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HomeMy WebLinkAboutPR 15547: TDHCA HOLD HARMLESS AGREEMENTINTEROFFICE MEMORANDUM HOUSING ASSISTANCE PROGRAMS To: Steve Fitzgibbons, City Manager From: Rebecca Underhill, Assistant City Date: September 19, 2009 Re: P.R. #15547 RECOMMENDATION: I recommend the City Council adopt Proposed Resolution 15547, authorizing the execution of a Indemnity and Hold Harmless Agreement ("Agreement's between the City of Port Arthur and Texas Department of Housing and Community Affairs (TDHCA). BACKGROUND: The City of Port Arthur Emergency Assistance Program completed homes after the Hurricane Rita Disaster with CDBG funds executing a five year lien (With Deferral and Forgiveness Provisions) with the homeowner for contracts exceeding $5,000. During the period of affordability (five years), Hurricane Ike struck the community. The TDHCA CDBG Disaster Recovery Program, Homeowner Assistance Program "HAP", has identified households in the City of Port Arthur CDBG area to receive assistance with the CFDA 14.228 Community Development Block Grant Program Funds. The TDHCA Indemnity and Hold Harmless Agreement ("Agreement") identifies the applicants who were previously assisted with the City's CDBG funds. The "Agreement" will allow the homeowner construction of improvements on the property while maintaining the property as the primary residence. Listed below is the following TDHCA "Agreement": Indemnity and Hold Harmless Agreement executed by Linda McCrearv, owner and holder of that certain superior promissory note in the original principal amount of $6,200 which is secured by a superior Deed of Trust dated October 2, 2006 from Linda McCreary to Stephen Fitrgibbons, Trustee to the City of Port Arthur, recorded in Lien Document Number 2007001733 official of Public Records of Jefferson County, Texas. STAFFING/EMPLOYEE EFFECT: Housing Administration staff will be responsible for administering the execution of the TDHCA Indemnity and Hold Harmless Agreement. SUMMARY: I recommend the City Council adopt Proposed Resolution 15547 authorizing the execution of the Indemnity and Hold Harmless Agreement between the City of Port Arthur and Texas Department of Housing and Community Affairs (TDHCA) for lien holder Linda McCreary. P. R. 15547 9/29/09 BAF/HOUSING RESOLUTION NUMBER A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN INDEMNITY AND HOLD HARMLESS AGREEMENT ("AGREEMENT' WITH THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS (TDHCA) FOR THE COMPLETION OF RECONSTRUCTION OF HOMES THAT WERE IDENTIFIED WITH SUBSTANTIAL DAMAGE CAUSED BY HURRICANE R1TA. THE PROGRAM WILL BE ADMINISTERED BY THE STATE OF TEXAS CDBG DISASTER RECOVERY PROGRAM WHEREAS, pursuant to Resolution No. 06-142, the City obligated itself to provide owner-occupied home rehabilitation and/or reconstruction assistance for low and moderate income persons/families; and, WHEREAS, pursuant to Resolution No. 06-509, the City adopted the Housing Assistance Rehabilitation Program Guidelines presented by HUD; and, WHEREAS, the City is the owner and holder of that certain promissory note executed by the homeowner and secured by a Deed of Trust from the homeowner to the Trustee for the City, Stephen Fitrgibbons; and, WHEREAS, Linda McCreary, is the owner and holder of that certain superior promissory note in the original principal amount of $6,200 which is secured by a superior Deed of Trust dated October 6, 2006 from Linda McCreary to Stephen Fitrgibbons, Trustee to the City of Port Arthur, recorded in Lien Document Number 2007001733 ofFcial of Public Records of Jefferson County, Texas as denoted in the Indemnity and Hold Harmless Agreement, attached hereto as Attachment"A"; and, WHEREAS, the "Agreement" is deemed essential for the completion of activities undertaken by TDHCA and must principally benefit low and moderate income persons which have been determined by the parties and is established under the guidelines of the Housing and Community Development Act of 1974, as