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in connection with awarding of any federal contract, the making of any federal grant or loan, entering into any
<br />cooperative agreement and the extension, renewal, amendment or modification of any federal contract, grant,
<br />loan or cooperative agreement.
<br />H. Compliance with Law/Program Income. District acknowledges that the funds being provided by City for
<br />the MPR/CC are received by City pursuant to the CDBG Program, as amended, and that expenditures of
<br />CDBG funds must be in accordance with the CDBG Program and its requirements (24 CFR 570.503 and 24
<br />CFR 570.504). Upon the expiration of this Agreement, any unexpended CDBG funds received by District
<br />shall be returned to City unless otherwise provided for in this Agreement or directed by the City. District
<br />agrees to comply fully with all federal, state and local laws and court orders applicable to its operation.
<br />Program income means gross income received by the District or a subrecipient directly generated from the
<br />use of CDBG funds. It is the gross income from the use or rental of real property, owned by the District or
<br />by a subrecipient, that was constructed or improved with CDBG funds, less costs incidental to generation
<br />of the income.
<br />1. Administrative Requirements/Cost Principles/Audit Standards. The following requirements and
<br />standards of 24 CFR § 570.502 must be complied with by the District: 24 CFR Part 85, §§ 85.3, 85.6,
<br />85.12, 85.20, 85.21, 85.22, 85.26, 85.32, 85.33, 85.34, 85.35, 85.36, 85.37, 85.40, 85.41, 85.42, 85.43,
<br />85.44, 85.5 1, and 85.52; OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal
<br />Governments; and OMB Circular A-133, Audits of State and Local Governments. This includes separate
<br />accounting of costs for the MPR/CC.
<br />J. Subpart K of 24 CFR Part 570. District will carry out its activities in compliance with the requirements
<br />of Subpart K of 24 CFR Part 570; however, District does not assume the City's environmental
<br />responsibilities or the responsibility for initiating the environmental review process under 24 CFR Part 52
<br />or City's responsibilities under 24 CFR § 570.604.
<br />K. Reversion of Assets.
<br />1. Per 24 CFR § 570.503(b)(7), any real property under the District's control that was acquired or improved in
<br />whole or in part with CDBG funds in excess of $25,000.00 must either be:
<br />a. Used, where City has given written approval, to meet one of the national objectives stated in 24 CFR §
<br />570.208 until five (5) years after expiration of this Agreement, or for such longer period of time as
<br />determined to be appropriate by City; or
<br />b. If not used in accordance with subparagraph (a) above, District shall pay to City an amount equal to
<br />the current market value of the acquired property or improvement, as the case may be, less any portion
<br />of the value attributable to the expenditure of non-CDBG funds for acquisition of, or improvement to,
<br />the property.
<br />3. The parties agree that the funding provided to District hereunder shall not be used for furniture, fixtures or
<br />equipment, however, subject to the obligations set forth herein, title to equipment acquired under the terms
<br />of this Agreement, if any, will vest upon acquisition in District. When said equipment which has been
<br />acquired in accordance with this Agreement and all applicable regulations are no longer needed for said
<br />program, disposition of said equipment will be made as follows:
<br />a. Items of equipment with a current per unit fair market value of less than $5,000.00 may be retained,
<br />sold or otherwise disposed of with no further obligation to City.
<br />b. Items of equipment with a current per unit fair market per unit value of $5,000.00 or more may be
<br />retained or sold and City shall have the right to an amount calculated by multiplying the current
<br />market value or proceeds from the sale by City's share of CDBG funds expended to acquire the
<br />equipment, in accordance with 24 CFR § 85.32(e)(2).
<br />Draft Construction Reimbursement Agreement - City of Santa Ana/SAUSD - MPR/CC 8-28-12 Page 6
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