Agreement (Endowment Trust Account) Additionally, under the Grant Agreement, the City and the Housing Authority may utilize approximately $1 million of CNI Grant funds to establish and administer an Endowment Trust Account. The $1 million for the Endowment Trust Account is already included in the original grant budget of $30 million, but the specific terms related to the Endowment Trust Account were not included in the Grant Agreement; these terms are included in the Addendum to the CNI Grant Agreement (Addendum) (Attachment 2). The Housing Authority will administer the Endowment Trust Account in accordance with the Addendum. The endowment funds will be used to plan, provide, and evaluate community and support service for the primary benefit of former Twin Rivers residents and resident returning to Mirasol Village, in accordance with the NTP. The Endowment Trust Account will remain in effect for approximately four years, until all the endowment funds have been expended. HUD will release the funds to the Housing Authority to be deposited into the Endowment Trust Account once all the parties sign the Addendum. The Addendum expressly survives the termination or closeout of the Grant Agreement.
First Amendment to Indemnity Agreement
Because the Housing Authority, as the Lead Grantee, is primarily responsible for oversight of the Grant Agreement, the City and the Housing Authority executed an Indemnity Agreement (2015-2231) on December 23, 2015, that requires the Housing Authority to indemnify the City for liabilities arising from activities related to the Grant Agreement. The First Amendment to the Indemnity Agreement (Attachment 3) amends the Housing Authority’s indemnification obligation so that it covers both the Grant Agreement and the Addendum.
Policy Considerations: The actions requested supports the River District Specific Plan goal to provide a range of housing choices attractive to families and individuals at all income levels; and the General Plan Housing Element Goals to increase affordable housing and workforce housing production and protect residents from displacement.
Economic Impacts: None.
Environmental Considerations: This action is exempt from the provisions of the California Environmental Quality Act (CEQA), consistent with section 15378, subsections (b)(4) and (5), of the CEQA Guidelines, which provide that the creation of government funding mechanisms or other government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment and organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment are not subject to environmental review. Further, it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment. (CEQA Guidelines, §15061(b)(3).)
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: Amending the Grant Agreement and Indemnity Agreement, and executing the Addendum, enables implementation of the River District-Railyards Neighborhood Transformation Plan (NTP), which facilitates ongoing redevelopment of Mirasol Village (formerly Twin Rivers Public Housing), provides programs to support Mirasol Village and former Twin Rivers residents, and delivers projects to stimulate revitalization of the River District. Authorizing the City Manager to execute future contracts related to the Grant Agreement will achieve administrative efficiencies.
Financial Considerations: This report recommends authorizing the City Manager to execute amendments to the Grant Agreement and Indemnity Agreement, and to execute the Addendum, related to ongoing implementation of the $30 million Choice Neighborhood Implementation Grant, to which the Housing Authority and City are the lead grant and co- grantee, respectively.
Local Business Enterprise (LBE): Not applicable.
First Amendment to the
FY2014-2015 Choice Neighborhoods Implementation Grant Agreement
Pursuant to section 234 of the Consolidated Appropriations Act, 2022, (Pub. L. No. 117-103), the Grant Agreement is amended to extend the period of performance through the following changes:
Article I.D of the Grant Agreement is removed and replaced with the following language:
D. In accordance with section 234 of the Consolidated Appropriations Act, 2022, (Pub. L.
No. 117-103), all FY2015 funding must be expended by September 30, 2023, which shall also be the period of performance end date. Any funds that are not expended by that date will be cancelled and recaptured by the Treasury, and thereafter will not be available for obligation or expenditure for any purpose. In order to ensure funds are drawn from LOCCS by that date, HUD may provide additional guidance as the deadline approaches for when grantees should submit the final draw request (e.g., usually approximately two weeks prior to the expenditure deadline).
Article III.D.6. of the Grant Agreement is amended by replacing “September 30, 2022” with “September 30, 2023”.
This First Amendment is effective upon execution by the Grantee, Co-Grantee, and HUD.
_______________________________________ _______________________________ La Shelle Dozier Date
Executive Director
Housing Authority of the County of Sacramento
_______________________________________ _______________________________ Howard Chan Date
City Manager
City of Sacramento
_______________________________________ _______________________________ Dominique Blom Date
General Deputy Assistant Secretary
for Public and Indian Housing
U.S. Department of Housing and Urban Development
Exhibit D
Addendum to the Choice Neighborhoods Implementation Grant Agreement (Endowment Trust)
This Addendum of the Choice Neighborhoods Implementation Grant Agreement (the “Addendum”) is made by and between the Grantee and the United States Department of Housing and Urban Development (“HUD”) as of the date of HUD’s execution of this Addendum. This Addendum is hereby incorporated into and made part of the Choice Neighborhoods Implementation Grant Agreement Number CA9G007CNG114, dated January 25, 2016 (“Grant Agreement”). All references to the Grant Agreement, whether in the Choice Neighborhoods Grant agreement or in this Addendum, shall be deemed for purposes of this Addendum to mean the Grant Agreement as supplemented and modified by this Addendum and will include any amendments hereto (unless the context requires otherwise).
