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1993-173-Adopting Rules And Regulations Governing Community Grants And Adopting A Standard Form Of Community Grant AgreementRESOLUTION 1993 -173 RESOLUTION OF THE TOWN OF LOS GATOS ADOPTING RULES AND REGULATIONS GOVERNING COMMUNITY GRANTS AND ADOPTING A STANDARD FORM OF COMMUNITY GRANT AGREEMENT RESOLVED BY THE TOWN COUNCIL: WHEREAS, the TOWN awards community grant funds to nonprofit agencies pursuant to the Town budget; and WHEREAS, the TOWN enters into agreements with various nonprofit agencies to provide public services, housing, arts, and other programs and projects that benefit our community; and WHEREAS, it is important that the use of and accountability for those funds be treated consistently to ensure that the funds are devoted to services that effectively meet community needs; and WHEREAS, the Rules and Regulations Governing Community Grants attached hereto as Exhibit 1 should be applied to community grants made by the Town from this point forward as provided in the Rules and Regulations; and WHEREAS, the form Community Grant Agreement attached hereto as Exhibit 2 should be used for community grants made by the Town from this point forward with such necessary and appropriate amendments as the Town Council, Town Manager, or Town Attorney approve. NOW, THEREFORE, IT IS RESOLVED: 1. The Rules and Regulations Governing Community Grants attached as Exhibit 1 hereto are adopted. 2. The Community Grant Agreement by and between the Town of Los Gatos and the Recipient attached hereto as Exhibit 2 is adopted as the basic form to be used in connection with community grants made by the Town with necessary and appropriate amendments in specific cases as the Town Council, Town Manager, or Town Attorney may approve. 3. This Resolution supersedes Resolution No. 1992 -123 adopted on July 6, 1992, and shall be applicable to all agreements regarding community grants made by the Town of Los Gatos from this point forward. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 6th day of December, 1993 by the following vote. COUNCIL MEMBERS: AYES: Joanne Benjamin, Steven Blanton, Linda Lubeck, Patrick O'Laughlin Mayor Randy Attaway NAYES: None ABSENT: None ATTEST: / CLERK OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATNY014 \CNCLRPTS \COMMGRAN.CSD 2 EXHIBIT 1 COMMUNITY GRANT AGREEMENT BY AND BETWEEN THE TOWN LOS GATOS AND THE ^Fl^ FISCAL YEAR 1993 -94 THIS AGREEMENT, entered into this _ day of , 1993, by and between the TOWN OF LOS GATOS, a municipal corporation (hereinafter TOWN), and ^Fl ^, a nonprofit corporation (hereinafter CONTRACTOR). WITNESSETH WHEREAS, TOWN appropriated funds in its Fiscal Year 1993 -94 Budget for allocation to community service agencies, and; WHEREAS, TOWN desires to engage CONTRACTOR, and TOWN has appropriated funds not to exceed ^F2^ ($ ^F3 ^), to be utilized during the time period between July 1, 1993, and June 30, 1994, for the purpose of meeting the goals and objectives outlined in EXHIBIT B, "SCOPE OF SERVICES" (hereinafter PROGRAM), operating within the TOWN OF LOS GATOS from facilities located at ^F4^ and benefitting ^F5 ^. WHEREAS, CONTRACTOR represents and warrants the truth of all statements contained in "ASSURANCES" attached as EXHIBIT A and incorporated herein by reference. NOW, THEREFORE, THE PARTIES AGREE, as follows: I. RULES AND REGULATIONS. The CONTRACTOR warrants that it has read and understands the TOWN's Rules and Regulations Governing Community Grants [hereinafter Rules and Regulations), and agrees that it shall be bound by those Rules and Regulations in its performance under this Agreement. In case of any conflict between the terms of this Agreement and the Rules and Regulations, the terms of this Agreement shall take precedence. II. PROGRAM COORDINATION A. TOWN: The Director of Community Services or his /her designee, shall be the PROGRAM MANAGER and shall render overall supervision of the progress and performance of this Agreement by TOWN. All services agreed to be performed by TOWN shall be under the overall direction of the PROGRAM MANAGER. B. CONTRACTOR: CONTRACTOR shall assign a single PROGRAM DIRECTOR who shall have overall responsibility for the progress and execution of this Agreement. Should circumstances or conditions subsequent to the execution of this Agreement require a substitute PROGRAM DIRECTOR, CONTRACTOR shall notify TOWN immediately of such occurrence in writing. PROGRAM DIRECTOR and CONTRACTOR staff will fully cooperate with TOWN'S PROGRAM MANAGER relating to the PROGRAM, areas of concern, and the impact of PROGRAM on residents of TOWN. C. NOTICES: All notices or other correspondence required or contemplated by this Agreement shall be sent to the parties at the following addresses: TOWN CONTRACTOR Regina A. Falkner ^F6^ Community Services Director ^F7^ October 11, 1993 1 Town of Los Gatos ^F8^ P.O. Box 949 ^F9 Los Gatos, CA 95031 ^F10^ III. OBLIGATIONS OF TOWN A. Contract Compliance: TOWN staff shall provide assistance to CONTRACTOR in connection with: 1. Obtaining conformity of the PROGRAM with the TOWN's policies and procedures and all TOWN codes, ordinances, directives and laws. 2. Performance review under the Agreement for compliance purposes and evaluating PROGRAM based on quarterly reports received from CONTRACTOR and on -site monitoring of client -based data. B. Method of Payment: 1. TOWN shall reimburse CONTRACTOR for all allowable costs and expenses incurred in providing the PROGRAM upon receipt of properly executed invoice and supporting data according to EXHIBIT C, "BUDGET ", as attached to this Agreement, and the Rules and Regulations. CONTRACTOR shall attach the corresponding monthly or quarterly report to the applicable invoice. 