07-033, Cupertino Community Services
()7-033
AGREEMENT
This Agreement is made and entered into this 7th day of November, 2006, by and between
the CITY of Cupertino, a municipal corporation ("CITY") and Cupertino Community Services, a
nonprofit corporation ("CORPORATION").
WITNESSETH
WHEREAS, CITY has accrued Below Market Rate (BMR) in-lieu fees to be used to
promote affordable housing development in Cupertino
WHEREAS, CITY has agreed to allocate a portion of its BMR in-lieu funds to
CORPORATION as a subrecipient for public service related activities within the CITY which
shall primarily benefit very low and low income households and shall promote affordable
housing in Cupertino.
NOW, THEREFORE, the parties agree as follows:
I. PROGRAM
CITY agrees to allocate to the CORPORATION a sum not to exceed $65,000.00 in funds
for the purpose of implementing the housing program ("Program") as more particularly described
in Exhibit "A" (Program Description), Exhibit "B" (Project Work Plan) Exhibit "C" (Time
Schedule) and Exhibit "D" (Project Budget).
II. TERM
The tenn of this Agreement shall begin July 1, 2006 and shall terminate June 30, 2007, or
the date of the expenditure of the total grant amount provided for herein, or upon the termination
date established pursuant to Section V or Section VII.
III. OBLIGATIONS OF CORPORATION
A. Organization of CORPORATION. CORPORATION shall:
1. Provide CITY with:
a. Its Articles ofIncorporation under the laws of the State of California;"
b. A copy of the current Bylaws of CORPORATION;
c. Documentation of its Internal Revenue Service nonprofit status;
d. Names and addresses of the current Board of Directors of CORPORATION; and,
e. An adopted copy of CORPORATION'S personnel policies, procedures and
approved affirmative action plan.
2. Report any changes in CORPORATION'S Articles of Incorporation, Bylaws, Board of
Directors, personnel policies and procedures, affirmative action plan, or tax-exempt
status immediately to Program Manager.
3. Maintain no member of its Board of Directors as a paid employee, agent or
subcontractor under this Agreement.
4. Open to the public all meetings of its Board of Directors, except meetings, or portions
thereof, dealing with personnel or litigation matters.
5. Keep minutes of all its regular and special meetings.
6. Comply with all provisions of California Nonprofit CORPORATION Law.
B. Program Perfonnance by CORPORATION. CORPORATION shall:
1. Conduct the PROGRAM within the City of Cupertino for the purpose of benefiting very
low and low-income households.
2. File quarterly narrative reports with the CITY on the types and numbers of services
rendered to Cupertino beneficiaries through the operation of the project, which reports
shall evaluate the manner in which the project is achieving its goals. The reports shall
be due within ten (10) working days of the end of the calendar year and shall cover the
entire year immediately preceding the date on which the report is filed. Said reports
shall be made on forms approved by CITY.
3. Coordinate its services with other existing organizations providing similar services in
order to foster community cooperation and to avoid unnecessary duplication of
servIces.
4. Seek out and apply for other sources of revenue in support of its operation or services
from local, state, federal and private sources and, in the event of such an award, inform
CITY within ten days.
5. Notify CITY within ten (10) days of the receipt of any local, state, federal, or private
sources of revenue for use in support of this operation or service.
6. Include an acknowledgment of CITY funding and support where appropriate.
C. Fiscal Responsibilities of CORPORATION. CORPORATION shall:
1. Appoint and submit the name of a fiscal agent who shall be responsible for the financial
and accounting activities of CORPORATION, including the receipt and disbursement
of CORPORATION funds. The CITY shall immediately be notified in writing of the
appointment of a new fiscal agent and that agent's name.
2. Establish and maintain an accounting system that shall be in conformance with
generally accepted principles of accounting. The accounting system shall be subject to
review and approval of CITY.
3. Document all Program costs by maintaining records in accordance with Section III,
Paragraph D below.
4. Submit on a quarterly basis, within ten (10) working days of the end of the quarter, a
payment request containing a summary statement of proposed expenditures and
revenue for the quarter immediately following the date on which the report is filed and
cumulative totals from the effective date of this agreement. In addition, the amount of
actual expenditures shall be reported to CITY within ten (10) working days of the end
of each quarter. Said reports shall be made on forms approved by CITY.
5. Submit to the CITY'S Finance Director an annual audit performed by an independent
auditor.
6. Certify insurability subject to CITY approval as outlines in Exhibit "E" (Insurance).
7. If applicable, submit an indirect cost plan to CITY for approval.
8. Items 1 through 7 are express conditions precedent to any CITY funding and failure to
comply with these conditions will, at discretion of CITY, result in suspension of
funding or termination of this Agreement.
9. CORPORATION is liable for repayment of all disallowed costs. Disallowed costs may
be identified through audits, monitoring or other sources. CORPORATION shall be
required to respond to any adverse findings that may lead to disallowed costs. The
CITY shall make the final determination of disallowed costs, subject to provisions of
OMB Circular A-122, "Cost Principles for Non-Profit Organizations."
D. Establishment and Maintenance of Records. CORPORATION shall maintain complete and
accurate records of all its transactions including, but not limited to, contracts, invoices, time
cards, cash receipts, vouchers, canceled checks, bank statements, client statistical records,
personnel, property and all other pertinent records sufficient to reflect properly (1) all direct
and indirect costs of whatever nature claimed to have been incurred or anticipated to be
incurred to perform this Agreement or to operate the Program, and (2) all other matters
covered by this Agreement.
