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Attachment 1A 1 JOINT EXERCISE OF POWERS AGREEMENT AND COOPERATION AGREEMENT TO UNDERTAKE OR TO ASSIST IN THE UNDERTAKING OF ESSENTIAL ACTIVITIES PURSUANT TO TITLE I OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974, AS AMENDED, FOR THE PERIOD OF OCTOBER 1, 2017 TO SEPTEMBER 30, 2020, AND SUBSEQUENT AUTOMATIC RENEWALS UNLESS TERMINATED This Agreement (“Agreement”) is entered into by and between the County of Santa Clara (“County”) and the Town of Los Gatos (“Town”) relating to essential community development and housing assistance activities funded by the Federal government for the Community Development Block Grant and HOME Program. RECITALS WHEREAS, Congress has enacted the Housing and Community Development Act of 1974, as amended, hereinafter referred to as the “Act”, and Title I of the Act provides for a program of Community Development Block Grants, hereinafter referred to as “CDBG” for funds that may be used for the support of activities that provide decent housing and suitable living environments and expanded economic opportunities principally for persons of low- and moderate income; and WHEREAS, the Congress of the United States has enacted the Cranston-Gonzalez National Affordable Housing Act, Title II of this Act created the HOME Investment Partnership Program, hereinafter called “HOME” that provides funds to states and local governments for the purpose of increasing the number of affordable housing opportunities for low- and moderate income families; and WHEREAS, Title I of the ACT makes entitlement grants available to cities with a population of 50,000 or more persons and to counties that qualify as an Urban County; and WHEREAS, the County is a qualified Urban County and hereinafter “Urban County Program” will refer to the County’s CDBG and HOME HUD grant programs as well as to the legislation and regulations that created and funded these programs; and WHEREAS, the Act requires that certain cooperative agreements be entered into between County and Town for a period of three years, with subsequent automatic renewals unless terminated, in order to implement the provisions and terms of said Act; and WHEREAS, the County and Town are public agencies under the provisions of Section 6500 of the Government Code and the State of California, and each is authorized by law to enter into a cooperative agreements; and ATTACHMENT 1 – EXHIBIT A WHEREAS, the County and Town agree that the County shall be solely responsible for administering, managing and directing the Urban County Program including but not limited to the preparation of the Consolidated Plan that is required to be submitted to HUD in order for the County to have access to Urban County Program funds and as such County has final authority for selecting activities that will be funded with Urban County Program funds; and WHEREAS, the execution of this Cooperative Agreement, hereinafter referred to as Agreement, is necessary in order to meet the desires of both County and Town of having the Town be part of the Urban County Program. WHEREAS, the Town may not apply for grants from appropriations under the State CDBG Program for fiscal years during the period in which it participates in the urban county's CDBG program; and may receive a formula allocation under the HOME Program only through the County, by entering into a cooperation agreement with the County, qualifying the County as an Urban County applicant; WHEREAS, the Town and the County agree to "cooperate to undertake, or assist in undertaking, community renewal and lower-income housing assistance activities;" WHEREAS, the County and Town may not sell, trade, or otherwise transfer all or any portion of such funds to another such metropolitan Town, urban county, unit of general local government, or Indian tribe, or insular area that directly or indirectly receives CDBG funds in exchange for any other funds, credits or non-Federal considerations, but must use such funds for activities eligible under title I of the Act. This new requirement is contained in the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act, 2014, Pub. L. 113-76; NOW, THEREFORE, in consideration of the mutual covenants herein set forth and the mutual benefits to be derived therefrom, the parties agree as follows: 1. General. This Agreement gives the County authority to undertake or assist in undertaking activities starting on July 1, 2017 for Fiscal Years 2017-2018, 2018-2019 and 2019-2020, which will be funded from Urban County Program funds and from any program income generated from the expenditures of such funds. County and Town agree to cooperate to undertake, or assist in undertaking community development and affordable housing activities. This Agreement shall automatically renew for a new three (3) year period every time County re-qualifies as an Urban County, (which is every three (3) years), until such time as the Town Council or Santa Clara County Board of Supervisors elects to terminate this Agreement at the conclusion of the preceding three-year term. This Agreement covers all Urban County Program funds. By executing this Agreement, Town understands that it may not apply for grants under the Small Cities or State CDBG Programs from appropriations for fiscal years during the term of this Agreement, and Town may not participate in a HOME consortium other than COUNTY HOME Program regardless of whether COUNTY receives a HOME formula allocation. 