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HomeMy WebLinkAbout026915 RES - 08/22/2006Page 1 of 2 RESOLUTION APPROVING THE CONTRACT BETWEEN THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION AND ACCION TEXAS, INC., FOR THE PERIOD BETWEEN AUGUST 1, 2006, AND JULY 31, 2007 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, THAT: SECTION 1. The City Council of the City of Corpus, Texas, approves the contract between the Corpus Christi Business and Job Development Corporation and ACCION Texas. Inc., to provide funding for the loan Toss reserve and the interest buy down program for a period of August 1, 2006, through July 31, 2007. A copy of the contract is attached as Exhibit "A." ATTEST: Armando Chapa Assistant Secretary Approved as to form August 16 2006. Gary .Smith Gary . Smith Assistant City Attorney For the City Attorney H: Leg- llir /gwsiagenda 2006/O8- 22,Res; Accron CITY • F CORPUS CHRISTI Henry Garre Mayor, City •f Corpus Christi 915 AGREEMENT BETWEEN THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION AND ACCIoN TEXAS, INC. Tls Agreement ( "Agreement ") is entered into between the Corpus Christi Business and Job Development Corporation ( "Corporation ") and ACCION Texas, Inc., a Texas nonprofit corporation "ACCION 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 118th 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 Criteria 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 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 $39 million in 6,700 loans to over 4,100 clients in Texas from 1994 to 2005; WHEREAS, ACCION Texas, through its contract with the Corporation has provided $150,000 in interest buy down loans to 23 small business owners, providing 30 new and 68 retained jobs in Corpus Christi since July, 2004; C:V OOCUME- 1 \User\LOCALS- 1\ Temp\ACCION TEXAS Agreement 060810.doc Page 1 of 10 WHEREAS, ACCION Texas anticipates disbursing, over the next twelve months, approximately 20 loans with a total value of $25,000 to low and moderate income micro and small business owners in Corpus Christi to generate 20 new permanent full -time jobs; 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, through the one - year extension of the contract with 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 for one year from August 1, 2006, through July 31, 2007. 3. Loan Loss Reserve Program. a. Pursuant to the Agreement between the Parties dated July 8, 2004, and amended April 19, 2005, In in consideration for creation and maintenance of new jobs as provided in this Agreement, the Corporation agrees-to-pay paid $50,000 and the Corporation agrees to pay $25,000 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 on May 5, 2003, and amended on July 24, 2004, and April 25, 2006. 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. C:1DOCUME-1 \User \LOCALS -1 Temp\ACCION TEXAS Agreement 060810.doc Page 2of10 g. Businesses assisted must be unable to obtain a loan form traditional lending institutions. h. Loan amounts shall be within the range of $-1-5 000 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. 1. ACCION Texas shall provide the corporation with quarterly reports of capital available for loans to qualified 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. 1. At the termination of this agreement and after repayment or other conclusion of all loans assisted by Interest Buy Down Program, ACCION Texas will return to the Corporation any unexpended funds remaining from this Loan Loss Reserve 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 ( "Business "). ii. ACCION Texas shall review the request for a loan from the Business. iii. Upon ACCION Texas approval of a loan and prior to the closing of the loan, ACCION Texas shall submit Attachment "A" to the Corporation requesting funds to buy down the interest rate from the interest rate allowable per the underwriting criteria to 5.5 %. The Corporation authorizes an interest buy -down up to 7% of the interest rate to finance the loan. Payment by Corporation shall not exceed $17,500 per loan and shall be calculated using the following formula: (Loan amount x interest rate to buy down to 5.5 %) % 12 = N N x number of payments—interest buy down reimbursement to Accion for business loan. (The number of monthly payments shall not exceed sixty (60).) Example: ($10,000x7 %)% 12 =55.33 55.33 x 36 = $2,100 = amount to be reimbursed to ACCION for business loan. iv. The Corporation shall provide a response to approve or deny the reimbursement for the Interest Buy Down Program funds to ACCION Texas within 2 business days of receipt of Attachment "A." The Corporation shall reimburse funds within 30 days after evidence of closing the loan is submitted. v. The total funds available on an annual basis under the Interest Buy Down Program under this agreement is $150,000. C:\pOCUME -1 \User \LOCALS-1` Temp \ACC'ION TEXAS Agreement 060810.doc Page 3of10 b. The loans assisted with the program shall be within the range of $5,000 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 within two years of the loans. 