E. Preservation of Records. CORPORATION shall preserve and make available its records:
1. Until the expiration of three years from the date of final payment to CORPORATION
under this Agreement; or
2. For such longer period, if any, as is required by applicable law; or,
3. If this 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 termination. .
F. Examination of Records; Facilities. At any time during normal business hours, and as often
as may be deemed necessary, CORPORATION agrees that the CITY'S authorized
representative(s) may until expiration of (1) three years after final payment under this
Agreement, (2) three years from the date of termination of this agreement, or (3) such longer
period as may be described by applicable law, have access to and the right to examine its
plants, offices and facilities used in the performance of this Agreement or the operation of
the Program, and all its records with respect to the Program and all matters covered by this
Agreement. CORPORATION also agrees that the CITY'S authorized representative(s) shall
have the right to audit, examine, and make excerpts or transactions of and from, such
records and to make audits of all contracts and subcontracts, invoices, payrolls, records of
personnel, conditions of employment, material and all other data relating to the Program and
matters covered by this Agreement. CORPORATION will be notified in advance that an
audit will be conducted. CORPORATION will be required to respond to any audit findings,
and have the responses included in the final audit report. The cost of any such audit will be
borne by CITY.
G. Compliance with Law. CORPORATION 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, executive orders and
statutes identified in Exhibit "F" (Assurances). Specifically, CORPORATION shall comply
with the requirements and standards of OMB Circular No. A-122, "Cost Principles for Non-
Profit Organizations" and the following attachments to OMB Circular No. A-ll 0:
1. Attachment A, "Cash Depositories, " except for Paragraph 4 concerning deposit
Insurance;
2. Attachment B, "Bonding and Insurance;"
3. Attachment C, "Retention and Custodial Requirements for Records;"
4. Attachment F, "Standards for Financial Management Systems;"
5. Attachment H, "Monitoring and Reporting Program Performance," paragraph 2;
6. Attachment N, "Property Management Standards," except for paragraph 3 concerning
the standards for real property; and
7. Attachment 0, "Procurement Standards."
IV. OBLIGATIONS OF CITY
A. Method of Payment. During the term of this Agreement, CITY shall reimburse
CORPORATION for all allowable costs and expenses incurred in connection with the
Program, not to exceed the total sum of Sixty Five Thousand Dollars and No Cents
($65,000.00) except that the CITY may, after the corrective action procedure is followed,
suspend or terminate payment to CORPORATION, in whole or in part, under this
Agreement or not to make any particular payment under this Agreement based on
CORPORATION'S noncompliance, including, but not limited to, incomplete documentation
of expenses, failure to submit adequate progress reports as required herein or other incidents
of noncompliance as described in Section V, Paragraph B, of this Agreement.
V. CONTRACT COMPLIANCE
A. Monitoring and Evaluation of Services. Evaluation and monitoring of the Program
performance shall be the mutual responsibility of both CITY and CORPORATION.
CORPORATION shall furnish all data, statements, records, information and reports
necessary for Program Manager to monitor, review and evaluate the performance of the
Program and its components. CITY shall have the right to request the services of an outside
agent to assist in any such evaluation. Such services shall be paid for by CITY.
B. Contract Noncompliance. Upon receipt by CITY of any information that evidences a failure
by CORPORATION to comply with any provision of this Agreement, CITY shall have the
right to require corrective action to enforce compliance with such provision. Areas of
noncompliance include but are not limited to:
1. If CORPORATION (with or without knowledge) shall have made any material
misrepresentation of any nature with respect to any information or data furnished by
CITY in connection with the Program.
2. If there is pending litigation with respect to the performance by CORPORATION of
any of its duties or obligations under this Agreement which may materially jeopardize
or adversely affect the undertaking of or the carrying out of the Program.
3. If CORPORATION shall have taken any action pertaining to the Program which
requires CITY approval without having obtained such approval.
4. If CORPORATION is in default under any provision of this Agreement.
5. If CORPORATION makes improper use of CITY funds.
6. If CORPORATION submits to CITY any report which is incorrect or incomplete in any
material respect.
C. Corrective Action Procedure. CITY upon occurrence or discovery of noncompliance by
CORPORATION under this Agreement, shall give CORPORATION notice of CITY'S
intention to demand corrective action to enforce compliance. Such notice shall indicate the
nature of the noncompliance and the procedure whereby CORPORATION shall have the
opportunity to participate in formulating any corrective action recommendation. CITY shall
have the right to require the CORPORATION President and/or Executive Director to appear
at a hearing or meeting called for the purpose of corrective action. Thereafter, CITY shall
forward to CORPORATION specific corrective action recommendations and a detailed
timetable for implementing these recommendations; such timetable shall allow
CORPORATION not less than ten (10) nor more than thirty (30) days to comply. Following
implementation of the corrective actions, CORPORATION shall forward to CITY, within
the time specified by CITY, any documentary evidence required by CITY to verify that the
corrective actions have been taken.
In the event that CORPORATION does not implement the corrective action
recommendations in accordance with the corrective action timetable, CITY may suspend
payments hereunder or terminate this Agreement.