Recitals
WHEREAS, HUD awarded a Fiscal Year [2014-2015] Choice Neighborhoods Implementation Grant (the “Choice Neighborhoods Grant”) to the Grantee to support the Transformation Plan that has been developed for the Twin Rivers community in the River District neighborhood. The Grantee and HUD entered into a grant agreement for the Choice Neighborhoods funds (the “Grant Agreement”);
WHEREAS, the Grantee wishes to establish a fund using Choice Neighborhoods Grant funds that will be used solely for certain limited purposes specified herein (the “Endowment Trust Account”);
WHEREAS, this Addendum is intended to establish requirements with which the Grantee must comply in order to place the Choice Neighborhoods grant funds into the Endowment Trust Account and set forth the purposes for which the funds in the Endowment Trust Account may be used;
NOW, THEREFORE, the Grantee and HUD hereby covenant and agree as follows:
1. The Grantee hereby agrees to place into the Endowment Trust Account approximately One million dollars ($1,000,000.00) of CN grant of Choice Neighborhoods Grant funds provided to the Grantee pursuant to the Grant Agreement.
2. The approximately $1,000,000.00 in Choice Neighborhoods funds shall be released by HUD promptly following execution hereof and deposited by Grantee into the Endowment Trust Account.
3. The Parties acknowledge that endowment funds are and shall remain throughout the existence of the Endowment, Choice Neighborhoods grant funds under the Grantee and control of the Grantee.
4. Funds placed in the Endowment Trust Account shall be utilized solely for planning, providing, and evaluation of community and support services for the primary benefit of former public housing residents of the Twin Rivers site and the returning residents of the Mirasol Village site in accordance with the Transformation Plan.
5. Nothing herein shall prohibit the Grantee from using non-Choice Neighborhoods Grant funds made available to the Housing Authority of the County of Sacramento or Sacramento Housing and Redevelopment Agency and placed in the Endowment Trust Account to provide supportive services to former and future housing residents of Mirasol Village.
6. The initial funds so deposited into the Endowment Trust Account shall be deemed to be Choice Neighborhoods grant funds.
7. Funds shall be invested in (a) direct obligations fully guaranteed by the United States of America or any agency therefore, (b) certificates of deposit and repurchase agreements (for a term not to exceed 30 days) which are fully insured by the Federal Deposit Insurance Corporation, (c) a money market fund limited to U.S. government obligations, U.S. agency obligations, or repurchase agreements backed by such obligations, or (d) such other investments approved in writing by the Grantee, provided that such other investments must be consistent with HUD notices on permitted investments or approved in writing by HUD.
8. Interest accrued on Choice Neighborhoods grant funds shall be deemed to constitute “Program Income”, as defined in 24 C.F.R. § 200.307. The Grantee will ensure the use of such Program Income (a) during the grant period in accordance with 24 C.F.R. § 200.307 and the Grant Agreement, only for eligible program costs pursuant to the Transformation Plan, and (b) after the end of the grant period, for eligible public housing program costs or other low-income housing purposes.
Concerning (a) and (b) in the case of Choice Neighborhoods endowments, any interest or program income earned from Choice Neighborhoods endowment funds must be reinvested back into the endowment and be specifically addressed in the CNI Program Income Certification.
9. The Grantee hereby agrees and acknowledges that this Addendum must be implemented in a manner consistent with all applicable federal, state and local statutory, regulatory and executive order requirements, including those set forth in the Grant Agreement and its Appendix A.
10. The Grantee shall provide HUD with an annual certification, certifying that the Grantee has used the funds in the Endowment Trust Account in compliance with this Addendum.
11. This Addendum expressly survives the termination or closeout of the Grant Agreement. This Addendum shall remain in effect so long as any of the rental units of Mirasol Village remain subject to the governing multifamily documents or until such time as all of the funds in the Endowment Trust Account have been expended in accordance with this Addendum, whichever shall be sooner. For good cause and in accordance with Public Housing Requirements, HUD may approve the termination of this Addendum prior to all funds in the Endowment Trust having been expended provided such funds revert to the Grantee to be used for purposes permitted by the Public Housing Requirements.
12. This Addendum may not be altered, modified, or rescinded without the written approval of HUD.
IN WITNESS WHEREOF, the parties have caused this Addendum to be duly executed as of the day and year last written below.
