HomeMy WebLinkAboutItem No. 10 - Approval of Community Development Block Grant (CDBG) Supplemental Agreement 202410)Approval of Community Development Block Grant (CDBG) Supplemental Agreement
2024 - 2025 Program Year
Approve and authorize the Mayor to execute the Supplemental Agreement between the
County of Riverside and the City of Lake Elsinore for the Use of 2024 – 2025 Community
Development Block Grant Funds.
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REPORT TO CITY COUNCIL
To:Honorable Mayor and Members of the City Council
From:Jason Simpson, City Manager
Prepared by:Brendan Rafferty, Assistant Administrative Services Director
Date:November 12, 2024
Subject:Approval of Community Development Block Grant (CDBG) Supplemental
Agreement 2024 - 2025 Program Year
Recommendation
Approve and authorize the Mayor to execute the Supplemental Agreement between the County
of Riverside and the City of Lake Elsinore for the Use of 2024 – 2025 Community Development
Block Grant Funds.
Background
At its meeting on November 14, 2023, the City Council approved the Community Development
Block Grant (CDBG) projects for the fiscal year 2024 – 2025. At that time, the City Council
decided to allocate FY 2024 – 2025 CDBG funds for the following:
•City of Lake Elsinore
•Assistance League of Temecula Valley
•Boys & Girls Club Scholarship Program
•HOPE Pantry Program
•Michelle’s Place
•Vista Community Clinic
Discussion
On September 27, 2024, the City received a “Supplemental Agreement for using 2024-2025
Community Development Block Grant Funds” (Agreement).
Executed copies of the Agreement must be returned to the County of Riverside Housing,
Homelessness Prevention, and Workforce Solutions (HHPWS) no later than November 26,
2024, for the Board of Supervisors to approve, after which a fully executed agreement will be
CDBG Supplemental Agreement 2024-2025 Program Year
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forwarded to the City along with the “authorization to incur costs.” When staff receives the
authorization, we can release funds to the approved projects with the assurance of
reimbursement from the County of Riverside to the City of Lake Elsinore.
The City of Lake Elsinore requested $595,254 for the program year 2024-2025; however,
HHPWS notified staff that this year’s total amount decreased to $587,974. Of the $587,974,
thirteen percent (13%) is used for the Riverside County Administrative costs. The Remaining
$511,537 is allocated to public service programs and capital improvement.
The approved allocation is as follows:
2. LE. 88-24 ADA Sidewalk Improvement Project $382,179
ADA Sidewalk Improvement Project Admin * $41,158
2.LE.89-24 Vista Community Clinic $20,840
2.LE90-24 Boys & Girls Club Scholarship Program $7,840
0.264-24 HOPE Pantry Program $28,840
0.265-24 Operation School Bell $25,840
0.266-24 Cancer Support Services $4,840
Total $511,537
* Approved by the County to be allocated upon receipt of funds from HUD.
Fiscal Impact
There is no fiscal impact to the 2024-2025 General Fund. Projects are paid through the CDBG
reimbursement process once the “authorization to incur costs” has been issued by the County of
Riverside.
Attachments
Attachment 1 - Supplemental Agreement
Attachment 2 - Original Agreement
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File No.: 2.LE.88-24, 2.LE.89-24, 2.LE.90-24,
0.264-24, 0.265-24, 0.266-24
SUPPLEMENTAL AGREEMENT FOR THE USE OF
2024-2025 COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS
This Supplemental Agreement (“Agreement”) is entered into by and between the COUNTY OF
RIVERSIDE, a political subdivision of the State of California, herein called, "COUNTY," and the CITY
OF LAKE ELSINORE, a political subdivision of the State of California, herein called "CITY."
COUNTY and CITY are collectively referred to as “Parties” and individually as “Party.”
The COUNTY and CITY mutually agree as follows:
1. GENERAL. COUNTY and CITY have executed a Cooperation Agreement, dated August
4, 2023 (“Cooperation Agreement”), whereby CITY elected to participate with COUNTY, which has
qualified as an "Urban County" for purposes of receiving Community Development Block Grant
(CDBG) funds (“CDBG”), and to assist and undertake essential community development and housing
assistance activities pursuant to the Housing and Community Development Act of 1974, Title 1, as
amended, Public Law 93-383 hereinafter referred to as "Act." Said Cooperation Agreement, dated
August 4, 2023, is incorporated herein by reference and made a part of this Agreement as if each and
every provision was set forth herein.
2. PURPOSE. CITY has been allocated $470,379 in CDBG Entitlement funds for the 2024-
2025 CDBG program year. CITY promises and agrees to undertake and assist with the community
development activities, within its jurisdiction, by utilizing the sum of $410,859 CDBG Entitlement
Funds, as specifically identified in Exhibit(s) A, B, C, D, E, and F, attached hereto, and are incorporated
herein by this reference, for the following project(s) (collectively, the “Projects”):
A) 2.LE.88-24 ADA Sidewalk Improvement Project, $382,179.
B) 2.LE.89-24 Vista Community Clinic $20,840.
C) 2.LE.90-24 Boys and Girls Club Scholarship Program, $7,840.
CITY has allocated the remaining $59,520 from its 2024-2025 CDBG allocation to
certain activities identified below, hereinafter referred to as “County-wide Activities,” that will be
directly administered by COUNTY:
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D) 0.264-24 H.O.P.E. Pantry Program, $28,840.
E) 0.265-24 Operation School Bell, $25,840.
F) 0.266-24 Cancer Support Services, $4,840.
3. TERM OF AGREEMENT. The term of this Agreement for the implementation of the
Project(s) shall be for a period of one (1) year from July 1, 2024, to termination on June 30, 2025.
4. COMPLETION SCHEDULE. CITY shall proceed consistent with the completion schedule
set forth in Exhibit(s) A, B, C, D, E, and F, attached hereto and incorporated herein.
5. EXTENSION OF TIME. In the event the Project(s) are not substantially completed by the
time set forth in the applicable completion schedule(s) due to a force majeure event (See Section 40
below), the COUNTY may consider extending the schedule for the completion of the project(s). Times
of performance for other activities may also be extended in writing by COUNTY. If substantial progress
toward completion in conformance with the completion schedule, as determined by COUNTY in its
discretion, of the project(s) not made during the term of this Supplemental Agreement, COUNTY may
suspend or terminate this Supplemental Agreement pursuant to the termination procedures set forth in
the section titled "Termination," and the entitlement funds associated with the Project(s) may be
reprogrammed by the COUNTY after appropriate notice is provided to the City.
6. LETTER TO PROCEED. CITY shall not initiate nor incur expenses for the CDBG-
funded Projects or activities covered under the terms of this Supplemental Agreement as set forth in
Exhibit(s) A, B, C, D, E, and F attached hereto, prior to receiving written authorization from COUNTY
to proceed.
7. NOTICES. Each notice, request, demand, consent, approval or other communication
(hereinafter in this Section referred to collectively as “notices” and referred to singly as a “notice”) which
the CITY or COUNTY is required or permitted to give to the other party pursuant to this Agreement
shall be in writing and shall be deemed to have been duly and sufficiently given if: (a) personally
delivered with proof of delivery thereof (any notice so delivered shall be deemed to have been received
at the time so delivered); or (b) sent by Federal Express (or other similar national overnight courier)
designating early morning delivery (any notice so delivered shall be deemed to have been received on
the next Business Day following receipt by the courier); or (c) sent by United States registered or certified
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mail, return receipt requested, postage prepaid, at a post office regularly maintained by the United States
Postal Service (any notice so sent shall be deemed to have been received two days after mailing in the
United States), addressed to the respective parties as follows:
COUNTY CITY
Heidi Marshall, Director Jason Simpson, City Manager
Riverside County HWS City of Lake Elsinore
P.O. Box 1528 130 S. Main Street
Riverside, CA 92502 Lake Elsinore, CA 92530
8. DISBURSEMENT OF FUNDS.
A. COUNTY's Board of Supervisors shall determine the final disposition and
distribution of all funds received by COUNTY under the Act consistent with Sections 2 and 3 of this
Supplemental Agreement. COUNTY, through its Department of Housing and Workforce Solutions,
shall make payment of the CDBG funds to CITY as set forth in the attached Exhibit(s) A, B, C, D, E
and F. It is the CITY’s responsibility to monitor all project activities set forth in the attached Exhibit(s)
A, B, C, D, E, and F, and to ensure compliance with applicable federal regulations and the terms of this
Supplemental Agreement.