amended; therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: SECTION I. That the facts and opinions in the preamble are true and correct. SECTION 2. That the City Manager is herein authorized to execute the "Agreement" with TDHCA as outlined herein and further described in the attached Indemnity and Hold Harmless Agreement, attached hereto as Attachment "A". SECTION 3. That a copy of the caption of this Resolution be spread upon the minutes of the City Council. READ, ADOPTED AND APPROVED this day of A.D., 2009 at a Regular Meeting of the City Council of the City of Port Arthur, Texas by the following vote: AYES: MAYOR COUNCILMEMBERS NOES: MAYOR ATTEST: CITY SECRETARY APPROVED FOR FORM: CITY ATT NEY Q.,, Q¢/~a,?~ a~~ APPROVED FOR ADMINISTRATION: ___~~~~ -~i `' C MANAGER I REBECCA UNDERHILL ASSISTANT CITY MANAGER/ADMINISTRATION ATTACHMENT "A" TF,XAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS CFDA 14.228 Community Development Block Grant Program ("CDBG^) Hurricanes Katrina, Rita and Wilma in the Gulf of Mexico 2005 Federally Declared Disaster Funding Under Department of Defense Appropriations Act, 2006 CDBG Disaster Recovery Program homeowner Assistance Program "HAP" ar Sabfne Pass Restoration Program "SPRP" Awarding Federal Agency: United States Department of Housing and Urban Development TDHCA Federal Award Number: B-06-DC-48-0002 Federal Award Year (Year of Award from HUD to TDHCA): 2006 TDHCA Award Year: 2007 INDEMNITY AND HOLD HARMLESS AGREEMENT ("Agreement") THIS AGREEMENT IS MADE BY AND BETWEEN City of Port Arthur, a _ (limited partnership~corporation/individual etc.] (hereinafter called "Indemnitor") and TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS, a public and official agency of the State of Texas (hereinafter called "TDHCA"), on this the day of , 2009. WITNESSETH: V1'HEREAS. lndemnitor is the owner and holder of that certain superior promissory note executed by Linda McCreary in the original principal amount of $6,200.00, which is secured by a superior Deed of Trust dated October 2, 2006 from Linda McCreary to Stephen Fitzgibbons, Trustee, recorded in Lien Document Number 2007001733 of the Official Public Records of Jefferson County, Texas, (hereinafter called "Mortgage Lien"), upon and against the following described real property: The real property described in Exhibit "A" attached hereto and located in ,lefferson County,, "texas (hereinafter called "Property"); and ~'i'HEREAS. Homeowner and 'TDHCA have executed, or plan to execute, a CDBG Disaster Recovery HAP or SPRP Program Grant Agreement ("Grant Agreement") for TDHCA to grant funds to Homeowrlea• for installation and/or construction of improvements on the Property in accordance with the CDBG regulations; and WHEREAS, Homeowner, TDHCA, and a contractor (the "Contractor") approved by Homeowner and TDHCA, have executed, or plan to execute, a CDBG Disaster Recovery HAP or SPRP Program Construction Grant Agreement ("Construction Grant Agreement") relating to the manner of disbursement of the grant proceeds under the Grant Agreement Yo or for the benefit of Homeowner and for installation andlor construction of improvements on the Property, subject to the terms contained therein; and TDI IG\ Grant indemnity a„d I lold Harmless Agreement Page I of S Fileq 1219-221 i396i 4529 WHEREAS, Indemnitor has been requested to consent to the planned demolition and replacement or rehabilitation of all or some improvements on the Property for which the TDHCA's funds will be used: and WHEREAS, the TDHCA declines to disbwse the funds under the Grant Agreement or Construction Grant Agreement for said activity on the Property unless Indemnitor consents to the demolition and replacetent or rehabilitation of improvements on the Property and indemnifies and holds hatniless the TDHCA from any loss, reduction of value or damage which may result from said activity; NOW', THEREFORE, inconsideration of the premises, parties hereby agree as follows: 1. In consideration for the TDHCA's