2. Definitions. For purposes of simplicity and clearer understanding, some of the definitions below have been shortened or rephrased from those set forth in the Act and Regulations thereunder. In the event of any conflict between the definitions in this Agreement and those set forth in the Act and Regulations, the latter shall govern. a. “Act”: Title I of the Housing and Community Development Act of 1974, P.L. 93- 383, as amended. b. “Applicant”: the County of Santa Clara applying as an Urban County. c. “Application”: the application for a grant to be submitted by the County, as an Urban County, for entitlement funds under Title I of the Act. d. “Board of Supervisors”: the County’s legislative body which is the legal recipient of the Community Development Block Grant from HUD and is legally responsible for the administration of the Urban County HCD Program. e. “CDBG”: Community Development Block Grant, a federal program administered by HUD which provides funding to eligible entitlement Cities and Urban Counties to address housing and community development needs of lower income persons. f. “Citizen Participation Plan”: the plan adopted by the Board of Supervisors of the County which outlines the opportunities and process for citizen input on matters pertaining to planning, monitoring, and evaluation of the Urban County HCD projects. g. “Town”: is the Town or town that is a party to this Agreement; such Town or town may be referred to as a “Non-Entitlement Town,” that is, a Town which cannot directly apply for or receive funds through cooperation agreements with the HUD. h. “Town Project”: is a proposal that will be i. “Consolidated Plan”: describes the housing conditions and goals to address the housing needs of lower income persons, and identifies specific housing actions to be taken by the Urban County to address its housing needs. The Consolidated Plan also serves as a guide for HUD in the distribution of assisted housing resources to communities. j. “County”: the County of Santa Clara through action by its Board of Supervisors. k. “Grant”: the CDBG funds allocated by HUD to the County of Santa Clara as the legal recipient of the Community Development Block Grant for the Urban County. l. “HOME”: the HOME Investment Partnership Program, a federal program administered by HUD to assist in addressing the affordable housing needs of lower income persons in Santa Clara County through such means as new housing development and construction; acquisition and rehabilitation of existing housing units; and provision of emergency rent subsidies. m. “Housing and Community Development Advisory Committee”: an advisory committee established by the Board of Supervisors of the County to be the policy recommending body to the Board of Supervisors for the HCD Program. n. “HUD”: the United States Department of Housing and Urban Development. o. “OSH”: Office of Supportive Housing, formerly known as the Office of Affordable Housing was established by the County of Santa Clara Board of Supervisors to operate the County’s housing programs and to assist in the development of affordable housing for low and lower income residents of Santa Clara County. p. “Project Proposals”: requests for an allocation of CDBG or HOME funds submitted by eligible applicants to implement specific eligible CDBG or HOME activities, as defined by HUD. q. “Regulations”: the rules and regulations of the U.S. Department of Housing and Urban Development; particular reference is made to those regulations stated in 24 Code of Federal Regulations Part 570 (containing the general regulations of Community Development Block Grants) and Part 58 (containing the regulations on the Federal Environmental Review Procedures). r. “Urban County”: a county that is (1) in a metropolitan area; (2) authorized by state law to undertake essential community development and housing assistance activities within its unincorporated areas, and (3) has a population of 200,000 or more within its unincorporated areas and units of general local government (cities) within the county with which it entered into cooperation agreements to undertake or to assist in the undertaking of eligible activities. 3. Term. The term of this Agreement shall be for fiscal years 2017-18, 2018-19, and 2019-20 and shall commence as of July 1, 2017. This Agreement will subsequently automatically renew when County re-qualifies as an Urban County for the next three (3) year period and therefore a new three (3) year term of this Agreement will begin at that time. The first of these automatic three (3) year term renewals will occur at the beginning of fiscal year 2020 -201 (July 1, 2020) and every three (3) years thereafter unless an earlier date of termination is fixed by HUD pursuant to Urban County Program or until such times the Town and County elects to terminate this Agreement at the conclusion of a 3-year term. This Agreement shall remain in effect until all Urban County Program funds covered under the terms of this Agreement, and any program income generated from the expenditure of such funds, are expended, and the funded activities completed, and that the County and participating units of general local government may not terminate or withdraw from this Agreement while this Agreement remains in effect. This Agreement may not be terminated or withdrawn by the parties for any circumstance or reason during the term of the agreement. In order for the automatic renewal provisions of this Agreement to be approved, HUD mandates that this Agreement include a stipulation that requires the Town and County to adopt any amendment(s) necessary to meet the requirements for cooperative agreements set forth in an Urban County Qualification Notice applicable for a subsequent three-year urban county qualification period, and to submit such amendment to HUD as provided in the Urban County Qualification Notice and that such failure to comply will void the automatic renewal for such qualification period. In addition, as part of the Urban County re-qualification process the County goes through every three (3) years, the County will notify Town, via a letter, that Town has the ability to terminate the Agreement and not be included as part of the submission by County to HUD for re-qualification as an Urban County for the subsequent three (3) year qualification period. Town agrees to send a timely response to County stating its intentions to either continue to be a part of the Urban County Program or to elect to terminate this Agreement and not be a part of the County’s upcoming submission to HUD to re-qualify as an Urban County for the subsequent three (3) year period. The County will submit to HUD the letter notifying the Town of its ability to terminate this Agreement as well as the Town’s response letter. County will also submit to HUD a written legal opinion provided by County Counsel stating that the terms and provisions continue to be authorized under state and local law and that the Agreement continues to provide full legal authority for County. The County and the Town have both adopted a resolution approving the Town being a part of the Urban County Program; the resolution will be sent to HUD along with this Agreement immediately after Agreement has been approved as well as whenever the County re-qualifies as an Urban County. 