Loading...
RES 1995-2309 - Agmt with Greenview Corporation for construction of residential units 4, -,,,•,, „(., 1 September 12, 1995 , re�`�� °M(.HA,NF - �30� �4, �, st H1.04:7onorable President it- , 4fiew 1.43 .® �f� � =i and Members of the City Council, o .-t �4TED FEBR"p. The attached Resolution approves a loan agreement between fi1w city df Chi maha City of Omaha Hal Daub,Mayor and the Greenview Corporation, a Nebraska Non-profit C o tio ,Mm chaet B Planning Department Maroney, President, 6655 Sorensen Parkway, Omaha,Nebraska 68152, for the construction of thirty-six(36)residential units in the area bounded generally by Omaha/Douglas Civic Center 17th Street on the East, 18th Street on the West, Clark Street on the South and 1819 Farnam Street,Suite 1100 Omaha,Nebraska 68183-0110 Grace Street on the North, but also including a small parcel in the Northeast (402)444-5200 corner of the block directly across 1 3th Street to the West; and the subsequent (402)444-5150 rental of each of the units to qualified, low and moderate income families. In Telefax(402)444-6140 accordance with requirements of the Americans With Disabilities Act and Section 504 of the Rehabilitation Act of 1973, two of the units will be constructed to be handicapped accessible. This Agreement provides CDBG financing for the project in the amount of $800,000 in the form of a deferred payment loan. Total project cost is estimated at$3,117,100. Sources of funds, in addition to the $800,000 CDBG Deferred Payment Loan, include a private lender loan in the amount of $466,000, a non-profit sponsor (New Community Development Corporation) note in the amount of $50,000, and an equity contribution of $1,801,100. The Contractor has on file a current Annual Contract Compliance Report Form (CC-1). As is City policy, the Human Relations Director will review the Contractor to ensure compliance with the Contract Compliance Ordinance. We believe this project represents an innovative method of encouraging infill development and expanding residential opportunities for low and moderate income families desiring to live in the North Omaha community. Your favorable consideration of this Resolution will he appreciated. Sincerely, Referred to the City Council for Conside tion: -i( -%--- .L-,----.- r Steven Jensen, Acting Director Planning Departmentfrp Mayor's Office/Tit,�e Approved: Approved:522 1 f -.--- FC.- 1 Louis A. D'Ercole, Acting Director Diane L. Thomas, Director Finance Department Human Relations Department P:\PLN\1998.SKZ A AGREEMENT THIS AGREEMENT is entered into by and between the City of Omaha and the Greenview Corporation, a Nebraska Non-profit Corporation, 6655 Sorensen Parkway, Omaha, Nebraska 68152-2139, also referred to as "Developer", for the development of affordable housing opportunities in the North Omaha community. RECITALS: WHEREAS, the City of Omaha (hereinafter referred to as "the City") is a municipal corporation located in Douglas County,Nebraska and is organized and existing under the laws of the State of Nebraska,and is authorized and empowered to exercise all powers conferred by the State constitution, laws, Home Rule Charter of the City of Omaha, 1956, as amended, and local ordinances, including but not limited to,the power to contract; and, WHEREAS,the City annually receives Community Development Block Grant funds under Title I of the Housing and Community Development Act of 1974, as amended, for the purpose of benefitting low and moderate income residents eliminating slums and blight and for other urgent community development needs; and, WHEREAS, the City has initiated the Housing Development Program for the purpose of encouraging construction of residential structures in the City; and, WHEREAS,the Mayor recommended various projects in the 1995 Consolidated Submission for Community Planning and Development Programs (Consolidated Plan) including the Housing Development Program; and, WHEREAS,the City Council approved the 1995 Consolidated Plan on December 6, 1994, by Resolution No. 3266; and, WHEREAS, the Greenview Corporation has submitted a project for the construction of thirty-six (36) residential units, of which two (2) units will be handicapped accessible, and supporting site amenities in the area bounded generally by 17th Street on the East, 18th Street on the West, Clark Street on the South and Grace Street on the North, but also including a small parcel in the Northeast corner of the block directly across 18th Street to the West, Omaha,Nebraska; and, WHEREAS, it is in the best interests of the citizens of the City of Omaha to enter into an Agreement with Greenview Corporation to promote additional reinvestment in the construction of residential units on vacant parcels such as the site mentioned above. IN CONSIDERATION of the mutual agreements herein contained, the parties hereto agree as follows: Section 1. Definitions The following terms shall have the following meanings for all purposes of this Agreement. 1.1 "City" shall mean-the City of Omaha, a Nebraska Municipal Corporation. 1.2 "Developer" or "GC" shall mean - Greenview Corporation, a Nebraska Non-profit Corporation of 6655 Sorensen Parkway, Omaha,Nebraska 68152-2139, and the sole General Partner of Greenview Limited Partnership ("GLP"), or its assignee pursuant to the provisions of Section 6.8 hereafter. (See Exhibit A) 1.3 "Director" shall mean-the Planning Director of the City of Omaha. 1.4 "Construction Contract" shall mean - the contract for construction work at the site, described in Section 1.5. 1.5 "Property" "Project Site" shall mean-the vacant site bounded generally by 17th Street on the East, 18th Street on the West, Clark Street on the South and Grace Street on the North, but also including a small parcel in the Northeast corner of the Block directly across 18th Street to the West; legally described as Lots 1 through 16, Block 14; and Lot 1, except the North 58 feet of the East 104 feet thereof; and all of Lots 2 and 3, Block 13, together with the East 1/2 of the vacated alley adjoining said Lots 1, 2 and 3 on the West, all in E.V. Smith's Addition, an Addition to the City of Omaha, as surveyed, platted and recorded in Douglas County,Nebraska. - 2 - e , 1.6 "CDBG-DPL" shall mean - a non-recourse Community Development Block Grant- Deferred Payment Loan in the amount of $800,000 made subject to the terms, conditions and provisions of the loan agreement under which said loan is made, which shall provide,inter alia,that same shall be repayable in fifty (50)years from and after December 1, 1996, at the annual interest rate of 3% simple interest, with interest accrued from and after December 1, 1996 and annual accruals of $24,000 each accumulating each December 1 thereafter,through and including December 1, 2016. Such interest and subsequent annual accruals of$24,000 are to be deferred for twenty (20) years and added to the principal amount of $800,000 on December 1, 2016. Beginning January 1, 2017, the loan balance of$1,280,000, together with interest at the rate of three percent per annum, will begin amortizing over the remaining thirty (30) year term (360 payments) with monthly payments of$5,396.53. The principal balance plus accrued interest shall become due and payable upon sale or transfer of the property except as provided in Paragraph 6.8 of this Agreement. The loan may only be used for the purposes described herein. 1.7 "Community Development Block Grant(CDBG)" shall mean-the program conducted under the provisions of the Housing and Community Development Act of 1974, as amended(42 U.S.C. 5301 et. seq.), and the Code of Federal Regulations (24 CFR Part 570). 1.8 "Subrecipient" shall mean - a public or private non-profit agency, authority or organization receiving CDBG funds to undertake eligible activities. In this Agreement, the Subrecipient is GC. 1.9 "Recipient" shall mean-the City of Omaha. 1.10 "Program Income" shall mean - the gross income received by the Recipient or Subrecipient directly generated by an activity that is only partially assisted with CDBG funds,the income shall be prorated to reflect the percentage of CDBG funds use. (See Exhibit B) 1.11 "Construction Work" shall mean - the acquisition of scattered vacant lots within the Project Site described in Section 1.5 and all work or services provided for in professional services or construction contracts and as may be required hereunder. 1.12 "CDBG Funds" shall mean-that portion of the Community Development Block Grant awarded to the City as may be available to loan during program year 1995 for professional services, Construction Work and Deferred Payment Loans involving the property as described in Section 1.5 of this Agreement in an amount not to exceed $800,000, subject to the terms, conditions and requirements of said Grant. - 3 - .44( 1 1.13 "Progress Payment" shall mean-that portion of the total Construction Contract paid in one or more disbursements,based upon the value of the construction, administrative or professional services work completed at the time the payment request is made. 1.14 "Mortgage Loan Rider" shall mean - the Rider identified as Attachment 1 herein, attached to and made a part of this Agreement, the mortgage or deed of trust, and the promissory note or other document(s) evidencing securing and governing of the Community Development Block Grant-Deferred Payment Loan described in Section 1.6 above. Section 2. Duties and Conditions of City Financing 2.1 The City shall convey by Warranty Deed platted vacant lots as described in Section 1.5 to GC for the sum of One Dollar($1.00)and other valuable consideration. The vacant lots shall be conveyed free of any and all encumbrances. The number of vacant lots conveyed to GC shall be sufficient number to enable the construction of thirty-six(36) apartment units. 2.2 Subject to and conditioned upon actual receipt of same, the City agrees to make available to GC $800,000 in funds received for use in the program year commencing January 1, 1995 under the CDBG program as hereinabove described and defined. Funding shall be subject to the terms and conditions specified and contained in this Agreement. The City will secure its CDBG-DPL with a second deed of trust subordinate to a first deed of trust in an amount not to exceed$500,000. The City shall insure that the GC repays the CDBG-DPL upon sale, grant, mortgage, assignment or other transfer of the property or portion thereof by the GC, except as provided in Paragraph 6.8 of this Agreement and in accordance with the Deferred Payment Promissory Note (Exhibit M). Further, funding, which shall be in amounts not to exceed$800,000(CDBG)during FY95, shall be used only for the following purposes: 2.2.1. Architectural,engineering, legal, financial and administrative services for the preparation of all design and construction documents and construction supervision necessary for site preparation, the installation of public improvements, and construction of thirty-six (36) residential units within the area described in Section 1.5 of this Agreement. All contracts for services and construction documents pursuant to this Section must be approved by the Planning Director,prior to funding of such contract. 2.2.2 Partial construction financing for the thirty-six(36)unit apartment complex as follows: A. The City shall provide the initial$150,000 required for site preparation and related professional services. All additional disbursements for - 431 4 - construction financing shall be based on the sources of funds schedule contained in Exhibit C to this Agreement. 2.2.3 City funding pursuant to this Section shall be contingent upon receipt of and subject to availability of Community Development Block Grant funds in FY95 in amounts adequate to meet any contractual obligations in force upon the date of execution of this Agreement as well as this proposed obligation. Should adequate funding not be available, the City shall notify GC as soon as reasonably possible. At this time,the responsibilities of the GC under Section 3 of this Agreement shall be released, the provision of Section 5.6 will be exercised and the Agreement will be terminated. 2.2.4 Except for the initial $150,000 required for site preparation, funds paying for contractual work shall be payable within the limits of the budget as described in Exhibit C. In accordance with the Director's prior approval, Performance Bonds or insurance, required by the Director, shall name the City as an additional insured. 2.3 The City shall review and approve all plans for public improvements, site preparation and house construction and perform interim and final inspections on each construction phase or completed residential unit. 2.4 The City shall review and monitor the quarterly reports that identify the progress/accomplishments of the GC,on the activities included in this Agreement and on contracts entered into with third parties pursuant thereto. 2.5 After completion of construction, the property must comply with all appropriate City codes and ordinances, and with Federal Section 8 Housing Quality Standards. 2.6 Except for the disbursement of$150,000 in CDBG funds for site preparation, in no event shall the City assume any obligation to make any or all of the above-referred funding available,nor shall the City incur any liability hereunder, unless and until the GC has submitted for and received the approval of the Director of all of the following: a. evidence that GC funding is available as required by Section 3.5 herein; and, b. duly executed contracts for Construction Work; and, c. Performance and Labor Materials Bonds from all subcontractors and/or Irrevocable Letters of Credit in force for one year following the completion of the Construction Work from the GC/General Contractor and all Subcontractors in an aggregate amount of the contract bid. The Letters of Credit and/or Bonds shall be in favor of the City and shall be submitted for review and approval by - 5 - the Director. The City reserves the right to reject the Letters of Credit and choice of surety for the Bonds. 2.7 Except for the initial $150,000 required for site preparation, in no event shall the City assume any obligation to make or continue to make any or all of the above-referenced funding available,nor shall the City incur any liability hereunder, unless and until GC has timely and fully complied with its duties and obligations arising hereunder. 2.8 In the event that all of the terms and conditions for funding as set forth hereinabove have been fully complied with,the City does hereby agree to make only those progress payments as may be authorized to be paid by the Director or his designate upon receipt, verification and approval of an American Institute of Architects Document G702 "Application and Certificate for Payment", provided that no payments shall be made for any acquisition,work,labor,material or expense incurred which the Director,in his sole discretion, deems to be : a. unacceptable or substandard; or. b. not in accordance with this Agreement or the Construction Contract as approved; or, c. not in conformance with the applicable state, federal and local laws, including but not limited to, the building, plumbing and/or electrical codes; or, d. not in conformance with the working drawings and/or specifications as approved. Further, any such administrative, acquisition and construction progress payments or sources of construction and permanent financing shall be made from, and be attributable to, each funding source in proportion to the approximate percentage that same bears to the total amount of funding hereunder, which, for the purpose of this Section, are hereby established in Exhibit C of this Agreement. 2.9 The City agrees to provide GC funds, as described in Section 2.2 herein,to carry out the services described herein for a period of twelve (12) months from the time of favorable consideration by the City Council. 2.10 The CDBG-DPL shall be a non-recourse loan; therefore, in the event of a default, the City shall rely solely upon the property which is secured by the deed of trust which is the security for the non-recourse promissory note and will not initiate or participate in any claim or proceedings against the maker of the non-recourse promissory note or its partners(or the partners,officers,directors,or shareholders of any partner)for payment of any sum due under the non-recourse promissory note or any other sum due under the - 6 - deed of trust. The City agrees to execute the Mortgage Loan Rider described in Section 1.14 above (Attachment 1 hereto). Section 3. Duties and Responsibilities of the Greenview Corporation 3.1 The GC agrees to develop platted vacant lots in the Project Site described in Section 1.5 of this Agreement in conformance with the requirements contained herein. 3.2 GC shall be responsible for the security and maintenance of Property upon receipt of the Warranty Deed from the City. 3.3 GC shall contract for architectural and engineering services for the preparation of all design and construction documents, cost estimates, and construction supervision necessary for the construction of thirty-six (36) apartments on the Property. In accordance with requirements of the Americans With Disabilities Act and Section 504 of the Rehabilitation Act of 1973, two of the units will be constructed to be handicapped accessible. As specified in Section 2.2, GC shall obtain the approval of the Director of all contracts, plans, and plats pursuant to this Section. 3.4 GC shall contract for and complete site preparation and construction of public improvements as specified in Section 2.2. GC shall obtain the approval of the Director for all construction contracts,prior to the start of such contracts. 3.5 The GC shall secure private funds as described in Exhibit C. The GC shall certify the availability of these funds to the Director in a manner designated by him. 3.6 The GC does hereby certify, contract and agree that any and all funding obtained by it or made available to it hereunder, shall be used solely and exclusively for the express purpose of developing the Property in strict compliance with this Agreement and the Construction Contracts as approved, as well as the drawings and other specifications as approved. 3.7 The GC shall submit to the Director, for his review and approval, all working drawings,plans and specifications necessary or incidental to this project. In addition, the GC shall submit duly authorized construction contracts for the Director'review and approval. The Director reserves the right to reject, modify or amend any or all of the foregoing. Upon approval, no changes or amendments may be made to any of the foregoing without the written approval of the Director. In no event shall the City become obligated to make any payments or release loan proceeds for any work performed, materials furnished, expenses incurred, or any other expenditures of whatsoever kind or nature unless same was expressly included in one or more of the above-mentioned documents as approved. - 7 - 3.8 The GC shall not commence any work hereunder until such time as it has received a written notice to proceed as issued by the Director. Any work performed prior to the issuance of such notice shall be the sole responsibility of the GC. 3.9 The GC agrees to use no lead-based paint in the performance of this Agreement, including the performance of any subcontractor. "Lead-based Paint" means any paint containing more than six one-hundredths of one (1) per centum of lead by weight (calculated as lead metal)in the total nonvolatile content of the paint, or the equivalent measure of lead in the dried film of paint already applied. The GC further agrees to abide by all Federal requirements regarding lead-based paint poison prevention. 3.10 The GC agrees that 100%of the housing units shall, through the GC's best efforts, be occupied by low and moderate income families whose annual income does not exceed 80% of the "Median Income by Family Size" as published by HUD, and as further updated and revised by HUD to reflect the current or most recent income level statistics, a copy of the relevant portion of which is attached hereto,marked as Exhibit D and incorporated herein by this reference. 3.11 The GC shall maintain the Property in a safe and sanitary condition to the extent reasonably possible during the construction and management phases of the project. 3.12 The GC shall ensure that all work performed and the construction as completed is in conformance with all state, federal, and local laws, ordinances, regulations and codes, including but not limited to,Section 8 Housing Quality Standards(HQS)as established by HUD. The Director shall assist GC in the same manner the Director provides technical assistance to other developers during the construction phase to ensure compliance with such requirements. 3.13 The GC shall obtain a certificate from each contractor or subcontractor to be used on this project to the effect that such contractor or subcontractor has not been disbarred or disqualified by the U.S. Department of Housing and Urban Development. The Director shall approve all contractors and subcontractors prior to being hired by GC. 3.14 The GC and the first mortgage or deed of trust lending institution, shall ensure that property insurance, all taxes, regular and special, are to be paid up-to-date as of the scheduled time for loan closing. 3.15 The GC shall submit to the Director, for his review and approval, a minority and women business participation plan which discusses economic development and employment opportunities. The GC shall make best efforts to ensure that construction services,contracts and employment opportunities are affirmatively marketed to women and members of minority groups. - 8 - �kfl 3.16 The GC shall employ affirmative marketing procedures in the advertising and marketing of completed residential units. In marketing,the GC shall also confirm to the nondiscrimination provisions as hereinafter set forth. Any such advertisements shall receive the approval of the Director prior to their release. 3.17 The GC shall maintain such records and accounts, including property, personnel and financial records, as are deemed necessary by the City to assure a proper accounting for all expenses. The Comptroller General of the United States, or any of their duly authorized representatives, or any duly authorized representatives of the City of Omaha, as approved by the Planning Director, shall have access to any books, documents,papers,records and accounts of the GC, contractor or subcontractor which are directly pertinent to this project for the purpose of making audit, examination, excerpts and transcriptions. Such records and accounts shall be retained for five years from the contract period completion. Any contract entered into by the GC with any contractor or subcontractor shall include this Section to ensure said access. 3.18 The GC shall submit to the Director a certified audit of all construction costs including developer and contractor costs. This audit shall be performed by a duly qualified professional,whom shall first be approved by the Director in writing. This audit shall be submitted to the Director for review and approval. The final amount of CDBG assistance will be based on the audited costs. If the final project cost is less than the estimated cost, the City and the GC will share the cost savings proportionately. 3.19 The GC shall submit a monthly progress report to the City of Omaha, Director of Planning. The progress report will delineate GC staff accomplishments for the previous 30-day period. 3.20 The GC shall comply with all provisions and regulations of the Community Development Block Grant Program and have an annual audit completed in compliance with OMB Circular A-133. A copy of this audit shall be provided to the Director. OMB Circular A-133 is attached as Exhibit E. 3.21 The GC shall ensure that the residential development conforms to City housing and zoning ordinances. The GC shall carry out all construction in an efficient manner. 3.22 The GC shall comply with and ensure that applicable bid documents, contracts, and subcontracts for site preparation and public improvements contain the Federal labor standards provisions and the applicable Department of Labor wage determination and that no contractor is ineligible for Federally assisted work. The wage determination may be modified to keep it current. All actions modifying a general wage determination applies, if notice of such action is published less than 10 days before contract award. The City will send these modifications to the GC (Exhibit F). - 9 * 0 - 3.23 The GC specifically hereby states, agrees and certifies that it is familiar with the limited purpose set forth in the Federal laws, rules and regulations, and in the laws of the State of Nebraska for which personal information requested may be used, and that the information received will be used solely for those limited purposes and not to harass,degrade or humiliate any person. The information released shall be used for the limited purpose stated, and GC further agrees to indemnify and hold harmless the City of Omaha for any liability arising out of the improper use of the information provided. 3.24 The GC shall maintain fiscal integrity of the program, which include all financial and narrative reports required by the City.of Omaha and the U.S. Department of Housing and Urban Development. 3.25 The GC shall ensure that any Program Income received will be returned to the City of Omaha within thirty(30)days of receipt. In the event the City shall cease to fund the redevelopment of the Property, GC shall have no further responsibility under the terms of the Agreement except to return the Property and any unobligated CDBG funds, if any, provided to GC under this Agreement, all as provided in Section 5.6 herein. 3.26 The GC shall execute any and all documents necessary to establish covenants to effect the purposes of this Agreement that shall run with the land. 3.27 The GC shall execute a non-recourse promissory note and deed of trust for the benefit of the City of Omaha securing the CDBG-DPL,together with the Mortgage Loan Rider described in Section 1.14 above (Attachment 1 hereto). Section 4. Terms of the Agreement This Agreement shall be effective for a period of twelve (12) months from the time of favorable consideration by the City Council. Section 5. Mutual Agreements The GC agrees, and the City states,that the City: 5.1 Is not acting as the GC's architect or engineer. 5.2 Makes no warranties, express or implied, as to the Rehabilitation Work. 5.3 Owes no duty to the GC or any other person that shall arise because of any inspection of the premises by the City's agents or employees. 5.4 May inspect the Property at any reasonable time,including a final inspection,to certify completion prior to final disbursement of loan proceeds. - 10 - 5.5 Shall be held harmless by the GC for all injury and damages arising by virtue of this Agreement. 5.6 Will be deeded any unused lots and/or parcels of land which have not been utilized, through the performance of this Agreement, upon the date the parties reach a mutual decision to terminate this Agreement before full development of the project or upon the expiration date of this Agreement as described in Section 4, whichever date or event first occurs. 5.7 The GC shall execute at closing covenants securing compliance with Federal regulations governing CDBG programs. Section 6. Provisions of the Agreement 6.1 Equal Employment Opportunity/Affirmative Action Plan. Attached hereto as Exhibits "G" and "H" and made a part hereof by reference are the equal employment provisions of this Agreement. 6.2 Non-Discrimination. The GC shall not in the performance of this Agreement, discriminate or permit discrimination in violation of sex, age, political or religious opinions, affiliations, national origin, familial status or handicap. 6.3 Captions. Captions used in this Agreement are for convenience and are not used in the construction of this Agreement. 6.4 Applicable Law. Parties to this Agreement shall conform with all existing and applicable city ordinances, resolutions, state laws, federal laws, and all existing and applicable rules and regulations. Nebraska law will govern the terms and the performance under this Agreement. 6.5 Interest of the City. Pursuant to Section 8.05 of the Home Rule Charter, no elected official or any officer or employee of the City shall have a financial interest, direct or indirect, in any City Agreement. Any violation of this section with the knowledge of the person or corporation contracting with the City shall render the Agreement voidable by the Mayor or the City Council. 6.6 Merger. This Agreement shall not be merged into any other oral or written Agreement, lease or deed of any type. 6.7 Modification. This Agreement contains the entire agreement of the parties. No representations were made or relied upon by either party other than those that are expressly set forth herein. No agent, employee or other representative of either party is empowered to alter any of the terms herein unless done in writing and signed by an - 11 - authorized officer of the respective parties,pursuant to Section 10-142 of the Omaha Municipal Code. 6.8 Assignment. The GC may assign its rights and/or obligations under this Agreement to Greenview Limited Partnership, a Nebraska Limited Partnership ("GLP"), 6655 Sorensen Parkway, Omaha,Nebraska 68152-2139, so long as GC remains a general partner. Such assignment shall be in form substantially similar to the form attached hereto as Exhibit I. Upon any such assignment,there shall be a novation with respect to GC and the GLP shall be the sole obligor (on a non-recourse basis with respect to the GLP and all of its partners) with respect to this Agreement and the CDBG-DPL. The GLP shall annually provide the Mayor with a list of its limited partners and the percentage of investments in the GLP of each limited partner. 6.9 Strict Compliance. All provisions of this Agreement and each and every document that shall be attached shall be strictly complied with as written, and no substitution or change shall be made except upon written direction from authorized officer of the parties,pursuant to Section 10-142 of the Omaha Municipal Code. 6.10 Termination. This Agreement may also be suspended or terminated in accordance with 24 CFR 85.43, Enforcement or 24 CFR 85.44, Termination for Convenience (Exhibit J). Upon termination of this Agreement, all funds and interest in any account hereunder become the roe of the Cityand shall be returned to the Cityof Omaha. property rtY 6.11 Subrecipients. The GC shall comply with the requirements and standards of OMB Circular No. A-122, "Cost Principles for the Non-Profit Organizations" (Exhibit K). 6.12 Other Program Requirements. The GC shall be required to carry out each activity of this Agreement in compliance with all Federal laws and regulations described in Subpart K of the CDBG Program Entitlement Grant Regulations Handbook 6500 (Exhibit L). 6.13 Reversion of Assets. Upon the expiration of this Agreement, the GC shall transfer to the City of Omaha any CDBG funds on hand at the time of expiration and not required for the purpose of this Agreement. 6.14 The GC shall indemnify and hold the City harmless from and against: (1) any and all claims arising from contracts between GC and third parties made to effectuate the purposes of this Agreement; and, (2)any and all claims, liabilities or damages arising from the preparation or presentation of any of the work covered by this Agreement. 6.15 If, through any cause, GC shall fail to fulfill in a timely and proper manner any obligations under this Agreement, or violate any of the covenants, representations or agreements hereof,the City may upon written notice terminate this Agreement or such - 12 - parts thereof as to this Agreement, and may hold GC liable for any damages caused to the City by reason of such default and termination. 6.16 Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall,as to such jurisdiction,be ineffective to the extent of such prohibition of enforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 6.17 This Agreement shall be a contract made under and governed by the laws of the State of Nebraska. 6.18 Disclosure of Lobbying. The GC shall certify and disclose, to the best of its knowledge and belief, that: (a) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned,to any person for influencing or attempting to influence an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment or modification of any Federal contract, grant, loan or cooperative agreement. (b) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying", in accordance with its instructions. (c) The language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. Section 7. Authorized Representative In further consideration of the mutual covenants herein contained,the parties hereto expressly agree that for purposes of notice, including legal service of process, during the term of this Agreement,and for the period of any applicable statute or limitations thereafter,the following named individuals shall be authorized representatives of the parties: - 13 - (1) City of Omaha Steven Jensen, Acting Director Planning Department Omaha/Douglas Civic Center 1819 Farnam Street Omaha,Nebraska 68183 (2) Developer: Greenview Corporation, a Nebraska Non-Profit Corporation Michael B. Maroney, President 6655 Sorensen Parkway Omaha,Nebraska 68152-2139 IN WITNESS WHEREOF,the parties have executed this Agreement as of the date indicated below: ATTEST: CITY OF O .• CI CLERK OF THE CITY OF OMAHA Ml OF THE CITY OF OMAHA GREENVIEW CORPORATION,A NEBRASKA NON-PROFIT CORPORATION By:C tjA Michael B. Maroney, Preside, ta,/ /975 Date APPROVED AS TO FORM: ASSISTANT CITY AT EY P:\PLN\2000.SKZ - 14 - ACKNOWLEDGEMENT STATE OF NEBRASKA ) ) SS. COUNTY OF DOUGLAS ) The foregoing Agreement was acknowledged before me this,/ 9 day of , 19 95` , by Michael B. Maroney,President, Greenview Corporation, on behalf of the orporation. /4:40.'r 7.---------,/ No,t ublic P:\PLN\2000.SKZ GENERAL [N3RRV.StaRIGGSte c!Nebraska �PJOTA . ; ; rb,cc:Tim.up.Sept 25,1996 - 15 - SCHEDULE OF EXHIBITS Agreement Exhibit Location Description Attachment 1 1.4, 2.10, 3.27 Mortgage Loan Rider A 1.2 Articles of Incorporation - Greenview Corporation, Corporation Resolution, List of Board Members, and Certificate of Greenview Limited Partnership B 1.10 Definition-Program Income C 2.2.2 Project Pro-Forma and Development Schedule 2.8, 3.5 D 3.10 Median Income by Family Size E 3.20 OMB Circular No. A-133 F 3.22 Davis-Bacon Wage Determination G 6.1 Equal Employment Opportunity Clause H 6.1 Affirmative Action Plan I 6.8 Assignment J 6.10 Termination- CFR 85.43 and CFR 85.44 K 6.11 OMB Circular No. A-122 L 6.12 Other Program Requirements -Handbook 6500, Subpart K M 2.2 Deferred Payment Promissory Note P:\PLN\2001.SKZ NEF/NYEF/CEF 1994 Model Form-3/1/95 Tab 4a Attach/rat 1 MORTGAGE LOAN RIDER This Rider is attached to and made a part of the promissory note, the mortgage or trust deed, and loan agreement or other document (s) evidencing, securing, and governing a loan in the amount of Eight Hundred Thousand Dollars ($ 800,000.00 . )_ (the "Loan" ) made by the City of Omaha ( "Lender" ) toGreenview Limited Partnership, Assignee)OROX2I.XXXEMMXADZOthe GYY1i 3a tXt' 15 $fi.V7f ixt of Greenview Corporation ( "Borrower" ) for the construction of Greenview A�th�.e. "froj ect" ) . The form of this Rider has been designed for use w"YieEfimer Borrower is a limited partnership, a land trust of which a limited partnership is the beneficiary, or otherwise. Accordingly, the limited partnership developing the Project, whether or not identified as Borrower, is sometimes referred to herein as the "Partnership" . The Articles of Limited Partnership forming or continuing the Partnership are referred to herein as the "Partnership Agreement" . The parties hereto agree that the following covenants, terms, and conditions shall be part of and shall modify or supplement each of the documents evidencing, securing, or governing the disbursement of the Loan (the "Loan Documents" ) , and that in the event of any inconsistency or conflict between the covenants, terms, and conditions of the Loan Documents and this Rider, the following covenants, terms, and conditions shall control and prevail : 1. Nonrecourse Obligation. The Loan is a nonrecourse obligation of Borrower. Neither Borrower nor any of its general and limited partners (or, if Borrower is not the Partnership, the general and limited partners of the Partnership) , nor any other party shall have any personal liability for repayment of the Loan. The sole recourse of Lender under the Loan Documents for repayment of the Loan shall be the exercise of its rights against the Project and related security thereunder. 2 . General Partner Change. The withdrawal, removal, and/or replacement of a general partner of the Partnership pursuant to the terms of the Partnership Agreement shall not constitute a default under any of the Loan Documents, and any such actions shall not accelerate the maturity of the Loan, provided that any required substitute general partner is reasonably acceptable to Lender and is selected with reasonable promptness . 3 . Monetary Default . If a monetary event of default occurs under the terms of any of the Loan Documents, prior to exercising any remedies thereunder Lender shall give Borrower and each of the general and limited partners of the Partnership, as identified in the Partnership Agreement, simultaneous written notice of such default . Borrower shall have a period of seven (7) days after such notice is given within which to cure the default prior to exercise of remedies by Lender under the Loan Documents, or such longer period of time as may be specified in the Loan Documents . 4. Non-Monetary Default. If a non-monetary event of default occurs under the terms of any of the Loan Documents, prior to exercising any remedies thereunder Lender shall give Borrower and each of the general and limited partners of the Partnership, as identified in the Partnership Agreement, simultaneous written notice of such default . If the default is reasonably capable of being cured within thirty (30) days, Borrower shall have such period to ' eT-fect a cure prior to exercise of remedies by Lender under the Load Documents, or such longer period of time as may be specified in the Loan Documents . If the default is such that it is not reasonably capable of being cured within thirty (30) days or such longer period if so specified, and if Borrower (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then Borrower shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Lender. If Borrower fails to take corrective action or to cure the default within a reasonable time, Lender shall give Borrower and each of the general and limited partners of the . Partnership written notice thereof, whereupon the limited partner may remove and replace the general partner with a substitute general partner who shall effect a cure within a reasonable time thereafter in accordance with the foregoing provisions . In no event shall Lender be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within one hundred eighty (180) days after the first notice of default is given, or such longer period of time as may be specified in the Loan Documents . 5 . Casualty, Condemnation, Etc . In the event of any fire or other casualty to the Project or eminent domain proceedings resulting in condemnation of the Project or any part thereof, Borrower shall have the right to rebuild the Project, and to use all available insurance or condemnation proceeds therefor, provided that (a) such proceeds are sufficient to keep the Loan in balance and reb-:ild the Project in a manner that provides adequate security to Lender for repayment of the Loan or if such proceeds are insufficient then Borrower shall have funded any deficiency, (b) Lender shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement, and (c) no material default then exists under the Loan Documents . If the casualty or condemnation affects only part of the Project and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of the Loan in a manner that provides adequate security to Lender for repayment of the remaining balance of the Loan. 6 . Force Maleure. There shall be no default for construction or rehabilitation delays beyond the reasonable control of Borrower, provided that such delays do not exceed one hundred eighty (180) days, or such longer period of time as may be specified in the Loan Documents . 7 . Purchase Rights . The execution and delivery of the purchase option and right of first refusal agreement described in the Limited- Partnership Agreement shall not constitute a default under the Loan Documents or accelerate the maturity of the Loan thereunder. Any requisite consent of Lender to (a) the exercise of said purchase option and right of first refusal agreement by the project sponsor identified therein, and to (b) the assumption without penalty of Loan obligations by the project sponsor and the release of Borrower from such obligations, shall not be unreasonably withheld. Subject to any such consent requirement, . the exercise of rights under such agreement shall not constitute a default or accelerate maturity of the Loan. 8 . [For below-market interest rate loans : ] Loan Assumption. If the purchase option and right of first refusal agreement described in the Limited Partnership Agreement is not exercised and the Project is sold subject to low-income housing use restrictions as contained in an existing regulatory agreement or other recorded covenant, any requisite consent of lender to said sale, and to the assumption without penalty of loan obligations by the purchaser and the release of Borrower from such obligations, shall not be unreasonably withheld. 