agreement to disbwse fiords, or to evaluate Homeowner's application for the receipt of funds, under the Grant Agreement and Construction Grant Agreement to improve the Property used as collateral under the Mortgage Lien, Indemnitor hereby releases, waives, discharges and covenants not to sue the TDHCA, its officers, agents, or employees from any and all liability, claims, demands, actions and causes of action whatsoever arising out of or related to any loss, reduction of value or damage to the Property in the demolition, rehabilitation andor construction of improvements on the Property, whether caused by the negligence of the TDHCA, its agents, Homeowner, Contractor, or otherwise, while perfommine or funding such activity. 2. Ludemnitor also has a significant financial interest in the Property to be demolished and rehabilitated. Accordingly, Indemnitor and TDHCA further agree as follows: A. Indenmitor is fully aware of the risks involved with the dentoli[ion and construction of improvements on the Propem•, including but not limited to the depreciation of value in the collateral securing Indemnitor's Mortgage Lien, and Indemnitor hereby consents to said activity by Contractor and their employees and sub-contractors, including the funding of said activity by TDHCA, with full knowledge that said activity may damage and/or reduce the value of the collateral securing Indcmrritor's Mortgage Lien. I3. Indetttnitor further hereby agrees to indemnify and hold harmless the TDHCA, its ot3icers, agents, or employees from any loss, liability, damage or costs, including court tests and attorney fees, that they may incur due to claims made by Indemnitor, its affiliates, subsidiaries, parent companies, assignees and/or any third parties who are party to a contractual service agreement with Indemnitor, relating to the TDIICA's disbursement of grant funds under the Grant Agreement and Construction Grant Agreement or the performance by Contractor or subcontractors under the Construction Grant Agreement Yor the demolition and construction of improvements on the Property, whether caused by negligence of the TDHCA, its agents, I-Iomeowner, Contractor and their employees and sub-contractors, or otherwise. C. Indemmitor understands that the TDHCA does not maintain arty insurance policy covering any circuntslance arising from Indemnitor's consent to the demolition and construction of the Property which serves as collateral for the Mortgage Lien. TDHCA Granl Indemnity and HoIJ Harmleti~c AgreemrnE Pagc 2 of 4 Pileq 1219-2?173961A5?9 ,. It is the parties express intent that this Agreement shall bind the parties hereto and their respective successors and assigns. The parties hereb}• further agree that this Agreement shall be construed in aceordance with the laws of the State of Texas. 4. In signing this Agrccment, Indemnitor acknowledges and represents that Indemnitor has read the foregoing Agreement, understands it and signs it voluntazily as Indemnitor's own free act and deed. No oral representations, statements, or inducements, apart from those expressly set forth in this Agreement, have been made. 5. The person signing this Agreement on behalf of each party represents that he or she has the full legal authority to execute this Agreement on behalf of the party for which he or she signs. IN W (['NESS WHEREOF, Indemnitor and TDFICA have executed this Al,Reemeni to be effective as of the date first above written. CITY OF PORT ARTHUR: u By: Name: Title: Date: TDHCA Grant Indemnirv and I told harmless Agreement Page 3 of Filr N 1219-221'3961-0529 TDHCA: TEYAS DEPARTMENT COMMUNITY AFFAIRS agency of the State of Texas sy: Name: Title: Date: OF HOUSING AND a public and oftlcial TDHCA (rant Indcmnip• v~d Hold Hv~ml~ss Agreement Paec ~ of 4 File 1219-2217396%4529 EXHIBIT "A" Lot Number Five (5) in Block Number Thirty Eight (38) of City of Port Arthur, Jefferson County, Texas as the same appears upon the map or plat thereof, on file and of record in Real Property records of Jefferson County.