D. Termination for Cause. Notwithstanding anything to the contrary contained in the foregoing,
CITY may terminate this Agreement by written notice to CORPORATION, if any of the
events of noncompliance listed in Section V, Paragraph B, occur or are discovered, if
CORPORATION does not implement any recommended corrective action, if
CORPORATION is in bankruptcy or receivership, if a member of the CORPORATION'S
Board of Directors, the Executive Director or other administrative staff person is the subject
of investigation for wrongdoing, or if there is reliable evidence that CORPORATION is
unable to operate the Program. Termination under this section shall be effective on the date
notice of termination is received or such later date as may be specified in the notice.
VI. PROGRAM COORDINATION
A. CITY: The Senior Planner (Housing Services), or his/her designee, shall be the Program
Manager for the CITY and shall monitor progress and performance of this Agreement for
CITY. The Program Manager shall be responsible for all services agreed to be performed by
CITY. .
B. CORPORATION: A single Program Director who shall have overall responsibility for the
progress and execution of this Agreement shall be assigned. Should circumstances or
conditions subsequent to the execution of this Agreement require a substitute or replacement
Program Director, CORPORATION shall immediately notify CITY of such occurrence.
Program Director and CORPORATION staff will cooperate fully with CITY in fulfillment
of this Agreement.
C. Correspondence: All correspondence and notices required by this Agreement shall be sent to
the parties at the following address:
CITY: Senior Planner (Housing Services), Community Development Department, City of
Cupertino, 10300 Torre Avenue, Cupertino, CA 95014
CORPORATION: Executive Director, 10104 Vista Drive, Cupertino, CA 95014
All notices shall either be hand delivered or sent by United States mail, registered or
certified, postage prepaid. Notices given in such a manner shall be deemed received when hand
delivered or seventy-two (72) hours after deposit in the United States mail. Any party may
change his or her address for the purpose of this section by giving five (5) days written notice of
such change to the other party in the manner provided in this section.
VII. TERMINATION
A. In addition to CITY'S right to terminate for cause set forth in Section V, either CITY or
CORPORATION may suspend or terminate this Agreement for any reason by giving thirty
(30) days prior written notice to the other party. Upon receipt of such notice, performance of
the services hereunder will be immediately discontinued.
B. Upon termination, either under this Section VII or Section V, CORPORATION shall:
1. be paid for all documented services actually rendered to CITY to the date of such
termination; provided, however, CITY shall be obligated to compensate
CORPORATION only for that portion of CORPORATION'S services which are
allowable costs and expenses as determined by an audit or other monitoring device;
2. turn over to CITY immediately any and all copies of studies, reports and other data,
whether or not completed, prepared by CORPORATION or its subcontractors, if any,
in connection with this Agreement. All documents from applicants or regarding
applicants shall be treated confidentially. Such materials shall become property of
CITY. CORPORATION, however, shall not be liable to CITY'S use of incomplete
materials or for CITY'S use of completed documents if used for other than services
contemplated by this Agreement; and
3. transfer to the CITY any BMR in-lieu funds on hand and any accounts receivable
attributable to the use of BMR in-lieu funds. All assets acquired with BMR in-lieu
funds shall be returned to the CITY.
C. Upon termination of this Agreement, CORPORATION shall immediately provide CITY
access to all documents, records, payroll, minutes of meetings, correspondence and all other
data pertaining to the CITY funds granted to CORPORATION pursuant to this Agreement.
VIII. PURCHASING REAL OR PERSONAL PROPERTY
A. Title to Personal Property. Title to any personal property used in connection with the project
shall vest as follows:
1. Personal property donated or purchased with other than CITY funds shall become the
property of CORPORATION or person specified by the donor or funding source;
otherwise the same shall become the property of CITY except for property and
equipment as described in 2.
2. Personal property and equipment permanently affixed to building owned by
CORPORATION shall become the property of CORPORATION.
3. All other personal property, supplies and equipment purchased pursuant to this
Agreement and not consumed shall become property of CITY.
B. Non expendable Property. Non-expendable property purchased by CORPORATION with
funds provided by CITY, with a purchase price in excess of One Hundred Dollars ($100),
must be approved in advance in writing by CITY. CITY shall retain title to said property. If
a Program will be continued beyond termination of this Agreement, CITY at its option, may
revert title to CORPORATION.
C. Purchase of Real Property. None of the funds provided under this Agreement shall be used
for the purchase of real property, unless CITY approves such purchase in writing containing
any conditions the CITY deems appropriate prior to the time CORPORATION finalizes
such purchase. Approval of any such contract or an option to purchase shall be processed
through the Pro gram Manager.
D. Security Document. As a condition precedent to CITY releasing funds for the purchase of
real property or an option to purchase real property, CORPORATION shall prepare and
execute a promissory note, deed of trust or other Agreement restricting the use of said real
property for purposes consistent with this Agreement.
IX. PROGRAM INCOME
Income generated by the Program shall be retained by CORPORATION. Such income
shall be used to reduce the monthly request for funds under this Agreement and for the same
purposes and activities described in Exhibit A. All provisions of this Agreement shall apply to
the use of Program income for such activities.
X.INDEPENDENTCONTRACTOR
This is an Agreement by and between independent contractors and is not intended and
shall not be construed to create the relationship of agent, servant, employee, partnership, joint
venture or association between CORPORATION and CITY. CORPORATION, including its
officers, employees, agents or subcontractors, shall not have any claim under this Agreement or
otherwise against CITY for any Social Security, Worker's Compensation, or employee benefits
extended to employees of CITY.
