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HomeMy WebLinkAbout025876 RES - 07/27/2004RESOLUTION APPROVING THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION'S CONTRACT WITH ACCION TEXAS, INC. FOR $200,000 FROM THE BUSINESS AND JOB DEVELOPMENT FUND 1140 TO IMPLEMENT A SMALL BUSINESS LOAN PROGRAM FOR UNBANKABLE BUSINESSES AND OFFERING LOANS UP TO $50,000 WHEREAS, the Texas Legislature in Section 4A of Article 5190.6, Vemon's Texas Revised Civil Statutes ("Development Corporation Act of 1979") empowered local communities with the ability to adopt an optional local sales and use tax as a means of improving the economic health and prosperity of their citizens; WHEREAS, on November 5, 2002, residents of the City of Corpus Christi passed Proposition 2, New and Expanded Business Enterprises, which authorized the adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of one-eighth of one percent to be imposed for 15 years; WHEREAS, the 1/8 cent sales tax authorized by passage of Proposition 2 was subsequently enacted by the City Council and filed with the State Comptroller of Texas, effective Apdl 1, 2003, to be administered by the Corporation's Board of Directors ("Board"); WHEREAS, Section 21 of the Development Corporation Act of 1979 requires the City Council to approve all programs and expenditures of the Corporation; WHEREAS, the Board of Directors of the Corporation ("Board"), on May 5, 2003, adopted the Corporation's Guidelines and Cdteria for Granting Business Incentives; WHEREAS, the City Council approved the Corporation's Guidelines and Criteria for Granting Business Incentives on May 13, 2003; WHEREAS, Accion Texas is a Texas nonprofit corporation whose principal mission is to provide loans to small business owners lacking access to commercial credit and Accion Texas has provided $27.4 million in 5,300 loans to over 3,330 clients in Texas from 1994 to 2003; WHEREAS, Accion Texas anticipates disbursing over three years nearly 300 loans with a total value of $3.5 million to Iow and moderate income micro and small business owners in Corpus Christi to generate 95 new permanent full-time jobs; WHEREAS, Accion Texas submitted a proposal to the Corporation to request business development funds of $50,000 for use as a loan loss reserve fund to leverage capital for its small business loans for Corpus Christi small businesses; Page 2 of 2 WHEREAS, Accion Texas submitted a proposal to the Corporation to request business development funds of $150,000 for loan interest buy down assistance for qualifying small businesses in Corpus Chdsti; and WHEREAS, the Board authorized agreement at its meeting of July 8, 2004 to provide business development funds to Accion Texas to be used by Accion Texas for small business loan assistance programs which will result in creation of new full-time permanent jobs in the city of Corpus Christi; WHEREAS, the City Council has determined that it is in the best interests of the Corporation and the citizens of Corpus Christi, Texas that the proposed Accion Texas project and its associated expenditure be approved; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, THAT: SECTION 1. The City Council approves the Corpus Christi Business and Job Development Corporation's contract with Accion Texas, Inc. for $200,000 from the business and job development fund 1140 to implement a small business loan program for unbankable businesses and offering loans up to $50,000. A copy of the agreement is attached as Exhibit A. A'Fi'EST CITY OF CORPUS CHRISTI Armand~ City Secretary Approved: July 21, 2004 Lisa Aguilar C/ Assistant City Attorney for City Attomey samuel L. I~leal, Jr. Mayor H:~LEG.DIR\Lisa~RES~July 27 Accion Res,doc Melody Cooper Henry Garrett Bill Kelly Rex A. Kinnison Jesse No¥ola Mark Scott Corpus Christi, Texa~ ,' f ,2004 The above resolution was passed by the following vote: Samuel L. Neal, Jr. Brent Chesney Javier D. Colmenero AGREEMENT BETWEEN THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION AND ACClON TEXAS, INC. This Agreement ("Agreement") is entered into between the Corpus Christi Business and Job Development Corporation ("Corporation") and Acci6n Texas, Inc., a Texas nonprofit corporation ("Accibn Texas"). WHEREAS, the Texas Legislature in Section 4A of Article 5190.6, Vernon's Texas Revised Civil Statutes (Development Corporation Act of 1979) empowered local communities with the ability to adopt an optional local sales and use tax as a means of improving the economic health and prosperity of their citizens; WHEREAS, on November 5, 2002, residents of the City of Corpus Christi ("City") passed Proposition 2, New and Expanded Business Enterprises, which authorized the adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of one-eighth of one percent to be imposed for 15 years, WHEREAS, the 1/8 cent sales tax authorized by passage of Proposition 2 was subsequently enacted by the City Council and filed with the State Comptroller of Texas, effective April 1, 2003, to be administered by the Corpus Christi Business and Job Development Corporation Board; WHEREAS, the Corpus Christi Business and Job Development Corporation exists for the purposes of encouraging and assisting entities in the creation of jobs for the citizens of Corpus Christi, Texas; WHEREAS, the