4. Purpose of Agreement. This Agreement is formed to meet the requirements and purposes of the Act and Regulations with respect to the application for an entitlement grant pursuant to Title I of the Act and to establish the respective rights of the parties to such grant. 5. Administration of Agreement. a. The officers and agents of both parties will cooperate in furnishing information and assistance necessary for the preparation, completion, and filing of the County’s application with HUD in accordance with the requirements of the Act and the Regulations. The Town shall provide opportunities for public participation as described in the Urban County Citizen Participation Plan. b. The Town shall submit to the County all necessary information required for the completion of a Consolidated Plan in the form required by HUD. This information will detail the Town’s commitments to providing housing assistance to low and very low income persons within the Town. The local commitments to housing assistance by the cities will be incorporated into the Urban County’s Consolidated Plan, which will be reviewed by HUD to determine the local commitments to address housing needs of low to very low income persons. c. The County shall not alter or amend the information furnished to County by cities in compliance with the Act and Regulations and consistent with identified Urban County needs and priorities, the County shall have full authority and necessary control of the preparation and filing of it’s Application for Federal Assistance to HUD and of other papers and documents in support thereof. 6. Project Proposals. Any and all Project Proposals for eligible activities, including those of the Town, shall be submitted directly to the County during its three-year funding cycle by eligible applicants. The three-year Notice of Funding Availability (NOFA) will outline the eligibility criteria and local priorities. Project Proposals must meet the HUD eligibility criteria within one of the funding categories contained in the NOFA. All Proposals for Public Service must be submitted directly to the County. Funding for Capital Improvement Projects will be pooled for a minimum of one eligible capital improvement project in each of the participating jurisdictions, pending funding availability. The Town will submit a proposal to the County for consideration for a shelf- ready project or a project that can be phased over a two year period with demonstrable programmatic and financial actions (i.e. design, architectural, construction costs). County and Town staff will work together to determine each project’s level of readiness and establish an implementation schedule. Jurisdictional reserves will not be carried over from year to year to ensure funds are spent in a timely manner. When such capital funds are not expended they will be used to supplement the Housing Development Category of funding, if they are not expended in the agreed upon project’s contract term between the Town and the County. The County will evaluate the Town’s timely expenditure of funds to ensure the County is in compliance with HUD before recommending funding for a capital project. Review and comment on Town proposed projects shall be to determine HUD eligibility and timely expenditure of funds. 7. Disbursement of Funds. a. Town understands and agrees that CDBG and HOME funds disbursed under this Agreement are the obligation of County and that such obligation of the County is dependent upon the qualification of the County as an Urban County applicant and upon the availability of federal funds to implement Title I of the Act. b. Funds disbursed to the Town and other subrecipients will be expended on eligible activities as described in the Urban County Program Consolidated Plan. The 2015- 2020 Consolidated Plan includes goals and strategies to address housing and community development needs in the Urban County and identifies the following Goals in its Strategic Plan: 1. Assist in the creation and preservation of Affordable housing for lower income and special needs households. 2. Support activities to end homelessness 3. Support activities that provide basic services, eliminate blight, and/or strengthen neighborhoods 4. Promote environmental sustainability c. Parties hereto agree that Urban County Program funding will be prohibited for activities in or in support of any participating Town that does not affirmatively further fair housing within its own jurisdiction or that impedes the County’s actions to comply with its fair housing certification. d. Prior to final approval and submittal to HUD a public hearing before the Board of Supervisors will be held. The Board of Supervisors will make final decisions regarding all applications. e. Upon approval of the Urban County Program application and the release of funds by HUD, the Town and other subrecipients may begin implementation of approved activities. Information on the progress of approved activities will be submitted to the County on a quarterly basis during the program year the activities are being carried out. This information will be included in the Urban County’s monitoring reports which are reviewed by HUD during the program year. Projects which fail to meet schedules according to the approved time schedule will be evaluated for compliance. 