XI. ASSIGNABILITY
A. This Agreement may not be assumed nor assigned to another corporation, person,
partnership or any other entity without the prior written approval of CITY.
B. None of the work or services to be performed hereunder shall be assigned, delegated or
subcontracted to third parties without the prior written approval of CITY. Copies of all third
party contracts shall be submitted to CITY at least thirty (30) days prior to the proposed
effective date. In the event CITY approves any such assignment, delegation or subcontract,
the subcontractors, assignees or delegates shall be deemed to be employees of
CORPORATION, and CORPORATION shall be responsible for their performance and any
liabilities attaching to their actions or omissions.
XII. DISCLOSURE OF CONFIDENTIAL CLIENT INFORMATION
CITY and CORPORATION 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, questionnaires,
interviews, tests, reports from public agencies or counselors, or any other source. Without the
written permission of the applicant, 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, and then only to persons having responsibilities under this
Agreement, including those furnishing services under the Program through approved
subcontracts.
XIII. HOLD HARMLESS
CORPORATION shall indemnify and hold CITY, its officers, employees and elected
officials, boards and commissions, harmless with respect to any damages, including attorney's
fees and court costs, arising from:
A. the failure of the Program to comply with applicable laws, ordinances, codes, regulations
and decrees; or,
B. any negligence or omISSIOn ansIng out of any work or services provided by
CORPORATION, its officers, employees, agents or subcontractors under the Program or
this Agreement.
XIV. WAIVER OF RIGHTS AND REMEDIES
In no event shall any payment by CITY constitute or be construed to be a waiver by
CITY of any breach of the covenants or conditions of this agreement or any default which may
then exist on the part of CORPORATION, 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
CITY with respect to such breach or default. In no event shall payment to CORPORATION by
CITY in any way constitute a waiver by CITY of its rights to recover from CORPORATION the
amount of money paid to CORPORATION on any item which is not eligible for payment under
the Program or this Agreement.
XV. NONDISCRIMINATION
In connection with the performance of this Agreement, CORPORATION assures that no
person shall be subject to discrimination because of sex, race, religion, ethnic background, sexual
preference, age, handicapped status or union activity.
XVI. AMENDMENTS
Amendments to the terms or conditions of this Agreement shall be requested in writing
by the party desiring such amendment, and any such amendment shall be effective only upon the
mutual Agreement in writing of the parties hereto.
XVII. INTEGRATED DOCUMENT
This Agreement contains the entire Agreement between CITY and CORPORATION with
respect to the subject matter hereof. No written or oral Agreements with any officer, agent or
employee of CITY prior to execution of this Agreement shall affect or modify any of the terms
or obligations contained in any documents comprising this Agreement.
XVIII. MISCELLANEOUS
A. The captions of this Agreement are for convenience of reference only, and the words
contained therein shall in no way be held to explain, modify, amplify or aid in the
interpretation, construction or meaning of the provisions of this Agreement.
B. All exhibits attached hereto and referred to in this Agreement are incorporated herein by this
reference as if set forth fully herein.
This AGREEMENT, consIstIng of eleven (11) pages, contains the entire agreement
between CITY and CORPORATION respecting the allocation of BMR in-lieu funds for the
provision of housing services.
CORPORATION has executed this Agreement in triplicate on this
November, 2006.
day of
CITY has executed this Agreement in triplicate on this _ day of August, 2006.
BY.:~ ~ --<:>i'
David W. Knapp
City Manager
Attested By:
Approved as to form:
EXHIBIT A
PROJECT PROPOSAL COVER SHEET
Name of Applicant: Program Year:
Cupertino Communit, Services 2006-2007
Contact Person: Title: Project # (For Office Use Only)
Jacquey Carey Housing Program
Director
Address: City: State: I ~i~~;:e:
10104 Vista Drive Cupertino CA
Telephone number: Fax Number: E-mail Address:
(408) 255-8033, ext. (408) 366-6090 j acqueyc@cupertinocommunityservices.org
201
Name of Project/Program:
Affordable Housin2 Pro2ram
Project/Program Location:
10104 Vista Dr., Cupertino, CA 95014
Project Type:
D Single Family D Homeownership D New Construction D Mixed Use
D Multifamily D Rental D Rehabilitation xD Public Service
Project Description:
Please describe the project with as many details as possible. Include general information, such
as the number of units, number of Cupertino residents that will be served, services that will be
provided, etc.
Cupertino Community Services, Inc. (CCS) has successfully implemented the Affordable Housing Program for the
City of Cupertino for the past thirteen years. The CCS Affordable Housing Program administers the Cupertino Below
Market Rate (BMR) Rental and Sales Programs.
The BMR Rental Program place very low to low income residents in over 100 BMR rental units. CCS documents
eligibility and maintains an open working waiting list for the prospective tenants. CCS requalifies all tenants on the
anniversary of their move-in date or when the HUD guidelines are announced. CCS also screens and places eligible
seniors into affordable units identified by the City. Currently, CCS manages 10 units at Chateau Cupertino.
The BMR Sales Program identifies, qualifies and places median and moderate income home buyers. CCS qualified
and maintains a waiting list for future sales projects. CCS also administers any resale of BMR purchased units to
qualified buyers. CCS stag conducts annual residency verification and audits.
CCS creates and distributes outreach materials to publicize the availability of all Affordable Housing programs. CCS
staff provides annual updated BMR informational brochures and statistical information to the City and the public.