HOUING AUTHORITY OF THE COUNTY OF SACRAMENTO
By: ____________________________
________________________________
Executive Official Name and Title
Date: _______________
CITY OF SACRAMENTO
By: ____________________________
________________________________
Executive Official Name and Title
Date: _______________
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
By: ____________________________
Assistant Secretary for Public and Indian Housing (confirm title with HUD before signing)
Date: ________________
First Amendment to Indemnity Agreement
(City Agreement 2015-2231-1)
This FIRST AMENDMENT TO INDEMNITY AGREEMENT, dated May 24, 2022, for purposes of identification, is between the CITY OF SACRAMENTO, a California municipal corporation (the “City”), and the HOUSING AUTHORITY OF THE COUNTY OF SACRAMENTO (the “Housing Authority”), a California public entity.
Background
The City, the Housing Authority, and the United States Department of Housing and Urban Development (“HUD”) are parties to a FY2014-2015 Choice Neighborhoods implementation grant agreement identified as City Agreement 2015-2230 (the “CNI Grant Agreement”).
In connection with the CNI Grant Agreement, the City and the Housing Agency entered into an indemnity agreement in which the Housing Agency agreed to indemnify the City for the Housing Authority’s and the Sacramento Housing and Redevelopment Agency’s activities under the CNI Grant Agreement (the “Indemnity Agreement”). The Indemnity Agreement is identified as City Agreement 2015-2231.
The Housing Authority would like the City and HUD to enter into an addendum to the CNI Grant Agreement that authorizes the Housing Authority to establish and administer an endowment trust account using grant funds provided under the CNI Grant Agreement (the “Addendum”). By its express terms, the Addendum can survive the termination or closeout of the CNI Grant Agreement.
The parties desire to amend the Indemnity Agreement so that it applies to both the CNI Grant Agreement and the Addendum.
With these background facts in mind, the City and the Housing Authority agree as follows:
1. Indemnity. Section 1 is hereby amended to read as follows:
“The Housing Authority shall defend, hold harmless and indemnify the City, its officers and employees, and each and every one of them, from and against any and all actions, damages, costs, liabilities, claims, demands, losses, judgments, penalties, costs and expenses of every type and description, including, but not limited to, any fees and/or costs reasonably incurred by the City’s staff attorneys or outside attorneys and any fees and expenses incurred in enforcing this provision (collectively, “Liabilities”), including Liabilities arising from personal injury or death, damage to personal, real or intellectual property or the environment, contractual or other economic damages, or regulatory penalties, arising out of or in any way connected with performance of or failure to perform the CNI Grant agreement or the Addendum by the Housing Authority or the Sacramento Housing and Redevelopment Agency, any subcontractor or agent, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, whether or not (i) such Liabilities are caused in part by a party indemnified hereunder or (ii) such Liabilities are litigated, settled or reduced to judgment; provided that the foregoing indemnity does not apply to liability for any damage or expense for death or bodily injury to persons or damage to property to the extent arising from the sole negligence or willful misconduct of the City, its agents, servants, or independent contractors who are directly responsible to the City, except when such agents,
servants, or independent contractors are under the direct supervision and control of the Housing Authority or the Sacramento Housing and Redevelopment Agency.”
2. All other terms remain in force. Except as modified by this agreement, the terms of the Indemnity Agreement remain unchanged. If there is any inconsistency between the Indemnity Agreement and this agreement, the terms of this agreement control.
3. Effective date. This agreement is effective on the date both parties have signed it, as indicated by the dates in the signature blocks below.
4. Integration and modification. This agreement sets forth the parties’ entire understanding regarding the matters set forth above and is intended to be their final, complete, and exclusive expression of those matters. It supersedes all prior or contemporaneous agreements, representations, and negotiations—written, oral, express, or implied—and may be modified only by another written agreement signed by both parties.
5. Counterparts. The parties may sign this agreement in counterparts, each of which is considered an original, but all of which constitute the same agreement. Facsimiles, pdfs, and photocopies of signature pages of the agreement have the same binding effect as originals.
6. Electronic signatures. The parties agree that this agreement may be electronically signed. The parties agree that the electronic signatures appearing on this agreement are the same as handwritten signatures for all purposes.
(Signature Page Follows)
City of Sacramento
By: ________________________________
Michael Jasso
Assistant City Manager
Date: _____________, 2022
Housing Authority of the County of Sacramento
By: ________________________________
LaShelle Dozier
Executive Director
Date: _____________, 2022
Approved as to Form
Sacramento City Attorney
By: ______________________________
Michael Sparks
Senior Deputy City Attorney
Attest:
By: _______________________________
Assistant City Clerk
Approved as to Legal Form
By: ________________________________
Authority Counsel
Attest:
By: ________________________________
Authority Clerk