9 . Lender Approvals, Etc . In any approval, consent, or other determination by Lender required under any of the Loan Documents, Lender shall act reasonably and in good faith. 10 . Prohibition of Sale. Lender shall not. (a) sell, assign, transfer, or convey any such indebtedness (or any interest therein) to Federal Home Loan Mortgage Corporation ( "Freddie Mac" ) , or (b) include such indebtedness (or any interest therein) in a pool of loans to be sold, assigned, transferred, or conveyed to Freddie Mac. (continued on next page) • In Witness Whereof, the undersigned have caused this Rider to be executed this a 9 A day of t 7(454- , 19 95 . Borrower: Lender: GREENVIEW LIMTMED PARTNERSHIP CITY OF OMAHA a (A) Nebraska— limited a (i) municipal corporation partnership By: GREENVIEW CORPORATION By: . a (n) Nebraska corporation Its : its general partner Attest : By: �'��� Its : President By: Its : Attest : Its :Qssr-Secretary • CL. STATE OF NEBRASKA SS SECRETARY'S OFFICE c Received and filed for record '_ and orsicd on Mtn roil No, at Page ZG t•-%2ir_ -Secretary of aiate 7 CERTI FICATE OF GREENVIEW By �� �� •�� � LIMITED PARTNERSHIP A Limited Partnership The undersigned, being desirous of forming a limited partnership, pursuant to provisions of the Nebraska Uniform Limited Partnersifihip e Act, fo do hereby make and severally sign and swear to the following c purpose: NAME The name under which the partnership is to be conducted is "Greenview Limited Partnership". PURPOSES The general purposes of the business are to acquire a fee simple interest in certain land in the vicinity of 17th & Clark Streets in the City of Omaha, and to construct certain residential buildings thereon (the "Project"); to finance such acquisition and construction through loans and other means, and to operate, manage, lease and otherwise deal with the Project as a real estate development consisting of, or including in significant part, low-income rental housing. The purposes of the Partnership shall further include the provision of decent, safe and sanitary housing affordable to low-income lds and all powersllfying for low- ne necessary to income housing tax benefits. The Partnership shall have accomplish such purposes. III OFFICE AND AGENT The location of the principal place of business of the Partnership shall be 6655 Sorensen Parkway, County of Douglas, in the City of Omaha, in the State of Nebraska, or at such other place as the General Partner may determine from time to time. The name and address of the agent for service of process shall be Charles P. Fike, 700 First National Plaza, 11404 West Dodge Road, Omaha, Nebraska 68154. ". /1TNT/UJfII9 Iv GENERAL AND LIMITED PARTNERS The name and address of the General Partner is Greenview Corporation 6655 Sorensen Parkway Omaha, Nebraska 68152 Attn: Rodney A. Conser, President The name and address of the Initial Limited Partner is Michael B. Maroney 6655 Sorensen Parkway Omaha, Nebraska 68152 V TERM The term of the partnership s�Sllucommence less sooneanuary 27, 1995, and shall r te Hated by action of the continue for a period of fifty (50) years, Partners, or as otherwise provided in the Partnership Agreement. . Witness our signatures on this„;7 ff day of January, 1995. GREENVIEW CORPORATION, General Partner, By: /-61-- z.r Rodney A./Conser, President Michael B. Maroney, Initial Limited Partner 2 )146,_ 0 STATE OF NEBRASKA ) ) SS. COUNTY OF DOUGLAS ) Before me, a Notary Public, qualified for said County, personally came RODNEY A. CONSER, President of Greenview Corporation, a Nebraska corporation, to me personally known to be the President and the identical person whose name is affixed to the above instrument, and acknowledged the execution thereof to be his voluntary act and deed and the voluntary act and deed of said corporation. WITNESS my hand and notarial seal on the 3-) ac day of January, 1995. `J ✓ Notary Public STATE OF NEBRASKA ) GENERAL NOTARY-State ofNebraska ) CHARLES P.FlKE SS. ., My Comm.Exp.Aug.1,1997 COUNTY OF DOUGLAS ) Before me, a Notary Public, qualified for said County, personally came MICHAEL B. MARONEY, known to me to be the identical person who signed the foregoing instrument, and acknowledged the execution thereof to be his voluntary act and deed. WITNESS my hand and notarial seal on the 7-7` day of January, 1995. Notary Public GENERAL NOTARYState of Nebraska • CHARLES P.AKE My Comm Exp.Aug.1,1997 3 EXHIBIT B Community Development Block Grant Program Handbook 6500 Entitlement Grant Regulations September 1988 "Program income" means gross income received by the Recipient or a Subrecipient directly generated from the use of CDBG funds. When such income is generated by an activity that is only partially assisted with CDBG funds, the income shall. be prorated to reflect the percentage of CDBG funds used. (1) Program income includes, but is not limited to the following: (i) Proceeds from the disposition by sale or long term lease of real property purchased or improved with CDBG funds: (ii) Proceeds from the disposition of equipment purchased with CDBG funds; (iii) Gross income from the use or rental of real or personal property acquired by the Recipient or. a Subrecipient with CDBG funds, less the costs incidental to the generation of such income; (iv) Gross income from the use or rental of real property owned by the Recipient or a Subrecipient that was constructed or improved with CDBG funds, less the costs incidental to the generation of such income; (v) Payments of principal and interest on loans made using CDBG funds; (vi) Proceeds from the sale of loans made with CDBG funds; (vii) Proceeds from the sale of obligations secured by loans made with CDBG funds; (viii) Interest earned on funds held in a revolving fund account; (ix) Interest earned on program income pending disposition of such income; and, (x) Funds collected through special assessments made against properties owned and occupied by households not of low and moderate income, where such assessments are used to recover all or part of the CDBG portion of a public improvement. (2) Program income does not include interest earned (except for interest described in § 570.513) on cash advances from the U.S. Treasury. Such interest shall be remitted to HUD for transmittal to the U.S. Treasury and will not be reallocated under section 106(c) or (d) of the Act. Examples of other receipts that are not considered program income are proceeds from fundraising activities carried out by Subrecipients receiving CDBG assistance; funds collected through special assessments used to recover the non-CDBG portion of a public improvement; and proceeds from the disposition of real property acquired or improved with CDBG funds when such disposition occurs after the applicable time period specified in § 570.503(b)(8) for Subrecipient-controlled property or § 570.505 for Recipient-controlled property. Exhibit C NN " " " NNN a00o ^4CC41 -aWN -1 (.3 3- oCO -. 0) CI -F. CAI DmvrncnZ. wN o ), ,0, ,fir s , 7rn0-' -,1 03 - -1 c c m xi 0 n X a x cmn my o Q -Tirn m z o COQ m X m -i m 0 a m M G) rc .60 w N log 'S a) -co1-033 71 s co NJZy,_C�4 ) i - A Q) -4 Naa el , O O O m vo CD U -4 5 V ' m n w ID r31 m 0 C o s a o a 0 a fl D D C) y I - w N in j lm C 02 koI a 0 a� pi ,o Yf/, / r - ,,a G-EJ W W Caw WNN � � tNJ/A W Nt3 ,0W MC'11 0"..1 � W -JOVt A. W }V O ]� WWWWW CCOM ..IO1UTAW N -� OC� CD XI ocPU? Qv2wc 29 Ono � 0o co p0 = 1- = 74 3 nacm N m ono �r, ES � o � � � � � � � � � U1 � -, o � -+ p 3+ Z 0 ' '2m 5P.ae ` z oo � ma) 2 ta m a 'n '1CD al � o ~ tD mf o a 0 r ar r c 3 o -n pCP m 0 km — o z } 0 . m c. c -=1 fA v, aCfl0a a N 3 w m an = 0, op -U 3 G N ,� cri m m t Z I 7 Q. o O r•o 5 CD 17 Z ICJ m e � CA 1 C q �- zg oCO Z D to ? • 1. n 4 c 40 ni ca = "' t13 M d 0 w = r- coil)\ c, 95 m A _ .. Cry a 1 - -\ (-c-j40cts2)os). I•eaf,i 4r1..%.A.43 -faf?t t243'\ N \' \44\ \CCm _ tf, 1 u, 0 ..� o C w w ' 0 -52 c 26oaw Quo alaoYo \I1 0 0000 000 0 O0 �� a co N \Tilt:5;r\ I j s (01 C7hN.l ,F1 A -•.1 Q! CJl �tr344 to O C`p1 F\ (D O 0 0 N pc�r�� ao010C-h.404 EA 02O ¢ O ooclillw � W o iCO I \ji \ 1 \ \ \ m \ ? al o \'! \ I a `I 1.1 1 . 1. \ . y a, ram!it, , . r Cc — /G if. L- 1 11 '-J V �1 ^4 -1 `4 V11CaCOCO CO 0) W C) 000LT1tJ1CJ100CP W N ,End � pAD -'�.1G�Jts k .8. i —'O co V Cato A W N 00m -4Qn01A Co Ns00 W 'mil i ^ toDO73 - 0J ? rngvN ' Ool �l onQopy R < l • Q 3 mpC) D�SI3 R Ohm � � o) a ¢§ = _. a = = Q � c-o � P'c � •"'� m <° nyc=o � a Fa Immg ma o D � � mCD7.1 C o3 -n rnoo -rt S n Sao = _ 0 > 0 = 0 0. 5*, -0 coo 0 in o m r � x r = t7 a� � m m 7J A) -T1 o. m = ro CD C) m o 0 a =.ia-i to 00 � ' � � 1 � �� � � � ,. o � *, = m a i ac m c° 13 a rn 0 I— = M 3 I n7 p co - CD � = 0 min = 0 0) o o el _ c`�'i 0 9 = I 0 5." p" .4CCp) co w !I, GSA 0O 0 OC3 0ffl cm0If)0 (ftEa00fAb3 Ise EA 004�4O (AO o ` + -► 0O�OO 0000 n0oo0o 00 OOOo o aa , •rb z7 I Ea t Ea EA Q. Q�J � . 0 �- (ii SO C) A_I A 0 CO I- N In O b9 Iv Ca U1 01 (A 4A {filfA (A O-el,to 4fi 0 C) 0 Co O 0 0 co. 01CO 130130 oLo{0000 010 oa0o co. f ZI of 2.I 0,II I 0( DI 0'1 i III xI 1 �I'co "col a co ccy I A: 61 co .61 �1 W ..P.- (.1) U'I ---., ...a 0 a C [ADO 0 O .. _ •O 0 �,1-/ , r e - P,96-E * dil 1 If p 0toe00c00t00c0c0CDcaOaC000mWtoasO0 O0IvDQ0 ID 01 ► 0000 `Do7 � CDUe ,P WN � 0coCo � Oy �, .AWN D -+14) t11 � 47 N ago o � mi° c m�m � n CD r _ � � mrn "' a r ova 0 = ^' Of mc . ► a � cu S. -umu) = `�1 co m a� � � CD: m m2as corn Q1mC) - 0 m N.#: co Q W to V► m �` 7> 33 � '1 —i CD � � � � rj r 1 71 rno a o rn o xi I - . Si m III J el, 1 I o X1m .. A o �rn ..Lj�AoP N1 Poi o V0 0 0\-.ts. c a01 1 o oo�smo 0 I Ha'S Eia 11° W 11 WQ7NN §' toy tJ+ 0 W - - Ut N,0D � 0 O cbV cr N � 0Qsa Oot0o _ O0 OP CIIICJ� d) ' �` 1 I Q f Q tU v ffl II N co 1Ii' co c o 0 a. o 00 'l � �CD .� aoi ' \ _ , I I Iico III \. Ill p 0 1V H3 a) 4?_W J 1 a ta . 00 0101 ,_.1. -,.(,r 8, r C — //-O- . GO EXHIBIT D p 0 0 0 O 0 0 0 0 0 0 0 0 S O in co op In in in 0 in O 0, 0 in O O enin N 00 co N en et ON O N ._ .� V) o: M 00 N .o O .f O �7 ..y en �f In in In .0 %0 es- t� 00 00 w 69 69 .64 69 69 69 69 64 64 69 64 69 0 CIO v: ICI •> a y 0 (24 u GI 0 0 CD 0 CD 0 0 0 0 0 C.)e O O 0 0 0 0 O 0 In 0 0 in co r-. co„ envG ON w en 00 N �G O VI O\ Cr) ..0 co0o N .0 O� en .0 0 M .0 O ON ..q en M M '1 1' of in in %o '.o '.0 N a. 69 es 69 ER 69 69 69 69 69 69 69 ER •3 E 0 N r...1 1••1 .C7 C cd Z 0 0 0 0 0 0 0 0 O 0 0 0 •E 0 'In 0 0 in 0 VI in 0 co co at ea O C\ en co„ oo in. en oo kr) M 4,. n 0 d- N co- �t O: N N o0 O M '.0 i. Cn 00 N N en en en en of 7 et In in in a, Q E- ;+ b p 64 69 69 69 64 64 69 64 69 69 69 . .'' i i Jca E W 0 'v) g 0 0 O © O 0 0 0 O 0 0 0 •O p O O In in O Lin) O vn I(I": O kn itn to i O O b� �n N a\ -- N M a\ o �0 —+ c� U = N tn oo N l� N Vi O N 7 so ` C' la. Z 4 N'` N N N M M M M 1' 1' N In 6 .0 - 69 69 64 69 69 64 69 •69 69 EA 69 69 E Qy +-- H C = 0 0 0 0 0 0 0 O 0 0 0 0 ,= N C•=�c44 .6 p O O O O O In O In �n O tn Ey . c a., as in C'. N in N O N 'O C\ en in o '0 — .N N N en en en en en '� o y . 64 64 64 es 69 6s 69 64 49 64 ER EA CO.a es - � Ire fig' C 0 0 c .0 �" In 6 52 0 0 0 0 O 0 O o O O O O ea..: a, -d ON e O O In in O O 0 In cn O In O a) co 0 0 00 o cn vi N C\ erC. %, 00 O N •'" — N N N N N en en en en ' w.- C .0 EA 69 69 EA 69 69 ER ER EA 64 64 ' i. — Cd c a o Vo F, eU 0 Cowl v) C o `t 00 0en .04. 0 0 o O O O O O aw .. •'' C p 0 = O - C'. VD O 0 N - c :, = >, 0 to t-: C\ e • v0 00 0 — M In •0 A u u, ' in en Q N N N N 64 4 69 64 69 669 69 69 6M4 6M9 69 6M9 • a LZI sa,CO W a g 0 N uIcov ty! N enin �o N 00 cr. O N '0 C.) "-+ N •E ea y 670 ' , _, :...,,,,..,c__4z _i___„..______p 0 . TioN--- - -- V AIEW BOARD OF DIRECTORS gOAI3D{�F r eams%Coaser 199 - 1995 Rodney A. AT&TDistinguished Bierober Network Systems � S C.FREEMAN, .r,PRESIDENTMEAGER OF EMAN,:ZATE James C. JAMS R. N AIO ACCOSTING Manager, biucual 1 TICS .I ESA- ANAL,INC. ICE 9910 NORTH 48TH AVENUE,#202 GUARANTEE ATV OMAH-A, 68152 1701 JO C MUTUAL ON LEE Charles P F (4�J2)453-9292 FAX 453-g452 OMAHA,NE 68111 BLVD. Attorney, MEMBER (402) 398-2665 (0) Ada gooney BOARD SCE CSAN Frederick,p•C- �� ��JTIVE DIRECTOR L.BROCKMAN, F1 e,IoiK L.gp,YES, cAP Comes A Pisa DE�b R S&ASSOCIA S, CPA President, METHODIST COlvIMUNITY CEO secretary UNITED jVA S& PLACE #2Qc retaty 2001 NORTH 35TH STREET OMA1 NE 68111 8420 WEST DODGE ROAD, 451-8532 -WEST 68114 Deborah L.Br°�'°a (402)451-2228 FAX (A02)390-2480 FAX 390-0885 BOARDMEMBERMEMBER zr�x�aEOARA3 G.ic' Coat RODNEY A.CONSERx,DISTINGUISIEDPrcsi C RI, A.PETERS, k.L.Es�a �,q $ER TECHNICAL ICAj,STAFF -AT&T PRESIDENT �p DES-ryviEj�iTS,INC- crAa 12410 ROSE LANE 3123 SON 144TH AVENUE b r-�°"e OhiA 691 (0) 493 A Q 68144 (s1(f2)6g1-3821 (0} 493-4510( } 691-8511 Ncs interratkani.tar. CHAIRMAN (402)691-E91 FAX J ,R.BeateT FAX 691-3510 SECRETARY Dale • pRESIDENTICEO CHARLES P.PIKE,ATTORNEYCK past iC Fax Note 7 From / SCHMID,MOONEY &FRE ; ` C. A4ic3iaal B. Plame" WEST11404 DODGE ROAD c . r dA11AHA,NE 68154 D Prione 3� 0(402)493-7700 FAX 493-7005 F o -» F� ,� A'�S T�ASU�R •Omaha, Nebraska 68152 (402}• 5 r 1 3104• FAX (402) 571 ` 0 . �__L_�.....,1 ousvo •�F�Sorensen paricvray 1 STATE OF �� , NEBRASKA -+ �� % Exhibit A ►w ir , ati 1 J. 10._r -RcN J7; Department of State ,,,.....A JniII ted States of America, �. �ii o mu i-- Lincoln, Nebraska State of Nebraska t I, Scott Moore, Secretary of State of the State of Nebraska do hereby tify; GREENVIEW CORPORATION filed Articles of Incorporation with its registered office located in OMAHA, Nebraska, in this office as a nonprofit corporation January 26, 1995. I further certify that said corporation is in good standing as of this date. In TestimonyWhereof I have hereunto set my hand and j� of the to {ILlfilieV the Great 5�21 411�. ✓tli of Nebraska on January 26' in the year of our Lord, one thousand nine hundred and ninety-five. 4Opp Ar#, Mi:25t.e- `•f' SECRETARY OF STATE \11'' 0.)*.- ' �N'GI/1 /4 ' �'y% / C r5S 1 STATE OF NEBRASKA t SS SECRETARY'S OFFICE Received and filed for record _- arid recorded on film roll No. • 6j 5 i iit p:.a..3 ARTICLES OF INCORPORATION OF GREENVIEW CORPORATION Secre::::y By The un iersigned citizens of the State of Nebraska, acting as incorporators of a corporation under the Nebraska Nonprofit Corporation Act, adopt the following Articles of Incorporation for such corporation: ARTICLE I NAME The name of the corporation is Greenview Corporation. ARTICLE II DURATION The corporation shall have perpetual existence. ARTICLE Ill MEMBERS The corporation shall have no members. ARTICLE IV PURPOSES The corporation is organized exclusively for the purposes of acquisition, development, financing, construction and management of a low-income housing project in the vicinity of 17th & Clark Streets in the City of Omaha, Nebraska, and any lawful activity appropriate or otherwise related to the accomplishment of such purposes, including, without limitation, the acting as a general partner in a limited partnership formed for the foregoing purposes. ARTICLE V PROVISIONS FOR THE REGULATION OF INTERNAL AFFAIRS AND DISTRIBUTION OF ASSETS Provisions for the regulation of the internal affairs of the corporation, including provisions for the distribution of assets on dissolution or final liquidation, if any, shall be as set forth in the bylaws of the corporation. pogi /^ 64F_f ARTICLE VI INITIAL REGISTERED OFFICE AND INITIAL REGISTERED AGENT The street address of the initial registered office of the corporation is: 700 First National Plaza 11404 West Dodge Road Omaha, Nebraska 68154 The name of the initial registered agent at such address is Charles P. Fike. The Board of Directors, by an appropriate resolution, shall have the power and authority to change the location of the registered office of the corporation, and to change the designation of the registered agent. ARTICLE VII BYLAWS The initial bylaws of the corporation shall be adopted by the Board of Directors, and may be amended by the Board at any regular or special meeting called for that purpose. ARTICLE VIII BOARD OF DIRECTORS The management and direction of the corporation shall be vested in its Board of Directors. The number of directors of the corporation shall be fixed by the bylaws, but shall not be less than three (3). The names and street addresses of the persons who shall serve as the initial direciors are as follows: James R. Beatty NATIONAL CONSULTING SYSTEMS, INC. 9910 North 48th Avenue Suite #202 Omaha, NE 68152 Deborah Brockman FAMILY HOUSING ADVISORY SERVICES 2416 Lake Street Omaha, NE 68111 -,1/1 T fr , /d /LTi < �A fir- ..3 Rodney A Conser AT&T NETWORK SYSTEMS 120TH & "I" Streets Omaha, NE 68137 • .Charles P. Fike SCHMID, MOONEY & FREDERICK, P.C. 700 First National Plaza 11404 West Dodge Road Omaha, NE 68154 James C. Freeman 1701 John Creighton Boulevard Omaha, NE 68111 Frank L. Hayes HAYES & ASSOCIATES, C.P.A.'s Suite 205 Morgan Place 8420 West Dodge Road Omaha, NE 68114 Charles A. Peters CAP INVESTMENTS, INC. 3123 South 144th Avenue Omaha, NE 68144 ARTICLE IX POWERS The corporation shall have and possess all powers and rights conferred upon corporations by the Nebraska Nonprofit Corporation Act, and any enlargement of such powers conferred by subsequent legislative acts; and, in addition, the corporation shall have and exercise all powers and rights, not otherwise denied nonprofit corporations by the laws of the State of Nebraska as are necessary, suitable, proper, convenient, or expedient to the attainment of the purposes set forth in Article IV hereof. ARTICLE X INCORPORATORS The names and addresses of the incorporators are as follows: -{/f, ,, r — //LR L i.:Lr ,, 7 *el _ Charles P. Fike SCHMID, MOONEY & FREDERICK, P.C. 700 First National Plaza 11404 West Dodge Road Omaha, Nebraska 68154 Janice J. Taylor SCHMID, MOONEY & FREDERICK, P.C. 700 First National Plaza 11404 West Dodge Road Omaha, Nebraska 68154 IN WITNESS WHEREOF, the above and foregoing Articles of Incorporation are executed this 24th day of January, 1995. ( 7(2 C�iarles P. Fike, Incorporator A ce J. Taylor(corporaf r CERTIFICATE OF SECRETARY OF GREENVIEW CORPORATION I HEREBY CERTIFY that I am the duly elected and acting Secretary of GREENVIEW CORPORATION, a Nebraska non-profit corporation (the "Corporation") and have access to and am familiar with the records of the Corporation. I HEREBY FURTHER CERTIFY as follows: 1. That GREENVIEW CORPORATION was incorporated and filed Articles of Incorporation with the Secretary of State of Nebraska on January 26, 1995. 2. That on January 27, 1995, GREENVIEW CORPORATION, General Partner, and Michael B. Maroney, as Initial Limited Partner, executed an agreement forming Greenview Limited Partnership, a Nebraska limited partnership, and a certificate of Greenview Limited Partnership was duly filed with the Office of the Secretary of State of Nebraska on February 3, 1995. 3. That at a meeting of the Board of Directors of GREENVIEW CORPORATION held on June 27, 1995, called in compliance with all applicable laws and the charter and bylaws of the Corporation, and a quorum being present, the following resolutions were duly adopted by unanimous vote of all Directors present: RESOLVED, that the Corporation hereby ratifies and approves the formation of Greenview Limited Partnership, with the Corporation as the General Partner, and Michael B. Maroney as the Initial Limited Partner, and otherwise substantially in the form presented to this meeting, and the execution thereof by Rodney A. Conser, as then President and on behalf of the Corporation, and further authorizes the execution by the Corporation of any other documents related thereto; RESOLVED FURTHER, that the Corporation, for itself and as General Partner and on behalf of Greenview Limited Partnership, be authorized to enter into a contract and/or loan agreement (the "Loan Agreement") with the City of Omaha, providing for the development by the Partnership of 36 apartment units in the vicinity of 17th to 18th, Clark to Grace Streets in the City of Omaha (to be known as the Greenview Apartments), with the assistance of financing and other aid from the City of Omaha, including, without limitation, the furnishing of $800,000.00 in the form of a CDBG - Deferred Payment Loan; RESOLVED FURTHER, that any officer of the Corporation including the President, the Vice President, the Secretary or the V Treasurer, be authorized to execute on behalf of the Corporation and the Partnership the Loan Agreement with the City of Omaha, as well as any other related document or agreement requested or required by the City in connection therewith, including, without limitation, any assignment of the Loan Agreement or any note, or any mortgage or deed of trust on the Project property securing said note. 4. That the present officers of the Corporation are: Rodney A. Conser, Chairman; Michael B. Maroney, President; James C. Freeman, Vice President; Charles A. Peters, Secretary; and Charles P. Fike, Treasurer. 5. That none of the Resolutions or other actions adopted or taken by the Corporation's Board of Directors conflict with the charter bylaws of the Corporation, nor has any of said Resolutions been in any way altered, amended, or repe led nd the same remain in full force and effect, unrevoked and unr cinded, as o d . Charles A. Peters, Secretary DATED: August 22, 1995 ri�BIT E • y EXECUTIVE OFFICE OF THE PRESIDENT ,. nx; .. OFFICE OP MANAGEMENT AND BUDGET WASHNGTON.D.C.2O O3 March 8 , 1990 • OMB Circular No.• A-133 TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS SUBJECT: Audits of Institutions of Higher Education and Other Nonprofit Institutions 1. purpose. Circular A-133 establishes audit requirements and - defines Federal responsibilities for implementing and monitoring such requirements for institutions of higher education and other nonprofit institutions receiving Federal awards. 2. Authority. Circular A-133 is issued under the authority of • the Budget and Accounting Act of 1921, as amended; the Budget and Accounting Procedures Act of 1950, as amended; Reorganization Plan No. 2 of "1970; and Executive Order No. 11541. 4 3. $uperaessiors. Circular A-133 supersedes Attachment F, • subparagraph 2h, of Circular A-110, "Uniform Administrative Requirements for Grants and other Agreements with Institutions of Higher Education, Hospitals, and other Nonprofit Organizations." 4. Applicability. The provisions of Circular A-133 apply to: a. Federal departments and agencies responsible for administering programs that involve grants, cost-type contracts and other agreements with institutions of higher education and other nonprofit recipients. b. Nonprofit institutions, whether they are recipients, receiving awards directly from Federal agencies, or are sub- recipients, receiving awards indirectly through other recipients. These principles, to the extent permitted by law, constitute ' guidance to be applied by agencies consistent with and within the discretion, conferred by the statutes governing agency action. 5. pecuirements and Responsibilities. The specific requirements and responsibilities of Federal departments and agencies and institutions of higher education and other nonprofit institutions are set forth in the attachment. • 6. Effective Date. The provisions of Circular A-133 are effective upon publication and shall apply to audits of nonprofit institutions for fiscal years that begin on or after January 1, 7 1990. Earlier implementation is encouraged. However, until this • Circular-is implemented, the audit provisions of Attachment F to Circular A-110 shall continue to be observed. 7. policy Review (Sunset) Datg. Circular A-133 will have a policy review three years from the date of issuance. • 8. • Inaairies. Further information concerning Circular A-133 may be obtained by contacting the Financial Management Division, Office .of Management and Budget, Washington, D.C. 20503, telephone (202) 395-3993. A. Richard G. Darman Director • • • • • • • I • • • 2 OMB CIRCULAR A-I33 • 1 ADMITS OF INS 1TLT10NS OF HIGH EDUCATION AND OTC_ NONPROFI v T 1ONS ATTACF .mot y' 1. pefinitions. For the purposes of this Circular, the following definitions apply: a. "Award" means financial assistance, and Federal cost-type contracts used to buy services or goods for the use of the Federal Government. It includes awards received directly from the Federal agencies or indirectly through recipients. It does not include procurement contracts to vendors under grants or contracts, used to buy goods or sa_*vicas. Audits of such vendors shall be covered by the terms and conditions of the contract. b. "Cognizant agency" means the Federal agency assigned by the Office of Management and Budget to carry out the responsibilities described in paragraph 3 of this Attach ant. c. "Coordinated audit approach" means an audit wherein the independent auditor, and other Federal and non-federal auditors consider each other's work, in determining the nature, timing, and extent of his or her own auditing procedures. A coordinated audit must be- conducted in accordance with G4verTment Auditing -gtandards and meet the objectives and reporting requirements set forth in paragraph 12 (b) -and 15, respectively, of this Attachment. The objective of the coordinated audit approach is to minimize duplication of audit effort, but not to limit the scope of the audit work so as to preclude the independent auditor from meeting the objectives set forth in paragraph 12 (b) or issuing the reports required in paragraph 15 in a timely manner. d. "Federal agency" has the same meaning as the term 'agency' in Section 551(1) of Title 5, United States Code. e. "Federal Financial Assistance." (1) "Federal financial assistance" means assistance provided by a Federal agency to a recipient or sub-recipient to carry out a program. Such assistance may be in the form of: -- grants; -- contracts; -- cooperative agreements; -- loans; loan guarantees; • . -- property; -- interest subsidies; -- insurance; -- direct appropriations; -- other non-cash assistance. (2) Such assistance does not include direct Federal cash assistance to individuals. (3) Such assistance includes awards received directly from Federal agencies, or indirectly when sub-recipients receive funds identified as Federal funds by recipients. (4) The granting agency is responsible for identifying the source of funds awarded to recipients;. the recipient is responsible for identifying the source of funds awarded to sub- recipients. f. "Generally accepted accounting principles" has the meaning specified in the Gcveri ent Auditinc Standards. g. "Independent auditor" means: (1) A Federal, State, or local government auditor who meets the standards specified in the Gover=ent Auditi g tandards; or (2) A public accountant who meets such standards. h. "Internal control structure" means the policies and . procedures established to provide reasonable assurance that: (1) Resource.use is consistent with laws, regulations, and award terms; (2) Resources are safeguarded against waste, loss, and misuse; and (3) Reliable data are obtained, maintained, and fairly disclosed in reports. i. "Xajor program" means an individual award or a number of awards in a category of Federal assistance or support for which total expenditures are the larger. of three percent of total Federal funds expended or $100,000, on which the auditor will be required to express an opinion as to whether the major program is being acim}ristared in compliance with laws and regulations. Each of the following categories of Federal awards shall constitute a major program where total expenditures are the larger of three percent of total Federal funds expended or $100, 000: • Research and Development. - Student Financial Aid. 2 Individual awards not in the student aid cr research and development category. j . "Management decision" means the evaluation by the management of an establishment of the findings and reco=endations included in an audit report and the issuance of a final decision by management concerning its response to such findings and recommendations, including actions concluded to be necessary. • k. "Nonprofit institution" means any corporation, trust, association, cooperative or other organization which 1) is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest; 2) is not organized primarily for profit; and 3) uses its net proceeds to maintain, improve, and/or expand its operations. The term . "nonprofit institutions" includes institutions of higher education, except those institutions that are audited as part of single audits in accordance with Circular A-128 "Audits of State and Local Governments. " The term does not include hospitals which are not affiliated with an institution of higher education, or State and local governments and Indian tribes covered by Circular A-128 +"Audits of State and Local Governments." 1. "Oversight" agency means the Federal agency that provides the predominant amount of direct funding to a recipient not assigned a cognizant agency, unless no direct funding is received. Where there is no direct funding, the Federal agency with the predominant indirect funding will assume the general oversight responsibilities. The duties of the oversight agency are described in paragraph 4 of this Attachment. m. "Recipient" means an organization receiving financial assistance to carry out a program directly from Federal agencies. n. "Research and development" includes all research activities, both basic and applied, and all development activities that are supported at universities, colleges, and other nonprofit institutions. "Research" is defined as a systematic study directed toward fuller scientific knowledge or understanding of the subject studied. "Development" is the systematic use of knowledge and understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes. o. "Student Financial Aid" includes those programs of general student assistance in which institutions participate, such as those authorized by Title IV of the Higher Education Act of 1965 which is administered by the U.S. Department of Education ., and similar programs provided by other Federal agencies. It does not include programs which provide fellowships or similar awards 3 to students on a competitive basis, or for specified studies or research. p. "Sub-recipient" means any person or government depa_-tment, agency, establishment, or nonprofit organization that receives financial assistance to carry out a program through a primary recipient or other sub-recipient, but does not include an individual that is a beneficiary of such a program. A sub- recipient may also be a direct recipient of Federal awards under other agreements. q. "Vendor" means an organization providing a recipient or sub-recipient with generally required goods or services that are. related to the administrative support of the Federal assistance program. 2 . audit of Nonprofit Institutions. • a. gdcuirements Eased on Awards Receive4. (1) Nonprofit institutions that receive $100,000 or more a year in Federal awards shall have an audit made in accordance with the provisions of this Circular. However, nonprofit institutions receiving $100, 000 or more but receiving awards under only one program have the option of having an audit of their institution prepared in accordance with the provisions. of the Circular or having an audit made of the one program. For prior or subsequent years, when an institution has only loan guarantees or outstanding loans that were made previously, the institution may be required to conduct audits for those programs, in accordance with regulations of the Federal 'agencies providing those guarantees or loans. (2) Nonprofit institutions that receive at least $25, 000 but less than $100,000 a year in Federal awards shall have an audit made in accordance with this Circular or have an audit made of each Federal award, in accordance with Federal laws and regulations governing the programs in which they participate. (3) Nonprofit institutions receiving less than $25,000 a year in Federal awards are exempt from Federal audit requirements, but records must be available for review by appropriate officials of the Federal grantor agency or subgranting entity. b. oversight by Federal Agencies. (1) To each of the larger nonprofit institutions the Office of Management and Budget (OMB) will assign a Federal - agency as the cognizant agency for monitoring audits and ensuring the resolution of audit findings that affect the programs of more than one agency. 4 - (2) Smaller institutions not assigned a cognizant agency will be under the general oversight of the Federal agency that provides them with the most funds. (3) Assignments to Federal cognizant agencies for carrying out responsibilities in this section are set forth in a separate supplement to this Circular. (4) Federal Government-owned, contractor-operated facilities at institutions or laboratories operated primarily for the Government are not included in the cognizance assignments. These will remain the responsibility of the contracting agencies. The listed assignments cover all of the functions in this Circular unless otherwise indicated. The Office of Management and Budget will coordinate changes in agency assignments. 3 . Cccnizant Acencv Res cnsibilities. A cognizant agency shall: a. Ensure that audits are made and reports are received in a timely manner and in accordance with the requirements of this Circular. 4 b. `Provide technical advice end liaison to institutions and independent auditors. c. Obtain or make quality control reviews of selected- audits made by non-Federal audit organizations, and provide the results, when appropriate, to other interested organizations. d. Promptly inform other affected Federal agencies and appropriate Federal law enforcement officials of any reported illegal acts or irregularities. A cognizant agency should also inform State or local law enforcement and prosecuting authorities, if not advised by the recipient, of any violation of law within their jurisdiction. e. Advise the recipient of audits that have been found not to have met the requirements set forth in this Circular. In such instances, the recipient will work with the auditor to take corrective action. If corrective action is not taken, the cognizant agency shall notify the recipient and Federal awarding agencies of the facts and make recommendations for follow-up ' action. Major inadequacies or repetitive substandard performance of independent auditors shall be referred to appropriate professional bodies for disciplinary action. f. Coordinate, to the extent practicable, audits or reviews made for Federal agencies that are in addition to the audits made pursuant to this Circular, so that the additional 5 • audits or reviews build upon audits performed in accordance with the Circular. g. Ensure the resolution of audit findings. that affect the programs of more than one agency. h. Seek the views of other interested agencies before completing a coordinated program. i. Help coordinate the audit work and reporting responsibilities among independent public accountants, State auditors, and.both resident and non-resident Federal auditors to achieve the most cost-effective audit. 4 . Oversicht ?cencv Responsibilities. An oversight agency shall provide technical advice and counsel to institutions and independent auditors when requested by the recipient. The oversight .agency may asp all or some of the responsibilities normally performed by a cognizant agency. 5. gecioient Responsibilities. A recipient that receives a Federal award and provides $25,000 or more of it during its fiscal year to a sub-recipient shall: I a. Ensure that the nonprofit institution sub-recipients that receive $25,000 or more have met the audit requirements- of this Circular, and that sub-recipients subject to OMB Circular A-128 have met the audit requirements of that Circular; b. Ensure that appropriate corrective action is taken within six months after receipt of the sub-recipient audit report in instances of noncompliance with Federal laws and regulations; c. Consider whether sub-recipient audits necessitate adjustment of the recipient's. own records; and 's. d. Require each sub-recipient to permit independent auditors to have access to the records and financial statements as necessary for the recipient to comply with this Circular. 6. gelation to Other Kudit tir nt. . a. - An audit made in accordance with this Circular shall be in lieu of any financial audit required under individual Federal awards. To the extent that an audit mad, in accordance with this Circular provides Federal agencies with the information and assurances they need to carry out their overall responsibilities, they shall rely upon and use such information. However, a Federal agency shall make any additional audits or reviews necessary to carry out responsibilities under Federal law and regulation. Any additional Federal audits or reviews shall be 6 planned and carried out in such a way as to build upon work performed by the independent auditor. b. Audit planning by Federal audit agencies should consider the extant to which reliance can be placed upon work performed by other auditors. Such auditors include State, local, Federal, and other independent auditors, and a recipient's internal auditors. Reliance placed upon the work of other auditors should be documented and. in accordance with. Gcvernment Auditing Standards. c. The provisions of this Circular do not limit the authority of Federal agencies to make or contract for audits and evaluations of Federal awards, nor do they limit the authority of any Federal agency Inspector General or other Federal official. d. The provisions of this Circular do not authorize any institution or sub-recipient thereof to constrain Federal agencies, in any manner, from carrying out additional audits, evaluations or reviews. e. A Federal agency. that makes or contracts for audits, in addition to the audits made by recipients pursuant to this Circular, shall, consistent with other applicable laws and regulations, arrange for funding the cost of such additional audits. Such additional audits or reviews include financial, performance audits and program evaluations. 7. grequencv of Audit. Audits shall usually be performed annually but not less frequently than every two years. 8 . Sanctions. No audit costs may be charged to Federal awards when audits required by this Circular have not been made or have been made but not in accordance with this Circular. In cases of continued inability or unwillingness to have a proper audit in accordance with the Circular, Federal agencies must consider appropriate sanctions including: -- withholding a percentage of awards until the audit is • completed satisfactorily; --- withholding or disallowing overhead costs; or -- suspending Federal awards until the audit is made. 9 . Audit Costs. The cost of audits made in accordance with the provisions of this Circular are allowable charges to Federal awards. The charges may be considered a direct cost or an allocated indirect cost, determined in accordance with the provisions of Circular A-21, "Cost Principles for Universities" or Circular A-122, "Cost Principles for Nonprofit Organizations," 7 • FAR subpart 31, or other applicable cost principles or regulatibas. 10. Auditor Selection. In arranging for audit services institutions shall follow the procurement standards prescribed by . Circular A-110, "Uniform Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and other Nonprofit Organizations. " 11. gall and Minority Audit Firms. a. Small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals shall have the maximum practicable opportunity to participate in contracts awarded to fulfill the requirements of this Circular. b. Recipients of Federal awards shall take the following - steps to further this goal: (1) Ensure that small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals are used to the fullest extent practicable; (2) Make information on forthcoming opportunities available and arrange timeframes for the audit to encourage and facilitate participation by small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals; (3) Consider in the contract process whether firms competing for larger audits intend to subcontract with small • audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals; (4) Encourage contracting with small audit firms or audit firms owned and controlled by socially and economically disadvantaged individuals which have traditionally audited government programs and in cases where this is not possible, assure that these firms are given consideration for audit • subcontracting opportunities; (5) Encourage contracting with consortiums of small audit firms as described in section (1) , above, when a contract is too large for an individual small audit firm or audit firm owned and controlled by socially and economically disadvantaged individuals; and (6) " Use the services and assistance, as appropriate, of such organizations as the Small Business Administration in the solicitation and utilization of small audit firms or audit firms 1 owned and controlled by socially and economically disadvantaged individuals. 8 12. §coo's of Audit and Audit Oblectives. a. The audit shall be made by an independent auditor in accordance with Government Auditing Standards developed -by the Comptroller General of the United States covering financial audits. An audit under this Circular should be an organization-wide audit of the institution. However, there may be instances where Federal- auditors are performing audits or are planning to perform audits at nonprofit institutions. In these cases, to minimize duplication of audit work, a coordinated audit approach may be agreed upon between the independent auditor, -the recipient and the cognizant agency or the oversight agency. Those auditors who assume responsibility for any or all of the • reports called for by paragraph 15 should follow guidance set forth in Government Auditing Standard4 in using work performed by oth ers. b. The auditor shall determine whether: (1) The financial statements of the institution present fairly its financial position and the results of its operations in Accordance with generally accepted accounting principles; (2) The institution has an internal control structure to provide reasonable assurance that the institution is managing Federal awards in compliance with applicable laws and regulations, and controls that ensure compliance with the laws and regulations that could have a material impact on the financial statements; and (3) The institution has complied with laws and regulations that may have a direct and material effect on its financial statement amounts and on each major Federal program. 