2. TOWN may, at any time and in its absolute discretion, elect to suspend or terminate payment to CONTRACTOR, in whole or in part, under this Agreement or not to make any particular payment under this Agreement in the event of unsatisfactory performance or noncompliance with this Agreement. IV. DISCLOSURE OF CONFIDENTIAL CLIENT INFORMATION TOWN and CONTRACTOR agree to maintain the confidentiality of any information regarding applicants for services offered by the PROGRAM pursuant to this Agreement or their immediate families which may be obtained through application forms, interviews, tests, or reports, from public agencies or counselors, or any other source. Without the written permission of the applicant or court order, such information shall be divulged only as necessary for purposes related to the performance or evaluation of the services and work to be provided pursuant to this Agreement to designated persons having responsibilities under the contract, including those furnishing services under the PROGRAM through subcontracts. V. ASSIGNABILITY AND INDEPENDENT CONTRACTOR REQUIREMENTS A. The relationship of CONTRACTOR to TOWN is that of an independent contractor. CONTRACTOR is responsible for the results of its PROGRAM and compliance with the terms of this Agreement. CONTRACTOR has full rights to manage its employees subject to the requirements of the taw. All persons employed by CONTRACTOR in connection with this Agreement shall be employees of CONTRACTOR and not employees of TOWN in any respect. CONTRACTOR shall be responsible for all employee benefits, including, but not limited to, statutory workers' compensation benefits. B. None of the work or services to be performed hereunder shall be delegated or subcontracted to third parties without prior written TOWN approval. October 11, 1993 2 C. No subcontractor of CONTRACTOR will be recognized by TOWN as such. All subcontractors are deemed to be employees of CONTRACTOR, and CONTRACTOR agrees to be responsible for their performance and any liabilities attached to their actions or omissions. D. This Agreement is based on the unique services of CONTRACTOR. This Agreement shall not be assigned or transferred without the written consent of the TOWN. No changes or variations of any kind are authorized without the written consent of the Town Manager. VI. COMPLIANCE WITH LAW CONTRACTOR shall become familiar and comply with and cause all its subcontractors and employees, if any, to become familiar and comply with all applicable federal, state and local laws, ordinances, codes, regulations, and decrees including, but not limited to, those federal rules and regulations outlined in EXHIBIT A, "ASSURANCES ". Failure of CONTRACTOR to, in any manner, observe and adhere to law as described herein or as amended shall in no way relieve CONTRACTOR of its responsibility to adhere to same and CONTRACTOR herein acknowledges this responsibility. VII. TERMS AND AMENDMENTS Amendments to the terms and conditions of this Agreement shall be requested in writing by the party desiring such revision, and any such adjustment to this Agreement shall be determined and effective only upon the mutual Agreement in writing of the parties hereto unless the Amendments are made by the TOWN as corrective actions under the Rules and Regulations, in which case they will be adopted as ordered. VIII. LEGAL MATTERS A. Integration This document and the Rules and Regulations represents the entire and integrated Agreement between the TOWN and the CONTRACTOR, and supersedes all prior negotiations, representations, and agreements, either written or oral. B. Binding Effect The terms of this Agreement shall bind, and inure to the benefit of, the parties, their heirs, successors, and assigns. DC. HOLD HARMLESS A. CONTRACTOR hereby releases and agrees to protect, defend, hold harmless, and indemnify TOWN, its Town Council, its officers, employees and elected officials, boards and commissions, from and against all claims, injury, liability, loss, costs and expense, or damage, however same may be caused, including all cost and reasonable attorney's fees in providing the defense to any claim arising therefrom, for any loss or damage to property (real and /or personal) and for personal injury to or death of any person or persons arising out of, occurring by reason of, or in any way connected with CONTRACTOR's PROJECT activities, or in consequence thereof. B. CONTRACTOR shall hold TOWN, its Town Council, officers, employees and boards and commissions harmless from CONTRACTOR's failure(s) to complywith anyrequirement imposed on PROJECT by virtue of the utilization of Federal funds. CONTRACTOR shall reimburse TOWN, for any disallowed costs and /or penalties imposed on TOWN because of CONTRACTOR's failure to comply with Federal regulations or requirements. October 11, 1993 3 X. WHEN RIGHTS AND REMEDIES WAIVED In no event shall any payment by TOWN or any acceptance of payment by CONTRACTOR hereunder constitute or be construed to be a waiver by TOWN or CONTRACTOR of any breach of covenants or conditions of this Agreement or any default which may then exist on the part of TOWN or CONTRACTOR, and the making of any such payment while any such breach or default shall exist shall in no way impair or prejudice any right or remedy available to TOWN or CONTRACTOR with respect to such breach or default. XI. TERMINATION A. Termination for Cause Unearned payments under this Agreement may be suspended or terminated at any time before the date of completion by TOWN if: 1. CONTRACTOR fails to comply with conditions of the Agreement. 2. CONTRACTOR refuses to accept any additional conditions that may be imposed by the TOWN. 3. TOWN Council determines the TOWN can no longer fund the monies for the Agreement. B. Termination for Convenience TOWN or CONTRACTOR may terminate this Agreement in whole or in part when both parties agree that the continuation of the PROJECT would not produce beneficial results commensurate with the further expenditure of funds. 