8. Compliance with Final Programs and Plans. County and Town shall comply in all respects with final Community Development plans and programs and the Consolidated Plan which are developed through mutual cooperation pursuant to the application requirements of Urban County Program and their regulations and approved by HUD. 9. Compliance with Legislation and Regulations County and Town shall comply with all applicable requirements of the Urban County Program and associated regulations, in utilizing grant funds under legislation that created and govern these grants, and shall take all actions necessary to assure compliance with County certifications required by Section 104(b) of Title I of ACT, as amended regarding the provisions of the National Environmental Policy Act of 1969, Title VI of the Civil Rights Act of 1964, Title VII of the Civil Rights Act of 1968, Executive Order 11988, Section 109 of Title I of the Act which incorporates Section 504 of the Rehabilitation Act of 1973 and the Age Discrimination Act of 1975, the Fair Housing Act, and affirmatively furthering fair housing and other applicable federal laws. The Town agrees that CDBG and HOME funding for activities in or in support of Town are prohibited if Town does not affirmatively further fair housing within its own jurisdiction or impedes County actions to comply with its fair housing certification. The Town may be required to demonstrate how it complies with the fair housing requirement. In order for County to avoid the risk of losing CDBG funds as a result of the Town not spending CDBG funds in a timely manner as required by the Act, County and Town both agree that the County has the authority to transfer CDBG funds to another CDBG-eligible project/program at County’s sole discretion if Town is not spending its CDBG funds in a timely manner. Prior to transferring the CDBG funds, the County will notify the Town in writing that the Town is at risk of not meeting this timeliness requirement and therefore County will transfer CDBG funds if timeliness is not met. Furthermore, Town hereby covenants by and for itself, its successors and assigns, and all persons claiming under or through it that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, familial status, disability, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of any project funded by HOME or CDBG funds, nor shall Town itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in any project funded as a result of this Agreement. The Town hereby covenants has adopted and is enforcing a policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction against any individual engaged in non-violent civil rights demonstrations. Furthermore, the Town has adopted and is enforcing a policy of enforcing applicable State and local laws against physically barring entrance to or exit from a facility or location which is the subject of such non-violent civil rights demonstrations within jurisdictions. 10. Conflict of Interest. Town shall comply with all applicable federal and state laws, regulations and policies governing conflict of interest, including State conflict of interest regulations found in California Government Code Sections 1090, 1126, 87100 et seq., Federal conflict of interest regulations found in 24 CFR 570.611, 85.36 ad 84.42, and any other applicable policies, rules and regulations related to conflict of interest. Any person who is an employee, agent, consultant, officer, elected or appointed official of the Town, who exercises any functions or responsibilities with respect to Urban County Program funded activities identified in this Agreement and who is in a position to participate in the decision-making process or gain inside information with regard to activities identified in this Agreement, may not obtain a financial interest or benefit from the Urban County Program assisted activities identified in this Agreement or any related agreement, subcontract, or contract, either for themselves, an immediate family member or business partner, during his/her tenure. Town shall maintain written standards of conduct governing performance of its employees engaged in the award and administration of contracts. 11. Areas of Housing Authority Operation. Nothing herein shall affect the rights and obligations of the parties with respect to any agreement which the Town may have with the Housing Authority of the County of Santa Clara (HACSC). 12. Services, Equipment and Property Reimbursement. County shall provide or be primarily responsible for providing the services, equipment and other property necessary for the planning, preparation and filing of the CDBG application and for the administration of the grant funds subject to the right of the County to seek reimbursement for actual expenses and costs of furnishing such services, equipment and property. Subject to the provisions of the application or of the grant award made thereon, all property furnished by County as herein-above described shall belong to County during the term of this Agreement and after its termination. At the termination of the CDBG program, all property and equipment acquired with CDBG funds will be subject to the requirements and conditions of OMB Circular A-102 Attachment N, Property Management Standards. 13. Program Income. Any revenue directly generated from the use of CDBG funds shall be included as available funds for the following funding cycle and thus shall be subject to regulations and reported to HUD. The County has the responsibility for monitoring and reporting to HUD on the use of any such program income, thereby requiring appropriate record keeping. 