13 . *Interrnal Controls Over Federal Award; Ccmolience Review13. a. General. The independent auditor shall determine and report on whether the recipient has an internal control structure to provide reasonable assurance that it is managing Federal awards in compliance with applicable laws, regulations, and contract terms, and that it safeguards Federal funds. In performing these reviews, independent auditors should rely upon • work performed by a recipient's internal auditors to the maximum extent possible. The extent of such reliance should be based upon the Government Auditing Standards. b. Internal Control_ Review. (1) In order to provide this assurance on internal t controls, the auditor must obtain an understanding of the 1 9 1 ` internal -control structure and assess levels of internal control risk. After obtaining an understanding of the controls, the assessment must be made whether or not the auditor intends to place reliance on the internal control structure. • (2) As part of this review, the auditor shall: (a) Perform tests of controls to evaluate the effectiveness of the design and operation of the policies and procedures in preventing or detecting material noncompliance. Tests of controls will not be required for those areas where the internal control structure policies and procedures are likely to be ineffective in preventing or detecting noncompliance, in which case a reportable condition or a material weakness should be reported in accordance with paragraph 15 c(2) of this Circular. (b) Review the recipient's system for monitoring sub-recipients and obtaining and acting cn sub-recipient audit • reports. (c) Determine whether controls are in effect to ensure direct. and indirect costs were computed- and billed in accordance with the guidance provided in the general requirements section of the compliance supplement to this Circular. c. Camoliance Review. (1) The auditor shall determine whether the recipient has complied with laws and regulations that may have a direct and material effect on any of its major Federal programs. In addition, transactions selected for non-major programs shall be tested for compliance with Federal laws and regulations that apply to such transactions. (2) In order to determine- which major programs are to be tested for compliance, recipients shall identify, in their accounts, all Federal funds received and expended and the programs under which they were received. This shall include funds received directly from Federal agencies, through other State and local governments or other recipients. To assist recipients in identifying Federal awards, Federal agencies and primary recipients shall provide the Catalog of ygderal Domestic • 24s istarica (CFDA) numbers to the recipients when making the awards. (3) The review must include the selection of an adequate number of transactions from each major Federal financial assistance program so that the auditor obtains sufficient evidence to support the opinion on compliance required by paragraph 15c(3) of this Attachment. The selection and testing 1 of transactions shall be based on the auditors' professional judgment considering such factors as the amount of expenditures 10 for the program; the newness of the program or changes in its conditions; prior experience with the program particularly as revealed-in audits and other evaluations (e.a,,, inspections, program reviews, or system reviews required by Federal Acquisitiott.Regulations) ; the extant to which the program is. carried cut through sub-recipients; the extant to which the program contracts for goods or services; the level to which the program is already subject to program reviews or other forms of independent oversight the -adequacy of -the controls for ensuring compliance; the expectation of adherence. or lack of adherence to the applicable laws and regulations; and the potential impact of adverse findings. (4) In making the test of transactions, the auditor shall determine whether: • -- the amounts reported. as expenditures were for allowable services, and -- the records show that those who received services or benefits were eligible to receive them. (5) 'In addition to transaction tasting, the auditor shall determine whether: matching requirements, levels of effort and earmarking limitations were met, Federal financial reports and claims for advances and reimbursement contain information that is supported by books and records from which the basic financial statements have bean prepared, and -- amounts claimed or used for matching were determined in accordance with 1) OMB Circular. • A-21, "Cost Principles for Educational Institutions"; 2) matching or cost sharing requirements in Circular A-110, "Uniform • Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals Nonprofit• Organizations"; and Other rg 3) Circular A-122 "Cost. PrinciP les for Organizations"; 4) FAR Nonprofit Ors subpart 31 cost principles; and ,5) other applicable cost principles or regulations. (6) The principal compliance requirements of the largest 'Federal programs may be ascertained by referring to the "Compliance Supplement for 6inale Audits of Educational ., Institutions and other Nonprofit Oraanizationa," and the 11 "Compliance Svmolemen for Sina1e Audits of State and s SVer?lme?+t3," issued by OMB and available from the Government Printing Office. For those programs not covered in the Compliance Supplements, the auditor should ascertain compliance requirements by reviewing the statutes, regulations, and agreements governing individual programs. (7) Transactions related to other awards that are selected in connection with examinations of •financial statements and evaluations of internal controls shall be tested for compliance with Federal laws and regulations that apply to such transactions. 14 . =lleaal Acts. If, during or in connection with the audit of a nonprofit institution, the auditor becomes aware of illegal acts, such acts shall be reported in accordance with the provisions of the Government Auditing Standards. 15. audit gemorts. • a. Audit reports must be prepared at the completion of the audit. b. The audit report shall state that the audit vas made in accordance with the provisions of this Circular. c. The report shall be made up of at least the following three parts: (1) The financial statements and a schedule of Federal awards and the auditor's report on the statements and the schedule. The schedule of Federal awards should identify major programs and show the total expendit-.=res- for each program. Individual major programs other than Research and Development and Student Aid should be listed by catalog numbe.r• as identified in the •: •. • �R _t. . �_,;� . • . Expenditures for Federal programs other than major programs shall be shown under the caption "other Federal assistance." Also, the value of non-cash assistance such as loan guarantees, food commodities or • donated surplus properties or the outstanding balance of loans should be disclosed in the schedule. • . `(2) A written report of the independent auditor's understanding of the internal control structure and the assessment of control risk. The auditor's report should include as .a mini: 1) the scope of the work in obtaining understanding of the internal control structure and in assessing the control risk, 2) the nonprofit institution's significant internal controls or control structure including the controls established to ensure compliance with laws and regulations that have a material impact on the financial statements and those that provide reasonable assurance that Federal awards are being 12 managed in compliance with applicable laws and regulations, and 3) the reportable conditions, including the identification of material weaknesses, identified as a result of the auditor's work in understanding and assessing the control risk. If the auditor limits his/her consideration of the internal control structure for any reason, the circumstances .should be disclosed in the report. • (3) The auditor's report on compliance containing: -- An opinion as to whether each major Federal program was being administered in compliance with laws and regulations applicable to the matters described in paragraph 13 (c) (3) of this Attachment, including compliance with laws and regulations .pertainirc to financial retorts and claims for advances and reimbursements; -- A statement of positive assurance on those items that were tested for compliance and negative assurance on those items not tested; -- Material findings of noncompliance presented in their proper perspective: 4 • o The size of the universe in number of itprnS and dollars, • o The number and dollar amount of transactions tested by the auditors, o The number-and corresponding dollar amount of instances of noncompliance; -- Where findings are specific to a particular Federal award, an identification of total amounts questioned, if any, for each Federal award, as a result of noncompliance and the auditor's recommendations for necessary corrective action. d. The three parts of the audit report may be bound into a single document, or presented at the same time as separate documents.- e. Nonmaterial findings need not be disclosed with the compliance; report but should be reported in writing to the recipient in a separate communication. The recipient, in turn, should forward the findings to the Federal grantor agencies or subgrantor sources. f. All fraud or illegal acts or- indications of such acts, including all questioned costs found as the result of these acts 13 that auditors become aware of, may be covered in a separate written report submitted in accordance with the Government Auditing Standards. g. The auditor's report should disclose the status of known but uncorrected significant material findings and recommendations from prior audits that affect the current audit objective as specified in the Government Auditing Standards: h. In addition to the audit report, the recipient shall provide a report of its comments on the findings and recommendations in the report, including a plan for corrective action taken or planned and comments on the status of corrective action taken on prior findings. If corrective action is not necessary, a statement describing the reason it is not should • accompany the audit report. i. Copies of the audit report shall be submitted in accordance with the reporting standards for financial audits contained in the Government Audit nc Standards. Sub-recipient • auditors shall submit copies to recipients that provided Federal awards. The report shall be due within 30 days after the completion of the audit, but the audit should be completed and the report submitted not later than 13 months after the end of the recipient 's fiscal year unless a longer period is agreed to with the cognizant or oversight agency. j . Recipients of more than $100,000 in Federal awards shall submit one copy of the audit report within 30 days after issuance to a central clearinghouse to be designated by the - office of Management and Budget. The clearinghouse will keep completed audit reports on file. r k. Recipients shall keep audit reports, including sub- recipient reports, on file for three years from their issuance. 16. Audit Resolution. a. As provided in paragraph 3 , the cognizant agency shall be responsible for ensuring the resolution of audit findings that affect the programs of more than one Federal agency. Resolution of findings that relate to the programs of a single Federal agency will be the responsibility of the recipient and the agency. Alternate arrangements may be made on case-by-case basis by agreement among the agencies concerned. b. A management decision shall be made within six months after receipt of the report by the Federal agencies responsible for audit resolution. Corrective action should proceed as rapidly as possible. } 14 17. Audit WorJnavers and Revortg. Workpapers and reports shall • be retained for a minimum of three years from the data of the audit report, unless the auditor is notified in writing by the cognizant-agency to extend the retention period. Audit . workpapers shall be made available upon request to the cognizant agency or its. designee or the General Accounting office, at the completion of the audit. • • 4,.. • • • • • • - -1 15 ' EXHIBIT F .D /) General Decision Number NE950009 ' Superseded General Decision No. NE940009 State: Nebraska °' `' _ Construction Type: ' w �. : RESIDENTIAL Z Cti County(ies) : e40' ��Z�'+ CASS DOUGLAS SARPY 6849G • RESIDENTIAL CONSTRUCTION PROJECTS (consisting of single family homes and apartments up to and including 4 stories) Modification Number Publication pate 0 02/10/1995 ' 1 02/17/1995 • • • • • NE950009 - 1 02/17/1995 COUNTY(ies) : CASS DOUGLAS SARPY * BRNE0001I 06/01/1994 Rates Fringes 9kc CASS COUNTY: BRICKLAYER: .. 'mot• .� Work on power plants, ethanol i Q` plants, food processing plants 468 j' and heavy industrial plants 9� (i.e. , automotive manufacturing plants or similar facilities) 16. 23 3 .97 All other work 15.40 2 .75 • * BRNE0001J 06/01/1994 Rates Fringes DOUGLAS AND SARPY COUNTIES: BRICKLAYER 16.23 3 . 97 �CARP0444C 10/O1/1993 t;=Z,, Rates Fringes CARPENTERS: Carpenter; Piledriver 14 . 35 3 . 21 • ELEC0022E 04/01/1994 Rates Fringes ELECTRICIAN 13 . 06 3 . 5% +2 . 37 PLAS0538C 06/01/1994 Rates Fringes CEMENT MASON 14. 03 3 . 53 PLUM0016E 06/01/1994 • Rates Fringes PLUMBER . 19. 07 4 .85 SUNE4003A 07/31/1990 Rates Fringes DRYWALL: Hanger 13-.57 2 . 10 Finisher & taper 8. 64 INSULATOR 11. 21 NE950009 - 2. 02/17/1995 , IRONWORKER 13 . 00 2 . 00 LABORERS: -0\-A20`''2‹` General 10. 41 1.8(0 ' Mason tender 10. 585 1 i,r€oS .r..-. r • PAINTER 10. 00 _ POWER EQUIPMENT OPERATORS: Loader 13 .49 % (t ii SHEET METAL WORKER 11. 89 1. •;: TRUCK DRIVER 10.27 68 ;;i7Z-L � WELDERS - Receive rate prescribed for craft performing operation to which welding is incidental. Requests for additional classifications and wage rates may be submitted to the contracting officer after award, and may be approved only if: (1) the work to be performed by the classi- fication requested is not performed by a classification in the wage determination; (2) the classification is utilized in the area by the construction industry; and (3) the proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determina- tion (for the given area and type of construction) . (See 29 -CFR 5. 5 (a) (v) ) . :,,, In the listing above, the "SU" .designation means that rates listed under that identifier do not reflect collectively bargained wage and fringe benefit rates. Other designations indicate unions whose rates have been determined to be prevailing. END OF GENERAL DECISION • • NE950009 - 3 02 17 1995 .* Federal Labor Standards Provisions U.S. Department of Housing f^ and Urban Development ,r App0cabWty The Project or Program to which the construction work covered by this HUD or its designee shall refer the questions,including the views of all contract pertains is being assisted by the United States of America and the interested parties and the recommendation of HUD or its designee,to the following Federal Labor Standards Provisions are included in this Contract Administrator for determination.The Administrator,or an authorized repre- pursuant to the provisions applicable to such Federal assistance. sentative,will issue a determination within 30 days of receipt and so advise A.1.(I)Minimum Wages.All laborers and mechanics employed or work- HUD or its designee or will notify HUD or its designee within the 30-day ing upon the site of the work(or under the United States Housing Act of period that additional time is necessary.(Approved by the Office of Man- 1937 or under the Housing Act of 1949 in the construction or development agement and Budget under OMB Control Number 1215-0140.) of the project),will be paid unconditionally and not less often than once a (d)The wage rate(including fringe benefits where appropriate) week,and without subsequent deduction or rebate on any account(except determined pursuant to subparagraphs(1)(b)or(c)of this paragraph,shall such payroll deductions as are permitted by regulations issued by the be paid to all workers performing work in the classification under this con- Secretary of Labor under the Copeland Act(29 CFR Part 3),the full amount tract from the first day on which work is performed in the classification. of wages and bona fide fringe benefits(or cash equivalents.thereof)due at Oil)Whenever the minimum wage rate prescribed in the contract for a time of payment computed at rates not less than those contained in the class of laborers or mechanics includes a fringe benefit which is not wage determination of the Secretary of Labor which is attached hereto and expressed as an hourly rate,the contractor shall either pay the benefit as made a part hereof,regardless of any contractural relationship which may stated in the wage determination or shall pay another bona fide fringe be alleged to exist between the contractor and such laborers and benefit or an hourly cash equivalent thereof. mechanics.Contributions made or costs reasonably anticipated for bona (iv)If the contractor does not make payments to a trustee or other third fide fringe benefits under Section 1(bX2)of the Davis-Bacon Act on behalf person,the contractor may consider as part of the wages of any laborer or of laborers or mechanics are considered wages paid to such laborers or mechanic the amount of any costs reasonably anticipated in providing mechanics,subject to the provisions of 29 CFR-5.5(aX1Xiv):also,regular bona fide fringe benefits under a plan or program,Provided,That the contributions made or costs incurred for more than a weekly period(but Secretary of Labor has found,upon the written request of the contractor, not less often than quarterly)under plans,funds,or programs,which cover that the applicable standards of the Davis-Bacon Act have been met.The the particular weekly period,are deemed to be constructively made or Secretary of labor may require the contractor to set aside in a separate incurred during such weekly period. account assets for the meeting of obligations under the plan or program. Such laborers and mechanics shall be paid the appropriate wage rate (Approved by the Office of Management and Budget under OMB Control and fringe benefits on the wage determination for the classification of work Number 1215-0140.) actually performed,without regard to skill,except as provided in 29 CFR 2.Withholding.HUD or its designee shall upon its own action or upon Part 5.5(aX4).Laborers or mechanics performing work in more than one. written request of an authorized representative of the Department of Labor classification may be compensated at the rate specified for each classifiea- withhold or cause to be withheld from the contractor under tr..is contract or tion for the time actually worked therein:Provided,That the employer's pay- any other Federal contract with the same prime contractor,or any other roll records accurately set forth the time spent in each classification in Federally-assisted contract subject to Davis-Bacon prevailing wage which work is performed.The wage determination(including any additional requirements,which is held by the same prime contractor so much of the classification and wage rates conformed under 29 CFR Part 5.5(ax1Xii)and accrued payments or advances as may be considered necessary to pay the Davis-Bacon poster(WH-1321)shall be posted at all times by the con- laborers and mechanics,including apprentices,trainees and helpers. tractor and its subcontractors at the site of the work in a prominent and employed by the contractor or any subcontractor the full amount of wages accessible place where it can be easily seen by the workers. required by the contract In the event of failure to pay any laborer or (II)(a)Any class of laborers or mechanics which is not listed in the . mechanic,including any apprentice.trainee or helper,employed or working wage determination and which is to be employed under the contract shall on the site of the work(or under the United States Housing Act of 1937 or be classified in conformance with the wage determination.HUD shall under the Housing Act of 1949 in the construction or development of the approve an additional classification and wage rate and fringe benefits project),all or part of the wages required by the contract,HUD or its desig- therefore only when the following criteria have been met nee may.after written notice to the contractor,sponsor,applicant or owner.. (1)The work to be performed by the classification requested is not take such action as may be necessary to cause the suspension of any performed by a classification in the wage determination;and further payment,advance,or guarantee of funds until such violations have (2)The classification is utilized in the area by the construction ceased.HUD or its designee may,atter written notice to the contractor.dis- industry;and - burse such amounts withheld for and on account of the contractor or sub- (3)The proposed wage rate,including any bona fide fringe bene- contractor to the respective employees to whom they are due.The Comp- fits,bears a reasonable relationship to the wage rates contained in the troller General shall make such disbursements in the case of direct wage determination. Davis-Bacon Act contracts. (b)If the contractor and the laborers and mechanics to be employed 3.(1)Payrolls and basic records.Payrolls and basic records relating in the classification(if known),or their representatives,and MUD or its thereto shall be maintained by the contractor during the course of the work designee agree on the classification and wage rate(including the amount preserved for a period of three years thereafter for all laborers and designated for fringe benefits where appropriate),a report of the action mechanics working at the site of the work(or under the United States taken shall be sent by HUD or its designee to the Administrator of the Wage Housing Act of 1937,or under the Housing Act of 1949,in the construction and Hour Division,Employment Standards Administration.U.S.Department or development of the project).Such records shall contain the name, of Labor,Washington,D.C.20210.The Administrator,or an authorized address,and social security number of each such worker,his or her cor- representative,will approve,modify,or disapprove every additional classifi- rect classification,hourly rates of wages paid(including rates of contribu- cation action within 30 days of receipt and so advise HUO or its designee tions or costs anticipated for bona fide fringe benefits or cash equivalents or will notify HUD or its designee within the 30-day period that additional thereof of the types described in Section 1(b)(2)(B)of the Davis-b,.con Act). time is necessary.(Approved by the Office of Management and Budget daily and weekly number of hours worked,deductions made and actual under OMB control number 1215-0140.) wages paid.Whenever the Secretary of Labor has found under 29 CFR 5.5 (c)In the event the contractor,the laborers or mechanics to be (a)(1Xiv)that the wages of any laborer oiY mechanic include the amount of employed in the classification or their representatives,and HUD or its any costs reasonably anticipated in providing benefits under a plan or pro- designee do not agree on the proposed classification and wage rate gram described in Section 1(b)(2)(B)of the Davis-Bacon Act the contractor (including the amount designated for fringe benefits,where appropriate), shall maintain records which show that the commitment to provide-uch Previous Edition is Obsolete HUO.41 0(2.84) (H .‘134 .1 benefits is enforceable,that the plan or program is financially responsible. apprentice.The allowable ratio of apprentices to journeymen on the job site and that the plan or program has been communicated in writing to the in any craft classification shall not be greater than the ratio permitted to the laborers or mechanics affected.and records which show the costs antici- contractor as to the entire work force under the registered program.Any pated or the actual cost incurred in providing such benefits.Contractors worker listed on a payroll at an apprentice wage rate.wro is not registered employing apprentices or trainees under approved programs shall maintain or otherwise employed as stated above,shall be paid not less than the written evidence of the registration of apprenticeship programs and certifi- applicable wage rate on the wage determination for the classification of cation of trainee programs,the registration of the apprentices and trainees. work actually performed.In addition,any apprentice performing work on and the ratios and wage rates prescnbed in the applicable programs the lob site in excess of the ratio permitted under the registered program (Approved by the Office of Management and Budget under OMB Control shall be paid not less than the-applicable wage rate on-the wage determi- Numbers 1215-0140 and 1215-0017.) .nation for the work actually performed.Where a contractor is performing (ii)(a)The contractor shall submit weekly for each week in which any construction on a•project in a locality-other than that in which its program is contract work is performed a copy of all payrolls to HUD or its designee-if registered.the ratios and wage rates(expressed in percentages of the jour- the agency is a party to the contract but if the agency is not such a party. -neyman's hourly rate)specified in the contractor's or subcontractor's regis- the contractor will submit the payrolls to the applicant,sponsor,or owner: tered program shall be observed.Every apprenctice must be paid at not as the case may be,for transmission to HUD or its designee.The payrolls less than the rate specified in the registered program for the apprentice's submitted shall set out accurately and completely all of the information level of progress expressed as a percentage of the journeymen hourly rate required to be maintained under 29 CFR Part 5.5(a)(3)(i).This information• specified in the applicable wage determination.Apprentices shall be paid may be submitted in any form desired.Optional Form WH-347 is available fringe benefits in accordance with the provisions of the apprenticeship for this purpose and may be purchased from the Superintendent of Doctr- program.It the apprenticeship program-does not specify fringe benefits. merits(Federal Stock Number 029-005-00014-1),U.S.Government Printing apprentices must tie paid the full amount of fringe benefits listed on the Office,Washington,DC.20402.The pnme contractor is responsible for the wage determination for the applicable classification.If the Administrator submission of copies of payrolls by all subcontractors.(Approved by the determines that a different practice prevails for the applicable apprentice Office of Management and Budget under OMB Control Number _-, classification,fringes shall be paid in accordance with that determination.In 1215-0149.) the event the Bureau of Ap prenticeship and Training,or a State Appren- (b)Each payroll submitted shall be accompanied by a"Statement of ticeship Agency recognized by the Bureau,withdraws approval of an Compliance,"signed by the contractor or subcontractor or his or her agent apprenticeship program,-the contractor will no longer be permitted to utilize mho pays or supervises the payment of the persons employed underthe." apprentices at less than the applicable predetermined rate for the work ontract and shall certify the following: • performed until an acceptable program is approved. - (1)That the payroll for the payroll period contains the information (ii)Trainees:Except as provided in 29 CFR 5.16.trainees will not be -Wired to be maintained under 29 CFR Part 5.5(a)(3)(i)and that such permitted to work at less than the predetermined rate for the work per- -formation is correct and complete: formed-unless they are employed pursuant to and indivicually registered in (2)That each laborer or mechanic(including each helper. .. a program wnicn has received prior approval evidenced by formal certifi- :pprentice.and trainee)employed on the contract during the payroll period cation by the'U.S.Department of Labor,Employment arc Training Admini- tas been paid the full weekly wages earned.without rebate.either directly stration.The ratio of trainees to journeymen on the lob site shall not be or indirectly,and that no deductions have been made either directly-or indi- greaterthan permitted under the plan approved by the Employment and redly from the full wages earned,other than permissable deductions asset Training Administration. Every trainee must be paid at not less than the rate forth in 29 CFR Part 3: specified in the approved program for the trainee's level of progress. (3)That each laborer or mechanic has been-paid not less than the • expressed as a percentage of the joumeymart hourly rate specified in the applicable wage rates and fringe benefits or cash equivalents for the class applicable wage determination.Trainees shall be paid fringe benefits in sication of work performed,as specified in the applicable wage determina- accordance with the provisions of the trainee program.if the trainee pro- tion incorporated into the contract • gram does not mention fringe benefits;trainees shall be paid the full (c)The weekly submission of a properly executed certification set amount of fringe benefits listed on the wage determination unless the forth on the reverse side of Optional Form WH-347 shall satisfy the • Administrator of the Wage and Hour Division determines that there is an requirement for submission of the"Statement of Compliance"required by apprenticesr.ip program associated with the corresponding journeyman paragraph A.3.ii)(b)of this section. wage rate on the wage determination which provides for less than full (d)The falsification of any of the above certifications may subject the fringe benefits for apprentices.Any employee listed on the payroll at a contractor or subcontractor to civil or criminal prosecution under Section trainee rate who is not registered and participating in a training plan • 1001 of Title 18 and Section 231 of Title 31 of the United States Code. approved by the Employment and Training Administration shall be paid not (lii)The contractor or subcontractor shall make the records required less than the applicable wage rate on the wage determination for the-work under paragraph A.3.(i)of this section available for inspection,copying,or actually performed.In addition,any trainee performing work on the job site transcription by authorized representatives of HUD or its designee or the in excess of the ratio permitted'under the registered program shall be paid Department of Labor,and shall permit such representatives to interview. not less than the applicable wage rate on the wage determination for the employees during working hours on the job.If the contractor or subcon- work actually performed.In the event the Employment aro Training Admin- tractor fails to submit the required records or to make them available.HUD istration withdraws approval of a training program,the contractor will no or its designee may,after written notice to the contractor.sponsor.appli- longer be permitted to-utilize trainees at less than the applicable predeter- cant,or owner,take such action as may be necessary to cause-the sus- • mined rate ter me work performed until an acceptacie program is Pension of any further payment advance,or guarantee of funds..Further- approved. - -. snore,failure to submit the required records upon request or to make such (iii)Equal'ernployment opportunity:The utilization of apprentices, records available may be grounds for debarment action pursuant to 29 trainees and journeymen under this part shall be in conformity with the CFR Part 5.12. equal employment opportunity requirements of Executive Order 11246.as 4.(i)Apprentices and Trainees.Apprentices.Apprentices will be per- amended.and 29 CFR-Part 30. • • miffed to work at less than the predetermined rate for the work they per- 5.Compliance with Copeland Act requirements.The contractor shall 'ormed when they are employed pursuant to and individually registered in a comply with the requirements-of 29 CFR Part 3 which are incorporated by bona fide apprenticeship program registered with the U.S.Department of reference in this contract ' - tabor,Employment and Training Administration,Bureau of Apprenticeship 6.Subcontracts.The contractor or subcontractor will insert in any sub- and Training,or with a State Apprenticeship Agency recognized by the contracts the clauses contained in 29 CFR 5.5(a)(1)through(10)and such Bureau,or it a person is employed in his or her first 90 days of probationary other clauses as HUD or its designee may by appropriate instructions employment as an apprentice in such an apprenticeship program,who is• require.and also a clause requiring the 3ubcontractors to include these lot individually registered in the program,but who has been certified by the clauses in any lower tier subcontracts.The prime contractor shall be 3ureau of Apprenticeship and Training or a State Apprenticeship Agency responsible for the compliance by any subcontractor or lower tier subcon- where appropriate)to be eligible for probationary employment as an • tractor with all the contract clauses in 29 CFR Part 5.5. HUD 010( -84) ty v . 7.Contracte termination;debarment.A breach of the contract clauses in compensation at a rate not less than one and one-half times the 29 CFR 5.5 may be grounds for termination of the contract and for debar- basic rate of pay for all hours worked in excess of forty hours in such workweek. ment as a contractor and a subcontractor as provided in 29 CFR 5.12. 8.Compliance with Davis-Bacon and Related Act Requirements.All rul- (2)Violation;liability for unpaid wages;liquidated damages.In the ings and interpretations of the Davis-Bacon and Related Acts contained in event of any violation of the clause set forth in subparagraph(1)of this 29 CFR Parts 1.3.and 5 are herein incorporated by reference in this paragraph,the contractor and any subcontractor responsible therefor shall contract be liable for the unpaid wages.In addition,such contractor and subcon- 9.Disputes concerning labor standards.Disputes arising out of the labor tractor shall be liable to the United States(in the case of work done unde' standards provisions of this contract shall not be subject to the general contract for the District of Columbia or a territory,to such District or to such disputes clause of this contract Such disputes shall be resolved in accor- territory),for liquidated damages.Such liquidated damages shall be corn- dance with the procedures of the Department of Labor set forth in 29 CFR puted with respect to each individual laborer or mechanic,including Parts 5.6,and 7.Disputes within the meaning of this clause include dis- watchmen and guards,employed in violation of the clause set forth in suo- putes between the contractor(or any of its subcontractors)and HUD or its paragraph(1)of this paragraph,in the sum of$10 for each calendar day on designee,the U.S.Department of Labor.or the employees or their which such individual was required or permitted to work in excess of representatives. the standard workweek of forty hours without payment of the 10.(i)Certification of Eligibility.By entering into this contract,the con- overtime wages required by the clause set forth in subpara- tractor certifies that neither it(nor he or she)nor any person or firm who graph (1) of this paragraph. has an interest in the contractor's firm is a person or firm ineligible to be (3)Withholding for unpaid wages and liquidated damages.HUD or is awarded Government contracts by virtue of Section 3(a)of the Davis- designee shall upon its own action or upon written request of an autro- Bacon Act or 29 CFR 5.12(a)(1)or to be awarded HUD contracts or partici- rized representative of the Department of Labor withhold or cause to be pate in HUD programs pursuant to 24 CFR Part 24. withheld.from any moneys payable on account of work performed bathe (ii)No part of this contract shall be subcontracted to any person or firm contractor or subcontractor under any such contract or any other Federsi ineligible for award of a Government contract by virtue of Section 3(a)of contract with the same prime contract or any other Federally-assisted ccn- the Davis-Bacon Act or 29 CFR 5.12(a)(1)or to be awarded HUD contracts • tract subject to the Contract Work Hours and Safety Standards Act whic- or participate in HUD programs pursuant to 24 CFR Part 24. is held by the same prime contractor such sums as may be determined to (iii)The penalty for making false statements is prescribed in the U.S. be necessary to satisfy any liabilities of such contractor or subcontractc- Criminal Code.18 U.S.C. 1001.Additionally,U.S.Crimnal Code.Section for unpaid wages and liquidated damages as provided in the clause set 1010.Title 18,U.S.C.,"Federal Housing Administration transactions",pro- forth in subparagraph(2)of this paragraph. vides in part:"Whoever,for the purpose of. . .influencing in any way the (4)Subcontracts.The contractor or subcontractor shall ir.ser r ar action of such Administration. . . makes.utters or publishes any statement. subcontracts the clauses set forth in subparagraph(1)through 14)cf:riffs knowing the same to be false. . . shall be fined not more than S5,000 or paragraph and also a clause requiring the subcontractors to include these imprisoned not more than two years.or both." clauses in any lower tier subcontracts.The prime contractor shall be 11.Complaints, Proceedings,or Testimony by Employees.No laborer or responsible for compliance by any subcontractor or lower tier subccrtrac- mechanic to whom the wage,salary,or other labor standards provisions of tor with the clauses set forth in subparagraphs(1)through(4)of this this Contract are applicable shall be discharged or in any other manner paragraph. discriminated against by the Contractor or any subcontractor because such C.Health and Safety employee has filed any complaint or instituted or caused to be instituted (1)No laborer or mechanic shall be required to work in surrour.dmcs any proceeding or has testified or is about to testify in any proceeding or under working conditions which are unsanitary,hazardous,or darger- under or relating to the labor standards applicable under this Contract to ous to his health and safety as determined under construction safety arc his employer. health standards promulgated by the.Secreary of Labor by regulator. B Contract Work Hours and Safety Standards Act.As used in this para- (2)The Contractor shall comply with all regulations issued by the graph,the terms"laborers"and"mechanics"include watchmen and Secretary of Labor pursuant to Title 29 Part 1926(formerly part 15181 anc guards. failure to comply may result in imposition of sanctions pursuant to the Con- (1) Overtime requirements. No contractor or subcontractor tract Work Hours and Safety Standards Act(Public Law 91-54.83 Stat 96). contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require (3)The Contractor shall include the provisions of this Article in ever: or permit any such laborer or mechanic in any workweek in which subcontract so that such provisions will be binding on each subcontractor. he or she is employed on such work to work in excess of forty The Contractor shall take such action with respect to any subcontract as hours in such workweek unless such laborer or mechanic receives the Secretary of Housing and Urban Development or the Secretary et Labor shall direct as a means of enforcing such provisions. HUD-4010 12.84) { EQUAL EMPLOYMENT OPPORTUNITY CLAUSE EXHIBIT G During the performance of this contract, the contractor agrees as follows: ( 1 ) The contractor shall not discriminate against any employee applicant for employment because of race, religion, color, sex or national origin. The contractor shall take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, religion, color, sex or national origin. As used herein, the word "treated" shall mean and include, without limitation, the following: Recruited, whether advertising or by other means; compensated; selected for training; including apprenticeship; promoted; upgraded; demoted; downgraded; transferred; laid off; and terminated. The contractor agrees to and shall post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officers for employment, notices to be provided by the contracting officers setting forth the provisions of this nondiscrimination clause. ( 2 ) The contractor shall, in all solicitations of advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, religions, color, sex or national origin. ( 3 ) The contractor shall send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding a notice advising the labor union or worker's representative of the contractor's commitments under the equal employment opportunity clause of the city and shall post copies of the notice in conspicuous places available to employees and applicants for employment. ( 4 ) The contractor shall furnish to the contract compliance officer all federal forms containing the information and reports required by the federal government for federal contracts under federal rules and regulations, and including the information required by Section 10-192 to 10-194, inclusive, and shall permit reasonable access to his records. Records accessible to the contract compliance officer shall be those which are related to Paragraphs (1) through (7) of this subsection and only after reasonable notice is given the contractor. The purpose of this provision is to provide for investigation to ascertain compliance with the program provided for herein. ( 5 ) The contractor shall take such actions with respect to any subcontractor as the city may direct as a means of enforcing the provisions of Paragraphs (1) through (7) herein, including penalties and sanctions for noncompliance; however, in the event the contractor becomes involved in or is threatened with litigation as the result of such directions by the city, the city will enter into such litigation as necessary to protect the interests of the city and to effectuate the provisions of this division; and in the case of contracts receiving federal assistance, the contractor or the city may request the United States to enter into such litigation to protect the interests of the United Sates. ( 6 ) The contractor shall file and shall cause his subcontractors, if any, to file compliance reports with the contractor in the same form and to the same extent as required by the federal government for federal contracts under federal rules and regulations. Such compliance reports shall be filed with the contract compliance officer. Compliance reports filed at such times as directed shall contain information as to the employment practices, policies, programs and statistics of the contractor and his subcontractors. ( 7 ) The contractor shall include the provisions of Paragraphs (1) through (7) of this Section. "Equal Employment Opportunity Clause", and Section 10-193 in every subcontract or purchase order so that such provisions will be binding upon ,each subcontractor or vendor. ;r EXHIBIT H MINORITY BUSINESS & WOMEN BUSINESS ENTERPRISE PLAN 5. CITY OF`OMAHA PLANNING-pEPARTMENT • SEPTEMBER 1992 PLANNING DEPARTMENT CITY OF OMAHA MINORITY BUSINESS/WOMEN BUSINESS ENTERPRISE PLAN • INTRODUCTION Minority and women business sectors play an important part in Omaha's overall plans for future growth, progress, and prosperity. It is vital to the City's economic condition and well-being that minority and women businesses expand, thrive and prosper, generating economic stability and increased job opportunities. Towards the fulfillment and accomplishment of these important objectives,the City of Omaha remains committed to minority and women business development. The City of Omaha's approach to minority/women business development is embedded in its policy of non-discrimination in the conduct of City business including the procurement of goods,;materials and services, construction and community and economic development projects. The City recognizes its obligations to each segment of the various communities it serves. It is in recognition of these responsibilities that the City established the City's Contract Compliance Ordinance. The Ordinance commits the City to: 1. Require contractors and/or vendors to provide employment opportunities without regard to race, creed, color, sex religion,or national origin; 2. Monitor contractor and vendor equal opportunity performance;and i 3. Increase the total number and total dollar volume of City contracts awarded to minority-owned and women-owned firms. GOALS AND OBJECTIVES The following represents a summary of the goals and objectives of the Planning Department as they relate to minority and women-owned businesses: .. 