B. CITY shall comply with timely drawdown of CDBG Entitlement funding by
expeditiously implementing and completing the COUNTY-approved, CDBG-funded Projects. CITY
acknowledges that CITY’s drawdown performance directly impacts the COUNTY’s overall program
drawdown rate. If the CITY’s unobligated CDBG fund balance, as of January 31, 2025, exceeds one
hundred and seventy-five percent (175%) of the CITY’s 2024-2025 CDBG allocation, the COUNTY
may, in its sole discretion, take the necessary administrative actions to reduce the CITY’s CDBG fund
balance. Necessary actions include, but are not limited to, reprogramming the excess CDBG fund
balance to other eligible activities as selected by COUNTY. COUNTY may, in its sole and absolute
discretion, authorize CITY in writing, prior to January 31, 2025, to exceed the CDBG fund balance
requirement.
C. CITY shall comply with timely drawdown of CDBG funds by submitting monthly
requests for reimbursement or other COUNTY approved reimbursement schedules. All disbursements
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of CDBG funds will be on a reimbursement basis and made within thirty (30) days after the COUNTY
has received the CITY’s reimbursement request including documentation supporting expenditures.
D. All authorized obligations incurred in the performance of the Supplemental
Agreement for projects eligible under the following CDBG regulations must be reported in writing to
COUNTY no later than June 1, 2025:
1. Acquisition [24 Code of Federal Regulations (CFR) 570.201 (a)]
2. Clearance Activities [24 CFR 570.201 (d)]
3. Interim Assistance [24 CFR 570.201 (f)]
4. Code Enforcement [24 CFR 570.202 (c)]
All public service activities [24 CFR 570.201 (e)] and other eligible activities under this
Supplemental Agreement must be implemented, completed, and obligations reported in writing to the
COUNTY by the CITY no later than the completion schedules set forth in the attached Exhibits to this
Supplemental Agreement. ”CFR” as used herein refers to the Code of Federal Regulations.
9. RECORDS AND INSPECTIONS.
A. CITY shall establish and maintain financial, programmatic, statistical, and other
supporting records of its operations and financial activities in accordance with the Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part
200), and 24 CFR Section 570.502 (a), as they relate to the acceptance and use of federal funds under
this Agreement. Said records shall be retained for a period of four (4) years from the date that the activity
or program funded with the CDBG Grant is closed out by the COUNTY and reported as complete in the
Comprehensive Annual Performance and Evaluation Report (CAPER). Exceptions to the four (4) year
retention period requirement, pursuant to 2 CFR 200.333 include, but not limited to, the following:
i. if any litigation, claim, or audit is started prior to the expiration of the four
(4) year period;
ii. when the CITY is notified in writing by the COUNTY, HUD, or other
Federal agency to extend the retention period;
iii. records for real property and equipment acquired with CDBG funds must
be retained for four (4) years after final disposition;
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iv. when the records are transferred by the CITY to the COUNTY, HUD, or
other Federal agency, the four (4) year period is not applicable.
B. CITY shall obtain an external audit in accordance with the Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR
Section 200.500). Audits shall usually be performed annually but not less frequently than every two
years. Nonprofit institutions and government agencies that expend less than $750,000 a year in Federal
awards are exempt from Federal audit requirements, but records must be available for review by
appropriate officials of the Federal grantor agency or subgranting entity. The audit report shall be
submitted to the COUNTY within 180 days after the end of the COUNTY'S fiscal year.
C. CITY shall maintain a separate account for the CITY’S CDBG Entitlement funds
received as set forth in Exhibit(s) A, B, C, D, E, and F attached hereto.
D. Pursuant to 2 CFR 200.336, CITY shall, during the normal business hours, make
available to COUNTY, the U.S. Department of Housing and Urban Development (HUD), or other
authorized representative, for the examination and copying, all of its records and other materials with
respect to matters covered by this Agreement and provide reasonable access to CITY staff for the purpose
of interview and discussion related to the records and documents.
E. CITY shall not retain any program income as defined in 24 CFR 570.500. Said
program income shall be used only for the activities that are the subject of this Agreement. Further, all
provisions of this Agreement shall apply to such activities.
F. The CITY shall ensure that at least fifty-one percent (51%) of the persons
benefiting from all CDBG-funded activities or projects designated as serving limited clientele [24 CFR
570.208(a)(2)(i)] are of low and moderate-income and meet the applicable household income guidelines.
The CITY shall provide the required income certification and direct benefit documentation, in writing,
to the COUNTY pursuant to the reporting requirement of each activity as set forth in Exhibit(s) A, B, C,
D, E, and F, attached hereto. In the event that CITY engages the services of a sub-contractor to implement
CDBG-funded activities, the CITY must collect, in writing, all required income certification and direct
benefit documentation from subcontractors prior to submittal to the COUNTY pursuant to the reporting
requirement of each activity as set forth in Exhibit(s) A, B, C, D, E and F, attached hereto.
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10. COMPLIANCE WITH LAWS. CITY shall comply with all applicable federal, state, and
local laws, regulations, and ordinances and any amendments thereto and the federal regulations and
guidelines now or hereafter enacted pursuant to the Act. More particularly, CITY is to comply with those
regulations found in the Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (2 CFR Part 200), and 24 CFR Part 570. CITY is to abide by the
provisions of the Community Development Block Grant Manual, prepared by COUNTY and cited in the
above-mentioned Cooperation Agreement. CITY shall comply, if applicable, with Section 3 of the
Housing & Urban Development Act of 1968 (12 U.S.C.A. Section 1701u), as amended, a copy of which
is attached hereto as Exhibit “S”, and incorporated herein by this reference. CITY shall adhere to the
regulations as set forth in Exhibit “R”, attached hereto and incorporated herein by this reference,
pertaining to inherently religious activities. CITY shall comply with the Additional Federal
Requirements, if applicable, attached hereto as Exhibit “AFR”, and incorporated herein by this reference.
11. COOPERATION WITH HOUSING ACTIVITIES. CITY shall cooperate with
COUNTY in undertaking essential community development and housing assistance activities,
specifically urban renewal and public assistance housing, and shall assist COUNTY in implementing
and undertaking the goals and strategies identified in the 2024-2029 Five Year Consolidated Plan,
pursuant to 24 CFR Part 91 and other requirements of the Community Development Block Grant
Program.
12. LEAD AGENCY FOR COMPLIANCE WITH THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT (CEQA). Pursuant to Title 14 CCR Section 1501(d), the CITY
is designated as the lead agency for the projects that are the subject matter of this Supplemental
Agreement.
13. HOLD HARMLESS AND INDEMNIFICATION. In contemplation of the provisions of
Section 895.2 of the California Government Code imposing certain tort liability jointly upon public
entities solely by reason of such entities being parties to an agreement as defined by Section 895 of the
Code, the Parties hereto, pursuant to the authorization contained in Section 895.4 and 895.6 of the Code,
agree that each Party shall be liable for any damages including, but not limited to, claims, demands,
losses, liabilities, costs and expenses including reasonable attorneys’ fees, resulting from the negligent
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or wrongful acts or omissions of their employees or agents in the performance of this Agreement, and
each Party shall indemnify, defend and hold harmless the other Parties from such claims, demands,
damages, losses or liabilities for their negligence.
The hold harmless and indemnification obligations set forth herein shall survive the termination
and expiration of this Agreement. In the event there is conflict between this clause and California Civil
Code Section 2782, this clause shall be interpreted to comply with Civil Code 2782. Such interpretation
shall not relieve the CITY from indemnifying the Indemnitees to the fullest extent allowed by law.