14. Revolving Loan Fund. a. The County is allowed to retain a separate fund in conjunction with a single family home rehabilitation program for eligible activities in accordance with all CDBG requirements as may apply. The Revolving Loan Fund must be held in an interest bearing account and the interest must be remitted to HUD annually. b. Eligible activities for single family home rehabilitation may be funded through loans. The loans, in turn, generate payments to the Revolving Loan Fund for use in carrying out the same activities. 15. Records. Town and County shall maintain appropriate books, records, files, and accounts relating to the receipt and disbursement of the grant funds, including records in accordance with 24 CFR Sec 570.503 as they relate to the application, acceptance, and use of federal funds for this federally assisted program and any other records imposed by County’s contract with HUD. All such books, records, files and accounts shall be made available for inspection at reasonable times and places by authorized representatives of Town, County, and HUD or any other person authorized by the Act or the Regulations. 16. Contractual Obligations. It is expressly understood and agreed that, as the applicant to HUD, County must take the full responsibility and assume all obligations of an applicant under the Act and that HUD will look only to the County in this regard. However, County assumes no responsibility nor liability towards Town for any failure to include Town in the application as a result of Town’s failure to supply County with information necessary to prepare and file the application, or as a result of Town’s failure to supply County with such information, upon designated dates, or as a result of Town’s failure to comply with the Act and the Regulations. 17. Indemnification. In lieu of and notwithstanding the pro rata risk allocation which might otherwise be imposed between the Parties pursuant to Government code Section 895.6, the Parties agree that all losses or liabilities incurred by a party shall not be shared pro rata but instead the County and Town agree that pursuant to Government Code Section 895.4, each of the parties hereto shall fully indemnify and hold each of the other parties, their officers, board members, employees and agents, harmless from any claim, expense or cost, damage or liability imposed for injury (as defined by Government code Section 810.8) occurring by reason of the negligent acts or omissions or willful misconduct of the indemnifying party, its officers, employees or agents, under or in connection with or arising out of any performance of obligations required by this Agreement, the Act, Application, Regulations or other applicable laws relating to this Agreement delegated to such party under this Agreement. No party, nor any officer, board member, employee or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions or willful misconduct of the other parties hereto, their officer, board members, employees or agents, under or in connection with or arising out of any performance of obligations required by this Agreement, the Act, Application, Regulations or other applicable laws relating to this Agreement delegated to such other parties under this Agreement. 18. Self-Insurance. The Town and County are authorized self-insured public entities for purposes of general liability, automobile liability, professional liability and worker’s compensation. Town and County warrant that through their respective programs of self-insurance, the have adequate coverage or resources to protect against any liabilities arising out of their performance regarding the terms and conditions of this Agreement. 19. Discretionary Actions. Nothing herein contained shall be construed to prohibit the Town from exercising its discretion on any legislative quasi-judicial and/or administrative matter (including but not limited to any action involving zoning of General Plan amendments). Nothing herein shall compel the Town to take any action on any matter save and except as expressly required in this Agreement. It is understood and agreed that the Town does not by this Agreement commit itself or delegate the exercise of any of its police powers in any matter whatsoever save and except as expressly set forth in this Agreement. 20. Timeliness. When any action is required hereunder upon request for action on a document or material furnished by the County to the Town said request for action on a document or material shall be furnished at least 30 days prior to the date said action is required in order to allow sufficient time for the Town to review and act on said document or material. 21. Severability. Should any part, term, provision of this Agreement be judicially determined to be illegal or in conflict with any law of the State of California or any law of the United States, or should any part, term, or provision of this Agreement be otherwise rendered unenforceable or ineffectual, the validity of the remaining portions or provisions shall not be affected thereby. 22. Section Headings. All section headings contained herein are for the convenience of reference only and are not intended to define or limit the scope of any provision of this Agreement. 23. Notices. Any notice, tender, or delivery to be given hereunder by either party to the other may be effected by personal delivery in writing or by certified mail, return receipt requested. Each party may change its address by written notice in accordance with this Section. IN WITNESS WHEREOF, parties hereto have executed this Agreement on the dates set forth below. TOWN OF LOS GATOS COUNTY OF SANTA CLARA By: ____________________________ By: ___________________________ ____________________________ ___________________________ Laurel Prevetti Jeffrey V. Smith Town Manager County Executive Attest: By: ___________________________ Clerk Administrator Approved as to form and legality: Approved as to form and legality: By: ___________________________ By: ____________________________ Town Attorney Christopher R. Cheleden Lead Deputy County Counsel Date: __________________________ Date: __________________________