1. Encourage, increase and promote business and procurement opportunities for women-owned businesses; 2. Increase and expand the awareness and understanding regarding the concerns, obstacles, and. hindrances preventing increased MBE/WBE participation in Planning Department activities; 3. Assist MBE's/WBE's through the revitalization of business districts; 4. Assist minority and female entrepreneurs in the formation and growth of new small businesses;and 5. Provide technical assistance to neighborhood organizations, MBE's and WBE's to increase their participation in the Planning Department programs and activities at all levels. ,2- SCOPE OF WORK In order to accomplish these objectives,the Planning Department will: 1. Require that recipients of grant awards, consulting contracts, or loans to develop and provide a MBE/WBE Utilization Plan. 2. Ensure that Requests for Proposals require the submission of MBE/WBE Utilization Plans. 3. Ensure that the programs of the Planning Department are advertised in the appropriate new media whose markets are targeted toward MBE/WBE. 4. Implement an outreach effort informing MBE and WBE firms and capture information on these firms doing business with the Planning Department. 5. Implement a system to identify MBE and WBE firms and capture information on these firms doing business with the Planning Department. 6. Require developers, corporations, partnerships and/or sole proprietors to register with the Human Relations Department and the Purchasing Department. In addition, require these entities to: A. Complete CC-1 (Human Relations Department) • B. Complete Bid List Registration(Finance Department, Purchasing Division C. Complete Business Certification(Human Relations Department) 7. Require developers, corporations, partnerships and/or sole proprietors to provide registration information on all sub-contractors. 8. Require loan agreements to include a statement that jobs created will be made available to low-to-moderate income persons. The following application package has been developed to assist you in complying with our request for information on your business and all sub-contractors providing goods and/or services on projects financed by and/or implemented through an agreement with the City of Omaha. If you have any questions or require further assistance in completing the application package, please contact Mr. Kenneth Johnson, Sr. at 444-5165. -3- • • MBE/WBE FOR EMPLOYMENT The following list of organizations is provided to assist you in identifying low-to-moderate income persons for employment opportunities. You must make concerted efforts to hire low-to-moderate income persons and document specific actions taken to achieve these objectives. To help accomplish the above goals, the following agencies should be notified of initial employment opportunities for low to moderate income persons: Nebraska Department of Labor-Omaha Job Service Omaha Ser-Jobs for Progress, Inc. 5036 Ames Avenue 5002 South 33rd Street Omaha,NE 68111 Omaha,NE 68107 Jack Meyers, Office Supervisor Hector Mota, Executive Director 595-3123 734-1321 Job Training of Greater Omaha - Native American. Community, Development Blue Lion Centre Corporation • 2421-23 North 24th Street 2451 St. Marys Avenue Omaha,NE 68110 Omaha,NE 68105 Ola Anderson, Director Vi Fickel, Executive Director 444-4700 341-8471 Urban League of Nebraska,Inc. Omaha Opportunities Industrialization Center 3022-24 North 24th Street 2724 North 24th Street Omaha,NE 68110 Omaha,NE 68110 George Dillard,President Dr. Bernice Dodd, Executive Director • 453-9730 457 4222 YWCA Girls Incorporated of Omaha 222 South 29th Street 2811 North 45th Street Omaha,NE 68131 ,Omaha,NE 68'104 Patricia Gaines, Program Director Debra Sykes West,Executive Director 345-6555 457-4676 I .. i -4- MBE/WBE FOR GOODS AND SERVICES Your company must make vendors aware of your policy to support equal opportunity utilization of minority, disabled and women-owned businesses. To accomplish this goal, you must provide a copy of the approved MBE/WBE Participation Plan to all businesses providing goods and/or services to the project. Your company must provide the opportunity for Minority Business Enterprises and Women Business Enterprises to provide goods and services through all phases of the project. A concerted effort must be made to allow these'businesses to actively compete for project contracts. This effort • will include utilization of the following resources and documentation of your actions to achieve these objectives. Omaha Small Business Network, Inc. 2505 North 24th Street Omaha,NE 68110 Kevin Clingman, Executive Director 346-8262 Housing and Community Development Division City Planning 1819 Famam Street, Room 1111 Omaha,NE 68183 Kenneth E. Johnson, Sr.,Economic Development Manager 444-5165 Nebraska Department of Economic Development Small Business(MBE/WBE/DBE)Assistance 301 Centennial Mall South Lincoln,NE 68509-4666 Steve Williams, Business Assistance Manager 471-3778 Mayor's Office of Marketing&Business Development 1819 Farnam Street, Room 304 Omaha,NE. 68183 Mike Kucera, Director 444-6274 Purchasing Department 1819 Farnam Street, Room 1003 Omaha,NE 68183 Gary Tomberlin, Purchasing Agent 444-5406 Human Relations Department Dian Thomas,Director(444--5050) Contract Compliance(MBE/WBE) 1819 Famam Street, Room 502 Omaha,NE 68183 Rita Vlademar, Contract Compliance Manager 444-5067 -5- MBE/WBE FOR GOODS AND SERVICES Regional Minority Purchasing Council Greater Omaha Chamber of Commerce 1301 Harney Street Omaha,NE 68102 Terrie Miller, Director 345-5000 Omaha Ser-Jobs for Progress,Inc. 5002 South 33rd Street • Omaha,NE 68107 Hector Mota, Executive Director 734-1321 Native American Community Development Corporation 2451 St. Marys Avenue Omaha,NE 68105 Vi Fickel,Executive Director 341-8471 ' United Minority Contractors Association 2221 North 24th Street Omaha,NE 68110 Al Epps, Executive Director 341-2177 Don Walker,ADDMSB Capital Ownership Development Small Business Administration 11145 Mill Valley Road Omaha,NE 68154 221-4691 Patricia Gaines, Program Director YWCA 222 South 29th Street - , Omaha,NE 68131 345-6555 Regina Yannayon, Deputy for Small Business U.S. Corps of Engineers 215 North 17th Street Omaha,NE 68102 221-4110 -6- . City of Omaha, Housing and Community Development Section BUSINESS QUALIFICATION RESUME DATE: L FIRM IDENTIFICATION: COMPANY NAME STREET ADDRESS CITY STATE ZIP CODE BUSINESS PHONE HOME PHONE MONTH&YEAR ESTABLISHED IL OWNERSHIP OF FIRM: IS THE FIRM OWNED AND CONTROLLED BY MEMBER OF MINORITY OR OTHER DISADVANTAGED GROUP?: YES NO MINORITY WOMAN N/A TYPE OF OWNERSHIP: INDIVIDUAL_PARTNERSHIP_CORPORATION_ IS 51%OWNED BY A MINORITY? YES NO NAME AND ADDRESS OF ALL STOCKHOLDERS AND/OR PARTNERS: NAME,TITLE,HOME ADDRESS %OF OWNERSHIP IIL MANAGEMENT(USE SAME FORMAT FOR ADDITIONAL MANAGEMENT PERSONNEL): NAME POSITION EDUCATION MANAGEMENT OR TECHNICAL TRAINING 6/22/90 -7- • City of Omaha, Housing and Community Development Division- CONTRACTOR INFORMATION FORM: DATE: PROJECT ADDRESS: OWNER INFORMATION: (To be filled out by the City of Omaha) • OWNER'S NAME J OWNER'S ADDRESS CITY/STATE/ZIP CODE OWNER'S PHONE NUMBER OWNER'S FEDERAL TAX IDENTIFICATION NUMBER: MINORITY INFORMATION: The Owner meets the following criteria: MINORITY • WOMAN N/A (If the company does not have a Federal Tax Identification Number,then provide the Owner's Social Security Number.) GENERAL CONTRACTOR INFORMATION: COMPANY'S NAME COMPANY'S ADDRESS CITY/STATE/ZIP CODE COMPANY'S PHONE NUMBER COMPANY'S FEDERAL TAX IDENTIFICATION NUMBER: MINORITY INFORMATION: The Company meets the following criteria: MINORITY WOMAN N/A CONTRACT AMOUNT: SUBCONTRACTOR LIST: SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE# MINORITY INFO.: MINORITY • WOMAN CONTRACT AMOUNT: N/A SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE# MINORITY INFO.: MINORITY WOMAN CONTRACT AMOUNT: N/A SUBCONTRACTOR TRADE FED. I.D.# TELEPHONE# MINORITY INFO.: MINORITY WOMAN CONTRACT AMOUNT: N/A -8- City of Omaha, Housing and Community Development Division SUBCONTRACTOR LIST (Continuation) DATE: PROJECT ADDRESS: SUBCONTRACTOR LIST: SUBCONTRACTOR TRADE FED.I.D. # TELEPHONE# MINORITY INFO.: • MINORITY WOMAN CONTRACT AMOUNT: N/A SUBCONTRACTOR TRADE FED.I.D. # TELEPHONE# MINORITY INFO.: MINORITY WOMAN CONTRACT AMOUNT: N/A SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE# MINORITY INFO.: MINORITY WOMAN CONTRACT AMOUNT: N/A SUBCONTRACTOR TRADE FED.I.D. # TELEPHONE# MINORITY INFO.: MINORITY WOMAN CONTRACT AMOUNT: N/A SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE# MINORITY INFO.: MINORITY WOMAN CONTRACT AMOUNT: N/A SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE# MINORITY INFO.: MINORITY WOMAN CONTRACT AMOUNT: N/A -9- EXHIBIT I ASSIGNMENT For One Dollar($1.00)and other good and valuable consideration, Greenview Corporation, a Nebraska Non-Profit Corporation hereby assigns and transfers to Greenview Limited Partnership, a Nebraska Limited Partnership in which Greenview Corporation is the sole general partner, all of Greenview Corporation's rights and obligations in and under that Certain Agreement between Greenview Corporation and the City of Omaha dated the day of , 1995 (the "Agreement"). This Assignment is made pursuant to the provisions of Section 6.8 of the Agreement approved by the City Council on , 1995,by Resolution No. , whereby the City of Omaha grants to Greenview Corporation authority to make this Assignment. By its signature affixed below, Greenview Limited Partnership accepts the foregoing Assignment and agrees to perform all the duties and obligations required of the Developer and/or Greenview Corporation, as specified in the Agreement. DATED this day of , 1995. GREENVIEW CORPORATION, a Nebraska Non-Profit Corporation By: Michael B. Maroney, President ACCEPTED: By: GREENVIEW LIMITED PARTNERSHIP, a Nebraska Limited Partnership By: GREENVIEW CORPORATION, a Nebraska Non-profit Corporation, General Partner By: Michael B. Maroney, President P:\PLN\2002.SKZ STA 1'h OF NEBRASKA ) SS. COUNTY OF DOUGLAS ) The foregoing Assignment was acknowledged before me this day of 19 by Michael B. Maroney, President, Greenview Corporation, a Nebraska non-profit corporation, on behalf of the corporation. Notary Public STATE OF NEBRASKA ) ) SS. COUNTY OF DOUGLAS ) The foregoing Assignment was acknowledged before me this day of 19 , by Michael B. Maroney, President, Greenview Corporation, sole general partner of Greenview Limited Partnership, on behalf of the corporation and the partnership. Notary Public P:\PLN\2002.SKZ • EXHIBIT I 24 CFR 85.43 ENFORCEMENT (a) Remedies for noncompliance. If a grantee or subgrantee materially fails to comply with any term of an award, whether stated in a Federal statute or regulation, an assurance, in a State plan or application, a notice of award, or elsewhere, the awarding agency may take one or more of the following actions, as appropriate in the circumstances:, (1) Temporarily withhold cash payments pending correction of the. deficiency by the grantee or subgrantee or more severe enforcement action by the awarding agency, (2) Disallow (that is, deny both use of funds and matching credit for) all or part of the cost of the activity or action not in compliance, (3) Wholly or partly suspend or terminate the current award for the grantee 's or subgrantee's program, (4) Withhold further awards for the program, or (5) Take other remedies that may be legally available. (b) Hearings, appeals. In taking an enforcement action, the awarding agency will provide the grantee or subgrantee an opportunity for such hearing, appeal, or other administrative proceeding to which the grantee or subgrantee is entitled under any statute or regulation applicable to the action involved. (c) Effects of suspension and termination. Costs of grantee or subgrantee resulting from obligations incurred by the grantee or subgrantee during a suspension or after termination of an award are not allowable unless the • awarding agency expressly authorizes them in the notice of suspension or termination or subsequently. Other grantee or subgrantee costs during suspension or after termination which are necessary and not reasonably avoidable are allowable if: (1) The costs result from obligations which were properly incurred by the grantee or subgrantee before the effective date of suspension or termination, are not in anticipation of it, and, in the case of a termination, are noncancellable, and, (2) The costs would be allowable if the award were not suspended or expired normally at the end of the funding period in which the termination takes effect. (d) Relationship to Debarment and Suspension. The enforcement remedies identified in this section, including suspension and termination, do not preclude grantee or subgrantee from being subject to "Debarment and Suspension" under E.O. 12549 (see § 85.35). 24 CFR 85.44 TERMINATION FOR CONVENIENCE Except as provided in § 85.43 awards may be terminated in whole or in part only as follows: (a) By the awarding agency with the consent of the grantee or subgrantee in which case the two parties shall agree upon the termination conditions, including the effective date and in the case of partial termination, the portion to be terminated, or (b) By the grantee or subgrantee upon written notification to the awarding agency, setting forth the reasons for such termination, the effective date, and in the case of partial termination, the portion to be terminated. However, if, in the case of a partial termination, the awarding agency determines that the remaining portion of the award will not accomplish the purposes for which the award was made, the awarding agency may terminate the award in its entirety under either § 85.43 or paragraph (a) of this section. 9124u PMENrpY U.S.Department of Housing and Urban Development Goa lr'1? 7 f III Community Planning and Development .9 Ilfil *=v BAY O[vt` Special Attention of: Transmittal Handbook No.: 1300 . 20 CPD Staff CDBG Grantees Issued: June 30, 1983 • 1. This Transmits Handbook 1300 .20 , Cost Principles for Non-Profit Organiza- tions , OMB Circular A-122. 2. Purpose: • The Office of Management and Budget (OMB) has established a set of cost principles to enable a uniform approach to the problem of determining costs for nonprofit organizations in its Circular A-122, July 1980. This Handbook is a brief introduction and a full reprinting of the Circular. 3. Filing Instructions: Insert Handbook 1300 .20 dated June 30 , 1983. ^�•,2131415,6 � ilk it'• N 1g3 0 i nr;�:' 'P� C./v. am. ' nCca<<�92 CFFO: Distribution: W-3-1, R-1,R-5,R-5-1, (Special) 6/83 Handbook 1300.20 IIll{iIiI *`Q I 44. U.S.Department of Housing and Urban Development f e+a°eve° Office of Community Planning and Development Program Participants and Departmental Staff Cost Principles for Nonprofit Organizations ( A Reprint of Office of Management and Budget Circular A-122 ) • CFFO: Distribution:W-3-1,R-1,R-5-1,(Special) - 1300 . 20 . t FOREWORD Circular A-122 provides uniform rules for determining costs applicable to grants, contracts, and other agreements ( including subawards) with nonprofit organizations other than institutions of higher education and hospitals. It defines allowable costs and sets forth the procedures to recover them. The principles are designed to provide that Federally assisted programs bear their fair share of costs. The Circular also provides that one Federal agency shall negotiate grantees' indirect costs on behalf. of all other Federal agencies. Headquarters personnel may direct their questions on the material in the Handbook to the Office of Procurement and Contracts. Field personnel may direct their questions to the respective Regional Contracting Officer. ti 1300. 20 1-1. ALLOWABLE COSTS. Generally, costs must be necessary., reasonable and directly related to the grant. In addition, they must be legal, proper and consistent with the policies that govern the grantee' s other expenditures. Any credits such as purchase discounts, rebates and allowances, adjustments of over payments must be deducted from total costs. In some instances, amounts received from the Federal Government to finance organizational activities or service operations should also be treated as applicable credits. 1-2. COMPOSITION OF COSTS. a. Costs applicable to a grant program may be direct or indirect. There are no strict guidelines for classifying costs as direct or indirect. In most cases, the accounting system used by the recipient will specify which types of costs are direct and which are indirect. The important thing is that grantees treat costs consistently for all grant programs . b. Direct costs should be identified specifically with a particular grant. Typical examples are employee compensation, materials, equipment , and services furnished in connection with the specific grant. c. Indirect costs are those incurred for common or joint objectives that benefit more. than one activity or cost objective. Typical examples are depreciation or use allowances on buildings and equipment, the costs of operating and maintaining facilities, and general administration and general expenses, such as the salaries and expenses of executive officers, personnel administration, and accounting. Indirect costs should be allocated - in a manner which will result in the grant program bearing its fair share of total indirect cost. - To - do this, a grantee must develop an indirect cost rate. This rate, expressed in percentage terms , is applied to direct costs in order to determine the amount of reimbursement a grantee can obtain for indirect costs. A predetermined rate may be negotiated for use in awards where there is reasonable assurance that the rate is not likely to exceed a rate based on the organization' s actual costs. A 'o —1— 1300 . 20 - 1-3. COGNIZANT AGENCY. a. Unless different arrangements are agreed to by the agencies concerned, the Federal agency with the largest dollar value of awards will be desig- nated as the cognizant agency for the negotiation and approval of indirect cost rates. After a rate has been agreed upon, it will be accepted by all Federal agencies. 1-4 . INDIRECT COST PROPOSALS. a . In order to recover indirect costs , the grantee must have an indirect cost proposal, which is the documentation prepared by an organization to substantiate its claim for the reimbursement of indirect costs. The proposal should describe the services provided and explain their relevance to the grant programs ; list the expenses to be charged to grant programs; and explain the method used to distribute the costs. b. A nonprofit organization which has not previously established an indirect cost rate with a Federal agency is required to submit its initial „cost proposal to the cognizant agency as soon as possible after an award is made. Organizations that have previously established indirect cost rates must submit a new indirect cost proposal to the cognizant agency within 6 months after the close of each fiscal year. 1-5. MAJOR SUBSTANTIVE AREAS COVERED BY THE CIRCULAR. a . Clarifies nonprofit organizations not covered by the circular. b. Permits Federal agencies to request exemptions from the circular. c. Establishes procedures for negotiation and approval of indirect cost rates. -2- 1 • 1300 . 20 t '^ d. Permits Federal agencies to accept a substitute system for documenting personnel costs through means other than personnel activity reports. e. Clarifies provisions covering the allowability of costs for unemployment compensation of workmen' s compensation and costs of insurance polices on the lives of trustees, officers or other employees. f. Makes allowable any increased costs of pension plans caused by delayed funding. g. Clarifies the value of donated services used in the performance of a direct cost activity. h. Establishes a definition of capital equipment cost $500 , useful life or more than two years. i. Permits organizational costs to be allowed when approved by awarding agency in writing. j . Allows Public Information Service Costs as direct costs with awarding agency approval.' k. Clarifies rental costs . 1. Deletes the travel cost requirement for prior approval for domestic costs. 1-6. EXCEPTIONS. OMB may grant exceptions. However, in the interest of achieving maximum uniformity, exceptions will be permitted only in highly unusual circumstances. Attachment A: OMB Circular A-122 Cost Principles for Non-Profit Organizations. -3- 1300. 20 Tuesday 111,10 July 8, 1980 Part III Office of Management and LU Budget Circular A-122, "Cost Principles for Nonprofit Organizations" 46022 Federal Register / Vol. 45, No. 132 / Tuesday, July 8, 1980 / Notices OFFICE OF MANAGEMENT AND public comments.The more significant cognizant agency and the recipient to BUDGET changes to the basic Circular and negotiate when there is no basis for • Attachment A include: determining the fair market value of the Circular A-122,"Cost Principles for 1. Paragraph 2."Supersession"was services rendered,and to permit indirect Nonprofit Organizations" added to the basic Circular to make it costs allocated to donated services to be AGENCY:Office of Management and clear that;his Circular supersedes cost charged to an agreement or used to meet principles'issued by individual agencies. cost sharing or matching requirements. Budget. 2.Paragraph 4 of the basic Circular 4.Paragraph 31,Equipment and Other ACTION:Final Policy. has been amended to make it clear that Capital Expenditures,was changed. the absence of an advance agreement on Capital equipment is now defined as SUMMARY:This notice advises of a new any element of cost will not in itself having an acquisition cost of$500 and a OMB Circular dealing with principles for affect the reasonayblenesa of allocability useful life of more than two years. determining costs of grants,contracts, of that element.Also,this paragraph 5.Paragraph 28.Meetings, and other agreements with nonprofit was amended to make it clear that Conferences.The prior approval where an item of cost requiring prior uirement for cha meetin sand organizations. requiring g The Circular is the product of an approval is specified inAhe budget. conferences as a direct cost was interagency review conducted over a approval of the budget constitutes deleted.A sentence was added to make - two-year period.Its purpose is to approval of the coat. it clear such costs were allowable provide a set of cost principles to 3.Paragraph 5 of the basic Circular provided they meet the criterion for the replace existing principles issued by has been changed to remove any doubt allowability of cost shown in individual agencies.These have often as to which nonprofit organizations Attachment A. contained varying and conflicting would not be covered by the Circular. 8.Paragraph 27,Organization Casts, Now,Appendix C to the Circular lists all was amended to provide that requirements, and created confusion exclusions. among agency administrators,auditors, organization costs may be allowable and nonprofit officials.The new Circular 4.Paragraph 8 was added to the basic when approved in writing by the Circular to permit Federal agencies to will provide a uniform approach to the awarding agency. request exceptions from the problem of determining costs,and 7.Paragraph 30,Page Charges in requirements of the Circular. promote efficiency and better Professional Journals. was revised to understanding between recipients and 5.Paragraph E 2.was added to provide that page charges may be the Federal Government. Attachment A to cover the negotiation allowable. EFFECTIVE DATE:The Circular becomes and approval of indirect cost rates,and 8.Paragraph 37,Public Information to provide for cognizance arrangements. effective on issuance. The more significant changes to Service Costs, was modified to make FOR FURTHER INFORMATION CONTACT. Attachment B to the Circular include: public information costs allowable as Palmer A.Marcantonio,Financial 1.Paragraph 5,Compensation for direct costs with awarding agency Management Branch,Office of Personal Services,was modified to: approval. Management and Budget.Washington, a.Permit Federal agencies to accept a 9•Paragraph 43,Rental Costs, was D.C.20503, (202)395-4773. substitute system for documenting rewritten to: SUPPLEMENTARY INFORMATION:Before personnel costs through means other a.Make it clear that rental costs the Circular became final there was than personnel activity reports. under leases which create a material extensive coordination with the affected b.Clarify provisions covering the equity on the leased property are nonprofit organizations,professional allowability of costs for unemployment allowable only to the amount that the associations,Federal agencies and compensation or workmen's organization would have been allowed others.All interested persons were compensation.and costs of insurance had they purchased the property;e.g., given an opportunity to comment on the policies on the lives of trustees,officers, depreciation or use allowances. proposed Circular through informal or other employees maintenance.taxes,insurance,etc. consultations and a notice in the Federal c.Make unallowable any increased b.Clarify the criteria for material Register.In response to our requests for costs of pension plans caused by equity leases. comment,we received about 100 letters delayed funding. 10.Paragraph 51, Travel Costs, was from Federal agencies,nonprofit d.Delete a paragraph dealing,with amended to delete the prior approval organizations.associations,and other review and approval of compensation of requirement for domestic travel.In interested members of the public.These individual employees. addition to the above,a number of comments were considered in the final 2.Paragraph 6.Contingencies,was editorial changes were made to the version,,f the Circular.There follows a changed to make it clear that the tern original document. summary of the major comments and the "contingency reserves"excludes self- Suggested Changes Not Considered action taken on each. insurance reserves or pension fund& Necee t e In addition to the changes described, 3.Paragraph 10 was modified to other changes have been made to provide that the value of donated Comment.Several respondents -improve the clarity and readability of services used in the performance of a questioned the provision that,for"less the Circular.To the extent possible,we direct cost activity shall be allocated a than arm's length"leases,rental costs have tried to make the language of this • share of indirect cost only when(a)the are allowable only up to the amount that Circular consistent with that of cost aggregate value of the service is would be allowed had title to the principles for educational institutions material,(b)the services are supported property been vested in the graniee (Circular A-21), and State and Iocal by a significant amount of the indirect organization.In their opinion this rule governments(Circular 74-4). cost incurred by the organization.and. will result in unnecessary cost to the (c)the direct cost activity is not pursued Federal Government,since it would Summary of Significant Changes: primarily for the benefit of the Federal encourage an organization to lease Set forth are changes that have been Government.Provisions were also space on the commercial market at made in the final Circular as a result of added to this paragraph for the higher rate. -1 * 0 - Federal Register I Vol. 45, No. 132 / Tuesday, filly 8, 1980 / Notices 46023 Response.The cost principles are employer relationship in the individual agencies for nonprofit designed to cover most situations; arrangements for this assistance,nor are organization. however,there are always exceptions there committee members normally 3.Applicability.a.These principles that must be considered on a case-by- reimbursed for such services.Further,it shall be used by all Federal agencies in case basis.The Circular contains a was pointed out the committee members determining the costs of work performed provision for Federal agencies to request spend many thousands of hours outside by nonprofit organizations under grants, exceptions. the organization's premises conducting cooperative agreements,cost. Comment.Several respondents research. reimbursement contracts,and other questioned why interest is not an . Response.It would appear.that this contracts in which costs are used in allowable cost,since it is an ordinary type of committee arrangement would pricing,administration,or settlement and necessary coat of doing business. not be considered in the determination All of these instruments are hereafter Response.It has been a longstanding of the organization's indirect cost rate referred to as awards.The principles do policy not to recognize interest as a cost provided that Federal agreements do not not apply to awards under which an However,this policy has recently been bear an unreasonable share of indirect organization is not required to account revised for State and local governments _ cost.However,the cognizant agency to the Government for actual costs in Circular 74-4.with respect to the cost will be responsible for evaluating the incurred. of office space.The revision provides allocation of indirect cost where there b.All cost reimbursement subawards that"rental"rates for publicly owned are committee-type arrangements on a (subgrants,subcontracts,etc.)are buildings may be based on actual costs, case-by-case basis. subject to those Federal cost principles including depreciation,interest. Comment. One respondent suggested applicable to the particular organization operation and maintenace costs,and that wherever possible the language in concerned.Thus,if a subaward is to a other allowable costs.This revision was the Federal Procurement Regulations be nonprofit organization,this Circular under consideration for some time.It shall apply;if a subaward is to a used for nonprofit organizations. was studied extensively by OMB,the commercial organization, the cost General AccountingOffice and others, Response.The language in the Federal Procurement Regulations was principles applicable to commercial and considerable analysis went into itsconcerns shall apply;if a subaward is to formulation.Suggestions for extending it designated primarily for commercial a college or university,Circular A-21 to nonprofit organizations would have to firms,and is not necessarily well suited shall apply;if a subaward is to a State, be examined with equal care.This has to nonprofit organizations.At the local,or federally recognized Indian not yet been done,and we were suggestion of the General Accounting tribal government,Circular 74-4 shall reluctant to further delay issuance of Office,the nonprofit cost principles apply. this Circular. were written to conform as closely as 4.Definitions.a. "Nonprofit Comment. Several respondents possible to those of educational P organization"means any corporation, questioned why public information costs institutions(Circular A-21),and State trust,association,cooperative,or other were not allowable as an indirect cost. and local governments(Circular 74-4). organization which(1)is operated Response.Public information costs John J.Low. primarily for scientific,educational, . are often direct services to an Chief Financial Management Branch service,charitable,or similar purposes organization's other programs.They are in the public interest;(2)is not allowable,however,as a direct charge (Circular No.A-122J organized primarily for profit;and(3) when they are within the scope of work June 27 198o uses its net proceeds to maintain, of a particular agreement. improve,and/or expand its operations. respondent rated To The Heads of Executive Comment. One res P Departments and Establishments For this purpose,the term"nonprofit that smaller grantees be excluded from P organization"excludes(i)colleges and complyingwith the Circular. Subject:Cost principles for nonprofit universities;(ii)hospitals:(iii)State, Response.Similar rules for the 50 organizations. local,and federally recognized Indian selected items of cost would be needed 1.Purpose.This Circular establishes tribal governments:and(iv)those regardless of the size of the grantee.To Principles for determining costs of contracts and other agreementsnonprofit organizations which are the extent possible, the Circular grants, excluded from coverage of this Circular provides simplified methods for smaller with nonprofit organizations.It does not in accordance with paragraph 5 below. grantees. apply to colleges and universities which b. "Prior approval"means securing Comment.One respondent said the are covered by Circular A-21;State, the awarding agency's permission in requirements of the Cost Accounting local, and federally recognized Indian advance to incur cost for those items Standards Board should be applied to tribal governments which are covered that are designated as requiring prior cover contracts with nonprofit by Circular 74-4;6r hospitals.The approval by the Circular.Generally this' . organizations. principles are designed to provide that permission will be in writing.Where an Response. It is unlikely that the type the Federal Government bear its fair item of cost requiring prior approval is of grantees covered by this Circular share of costs except wlJere restricted or specified in the budget of an award. would have contracts large enough to be prohibited by law.The principles do not approval of the budget constitutes covered by the CASB.In the event that attempt to prescribe the extent of cost approval of that cost. they do,however,the regulations of the sharing or matching on grants,contracts. 5.Exclusion of some nonprofit CASB would apply. or other agreements.However,such cost organizations.Some nonprofit Comment. One respondent said the sharing or matching shall not be organizations,because of their size and allocation of indirect cost to donated accomplished through arbitrary; nature of operations,can be considered services would pose a tremendous limitations on individual cost elements to be similar to commercial concerns for difficulty to the organization.The by Federal agencies.Provision for profit purpose of applicability of cost organization relies on a corps of or other increment above cost is outside principles.Such nonprofit organizations approximately 8,000 committee members the scope of this Circular. shall operate under Federal cost d to carry out obligations in response to 2.Supersession.This Circular principles applicable to commercial Government requests.There is no supersedes cost principles issued by concerns.A listing of these 1 -2-. • 46024 Federal Register / Vol. 45. No. 132 / Tuesday, July 8. 1980 / Notices organizations is contained in 5.Applicable credits clients,the public at large.and the Attachment C.Other organizations may 6.Advance understandings Government. be added from time to time. B.Direct Costs d.Significant deviations from the 8.Responsibilities.Agencies established practices of the organization C.Indirect Costs cwhich osts. may unjustifiably increase the award responsible for administering programs that involve awards to nonprofit D.Allocation of Indirect Costs and 4.Allocable costs. organizations shall implement the Determination of Indirect Cost Rates a.A cost is allocable to a particular cost provisions of this Circular.Upon 1.General objective,such as a grant,project•service,or request,implementing instruction shall 2.Simplified Lllocation method other activity.in accordance with the relative be furnished to the Office of 3.Multiple allocation base method benefits received.A cost is allocable to a Management and Budget Agencies shall 4.Direct allocation method Government award if it is treated 5.Special indirect cost rates consistently with other costa incurred for the designate a liaison official to serve as same purpose in like circumstances and if ib the agency representative on matters E.Negotiation and Approval of Indirect Cost (1)Is incurred specifically for the award relating to the implementation of this Rates (2)Benefits both the award and other work Circular.The name and title of such 1.Definitions .and can be distributed in reasonable representative shall be furnished to the 2.Negotiations and approval of rates proportion to the benefits received. Office of Management and Budget [Circular No.A-1221 (3)Is necessary to the overall operation of within 30 days of the date of this Attachment A relatthe ionship to any partition. cular cost objective Circular• cannot be shown. 7.Attachments.The principles and General Principles b.Any cost allocable to a particular award related policy guides are set forth in the A.Basic Considerations or other cost objective under these principles following Attachments: 1.Composition of total costs The total cost may not be shifted to other Federal awards to Attachment A—General Principles of an award is the sum of the allowable overcome funding deficiencies,or to avoid Attachment B--Selected Items of Cost direct and allocable indirect costa less any restrictions imposed by law or by the terms Attachment C—Nonprofit applicable credits. of the award. Organizations Not Subject to This 2.Factors affecting allowability of costs. 5.Applicable credits. Circular To be allowable under an award.costs must a.The term applicable credits refers to those receipts,or reduction of expenditures 8.Requests for exceptions.The Office meet the following general criteria: which operate to offset or reduce expanses of Management and Budget may grant a.Be reasonable for the performance of the items that are allocable to awards as direct exceptions to the requirements of this award and be allocable thereto under these or indirect costa.Typical examples of such principles. ' Circular when permissible under transactions are:purchase disounts•rebates existing law.However,in the interest of b.Conform to any limitations or exclusions or allowances,recoveries or indemnities on achieving maximum uniformity, set forth in these principles or in the award losses,insurance refunds,and adjustments of ng y as to types or amount of cost items - exceptions will be permitted only in c.Be consistent with policies and overpayments or erroneous charges.To the highly unusual circumstances. procedures that apply uniformly to both extent that such credits accruing or received 9.Effective Date.The rovisions of federallyfinanced and other activities of the by the organization relate to allowable cost P they shall be credited to the Government this Circular are effective immediately. organization. either as'a cost reduction or cash refund as shallbein d.Be accorded consistent treatment. Implementation phasedbyappropriate. incorporating the provisions into new e.Be determined in accordance with b.In some inItances,the amounts received awards made after the start of the generally accepted accounting principles form the Federal Governmentlo finance organization's next fiscal year.For f.Not be included as a cost or used to meet organizational activities or service operations existing awards the new principles may cost sharing or matching requirements of any should be treated as applicable credits. be applied if an organization and the other federally financed program in either the Specifically,the concept of netting such PP B current or a prior period credit items against related expenditures cognizant Federal agency agree.Earlier . g.Be adequately documented. should be applied by the organizaton in implementation,or a delay in . 