Staff works with the Housing Commission to ensure that the Program follows City goals and objectives on a
continuous basis.
It is projected that CCS will work with 250 households annually.
EXHIBIT B
CITY OF CUPERTINO
PROJECT WORK PLAN
FY 2006/2007
AGENCY NAME
Cupertino Community Services
DATE PREPARED Dec. 20.2006
PROJECT NAME Affordable Housing Program
Specific Activities Products or Milestones to be accomplished Benchmarks or Beneficiaries
(Use Specific Numerical Data When Possible) For Each Quarter
Quantify When Possible
1 st 2nd 3rd 4th TOTAL
. Provide PR for BMR program . To be done on an as needed basis, at
least 4 times per year. 1 ad 1 ad 1 ad 1 ad 4 ads
. Update informational packets . To be done annually following HUD
Annually (eg. Applications, trifolds, release dates 0 0 1 0 1 set of
Website, etc.) updated
packets.
. Distribute packets to appropriate . To be done annually following HUD
Locations (i.e. Library, City Hall, release dates 0 0 100 0 100 packets
School Districts, Comm. Centers, placed in
etc.) Cupertino
. Process applications (inc. . Keep adequate households for vacancies. 138 37 37 38 250 HHs
interviews and recertification)
BMR rental and sales . To be run quarterly following HUD 1 1 1 1 4
. Maintain active waiting and all release dates.
units occupied 2 2 68 3 75
. Audit participating rental . On-going
complexes and sales units. HH
3 3 3 3 12 mtgs.
Work with Housing Commission for . On-going
advocating according to City goals for
affordable housing, attend meetings,
doin2 research, etc.
EXHIBIT C
Proposed Implementation Time Schedule
Fiscal Year 2006 - 2007
Agency Name: Cupertino Community Services
Date: Dec. 20. 2007
Project Name: Affordable Housin2: Pro2:ram
~,xx,.,.".,/.,.,.""..,.."",.,x"',.x.,..I.........,........ .......'x.............'..,...... ....x....,.,....... i~ ~ ...... ....;,.. =... X"". xxx ,'-"x.... -- ~
.'.o.UJ::. :~t:1.J .'V'"......... ..... .uec
. Provide PR for BMR program X X X X
. Update informational packets annually X X
. Distribute packets to appropriate X X
locations
. Process applications BMR rental & X X X X X X X X X X X X
sales X(sales) X(sales)
. Maintain active waiting lists and all X X X X
units occupied
. Audit participating rental complexes & 2 3 68hh 2
Sales units
. Work with housing Commission for 1 1 1 1 1 1 1 1 1 1 1 1
advocating according to City goals for
affordable housing, attend meetings,
doing research, etc.
EXHIBIT D
BUDGET
For Grant Amount
FY 2006 /2007
Agency Name:
Project Name:
Cupertino Community Services
Date Prepared: Dec. 20. 2006
Affordable Housing Program
CATEGORY BUDGET FOR YEAR
SALARIES:
Personnel $50,000
Benefits 15,000
OFFICE EXPENSE:
Rent
Telephone/Fax
Printing
Travel
Utilities
Office Supplies
Postage
Equipment Maintenance
/Repair
PROJECT EXPENSES:
Accounting Services
Auditing Fees
Insurance
Davis Bacon Compliance
PROJECT CONSTRUCTION:
Appraisal
Engineering Services
ArchitecturallDesign
Acquisition
TOTAL: $65,000
EXHIBIT E
BASIC INSURANCE AND BOND REQUIREMENTS FOR
NON-PROFIT CONTRACTS
Definition of Contractor: The "Contractor" as the word is used herein is the party contracting
with the City of Cupertino for the direct distribution of CDBG funds. If your organization will
be contracting for construction work (such as general contractors building rental apartments) to
undertake a Program (as defined in this Non-Profit/City Contract) then the requirements set forth
herein shall be complied with by the party contracted with for construction work protecting both
the non-profit and the City.
Indemnity
The Contractor shall indemnify, defend, and hold harmless the City of Santa Clara (hereinafter
"City"), its officers, agents and employees from any loss, liability, claim, injury or damage arising
out of, or in connection with performance of this Contract by Contractor and/or its agents,
employees or subcontractors, excepting only loss, injury or damage caused solely by the acts or
omissions of personnel employed by the City. It is the intent of the parties to this Contract to
provide the broadest possible coverage for the City. The Contractor shall reimburse the City for
all costs, attorneys' fees, expenses and liabilities incurred with respect to any litigation in which
the Contractor is obligated to indemnify, defend and hold harmless the City under this Contract.
Insurance
Without limiting the Contractor's indemnification of the City, the Contractor shall provide and
maintain at its own expense, during the tenn of this Contract, or as may be further required
herein, the following insurance coverages and provisions:
A. Evidence of Coverage
Prior to commencement of this Contract, the Contractor shall provide on the City's own form or a
form approved by the City's Insurance Manager an original plus one copy of a Certificate of
Insurance certifying that coverage as required herein has been obtained and remains in force for
the period required by this Contract. The contract number and project name must be stated
on the Certificate of Insurance. The City's Special Endorsement form shall accompany the
certificate. Individual endorsements executed by the insurance carrier may be substituted for the
City's Special Endorsement form if they provide the coverage as required. In addition, a certified
copy of the policy or policies shall be provided by the Contractor upon request.