Board of Directors of the Corporation ("Board"), on May 5, 2003, adopted the Corporation's Guidelines and Cdteria for Granting Business Incentives; WHEREAS, Section 21 of the Texas Development Corporation Act of 1979, Art. 5190.6, Vernon's Texas Revised Civil Statutes, requires the City Council to approve all programs and expenditures of the corporation; WHEREAS, the City Council approved the Corporation's Guidelines and Criteda for Granting Business Incentives on May 13, 2003; WHEREAS, Acci~Sn Texas is a Texas nonprofit corporation whose principal mission is to provide loans to small business owners lacking access to commercial credit and Accion Texas has provided $27.4 million in 5,300 loans to over 3,330 clients in Texas from 1994 to 2003; WHEREAS, Accion Texas anticipates disbursing over three years nearly 300 loans with a total value of $3.5 million to Iow and moderate income micro and small business owners in Corpus Chdsti to generate 95 new permanent full-time jobs; Accion06292004.doc Page I of 10 WHEREAS, Acci6n Texas submitted a proposal to the Corporation to request business development funds of $50,000 for use as a loan loss reserve fund to leverage capital for its small business loans for Corpus Christi small businesses; WHEREAS, Accibn Texas submitted a proposal to the Corporation to request business development funds of $150,000 for loan interest buy down assistance for qualifying small businesses in Corpus Christi; and WHEREAS, the Board has determined that it is in the best interests of the citizens of Corpus Christi, Texas that business development funds be provided to Accion Texas to be used by Accion Texas for small business loan assistance programs which will result in creation of new full-time permanent jobs in the city of Corpus Christi In consideration of the covenants, promises, and conditions stated in this Agreement, Corporation and Accion Texas agree as follows: '1. Effective Date. The effective date of this Agreement ("Effective Date") is the latest date that either party executes this Agreement. 2. Term. The term of this Agreement is one year from August 1,2004 through July 31, 2005. This agreement may be extended at the option of the Corporation for up to two additional one year terms, contingent upon annual appropriation of funds. 3. Loan Loss Reserve Program. a. In consideration for creation and maintenance of new jobs as provided in this Agreement, the Corporation agrees to pay $50,000 within 30 days of Corporation's execution of this Agreement for the Loan Loss Reserve Program. b. The Loan Loss Reserve Program funds will be used to allow Accion Texas to leverage additional capital for small business loans. c. "Small business" is defined in the Corpus Christi Business & Job Development Corporation Guidelines & Criteria for Granting Business Incentives ("Corporation Guidelines"), adopted May 5, 2003, as amended. d. Accion Texas anticipates that it will have one million dollars available on an annual basis to be lent to qualifying small businesses in Corpus Christi. e For every $50,000 in loans that Accion Texas provides to a small business in Corpus Christi, Accion Texas shall ensure that the loan will result in the creation of one new full- time permanent job in the city of Corpus Christi. f. Businesses assisted must be located in or locating within the city limits of Corpus Christi, Texas. g. Businesses assisted must be unable to obtain a loan from traditional lending institutions. Aocron06292004.doc Page 2 of 10 h. Loan amounts shall be within the range of $1,000 to $50,000. i. Accion Texas shall provide the Corporation with quarterly reports to identify the loans made, name and address of business receiving loan, jobs created, and other reports as requested by the Corporation. j. Accion Texas shall provide the corporation with quarterly reports of capital available for loans to qualifed Corpus Christi small businesses or qualified small businesses locating to Corpus Christi. k. Accion Texas will provide funds for operations and loan capital to implement and sustain the program. 4. Interest Buy Down Program. a. In consideration for creation and maintenance of new jobs as provided in this Agreement, the Corporation agrees to pay Accion Texas up to $150,000 for the Interest Buy Down Program as follows: i. Accion Texas must first receive a request for a loan from a small business located in Corpus Christi, or a business locating in Corpus Christi. ii. The request must include the business name, name of business owner(s), location of business, type of business, number of new jobs to be created, amount of loan, and amount of interest buy down program funds requested (up to 7% of the loan). iii. Accion Texas shall review the request for a loan. iv. Upon Accion Texas approval of a loan, Accion Texas shall submit request to Corporation for the interest buy down program funds for the loan. Payment by Corporation shall be calculated using the following formula: ((Loan amount x interest rate (up to 7%))/12 = N. N x number of payments = interest buy down reimbursement to Accion for business loan. Example: ($10,000 x 7%)/12 = 55.33 55.33 x 36 = $2100=amount to be reimbursed to Accion for business loan. v. The Corporation shall distribute the Interest Buy Down