3.Reasonable costs.A cost is reasonable determing the rates or amounts to be implementation of individual provisions if,in its nature or amount,it does not exceed charged to Federal awards for services is also permitted by mutual agreement that which would be incurred by a prudent rendered whenever the facilities or other between an organization and the. person under the circumstances prevailing at - resources used in providing such services cognizant Federal agency. the time the decision was wade to incur the have been financed directly,is whole or 10.Inquiries.Further information costs.The question of the reasonableness of. in part,by Federal funds specific costs must be scrutinized with concerning this Circular may be a(c)For rules covering program income particular care in connection i with i.e.,gross income earned from federally- organizations obtained by contacting the Financial or separate divisions thereof ( Management Branch.Budget Review which receive the preponderance of their supported activities)see Attachment D of • Division,Office of Management and support from awards made by Federal ... OMB Circular A-110. • Budget,Washington,D.C.2050. agencies.In determining the reasonableness . a.Advance and understandings:Under any telephone(202)395-47 3, - of a given cost,consideration shall be given- given award the reasonableness and lames T.McIntyre,jr.; . to . allocability of certain items of costs may be - - Director. a.Whether the cost is of a type generally difficult to determine.This is particularly true recognized as ordinary and necessary for the in connection with orgizations that receive a [Circular No.A-1221 • - operation of the organization or the- •• preponderance of their support from Federal Attachment A . performance of the award. agencies.In order to avoid subsequent. b.The restraints or requirements imposed disallowance or dispute based on General Principles - by such factors as generally accepted sound unreasonableness or nonallocability.It is • Table of Contents business practices,arms length bargaining. often desirable to seek a written agreement Federal and State laws and regulations,and with the cognizant or awarding agency in . A.Basic Considerations terms and conditions of the award. advance of the incurrence of special or 1.Composition of total costs c.Whether the individuals concerned acted unusal costs.The absence of an advance 2.Factors affecting allowabillty of costs with prudence in the circumstances. agreement on any element of cost will not.In. 3.Reasonable costs considering their responsibilities to the itself,affect the reasonableness or 4.Allocable costs ... organization.its members.employees.and allocability of that element. - ea. -3- • Federal Register I Vol. 45. No. 132 / Tuesday. July 8. 1980 / Notices 46025 -B.Direct................. ...... . ... ... . . ....in like circumstances.haa.beea.aasignd]a.. . where anorganization has only one major L Direct costs are those that can be "" an award as a direct cost function encompassing a number of identified specifically with a particular final 2•Because of the diverse characteristics individual projects or activities.and may be coat objective:i.e.,a particular award, and accounting practices of nonprofit used where the level of Federal awards to an project,service,or other direct acttMty of an organizations.it li not possible to specify the organization is relatively small. organization.However,a cost may not be types of cost which may be classified as b.both the direct costs and the indirect assigned to an award as a direct cost if any indirect cost in all situation.However,typical costs shall exclude capital expenditures and other cost incurred for the same purpose.in examples of indirect cost for many nonprofit unallowable costs.However.unallowable like circumstance,has been allocated to an organizations may include depreciation or costs which represent activities must be . award as an indirect cost Cost identified use allowances on bwlding i and equipment.' included in the direct costs under the specifically with awards are direct cost of the the costs of operating and maintaining conditions described in paragraph B.3.above. awards and are to be assigned directly facilities,and general administration and c.The distribution base may be total direct thereto.Cost identified specifically with other general expenses,such as the salaries and costs(excluding capital expenditures and final cost objectives of the organization are expenses of executive officers,personnel other distorting items,such as major direct costs of those cost objectives end are administration,and accounting. , subcontracts or subgrants),direct salaries riot to be assigned to other awards directly or D.rlllocaliaa of indirect Cost and and wages.or other base which results in an r Indirectly. Determination of Indirect Cost Rates. • equitable distribution.The distribution base 2.Any direct cost of a minor amount may shall generally exclude participant suport _ be treated as an indirect cost ofor reasons of 1. General. costs as defined in paragraph 2 of practicality where the accounting treatment a.Where a nonprofit organization has only Attachment B. for such cost is consistently applied to all one major function,or where all its major d.Except where a special rate(s)is final cost objectives functions benefit from its indirect costs to required in accordance with paragraph D.5 . 3.The cost of certain activities are not approximately the same degree,the below,the indirect cost rate developed tinder allowable as charges to Federal awards(see, allocation of iadueft coats and the the above principles is applicable to all for example,fund raising costs in paragraph computation of an indirect cost rate may be awards at the organization.If a special ' 21 of Attachment B).However,even though accomplished through simplified allocation rate(s)is required,appropriate modifications these costs are unallowable for purposes of procedures as described in paragraph 2 shall be made in order to develop the special computing charges to Federal awards,they below. rate(s). nonetheless must be treated as direct cost for b.Where an organization has several major 3.Multiple allocation base method purposes of determining indirect cost rates functions which benefit from its indirect costs a.Where an organisation's indirect costs and be allocated their share of the in varying degrees.allocation of Indirect benefit its major functions in varying degrees, organization's indirect costs if they represent costs may require the accumulation of such such costs shall be accumulated into separate activities which(1)include the salaries of costs into separate cost groupings which then cost groupings.Each grouping shall then be personnel.(2)occupy space,and(3)benefit are allocated individually to benefiting allocated individually to benefiting functions from the organization's indirect costs. functions by means of a base which best by means of a base which best measures the 4.The costs of activities performed measures the relative degree of benefit.The relative benefits. primarily as a service to members,clients,or indirect costs allocated to each function are b.The groupings shall be established so as the general public when significant and then distributed to individual awards and to permit the allocation of each grouping on necessary to the organization's mission must other activities included in that dunction by the basis of benefits provided to the major be treated as direct costs when or not means of an indirect cost rate(s). functions.Each grouping should constitute a . allowable and be allocated an equitable c.The determination of what constitutes an pool of expenses that are of like character in share of indirect costs.Some examples of organization's major functions will depend on terms of the functions they benefit and in these types of activities include: its purpose in being:the types of services it terms of the allocation base which best a.Maintenance of membership rolls, ' renders to the public,its clients,and its measure the relative benefits providd to each subscriptions,publications,and related members;and the amount of effort it devotes function.The number of separate groupings functions. to such activities as fund raising,public should be held within practical limits,taking b.Providing services and information to information and membership activities. into consideration the materiality of the members,legislative or administrative .d.Specific methods for allocating indirect amounts involved and the degree of precision bodies,or the public. coats and computing indirect cost rates along desired. a Promotion,lobbying,and other forms of with the conditions under which each method c.Actual conditions must be taken into public relations. should be used are described in paragraphs 2 account in selecting the base to be used in d.Meetings and conferences except those through 5 below. allocating the expenses in each grouping to held to conduct the general administration of e.The base period for the allocation of benefiting functions.When an allocation can the organization. indirect costs is the period in which such be made by assignment of a cost grouping 3.Maintenacne,protection,and investment costs are incurred and accumulated for directly to the function benefited,the of special funds not used in operation of the allocation to work performed in that period. allocation shall be made in that manner. organization. The base period normally should coincide ' When the expenses in a grouping are more f.Administration of group benefits on with the organization's fiscal year,but in any general in nature,the allocation should be behelf of members or clients including life evnt,shall be so selected as to avoid made through the use of a selected base .. • and hospital insurance.annuity or retirement inequities in the allocation of the costs. which produces results that are equitable to plans,financial aid.etc. 2.Simplified allocation method. both the Government and the organization.In C.Indirect Cost. . a.Where an organization's major functions general,any cost element or cost related" benefit from its indirect costs to factor associated with the organization's 1.Indirect costs are those that have been approximately the same degre.the allocation work is potentially adaptable for use as an incurred for common or joint objectives and of indirect costs may be accomplished by(i) allocation base provided(i)it can readily be cannot be readily,identified with a particular separating the organization's total costs for expressed in terms of dollars or other final cost objective.Direct cost of minor the base period as either direct or indirect, quantitative measures(total direct costs, amounts may be treated as indirect costs and(ii)dividing the total allowable indirect direct salaries and wages,staff hours applied. under the conditions described in paragraph costs(net of applicable credits)by an square feet used,hours of usage.number of B.2.above.After direct costs have been equitable distribution base.The result of this documents processed population served,and determined and assigned directly to awards process is an indirect cost rate which is used the like)and(ii)it is common to the or other work as appropriate,indirect costs to distribute indirect costs to individual benefiting functions during the base period. are those remaining to be allocated to awards.The rate should be expressed as the d.Except where a special indirect cost • benefiting cost objectives.A cost may not be percentage which the total amount of . rate(s)is required in accordance with allocated to an award as an indirect cost if allowable indirect costs bears to the Ease paragraph D.5.below,the separate groupings any other cost incurred for the same purpose. selected.This method should alas be used of indirect costs allocated to each major -4- 46026 Federal Register / Vol. 45, No. 132 / Tuesday, July 8, 1980 / Notices function shall be agregated and treated as a used.or any combination thereof.When a Is a major long-term shift in the dollar volume common pool for that function.The costs in particular segment of work is performed in an of the.Federal awards to the organization.All the common pool shall then be distributed to environment which appears to generate a concerned Federal agencies shall be given the individual awads included in that function by significantly different level of indirect costs, opportunity to participate in the negotiation use of a single indirect cost rate. provisions should be made for a separate. process,but after a rate has been agreed e.The distribution based used in computing indflect cost pool applicable to such work. upon it will be accepted by all Federal the indirect cost rate for each function may The separate indirect cost pool should be agencies.When a Federal agency has reason be total direct coats(excluding capital developed during the course of the regular to believe that special operating factors expenditures and other distorting items such allocation process,and the separate indirect affecting its awards necessitate special as major subcontracts and subgrants),direct coat rate resulting therefrom should be used indirect cost rates in accordance with , salaries and wages.or other base which provided it is determined that(i)the rate paragraph D.5 above,It will.prior to the time results in an equitable distribution.The differs significantly from that which would the rates are negotiated.notify the cognizant distribution base shall generally exclude have been obtained under paragraph D.2,3, agency. participant support costs as defined in and 4 above,and(ii)the volume of work to b.A nonprofit organization which has not paragraph 29.Attachment B.An indirect cost which the rate would apply is material. previously established an indirect coat rate 1 rate should be developed fir each separate with a Federal agency shall after the indirect cost pool developed.The rate in each Negotiation and Approval of Indirect Cost organization is advised that an award will be case should be stated as the percentage Rates. made and,in no event,later than three which the amount of the particular indirect 1.Definitions.As abed in this section.the months after the effective date of the award, cost pool is of the distribution base identified following terms have the meanings set forth c.Organizations that have previously with that pooL below: established Indirect cost rates must submit a 4.Direct allocation method. a."Cognizant agency"means the Federal new indirect cost proposal to the cognizant a.Some nonprofit organizations.treat all agency responsible for negotiating and agency within six months after the close of costs as direct costa except general approving indirect cost rates for a nonprofit each fiscal year. administration and general expenses.These organization on behalf of all Federal d.A predetermined rate may be negotiated organizations generally separate their costs agencies. for use on awards where there is reasonable into three basic categories:(i)General b."Predetermined rate"means an Indirect assurance.based on past experience and administration and general expenses,(ii) cost rate,applicable to a specified current or reliable projection of the organization's costs. fund raising.and(iii)other direct functions future period usually the organization's fiscal that the rate is not likely to exceed a rate (including projects performed under Federal year.The rate is based on an estimate of the based on the organization's actual costs. awards).Joint costs,such as depreciation. costs to be incurred during the period.A e.Fixed rates may be negotiated where rental costs,operation and maintenance of predetermined rate is not subject to predetermined rates are not considered ' facilities,telephone expenses,and the like adjustment. appropriate.A fixed rate,however,shall not are prorated indivisually as direct cost to c."Fixed rate"means an Indirect cost rate be negotiated if(i)all or a substantial portion each category and to each award,or other which has the same characteristics as a of the organization's awards are expected to activity using a base most appropriate to the predetermined rate,except that the difference expire before the carry-forward adjustment. particular cost being prorated. ,between the estimated costs and the actual can be made:(ii)the mix of Government and • b.This method is acceptable provided each costs of the period covered by the rate is non-government work at the organization is joint cost is prorated using a base which carried forward as an adjustment to the rate too erratic to permit an equitable carry- accurately measures the benefits provided to computation of a subsequent period. forward adjustment or(iii)the organization's each award or other activity.The bases must d."Final rate"means an indirect cost rate operations fluctuate significantly from year to be established in accordance with resonable applicable to a specified past period which is year. criteria.and be supported by current data based on the actual costs of the period.A f.Provisional and final rates shall be This method is compatible with the , final rate is not subject to adjustment negotiated where neither predetermined nor Standards of Accounting and Financial e."Provisional rate"or billing rate means a fixed rates are appropriate. Reporting for Voluntary Health and Welfare temporary indirect coat rate applicable to a g•The results of each negotiation shall be - Organizations issued jointly by the National specified period which is used for funding, formalized in a written agreement between Health Council,Inc.,the National Assembly interim reimbursement,and reporting indirect the cognizant agency and the nonprofit of Voluntary Health and Social Welfare • costs on awards pending the establishment of organization.The cognizant agency shall Organizations,and the United Way of a rate for the period. distribute copies of the agreement to all America. f."Indirect coat proposal"means the concerned Federal agencies. c.Under this method indirect costs consist documentation prepared by an organization h?If a dispute arises in a negotiation of an eclusively of general administration and to substantiate its claim for the indirect cost rate between the cognizant general expenses.In all other respects.the reimbursement of indirect costs.This agency and the nonprofit organization,the organization',indirect cost ratess shal be proposal provides the basis for the review dispute shall be resolved in accordance with computed in the same manner as that and negotiation leading to4re establishment the appeals procedures of the cognizant described in paragraph D.2 above. of an organization's indirect coat rate. agency. 5.Special indirect cast rates.In some g."Cost objective"means a function. I.To the extent that problems are instances,a single indirect cost rate for all organizational subdivision.contract,grant,or encountered among the Federal agencies to activities of an organization or for each major other work unit for which coat data are connection with the negotiation and approval function of the organization ay not be desired and for which provision is made to process,the Office of Management and appropriate,since it would not take into accumulate and measure the cost of--- Budget will lend assistance as required to account those different factors which may processes,projects,jobs and capitalized . resolve such problems In a timely manners."_.."_ substantially affect the indirect costs projects. - [Circular No..A-1221-. ..-. ___- - - applicable to a particular segment of work. 2.Negotiation and approval of rates. Attachment B For this purpose,a particular segment of a.Unless different arrangements are • • - .. _ work.For this purpose,a particular segment agreed to-by the agencies concerned,the Selected Items of Cost - of work may be that performed under a single Federal agency with the largest dollar value Table of Contents award or it may consist of work under a• of awards with an organization will be group of awards performed in a common designated as the cognizant agency for the . 1.Advertising cosh . environment.The factors may include the ' negotiation and approval of indirect cost -2:Bad debts physical location of the work.the level of rates and,where neoeesary,other rates such 3.Bid and proposal oasts(reserved} , administrative support required,the nature of as fringe benefit and computer charge-out 4.Bonding costs the facilities or other resources employed,the rates.Once an agency is assigned cognizance S.Communication casts <_........--- scientific disciplines or technical skills for a particular nonprofit organization,the s.Compensation for personal services involved the organizational arrangements a/aig:0eat will not be changed sinless there. - 7.Contingency provisions a —5— Federal Register / Vol. 45, No. 132 j Tuesday, July 8, 1980 / Notices 46027 .8.Contributions .. in paragraph 46(il)the peoaarement of goods -activities,compensation for employees on 9.Depreciation and use allowances and services;(ill)the disposal of surplus Government-sponsored work will be• I, 10.Donations materials acquired in the performance of the -- considered reasonable to the extent that ii is 11.Employee morale,health and welfare award except when organizations are comparable to that paid for similar work in costs and credits reimbursed for disposals at a predetermined the labor markets in which the organization -12.Entertainment costs • amount in accordance with Attachment N of competes for the kind of employees involved. 13.Equipment and other capital expenditures OMB Circhdar A 110,or(iv)specific d.Special considerations in determining -14.Fines and penalties requirements of the award. ollowehility.Certain conditions require 15.Fringe benefits 2.Bad debts.Bad debts,including leases special consideration and possible limitations 16.Idle facilities and idle capacity . (whether actual or estimated)arising from in determining costs under Federal awards 17.Independent research and development` unrnllertibie accounts and other claims. where amounts or types of compensation (reserved) - related collection omits,and related legal appear unreasonable.Among such conditions 18.Insurance and indemnification costs.are unallowable. are the following: Z-19.Interest.fund raising,and investment 3.Bid and proposal coots.(reserved) - (1)Compensation to members of nonprofit management costs 4.Bonding costs. organizations.trustees,directors,associates. 20.Labor relations costs a.Bonding costs arise when the officers,or the immediate families thereof. 21.Losses on other awards Government requires assurance against Determination should be made that such - 22 Maintenance and repair costs _ financial loss to itself 6r others by reason of compensation is reasonable for the actual . 23.Materials and supplies the act or default of the organization.They personal services rendered rather than a 24.Meetings,conferences arise also in instances where the organization distribution of earnings in excess of costs. 25.Memberships,subscriptions,and requires similar assurance.Included are such (2)Any change in an organization's . professional activity costs bonds as bid.performance,payment, compensation policy resulting in a -26.Organization costs advance payment,infringement.and fidelity substantial increase in the organization's 27.Overtime.extra-pay shift,and multishlft bonds. level of compensation,particularly when it premiums b.Costs of bonding required pursuant to was concurrent with an increase in the ratio 28.Page charges in professional journals the terms of the award are allowable. of Government awards to other activities of 29.Participant support costs c.Costs of bonding required by the the organization or any change in the 30.Patent costs organization in the general conduct of its treatment of allowability of specific types of 31.Pension plans operations are allowable to the extent that compensation due to changes in Government 32.Plant security costs such bonding is in accordance with sound policy. 33.Preaward costs business practice and the rates and premiums e.Unallowable costs.Costs which are 34.Professional service costs are reasonable under the circumstances. unallowable under other paragraphs of this 35.Profits and losses on disposition of tit.Communication costs.Costs incurred for Attachment shall not be allowable under this depreciable property or other capital telephone services.local and long distance paragraph solely on the basis that they assets telephone calls.telegrams.radiograms. constitute personal compensation. 38.Public information service costs postage and the like.are allowable. f.Fringe benefits. 37.Publication and printing costs 6.Compensation for personal services. (1)Fringe benefits in the form of regular 38.Rearrangement and alteration costs a.Definition.Compensation for personal compensation paid to employees during 39.Reconversion costs services includes all compensation paid periods of authorized absences from the job. 40.Recruiting costs currently or accrued by the organization for such as vacation leave.sick leave,military 41.Relocation costs services of employees rendered during the leave,and the like,are allowable provided 42.Rental costs period of the award(except as otherwise such costs are absorbed by all organization 43.Royalties and other costs for use of provided in paragraph g.below).It includes, activities in proportion to the relative amount patents and copyrights but is not limited to,salaries,wages, of time or effort actually devoted to each. 44.Severance pay director's and executive committee member's (2)Fringe benefits in the form of employer 46.Specialized service facilities fees,incentive awards,fringe benefits, contributions or expenses for social security, 46.Taxer pension plan costs,allowances for off-site employee insurance,workmen's 47.Termination costs • pay,incentive pay,location allowances, compensation insurance,pension plan costs 48.Training and education costs hardship pay.and cost of living differentials. (see paragraph g.below),and the like,are 49.Transportation costs b.Allowability.Except as otherwise allowable provided such benefits are granted 50.Travel costs specifically provided in this paragraph the in accordance with established written [Circular No.A-122J costs of such compensation are allowable to organization policies.Such benefits whether the extent that: _ treated as indirect coats or as direct costs. Attachment B (1)Total compensation to individual shall be distributed to particular awards and Selected Items of Cps! - employees is reasonable forthe services other activities in a manner consistent with rendered and conforms to the established the pattern of benefits accruing to the Paragraphs 1 through 50 provide principles policy of the organization consistently individuals or group of employees whose to be applied in establishing the allowability applied to both Government and non- salaries and wages are chargeable to such - of certain items of cost.These principles Government activities;and awards and other activities. apply whether a cost is treated as direct or (2)Charges to awards whether treated as (3)(a)Provisions for a reserve under a self- indirect.Failure to mention a particular item direct or indirect costs are determined and insurance program for unemployment of cost is not intended to imply that it is supported as required in this paragraph. compensation or workmen's compensation 1 unallowable;rather determination as to c.Reasonableness. ' are allowable to the extent that the allowability in each case should be based on (1)When the organization is predominantly provisions represent reasonable estimates of the treatment or principles provided for engaged in activities other than those the liabilities for such compensation,and the . similar or related items of cost. sponsored by the Government,compensation types of coverage,extent of coverage,and 1.Advertising costs. for employees on Government-sponsored rates and premiums would have been a.Advertising costs mean the coats of work will be considered reasonable to the allowable had insurance been purchased to media services and associated costs.Media extent that it is consistent with that paid for cover the risks.However,provisions for self- advertising includes magazines,newspapers, similar work in the organization's other insured liabilities which do not become radio and television programs,direct mail. activities. • payable for more than one year after the exhibits,and the like. (2)When the organization is predominantly provision is made shall not exceed the b.The only advertising costs allowable are engaged in Government-sponsored activities present value of the liability. " i those which are solely for(i)the recruitment and in cases where the kind of employees (b)Where an organization follows a of personnel when considered in conjunction required for the Government activities are consistent polcy of expensing actual with all other recruitment costs,as set forth net found in the organization's other • payments to,or on behalf of,employees or • -6- 46028 Federal Register / Vol. 45, No. 132 / Tuesday. July 8, 1980 / Notices former employees for unemployment (2)Reports reflecting the distribution of on hand may be made through use compensation or workmen's compensation. activity of each employee must be allowances or depreciation.However.e.xcept such payments are allowable in the year of maintained for all staff members as provided in paragraph f.below a payment with the prior approval of the (professionals and nonprofessionals)whose combination of the two methods may not be awarding agency provided they are allocated compensation is charged.in whole or in part, used in connection with a single class of to all activities of the organization. directly to awards.In addition,in order to fixed assets(e.g.,buildings.office equipment, (4)Coats of insurance on the lives of support the allocation of indirect costs,such computer equipment,etc.). trustees,officers,or other employees holding reports must also be maintained for other b.The computation of use allowances or positions of similar responsibility are employees whose work involves two or more depreciation shall be based on the allowable only to the extent that the functitona or activities if a distribution of their acquisition cost of the assets involved.The insurance represents additional compensation between such functions or acquisition cost of an asset donated to the compensation.The costs of such insurance activities is'needed in the determination of organization by a third party shall be its fair when the organization is named as the organization's indirect cost rate(s)(e.g., market value at the time of the donation. beneficiary are unallowable. an employee engaged part-time in indirect c.The computation of use allowances or g.Pension plan coats. cost activities and part-time in a direct depreciation will exclude. (1)Costs of the organization's pension plan function).Reports maintained by nonprofit (1)The cost of land: which are incurred in accordance with the organizations to satisfy these requirements (2)Any portion of the coat of buildings and established policies of the organization are must meet the following standards: equipment borne by or donated by the _ allowable,provided: (a)The reports must reflect an after-the- Federal Government irrespective of where (a)Such policies meet the test of fact determination of the actual activity of title was originally vested or where it reasonableness; each employee.Budget estimates(Le., presently resides:and (b)The methods of cost allocation are not estimates determined before the services are (3)Any portion of the cost of buildings and discriminatory; performed)do not qualify as support for equipment contributed by or for the (c)The cost assigned to each fiscal year is charges to awards. organization in satisfaction of a statutory determined in accordance with generally (b)Each report must account for the total matching retirement accepted accounting principles as prescribed activity for which employees are d.Where the use allowance method is in Accounting Principles Board Opinion No.8 compensated and which is required in followed the use allowance for buildings and issued by the American Institute of Certified fulfillment of their obligations to the improvement(including land improvements Public Accountants;and organization. - such as paved parking areas.fences,and (d)The costs assigned to a given fiscal year (c)The reports must be signed by the sidewalks)will be computed at an anneal are funded for all plan participants within six individual employee,or by a responsible rate not exceeding two percent of acquisition months after the end of that year.However, supervisory official having first hand cost.The use allowance for equipment will increases to normal and past service pension knowledge of the activities performed by the be computed at an annual rate not exceeding costs caused by a delay in funding the employee that the distribution of activity six and two-thirds percent of acquisition cost. actuarial liability beyond 30 days after each represents a reesonable estimate of the When the use allowance method is used for quarter of the year to which such coats are actual work performed by the employee buildings,the entire building mast be treated assignable are unallowable. during the periods covered by the reports. as a single asset the building's components (2)Pension plan termination insurance• (d)The reports mast be prepared at least (e.g.plumbing system,heating and air premiums paid pursuant tothe Employee monthly and must coincide with one or more conditioning,etc.)cannot be segregated frosts- Retirement Incomeme Security curity Act of 1974(Pub. pay Periods- the building's shell.The two percent L 93-4oe)are allowable.late payment (3)Charges for the salaries and wages of limitation.however,need not be applied to charges on such premiums are unallowable. nonprofessional employees,in addition to the equipment which is merely attached or (3)Excise taxes on accumulated funding supporting documentation described in fastened to the building but not permanently deficiencies and other penalties imposed subparagraphs(1)and(2)above,must also fixed to it and which is used as furnishings or Secur the Employee Retirement Income be supported by records indicating the total decorations or for specialized purposes(e.g.. Security Act are unallowable. number of hours worked each day dentist chairs and dental treatment units. h.Incentive compensation.Incentive maintained in conformance with Department counters,laboratory benches bolted to the coreduction,or to sent per s based on cost of Labor regulations implementing the Fair floor,dishwashers,carpeting,etc.).Such ssuggesiio a ands.safety performance. Labor Standards Act(29 CFR Part 518).For equipment will be considered as not being allowableuggeon owaeds, awards,eta,are this the term"nonprofessional permanentlyfixed to the buildingif it can be to the extent that the overallp�°ce' P compensation is determined to be reasonable employee"shall have the same meaning as removed without the need for costly or and such costs are paid or accrued pursuant ' "nonexempt employee,"under the Fair Labor extensive alterations or repairs to the to an agreement entered into in good faith Standards Act building or the equipment.Equipment that • between the organization and the employees (4)Salaries and wages of employees used meets these criteria will be subject to the aix before the services were rendered,or in meeting cost sharing or matching . and two-thirds percent equipment use pursuant to an established plan followed by requirements on awardsprust be supported In allowance limitation. • the organization so consistently as to imply, the same manner as salaries and wages e.Where depreciation method is followed, in effect,an agreement to make such claimed for reimbursement from awarding the period of useful service(useful life) payment. agencies. established in each case for usable capital i.Overtime.extra pay shift,and multishift 7.Contingency provisions.Contributions to assets must take into consideration such premiums.See paragraph V. a contingency reserve or any similar factors as type of construction,nature of the J.Severance pay.See paragraph 44. provision made for events the occurrence of equipment used,technological developments k.Training and education costs.See which cannot be foretold with certainty as to in the particular program area,and the paragraph 48. - time,intensity,or with an assurance of their renewal and replacement policies followed L Support of salaries and wages. happening,are unallowable.The term • for the the individual items or classes of - (1)Charges to awards for salaries and "contingency reserve"excludes self- assets involved.The method of depreciation wages,whether treated as direct costs or insurance reserves(see paragraph 8.f.(3)and used to assign the cost of an asset(or group Indirect costs,will be based on documented 18.a.(2Xd));pension funds(see paragraph of assets)to accounting periods shall reflect payrolls approved by a responsible official(*) 8.(g));and reserves for normal severance pay the pattern of consumption of the asset of the organization.The distribution of (see paragraph 44.(b)(1). during its useful life.In the absence of clear salaries and wages to awards must be 8.Contributions.Contributions and evidence Indicating that the expected supported by personnel activity reports as donations by the organization to others are . consumption of the asset will be significantly prescribed in subparagraph(2)below,except unallowable, greater or lesser in the early portions of its when a substitute system has been approved 9.Depreciation and use allowances. useful life than in the later portions the in writing by the the cognizant agency.(See. . a.Compensation for the use of buildings.. straight-line method shall be presumed to be paragraph E2 of Attachment A) other capital improvements,and equipment , the appropriate method.Depreciation * 411 —7— Federal Register / V . 45, No. 132 ./:Tuesday...July .8, 1980 / Notices 46029 methods once used shall not be changed reimbursed under the award or used to meet (1)"Equipment"means an article of -- unless approved in advance by the cognizant cost sharing or matching requirements. nonexpendable tangible personal property } Federal agency.When the depreciation (5)The value of the donated services may having a useful life of more than two years method is Introduced for application to assets be used to meet cost sharing or matching and an acquisition cost of$500 or more per previously subject to a use allowance,the requirements under conditions described in unit.An organization may use its own combination of use allowances and Attachment E.OMB Circular No.A-110. definition provided that it at least includes all depredation applicable to such assets must Where donated services are treated as nonexpendable tangible personal property as not exceed the total acquisition cost of the indirect costs,indirect cost rates will defined herein. assets.When the depreciation method is used separate the value of the donations so that (2)"Acquisition cost"means the net for buildings,a building's shell may be reimbursement will not be made. invoice unit price of an item of equipment. segregated from each building component (6)Fair market value of donated services . Including the cost of any modifications, (e.g.,plumbing system,heating,and air.. .. shall be computed as follows: attachments,accessories,or auxiliary conditioning system.etc.)and each item (a)Rates for volunteer services.Rates for apparatus necessary to make it usable for the depredated over its estimated useful life;or volunteers shall be consistent with those purpose for which it Is acquired.Ancillary the entire building(i.e.,the shell and all regular rates paid for similar work in other charges,such as taxes,duty,protective in- components)may be treated as a single asset activities of the organization.In cases where transit insurance,freight,and installation and depreciated over a single useful life. the kinds of skills involved are not found In shall be included in or excluded from f.When the depreciation method is used the other activities of the organization,the acquisition cost in accordance with the • for a particular class of assets,no rates used shall be consistent with those paid organization's regular written accounting -depreciation may be allowed on any such for similar work in the labor market in which Practices. assets that,under paragraph e.above,would the organizatiog,competes for such skills. (3)"Special purpose equipment"means be viewed as fully depreciated.However,a (b)Services donated by other equipment which is usable only for research, reasonable use allowance may be negotiated organizations.When an employer donates medical,scientific.or technical activities. for such assets if warranted after taking into the services of an employee,these services Examples of special purpose equipment consideration the amount of depreciation shall be valued at the employee's regular rate include microscopes,x-ray machines,surgical previously charged to the Government,the of pay(exclusive of fringe benefits and instruments,and spectrometers. estimated useful life remaining at time of indirect costs)provided the services are In (4)"General purpose equipment"means negotiation,the effect of any increased the same skill for which the employee Is equipment which is usable for other than maintenance charges or decreased efficiency normally paid.If the services are not in the research medical,scientific,or technical due to age,and any other factors pertinent to same skill for which the employee is normally activities,whether or not special the utilization of the asset for the purpose paid,fair market value shall be computed is modifications are needed to make them contemplated. accordance with subparagraph(a)above. suitable for a particular purpose.Examples of g.Charges for use allowances or b.Goods and space. general purpose equipment include office depreciation must be supported by adequate . (1)Donated goods;i.e.,expendable equipment and furnishings,air conditioning ng property records and physical inventories personal property/supplies,and donated use equipment,mreprodvti vehicles,n and andp auto must be taken at least once every two years of space may be furnished to an organization. data eqprocessinguipment. equipment.r automatic (a statistical sampling basis is acceptable)to The value of the goods and space is not data Cai ensure that assets exist and are usable and reimbursable either as a direct or indirect b.