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materials, supplies, labor and services that are an integral part of the Project, including but not <br />limited to: architecture and engineering, consulting, building permit(s), planning and other <br />governmental fees, title and escrow fees and construction costs. Funds shall be disbursed in the <br />amounts approved by City. All disbursements shall be made subsequent to Project Sponsor taking <br />title to the Property. <br />b. Schedule. Project Sponsor shall close escrow thirty (30) days after the execution of <br />this Agreement. All funds must be returned to the City should Project Sponsor fail to acquire the <br />Property. Project Sponsor shall commence rehabilitation of the Property not later than ninety (90) <br />days after execution of this Agreement, and shall complete the work not later than 180 days after <br />commencement. This schedule may be modified with the consent of the City Manager, or his/her <br />designee. <br />C. Scope of Rehabilitation. The development of the Property shall be performed in a <br />matmer consistent with the scope of rehabilitation to be provided to the City prior to any <br />rehabilitation work. <br />d. inspections During Rehabilitation. The City shall inspect any work performed <br />hereunder to ensure that the work is being and has been performed in accordance with the <br />applicable federal, state and /or local requirements and this Agreement. Project Sponsor agrees to <br />require that all work found by such inspections not to conform to the applicable requirements be <br />corrected, and to withhold payment to the construction contractor or subcontractor until the work <br />has been corrected. The City reserves the right to inspect the Property at any time during the period <br />of time set forth in Section 3 of this Agreement. <br />2. Disbursement of Funds l24 CFR 92.504(c)(10)] Project Sponsor shall not request <br />disbursement of any portion of the Grant until the funds are needed to pay eligible costs. The <br />amount of each disbursement request shall be limited to the amount needed. The City shall have <br />the right to disapprove any request if the City determines the request is for an ineligible item or is <br />otherwise not in compliance with or is inconsistent with this Agreement. <br />Grant proceeds used for actual costs shall be placed in an non - interest bearing escrow account with <br />United States Escrow or at such other institution as City requires in compliance with federal <br />regulations found at 24 CFR 511 (the "Escrow Account "). Upon written request of Project <br />Sponsor, City will request disbursement of funds. Such requests by City for payments for <br />individual work items shall be made after inspection and acceptance of the work by City and City <br />approval of Project Sponsor's requisitions (to be in the form of Exhibit B attached hereto) and <br />invoices and satisfactory proof that the Property, Project Sponsor and City are properly protected <br />from liens or claims of liens for labor and materials. All funds disbursed to Project Sponsor shall <br />be received by Project Sponsor in trust and Project Sponsor agrees that the same shall be used only <br />for the payment of the items approved for by the disbursement. <br />City shall not be required to request disbursement of any amount which, in City's opinion, will <br />reduce that portion of the undisbursed finds designated for the cost of completion of the Project <br />below that needed to pay for the labor and materials necessary to complete the work. <br />25H -4 <br />