Program funds to Accion Texas within 30 days of receipt of notification of approval of loan under the Interest Buy Down Program. vi. The total funds available on an annual basis under the Interest Buy Down Program under this agreement is $150,000. AccJon06292004.doc Page 3 of 10 b. The loans assisted with this program shall be within the range of $10,000 to $50,000. c. This program shall result in the creation of one permanent full-time job per every $50,000 in loans assisted with the Interest Buy Down Program. Accion Texas shall ensure that the loan will result in the creation of one new full-time permanent job in the city of Corpus Christi. d. Businesses assisted must be unable to obtain a loan from a traditional financial institution. e. Accion Texas shall provide the Corporation with quarterly reports to identify the loans made, name and address of the business receiving the loan, jobs created under the Interest Buy Down Program, and other reports as requested by the Corporation. f. Accion Texas shall provide funds for operations and loan capital to implement and sustain the program. g. Accion Texas shall develop loan underwriting criteria and payment terms and conditions for its loan program. 5. Job Creation Qualification a. In order to count as a job under this Agreement, the job must pay wages as required in Section 38 (b) of the Development corporation Act of 1979, as amended. b. A full-time permanent job is one that provides at least 2,080 hours annually. The jobs shall be primarily engaged in serving a customer base outside a 50-mile radius of the city of Corpus Christi. c. Accion Texas agrees to confirm and document to the Corporation that each job created under this Agreement is maintained throughout the term of this Agreement. d. Accion Texas agrees to provide Corporation with a sworn certificate by authorized representative of each small business assisted under this Agreement certifying the number of full-time permanent employees employed by the small business. e. Accion Texas shall ensure that the Corporation is allowed reasonable access to personnel records of the small businesses assisted under this Agreement. 6. Buy Local Provision. a. Accion Texas agrees to use its best efforts to give preference and priority to local manufacturers, suppliers, contractors, and labor, except where not reasonably possible to do so without added expense, substantial inconvenience, or sacrifice in operating efficiency. Page 4 of 10 b. For the purposes of this section, the term "local" as used to descdbe manufacturers, suppliers, contractors, and labor includes firms, businesses, and persons who reside in or maintain an office within a 50-mile radius of Nueces County. 7. Local Offices. Two staff persons of Accion Texas offices shall be located in Corporation designated offices or a mutually agreeable location. 8. Representation on Accion Texas governing board. Accion Texas agrees to appoint a person designated by the Corporation as a member of Accion Texas goveming board. 9. Warranties. Accion Texas warrants and represents to Corporation the following: a. Accion Texas a corporation duly organized, validly existing, and in good standing under the laws of the State of Texas, has all corporate power and authority to carry on its business as presently conducted in Corpus Christi, Texas. b. Accion Texas has the authority to enter into and perform, and will perform, the terms of this Agreement. c. Accion Texas has timely filed and will timely file all local, State, and Federal tax reports and returns required by laws to be filed and all taxes, assessments, fees, and other governmental charges, including applicable ad valorem taxes, have been timely paid, and will be timely paid, during the term of this Agreement. d. Accion Texas has received a copy of the Texas Development Corporation Act of 1979, Art. 5190.6, Vernon's Texas Revised Civil Statutes, and acknowledges that the funds granted in this Agreement must be utilized solely for purposes authorized under State law and by the terms of this Agreement. e. If an audit determines that the funds were not used for authorized purposes, Accion Texas agrees to reimburse Corporation for the sums of money spent for purposes not authorized by law within 30 days written notice requesting reimbursement.. f. The parties executing this Agreement on behalf of Accion Texas are duly authorized to execute this Agreement on behalf of Accion Texas. 10. Compliance with Laws. Accibn Texas shall observe and obey all applicable laws, ordinances, regulations, and rules of the Federal, State, County and City governments. 