(1)Capital expenditures for general purpose equipment are unallowable as a needed.When the depreciation method is cost. followed.adequate depreciation records (2)The value of the donations may be used direct coat except with the prior approval of indicating the amount of depreciation taken to meet cost sharing or matching share the awaitag agency. special each period must also be maintained requirements under the conditions described tal expenditures for 10.Donations in Attachment E,OMB Circular No.A-110. pqui Cappipment are allowable as nirect cooats purpose provided that items with a unit cost of S1000 a.Services received. The value of the donations shall be or more have the prior approval of the (1)Donated or volunteer services may be determined in accordance with Attachment awarding agency. furnished to an organization by professional E Where donations are treated as indirect c.Capital expenditures for Iand or and technical personnel.consultants,and costs,indirect cost rates will separate the buildings are unallowable as a direct cost other skilled and unskilled labor.The value value of the donations so that reimbursement except with the prior approval of the of these services is not reimbursable either as will not be made. awarding agency. a direct or indirect cost. 11.Employee morale,health,and welfare, d.Capital expenditures for improvements (2)The value of donated services utilized costs and credits.The costs of house to land.buildings,or equipment which in the performance of a direct cost activity publications,health or first-aid clinics,and/ materially increase their value or useful life shall be considered in the determination of or infirmaries,recreational activities, are unallowable as a direct cost except with the organization's indirect cost rate(s)and, employees'counseling services,and other the prior approval of the awarding agency. accordingly,shall be allocated a expenses incurred in accordance with the e.Equipment and other capital proportionate share of applicable indirect organization's established practice or custom expenditures are unallowable as indirect costs when the following circumstances exist: for the improvement of working conditions, costs.However,see paragraph 9 for (a)The aggregate value of the services is employer-employee relations,employee allowability of use allowances or . material; morale,and employee performance are depreciation on buildings,capital (b)The services are supported by a allowable.Such costs will be equitably improvements,and equipment.Also,see significant amount of the indirect costs apportioned to all activities of the paragraph 42 for allowability of rental costs - incurred by the organization; organization.Income generated from any of for land buildings,and equipment. (c)The direct cost activity is not pursued these activities will be credited to the cost 14.Fines and penalties.Costs of fines and primarily for the benefit of the Federal thereof unless such income has been penalties resulting from violations of,or Government irrevocably set over to employee welfare failure of the organization to comply with (3)In those instances where there is no organizations. . Federal,State,and local laws and regulations basis for determining the fair market value of 12.Entertainment costs.Costs of are unallowable except when incurred as a the services rendered the recipient and the amusement,diversion,social activities, result of compliance with specific provisions 1 cognizant agency shall negotiate an ceremonials,and costs relating thereto,such of an award or instructions in writing from appropriate allocation of indirect cost to the as meals,lodging,rentals,transportation,and the awarding agency. • services. gratuities are unallowable(but see 15,Fringe benefits.See paragraph 6.f. (4)Where donated services directly benefit paragraphs 11 and 25). 16.Idle facilities and idle capacity. a project supported by an award,the indirect 13.Equipment and other capital a.As used in this paragraph the following costs allocated to the services will be expenditures. terms have the meanings set forth below: considered as a part of the total costs of the a.As used in this paragraph,the following (1)"Facilities"means land and buildings or project.Such indirect costs may be terms have the meanings set forth below: any portion thereof,equipment individually 1 • —8- 46030 Federal Register / Vol. 45, No. 132 / Tuesday, July 8. 1980 / Notices or collectively,or any other tangible capital (a)Types and extent of coverage shall-be 21.Losses on other awards.Any excess of ( asset,wherever located,and whether owned in accordance with sound business practice costs over income on any award is or leased by the organization. and the rates and premiums shell be unallowable as a cost of any other award. (2)"Idle facilities"means completely reasonable under the circumstances. This includes,but is not limited to.the unused facilities that are excess to the (b)Costs allowed for business interruption organization's contributed portion by reason organization's current needs. or other similar insurance shall be limited to of cost sharing agreements or any (3)"Idle capacity"means the unused exclude coverage of management fees. underrecoveries through negotiation of lump capacity of partially used facilities.It is the (c)Costs of insurance or of any provisions sums for,or ceilings on,indirect costs. i difference between that which a facility for a reserve covering the risk of loss or 22.Maintenance and repair costs.Costs could achieve under 100 per cent operating damage to Government property are incurred for necessary maintenance,repair. 1 time on a one-shift basis less operating allowable only to the extent that the or upkeep of buildings and equipment interruptions resulting from time lost for organization is liable for such loss or damage. (including Government property unless repairs,setups.unsatisfactory materials,and (d)Provisions fqr a reserve under a self- otherwise provided for)which neither add to" other normal delays,and the extent to which insurance program are allowable to the the permanent value of the property nor the facility was actually used to meet extent that types of coverage,extent of appreciably prolong its intended life,but demands during the accounting period.A coverage,rates,and premiums would have keep it in an efficient operating condition,are multishift basis may be used if it can be been allowed bed insurance been purchased allowable.Costs incurred for improvements - shown that this amount of usage could to cover the risks.However,provision for which add to the permanent value of the normally be expected for the type of facility known or reasonably estimated self-insured buildings and equipment or appreciably • involved. liabilities,which do not become payable for prolong their intended life shall be treated as (4)"Costs of idle facilities or Idle capacity" more than one year after the provision is capital expenditures(see paragraph 13). • means costs such as maintenance,repair. made shall not exceed the present value of 23.Materials and supplies.The costs of housing,rent,and other related costs;e.g., the liability. materials and supplies necessary to carry out property taxes,insurance.and depreciation (e)Costs of insurance on the lives of an award are allowable.Such costs should be or use allowances. trustees,officers.or other employees holding charged at their actual prices after deducting b.The costs of idle facilities are positions of similar responsibilities are all cash discounts,trade discounts,rebates, unallowable except to the extent that allowable only to the extent that the and allowances received by the organization. (1)They are necessary to meet insurance represents additional Withdrawals from general stores or fluctuations in workload:or compensation(see paragraph 8).The cost of stockrooms should be charged at cost under (2)Although not necessary to meet such insurance when the organization is any recognized method of pricing fluctuations in workload,they were identified as the beneficiary is unallowable. consistently applied.Incoming transportation necessary when acquired and are now idle (3)Actual losses which could have been charges may be a proper part of material because of changes in program requirements. covered by permissible insurance(through cost.Materials and supplies charged as a efforts to achieve more economical the purchase of insurance or a self-insurance direct cost should include only the materials operations.reorganization.termination.or program)are unallowable unless expressly and supplies actually used for the other causes which could not have been provided for in the award,except performance of the contract or grant,and due reasonably foreseen.Under the exception (a)Costs incurred because of losses not credit should be given for any excess stated in this subparagraph.costs of idle covered under nominal deductible insurance materials or supplies retained,or returned to . facilities are allowable for a reasonable coverage provided in keeping with sound vendors. period of time,ordinarily not to exceed one business practice are allowable. 24.Meetings,conferences. year,depending upon the Initiative taken to (b)Minor losses not covered by Insurance. a.Costs associated with the conduct of use.lease,or dispose of such facilities(but such as spoilage,breakage,and meetings,and conferences',and include the see paragraphs 47.b.and d.). disappearance of supplies,which occur in the cost of renting facilities,meals,speakers' c.The costs of idle capacity are normal- ordinary course of operations,are allowable. fees,and the like.But see paragraph 12, costs of doing business and are a factor in the b.Indemnification includes securing the Entertainment costs.and paragraph 29, normal fluctuations of usage or indirect cost organization against liabilities to third Participant support costs. rates from period to period.Such costs are persona and any other loss or damage,not b.To the extent that these costs are allowable,provided the capacity is compensated by insurance or otherwise.The identifiable with a particular cost objective. reasonably anticipated to be necessary or Government is obligated to indemnify the they should be charged to that objective.(See was originally reasonable and is not subject organization only to the extent expressly paragraph B.of Attachment A.)These costs to reduction or elimination by subletting provided in the award. are allowable provided that they meet the renting,or sale,in accordance with sound. 19.Interest fiord raising,and investment general tests of allowable,shown in business,economics.or security practices. management costs. Attachment A to this Circular. Widespread Idle capacity throughout an. a.Costs incurred for Mtereet on borrowed* ' c.Costs of meetings and conferences held • entire facility or among a group of assets ' capital or temporary use of endowment to conduct the general administration of the having substantially the same function may funds,however represented,are unallowable. organization are allowable. be idle facilities. b.Costa of organized fund raising, 25.Memberships,subscriptions,and 17.Independent research and development Including financial campaigns,endowment professional activity costs. [Reserved]. - drives,solicitation of gifts and bequests,and a.Costs of the organization's membership 18.Irsurunce and mdemnrftcatiiz - -- similar expenses incurred solely to raise in civic,business,technical and professional a.Insurance includes insurance which the- capital or obtain contributions are - i " •.. organizations are allowable. organization is required to carry.or which is unallowable. b.Costs of the organization's subscriptions approved,under the terms of the award and'- c.Coate of investment counsel and stall to civic,business,professional,and technical any other insurance which the organization and similar expegpes incurred solely to periodicals are allowable. _. maintains in connection with the general enhance income from investments are -- c.Costs of attendance at meetings and • conduct of its operations.This paragraph unallowable. - conferences,sponsored by others when the does not apply to insurance which represents d.Fund raising and investment activities primary purpose is the dissemination of fringe benefits for employees(see paragraph- shall be allocated an appropriate share of ' technical information,are allowable.This e.f.and 8.g.(2)). indirect costs under the conditions described includes costs of meals,transportation,and (1)Costs of insurance required or in paragraph B of Attachment A. other items incidental to such attendance. • approved.and maintained,pursuant to the . : 20.Labor relations costs.Costs incurred in 28.Organization costs.Expenditures,such award are allowable. maintaining satisfactory relations between as incorporation fees,brokers'fees,fees s to (2)Costs of othetinsurenna maintained by • the organization and its employees.inclirdlrrg promoters:organizers or management the organization in connection with the ' costs of labor management committees. . - ' consultants,attorneys,accountants.or general conduct of its operations are employee publications,and other related investment counselors,whether or not allowable subject to the following limitations. activities are allowable. employees of the organization.in connection —9 411 — r .. Federal Register / Vol. 45, No.-132 f'"Tuesday;-jti y-8, 1980 [-Notices . 46031 with establishment or reorganization of an 33.Preaward costs.Preaward costs are in which the depreciation applicable to such 4"--- organization,are unallowable except with those incurred prior to the effective date of property was included.The amount of the prior approval of the awarding agency. the award directly pursuant to the gain or loss to be included as a credit or 27.Overtime.extra pay shift.and ' negotiation and in anticipation of the award charge to the appropriate cost groupings) multishift premiums.Premiums for overtime, where such costs is necessary to comply with shall be the difference between the amount extra-pay shifts,and multishift work are the proposed delivery schedule or period of realized on the property and the allowable only with the prior approval of the performance.Such costs are allowable only undepreciated basis of the property. awarding agency except: to the extent that they would have been (2)Gains and losses on the disposition of a.When necessary to cope with allowable if incurred after the date of the depreciable property shall not be recognized 1 emergencies,such as those resulting from award and only with the written approval of as a separate credit or charge under the accidents,natural disasters,breakdowns of the awarding agency. following conditions. equipment.or occasional operational • 34.Professional service costs. (a)The gain or loss is processed through a bottlenecks of a sporadic nature. a.Costs of professional and consultant depreciation reserve account and is reflected b.When employees are performing indirect services rendered by persons who are in the depreciation allowable under functions such as administration, members of a particular profession or possess paragraph 9. • maintenance,or accounting. a special skill,and who are not officers or (b)The property is given in exchange as .. c.In the performance of tests,laboratory employees of the organization,are allowable, part of the purchase price of a similar item procedures,or other similar operations which subject to b,c,and d,of this paragraph when and the gain or lose is taken into account in are continuous in nature and cannot reasonable in relation to.the services determining the depreciation cost basis of the reasonably be interrupted or otherwise rendered and when not contingent upon new item. completed. recovery of the costs from the Government. (c)A loss results from the failure to , d.When lower overall cost to the b.In determing the allowability of oosts in maintain permissible insurance,except es Government will result. a particular case,no single factor or any otherwise provided in paragraph 18.a.(3). 28.Page charges in professional journals. special combination of factors is necessarily (d)Compensation for the use of the Page charges for professional journal determinative.However,the following property was provided through use publications are allowable as a necessary factors are relevant allowances in lieu of depreciation in part of research costs,where: (1)The nature and scope of the service accordance with paragraph 9. a.The research papers report work rendered in relation.to the service required (e)Gains and losses arising from mass or supported by the Government;and (2)The necessity of contracting for the extraordinary sales,retirements,or other b.The charges are levied impartially on all service,considering the organization's dispositions shall be considered on a case- research papers published by the journal, capability in the particular area. by-case basis. whether or not by Government-sponsored (3)The past pattern of such costs, b.Gains lor e losses of any nature arising authors. particularly in the years prior to Government from the sale or exchange of property other 29.Participant support costs.Participant awards. than the property covered in paragraph a. support costs are direct costs for items such (4)The impact of Government awards on above shall be excluded in computing award as stipends or subsistence allowances,travel the organization's business(i.e.,what new 36Costs' allowances,and registration fees paid to or problems have arisen). a.PublPublic i information servicerviecostscos i on behalf of participants or trainees(but not a.Public information service include p p (5)Whether the proportion of Government the cost associated with pamphlets,news employees)in connection with meetings, work to the organization's total business is releases,and other forms of information • conferences,symposia,or training projects. such as to influence the organization in favor services.Such costs are normally incurred to: These costs are allowable with the prior of incurring the cost,particularly where the (1)Inform or instruct individuals,groups,or approval of the awarding agency. services rendered are not of a continuing the general public. 30.Patent'costs. nature and have little relationship to work (2)Interest individuals or groups in a.Costs of(i)preparing disclosures, under Government grants and contracts. participating in a service program of the reports,and other documents required by the (6)Whether the service can be performed organization. award and of searching the art to the extend more economically by direct employment (3)Disseminate the results of sponsored necessary to make such disclosures.(ii) rather than contracting. and nonsponsored activities. preparing documents and any other patent (7)The qualifications of the individual or b.Public information service costs are costs in connection with the filing and concern rendering the service and the allowable as direct costs with the prior prosecution of a United states patent customary fees charged,especially on non- approval of the awarding agency.Such costs application where title or royalty-free license Government awards. are unallowable as indirect costs. is required by the Government to be (8)Adequacy of the contractual agreement 37.Publication and printing costs. conveyed to the Government,and(iii)general for the service(e.g.,description of the service, a.Publication costs include the costs of counseling services relating to patent and estimate of time required,rate of printing(including the processes of copyright matters•such as advice on patent compensation,and termination provisions). composition,plate-making,press work. and copyright laws,regulations,clauses,and c.In addition to the factors in paragraph b binding,and the end products produced by employee agreements are allowable(but see above,retainer fees to the allowable must be such processes),distribution,promotion. paragraph 34). supported by evidence of bdna fide services mailing,and general handling. - . b.Cost of preparing disclosures,reports, available or rendered. b.If these costs are not identifiable with a and other documents and of searching the art d.Cost of legal.accounting,and consulting particular cost objective,they should be . to the extent necessary to make disclosures, services,and related coats incurred in allocated as indirect costs to all benefiting - if not required by the award.are connection with defense of antitrust suits, activities of the organization. unallowable.Costs in connection with(i) and the prosecution of claims against the c.Publication and printing costs are filing and prosecuting any foreign patent Government.are unallowable.Costs of legal, unallowable as direct costs except with the application,or(ii)any United States patent accounting and consulting services,and prior approval of the awarding agency. application,where the award does not related costs,incurred in connection with d.The cost of page charges in journals is require conveying title or a royalty-free patent infringement litigation,organization addressed paragraph 28. license to the Government.are unallowable and reorganization,are unallowable unless 38.Rearrangement and alteration costs. (also see paragraph 43). otherwise provided for in the award(but see Costs incurred for ordinary or normal 31.Pension plans.See paragraph 6.g. paragraph 47e). rearrangement and alteration of facilities are 32.Plant security costs.Necessary 35.Profits and losses on disposition of allowable.Special arrangement and expenses incurred to comply with depreciable property or other capital pssets. alteration costs incurred specifically for the t. Government security requirements or for a.(1)Gains and losses on sale•retirement. project are allowable with the prior approval i facilities protection,including wages, or other disposition of depreciable property of the awarding agency. uniforms,and equipment of personnel are shall be included in the year in which they 39.Reconversion costs.Costs incurred in allowable. occur as credits or charges to cost groupings) the restoration or rehabilitation of the —10- 1 46O32 Federal Register / Vol. 45, No. 132 / Tuesday, July 8. 1980 I Notices —` organization's facilities to approximately the control within 12 months after hire.the if any)is equal to 75 per cent or more of the same condition existing immediately prior to organization shall refund or credit the economic life of the leased property;i.e..the commencement of Government awards,fair Government for its share of the cost period the property is expected to be wear and tear excepted.are allowable. However.the costs of travel to an overseas economically usable by one or more users. 40.Recruiting costs.The following location shall be considered travel costs In 43.Royalties and other costs for use of recruiting costs are allowable:cost of"help accordance with paragraph 50 and not patents and copyrights. wanted"advertising,operating costs of an relocation costa for the purpose of this a.Royalties on a patent or copyright or employment office,coats of operating an paragraph if dependents are not permitted at amortization of the cost of acquiring by educational testing program,travel expenses the location for any reason and the costs do purchase a copyright,patent,or rights including food and lodging of employees not include costs of transporting household thereto,necessary for the proper performance while engaged in recruiting personnel,travel goods. . of the award are allowable unless costs of applicants for interviews for d.The following costs related to relocation (1)The Government has a license or the prospective employment,and relocation costs are unallowable: right to free use of the patent or copyright. incurred incident to recruitment of new (1)Fees and other costs associated with • (2)The patent or copyright has been employees(see paragraph 41c).Where the acquiring a new home., adjudicated to be invalid.or has been organization uses employment agencies, (2)A loss on the sale of a former home. administratively determined to be invalid costs not in excess of standard commercial (3)Continuing mortgage principal and, (3)The patent or copyright is considered to rates for such services are allowable. interest payments on a home being sold. be unenforceable. 41.Relocation civets. (4)Income taxee.pald by an employes (4)The patent or copyright Is expired. a.Relocation costs are costs incident to the related to reimbursed relocation costs. b.Special care should be exercised in permanent change of duty assignment(for an 42.Rental costs. determining reasonableness where the indefinite period or for a stated period of not a.Subject to the limitations described in royalties may have been arrived at as a result less than 12 months)of an existing employee paragraphs b.through d.of this paragraph. of less then arm's length bargaining;e.g.: or upon recruitment of a new employee. rental costs are allowable to the extent that (1)Royalties paid to persons,including Relocation costs are allowable.subject to the the rates are reasonable in light of such corporations,affiliated with the organization. limitation described in paragraphs b,e,and d, factors as:rental costs of comparable (2)Royalties paid to unaffiliated parties, below,provided that property,if any market conditions In the including corporations,under an agreement (1)The move is for the benefit of the area:alternatives available and the type,)ifs entered into in contemplation that a employer: expectancy,condition and value of the Government award would be made. (2)Reimbursement to the employee is in property leased (3)Royalties paid under an agreement accordance with an established written b.Rental coats under sale and leaseback entered into after an award is made to an arrangements are allowable only up to the policy consistently followed by the employer amount that would be allowed had the organization. (3)The reimbursement does not exceed the organization continued to own the property. c.In any case involving a patent Or " employee's actual(or reasonably estimated) c.Rental costs under less-than-length copyright formerly owned by the expenses leases are allowable only up to the amount organization,the amount of royalty allowed b.Allowable relocation costs for current that would be allowed had title to the should not exceed the cost which would have employees are limited to the following- been allowed_had the organization retained property vested in the organization.For this ` (1)The coats of transportation of the purpose,a less-than-arms-length lease is one title`s to employee,members of his immediate family 44.Severance pay. ) and his household.and personal effects to the under which one party to the lease agreement a.Severancepayralso commonly referred is able to control or substantially influence to as dismissal wages.is a payment in new location. the actions of the other.Such leases include. p (2)The costs of fording a new home,such but are not limited to those between(i) addition to regular salaries and wages,by as advance trips by employees and spouses divisions of an organ ation;(ii)organizations organizations to workers whose employment to locate living quarters and temporary under common control through common is being terminated.Costs of severance pay lodging during the transition period up to a officers.directors.or members;and(iii)sm are allowable only to the extent that in each maximum period of 30 days,including organization and a director.trustee,officer, case,it is required by(i)law,(ii)employer- advance trip time. or key employee of the organization or his employee agreement,(iii)established policy (3)Closing costs,such as brokerage,legal.. immediate family either directly or through that constitutes,in effect.an implied and appraisal fees,incident to the disposition corporations,trusts,or similar arrangements agreement on the organization's part,or(iv) of the employee's former home.These costs, in which they hold a controlling interest. • circumstances of the particular employment. together with those described in(4)below, d.Rental costs under leases which create a b.Costs of severance payments are divided are limited to 8 per cent of the sales price of material equity in the leased property are into two categories as follows: the employee's former home. allowable only up to the amount that would (1)Actual normal trunover severance (4)The continuing costs of ownership of be allowed had the organization purchased payments shall be allocated to all activities; the vacant former home after the settlement the property on the date the 19ase agreement or,where the organization provides for a or lease data of the employee's new was executed:e.g.,depreciation or use reserve for normal severances such method permanent home,such as maintenance of allow:nee%maintenance,taxes,insurance will be acceptable if the charge to current buildings and grounds(exclusive of fixing up but excluding interest expense and other • operations is reasonable in light of payments expenses),utilities,taxes,and property unallowable costs.For this purpose,a actually made for normal severances over a insurance. material equity in the property exists if the representative past period and if amounts (5)Other necessary and reasonable lease in noncancelable or is cancelable only charged are allocated to all activities of the expenses normally incident to relocation, • upon the occurrence of some remota organization. such as the costs of cancelling an unexpired contingency and has one or morsel the - (2)Abnormal or mass severance pay is of lease,disconnecting and reinstalling following characteristics: such aconjechual nature that measurement household appliances,and purchasing (1)The organization has the right to of costs by means of an accrual will not insurance against loss of or damages to purchase the property for a price which at the achieve equity to both parties.Thus,accruals personal property.The cost of cancelling an beginning of the lease appears to be for this purpose are not allowable.However, unexpired lease is limited to three times the substantially less than the probable fair the Government recognizes its obligation to monthly rental. market value at the time it is permitted to participate to the extent of its fair share.in c.Allowable relocation coats for new purchase the property(commonly called a. any specific payment Thus,allowability will employees are limited to those described In lease with a bargain purchase option): be considered on a case-by-case basis in the (1)and(2)of paragraph b.above.When (2)Title to the property passes to the. event of occurrence. relocation costs incurred incident to the organization at some time during or after the 45.Specialized service facilities. recruitment of new employees have been lease period: a.The costs of services provided by highly allowed either as a direct or indirect cost and* (3)The term of the lease(initial term plus complex or specialized facilities operated by the employee resigns for reasons within his' periods covered by bargain renewal options, the organization.such as electronic —11— ` Federal Register ./ Vol. 45, No. 232 / Tuesday, July 8, 1980 / Notices 46033 computers and wind tunnels,are allowable - - b.Coate continuing after termiaatian.lf In with the basic guidelines contained in . "-"__"" provided the charges for the services meet a particular case,despite all reasonable Attachment A.The indirect expense so the conditions of either b.or c.of this - efforts by the organization,certain costs allocated shall exclude the same and similar paragraph and,in addition,take into account cannot be discontinued immediately after the costa claimed directly or indirectly as any items of income or Federal financing that effective date of termination,such costs are settlement expenses. qualify as applicable credits under paragraph generally allowable within the limitations set 48 Training and education costs. A.S.of Attachment A. forth in this Circular,except that any such a.Costs of preparation and maintenance of b.The costs of such services.when costs continuing after termination due to the a program of instruction including but not material,must be charged directly to negligent or willful failure of the organization limited to on-the-job,classroom,and applicable awards based on actual usage of. to discontinue such costs shall be apprenticeship training,designed to increase the services on the basis of a schedule of" unallowable. the vocational effectiveness of employees, rates or established methodology that jf)does c.Loss of useful value.Loss of useful value including training materials,textbooks, not discriminate against federally supported " of special tooling.machinery and equipment salaries or wages of trainees(excluding activities of the organization,including usage which was not charged to the award as a overtime compensation which might arise by the organization for internal purposes,and capital expenditure is generally allowable le therefrom),and(i)salaries of the director of (ii)is designed to recover only the aggregate (1)Such special tooling,machinery,or training and staff when the training program costs of the services.The costs of each _ " equipment is not reasonably capable ofnsetn is conducted by the organisation;or(ii) service shall consist normally of both its - the the other work of the organization - tuition and fees whoa the training is in an ' direct costs end its allocable share of all (2)The interest of the Government is institution not operated by the organization. indirect costs.Advance agreements pursuant protected by transfer of title or by other are allowable. to paragraph A.6.of Attachment A are ' means deemed appropriate by the awarding b.Costs of part-time education,at an , particularly important in this situation. agency; - undergraduate or postgraduate college level. c.Where the costs incurred for a service d.Rental costs.Rental costs under including that provided at the organization's are not material,they may be allocated as unexpired leases ale generally allowable - own facilities,are allowable only when the indirect costs. where clearly shown to have bent course or degree pursued is relative to the 46.Taxes. • reasonably necessary for the performance of field in which the employee is now woricing a.In general,taxes which the organization the terminated award leas the residual value or may reasonably be expected to work,and is required to pay and which are paid or of such leases,if(I)the amount of such rental are limited to: accrued in accordance with generally claimed does not exceed the reasonable use (1)Training materials. accepted accounting principles,and value of the property leased for the period of (2)Textbooks. payments made to local governments in lieu the award and such further period as may be (3)Fees charges by the educational of taxes which are commensurate with the reasonable,and(ii)the organization makes institution. local government services received are all reasonable efforts to terminate,assign, (4)Tuition charged by the educational allowable,except for(i)taxes from which settle,or otherwise reduce the cost of such institution,or in lieu of tuition,instructors' exemptions are available to the organization lease.There also may be included the cost of salaries and the related share of indirect directly or which are available to the alterations of such leased property,provided costs of the educational institution to the organization based on an exemption afforded such alterations were necessary for the extent that the sum thereof is not in excess of the Government and in the latter case when performance of the award and of reasonable the tuition which would have ben paid to the the awarding agency makes available the restoration required by the provisions of the participating educational institution. necessary exemption certificates,(ii)special lease. (5)Salaries and related costs of instructors assessments on land which represent capital a.Settlement expenses.Settlement who are employees of the organization. improvements,and(iii)Federal income taxes, expenses including the following are (6)Straight-time compensation of each b.Any refund of taxes,and any payment to generally allowable: employee for time spent attending classes the organization of interest thereon,which (1)Accounting,legal,clerical,and similar during working hours not in excess of 156 were allowed as award'costs,will be costs reasonably necessary for: • hours per year and only to the extent that credited either as a cost reduction or cash (a)The preparation and presentation to . circumstances do not permit the operation of refund,as appropriate,to the Government. awarding agency of settlement claims and classes or attendance at classes after regular 47.Termination costs.Termination of supporting data with respect to the working hours;otherwise such compensation awards generally give rise to the incurrence terminated portion of the award unless the is unallowable. of costs,or the need for special treatment of termination is for default.(See paragraph 4.a. c.Costs of tuition,fees,training materials, costs,which would not have arisen had the of Attachment L.OMB Circular No.A—lit; and textbooks(but not subsistence,salary,or award not been terminated.Cost principles and any other emoluments)in connection with covering these items are set forth below. (b)The termination and settlement of full-time education,including that provided at They are to be used in conjunction with the subawards. the organization's own facilities,at a other provisions of this Circular in (2)Reasonable costs for the storage. postgraduate(but not undergraduate)college termination situations. transportation,protection,and disposition of level,are allowable only when the course or a.Common items.The cost of items property provided by the Government or degree pursued is related to the field in which reasonably usable on the organization's other acquired or produced for the award except the employee is now working or may work shall not be allowable unless the when grantees are reimbursed for disposals reasonably be expected to work,and only organization submits evidence that it would at a predetermined amount in accordance where the costs receive the prior approval of not retain such items at cost without with Attachment N of OMB Circular A-110. the awarding agency.Such costs are limited - sustaining a loss.In deciding whether such (3)Indirect costs related to salaries and to the costs attributable to a total period not items are reasonably usable on other work of wages incurred as settlement expenses in to exceed one school year for each employee the organization,the awarding agency should subparagraphs(1)and,(2)of this paragraph. so trained.In unusual cases the period may consider the organization's plans and orders Normally,such indirect costs shall be limited be extended. • for current and scheduled activity, to fringe benefits,occupancy cost.and d.Costs of attendance of up to 16 weeks Contemporaneous purchases of common immediate supervision, per employee per year at specialized items by the organization shall be regarded f.Claims under subowards Claims under programs specifically designed to enhance as evidence that such items are reasonably subawards,including the allocable portion of the effectiveness of executives or managers usable on the organization's other work.Any claims which are common to-the award,and or to prepare employees for such positions acceptance of common items as allocable to to other work of the organization are are allowable.Such costs include enrollment the terminated portion of the award shall be generally allowable.An appropriate share of fees,training materials,textbooks and limited to the extent that the quantities of the organization's indirect expense may be related charges,employees'salaries, such items on hand,in transit,and on order allocated to the amount of settlements with subsistence,and travel.Coats allowable are in excess of the reasonable quantitative subcontractor/subgrantees;provided 4hat the , under this paragraph do not include those for requirements of other work. amount allocated is otherwise consistent courses that are part of a degree oriented —12- 46034 Federal Register / Vol. 45, No. 132 / Tuesday, July 8, 1980 / Notices • curriculum,which are allowable only to the allocation on the basis of work or time period Universities Research-Association. extent set forth in b.and c.above. benefited when appropriate.Advance Incorporated(National Acceleration Lab). e.Maintenance expense,and normal agreements are particularly important. Argonne,Illinois ` depreciation or fair rental,on facilities e.Ditect charges for foreign travel•costs are Universities Corporation for Atmospheric owned or leased by the organization for allowable only when the travel has received Research.Boulder.Colorado training purposes are allowable to the extent prior approval of the awarding agency.Each Nonprofit Insurance Companies such as Blue set forth in paragraphs 9.22.and 42. separate foreign trip must be approved.For Cross and Blue Shield Organizations f.Contributions or donations to purposes of this provision,foreign travel is Other nonprofit organizations as negotiated educational or training institutions.Including defined as any travel outside of Canada and with awarding agencies. the donation of facilities or other properties, the United States and its territories and la Doc.ss-mmo piled 7-7-6 8:45 amj and scholarships or fellowships,are possessions.Howevee,for an organization MLLEM CODE 3110-41-+M unallowable. located in foreign countries,the term"foreign g.Training and education costs in excess of travel"means travel outside that country. those otherwise allowable under paragraphs b.and c.of this paragraph may be allowed [Circular No.A-1221 with prior approval of the awarding agency. Attachment C To be considered for approval,the • organization must demonstrate that such Nonprofit Organtzationanot Subject to this 1 costs are consistently incurred pursuant to an Circular established training and education program. Aerospace Corporation.El Segundo. and that the course or degree pursued is California relative to the field in which the employee is Argonne Universities Association,Chicago. now working or may reasonably be expected Illinois to work. Associated Universities,Incorporated. 