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. C. Upon Suspension or Termination CONTRACTOR shall: 1. Not incur new obligations and shall cancel as many outstanding obligations as possible. 2. Be paid only for services actually rendered to TOWN to the date of such suspension or termination; provided, however, if this Agreement is suspended or terminated for fault of CONTRACTOR, TOWN shall be obligated to compensate CONTRACTOR only for that portion of CONTRACTOR's services which are of benefit to TOWN. 3. Turn over to TOWN immediately any and all copies of studies, reports and other data, prepared by CONTRACTOR or its subcontractors, whether or not completed, if any, in connection with this Agreement; such materials shall become property of TOWN. CONTRACTOR, however, shall not be liable for TOWN's use of incomplete materials or for TOWN'suse of complete documents if used for other than the services contemplated by this Agreement. TOWN is not Gable for any CONTRACTOR expenses incurred after the termination or closing date of the Agreement. XII. MISCELLANEOUS PROVISIONS A. The Caption The captions of the various sections, paragraphs, and subparagraphs of the Agreement are for convenience only and shall not be considered nor referred to for resolving questions of the interpretation. October 11, 1993 4 B. No Third Party Beneficiary This Agreement shall not be construed or deemed to be an Agreement for the benefit of any third party or parties, and no third party shall have any claim or right of action hereunder for any cause whatsoever. C. Severability Clause In case any one or more of the provisions contained herein shall, for any reason, be held invalid, illegal, or unenforceable in any respect, it shall not affect the validity of the other provisions which shall remain in full force and effect. D. No Pledging of TOWN's Credit Under no circumstances shall CONTRACTOR have the authority or power to pledge the credit of TOWN, or incur any obligation in the name of TOWN. CONTRACTOR shall save and hold harmless TOWN, its Town Council, its officers, employees and boards and commissions from expenses arising out of this Agreement. E. Disputes In any dispute over any aspect of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, as well as reasonable costs, but not to exceed $5,000. F. Nondiscrimination 1. Neither the CONTRACTOR nor any of its subcontractors shall discriminate in the employment of persons because of their race, color, national origin, sex, age, ancestry, sexual orientation, religion, physical or mental disability, or marital status, unless based upon a bona fide qualification under the California Fair Employment and Housing Act. 2. Neither the CONTRACTOR nor any of its subcontractors shall discriminate in the provision of any services or programs because of race, color, national origin, sex, age, ancestry, sexual orientation, religion, physical or mental disability, or marital status, unless based upon a bona fide qualification under the California Fair Employment and Housing Act. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first hereinabove set forth. "F1" "F11" "F12" TOWN OF LOS GATOS David W. Knapp Town Manager October 11, 1993 5 APPROVED AS TO FORM: Larry E. Anderson Town Attorney ATTESTED TO: Marian V. Cosgrove Town Clerk APPROVED AS TO CONTENT: Regina A. Falkner Community Services Director EXHIBITS ATTACHED: EXHIBIT A - ASSURANCES EXHIBIT B - SCOPE OF SERVICES EXHIBIT C - BUDGET CSD14 \C0NTRACT\GRANTAGR..M1 October 11, 1993 EXHIBIT A. ASSURANCES The CONTRACTOR assures and certifies to the TOWN that: 1. It possesses legal authority to apply for the grant; that a resolution, motion or similar action has been duly adopted or passed as an official act of the CONTRACTOR'S governing body, authorizing the filing of the application, including all understandings and assurances contained herein, and directing and authorizing the person identified as the official representative of the CONTRACTOR to act in connection with the application and to provide such additional information as may be required. 2. It will comply with Title VI. of the Civil Rights Act of 1964 (42 USC 2000[a)) prohibiting employment discrimination where (1) the primary purpose of a grant is to provide employment or (2) discriminatory employment practices will result in unequal treatment of persons who are or should be benefitting from the grant aided activity. 3. Not excluded from participation in, deny the benefits of, or subject to discrimination under any PROGRAM or activity, any person in the United States on the grounds of race, color, national origin, sex, age, religion or handicap status in accordance with the Age Discrimination Act of 1975, Section 504 of the Rehabilitation Act of 1973, Civil Rights Act of 1964 or Title VII. of the Act of 1968. 4. It will comply with the provisions of the Hatch Political Activity Act 5 USC 1501 et seq. which limit the political activity of employees. 5. It will establish safeguards to prohibit employees of CONTRACTOR or Federal, State or local Governments from using their positions for a purpose that is or gives the appearance of being motivated by a desire for private gain for themselves or others, particularly those with whom they have family, business, or other ties. 6. Comply with the applicable provisions of the Political Reform Act of 1974 relating to conflicts of interest (codified in California Government Code Section 87100, et seq.) and promptly advise TOWN of the facts and circumstances concerning any disclosure made to it or any information obtained by it relating to conflicts of interest. 