This verification of coverage shall be sent to the address as shown on the City's CeIiificate of
Insurance form and to the Housing and Community Development Program at the address set
forth in this Contract at Section VI. PROGRAM COORDINATION, Paragraph c., NOTICES.
The Contractor shall not issue a Notice to Proceed with the work under this Contract until it has
obtained all insurance required and such insurance has been approved by the City. This approval
of insurance shall neither relieve nor decrease the liability of the Contractor.
EXHIBIT E - NON-PROFITS
1
REVISED 6/8/95
B. Notice of Cancellation of Reduction of Coverage
All policies shall contain a special provision for thirty (30) days prior written notice of any
cancellation or reduction in coverage to be sent to the Community Development Department,
10300 Torre Avenue, Cupertino, CA 95014.
C. Qualifying Insurers
All policies shall be issued by companies which hold a current policy holder's alphabetic and
financial size category rating of not less than A VIII, according to the current Best's Key Rating
Guide, unless otherwise approved by the City's Insurance Manager.
D. Insurance Required
1. Comprehensive General Liability Insurance - for bodily injury (including death) and
property damage which provides limits of not less than one million dollars ($1,000,000)
combined single limit (CSL) per occurrence.
OR
2. Commercial General Liability Insurance - for bodily injury (including death) and property
damage which provides limits as follows:
a. General limit per occurrence - $1,000,000
b. General limit aggregate - $2,000,000
c. Products/Completed Operations- $1,000,000 aggregate
d. Personal Injury limit - $1,000,000
If coverage is provided under a Commercial General Liability Insurance form, the carrier
shall provide the City Insurance Manager with a quarterly report of the amount of
aggregate limits expended to that date. If over 50% of the aggregate limits have been paid
or reserved, the City may require additional coverage to be purchased by the Contractor to
restore the required limits.
3. For either type of insurance, coverage shall include:
a. Premises and Operations
b. Products/Completed Operations with limits of one million dollars ($1,000,000)
per occurrence/ aggregate to be maintained for two (2) years following acceptance
of the work by the City.
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c. Contractual Liability expressly including liability assumed under this Contract.
d. Personal Injury liability.
e. Independent Contractors' (Protective) liability.
f. Severability of Interest clause providing that the coverage applies separately to
each insured except with respect to the limits of liability.
4. For either type of insurance, coverage shall include the following endorsements, copies of
which shall be provided to the City:
a. Additional Insured Endorsement:
Such insurance as is afforded by this policy shall also apply to the City of
Cupertino, and members of the City Council, and the officers, "agents and
employees of the City of Cupertino, individually and collectively, as additional
insureds.
b. Primary Insurance Endorsement:
Such insurance as is afforded by the additional insured endorsement shall apply as
primary insurance, and other insurance maintained by the City of Cupertino, its
officers, agents, and employees shall be excess only and not contributing with
insurance provided under this policy.
c. Notice of Cancellation or Change of Coverage Endorsement:
This policy may not be cancelled nor the coverage reduced by the Company
without 30 days prior written notice of such cancellation or reduction in coverage
to the City of Cupertino at the address shown on the Certificate of Insurance.
d. Contractual Liability Endorsement:
This policy shall apply to liability assumed by the insured under written contract
with the City of Cupertino.
e. Personal Injury Endorsement:
The provisions of this policy shall provide Personal Injury coverage.
f. Severability of Interest Endorsement:
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The insurance afforded by this policy shall apply separately to each insured that is
seeking coverage or against whom a claim is made or a suit is brought, except
with respect to the Company's limit of liability.
5. Comprehensive Automobile Liability Insurance for bodily injury (including death) and
property damage which provides total limits of not less than one million dollars
($1,000,000) combined single limit per occurrence applicable to all owned, non-owned
and hired vehicles.
6. Worker's Compensation and Employer's Liability Insurance for:
a. Statutory California Workers' Compensation coverage including a broad form all-
states endorsement.
b. Employer's Liability coverage for not less than one million dollars ($1,000,000)
per occurrence for all employees engaged in services or operations under this
Contract.
c. Inclusion of the City and its governing board(s), officers, representatives, agents,
and employees as additional insureds, or a waiver of subrogation.
7. Professional Errors and Omissions Liability Insurance
This type of insurance should be provided by persons/entities you contract with to
provide you with professional services.
a. Limits of not less than one million dollars ($1,000,000).
b. If this policy contains a self retention limit, it shall not be greater than ten
thousand dollars ($10,000) per occurrence/event.
c. This coverage shall be maintained for a minimum of two .(2) years following
termination of this Contract.
The City must first approve any exceptions to the above requirements.
8. Bond Requirements
Fidelity Bond - Before receIvmg compensation under this Contract, Contractor will
furnish City with evidence that all officials, employees, and agents handling or having
access to funds received or disbursed under this Contract, or authorized to sign or
countersign checks, are covered by a BLANKET FIDELITY BOND in an amount of
AT LEAST fifteen percent (15%) of the maximum financial obligation of the City cited
herein. If such bond is cancelled or reduced, Contractor will notify City immediately, and
City may withhold further payment to Contractor until proper coverage has been
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obtained. Failure to give such notice may be cause for termination of this Contract, at the
option of the City.