14. INSURANCE. Without limiting or diminishing the CITY’s obligation to indemnify or
hold the COUNTY harmless, CITY shall procure and maintain or cause to be maintained, at its sole cost
and expense, the following insurance coverage’s during the term of this Agreement. As respects to the
insurance section only, the COUNTY herein refers to the County of Riverside, its Agencies, Districts,
Special Districts, and Departments, their respective directors, officers, Board of COUNTY OF
RIVERSIDE Supervisors, employees, elected or appointed officials, agents, or representatives as
Additional Insureds
a. Workers’ Compensation:
If the CITY has employees as defined by the State of California, the CITY shall maintain
statutory Workers' Compensation Insurance (Coverage A) as prescribed by the laws of the State of
California. Policy shall include Employers’ Liability (Coverage B) including Occupational Disease with
limits not less than $1,000,000 per person per accident. The policy shall be endorsed to waive
subrogation in favor of the County of Riverside.
b. Commercial General Liability:
Commercial General Liability insurance coverage, including but not limited to, premises
liability, contractual liability, products and completed operations liability, personal and
advertising injury, and cross liability coverage, covering claims which may arise from or out of
CITY’S performance of its obligations hereunder. Policy shall name the County of Riverside as
Additional Insured. Policy’s limit of liability shall not be less than $2,000,000 per occurrence
combined single limit. If such insurance contains a general aggregate limit, it shall apply
separately to this agreement or be no less than two (2) times the occurrence limit.b.1
Sexual Abuse or Molestation (SAM) Liability:
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If the work will include contact with minors, and the Commercial General Liability policy
is not endorsed to include affirmative coverage for sexual abuse or molestation, Vendor/Contractor shall
obtain and maintain a policy covering Sexual Abuse and Molestation with a limit no less than $2,000,000
per occurrence or claim.
c. Vehicle Liability:
If vehicles or mobile equipment are used in the performance of the obligations under this
Agreement, then CITY shall maintain liability insurance for all owned, non-owned or hired vehicles so
used in an amount not less than $1,000,000 per occurrence combined single limit. If such insurance
contains a general aggregate limit, it shall apply separately to this agreement or be no less than two (2)
times the occurrence limit. Policy shall name the County of Riverside as Additional Insured.
d. General Insurance Provisions - All lines:
(i). Any insurance carrier providing insurance coverage hereunder shall be
admitted to the State of California and have an A M BEST rating of not less than A: VIII (A:8) unless
such requirements are waived, in writing, by the County Risk Manager. If the County’s Risk Manager
waives a requirement for a particular insurer such waiver is only valid for that specific insurer and only
for one policy term.
(ii). The CITY must declare its insurance self-insured retentions. If such self-
insured retentions exceed $500,000 per occurrence such retentions shall have the prior written consent
of the County Risk Manager before the commencement of operations under this Agreement. Upon
notification of self-insured retention unacceptable to the COUNTY, and at the election of the Country’s
Risk Manager, CITY’S carriers shall either; 1) reduce or eliminate such self-insured retention as respects
this Agreement with the COUNTY, or 2) procure a bond which guarantees payment of losses and related
investigations, claims administration, and defense costs and expenses.
(iii). CITY shall cause CITY’S insurance carrier(s) to furnish the County of
Riverside with either 1) a properly executed original Certificate(s) of Insurance and certified original
copies of Endorsements effecting coverage as required herein, and 2) if requested to do so orally or in
writing by the County Risk Manager, provide original Certified copies of policies including all
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Endorsements and all attachments thereto, showing such insurance is in full force and effect. Further,
said Certificate(s) and policies of insurance shall contain the covenant of the insurance carrier(s) that
thirty (30) days written notice shall be given to the County of Riverside prior to any material
modification, cancellation, expiration or reduction in coverage of such insurance. In the event of a
material modification, cancellation, expiration, or reduction in coverage, this Agreement shall terminate
forthwith, unless the County of Riverside receives, prior to such effective date, another properly executed
original Certificate of Insurance and original copies of endorsements or certified original policies,
including all endorsements and attachments thereto evidencing coverage’s set forth herein and the
insurance required herein is in full force and effect. CITY shall not commence operations until the
COUNTY has been furnished original Certificate (s) of Insurance and certified original copies of
endorsements and if requested, certified original policies of insurance including all endorsements and
any and all other attachments as required in this Section. An individual authorized by the insurance
carrier to do so on its behalf shall sign the original endorsements for each policy and the Certificate of
Insurance.
(iv). It is understood and agreed to by the parties hereto that the CITY’S
insurance shall be construed as primary insurance, and the COUNTY'S insurance and/or deductibles
and/or self-insured retention’s or self-insured programs shall not be construed as contributory.
(v). If, during the term of this Agreement or any extension thereof, there is a
material change in the scope of services; or, there is a material change in the equipment to be used in the
performance of the scope of or, the term of this Agreement, including any extensions thereof, exceeds
five (5) years, the COUNTY reserves the right to adjust the types of insurance required under this
Agreement and the monetary limits of liability for the insurance coverage’s currently required herein, if;
in the County Risk Manager's reasonable judgment, the amount or type of insurance carried by the CITY
has become inadequate.
(vi). CITY shall pass down the insurance obligations contained herein to all
tiers of subcontractors working under this Agreement.
(vii). The insurance requirements contained in this Agreement may be met with
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a program(s) of self-insurance acceptable to the COUNTY.
(viii). CITY agrees to notify COUNTY of any claim by a third party or any
incident or event that may give rise to a claim arising from the performance of this Agreement.
15. INDEPENDENT CONTRACTOR. The CITY is, for purposes relating to this
Supplemental Agreement, an independent contractor and shall not be deemed an employee of the
COUNTY. It is expressly understood and agreed that the CITY (including its employees, agents and
subcontractor’s) shall in no event be entitled to any benefits to which the COUNTY employees are
entitled, including but not limited to overtime, any retirement benefits, worker's compensation benefits,
and injury leave or other leave benefits. There shall be no employer-employee relationship between the
parties; and the CITY shall hold the COUNTY harmless from any and all claims that may be made
against the COUNTY based upon any contention by a third party that an employer-employee relationship
exists by reason of this Supplemental Agreement. It is further understood and agreed by the parties that
the CITY in the performance of this Supplemental Agreement is subject to the control or direction of the
COUNTY merely as to the results to be accomplished and not as to the means and methods for
accomplishing the results.
16. NONDISCRIMINATION. CITY shall abide by 24 CFR Sections 570.601 and 570.602
of Title 24 of the Code of Federal Regulations which requires that no person in the United States shall
on the grounds of race, color, national origin, sex, sexual orientation, gender identity, or veterans status
be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any
program or activity funded in whole or in part with Community Development funds.
CITY shall abide by and include in any subcontracts to perform work under this Supplemental
Agreement, the following clause:
"During the performance of this Supplemental Agreement, CITY and its subcontractors shall not
unlawfully discriminate against any employee or applicant for employment because of race,
religion, color, national origin, ancestry, physical disability, medical condition, marital status,
veterans status, sexual orientation, gender identity, age (over 40) or sex. CITY and
subcontractors shall insure that the evaluation and treatment of their employees and applicants
for employment are free of such discrimination. CITY and subcontractors shall comply with the
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provisions of the Fair Employment and Housing Act (California Government Code Section
12900 et seq.). The applicable regulations of the Fair Employment and Housing Commission
are implementing California Government Code Section 12990 et seq., set forth in Chapter 1 of
Division 4.1 of Title 2 of the California Administrative Code are incorporated into this
Agreement by reference and made a part hereof as if set forth in full. CITY and its subcontractors
shall give written notice of their obligations under this clause to labor organizations with which
they have a collective bargaining or other agreement."