7. It will comply with Section 504 of the Rehabilitation Act of 1973, as amended (29 USC 794). CS014 \C0NTRACT\GRANTAGR.M1 October 11, 1993 1 EXhIBiT 2 RULES AND REGULATIONS GOVERNING COMMUNITY GRANTS 1. PURPOSES AND APPLICATION. The following rules and regulations shall apply to all community grants made by the Town of Los Gatos and shall be incorporated by reference into the Community Grant Agreements between the Town and the recipient organizations. These Rules and Regulations are intended to provide a consistent system of evaluating the use of Town funds to deliver services and to ensure that the organizations receiving those funds know what is expected of them and are accountable for the funds and the services. II. DEFINITIONS. A. Contractor. As used in these Rules and Regulations, "Contractor" means the recipient of the Town community grant that is to deliver services under the terms of the grant. B. Program. As used in these Rules and Regulations, "Program" means the services to be provided by the Contractor as designated in the terms of the grant. C. Program Manager. As used in these Rules and Regulations, "Program Manager" means the person designated by the Town to be the principal liaison between the Town and the Contractor regarding the Program. III. ORGANIZATION AND CONDUCT OF CONTRACTOR. A. Contractor's Board of Directors shall include representation from the broadest possible cross section of the community including: those with expertise and interest in the Contractor's services, representatives from community organizations interested in the Contractor's services, and users of the Contractor's services. B. No member of the Board of Directors or the Director's family may be a paid employee, agent, or subcontractor of Contractor. C. Meetings of Contractor's Board of Directors, except meetings, or portions thereof, dealing with personnel or litigation matters, shall be open to the public. D. Contractor shall keep minutes, approved by the Board of Directors, of all regular and special meetings. E. Contractor shall encourage public participation in planning and implementing services under the grant agreement with the Town. IV. DOCUMENTS TO BE PROVIDED BY CONTRACTOR. A. Within 15 days of execution of the underlying grant agreement with the Town, Contractor shall deliver the following to the Program Manager: 1. The Articles of Incorporation under the laws of the State of California. 2. Current Bylaws. 3. Verification and documentation of Internal Revenue Service nonprofit status under Title 26, Section 501(c) of the Federal Code. 4. Names and addresses of current Board of Directors. October 11, 1993 1 5. An organizational chart and staffing profile. 6. If the Contractor employs more than fifteen (15) employees, the personnel policies and procedures including an Affirmative Action Plan. 7. A copy of any lease agreement by the Contractor then in effect. Contractor shall report in writing any changes within five days of the effective date. B. Within ten (10) calendar days of the end of the last reporting period of the grant agreement, Contractor shall: 1. File reports (on forms approved by Town) with the Program Manager on the type and number of services rendered to beneficiaries through the operation of the Program. Such reports shall evaluate the manner in which the program is achieving its objectives and goals according to standards established by Town during the immediately preceding time period. 2. Submit to the Program Manager (on the Town- approved form) Contractor's request for reimbursement and supporting documentation on a quarterly basis according to the Budget contained in the grant agreement (see Section IV, B, 1. below). C. Prior to entering into any lease agreement, the Contractor shall submit the agreement for approval by Town. V. PROGRAM PERFORMANCE BY CONTRACTOR. A. Contractor shall: 1. Provide services in accordance with the "Scope of Services" and the "Budget" defined in the grant agreement. 2. Coordinate its services with existing organizations providing similar service in order to foster community cooperation and to avoid unnecessary duplication of services. 3. Seek out and apply for other sources of revenue in support of its operation or services from county, state, federal and private sources and inform the Program Manager in its quarterly report immediately following any such award. 4. Include an acknowledgment of Town funding and support on all appropriate publicity and publications using words to the effect that "Services are provided with funds from the Town of Los Gatos." VI. FISCAL RESPONSIBILITIES OF CONTRACTOR. A. Contractor shall: 1. Appoint and submit the name of a fiscal agent who shall be responsible for the financial and accounting activities of the Contractor, including the receipt and disbursement of Contractor funds. 2. Appoint a Treasurer from its Board, who shall review and by signature approve all receipts, disbursements, and bank account balances no less than monthly. October 11, 1993 2 3. Establish and maintain a system of accounts that shall be in conformance with generally accepted principles of accounting for budgeted funds. This system of accounts shall be subject to review and approval of Town. 4. Document all costs by maintaining complete and accurate records of all financial transactions, including, but not limited to, contracts, invoices, time cards, cash receipts, vouchers, cancelled checks, bank statements and /or other official documentation evidencing in proper detail the nature and propriety of all charges. 5. Submit financial analysis at least every year in accordance with the criteria and standards contained in Exhibit A to these Rules and Regulations. 6. Repay any disallowed costs. Disallowed costs may be identified through audits, monitoring, or other sources. Contractor shall be afforded the opportunity to respond to any adverse findings which may lead to disallowed costs. The Town shall make the final determination of disallowed costs, consistent with the principles contained in OMB circular A -122, Cost Principles for Nonprofit Organizations. 