11. Non-Discrimination. Acci6n Texas covenants and agrees that Acci6n Texas will not discriminate nor permit discrimination against any person or group of persons, with regard to employment and the provision of services at, on, or in the Facility, on the grounds of race, religion, national origin, marital status, sex, age, disability, or in any manner prohibited by the laws of the United States or the State of Texas. Accion06292004.doc Page 5 of 10 12. Force Majeure. If the Corporation or Acci6n Texas are prevented, wholly or in part, from fulfilling its obligations under this Agreement by reason of any act of God, unavoidable accident, acts of enemies, fires, floods, governmental restraint or regulation, other causes of force majeure, or by reason of circumstances beyond its control, then the obligations of the Corporation or Acci6n Texas are temporarily suspended during continuation of the force majeure. If either party's obligation is affected by any of the causes of force majeure, the party affected shall promptly notify the other party in writing, giving full particulars of the force majeure as soon as possible after the occurrence of the cause or causes relied upon. 13. Assignment. Acci6n Texas may not assign all or any part of its dghts, privileges, or duties under this Agreement without the prior written approval of the Corporation and City. Any attempted assignment without approval is void, and constitutes a breach of this Agreement. f4. Indemnity. AcciOn Texas covenants to fully indemnify, save, and hold harmless the Corporation, the City, their respective officers, employees, and agents ("lndemnitees") against all liability, damage, loss, claims, demands, and actions of any kind on account of personal injuries (including, without limiting the foregoing, workers' compensation and death claims), or property loss or damage of any kind, which arise out of or are in any manner connected with, or are claimed to arise out of or be in any manner connected with Acci6n Texas activities conducted under or incidental to this Agreement, including any injury, loss or damage caused by the sole or contributory negligence of any or all of the Indemnitees. Acci(~n Texas must, at its own expense, investigate all those claims and demands, attend to their settlement or other disposition, defend all actions based on those claims and demands with counsel satisfactory to Indemnitees, and pay all charges of attorneys and all other cost and expenses of any kind arising from the liability, damage, loss, claims, demands, or actions. 15. Events of Default. The following events constitute a default of this Agreement: a. Failure of Accibn Texas to timely, fully, and completely comply with any one or more of the requirements, obligations, duties, terms, conditions, or warranties of this Agreement; b. The Corporation or City determines that any representation or warranty on behalf of Accibn Texas contained in this Agreement or in any financial statement, certificate, report, or opinion submitted to the Corporation in connection with this Agreement was incorrect or misleading in any material respect when made; AccJon06292004.doc Page 6 of 10 c. Any judgment is assessed against Accibn Texas or any attachment or other levy against the property of Accibn Texas with respect to a claim remains unpaid, undischarged, or not dismissed for a period of 30 days. d. Accibn Texas makes an assignment for the benefit of creditors. e. Acci6n Texas files a petition in bankruptcy, or is adjudicated insolvent or bankrupt. f. If taxes on owed by Accibn Texas become delinquent, and Acci6n Texas fails to timely and properly follow the legal procedures for protest or contest. g. Accibn Texas changes the general character of business as conducted of the date this Agreement is approved by the Corporation. 16. Notice of Default. Should the Corporation or C~ determine that Accibn Texas is in default according to the terms of this Agreement, the Corporation or City shall notify Acci6n Texas in writing of the event of default and provide 60 days from the date of the notice ("Cure Pedod") for Accibn Texas to cure the event of default. 17. Results of Uncured Default. After exhausting good faith attempts to address any default during the Cure Pedod, and taking into account any extenuating circumstances that might have occurred through no fault of Accibn Texas, as determined by the Board of Directors of the Corporation, the following actions must be taken for any default that remains uncured after the Cure Period: a. Acci6n Texas shall immediately pay $200,000 to Corporation, with interest at the interest rate paid by the City on its most recently issued general obligation bonds from date of expiration of Cure Pedod until fully paid. b. Accibn Texas shall pay Corporation reasonable attorney fees and costs of court to collect amounts due to Corporation. c. The Corporation shaft have no further obligations to Acci6n Texas under this Agreement. d. Neither the City nor the Corporation may be held liable for any consequential damages. e. The Corporation may pursue all remedies available under law. 18. No Waiver. a. No waiver of any covenant or condition, or the breach of any covenant or condition of this Agreement, constitutes a waiver of any subsequent breach of the covenant or condition of the Agreement. Accion06292004 .doc Page 7 of 10 b. No waiver of any covenant or condition, or the breach of any covenant or condition of this Agreement, justifies or authorizes the nonobservance on any other occasion of the covenant or condition or any other covenant or condition of this Agreement. c. Any waiver or indulgence of Acci6n Texas default may not be considered an estoppel against the Corporation. d. It is expressly understood that if at any time Acci6n Texas is in default in any of its conditions or covenants of this Agreement, the failure on the part of the Corporation to promptly avail itself of the rights and remedies that the Corporation may have, will not be considered a waiver on the part of the Corporation, but Corporation may at any time avail itself of the rights or remedies or elect to terminate this Agreement on account of the default. 