49. Transportation costs.Transportation Washington.D.C. costs include freight.express,cartage.and Associated Universities for Research and postage charges relating either to goods Astronomy,Tucson,Arizona purchased,in process.or delivered.These Atomic Casualty Commission.Washington. costs are allowable.When such costs can D.C. readily be identified with the items involved, Battelle Memorial Institute,Headquartered in they may be directly charged as Columbus.Ohio transportation costs or added to the cost of Brookhaven National Laboratory,Upton. such items(see paragraph 23).Where New York identification with the materials received Center for Energy and Environmental cannot readily be made,transportation costs Research(CEEB),(University of Puerto may be charged to the appropriate indirect Rico) cost accounts if the organization follows a Commonwealth of Puerto Rico,Charles Stark consistent,equitable procedure in this Draper Laboratory,Incorporated respect. 50 Travel costa. Cambridge.Massachusetts.Comparative - a.Travel costs are the expenses for Animal Research Laboratory(CARE) transportation,lodging,subsistence,and (University of Tennessee),Oakridge, related items incurred by employees who are Tennessee . in travel status on official business of the Environmental Institute of Michigan,Ann organization.Travel costs are allowable Arbor,Michigan subject to paragraphs b.through e.below, Hanford Environmental Health Foundation. when they are directly attributable to specific Richland.Washington work under an award or are incurred in the UT Research Institute,Chicago,Illinois normal course of administration of the Institute for Defense Analysis,Arlington. nization. V o be Such costs may be charged on an actual Institute of Gas Technology,Chicago,Illinois basis.on a per diem or mileage basis in Hem Midwest Research Institute,Headquartered of actual costs incurred.or on a combination in Kansas City,Missouri of the two,provided the method used results Mitre Corporation.Bedford,Massachusetts in charges consistent with those normally Montana Energy Research Ind Development allowed by the organization in its regular Institute,Inc..(MERDI).Butte.Montana operations. National Radiological Astronomy c.The difference In cost between first-class Observatory.Green Bank.West Vtrgtnia air accommodations and less than first-class Oakridge Associated Universities,Oakridge. air accommodations is unallowable except Tennessee ` when less than first-class air Project Management Corporation.Oakridge. accommodations are not reasonably Tennessee _ available to meet necessary mission Rand Corporation.Santa Monica,California requirements,such es where less than first-- Research Triangle Institute,Research class accommodations would(i)require Triangle Park.North Carolina circuitous routing.(ii)require travel during Riverside Research Institute.New York.New unreasonable hours.(lii)greatly increase the York duration of the flight.(iv)result in additional Sandia Corporation.Albuquerque.New costs which would offset the transportation Mexico savings.or(v)offer accommodations which Southern Research Institute.Birmingham. are not reasonably adequate for the medical Alabama • needs of the traveler. Southwest Research Institute,San Antonia. d.Necessary and reasonable costs of Texas family movements and personnel movements SRI International,Menlo Perk.California of a special or mass nature are allowable. Syracuse Research Corporation.Syracuse. pursuant to paragraphs 40 and 41,subject to New York n 0 c' -1 3- *U.S. Government Printing Office : 1983 -381-215-1184 .. _ • FM� bI � L �•�� °-� Hand booK 6500 ,111 v . • U.S.Department of Housing and Urban Development e`�',N ocvEsa� Office of Community Planning and Development f Program Participants and Departmental Staff September 1988 �rr�rnunity +gevelopn�ent Block Grant Program Entitlement Grant Regulations CCBE: Distribution:W-1,W-3-1, R-1, R-6, Special(CPD Field Directors) DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Office, of the Assistant Secretary for Community Planning and Development 24 CFR Part 570 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM IL _ T c FINAL RULE as published in the FEDERAL REGISTER [53 FR 34437; September 6, 19881 V�Joii c POLLLw i iG : ( i) The subrecipient does not assume the recipient 's environmental responsibilities described at § 570.604; and (ii) The subrecipient does not assume the recipient 's responsibility for initiating the review process under Executive Order 12372. 7. Subpart K of Part 570 is revised to read as follows: Subpart K -- Other Program Requirements. Sec. 570.600 General. 570.601 Public Law 88-352 and Public Law 90-284 ; affirmatively furthering fair housing ; and Executive Order 11063 . 570.602 Section 109 of the Act. 570. 603 Labor standards. 570.604 Environmental standards. 570.605 National Flood Insurance Program. 570.606 Relocation, displacement and acquisition. 570.607 Employment and contracting opportunities. 570. 608 Lead-based paint. 570.609 Use of debarred, suspended, or ineligible contractors or subrecipients. 570.610 Uniform administrative requirements and cost principles. 570.611 Conflict of interest. 570.612 Executive Order 12372. Subpart H -- Other Program Requirements. S 570.600 General. (a) Section 104 (b) of the Act provides that any grant under section 106 of the Act shall be made only if the grantee certifies to the satisfaction of the Secretary, among other things, that the grant "will be conducted and administered in conformity with Public Law 88-352 and Public Law 90-284," and, further, that the grantee "will comply with the other provisions of this title and with other applicable laws. " Section 104 (e) (1) of the Act requires that the Secretary determine with respect to grants made pursuant to section 106 (b) (Entitlement Grants) and 106 (d) (2) (S) (HUD-administered Small Cities Grants) , at least on an annual basis, among other things, "whether the grantee has carried out (its) certifications in compliance with the requirements and the primary objectives of this title and with other applicable laws. . . . " Certain other statutes are expressly made applicable to activities assisted under the Act by the Act itself, while other laws not referred to in the Act may be applicable to such activities by their own terms. Certain statutes or Executive Orders which may be applicable to activities assisted under the Act by their own terms are administered or enforced by governmental departments . or agencies other than the Secretary or the Department. This Subpart K enumerates laws which the Secretary will treat as applicable to grants made under section 106 of the Act, other than grants to States made pursuant to section 106 (d) of the K-1 9/88 Act, for purposes of the determinations described above to be / = made by the Secretary under section 104 (e) (1) of the Act, 1) including statutes expressly made applicable by the Act and certain other statutes and Executive Orders for which the Secretary has enforcement responsibility. The absence of mention herein of any other statute for which the Secretary does not have direct enforcement responsibility is not intended to be taken as an indication that, in the Secretary's opinion, such statute or Executive Order is not applicable to activities assisted under the Act. Fop laws which the Secretary will treat as applicable to grants made to States '• under section 106 (d) of the Act for purposes of the determination required to be made by the Secretary pursuant to section 104 (e) (2) of the Act, see § 570.496. (b) This subpart also sets forth certain additional program requirements which the Secretary has determined to be applicable to grants provided under the Act as a matter of administrative discretion. (c) In addition to grants made pursuant to section 106 (b) and 106 (d) (2) (B) of the Act (Subparts D and F, respectively) , the requirements of this Subpart K are applicable to grants made pursuant to sections 107 and 119 of the Act (Subparts E and G, respectively) , and to loans guaranteed pursuant to Subpart M. S 570.601 Public Law 88-352 and Public Law 90-284; affirmatively furthering fair housing; Executive Order 11063. Section 104 (b) of the Act provides that any grant under section 106 of the Act shall be made only if the grantee certifies to the satisfaction of the Secretary that the grant "will be conducted and administered in conformity with Public Law 88-352 and Public Law 90-284 and the grantee will affirmatively further fair housing . " Similarly, section 107 provides that no grant may be made under that section (Secretary's Discretionary Fund) or section 119 (UDAG) without .satisfactory assurances that the grantee's program will be conducted and administered in conformity with Public Law 88-352 and Public Law 90-284. (a) "Public Law 88-352" refers to title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et ses.) , which provides that no person in the United States shall on the ground of race, color , or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. Section 602 of the Civil Rights Act of 1964 directs each Federal department and agency empowered to extend Federal financial assistance to any program or activity by way of grant to effectuate the foregoing prohibition by issuing rules, regulations, or orders of general applicability which K-2 9/88 shall he consistent with achievement of the statute authorizing the financial assistance . HUD regulations implementing the requirements of Title VI with respect to HUD programs are contained in 24 CFR Part 1. (b) "Public Law 90-284" refers to title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601 et se . ) , popularly known as the Fair Housing Act , which provides that it is the policy of the United States to provide, within constitutional limitations, • for fair housing throughout the United States and prohibits any person from discriminating in the sale or rental of housing , the financing of housing , or the provision of ' brokerage services , including otherwise :making unavailable or denying a dwelling to any person, because of race, color , religion , sex , or national • origin. Title VIII further requires the Secretary to administer the programs and activities relating to housing and urban development in a manner affirmatively ' to further the policies of Title VIII. Pursuant to this statutory direction, the Secretary requires that grantees administer all programs and activities related to housing and community development in a manner to affirmatively further the policies of Title VIII ; furthermore, section 104 (b) (2) of the Act requires that each grantee receiving funds under section 106 of the Act (entitlement or small cities grantees) certify to the satisfaction of the Secretary that it will affirmatively further fair housing. (L (c) Executive Order 11063, as amended by Executive Order 12259, directs the Department to take all action necessary and appropriate to prevent discrimination because of race, color , religion (creed) , sex , or national• origin, ' in the sale, leasing , rental, or other disposition of residential property and related facilities (including land to be developed for residential use) , or in the use or occupancy thereof, if such property and related facilities are, among other things, provided in whole or in part with ,the aid of loans, advances, grants, or contributions agreed 'to be made by the Federal Government. HUD regulations implementing Executive Order 11063 are contained in 24 CFR Part 107. S 570.602 Section 109 of the Act. (a) Section 109 of the Act requires that no person in the United States shall on the ground of race , color, national origin or sex, be excluded from participation in, be denied the benefits of , or be subjected to discrimination under, any program or activity funded in whole or in part with community development funds made available pursuant to the Act. For purposes of this section "program or activity" is defined as any function conducted by an identifiable administrative unit of the recipient, or by any unit of government, subrecipient, or K--3 9/88 private contractor receiving community development funds or loans from the recipient. "Funded in whole or in part with `4 community development funds" means that community development 9 funds ih any amount in the form` of grants or proceeds from HUD guaranteed loans have been transferred by the recipient or a subrecipient to an identifiable administrative unit and disbursed in a program or activity. In subsection (b) of this section, "recipient" means recipient as defined in 24 CFR 1.2 (f) . (b) Specific discriminatory actions prohibited and corrective actions. • (1) A recipient may not, under any program or activity to which the regulations of this part may apply, directly or through contractual or other arrangements, on the ground of rice, color , national origin, or sex: (i) Deny any individual any facilities, services, financial aid or other benefits provided under the program or activity. (ii) Provide any facilities, services, financial aid or other benefits which are different, or are provided in a different form, from that provided to others under the program or activity. (iii) Subject an individual to segregated or separate treatment in any facility in, or in any matter of process related to receipt of any service or benefit under the program or activity. (iv) Restrict an individual in any way in access to, or in the enjoyment of, any advantage or privilege enjoyed by others in connection with facilities, services, financial aid or other benefits under the program or activity. (v) Treat an individual differently from others in determining whether the individual satisfies any admission, enrollment, eligibility, membership, or other requirement or condition which the individual must meet in order to be provided any facilities, services or other benefit provided under the program or activity. (vi) Deny an individual an opportunity to participate in a program or activity as an employee. (2) A recipient may not use criteria or methods of administration which have the effect of subjecting persons to discrimination on the basis of race, color, national K-4 9/88 • origin, or sex , or have the effect of defeating or substantially impairing accomplishment of the objectives • . of the program or activity with respect to persons of a particular race, .color , national origin, or sex . (3) A recipient, in determining the ' site or location of housing or facilities • provided in whole or in part with funds under this part, may not make selections of such site or location which have the effect of excluding • persons from, denying them the benefits of , or subjecting them to discrimination . on the ground of race , color , • national origin, or sex; or which have the purpose or effect of defeating or substant'iz.11y - impairing the accomplishment of . the objectives of the Act and • of this section. • (4) (i) In administering a program or activity funded in .whole or in part with CDBG funds regarding which the recipient has previously discriminated against itersons on the ground of race , color , national origin or sex, or if there is sufficient • evidence to conclude that such discrimination existed, the recipient . must take .remedial affirmative action to overcome the effects of prior discrimination. The word "previously" does not exclude current discriminatory Practices. (ii) In the absence of discrimination, a recipient, in administering a program or activity funded in whole or in part with funds made available under this part, may take any;, nondiscriminatory affirmative action necessary to ensure that the program or activity is open to all without rregerd to race , color, national. . origin or sex, (iii) After a finding of noncompliance or after a recipient has a firm basis to conclude that discrimination has occurred , a recipient shall not be prohibited by this section from taking any action eligible under Subpart . C to ameliorate an imbalance in services or facilities • provided to any geographic area or specific group of persons within its jurisdiction, where the purpose of such action is to remedy prior discriminatory practice or usage. (5) Notwithstanding anything to the contrary in this section, nothing contained herein shall be construed to prohibit any recipient from maintaining or constructing separate living facilities or. rest room facilities for the different sexes. Furthermore , selectivity on the basis of sex is not prohibited when institutional or custodial 9/35 • 11110 ' V services can properly be performed only by a member of the same sex as the recipients of the services. (c) Section 109 of the Act further provides that any prohibition against discrimination on the basis of age under the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seg. ) or with respect to an otherwise qualified handicapped person as provided in section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) shall also apply to any program or activity funded in whole or in part with funds made available pursuant to the Act. HUD regulations implementing the Age Discrimination Act are contained in 24 CFR Part 146 and the regulations implementing section 504 are contained in 24 CFR Part 8. S 570.603 Labor standards. Section 110 of the Act requires that all laborers and mechanics employed by contractors or subcontractors on construction work financed in whole or in part with assistance received under the Act shall be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a - 276a-5) . By reason of the foregoing requirement, the Contract Work Hours and Safety Standards Act (40 U.S.C. 327 et seq. ) also applies. However, these requirements apply, to the rehabilitation of residential property only if such property contains not less than 8 units. With respect to the labor standards specified in this section, the Secretary of Labor has the authority and functions set forth in Reorganization Plan Number 14 of 1950 (5 U. S.C. 1332-15) and section 2 of the Act of June 13, 1934 , as amended (40 U.S.C. 276c) . S 570.604 Environmental standards. Section 104 (g) expresses the intent that "the policies of the National Environmental Policy Act of 1969 and other provisions of law which further the purposes of such Act (as specified in regulations issued by the Secretary) . . . (be] most effectively implemented in connection with the expenditure of funds under" the Act. Such other provisions of law which further the purposes of the National Environmental Policy Act of 1969 are specified in regulations issued pursuant to section 104 (g) of the Act and contained in 24 CFR Part 58 . Section 104 (g) also provides that, in lieu of the environmental protection procedures otherwise applicable, the Secretary may under regulations provide for the release of funds for particular projects to grantees who assume all of the responsibilities for environmental review, decisionmaking, and action pursuant to the National Environmental Policy Act of 1969 , and the other provisions of law specified by the Secretary as described above, that would apply to the Secretary were he/she to K-6 9/88 undertake such projects as Federal projects. Grantees assume such environmental review, decisionmaking , and action responsibilities by execution of grant agreements with the Secretary. The procedures for. •carrying out such environmental responsibilities are contained in 24 CFR Part 5B. S 570.605 National Flood Insurance Program. • Section 202 (a) of the Flood r)13aster Protection Act of 1973 (42 U.S.C. 4106) provides that no Federal officer or agency shall approve any financial assistance for acquisition or construction purposes (as defined under • section 3 (a) of said Act (42 U.S.C . 400 (a) ) , one year after a community has been formally notified of its identification as a community containing an area of special flood hazard , for use in any area that has been identified by the Director of the Federal Emergency Management Agency as an area having special flood hazards unless the community in which such area is situated is then participating in the National Flood Insurance Program. Notwithstanding the date of HUD approval of. the recipient 's application (or , in the case of grants made ender Subpart D, the date of submission of the grantee ' s final statement pursuant to § 570. 302) , funds provided under this part shall not he expended for acquisition or construction purposes in an area that has been identified by the Federal Emergency Management Agency (FEMA) as having special flood hazards unless the community in which the area is situated is participating in the National Flood Insurance Program in accordance with 44 CFR Parts 59-79, or less I than a year has passed since FEMA notification to the community • regarding such hazards; and flood insurance is obtained in i accordance with section 102 (a) of the Flood Disaster Protection Act 1 of, 1973 (42 U.S.C. 4001) . S S 570.606 Relocation, displacement and acquisition. j (a) Uniform Relocation Act. • (1) The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (ORA) (42 U.S.0 4601) and HUD implementing regulations. at 24 CFR Part 42 apply to the acquisition of real property by a State agency for an i activity assisted under this part and to the displacement of any family, individual, business, nonprofit organization or farm .that results from such acquisition. The grantee' s certification of compliance with the URA is required in the grant agreement. 1 (2) An acquisition and resulting displacement by a State 1 agency is "for an assisted activity" if , it occurs on or after the date of the initial submission of a final statement under 24 CFR 570. 302 (a) (2) (Entitlement Grants) ; • N-% 9/88 • the initial submission of an application to HUD by a unit of general local government under §S 570. 426 , 570.430, or 570.435 (d) that is granted for the requested activity (HUD administered Small Cities Program) ; or the submission of an application to HUD by a city or urban county under S 570.458 that is granted for the requested activity (UDAG) . However, an acquisition or displacement that occurs on or after the described date is not subject to the URA if the grantee determines that the acquisition or displacement was not carried out for an assisted activity, and the HUD Field Office concurs in that determination. An acquisition or displacement that occurs before the described date is subject to the URA, if the grantee or the HUD Field Office determines that the acquisition or displacement was carried out for the assisted activity. The grantee may, at any time, request a HUD determination whether an acquisition or displacement will be considered to be for an assisted activity and thus subject to these regulations. To be eligible for relocation assistance, however , a person must also meet the eligibility criteria in 24 CFR Part 42. (b) Residential antidisplacement and relocation assistance plan. Under section 104 (d) of the Act, each grantee must adopt, make public and certify that it is following a residential antidisplacement and relocation assistance plan providing one- for-one replacement units (paragraph (b) (1) of this section) , and relocation assistance (paragraph (b) (2) of this section) . The plan must also indicate the steps that will be taken consistent with other goals and objectives of this part to minimize the displacement of persons from their homes as a result of any activities assisted under this part. (1) One-for-one replacement units. (i) All occupied and vacant occupiable low/moderate-income dwelling units that are demolished or converted to a use other than as low/moderate-income dwelling units as a direct result of an activity assisted under this part must be replaced by governmental agencies or private developers with low/moderate-income dwelling units. Replacement low/moderate-income dwelling units may include public housing, or existing housing receiving Section 8 project-based assistance under the United States Housing Act of 1937. The replacement low/moderate-income dwelling units must be provided within three years of the commencement of the demolition or rehabilitation related to the conversion, and must meet the Following requirements : (A) The units must be located within the grantee 's jurisdiction. K-8 9/88 , (B) The units must be sufficient in number and size to • house at least the number of occupants that could have been housed in the units that are demolished or converted. The number of occupants that may be housed in units Ashall be determined in accordance • with local housing occupancy codes. (C) The units must be provided in standard condition. Replacement low/moderate-income dwelling units may include units that have been raised to standard from substandard condition. (0) The units must be designed to remain low/moderate- income dwelling units for at least 10 years from the date of initial occupancy. (ii) Before obligating or expending funds provided under this part for any activity that will directly result in the demolition of low/moderate-income dwelling units or the conversion of low/moderate-income dwelling units to another use, the grantee must make j public, and submit the following information in writing to HUD: i (A) A description of the proposed assisted activity; (I(• ( . (B) The general location on a map and approximate number of dwelling units by size (number of bedrooms) that i will be demolished or converted to a use other than for low/moderate-income dwelling units as a direct result of the assisted activity; 1 (C) A time schedule for the commencement and completion of the demolition or conversion; (D) The general location on a map and approximate number of dwelling units by size (number of bedrooms) that will be provided as replacement dwelling units; (E) The source of funding and a time schedule for the ( provision of replacement dwelling units; (F) The basis .for concluding that each replacement . dwelling unit will remain a low/moderate-income dwelling unit for at least 10 years from the date of initial occupancy. • (iii) (A) The requirements of paragraph (b) (1) of this section do not apply if the HUD Field Office determines, C , based upon objective data, that there is an adequate l� supply of vacant low/moderate-income dwelling units K-9 9/88 ,' in standard condition available on a nondiscriminatory basis within the grantee 's ) jurisdiction. In making this determination, the HUD Field Office will consider the housing vacancy rate for the jurisdiction, the number of vacant low/moderate-income dwelling units in the jurisdiction (excluding units that will be demolished or converted) and the number of eligible families on waiting lists for housing assisted under the United States Housing Act of 1937 in the jurisdiction. (B) The HUD Field Office may consider the supply of vacant low/moderate-income dwelling units in standard condition available on• a nondiscriminatory basis in an area that is larger than the grantee's jurisdiction. Such additional dwelling units shall be considered if the HUD Field Office determines that the units would be suitable to serve the needs of the low- and moderate income households that could be served by the low/moderate-income dwelling units that are to be demolished or converted to another use. The HUD Field. Office must base this determination on geographic and demographic factors, such as location and access to places of employment and to other facilities. (C) The grantee must submit a request for a determination under paragraph (b) (1) (iii) of this section, directly to the HUD Field Office. " 1 (2) Relocation assistance. (i) Each low- or moderate-income household that is displaced by demolition or by the conversion of a low/moderate income dwelling unit to another use as a direct result of an activity assisted under this part shall be provided with relocation assistance. The low- or moderate-income household may elect to receive relocation assistance described at 24 CFR Part 42 (HUD's regulations implementing the URA) , or may elect to receive the following relocation assistance: (A) The relocation assistance described at 24 CFR Part 42, Subpart C (General Relocation Requirements) and Subpart D (Payment for Moving and Related Expenses) . Relocation notices must be issued consistent with, and in the manner prescribed under, 24 CFR 42.203. The definition of "comparable replacement dwelling" used in 24 CFR Part 42 is modified as described in paragraph (b) (3) (i) of this section. Displaced households provided with replacement housing assistance under paragraph K-10 9/88 • (b) (2) ( i) (C) of this 3oction, • in the form of a certificate or housing voucher under Section 8 of the • United States Housing Act of 1937 , must be provided referrals to comparable replacement dwelling units whose owners are willing to participate in the housing voucher or certificate program. Tne grantee. shall advise tenants cf their .tights under the Federal Fair Housing Law (Title VIII) and of replacement housing opportunities in such a manner that, whenever feasible, they will have a choice Between relocating within their neighborhoods and other neighborhoods consistent with the grantee 's _ responsibility to affirmatively further fair housing ; (B) The reasonable and necessary cost of any security deposit required to rent the replacement dwelling unit, and credit checks required to rent or purchase the replacement dwelling unit ; and (C) Replacement housing. assistance. Households are eligible to receive one of the following forms of replacement housing assistance : (1) Each household must be offered compensation designed to ensure that, for a five-year period , the displaced household will not, bear, after • relocation , a ratio of shelter costs to income that exceeds 30 percent. Such compensation shall be either : (i) A certificate or housing voucher for rental assistance provided through the local Public Housing Agency under Section 8 of the United State Housing Act of 1937; or (ii) Cash rental assistance equal to 60 times the amount that is obtained by subtracting 30 percent of the displaced household 's monthly gross income (with such adjustments as the grantee may deem appropriate) from the lesser of : the monthly cost of rent and utilities at a • comparable replacement dwelling unit or the monthly cost of rent and utilities at the decent, safe and sanitary replacement dwelling to which the household relocates. The grantee may provide the cash payment in either a lump sum or in installments. The grantee may at its t . discretion offer the household a choice between the ' certificate/housing voucher of• cash rental assistance. f , 1 fi-ll 9/88 (2) If the household purchases an interest in a housing cooperative or mutual housing Mlh association and occupies a decent, safe and sanitary unit in the cooperative or association, the household may elect to receive a lump sum payment. This lump sum payment shall be equal to the capitalized value of 60 monthly installments of the amount that is obtained by subtracting 30 percent of the displaced household 's monthly gross income (with such adjustments as the grantee may deem appropriate) from the monthly cost of rent and utilities at a comparable replacement dwelling unit. To compute the capitalized value, the installments shall be discounted at the rate of interest paid on passbook savings deposits by a federally- insured bank or savings and loan institution conducting business within the grantee's jurisdiction. To the extent necessary to minimize hardship to the household, the grantee shall, subject to appropriate safeguards, issue a . payment in advance of the purchase of the interest in the housing cooperative or mutual housing association. (ii) Eligibility for relocation assistance. (A) A low- or moderate-income household that is required to move as a direct result of demolition or conversion of a low/moderate income dwelling unit to another use, is eligible for relocation assistance under paragraph (b) (2) of this section if: (1) The household is required to move from the dwelling unit on or after the date that the owner submits a request to the grantee for financial assistance that is later approved for the requested activity. (This applies to dwelling units owned by a person other than a • Federal or State agency, as defined under the URA) . (2) The household is required to move from the dwelling unit on or, after the date of the initial submission of a final statement under 24 CFR 570.302 (a) (2) (Entitlement Grants) ; the initial submission of an application to HUD by a unit of general local government under SS 570.426, 570.430, or 570.435(d) that is granted for the requested activity (HUD administered Small Cities Program) ; or the submission of an application to HUD by a city or urban county under § 570.458 that is granted for 411 K-12 9/88 the requested activity (UDAG) . (This applies to dwelling units owned by a Federal or State agency as defined under the URA.) (B) If the displacement occurs on or after the appropriate date described in paragraph (b) (2) (ii) (A) of this section, the low- or moderate-income household is not eligible for relocation assistance if: (1) The household is evicted for cause ; (2) The household moved into the property on or after the date described in paragraph (b) (2) (ii) (A) of this section, after receiving written notice of the expected displacement; or (3) The grantee determines that the displacement was not a direct result of the assisted activity, and the HUD office concurs in that determination. (C) If the displacement occurs before the appropriate date described in paragraph (b) (2) (ii) (A) of this section, the low- or moderate-income household is eligible for relocation assistance if the grantee or HUD determines that the displacement was a direct result of an activity assisted under this part. (3) Definitions. For the purposes of paragraph (b) of this section: (i) "Comparable replacement dwelling unit" means a dwelling unit that: (A) Meets the criteria of 24 CFR 42.2 (c) (1) through (4) ; and (B) Is available at a monthly cost for rent plus estimated average monthly utility costs that does not exceed 30 percent of the household's average gross monthly income (with such adjustments to income as the grantee may deem appropriate) after taking into account any rental assistance the household would receive. Where a certificate or housing voucher is 4 provided to a household under paragraph (b) (2) (i) (C) (1) (i) of this section, the dwelling unit must .be available to the household at a monthly cost for rent and estimated average monthly utility cost that does not exceed the Fair Market Rent or the payment standard, respectively. K-13 9/88 .3) (ii) "Decent, safe and sanitary dwelling" means a decent, safe and sanitary dwelling as defined in 24 CFR 42.2 (e) . (iii) "Low/moderate income dwelling unit" means a dwelling unit with a market rental (including utility costs) that does not exceed the applicable Fair Market Rent (FMR) for existing housing and moderate rehabilitation established under 24 CFR Part 888. (iv) "Occupiable dwelling unit" means a dwelling unit that is in a standard condition , or is in a substandard • condition, but is suitable for rehabilitation. (v) "Standard condition" and "substandard condition suitable for rehabilitation. " If the grantee has a HUD-approved Housing Assistance Plan, the definitions of "standard condition" and "substandard condition suitable for rehabilitation" established in the plan will apply. If the grantee does not have a HUD- approved Housing Assistance Plan, the grantee must establish and make public its definition of these terms consistent with the requirements of S 570.306 (e) (1) . (4) Effective date. For all grants except those made under Subpart D of this part (Entitlement Grants) , the �. provisions of this paragraph (b) are applicable to grants made on or after October 1, 1988. For grants made under Subpart D, these provisions will govern all activities for which funds are first obligated by the grantee on or after the date the first grant is made after September 30, 1988, without regard to the source year of the funds used for the activity. (c) Section 104 (k) relocation requirements. Section 104(k) of the Act requires that reasonable relocation assistance be provided to persons (families, individuals, businesses, nonprofit organizations, or farms) displaced (i .e. , moved permanently and involuntarily) as a result of the use of assistance received under this part to acquire or substantially rehabilitate property. If such displacement is subject to paragraph (a) or (b) of this section, above, this paragraph does not apply. The grantee must develop, adopt and provide to persons to be displaced a written notice of the relocation assistance for which they are eligible. The minimum requirements for such assistance under the UDAG Program are described at 5 570.457 (b) . Under CDBG programs, persons entitled to assistance under this paragraph must be provided relocation assistance, including at a minimum: (1) Reasonable moving expenses; K-14 9/88 (2) Advisory services needed to help in relocating. The grantee shall advise tenants of their rights under the Federal Fair Housing Law (Title VIII) and of replacement housing opportunities in such a manner that, whenever feasible, they will have a choice between relocating within their neighborhoods and other neighborhoods consistent with the grantee 's responsibility to affirmatively further fair housing ; and (3) Financial assistance sufficient to enable any person displaced from his or her dwelling to lease and occupy a suitable, decent, safe and sanitary replacement dwelling where the cost of rent and utilities does not exceed 30 percent of the household 's gross income. (d) Optional relocation assistance. Under section 105 (a) (11) of the Act, the grantee may provide relocation payments and other relocation assistance for individuals, families, businesses, nonprofit organizations and farms displaced by an activity not subject to paragraphs (a) , (b) or (c) of this section ., The grantee may also provide relocation assistance to persons covered under paragraphs (a) , (b) or (c) of this section beyond that required. Unless such assistance is provided pursuant to State or local law, the grantee must provide the assistance only upon the basis of a written determination that the assistance is appropriate and must adopt a written policy available to the public that describes the relocation assistance that the grantee has elected to provide and that provides for equal relocation assistance within each class of displacees. (e) Appeals. If a person disagrees with the grantee 's determination concerning the person's eligibility for, or the amount of a relocation payment under this section, the person may file a written appeal of that determination with the grantee. The appeal procedures to be followed are described in 24 CFR 42. 