7. Contractor shall, at its sole cost and expense, obtain and maintain in full force and effect throughout the term of the grant agreement with the Town, insurance as set forth in Exhibit B. 8. Town shall make the final determination of validity of costs included in request for reimbursement and shall have the right to reject and deduct from the amount requested for reimbursement any costs the Town determines are not valid. VI. PRESERVATION OF RECORDS. A. Contractor shall preserve and make available its records: 1. Until the expiration of three years from the date of the submission of the final expenditure report or, for grants that are renewed annually, from the date of the submission of the annual financial status report; or 2. For such longer period, if any, as is required by applicable law; or 3. If the grant agreement is completely or partially terminated, the records relating to the work terminated shall be preserved and made available for a period of three years from the date of any resulting final settlement. VII. EXAMINATION OF RECORDS, FACILITIES. At any time during normal business hours and as often as may be deemed necessary, Contractor agrees that Town, and /or any duly authorized representatives shall, until expiration of (a) three years after final payment under the underlying grant agreement, or (b) such longer period as may be prescribed, have access to and the right to examine its plants, offices and facilities engaged in performance of the grant agreement and all its records with respect to all matters covered by the grant agreement, excepting those falling within the attorney- client privilege, and those falling within the attorney work - product privilege; provided that in the event of a dispute regarding the applicability of the attorney work - product privilege to specific records, the parties agree to submit the dispute to an impartial arbitrator agreeable to both parties. Agreement to the October 11, 1993 3 arbitrator shall not be withheld unreasonably. Costs of such arbitration shall be divided equally between the parties. Contractor also agrees that the Town, or any duly authorized representatives, have the right to audit, examine and make excerpts or transcripts of and from, such records, and to make audits of all contracts and subcontracts, invoices, payrolls, records of personnel, conditions of employment, materials and all other data relating to matters affecting the Program. VIII. TOWN AUDITS. The Town may require an independent audit. Such audits may cover program compliance as well as fiscal matters. Contractor will be notified in advance that an audit will be conducted, and the Contractor shall fully cooperate with the auditors. Contractor will be afforded an opportunity to respond to any audit findings, and have the responses included in the final audit report. Cost of such audits will be borne by the Town. IX. PURCHASING. A. Title to Personal property: Title to any personal property used in performance of the services and work specified in the grant agreement shall be as follows: 1. Personal property donated shall become the property of Contractor or person specified by the donor; otherwise the same shall become property of Town except for property and equipment described in subparagraph (2) below. 2. Personal property and equipment permanently affixed to buildings owned by Contractor shall become property of Contractor. 3. All other personal property, supplies, and equipment purchased with funds provided pursuant to the grant agreement with the Town and not consumed shall become property of Town and revert to Town upon the termination of the grant agreement with the Town. Town may elect at its sole option to decline to take title to all or any part of these items. B. Non - expendable Property. Any non - expendable property purchased by Contractor with funds approved by Town, with a purchase price in excess of One Hundred Dollars ($100.00), must be approved in writing by Town. Town shall retain title to said property. If the Program will be continued beyond termination of the grant agreement with the Town, the Town, at its sole option, may vest title in Contractor. C. Purchase of Real Property. None of the funds provided under the grant agreement with the Town shall be used for the purchase of real or non - expendable property with a purchase price in excess of One Thousand Dollars ($1,000.00), or for the purchase of an option on the purchase of real or non - expendable property, unless the Town's Program Manager approves, in writing, such purchase or option to purchase prior to the time when Contractor enters into a contract for such purchase or option to purchase. Any such purchase or option shall be processed through the Town Manager. October 11, 1993 4 X. MONITORING AND EVALUATION OF SERVICE A. Evaluation of Program Performance. Evaluation of Program performance shall be the mutual responsibility of both Contractor and Town. Contractor shall furnish all data, statements, records, information and reports necessary for Program Manager to monitor, review and evaluate performance of Contractor with respect to the Program and its components. The results of Contractor's performance will be recorded on a Town- approved monitoring and evaluation form. Town shall have the right to request the services of an outside agent to assist in any such evaluation. Such outside services shall be paid for by Town. B. Unsatisfactory Performance. Contractor shall be considered to be performing in an unsatisfactory manner if the Program Manager determines that the Contractor is providing client services below an established minimum standard or level as stated in the "Scope of Services" established in the grant agreement with the Town. A Contractor determined to be performing unsatisfactorily will be notified and shall have the opportunity to provide any relevant information to the Program Manager prior to any corrective action being taken by the Town. C. Upon receipt by Town of any information that evidences a failure or deficiency by Contractor to comply with any provision of these Rules and Regulations or the grant agreement, the Town may require corrective action to enforce compliance with such provision. Corrective action, up to and including termination of the grant agreement, may be taken if any of the following, as examples only, occur: 1. If Contractor (with or without knowledge) has made any material misrepresentation of any nature with respect to any information or data furnished to Town in connection with the Program. 