17. PROHIBITION AGAINST CONFLICTS OF INTEREST
A. CITY and its assigns, employees, agents, consultants, officers and elected and
appointed officials shall become familiar with and shall comply with the Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200) and the
CDBG regulations prohibiting conflicts of interest contained in 24 CFR 570.611.
B. The Subrecipient shall maintain a written code or standards of conduct that shall
govern the performance of its officers, employees or agents engaged in the award and administration of
contracts supported by Federal funds.
C. No employee, officer or agent of the Subrecipient shall participate in the
selection, or in the award, or administration of, a contract supported by Federal funds if a conflict of
interest, real or apparent, would be involved.
D. No covered persons who exercise or have exercised any functions or
responsibilities with respect to CDBG-assisted activities, or who are in a position to participate in a
decision-making process or gain inside information with regard to such activities, may obtain a financial
interest in any contract, or have a financial interest in any contract, subcontract, or agreement with respect
to the CDBG-assisted activity, or with respect to the proceeds from the CDBG-assisted activity, either
for themselves or those with whom they have business or immediate family ties, during their tenure or
for a period of one (1) year thereafter. For purposes of this paragraph, a “covered person” includes any
person who is an employee, agent, consultant, officer, or elected or appointed official of the Grantee, the
Subrecipient, or any designated public agency.
E. CITY understands and agrees that no waiver of exception can be granted to the
prohibition against conflict of interest except upon written approval of HUD pursuant to 24 CFR
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570.611(d). Any request by CITY for an exception shall first be reviewed by COUNTY to determine
whether such request is appropriate for submission to HUD in the COUNTY’S sole and absolute
discretion. In determining whether such request is appropriate for submission to HUD, COUNTY will
consider the factors listed in 24 CFR 570.611(d)(2).
F. Prior to the distribution of any CDBG funding under this Supplemental
Agreement, CITY shall provide COUNTY, in writing, a list of all employees, agents, consultants,
officers and elected and appointed officials who are in a position to participate in a decision making
process, exercise any functions or responsibilities, or gain inside information with respect to the CDBG
activities funded under this Agreement. CITY shall also promptly disclose to COUNTY any potential
conflict, including even the appearance of conflict that may arise with respect to the CDBG activities
funded under this Supplemental Agreement.
G. Any violation of this Section 17 shall be deemed a material breach of this
Supplemental Agreement, and the Supplemental Agreement shall be immediately terminated by the
COUNTY.
18. LOBBYING. CITY certifies to the best of its knowledge and belief, that:
a. No federally-appropriated funds have been paid or will be paid, by or on behalf
of the CITY, to any person for influencing or attempting to influence an officer or employee of any
agency, a member of Congress, an officer or employee of Congress, or an employee of a member of
Congress in connection with the awarding of any federal contract, the making of any federal grant, the
making of any federal loan, the entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any federal contract, grant, loan, or cooperative
agreement.
b. If any funds other than federally-appropriated funds have been paid or will be paid
to any person for influencing or attempting to influence an officer or employee of any agency, a member
of Congress, an officer or employee of Congress, or an employee of a member of Congress in connection
with this federal contract, grant, loan, or cooperative agreement, the CITY shall complete and submit
Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions.
c. CITY shall require that the language of this certification be included in the award
documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants,
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loans, and cooperative agreements) and that all sub-recipients shall certify and disclose accordingly.
This certification is a material representation of fact upon which reliance was placed when this
transaction was made or entered into.
19. TERMINATION.
A. CITY. CITY may not terminate this Agreement except upon express written
consent of COUNTY, pursuant to 2 CFR 200.339 (a)(3).
B. COUNTY. Notwithstanding the provisions of Paragraph 19a above, COUNTY
may suspend or terminate this Supplemental Agreement upon a ten (10) day written notice to CITY of
action being taken and the reason for such action including, but not limited to, the following reasons:
(1) In the event CITY fails to perform the covenants herein contained at such
times and in such manner as provided in this Supplemental Agreement; and
(2) In the event there is a conflict with any federal, state or local law,
ordinance, regulation or rule rendering any of the provisions of this Supplemental Agreement invalid or
untenable; or
(3) In the event the funding from the Department of Housing and Urban
Development referred to in Sections 1 and 2 above is terminated or otherwise becomes unavailable.
C. This Agreement may be terminated and/or funding suspended, in whole or in part,
for cause in accordance with the Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (2 CFR 200.339). Cause shall be based on the failure of the CITY to
materially comply with either the terms or conditions of this Agreement. Upon suspension of funding,
the CITY agrees not to incur any costs related thereto, or connected with, any area of conflict from which
the COUNTY has determined that suspension of funds is necessary. CITY acknowledges that failure to
comply with Federal statutes, regulations, or the terms and conditions of this Agreement may be
considered by the COUNTY in evaluating future CDBG and non-CDBG funding applications submitted
by CITY.
D. Upon suspension or termination of this Supplemental Agreement, CITY shall
return any unencumbered funds which it has been provided by COUNTY. In accepting said funds,
COUNTY does not waive any claim or cause of action it may have against CITY for breach of this
Supplemental Agreement.
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E. Reversion of Assets
1. Upon expiration or termination of this Supplemental Agreement, the
CITY shall transfer to the COUNTY any CDBG funds on hand at the time of expiration of the
Supplemental Agreement as well as any accounts receivable held by CITY which are attributable to the
use of CDBG funds awarded pursuant to this Supplemental Agreement.
2. Any real property under the CITY’S control that was acquired or improved
in whole or in part with CDBG funds (including CDBG funds provided to the CITY in the form of a
loan) in excess of $25,000 is either:
(i) Used to meet one of the National Objectives pursuant to 24 CFR
570.208 until five years after expiration of this agreement, or for such longer period of time as determined
to be appropriate by the COUNTY; or
(ii) Not used in accordance with Clause (i) above, in which event the
CITY shall pay the COUNTY an amount equal to the current market value of the property less any
portion of the value attributable to expenditures of non-CDBG funds for the acquisition of, or
improvement to, the property.
20. PUBLICITY. Any publicity generated by CITY for the Projects funded pursuant to this
Supplemental Agreement will make reference to the contribution of the COUNTY, the Department of
Housing, and Workforce Solutions, and the Community Development Block Grant Program in making
the project possible.
21. PROGRAM MONITORING AND EVALUATION. CITY and its subcontractors shall
be monitored and evaluated in terms of its effectiveness and timely compliance with the provisions of
this Supplemental Agreement and the effective and efficient achievement of the CDBG National
Objectives as set forth in Exhibit(s)A, B, C, D, E, and F, attached hereto. Quarterly reports shall be due
on the last day of the month immediately following the end of the quarter being reported. The quarterly
written reports shall include, but shall not be limited to, the following data elements:
A. Title of program, listing of components, description of activities/operations.
B. The projected goals, indicated numerically, and also the goals achieved (for each
report period). In addition, identify by percentage and description, the progress achieved towards
meeting the specified goals and identify any problems encountered in meeting goals.
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C. If the CDBG-funded activity meets a National Objective under 24 CFR 570.208
(a)(2)(i), CITY will report the following:
1) Total number of direct beneficiaries (clientele served) with median
household incomes (MHI) at:
• Above 80% MHI
• Between 50% and 80% MHI (Low-Income)
• Between 30% and 50% MHI (Very Low-Income)
• Less than 30% MHI (Extremely Low-Income)
2) Total number and percent (%) of the clientele served that have household
incomes at or below 80% MHI
3) Racial ethnicity of clientele
4) Number of Female-Headed Households
D. CITY shall report, in writing, and cause its subcontractors to report, in writing,
beneficiary statistics monthly to Housing and Workforce Solutions (HWS) on the pre-approved Direct
Benefit Form and Self-Certification Form (certifying income, family size, and racial ethnicity) as
required by HUD. Updated forms are to be provided to CITY by HWS should HUD implement changes
during the term of this Supplemental Agreement. CITY and subcontractors will collect and provide all
necessary data required by HUD pertaining to the Specific Outcome Indicators as identified in HUD’s
Community Planning and Development (CPD) Outcome Performance Measurement System.