19. Notices. a. Any required written notices shall be sent mailed, certified mail, postage prepaid, addressed as follows: Accibn Texas: Accibn Texas Attn.: Janie Barrera 2014 Hackberry San Antonio, Texas 78210 Corporation: City of Corpus Christi Business and Job Development Corporation Attn: Executive Director 1201 Leopard Street Corpus Chdsti, Texas 78401 b. A copy of all notices and correspondence must be sent the City at the following address: City of Corpus Christi Attn.: City Manager P.O. Box 9277 Corpus Christi, Texas 78469-9277 c. Notice is effective upon deposit in the United States mail in the manner provided above. 20. Incorporation of other documents. Accion06292004.doc Page 8 of 10 The Corpus Christi Business & Job Development Corporation Guidelines & Criteria for Granting Business Incentives ("Corporation Guidelines"), adopted May 5, 2003, are incorporated into this Agreement. 21. Amendments or Modifications. No amendments or modifications to this Agreement may be made, nor any provision waived, unless in wdting signed by a person duly authorized to sign agreements on behalf of each party. 22. Relationship of Parties. In performing this Agreement, both the Corporation and Acci6n Texas will act in an individual capacity, and not as agents, representatives, employees, employers, partners, joint-venturers, or associates of one another. The employees or agents of either party may not be, nor be construed to be, the employees or agents of the other party for any purpose. 23. Captions. The captions in this Agreement are for convenience only and are not a part of this Agreement. The captions do not in any way limit or amplify the terms and provisions of this Agreement. 24. Severability. a. If for any reason, any section, paragraph, subdivision, clause, provision, phrase or word of this Agreement or the application of this Agreement to any person or circumstance is, to any extent, held illegal, invalid, or unenforceable under present or future law or by a final judgment of a court of competent jurisdiction, then the remainder of this Agreement, or the application of the term or provision to persons or circumstances other than those as to which it is held illegal, invalid, or unenforceable, will not be affected by the law or judgment, for it is the definite intent of the parties to this Agreement that every section, paragraph, subdivision, clause, provision, phrase, or word of this Agreement be given full force and effect for its purpose. b. To the extent that any clause or provision is held illegal, invalid, or unenforceable under present or future law effective during the term of this Agreement, then the remainder of this Agreement is not affected by the law, and in lieu of any illegal, invalid, or unenforceable clause or provision, a clause or provision, as similar in terms to the illegal, invalid, or unenforceable clause or provision as may be possible and be legal, valid, and enforceable, will be added to this Agreement automatically. 25. Venue. Venue for any legal action related to this Agreement is in Nueces County, Texas. 26. Sole Agreement. This Agreement constitutes the sole agreement between the Corporation and AcciOn Texas. Any prior agreements, promises, negotiations, or representations, verbal or otherwise, not expressly stated in this Agreement, are of no force and effect. Accion06292004.doc Page 9 of 10 Corpus Christi Business & Job Development Corporation BY: Name: Title: Date: Attest By: Acci6n Texas, Inc. By: Janie Barrera President and Chief Executive Officer Date: STATE OF TEXAS § COUNTY OF NUECES § This instrument was acknowledged before me on ,2004, by Janie Barrera, President and Chief Executive Officer for Accion Texas, Inc., a Texas non-profit corporation, on behalf of Accion Texas, Inc.. Notary Public, State of Texas Accion06292004,doc Page 10 of 10 CITY OF CORPUS CHRISTI CERTIFICATION OF FUNDS (City Charter Article IV, Sections 7 & 8) 1, the Director of Financial Services of the City of Corpus Christi, Texas (or his/her duly authorized representative), hereby certify to the City Council mad other appropriate office~ that lhe money xequired for abe current fiscal year's portion of the conWact, agreement, obligation or expenditure descn~ned below is m the Treasury ta the c~edit of tt~ Fund specified below, l~om which it is t~ be c~awn, ~adhas not been appropriated for any other purpose. Future payments are subject to annual approprialion by the City Council. City Council Action Date July 27, 2004 Agenda Item: B. Resolution Approving the Corpus Christi Business and Job Development Corporation's contract with ACCION Texas for $200,000 fi.om the Business md Job Development Fund 1140 to implemmt a small business loan program for unbankable businesses and offering loans up to $50,000 Amount Required: $200,000 Fund Name Fund No. OrR. No. Account No- Business & Job Development 1140 15020 530000 Fund Small Business Projects Project No. Amount $200,000 Total __ Cel-fiflcafion Not Required $200,000 Director of Finan6ial Services Date: V/,