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 through this program must be: i. Unable to obtain a loan from a traditional fmancial institution or unable to qualify for the total needed for a business loan through a bank or credit union, in which case ACCION Texas can loan the remaining amount with the buy -down interest rate program in conjunction with the bank \credit union. ii. Located in or locating in Corpus Christi city limits. iii. New or expanding business or home -based businesses located in the Corpus Christi city limits. iv. Current on payment of all sales taxes. v. Current on payment of all ad valorem taxes in the City of Corpus Christi. e. The following projects are ineligible for this program: i. Refinancing of existing loans or debt ii. Businesses located outside the Corpus Christi city limits iii. Home -based businesses located outside the Corpus Christi city limits iv. Loans to existing businesses which are not planning on expanding v. Business retention. f. ACCION Texas shall provide the Corporation with quarterly reports as provided in Attachment `B" 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. g- ACCION Texas shall provide funds for operations and loan capital to implement and sustain the program. h. ACCION Texas shall develop loan underwriting criteria and payment terms and conditions for its loan program and provide to the Corporation. 5. Job Creation Qualification. a. In order to count as a created job under this Agreement, the job must pay wages as required by Section 38(b) of the Development Corporation Act of 1979, as amended, which is the median wage of the occupation in the Corpus Christi MSA as determined by Texas Workforce Commission's Texas Industry Profiles report. b. A full -time permanent job is one that provides at least 2,080 hours annually. C:DOCUME -1 \User \LOCALS -1 Femp\ACC ION TEXAS Agreement 060810.doc Page 4 of 10 c. ACCION Texas agrees to confirm and document to the Corporation that each job created as a result of funding provided by this Agreement is maintained throughout the term of the loan to the Business. d. ACCION Texas agrees to provide Corporation with a sworn certificate by authorized representative of each shall 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. b. For the purposes of this section, the term "local" as used to describe 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. Representation on Accibn Texas governing board. ACCION Texas agrees to appoint a person designated by the Corporation as a member ofAccion Texas governing board. 8. 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 Texas, 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 C:\DOCUME -1 \User\LOCALS —1 Temp\ACCION TEXAS Agreement 060810.doc Page5ofl0 funds granted to 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. 1(} Compliance with Laws. ACCION Texas shall observe and obey all applicable laws, ordinances, regulations, and rules of the Federal, State, County and City governments. 11. Non - Discrimination. ACCION Texas covenants and agrees that ACCION 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. 12. Force Majeure. If the Corporation or ACCION 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 Accion 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 ofthe force majeure as soon as possible after the occurrence of the cause or causes relied upon. 13. Assignment. ACCION Texas may not assign all or any part of its rights, privileges, or duties under this Agreement without the prior written approval ofthe Corporation and City. Any attempted assignment without approval is void, and constitutes a breach of this Agreement 14. Indemnity. ACCION Texas covenants to fully indemnify, save, and hold harmless the Corporation, the City, their respective officers, employees, and agents ( "Indemnitees ") 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 ACCION 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. ACCION 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. C:\DOCUME --1 \User \LOCALS -1 \Temp \ACCION TEXAS Agreement 060810.doc Page 6 o f l 0 15. Events of Default. The following events constitute a default of this Agreement: a. Failure of ACCION 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 ACCION 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; c. Any judgment is assessed against ACCION Texas or any attachment