22. PRIOR AUTHORIZATION. CITY shall obtain COUNTY's written approval from
HWS prior to implementing the following “high risk” activities funded with CDBG assistance:
A. Construction of public facilities (project plans and specifications);
B. Acquisition of real property;
C. Historic Preservation;
D. Relocation; and
F. Economic Development
23. PRIOR COUNTY APPROVAL (CONSTRUCTION ACTIVITIES). CITY shall obtain
COUNTY's written approval, through its HWS, of the project plans, specifications, and construction
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documents prior to CITY’S construction of same for all projects consisting of CDBG-funded
construction activities. The COUNTY neither undertakes nor assumes nor will have any responsibility
or duty to CITY or to any third party to review, inspect, supervise, pass judgment upon or inform CITY
or any third party of any matter in connection with the development or construction of the
improvements, whether regarding the quality, adequacy or suitability of the plans, any labor, service,
equipment or material furnished to the property, any person furnishing the same, or otherwise. CITY
and all third parties shall rely upon its or their own judgment regarding such matters, and any review,
inspection, supervision, exercise of judgment or information supplied to CITY or to any third party by
the COUNTY in connection with such matter is for the public purpose of assisting with a community
development and housing activity pursuant to the Act, and neither CITY (except for the purposes set
forth in this Agreement) nor any third party is entitled to rely thereon. The COUNTY shall not be
responsible for any of the work of construction, improvement, or development of the property.
It is the responsibility of CITY, without cost to COUNTY, to ensure that all applicable local
jurisdiction land use requirements will permit development of the property and construction of the
improvements and the use, operation, and maintenance of such Improvements in accordance with the
provisions of this Agreement. Nothing contained herein shall be deemed to entitle Sponsor to any
local jurisdiction or County permit or other local jurisdiction or County approval necessary for the
development of the Property, or waive any applicable local jurisdiction or County requirements
relating thereto. This Agreement does not (a) grant any land use entitlement to CITY, (b) supersede,
nullify, or amend any condition which may be imposed by the local jurisdiction in connection with
approval of the development described herein, (c) guarantee to CITY or any other party any profits
from the development of the Property, or (d) amend any local jurisdiction or County laws, codes or
rules.
City agrees and acknowledges that it is the responsibility of City to obtain a legal determination
at City’s sole cost and expense, as to whether prevailing wages must be paid during construction of the
Project. If the Project is subject to prevailing wages, then City shall be solely responsible to pay its
contractors and subcontractors the required prevailing wage rate. City agrees to indemnify, defend,
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and hold County harmless from and against any liability arising out of and related to City’s failure to
comply with any and all Davis Bacon and or prevailing wage requirements.
24. PRIOR COUNTY APPROVAL (AQUISITION ACTIVITIES). CITY shall obtain
COUNTY's written approval and authorization to proceed, through HWS, of all CDBG-funded real
property acquisition activities.
25. REAL PROPERTY ACQUIRED OR PUBLIC FACILITY CONSTRUCTED WITH
CDBG FUNDS. When CDBG funds are used, in whole or in part, by CITY to acquire real property or
to construct a public facility, CITY will comply with the Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (2 CFR Section 200.311); National
Environmental Policy Act of 1969 (42 U.S.C.A. §4321, et seq.); the California Environmental Quality
Act (Cal. Pub. Resources Code §21000, et seq.); the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970, as amended (42 U.S.C.A. §4630, et seq.); and the COUNTY’s Five
Year Consolidated Plan. In addition, the following is to occur:
a. Title to the real property shall vest in CITY;
b. The real property will be held by CITY, or the constructed facility will be
maintained by the CITY, for a minimum period of five (5) years from the date the CDBG-funded
activity is closed-out and reported as complete by the COUNTY through the Comprehensive Annual
Performance and Evaluation Report (CAPER);
c. While held by CITY, the real property or the constructed facility is to be used
exclusively for the purposes for which acquisition or construction was originally approved by
COUNTY;
d. Written approval from COUNTY must be secured if the property or the facility is
to be put to an alternate use that is consistent with the COUNTY’S Five-Year Consolidated Plan or the
applicable federal regulations governing CDBG funds;
e. Should CITY desire to use the real property or the constructed facility, prior to
the completion of the mandatory five-year period, for a purpose not consistent with applicable federal
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regulations governing CDBG funds or to sell the real property or facility, then:
(1) If CITY desires to retain title, CITY will reimburse COUNTY the amount
that represents the percentage of current fair market value that is identical to the percentage that CDBG
funds initially comprised of monies paid to acquire the property or construct the facility; or
(2) If CITY sells the property or facility or is required to sell the property or
facility, CITY shall reimburse COUNTY the amount that represents the percentage of proceeds
realized by the sale that is identical to the percentage that CDBG funds initially comprised of monies
paid to acquire the property or construct the facility. This percentage amount will be calculated after
deducting all actual and reasonable cost of sale from the sale proceeds.
26. ENTIRE AGREEMENT. This Supplemental Agreement, including any attachments or
exhibits hereto constitutes the entire Supplemental Agreement of the parties with respect to its subject
matter and supersedes all prior and contemporaneous representations, proposals, discussions and
communications, whether oral or in writing. No oral understanding or agreement not incorporated herein
shall be binding on any of the parties hereto. Each of the attachments and exhibits attached hereto is
incorporated herein by this reference.
27. SEVERABILITY. Each section, paragraph and provision of this Supplemental
Agreement is severable from each other provision, and if any provision or part thereof is declared invalid,
the remaining provisions shall remain in full force and effect.
28. EMPLOYMENT OPPORTUNITIES TO BE CAUSED BY PROJECT. CITY agrees to
notify in writing, and to cause any subcontractor implementing CDBG-funded Projects to notify, in
writing, the Riverside County Workforce Development Center of any and all job openings that are caused
by the CDBG-funded Projects under this Supplemental Agreement.
29. MINISTERIAL ACTS. The Director of Housing and Workforce Solutions or designee(s)
are authorized to take such ministerial actions as may be necessary or appropriate to implement the terms,
provisions, and conditions of this Supplemental Agreement as it may be amended from time-to-time by
COUNTY.
30. PROJECT ELIGIBILITY. As to CITY or its claimants, COUNTY shall bear no liability
for any later determination by the United States Government, the U.S. Department of Housing and Urban
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Development, or any other person or entity that CITY is or is not eligible under 24 CFR Part 570 to
receive CDBG entitlement funds from the COUNTY.
31. SOURCE OF FUNDING. CITY acknowledges that the source of funding pursuant to this
Supplemental Agreement is Community Development Block Grant funds (CFDA 14.218), and the Grant
Award Number is B-24-UC-06-0506.
32. ASSIGNMENT. The CITY shall not make any assignment or transfer in any form with
respect to this Supplemental Agreement, without prior written approval of the COUNTY.
33. INTERPRETATION AND GOVERNING LAW. This Supplemental Agreement and any
dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State
of California. This Supplemental Agreement shall be construed as a whole according to its fair language
and common meaning to achieve the objectives and purposes of the parties hereto, and the rule of
construction to the effect that ambiguities are to be resolved against the drafting party shall not be
employed in interpreting this Supplemental Agreement, all parties having been represented by counsel
in the negotiation and preparation hereof.
34. WAIVER. Failure by a party to insist upon the strict performance of any of the
provisions of this Supplemental Agreement by the other party, or the failure by a party to exercise its
rights upon the default of the other party, shall not constitute a waiver of such party’s rights to insist and
demand strict compliance by the other party with the terms of this Supplemental Agreement thereafter.