9. Special Provisions
The following provisions shall apply to this Contract:
a. The foregoing requirements as to the types and limits of insurance coverage to be
maintained by the Contractor and any approval of said insurance by the City or its
insurance consultant(s) are not intended to and shall not in any manner limit or
qualify the liabilities and obligations otherwise assumed by the Contractor
pursuant to this Contract, including but not limited to the provisions concerning
indemnification.
b. The City acknowledges that some insurance requirements contained in this
Contract may be fulfilled by self-insurance on the part of the Contractor.
However, this shall not in any way limit liabilities assumed by the Contractor
under this Contract. The City shall approve any self-insurance in writing.
c. The City reserves the right to withhold payments to the Contractor in the event of
material noncompliance with the insurance requirements outlined above.
d. If the Contractor fails to maintain such insurance as is called for herein, the City
must order the Contractor to immediately suspend work at Contractor's expense
until a new policy of insurance is in effect.
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ADDENDUM TO EXHIBIT "E"
BASIC INSURANCE AND BOND REQUIREMENTS
FOR CONSTRUCTION PROJECTS USING CITY FUNDS
If your organization will be contracting for constmction work (such as general contractors
building rental apartments) to undertake a Program (as defined in this Non-Profit/City Contract)
then the requirements set forth in this Addendum to Exhibit "E" shall be complied with by the
party contracted with for construction work protecting both the non-profit and the City.
Indemnity
The General Contractor (hereinafter referred to as "General") shall indemnify, defend, and hold
harmless the City of Cupertino (hereinafter "City"), its officers, agents and employees, and the
Contractor, it's officers, agents and employees from any loss, liability, claim, injury or damage
arising out of, or in connection with performance of this Contract by General and/or its agents,
employees or subcontractors, excepting only loss, injury or damage caused solely by the acts or
omissions of personnel employed by the City or the Contractor. It is the intent of the parties to
this Contract to provide the broadest possible coverage for the City and the Contractor. The
General shall reimburse the City and the Contractor for all costs, attorneys' fees, expenses and
liabilities incurred with respect to any litigation in which the General is obligated to indemnify,
defend and hold harmless the City and the Contractor under this Contract.
Insurance
Without limiting the General's indemnification of the City and the Contractor, the General shall
provide and maintain at its own expense, during the term of this Contract, or as may be further
required herein, the following insurance coverages and provisions:
A. Evidence of Coverage
Prior to commencement of this Contract, the General shall provide an original plus one copy of a
Certificate of Insurance certifying that coverage as required herein has been obtained and remains
in force for the period required by this Contract. The contract number and project name must be
stated on the Certificate of Insurance. Individual endorsements executed by the insurance carrier
shall accompany the Certificate.
This verification of coverage shall be sent to the Contractor at the address stated below and to the
Community Development Department, 10300 Torre Avenue, Cupertino, CA 95014. The
Contractor shall not issue a Notice to Proceed with the work under this Contract until it has
obtained all insurance required and such insurance has been approved by the Contractor and final
approval by the City. This approval of insurance shall neither relieve nor decrease the liability of
the Contractor.
B. Notice of Cancellation or Reduction of Coverage
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All policies shall contain a special provision for thirty (30) days prior written notice of any
cancellation or reduction in coverage to be sent to the Community Development Department as
stated above, and the Contractor at the following address:
Cupertino Community Services
Contractor's Name
10104 Vista Drive
Street Address
Cupertino. CA 95014
City, State, Zip
C. Qualifving Insurers
1. All policies shall be issued by companies which hold a current policy holder's alphabetic
and financial size category rating of not less than A VIII, according to the current Best's
Key Rating Guide, unless otherwise approved by the City.
2. Surety coverage (including bid, performance and payment bonds) shall be required as
follows:
a. For projects in excess of $1 00,000:
1. Either a California Admitted Surety OR a current Treasury Listed Surety
(Federal Register); and either a current AM. Best A IV rated Surety OR a
current Standard and Poors (S&P) rating of A;
2. An admitted surety insurer which complies with the provisions of the
Code of Civil Procedure, Section 995.660*;
OR
3. In lieu of 1 & 2, a company of equal financial size and stability that is
approved by the City's Insurance/Risk Manager.
b. For projects between $25,000 and not exceeding $100,000:
I. A California Admitted Surety and either a current A.M. Best B rated
Surety OR a current Standard and Poors (S&P) rating ofB B;
OR
2. An admitted surety insurer which complies with the provisions of the
Code of Civil Procedure, Section 995.660*;
* California Code of Civil Procedure Section 995.660 in summary, states that an admitted surety must
provide: 1) the original, or a certified copy of instrument authorizing the person who executed the bond to
do so; 2) a certified copy of the Certificate of Authority issued by the Insurance Commissioner; 3) a
certificate from City Clerk of Santa Clara City that Certificate of Authority has not been surrendered,
revoked, canceled, annulled or suspended; 4) a financial statement showing the assets and liabilities of the
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OR
3. In lieu of 1 & 2, a company of equal financial size and stability that is
approved by the City's InsuranceIRisk Manager.
D. Insurance Required
1. Comprehensive General Liability Insurance - for bodily injury (including death) and
property damage which provides limits of not less than one million dollars ($1,000,000)
combined single limit (CSL) per occurrence.
OR
2. Commercial General Liability Insurance - for bodily injury (including death) and property
damage which provides limits as follows:
a. General limit per occurrence - $1,000,000
b. General limit aggregate - $2,000,000
c. Products/Completed Operations- $1,000,000 aggregate
d. Personal Injury limit - $1,000,000
If coverage is provided under a Commercial General Liability Insurance form, the carrier
shall provide the City Insurance Manager with a quarterly report of the amount of
aggregate limits expended to that date. If over 50% of the 'aggregate limits have been paid
or reserved, the City may require additional coverage to be purchased by the General to
restore the required limits.