10. A low- or moderate-income household that has been displaced from a dwelling may file a written request for review of the grantee decision, to the HUD Field Office. (f) Responsibility of grantee. i (1) The grantee is responsible for ensuring compliance with the requirements of this section, notwithstanding any third party's contractual obligation to the grantee to comply with the provisions of this part. (2) The cost of assistance required under this section may be paid from local public funds, funds provided under this part, or funds available from other sources. K-15 9/88 • (3) The grantee must maintain records in sufficient detail to demonstrate compliance with the provisions of this section. (g) Displacement. For the purposes of this section, a "displaced person" is a person that is required to move per manently and involuntarily and includes a residential tenant who moves from the real property if : (1) The tenant has not been provided with a reasonable opportunity to lease and occupy a suitable, decent, safe and sanitary dwelling in the same building or in a nearby • building on the real property following the completion of the assisted activity at a monthly rent and estimated average cost for utilities that does not exceed the greater of (i) 30 percent of the tenant household 's average monthly gross income ; or (ii) The tenant 's monthly rent and average cost for utilities before (A) The date that the owner submits a request . to the grantee for financial assistance that is later approved for the requested activity. (This applies • to dwelling units owned by a person other than a Federal or State agency, as defined under the URA) ; or - • (B) The date of the initial submission of a final statement under S 570.302(a) (2) (Entitlement Grants) ; the initial submission of an application to HUD by a unit of general local government under S 570.426, 570.430, or, 570.435 (d) that is granted for the requested activity (HUD administered Small Cities Program) ; or the submission of an application to HUD by a city or urban county under S 570.458 - that is granted for the requested activity (UDAG) . (This applies to dwelling units owned by a Federal or State agency as defined under the URA) ; or (2) The tenant is required to move to another dwelling in the real property but is not reimbursed for all actual reasonable out-of-pocket costs incurred in connection with the move; or • (3) The tenant is required to relocate temporarily and: ( i) Is not reimbursed for all reasonable out-of-pocket expenses incurred in connection with the temporary relocation, including moving costs and any increased rent and utility costs; or • K-16 9/88 ( ii) Other conditions of the temporary relocation are not reasonable . S 570.607 Employment and contracting opportunities. (a) Grantees shall comply with Executive Order 11246 , as amended by Executive Order 12086 , and the regulations issued pursuant thereto (41 CFR Chapter 60) which provide that no person shall be discriminated against on the basis of race , color , religion , sex , or national origin in all phases of employment during the performance of Federal or . federally assisted construction contracts. As specified in Executive Order 11246 and the implementing regulations, contractors and subcontractors on Federal or federally assisted construction contracts shall take affirmative action to ensure fair treatment in employment, upgrading , demotion or transfer , recruitment or recruitment advertising , layoff or termination, rates of pay, or other forms of compensation and selection for • training and apprenticeship. (b) Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) requires , in connection with the planning and carrying out of any project assisted under the Act, that to the greatest extent feasible opportunities for training and employment be given to low and moderate income persons . residing within the unit of local government or the � ( metropolitan area (or nonmetropolitan county) as determined by the Secretary, in which the project is located , and that contracts for work in connection with the project be awarded to eligible business concerns which are located in , or owned E in , substantial part by persons residing in the same metropolitan area (or nonmetropolitan county) as the project. Grantees shall adopt appropriate procedures and requirements to assure good faith efforts toward compliance 1 with the statutory directive. HUD regulations at 24 CFR Part 135 are not applicable to activities assisted under this part 1 but may be referred to as guidance indicative of the Secretary's view of the statutory objectives in other } contexts. ! I ( S 570.608 Lead-based paint. (a) Prohibition against the use of lead-based paint. Section 401(b) of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4831 (b) ) directs the Secretary to prohibit the use of lead-based paint in residential structures constructed or rehabilitated with Federal assistance. Such prohibitions are contained in 24 CFR Part 35, Subpart B, and are applicable to residential structures constructed or rehabilitated with assistance provided under this part. K-17 9/88 (b) Notification of hazards of lead-based paint poisoning. (1) The Secretaryhas promulgated requirements regarding notification to purchasers and tenants of HUD-associated housing constructed prior to 1978 of the hazards of lead- based paint poisoning at 24 CFR Part 35, Subpart A. This paragraph is promulgated pursuant to the authorization granted in 24 CFR 35.5 (c) and supersedes , with respect to all housing to which it applies, the notification requirements prescribed by Subpart A of 24 CFR Part 35. • (2) For properties constructed prior to 1978 , applicants for rehabilitaion - assistanceprovided under this part and tenants or purchasers of properties owned by the grantee or its subrecipient and acquired or rehabilitated with assistance provided under this part shall be notified : (i) That the property may contain lead-based paint; (ii) of the hazards of lead-based paint; (iii) of the symptoms and treatment of lead-based poisoning ; (iv) of the precautions to be taken to avoid lead-based paint poisoning (including maintenance amd removal techniques for eliminating such hazards) ; (v) of the advisability and availability of blood lead level screening for children under seven years of age; and (vi) that in the event lead-based paint is found on the property, appropriate abatement procedures may be undertaken. (c) Elimination of lead-based paint hazards. The purpose of this paragraph is to implement the provisions of section 302 of the Lead-Based Paint Poisoning Prevention Act, 42 U.S.C. 4822, by establishing procedures to eliminate as far as practicable the hazards due to the presence of paint which may contain lead and to which children under seven years of age may be exposed in existing housing which is rehabilitated with assistance provided under this part. The Secretary has promulgated requirements regarding the elimination of lead-based paint hazards in HUD-associated housing at 24 CFR Part 35, Subpart C. This paragraph is promulgated g pursuant to the authorization granted in 24 CFR 35.24 (b) (4) and supersedes, with respect to all housing to which it applies, the requirements prescribed by Subpart C of 24 CFR Part 35. K-18 9/88 (1) Applicability. This paragraph applies to the rehabilitation of applicable surfaces in existing housing which is assisted under this part. The following activities assisted under the Community Development Block Grant program are not covered by this paragraph : (i) Emergency repairs (not including lead-based paint— related emergency repairs) ; • (ii) weatherization; (iii) water or sewer hook-ups; (iv) installation of security devices; ' (v) facilitation of tax exempt bond issuances which provide funds for rehabilitation; (vi) other similar types of single-purpose programs that do not include physical repairs or remodeling of applicable surfaces (as defined in 24 CFR 35.22) of { residential structures; and (vii) any non-single purpose rehabilitation that does not involve applicable surfaces (as defined in 24 CFR 35.22) that does not exceed $3,000 per unit. (2) Definitions. - Applicable surface. All intact and nonintact interior and exterior painted surfaces of a residential structure. Chewable surface. All chewable protruding painted surfaces up to five feet from the floor or ground, which are readily accessible to children under seven years of age, e.g. , protruding corners, windowsills and frames, doors and frames, and other protruding woodwork. Defective paint surface. Paint on applicable surfaces that is cracking , scaling, chipping, peeling or loose. Elevated blood lead level or EBL. Excessive absorption of lead, that is, a confirmed concentration of lead in whole blood of 25 ug/dl (micrograms of lead per deciliter of whole blood) or greater. Lead-based paint surface. A paint surface, whether or not defective, identified ag having a lead content greater than or equal to 1 mg/cm • jl (3) Inspection and Testing K-19 9/88 4 i R�^ } (i) Defective paint surfaces. The grantee shall inspect for defective paint surfaces in all units constructed prior to 1978 which are occupied by families with children under seven -years of age and which are proposed for rehabilitation assistance. The inzpection shall occur at the same time the proerty is being inspected for rehabilitation. Defective paint conditions will be included in the work write-up for the remainder of the rehabilitation work. (ii) Chewable surfaces. The grantee shall be required to test the lead content of chewable surfaces if the family residing in a unit, constructed prior to 1978 and receiving rehabilitation assistance, includes a child under seven years of age with an identified EBL condition. Lead content shall be tested by using an X-ray fluorescence analyzer (XRF) or other method approved by HUD. Test readings of 1 mg/cm2 or higher using an XRF shall be considered positive for presence of lead-based paint. (iii) Abatement without testing. In lieu of the procedures set forth in paragraph (c) (3) (ii) of this section, in the case of a residential structure constructed prior to 1978, the grantee may forgo testing and abate all applicable surfaces in accordance with the methods set out in 24 CFR 35.24 (b) (2) (ii) . (4) Abatement Actions. (i) For inspections performed under § 570.608 (c) (3) (i) and where defective paint surfaces are found, treatment shall be provided to defective areas. Treatment shall be performed before final inspection and approval of the work. (ii) For testing performed under § 570.608 (c) (3) (ii) and where interior chewable surfaces are found to contain lead-based paint, all interior chewable surfaces in any affected room shall be treated. Where exterior chewable surfaces are found to contain lead-based paint, the entire exterior chewable surface shall be treated. Treatment shall be performed before final inspection and approval of the work. (iii) When weather prohibits repainting exterior surfaces before final inspection, the grantee may permit the owner to abate the defective paint or chewable lead- based paint as required by section and aree to repaint by a specified date. thAsseparate inspection is required. K-20 9/88 (5) Abatement methods. At a minimum, treatment of the defective areas and chewable lead-based paint surfaces shall consist of covering or removal of the painted surface as described in 24 CFR 35. 24 (b) (2) (ii) . (6) Funding for inspection, testing and abatement. Program requirements and local program design will determine whether the cost of inspection, testing or abatement is to be borne by the owner/developer, the grantee or a combination of the owner/developer and the grantee. (7) Tenant protection. The owner/developer shall take appropriate action to protect tenants from hazards associated with abatement procedures. Where necessary, these actions may include the temporary relocation of tenants during the abatement process. The owner/developer shall notify the grantee of all such actions taken. (8) Records. The grantee shall keep a copy of each inspection and/or test report for at least three years. (9) Monitoring and enforcement. HUD field office monitoring of rehabilitation programs includes reviews for compliance with applicable program requirements for lead-based paint. The CPD Field Monitoring Handbook which currently includes instructions for monitoring lead-based paint :31 requirements will be amended as appropriate. In cases of noncompliance, HUD may impose conditions or sanctions on grantees to encourage prompt compliance. (10) Compliance with other program requirements, Federal, State and local laws. (i) Other program requirements. To the extent that assistance from any of the programs covered by this section is used in conjunction with other HUD program assistance which have lead-based paint requirements which may have more or less stringent requirements, the more stringent requirements will prevail. (ii) HUD responsibility. If HUD determines that a State or local law, ordinance, code or regulation provides for lead-based paint testing or hazard abatement in a manner which provides a level of protection from the hazards of lead-based paint poisoning at least comparable to that provided by the requirements of this section and that adherence to the requirements of this subpart would be duplicative or otherwise cause inefficiencies, HUD may modify or waiv.e the requirements of this section in such manner as may be appropriate to promote efficiency while ensuring such comparable level of protection. J K-21 9/88 .. 1 (iii) Grantee responsibility. Nothing in this section is intended to relieve any grantee in the programs covered by this section of any responsibility for compliance •with„State- or local laws, ordinances, codes or regulations 'g.overn 'ng lead-based paint testing or hazard abatement. l (iv) Disposal of. le81-based. paint debris. Lead-basd paint and defective paint debris shall be disposed of in accordance with applicable Federal, State or local requirements. (See, e.g . , 40 CFR Parts 260 through 271. ) S 570.609 Use of debarred, suspended, or ineligible contractors or subrecipients. . i Assistance under this part shall not be used directly or indirectly to employ, award contracts to, or otherwise engage the services of, or fund any contractor or subrecipient during any period of debarment, suspension, or placement in ineligibility status under the provisions, of 24 CFR Part 24. S 570.610 Uniform administrative requirements and cost principles. The recipient, its agencies or instrumentalities, and subrecipients shall comply with the policies, guidelines, and requirements of 24 CFR Part 85 and OMB Circulars A-87, A-110, A- 122, and A-128 (implemented at 24 CFR Part 44) , as applicable, as they relate to the acceptance and use of Federal funds under this part. The applicable sections of 24 CFR Part 85 and OMB Circular A-110 are set forth at S 570.502. S 570.611 Conflict of interest. (a) Applicability. (1) In the procurement of supplies, equipment, construction, and services by recipients, and by subrecipients (including those specified at § 570.204 (c) ) , the conflict of interest provisions in 24 CFR 85.36 and OMB Circular A- 110, respectively, shall apply. (2) In all cases not governed by 24 CFR 85.36 and OMB Circular A-110, the provisions of this section shall apply. Such cases include the acquisition and disposition of real property and the provision of assistance by the recipient, �;, .. by its subrecipients, or to individuals, businesses and other private entities under eligible activities which authorize such assistance (e.g. , rehabilitation, K-22 9/88 , i 1 preservation, and other improvements of private properties or facilities pursuant to S 570.202, or grants, loans and ' , other assistance to businesses, individuals and other j private entities pursuant to S 570.203, S 570.204 or S 570.455) . (b) Conflicts prohibited. Except forthe use of CDBG funds to pay 1 salaries and other related administrative or personnel costs, the general rule is that no persons described in paragraph (c) • of this section who exercise or have exercised any functions ior responsibilities with respect to CDBG activities assisted under this part or who are in a position to participate in a decisionmaking process or gain inside information with regard to such activities, may obtain a personal or financial 4 interest or benefit from a CDBG assisted activity, or have an interest in any contract, subcontract or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties, during their tenure or for one year thereafter. For the UDAG program, the above restrictions shall apply to all activities that are a part of the UDAG project, and shall cover any such interest or benefit during, or at any time after, such person's tenure. • (c) Persons covered. The conflict of interest provisions of paragraph (b) of this section apply to any person who is an employee, agent, consultant, officer, or elected official or appointed official of the recipient, or of any designated public agencies, or subrecipients which are receiving funds under this part. (d) Exceptions : threshold recLuirements. Upon the written request of the recipient, HUD may grant an exception to the provisions of paragraph (b) of this section on a case-by-case basis when it determines that such an exception will serve to further the purposes of the Act and the effective and efficient administration of the recipient 's program or project. An . exception may be considered only after the recipient has provided the following : (1) A disclosure of the nature of the conflict, accompanied by • an assurance that there has been public disclosure of the conflict and a description of how the public disclosure : j was made; and (2) An opinion of the recipient's attorney that the interest for which the exception is sought would not violate State or local law. i (e) Factors to be considered for exceptions. In determining ' whether to grant a requested exception after the recipient has satis.factrily met the requirements of paragraph (d) of this K_23 9 88 • • section, HUD shall' consider the cumulative effect of the . following factors , where applicable : (1) Whether the exception would provide a significant cost benefit or an essential degree of expertise to the program or project which would otherwise not be available; • (2) Whether an opportunity was provided for open competitive bidding or negotiation; (3) Whether the person affected is a member of a group or class of low or moderate income persons intended to be the , • beneficiaries of the assisted. activity, and the exception will permit ' such person to receive generally the same interests or benefits as are being made available or - provided to the group or class; (4) Whether the affected person has withdrawn from his or her functions or responsibilities, or the decisionmaking process with respect to the specific assisted activity in question: (5) Whether the interest or benefit was present before the affected person was in a position as described in paragraph (b) of this section; (6) Whether undue hardship wilt result either to the recipient or the person affected when weighed against the public interest served by avoiding the prohibited conflict; and • (7) Any other relevant considerations. • S 570.612 Executive Order 12372. (a) General. Executive Order 12372, Intergovernmental Review of Federal Programs, and the Department 's implementing regulations at 24 CFR Part 52, allow each State to establish • its own process for review and comment On proposed Federal financial assistance programs. (b) Applicability. Executive Order 12372 applies to the CDBG Entitlement program and the UDAG program. The Executive Order applies to all activities proposed to be assisted under UDAG, but it applies to the Entitlement program only where a grantee proposes to use funds for the planning or construction (reconstruction or installation) of water or sewer facilities. Such facilities include storm sewers as well as all sanitary sewers, but do not include water and sewer lines connecting a structure to the lines in the public right-of-way or easement. It is the responsibility of the grantee to initiate the Executive Order review process if it proposes to . use its CDBG or UDAG funds for activities subject to review. K-24 9/88 NON-RECOURSE CDBG DEFERRED PAYMENT LOAN PROMISSORY NOTE Project: CDBG Housing Place: Omaha, Douglas County, Nebraska Development Program Loan No. Date: FOR VALUE RECEIVED, the undersigned promises to pay to the order of the CITY OF OMAHA(hereinafter called"City"),acting by and through the Director of the Planning Department or its successors, the principal sum of EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS ($800,000.00), together with interest thereon as hereafter provided: that same shall be repayable in fifty (50)years from and after December 1, 1996, at the annual interest rate of 1% simple interest, with interest accrued from and after December 1, 1996 and annual accruals of $24,000.00 each accumulating each December 1 thereafter, through and including December 1, 2016. Such interest and subsequent annual accruals of$24,000.00 are to be deferred for twenty (20) years and added to the principal sum of $800,000.00 on December 1, 2016. Beginning January 1, 2017, the loan balance of $1,280,000.00 together, with interest at the rate of three percent per annum, will begin amortizing over the remaining thirty (30) year term (360 payments) with monthly payments of$5,396.53. The principal balance plus accrued interest shall become due and payable upon sale or transfer of the property except as provided in Paragraph 6.8 of the Agreement approved by the City Council on , , by Resolution No. on file with the City of Omaha City Clerk's office. All payments on this Note shall be made in lawful money of the United States at the principal office of the City of Omaha, 1819 Farnam Street, Omaha,Nebraska or at such other place or places as shall be designated in writing for such purposes by the City. The undersigned reserves the right to prepay at any time all or any part of the principal amount of this Note without the payment of penalties or premiums. IN THE EVENT the undersigned shall fail to pay the interest on or principal amount of this Note when due, and such default in payment continues for a period of fifteen (15) days after written notice thereof has been given by the City to the undersigned, the City may at any time thereafter, at its option, declare the entire unpaid balance of principal and interest at once due and owing, without further notice. Failure of the City to exercise such option shall not constitute a waiver of such default. No fault shall exist by reason of nonpayment of any required installment of principal and interest, so long as the amount of any optional prepayments already made pursuant hereto equals or exceeds the amount of the required installments. If the interest on, and the principal of, this Note are not paid during the calendar month which includes the due date, the undersigned shall pay to the City a late charge of 4% per calendar month, or fraction thereof, on the amount past due and remaining unpaid. Notwithstanding anything to the contrary set forth above, but except as herein provided, the principal, together with all interest, of and on this Note , shall be due and payable on the first day after the undersigned conveys, grants, mortgages, assigns or otherwise transfers its interest, or any portion thereof, in the property or improvements in the City of Omaha, and legally described as: Lots 1 through 16, Block 14; and Lot 1, except the North 58 feet of the East 104 feet thereof; and all of Lots 2 and 3, Block 13, together with the East 1/2 of the vacated alley adjoining said Lots 1, 2 and 3 on the West, all in E. V. Smith's Addition, an Addition to the City of Omaha, as surveyed,platted and recorded in Douglas County, Nebraska without the prior written consent of the Director of the Planning Department of the CITY OF OMAHA, which consent shall not be unreasonably withheld. The loan evidenced by this Note is a non-recourse obligation of the undersigned. Neither the undersigned nor any of its general and limited partners (or the partners, officers, directors or shareholders of any such partner) shall have any personal liability for repayment of any sum due under this Note or the Deed of Trust securing it. The sole recourse against the undersigned by the Lender under this Note and related Deed of Trust for repayment of the loan evidenced thereby shall be by the exercise by the Lender of its rights against the above-described property and improvements, and related security thereunder. This Note is secured by a second Deed of Trust upon the above-described property, which has been duly filed of record in Douglas County, Nebraska. Such second (City) Deed of Trust is and shall be junior to a first Deed of Trust in favor of the First National Bank of Omaha(or other lender) in principal amount not to exceed $500,000.00, but which (City) Deed of Trust shall be senior to any mortgage or deed of trust in favor of the General Partner of the undersigned or its affiliate,New Community Development Corporation. NEF Mortgage Loan Rider: The Mortgage Loan Rider on the National Equity Fund form bearing even date herewith attached hereto, is executed in conjunction with and shall become part of, this document. In the event that this Note should be reduced to judgment, such judgment shall bear interest thereon at the statutory rate,but not to exceed 9% per annum. IF SUIT is instituted by the City to recover upon this Note, the undersigned agrees to pay all costs of such collection, including reasonable attorneys' fees and court costs. DEMAND, protest and notice of demand and protest are hereby waived, and the undersigned hereby waives, to the extent authorized by law, any and all homestead and other exemption rights which otherwise would apply to the debt evidenced by this Note. IN WITNESS WHEREOF,this Note has been duly executed by the undersigned, as of the day and year above set forth. GREENVIEW LIMITED PARTNERSHIP, a Nebraska Limited Partnership(Assignee of Greenview Corporation, a Nebraska Non-Profit Corporation) By: Michael B. Maroney,President of Greenview Corporation, General Partner of Greenview Limited Partnership ,\7 0 N1 'NEF/NYEF/CEF 1994 Model Form-3/1/95 Tab 4a MORTGAGE LOAN RIDER This Rider is attached to and made a part of the promissory note, the mortgage or trust deed, and loan agreement or other document (s) evidencing, securing, and governing a loan in the amount of Eight Hundred Thousand Dollars ($ 800,000.00 . (the "Loan" ) made by the City of Omaha ( "Lender") toGreenview Limited Partnership, Assignee kRaC8) l/Z(XX0ZX)Xel dWittAXIMM:YeDZitXMICaNikitiniXAX201V6f of Greenview Corporation ( "Borrower" ) for the construction of Greenview t e "enPfroj ect" ) . The form of this Rider has a m been designed for use w e er gorrower is a limited partnership, a • land trust of which a limited partnership is the beneficiary, or otherwise. Accordingly, the limited partnership developing the Project, whether or not identified as Borrower, is sometimes referred to herein as the "Partnership" . The Articles of Limited Partnership forming or continuing the Partnership are referred to herein as the "Partnership Agreement" . The parties hereto agree that the following covenants, terms, and conditions shall be part of and shall modify or supplement each of the documents evidencing, securing, or governing the disbursement of the Loan (the "Loan Documents" ) , and that in the event of any inconsistency or conflict between the covenants, terms, and conditions of the Loan Documents and this Rider, the following covenants, terms, and conditions shall control and prevail : 1 . Nonrecourse Obligation. The Loan is a nonrecourse obligation of Borrower. Neither Borrower nor any of its general and limited partners (or, if Borrower is not the Partnership, the general and limited partners of the Partnership) , nor any other party shall have any personal liability for repayment of the Loan. The sole recourse of Lender under the Loan Documents for repayment of the Loan shall be the exercise of its rights against the Project and related security thereunder. 2 . General Partner Change. The withdrawal, removal, and/or replacement of a general partner of the Partnership pursuant to the terms of the Partnership Agreement shall not constitute a default under any of the Loan Documents, and any such actions shall not accelerate the maturity of the Loan, provided that any required substitute general partner is reasonably acceptable to Lender and is selected with reasonable promptness . 3 . Monetary Default. If a monetary event of default occurs under the terms of any of the Loan Documents, prior to exercising any remedies thereunder Lender shall give Borrower and each of the general and limited partners of the Partnership, as identified in the Partnership Agreement, simultaneous written notice of such default . Borrower shall have a period of seven (7) days after such notice is given within which to cure the default prior to exercise of remedies by Lender under the Loan Documents, or such longer period of time as may be specified in the Loan Documents . L , 4 . Non-Monetary Default. If a non-monetary event of default occurs under the terms of any of the Loan Documents, prior to exercising any remedies thereunder Lender shall give Borrower and each of the general and limited partners of the Partnership, as identified in the Partnership Agreement, simultaneous written notice of such default . If the default is reasonably capable of being cured within thirty (30) days, Borrower shall have such period to ' e-Efect a cure prior to exercise of remedies by Lender under the Loap Documents, or such longer period of time as may be specified in the Loan Documents . If the default is such that it is not reasonably capable of being cured within thirty (30) days or such longer period if so specified, and if Borrower (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then Borrower shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Lender. If Borrower fails to take corrective action or to cure the default within a reasonable time, Lender shall give Borrower and each of the general and limited partners of the Partnership written notice thereof, whereupon the limited partner may remove and replace the general partner with a substitute general partner who shall effect a cure within a reasonable time thereafter in accordance with the foregoing provisions . In no event shall Lender be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within one hundred eighty (180) days after the first notice of default is given, or such longer period of time as may be specified in the Loan Documents . 5 . Casualty, Condemnation, Etc . In the event of any fire or other casualty to the Project or eminent domain proceedings resulting in condemnation of the Project or any part thereof, Borrower shall have the right to rebuild the Project, and to use all available insurance or condemnation proceeds therefor, provided that (a) such proceeds are sufficient to keep the Loan in balance and reb-:ild the Project in a manner that provides adequate security to Lender for repayment of the Loan or if such proceeds are insufficient then Borrower shall have funded any deficiency, (b) Lender shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement, and (c) no material default then exists under the Loan Documents . If the casualty or condemnation affects only part of the Project and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of the Loan in a manner that provides adequate security to Lender for repayment of the remaining balance of the Loan. 6 . Force Maieure. There shall be no default for construction or rehabilitation delays beyond the reasonable control of Borrower, provided that such delays do not exceed one hundred eighty (180) days, or such longer period of time as may be specified in the Loan Documents . 7 . Purchase Rights . The execution and delivery of the purchase option and right of first refusal agreement described in the Limited- Partnership Agreement shall not constitute a default under the Loan Documents or accelerate the maturity of the Loan thereunder. Any requisite consent of Lender to (a) the exercise of said purchase option and right of first refusal agreement by the project sponsor identified therein, and to (b) the assumption without penalty of Loan obligations by the project sponsor and the release of Borrower from such obligations, shall not be unreasonably withheld. Subject to any such consent requirement, . the exercise of rights under such agreement shall not constitute a default or accelerate maturity of the Loan. 8 . [For below-market interest rate loans : ] Loan Assumption. If the purchase option and right of first refusal agreement described in the Limited Partnership Agreement is not exercised and the Project is sold subject to low-income housing use restrictions as contained in an existing regulatory agreement or other recorded covenant, any requisite consent of lender to said sale, and to the assumption without penalty of loan obligations by the purchaser and the release of Borrower from such obligations, shall not be unreasonably withheld. 9 . Lender Approvals, Etc. In any approval, consent, or other determination by Lender required under any of the Loan Documents, Lender shall act reasonably and in good faith. 10 . Prohibition of Sale. Lender shall not (a) sell, assign, transfer, or convey any such indebtedness (or any interest therein) to Federal Home Loan Mortgage Corporation ( "Freddie Mac" ) , or (b) include such indebtedness (or any interest therein) in a pool of loans to be sold, assigned, transferred, or conveyed to Freddie Mac. (continued on next page) In Witness Whereof, the undersigned have caused this Rider to be executed this Aq day of ait,otitA , 19 95 . C Borrower: Lender: GREENVIEW LIMXTED PARTNERSHIP CITY OF OMAHA a (A) Nebraska limited a (i) munici corpo tion partnership By: GREENVIEW CORPORATION By: a (n) Nebraska corporation I s : /tf/D4 7Gr its general partner Attest : By: Its : Presi ent By: It : ( �� ag// Attest : By: , , -t, A X eL0- 0'k-J Its :ffdr Secretary i'- • WARRANTY DEED KNOW ALL MEN BY THESE PRESENTS, that the CITY OF OMAHA, a Municipal Corporation in the State of Nebraska,hereinafter referred to as CITY, in consideration of One and No/100 Dollar($1.00) and other valuable consideration in hand paid, does hereby grant, bargain, sell, convey and confirm unto Greenview Limited Partnership, a Nebraska Limited Partnership, hereinafter referred to as Grantee, the following described real estate, situated in the County of Douglas and State of Nebraska to-wit: Lots 1 through 16, Block 14; and Lot 1, except the North 58 feet of the East 104 feet thereof, and all of Lots 2 and 3, Block 13, together with the East 1/2 of the vacated alley adjoining Lots 1, 2 and 3 on the West, all in E. V. Smith's Addition, an addition to the City of Omaha, as surveyed,platted and recorded in Douglas County,Nebraska together with all the tenements, hereditaments, and appurtenances to the same belonging, and all the estate, title,claim or demand whatsoever of the CITY of,in,or any part thereof. TO HAVE AND TO HOLD the above described premises, with the appurtenances,unto the Grantee and to its successors and assigns forever, and the CITY for itself and its successors and assigns, do covenant with said Grantee and its successors and assigns that the CITY is lawfully seized of said premises, that they are free from encumbrance except those of record, that the CITY has good right and lawful authority to sell the same and that the CITY will and its successors and assigns shall warrant and defend the same unto the said Grantee and its successors and assigns forever, against the lawful claims of all persons whomsoever. IN WITNESS WHEREOF, the CITY OF OMAHA, a Municipal Corporation, has caused these present to be executed by,,itsMayor and its Corporate seal to be affixed hereto this 2 9'—day of ) �7 , 19 . THE CITY OF OMAHA, (Corporate Seal) A Municipal C' .oration r4 I By: . )L ! MAYOR ATTEST: APPROVED AS TO FORM: LERK ASSISTANT CITY ATT L Warranty Deed Page -2- STATE OF NEBRASKA ) ) SS COUNTY OF DOUR AS ) On this day of 44.„„„",,- , 19 95 , before,me, the undersigned, a Not Public in and for s��uid County,personally came �o f2z, , Mayor and A //` %i��e.i/I) ey f� , City Clerk of the City of Omaha, a Municipal Corporation, to me personally kn6wn to be the Mayor and the City Clerk and who executed the above conveyance, and acknowledged the execution thereof to be the voluntary act and deed of the City of Omaha, a Municipal Corporation, and that the Corporate Seal of the City of Omaha was thereto affixed by its authority. In testimony whereof, I have hereunto set my hand and affixed my Notary Seal at Omaha in Douglas County, on the day and date last above written. GENERALNOTARY-State of Nebraska s riv , ES My Comm.Exp.July 29,1996 (4-77da NOTARY PUBLIC My Commission expires_.s.4,4_4go WARRANTY DEED) KNOW ALL MEN BY THESE PRESENTS, that the CITY OF OMAHA, a Municipal Corporation in the State of Nebraska, hereinafter referred to as CITY, in consideration of One and No/100 Dollar($1.00) and other valuable consideration in hand paid, does hereby grant, bargain, sell, convey and confirm unto Greenview Corporation, a Nebraska Non-profit Corporation, hereinafter referred to as Grantee, the following described real estate, situated in the County of Douglas and State of Nebraska to-wit: Lots 1 through 16, Block 14; and Lot 1, except the North 58 feet of the East 104 feet thereof, and all of Lots r2 and 3, Block 13, together with the East 1/2 of the vacated alley adjoining Lots 1, 2 and 3 on the West, all in E. V. Smith's Addition, an addition to the City of Omaha, as surveyed,platted and recorded in Douglas County,Nebraska together with all the tenements, hereditaments, and appurtenances to the same belonging, and all the estate,title, claim or demand whatsoever of the CITY of, in, or any part thereof. TO HAVE AND TO HOLD the above described premises, with the appurtenances,unto the Grantee and to its successors and assigns forever, and the CITY for itself and its successors and assigns, do covenant with said Grantee and its successors and assigns that the CITY is lawfully seized of said premises, that they are free from encumbrance except those of record, that the CITY has good right and lawful authority to sell the same and that the CITY will and its successors and assigns shall warrant and defend the same unto the said Grantee and its successors and assigns forever, against the lawful claims of all persons whomsoever. IN WITNESS WHEREOF, the CITY OF OMAHA, a Municipal Corporation, has caused these esent be executed by its Mayor and its Corporate seal to be affixed hereto this gilCday of , 19 . % ' I, THE CITY OF OMAHA, (Corporate Seal) A Municipal rporation By: ATTEST: APPROVED AS TO FORM: 44 / CLE ASSISTANT CITY Warranty Deed Page-2- STATE OF NEBRASKA ) ) SS COUNTY OF DOUGLAS ) On this day of (r7`e /` , 19 9 .bef a me the undersigned, a Notary ' Public in for s C nty,persQQ ally c e fa% 'v�✓r , Mayor and )6 /{/ rz7J 7,2 / 4 , City Clerk of the City of Omaha, a Municipal Corporation,/t'o me personally known to be the Mayor and the City Clerk and who executed the above conveyance, and acknowledged the execution thereof to be the voluntary act and deed of the City of Omaha, a Municipal Corporation, and that the Corporate Seal of the City of Omaha was thereto affixed by its authority. - In testimony whereof,I have hereunto set my hand and affixed my Notary Seal at Omaha in Douglas County, on the day and date last above written. GENERAL NOTARY-State of NSES ebraska My Comm.Exp.July 29,1996s.4,/,Z /1r7 7f• ��1� NOTARY PUBLIC My Commission expires 4,, /99 . C-25A CITY OF OMAHA LEGISLATIVE CHAMBER Omaha, Nebr September 12 lg 95 RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: WHEREAS,the City annually receives Community Development Block Grant funds under Title I of the Housing and Community Development Act of 1974,as amended,for the purpose of benefitting low and moderate income residents, eliminating slums and blight,and for other urgent community development needs; and, WHEREAS, the Mayor recommended various projects in the 1995 Consolidated Submission for Community Planning and Development Programs(Consolidated Plan)including the Housing Development Program; and, WHEREAS, the City Council approved the 1995 Consolidated Plan on December 6, 1994, by Resolution No. 3266; and, WHEREAS, the Greenview Corporation, a Nebraska Non-profit Corporation, Michael B. Maroney, President, has submitted a proposal for the construction of thirty-six (36)• residential units in the area bounded generally by 17th Street on the East, 18th Street on the West, Clark Street on the South and Grace Street on the North, but also including a small parcel in the Northeast corner of the block directly across 18th Street to the West; and the development of supporting site amenities for the low and moderate income occupants of the residential units; and, WHEREAS,in accordance with requirements of the Americans With Disabilities Act and Section 504 of the Rehabilitation Act of 1973,two of the thirty-six units will be constructed to be handicapped accessible; and, WHEREAS, it is in the best interests of the citizens of Omaha to promote construction of such properties, and enter into an Agreement with the Greenview Corporation to provide such a project. NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: By Councilmember Adopted City Clerk Approved Mayor C-25A CITY OF OMAHA LEGISLATIVE CHAMBER Omaha, Nebr September 12 19 95 PAGE 2 THAT, as recommended by the Mayor, the attached Loan Agreement, between the City of Omaha and the Greenview Corporation, a Nebraska Non-profit Corporation, Michael B. Maroney, President, 6655 Sorensen Parkway, Omaha, Nebraska 68152, to provide a $800,000 Deferred Payment Loan for the construction of thirty-six residential units (of which two units will be handicapped accessible)and the subsequent rental of these units to low and moderate income families in the area bounded by 17th Street on the East, 18th Street on the West,Clark Street on the South and Grace Street on the North,but also including a small parcel in the Northeast corner of the block directly across 18th Street to the West,is hereby approved. Funds shall be payable from the Housing Development Program,Fund 193, Organization No. 8335. P:\PLN\1999.SKZ APPROVED AS TO FORM: ASSISTANT C OR By •. Councilmember • Adopted SEP 12 1995 7City-d C k• /D Approved;... ..,r • 1 Mayor 4 as u a 5, - q cn u) 0 o o w 4. m -., .y d CD Cp O ts ''' ..!) L:f1~cc G `C `� O c Q cD N 0 a. el oc co D` da 8o•a D Y 0 n 005 �' a i 1 Imob s• o �• qA g• no ,�. , c., g�p ' c' ,CD. :° c�sD ors' en,' O 5 — O" ,•" O CD r.s• CD P. r-n CD P� ., CD ft • \• '• . \ N. illkil \ • . • • • • . , 41. 4 .t t s yet