35. JURISDICTION AND VENUE: Any action at law or in equity arising under this
Supplemental Agreement or brought by a party hereto for the purpose of enforcing, construing or
determining the validity of any provision of this Supplemental Agreement shall be filed only in the
Superior Court of the State of California, located in Riverside, California, and the parties hereto waive
all provisions of law providing for the filing, removal or change of venue to any other court or jurisdiction
36. USE OF PROPERTY. Whenever federal CDBG funds or program income are used, in
whole or in part, for the purchase of equipment or personal property, the property shall not be transferred
from its originally funded use, by CITY or the CITY’S subcontractor implementing the CDBG-funded
activity, for a period of five (5) years from the close-out date of the grant from which CDBG assistance
was provided. The CITY shall maintain a current inventory for COUNTY monitoring and review.
37. AUTHORITY TO EXECUTE. The persons executing this Supplemental Agreement or
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exhibits attached hereto on behalf of the parties to this Supplemental Agreement hereby warrant and
represent that they have the authority to execute this Supplemental Agreement and warrant and represent
that they have the authority to bind the respective parties to this Supplemental Agreement to the
performance of its obligations hereunder.
38. EFFECTIVE DATE. The effective date of this Supplemental Agreement is the date the
parties sign the Supplemental Agreement. If the parties sign the Supplemental Agreement on more than
one date, then the last date the Supplemental Agreement is signed by a party shall be the effective date.
39. COUNTERPARTS. This Supplemental Agreement may be signed by the different
parties hereto in counterparts, each of which shall be an original but all of which together shall constitute
one and the same agreement.
40. FORCE MAJEURE.
A. Performance by either party hereunder shall not be deemed to be in default where
delays or defaults are due to war, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires,
casualties, acts of God, acts of the public enemy, epidemics, pandemic, quarantine restrictions, freight
embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe
weather, inability to secure necessary labor, material or tools, delays of any contractor, sub-contractor
or supplier, acts of the other party, acts or failure to act of a public or governmental agency or entity, or
any causes beyond the control or without the fault of the party claiming an extension of time to perform.
B. An extension of time for any such cause (a “Force Majeure Delay”) shall be for
the period of the enforced delay and shall commence to run from the time of the commencement of the
cause, if notice by the party claiming such extension is sent to the other party within thirty (30) calendar
days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the
foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such delay
and interference delivers to the other party written notice describing the event, its cause, when and how
such party obtained knowledge, the date the event commenced, and the estimated delay resulting
therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within thirty (30)
calendar days after it obtains knowledge of the event.
41. MODIFICATION OF AGREEMENT. This Supplemental Agreement may be modified
or amended only by a writing signed by the duly authorized and empowered representative of COUNTY
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and CITY respectively.
42. DIGITAL AND ELECTRONIC SIGNATURES. The parties agrees to the use of electronic
signatures, such as digital signatures that meet the requirements of the California Uniform Electronic
Transactions Act ((“CUETA”) Cal. Civ. Code §§ 1633.1 to 1633.17). The parties further agree that the
electronic signatures of the parties included in this Agreement are intended to authenticate this writing
and to have the same force and effect as manual signatures. Electronic signature means an electronic
sound, symbol, or process attached to or logically associated with an electronic record and executed or
adopted by a person with the intent to sign the electronic record pursuant to CUETA as amended from
time to time. Digital signature means an electronic identifier, created by computer, intended by the party
using it to have the same force and effect as the use of a manual signature, and shall be reasonably relied
upon by the parties. For purposes of this section, a digital signature is a type of "electronic signature"
as defined in subdivision (i) of Section 1633.2 of the Civil Code.
[Remainder of Page Intentionally Blank]
[Signatures on Following Page]
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IN WITNESS WHEREOF, the COUNTY and the CITY have executed this Agreement as of the
dates set forth below.
COUNTY OF RIVERSIDE, CITY OF LAKE ELSINORE,
a political subdivision of the A general law city
State of California
BY: ____________________________ BY: _________________________
Juan Garcia, Name:
Deputy Director
Title:
Date: Date:
APPROVED AS TO FORM: ATTEST:
MINH C. TRAN
COUNTY COUNSEL
By: ____________________________ BY: _________________________
Paula S. Salcido, City Clerk
Deputy County Counsel
APPROVED AS TO FORM:
BY: __________________________
City Attorney
EXHIBIT "R"
24 C.F.R. § 5.109
Equal participation of faith-based organizations in
HUD programs and activities.
Effective: May 4, 2016
(a) Purpose.
Consistent with Executive Order 13279 (issued on December 12, 2002, 67 FR 77141), entitled “Equal Protection
of the Laws for Faith–Based and Community Organizations,” as amended by Executive Order 13559 (issued on
November 17, 2010, 75 FR 71319), entitled “Fundamental Principles and Policymaking Criteria for Partnerships
With Faith–Based and Other Neighborhood Organizations,”, and further amended by Executive Order 13831
(issued on May 3, 2018, 83 FR 20715) entitled “Establishment of a White House Faith and Opportunity Initiative,”
this section describes requirements for ensuring the equal participation of faith-based organizations in HUD
programs and activities. These requirements apply to all HUD programs and activities, including all of HUD’s
Native American Programs, except as may be otherwise noted in the respective program regulations in title 24 of
the Code of Federal Regulations (CFR), or unless inconsistent with certain HUD program authorizing statutes.
b) Definitions. The following definitions apply to this section:
Direct Federal financial assistance means Federal financial assistance provided when a Federal Government
agency or an intermediary, as defined in this section, selects the provider and either purchases services from that
provider (i.e., via a contract) or awards funds to that provider to carry out an activity (e.g., via grant, sub-grant,
sub-award, or cooperative agreement). The recipients of sub-grants or sub-awards that receive Federal financial
assistance through State-administered programs (e.g., flow-through programs) are considered recipients of direct
Federal financial assistance. In general, Federal financial assistance shall be treated as direct, unless it meets the
definition of indirect Federal financial assistance.
Federal financial assistance means assistance that non–Federal entities receive or administer in the forms of grants,
contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or
other assistance, but does not include a tax credit, deduction, or exemption.
Indirect Federal financial assistance means Federal financial assistance provided when the choice of the provider
is placed in the hands of the beneficiary, and the cost of that service is paid through a voucher, certificate, or other
similar means of Government-funded payment. Federal financial assistance provided to an organization is
considered indirect when the Government program through which the beneficiary receives the voucher, certificate,
or other similar means of Government-funded payment is neutral toward religion meaning that it is available to
providers without regard to the religious or non-religious nature of the institution and there are no program
incentives that deliberately skew for or against religious or secular providers; and the organization receives the
assistance as a result of a genuine, independent choice of the beneficiary.
Intermediary means an entity, including a nongovernmental organization, acting under a contract, grant, or other
agreement with the Federal Government or with a State, tribal or local government that accepts Federal financial
assistance and distributes that assistance to other entities that, in turn, carry out activities under HUD programs.
(c) Equal participation of faith-based organizations in HUD programs and activities.
Faith-based organizations are eligible, on the same basis as any other organization, to participate in any HUD
program or activity, considering any permissible accommodations, particulary under the Religious Freedome
Restoration Act. Neither the Federal Government, nor a State, tribal or local government, nor any other entity that
administers any HUD program or activity, shall discriminate against an organization on the basis of the
organization’s religious character, affiliation, or lack thereof, or on the basis of the organization’s religious
exercise. For purposes of this part, to discriminate against an organization on the basis of the organization’s
religious exercise means to disfavor an organization, including by failing to select an organization, disqualifying
an organization, or imposing any condition or selection criterion that otherwise disfavors or penalizes an
organization in the selection process or has such an effect:
(1) Because of conduct that would not be considered grounds to disfavor a secular organization;
(2) Because of conduct that must or could be granted an appropriate accommodation in a manner consistent with
RFRA (42 U.S.C. 2000bb through 2000bb-4) or the Religion Clauses of the First Amendment to the Constitution;
or
(3) Because of the actual or suspected religious motivation of the organization's religious exercise.
(4) In addition, decisions about awards of Federal financial assistance must be free from political interference or
even the appearance of such interference and must be made on the basis of merit, not based on the organization's
religious character, affiliation, or lack thereof, or based on the organization's religious exercise. Notices of funding
availability, grant agreements, and cooperative agreements shall include language substantially similar to that in
appendix A to this subpart, where faith-based organizations are eligible for such opportunities.