or other levy against the property of ACCION Texas with respect to a claim remains unpaid, undischarged, or not dismissed for a period of 30 days. d. ACCION Texas makes an assignment for the benefit of creditors. e. ACCION Texas files a petition in bankruptcy, or is adjudicated insolvent or bankrupt. f. If taxes owed by ACCION Texas become delinquent, and ACCION Texas fails to timely and properly follow the legal procedures for protest or contest. g. ACCION 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 City determine that Accion Texas is in default according to the terms of this Agreement, the Corporation or City shall notify ACCION Texas in writing of the event of default and provide 60 days from the date of the notice ( "Cure Period ") for ACCION Texas to cure the event of default. 17. Results of Uncured Default. After exhausting good faith attempts to address any default during the cure Period. and taking into account any extenuating circumstances that might have occurred through no fault of ACCION 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, ACCION 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 Period until fully paid. b. ACCION Texas shall pay Corporation reasonable attorney fees and costs of court to collect amounts due to Corporation. c. The Corporation shall have no further obligations to ACCION Texas under this Agreement. C:DOCUME- 1 \User\LOCALS -1 Temp\ACCION TEXAS Agreement 060810.doc Page 7of10 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. 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 ACCION Texas' default may not be considered an estoppel against the Corporation. d. It is expressly understood that if at any time ACCION 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: ACCION Texas: ACCION 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 Christi, Texas 78401 C: 10OCUME- 11User1LOCALS- 1\Temp1ACCION TEXAS Agreement 060810.doc Page 8of10 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. The Corpus Christi Business and Job Development Corporation Guidelines and Criteria for Granting Business Incentives ( "Corporation Guidelines"), as amended, 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 writing 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 ACCION 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 C: DOCUME- 11User1LOCALS- 1'Temp1ACCION TEXAS Agreement 060810.doc Page 9of10 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 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. 27. Survival of terms of agreement and obligations of parties. The terms of this agreement and the obligation of the parties relating to the Loan Loss Reserve Program and the Interest Buy Down Program shall survive the termination of this agreement. Carpus Christi Business & Job Development Corporation By. Gail Hoffman Chairperson Date: Attest: By Armando Chapa, Assistant Secretary ACCION Texas, Inc. By: - - -- Jai a Barrera President and Chief Executive Officer Date: THE STATE OF TEXAS CCRJNTY OF NUECES This instrument was acknowledged before me on , 2006, by Janie Barrera, President and Chief Executive Officer for Accion Texas, Inc., a Texas non -profit cooration, on behalf of ACCION Texas, Inc. Notary Public, State of Texas C:\DOCUME—I \User\LOCALS-1, Temp\ACCION TEXAS Agreement 060810.doc Page 10 of 10 Corpus Chri ti. Texas i of G The above resolution was passed by the following vote: 2006 Henry Garrett Brent Chesney Melody Cooper Jerry Garcia Bill Kelly Rex A. Kinnison John E. Marez Jesse Noyola Mark Scott H: Leg- I)ir /gwsiagenda 2006/08-22/R esiAc on : ri 9 15 Page 2 of 2 CITY OF CORPUS CHRISTI CERTIFICATION OF FUNDS (City Charter Article IV, Sections 7 & 8) I, the Director of Finance of the City of Corpus Christi, Texas (or his /her duly authorized representative), hereby certify to the City Council and other appropriate officer that the money required for the contract. agreement, obligation or expenditure described below is in the Treasury to the credit of the Fund specified below, from which it is to be drawn, and has not been appropriated for any other purpose. 2 2_ City Council Action Date: August 1, 2006 Agenda Item (Caption as it should appear on the ager da) Resolution approving the second extension of the agreement between the Corpus Christi Business and Job Development Corporation and ACCION TEXAS, Inc. for $150,000 to furxi the Interest Buy Down program and $25,000 for a loan loss reserve. The extension is effective from August 1 2006 through July 31 2007. Amount Required: $175,000 Fund Name Fund No. Org. No. Account Project No. No. Business & Job 1140 15020 530000 Development Total Certification Not Required Amount $175,000 $175,000 or of Fin ncial Services s Date: ,S1( 7/D6