2. If there is pending litigation with respect to the performance by Contractor of any of its duties or obligations under the grant agreement that may materially jeopardize or adversely affect the undertaking of or the carrying out of the Program. 3. If Contractor shall have taken any action pertaining to the Program which requires Town approval without first having obtained such approval. 4. If Contractor is in default under any provision of the grant agreement. 5. If Contractor makes improper use of grant funds. 6. If Contractor fails to comply with any of the terms and conditions of the grant agreement or these Rules and Regulations as to constitute material breach thereof. 7. If Contractor submits to Town any reports that are incorrect or incomplete in any material respect. D. Corrective Action. In reviewing whether performance of the Program has met the level or standard established in the grant agreement, the Town shall have the right to require the presence of Contractor or its representative at any hearing or meeting called for the purpose of considering corrective action within seven (7) working days of receiving such notice. Contractor will have an opportunity to participate in corrective action deliberations, but the October 11, 1993 5 ultimate determination of action to be taken shall be solely the Town's. Town shall forward to Contractor a set of specific corrective action recommendations relative to unsatisfactory Program performance and /or noncompliance and a timetable for implementing the specified corrective action recommendations; such timetable shall allow Contractor not less than seven (7) working days to comply with the specked corrective action recommendations. Following implementation of the corrective actions, Contractor shall forward to Town, within ten (10) working days any documentary evidence required by Town to verify that the corrective actions have been taken. In the event Contractor does not implement the corrective action recommendations in accordance with the corrective action timetable, Town may suspend payments hereunder and /or provide notice of intent to terminate this contract. However, should the Town determine that illegal activity or misuse of Town funds may have occurred, the Program Manager may immediately suspend payments until the Program Manager is satisfied that no illegal activity or misuse has occurred or the processes for corrective action described above have been resolved. XI. PROGRAM INCOME. A. Income from Disposition of Property. 1. If disposition instructions from Town require sale of property, Contractor must compensate Town the amount computed by applying Town's percent of participation in the cost of the Program to the proceeds from sale after deducting actual and reasonable selling and fix -up expenses, if any, from the sale proceeds. 2. If Contractor is directed to transfer title of property to Town, Contractor shall be entitled to compensation computed by applying the Town's percentage of participation in the cost of the Program to the current fair market value of the property. B. Other Income. All other Program income earned during the grant period shall be retained by the Contractor and shall be added to funds committed to Program by the Town and used to further eligible Program activities and to finance, upon Town's approval, the non - federal share of Program or, deducted from the total project costs for the purpose of determining the net costs on which the Town's share of costs will be based. XII. REALLOCATION OFFUNDS. Town may reallocate the amount of underspending in the Program as a whole, to another project. Town shall, before reallocation, give Contractor ten (10) working days written notice of its intention to reallocate funds, together with a copy of Town's expenditure review for the Program and statements of its reasons for such reallocation. Town shall make its final determination with respect to reallocation only after Contractor has been given an opportunity to present its views and recommendations with respect to such contemplated reallocation. In no event, however, shall Town be bound to accept Contractor's views or recommendations with respect to such contemplated reallocation. CSD14 * \C0NTRACT\GRANTRUL.CSS October 11, 1993 6 EXHIBIT A FINANCIAL ANALYSIS REQUIREMENTS FOR CONTRACTORS A. Types of Financial Analyses 1. Contractor Internal - Revenue and Expenditures: A statement of revenue and expenditures only, certified be the Contractor's Board of Directors. 2. Contractor Internal - Financial Statements: A set of financial statements, prepared in conformity with generally accepted accounting principles, and certified by the Contractor's Board of Directors. (Includes balance sheet and statement of revenue and expenditures. A statement of cash flow is desireable, but not required.) 3. Accountant's Report: Compiled or reviewed statements, prepared by a certified public accountant, in conformity with generally accepted accounting principles. Footnote discloses may be omitted at the discretion of the program manager. 