(d) Independence and identity of faith-based organizations.
(1) A faith-based organization that applies for, or participates in, a HUD program or activity supported with
Federal financial assistance retains its autonomy, right of expression, religious character, authority over its
governance, and independence, and may continue to carry out its mission, including the definition, development,
practice, and expression of its religious beliefs. A faith-based organization that receives Federal financial
assistance from HUD does not lose the protections of law.
(2) A faith-based organization that receives direct Federal financial assistance may use space (including a
sanctuary, chapel, prayer hall, or other space) in its facilities (including a temple, synagogue, church, mosque, or
other place of worship) to carry out activities under a HUD program without concealing, altering, or removing
religious art, icons, scriptures, or other religious symbols. In addition, a faith-based organization participating in
a HUD program or activity retains its authority over its internal governance, and may retain religious terms in its
organization’s name, select its board members and employees on the basis of their acceptance of or adherence to
the religious tenets of the organization consistent with paragraph (i) of this section), and include religious
references in its organization’s mission statements and other governing documents.
(e) Explicitly religious activities.
If an organization engages in explicitly religious activities (including activities that involve overt religious content
such as worship, religious instruction, or proselytization), the explicitly religious activities must be offered
separately, in time or location, from the programs or activities supported by direct Federal financial assistance and
participation must be voluntary for the beneficiaries of the programs or activities that receive direct Federal
financial assistance. The use of indirect Federal financial assistance is not subject to this restriction. Nothing in
this part restricts HUD’s authority under applicable Federal law to fund activities, that can be directly funded by
the Government consistent with the Establishment Clause of the U.S. Constitution.
(f) Intermediary responsibilities to ensure equal participation of faith-based organizations in HUD programs.
If an intermediary - acting under a contract, grant, or other agreement with the Federal Government or with a
State, tribal or local government that is administering a program supported by Federal financial assistance - is
given the authority to select a nongovernmental organization to receive Federal financial assistance under a
contract, grant, sub-grant, sub-award, or cooperative agreement, the intermediary must ensure that such
organization complies with the requirements of this section. If the intermediary is a nongovernmental
organization, it retains all other rights of a nongovernmental organization under the program’s statutory and
regulatory provisions.
(g) Nondiscrimination requirements.
Any organization that receives Federal financial assistance under a HUD program or activity shall not, in
providing services with such assistance or carrying out activities with such assistance, discriminate against a
beneficiary or prospective beneficiary on the basis of religion, religious belief, a refusal to hold a religious
belief, or a refusal to attend or participate in a religious practice. However, an organization that participates in a
program funded by indirect Federal financial assistance need not modify its program or activities to
accommodate a beneficiary who chooses to expend the indirect aid on the organization's program and may
require attendance at all activities that are fundamental to the program.
(h) No additional assurances from faith-based organizations.
A faith-based organization is not rendered ineligible by its religious nature to access and participate
in HUD programs. Absent regulatory or statutory authority, no notice of funding availability, grant agreement,
cooperative agreement, covenant, memorandum of understanding, policy, or regulation that is used by HUD or a
recipient or intermediary in administering Federal financial assistance from HUD shall require otherwise eligible
faith-based organizations to provide assurances or notices where they are not required of similarly situated secular
organizations. All organizations that participate in HUD programs or activities, including organizations with
religious character or affiliations, must carry out eligible activities in accordance with all program requirements,
subject to any required or appropriate accommodation, particularly under the Religious Freedom Restoration Act,
and other applicable requirements governing the conduct of HUD-funded activities, including those prohibiting
the use of direct financial assistance to engage in explicitly religious activities. No notice of funding availability,
grant agreement, cooperative agreement, covenant, memorandum of understanding, policy, or regulation that is
used by HUD or a recipient or intermediary in administering financial assistance from HUD shall disqualify
otherwise eligible faith-based organizations from participating in HUD's programs or activities because such
organization is motivated or influenced by religious faith to provide such programs and activities, or because of
its religious character or affiliation, or on grounds that discriminate against an organization on the basis of the
organization's religious exercise, as defined in this part.
(i) Exemption from Title VII employment discrimination requirements.
A religious organization’s exemption from the Federal prohibition on employment discrimination on the basis of
religion, set forth in section 702(a) of the Civil Rights Act of 1964 (42 U.S.C. 2000e–1), is not forfeited when the
organization participates in a HUD program. Some HUD programs, however, contain independent statutory
provisions that impose certain nondiscrimination requirements on all grantees. Accordingly, grantees should
consult with the appropriate HUD program office to determine the scope of applicable requirements.
(j) Acquisition, construction, and rehabilitation of structures.
Direct Federal financial assistance may be used for the acquisition, construction, or rehabilitation of structures
only to the extent that those structures are used for conducting eligible activities under a HUD program or activity.
Where a structure is used for both eligible and explicitly religious activities (including activities that involve overt
religious content such as worship, religious instruction, or proselytization), direct Federal financial assistance may
not exceed the cost of the share of acquisition, construction, or rehabilitation attributable to eligible activities in
accordance with the cost accounting requirements applicable to the HUD program or activity. However,
acquisition, construction, or rehabilitation of sanctuaries, chapels, or other rooms that a HUD–funded faith-based
organization uses as its principal place of worship, may not be paid with direct Federal financial assistance.
Disposition of real property by a faith-based organization after its use for an authorized purpose, or any change in
use of the property from an authorized purpose, is subject to Government-wide regulations governing real property
disposition (2 CFR part 200, subpart D) and the HUD program regulations, as directed by HUD.
(k) Commingling of Federal and State, tribal, and local funds.
If a State, tribal, or local government voluntarily contributes its own funds to supplement direct Federal financial
assistance for an activity, the State, tribal or local government has the option to segregate those funds or
commingle them with the direct Federal financial assistance. However, if the funds are commingled, the
requirements of this section apply to all of the commingled funds. Further, if a State, tribal, or local government
is required to contribute matching funds to supplement direct Federal financial assistance for an activity, the
matching funds are considered commingled with the direct Federal financial assistance and, therefore, subject to
the requirements of this section. Some HUD programs’ requirements govern any activity assisted under those
programs. Accordingly, recipients should consult with the appropriate HUD program office to determine the scope
of applicable requirements.
(l) Tax exempt organizations.
In general, HUD does not require that a recipient, including a faith-based organization, obtain tax-exempt status
under section 501(c)(3) of the Internal Revenue Code to be eligible for funding under HUD programs. Many grant
programs, however, do require an organization to be a nonprofit organization in order to be eligible for funding.
Notices of funding availability that require organizations to have nonprofit status will specifically so indicate in
the eligibility section of the notice of funding availability. In addition, if any notice of funding availability requires
an organization to maintain tax-exempt status, it will expressly state the statutory authority for requiring such
status. Applicants should consult with the appropriate HUD program office to determine the scope of any
applicable requirements. In HUD programs in which an applicant must show that it is a nonprofit organization but
this is not statutorily defined, the applicant may do so by any of the following means:
(1) Proof that the Internal Revenue Service currently recognizes the applicant as an organization to which
contributions are tax deductible under section 501(c)(3) of the Internal Revenue Code;
(2) A statement from a State or other governmental taxing body or the State secretary of State certifying that -
(i) The organization is a nonprofit organization operating within the State; and
(ii) No part of its net earnings may benefit any private shareholder or individual;
(3) A certified copy of the applicant's certificate of incorporation or similar document that clearly establishes the
nonprofit status of the applicant;
(4) Any item described in paragraphs (l)(1) through (3) of this section, if that item applies to a State of national
parents organization, together with a statement by the State of parent organization that the applicant is a local
nonprofit affiliate; or
(5) For an entity that holds a sincerely held religious belief that it cannot apply for a determination as an entity
that is tax-exempt under section 501(c)(3) of the Internal Revenue Code, evidence sufficient to establish that the
entity would otherwise qualify as a nonprofit organization under paragraphs (l)(1) through (4) of this section.