3. For either type of insurance, coverage shall include:
a. Premises and Operations
b. Products/Completed Operations with limits of one million dollars ($1,000,000)
per occurrence/aggregate to be maintained for two (2) years following acceptance
of the work by the City.
c. Contractual Liability expressly including liability assumed under this Contract.
d. Personal Injury liability.
e. Independent Contractors' (Protective) liability
f. Severability of Interest clause providing that the coverage applies separately to
. each insured except with respect to the limits of liability.
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4. For either type of insurance, coverage shall include the following endorsements, copies of
which shall be provided to the City and the Contractor:
a. Additional Insured Endorsement:
Insurance afforded by this policy shall also apply to the City of Cupertino and
Contractor as additional insureds.
b. Primary Insurance Endorsement:
Insurance afforded by the additional insured endorsement shall apply as primary
insurance, and other insurance maintained by the City of Cupertino and the
Contractor shall be excess only and not contributing with insurance provided
under this policy.
c.
Notice of Cancellation or Change of Coverage
Endorsement:
This policy may not be canceled nor the coverage reduced by the Company
without 30 days prior written notice of such cancellation or reduction in coverage
to the City of Cupertino CDBG Program, and the Contractor at the addresses set
forth on page 10 of this Addendum.
d. Severability of Interest Endorsement:
The insurance afforded by this policy shall apply separately to each insured who is
seeking coverage or against whom a claim is made or a suit is brought, except
with respect to the Company's limit of liability.
5. Comprehensive Automobile Liability Insurance for bodily injury (including death) and
property damage which provides total limits of not less than one million dollars
($1,000,000) combined single limit per occurrence applicable to all owned, non-owned
and hired vehicles.
6. Worker's Compensation and Employer's Liability Insurance for:
a. Statutory California Workers' Compensation coverage including a broad form all-
states endorsement.
b. Employer's Liability coverage for not less than one million dollars ($1,000,000)
per occurrence for all employees engaged in services or operations under this
Contract.
7. Work and Materials Insurance (including but not limited to Builder's Risk, Course of
Construction, Installation Floater or similar first party property insurance for covering the
interest ofthe Contractor and the City) shall be provided by the Contractor.
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The Contractor's coverage shall provide the following:
a. Coverage shall be provided on an "all-risk" basis.
b. Coverage shall be provided on the work and materials which are the subject of
this Contract, whether in process or manufacture or finished, including "in transit" .
coverage to the final agreed upon destination of delivery, and including loading
and unloading operations, and such coverage shall be in force until the work and
materials are accepted by the City.
c. City and non-profit shall be named as additional insured as its interests may
appear at the time of loss.
d. Coverage shall be in an amount no less than the full replacement value of the
property at the time of loss.
e. The deductible shall not exceed $1,000 per occurrence unless otherwise approved
by the City and shall be borne by the Contractor.
f. If the construction contractor fails to maintain such insurance as is called for
herein, the City shall have cause to terminate this Contract in accordance with
Section V, paragraph B.
8. Bond Requirements
The following bond requirements apply:
a. Contract Bonds - Prior to execution of the Contract, Contractor shall file with the
City on the approved forms, the two surety bonds in the amounts and for the
purposes noted below, duly executed by a reputable surety company satisfactory
to City, and Contractor shall pay all premiums and costs thereof and incidental
thereto. Both Contractor and the sureties shall sign each bond.
b. The "payment bond for public works" shall be in an amount of one
hundred percent (100%) of the Contract price, as determined from the prices in
the bid form, and shall insure to the benefit of persons performing labor or
furnishing materials in connection with the work of the proposed Contract. This
bond shall be maintained in full force and effect until all work under the Contract
is completed and accepted by the City, and until all claims for materials and labor
have been paid.
c. The "performance bond" shall be in an amount of one hundred percent (100%) of
the Contract price as determined from the prices in the bid form. and shall insure
the faithful performance by Contractor of all work under the Contract. It shall also
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insure the replacing of, or making acceptable, any defective materials or faulty
workmanship.
Should any surety or sureties be deemed unsatisfactory at any time by the City
notice will be given Contractor to that effect, and Contractor shall forthwith
substitute a new surety or sureties satisfactory to the City. No further payment
shall be deemed due or will be made under the Contract until the new sureties
qualify and are accepted by the City.
All alterations, time extensions, extra and additional work, and other changes
authorized by the Specifications, or any part of the Contract, may be made without
securing consent of the surety or sureties on the contract bonds.
9. Special Provisions
The following provisions shall apply to this Contract:
a. The foregoing requirements as to the types and limits of insurance coverage
to be maintained by the General and any approval of said insurance by the City or
the Contractor are not intended to and shall not in any manner limit or qualify the
liabilities and obligations otherwise assumed by the General pursuant to this
Contract, including but not limited to the provisions concerning indemnification.
b. The Contractor reserves the right to withhold payments to the General in the event
of material noncompliance with the insurance requirements outlined above.
c. The Contractor shall notify the City Community Development Department
promptly of all losses or claims over $25,000 resulting from work performed
under this contract, or any products/completed operations loss or claim against the
contractor resulting from any of the contractor's work.
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