4. Audit: Audited statements, prepared by a certified public accountant. Copies of all management letters must also be provided. B. Requirements 1. The type of financial analysis required of the Contractor will depend on the amount of Town funds allocated to the Contractor and the size of the Contractor's annual budget: a. For a Contractor receiving $5,000 or less of Town Funds: a Certification. b. For a Contractor receiving over $5,000 in Town Funds, or a Contractor receiving over $10,000 in Town funds but with an annual budget of less than $100,000: a Review. C. For a Contractor receiving over $10,000 in Town funds and with an annual budget of $100,000 or more, or a Contractor receiving over $20,000 in Town funds but with an annual budget under $200,000: an Accountant's Report. d. For a Contractor receiving more than $30,000 in Town funds and with an annual budget of more than $400,000: a Financial Audit. 2. If the Program Manager determines that a higher level of financial analysis is necessary than provided above, the Program Manager may require a higher level of analysis as a corrective action under the Rules and Regulations. CSD14: A: \CONTRACT \GRANTRUL. CSS December 1, 1993 1 EXHIBIT B INSURANCE REQUIREMENTS FOR CONTRACTORS Contractor shall procure and maintain for the duration of the contract, insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Program by the Contractor, its agents, representatives, employees or subcontractors. The cost of such insurance shall be borne by the Contractor. A. MINIMUM SCOPE OF INSURANCE Coverage shall be at least as broad as: 1. Insurance services Office form number GL 0002 (Ed. 1/73) covering Comprehensive General Liability and Insurance Services Office form number GL 0404 covering Broad Form Comprehensive General Liability; or Insurance Services Office Commercial General Liability coverage ( "occurrence" form CG 0001). 2. Insurance Services Office form number CA 0001 (Ed 1/78) covering Automobile Liability, code 1 "any auto" and endorsement CA 0025. 3. Workers' Compensation insurance as required by the Labor Code of the State of California and Employers Liability insurance. B. MINIMUM LIMITS OF INSURANCE Contractor shall maintain limits no less than: 1. General Liability: $1,000,000 combined single limit per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project /location or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and property damage. 3. Workers' Compensation and Employers Liability: Workers' compensation limits as required by the Labor Code of the State of California and Employers Liability limits of $1,000,000 per accident. C. DEDUCTIBLES AND SELF - INSURED RETENTIONS Any deductibles or self- insured retentions must be declared to and approved by the Town. At the option of the Town, either: the insurer shall reduce or eliminate such deductibles or self - insured retentions as respects the Town its officers, officials, employees and volunteers; or the Contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. D. OTHER INSURANCE PROVISION The policies are to contain, or be endorsed to contain, the following provisions: 1. General Liability and Automobile Liability Coverages October 11, 1993 1 a. The Town, its officers, officials, employees and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Contractor, products and completed operations of the Contractor, premises owned, occupied or used by the Contractor, or automobiles owned, leased, hired or borrowed by the Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the Town, its officers, officials, employees or volunteers. b. The Contractor's insurance coverage shall be primary insurance as respects the Town, its officers, officials, employees and volunteers. Any insurance or self - insurance maintained by the Town, its officers, officials, employees or volunteers shall be excess of the Contractor's insurance and shall not contribute with it. C. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the Town, its officers, officials, employees or volunteers. d. The Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 2. Workers' Compensation and Employers Liability coverage The insurer shall agree to waive all rights of subrogation against the Agency, its officers, officials, employees and volunteers for losses arising from work performed by the contractor for the Town. 3. All Coverages Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, cancelled by either party, reduced in coverage or in limits except after thirty (30 days' prior written notice by certified mail, return receipt requested, has been given to the Town. E. ACCEPTABILITY OF INSURERS Insurance is to be placed with insurers with a Best's rating of no less than ANII. F. VERIFICATION OF COVERAGE Upon execution of this agreement, Contractor shall furnish the Town with certificates of insurance and with original endorsements effecting coverage required by this clause. The certificates and endorsements for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificates and endorsements are to be on forms provided by the Town. Where by statute, the Town's workers' compensation - related forms cannot be used, equivalent forms approved by the Insurance Commissioner are to be substituted. All certificates and endorsements are to be received and approved by the Town before work commences. The Town reserves the right to require complete, certified copies of all required insurance policies, at any time. G. SUBCONTRACTORS Contractor shall include all subcontractors as insureds under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. CSDIa:A:\CONTRACT\GRANTRUL.CSS October 11, 1993 2 EXHIBIT C PAYMENTS TO CONTRACTOR I. GENERAL. TOWN agrees to pay CONTRACTOR for the performance of the services, work, and duties, subject to and performed in connection with the Grant Agreement a sum of money not to exceed the amount set forth in the "Budget" attached to the Grant Agreement. These payments are made on a reimbursement basis for services actually performed by CONTRACTOR and for eligible costs actually incurred and paid by CONTRACTOR pursuant to the Grant Agreement according to the cost categories described in this Exhibit. The statement or statements requesting payment shall be in a form approved by the Town, and the CONTRACTOR shall specify in detail the services performed by and the costs incurred and paid by the CONTRACTOR during the month or quarter for which payment is sought. In no event shall the CONTRACTOR overrun the total budget for any quarter without obtaining prior written approval from the TOWN. II. TOWN REVIEW. Payment to the CONTRACTOR shall be made upon receipt by TOWN of the monthly or quarterly reports required by the Grant Agreement and the Rules and Regulations, and any required documentation, including but not limited to, paid invoices. The TOWN will determine whether payment can be made under the Grant Agreement and may rely upon the certification by CONTRACTOR that the items appearing on the statement and its supporting data are eligible items under the PROGRAM. However, no such determination shall constitute a waiver by the TOWN of its right to recover from CONTRACTOR any monies paid on items that were not eligible to payment under the PROGRAM and the Grant Agreement. The total amount of payments made to the CONTRACTOR shall be distributed as shown in the "Budget" attached to the Grant Agreement. III. COST CATEGORIES. A. Communications: Eligible costs for telephone, telegraph, postage, and other communication costs that are essential to the operation of the PROGRAM. B. Contractual Services: Eligible payments for contractual expert services of a professional, scientific, or technical nature, as well as eligible payments made to contractors for performing construction work or any other services that the PROGRAM does not have the capability of performing itself. Contracts or subcontracts in excess of One Hundred Dollars ($100) require prior written approval of the Town. C. Equipment: Eligible payments for the purchase of equipment, which is defined as tangible property having a useful life of more than one (1) year and a unit cost of Five Hundred Dollars ($500) or more. All equipment purchases require prior Town approval. D. Equipment Rental: Eligible costs for rental of equipment defined as tangible property other than land or buildings or building improvements. E. Fringe Benefits: Eligible payroll- related costs of health insurance, retirement fund contributions, FICA, and other payments made on behalf of a CONTRACTOR employee. F. Personnel: Eligible payments made to CONTRACTOR's employees for time actually worked for all positions listed in the "Scope of Services" attached to the Grant Agreement. October 11, 1993 3 1 G. Printing & Advertising: Eligible costs that are essential to the operation of the PROGRAM and for printing and duplicating services; newspaper printing by contract; and newspaper advertising. H. Space Rental: Eligible costs for building space used in connection with the PROGRAM, including rent, maintenance, and janitorial services when included in the lease, not including fixtures, furniture, equipment, or utilities. I. Supplies: Eligible costs for consumable commodities that have useful life of one (1) year or less, or that cost less than Five Hundred Dollars ($500) and that are essential to the operation of the PROGRAM. J. Travel (Local): Allowable reimbursement to CONTRACTOR's employees for actual automobile mileage, transportation, and other necessary and ordinary travel expenses while on official PROGRAM business within the County of Santa Clara. K. Travel (Other): Allowable reimbursement to CONTRACTOR's employees for actual automobile mileage, transportation, and other necessary and ordinary travel expenses while on official PROGRAM business outside the County of Santa Clara. Any out -of -State travel must be approved by TOWN prior to any such travel. All conferences, seminars, and similar meetings for which the cost is One Hundred Dollars ($100) or more per person require prior TOWN approval. L. Utilities: Eligible costs incurred for water, gas, electric, garbage and trash collection, and similar expenses. M. Miscellaneous: Eligible costs and payments for any item not in other cost categories. Any expenditure under this category for an item costing more than One Hundred Dollars ($100) requires prior approval of the TOWN. IV. TRANSFER OF PROGRAM FUNDS. On a quarterly basis, TOWN will review CONTRACTOR's quarterly expenditures, if any, for services performed and costs incurred by CONTRACTOR. If the review reveals that the budgeted expenditures for the PROGRAM in any quarter as a whole or by any cost category are below the amount allocated under the Grant Agreement, the TOWN may transfer the amount of that underspending into another cost category of the PROGRAM. Before making such a transfer, the TOWN shall follow the same process provided in the Rules and Regulations for a reallocation of funds. If the expenditures in any quarter by the CONTRACTOR exceed the amount allocated to the PROGRAM or any cost category, the TOWN may terminate non -salary expenditures for the PROGRAM until the expenditures are brought into conformance with the Grant Agreement. At the request of the CONTRACTOR, the PROGRAM MANAGER may approve transfer of funds from one cost category to another cost category if: 1) there is no increase in the total amount specified in the Grant Agreement, and 2) the goals and objectives set forth in the "Scope of Services" of the Grant Agreement will not be negatively affected. Any such approval shall be in writing before being effective. CSD14:A: \CONTRACT\GRANTRUL.CSS October 11, 1993 2