(m) Rule of construction.
Neither HUD nor any recipient or other intermediary receiving funds under any HUD program or activity shall
construe these provisions in such a way as to advantage or disadvantage faith-based organizations affiliated with
historic or well-established religions or sects in comparison with other religions or sects.
Credits
[69 FR 41717, July 9, 2004; 80 FR 75934, Dec. 7, 2015; 81 FR 19416, April 4, 2016; 85 FR 82315, Dec 17, 2020]
SOURCE: 61 FR 5202, Feb. 9, 1996; 61 FR 9041, March 6, 1996; 61 FR 9537, March 8, 1996; 61 FR 11113,
March 18, 1996; 61 FR 13616, March 27, 1996; 61 FR 54498, Oct. 18, 1996; 70 FR 77743, Dec. 30, 2005; 73 FR
72340, Nov. 28, 2008; 75 FR 66258, Oct. 27, 2010; 77 FR 5674, Feb. 3, 2012; 80 FR 42352, July 16, 2015; 81
FR 19416, April 4, 2016; 81 FR 80798, Nov. 16, 2016; 81 FR 90657, Dec. 14, 2016, unless otherwise noted.
AUTHORITY: 12 U.S.C. 1701x; 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n, 3535(d); Sec. 327, Pub.L. 109–
115, 119 Stat. 2936; Sec. 607, Pub.L. 109–162, 119 Stat. 3051 (42 U.S.C. 14043e et seq.); E.O. 13279, 67 FR
77141, 3 CFR, 2002 Comp., p. 258; and E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273.; 29 U.S.C. 794,
42 U.S.C. 1437a, 1437c, 1437c–1(d), 1437d, 1437f, 1437n, 3535(d), and Sec. 327, Pub.L. 109–115, 119 Stat.
2936; 42 U.S.C. 3600–3620; 42 U.S.C. 5304(b); 42 U.S.C. 12101 et seq.; 42 U.S.C. 12704–12708; E.O. 11063,
27 FR 11527, 3 CFR, 1958–1963 Comp., p. 652; E.O. 12892, 59 FR 2939, 3 CFR, 1994 Comp., p. 849.
EXHIBIT “S”
Page 1 of 2
Economic Opportunities for Low- and Very Low-Income Persons
CONTRACT REQUIREMENTS
24 CFR Part 75
RIVERSIDE COUNTY
Section 75.1 Purpose
This part establishes the requirements to be followed to ensure the objectives of Section 3 of the
Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) (Section 3) are met. The
purpose of Section 3 is to ensure that economic opportunities, most importantly employment,
generated by certain HUD financial assistance shall be directed to low- and very low-income
persons, particularly those who are recipients of government assistance for housing or residents
of the community in which the Federal assistance is spent.
Section 75.3 Applicability
(a) General applicability. Section 3 applies to public housing financial assistance and Section 3
projects, as follows:
(1) Public housing financial assistance. Public housing financial assistance means:
(i) Development assistance provided pursuant to section 5 of the United States Housing Act of
1937 (the 1937 Act);
(ii) Operations and management assistance provided pursuant to section 9(e) of the 1937 Act;
(iii) Development, modernization, and management assistance provided pursuant to section 9(d)
of the 1937 Act; and
(iv) The entirety of a mixed-finance development project as described in 24 CFR 905.604,
regardless of whether the project is fully or partially assisted with public housing financial
assistance as defined in paragraphs (a)(1)(i) through (iii) of this section.
(2) Section 3 projects. (i) Section 3 projects means housing rehabilitation, housing
construction, and other public construction projects assisted under HUD programs that
provide housing and community development financial assistance when the total amount
of assistance to the project exceeds a threshold of $200,000. The threshold is $100,000 where
the assistance is from the Lead Hazard Control and Healthy Homes programs, as
authorized by Sections 501 or 502 of the Housing and Urban Development Act of 1970 (12
U.S.C. 1701z-1 or 1701z-2), the Lead-Based Paint Poisoning Prevention Act (42 U.S.C 4801
et seq.); and the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C.
4851 et seq.). The project is the site or sites together with any building(s) and improvements
located on the site(s) that are under common ownership, management, and financing.
(ii) The Secretary must update the thresholds provided in paragraph (a)(2)(i) of this section not
less than once every 5 years based on a national construction cost inflation factor through Federal
Register notice not subject to public comment. When the Secretary finds it is warranted to ensure
compliance with Section 3, the Secretary may adjust, regardless of the national construction cost
factor, such thresholds through Federal Register notice, subject to public comment.
(iii) The requirements in this part apply to an entire Section 3 project, regardless of whether the
project is fully or partially assisted under HUD programs that provide housing and community
development financial assistance.
(b) Contracts for materials. Section 3 requirements do not apply to material supply contracts.
(c) Indian and Tribal preferences. Contracts, subcontracts, grants, or subgrants subject to Section
7(b) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 5307(b)) or
subject to tribal preference requirements as authorized under 101(k) of the Native American
Housing Assistance and Self-Determination Act (25 U.S.C. 4111(k)) must provide preferences
in employment, training, and business opportunities to Indians and Indian organizations, and are
therefore not subject to the requirements of this part.
(d) Other HUD assistance and other Federal assistance. Recipients that are not subject to Section
3 are encouraged to consider ways to support the purpose of Section 3.
Section 75. 5 Definitions.
The terms HUD, Public housing, and Public Housing Agency (PHA) are defined in 24 CFR part
5. The following definitions also apply to this part:
1937 Act means the United States Housing Act of 1937, 42 U.S.C. 1437 et seq.
Contractor means any entity entering into a contract with:
(1) A recipient to perform work in connection with the expenditure of public housing
financial assistance or for work in connection with a Section 3 project; or
(2) A subrecipient for work in connection with a Section 3 project.
Labor hours means the number of paid hours worked by persons on a Section 3 project or by
persons employed with funds that include public housing financial assistance.
Low-income person means a person as defined in Section 3(b)(2) of the 1937 Act.
Material supply contracts means contracts for the purchase of products and materials, including,
but not limited to, lumber, drywall, wiring, concrete, pipes, toilets, sinks, carpets, and office
supplies.
Professional services means non-construction services that require an advanced degree or
professional licensing, including, but not limited to, contracts for legal services, financial
consulting, accounting services, environmental assessment, architectural services, and civil
engineering services.
Public housing financial assistance means assistance as defined in §75.3(a)(1).
Public housing project is defined in 24 CFR 905.108.
Recipient means any entity that receives directly from HUD public housing financial assistance
or housing and community development assistance that funds Section 3 projects, including, but
not limited to, any State, local government, instrumentality, PHA, or other public agency, public
or private nonprofit organization.
Section 3 means Section 3 of the Housing and Urban Development Act of 1968, as amended (12
U.S.C. 1701u).
Section 3 business concern means:
(1) A business concern meeting at least one of the following criteria, documented within the last
six-month period:
(i) It is at least 51 percent owned and controlled by low- or very low-income persons;
(ii) Over 75 percent of the labor hours performed for the business over the prior three-
month period are performed by Section 3 workers; or
(iii) It is a business at least 51 percent owned and controlled by current public housing
residents or residents who currently live in Section 8-assisted housing.
(2) The status of a Section 3 business concern shall not be negatively affected by a prior arrest or
conviction of its owner(s) or employees.
(3) Nothing in this part shall be construed to require the contracting or subcontracting of a Section
3 business concern. Section 3 business concerns are not exempt from meeting the specifications
of the contract.
Section 3 project means a project defined in §75.3(a)(2).
Section 3 worker means:
(1) Any worker who currently fits or when hired within the past five years fit at least one of the
following categories, as documented:
(i) The worker's income for the previous or annualized calendar year is below the income
limit established by HUD.
(ii) The worker is employed by a Section 3 business concern.
(iii) The worker is a YouthBuild participant.
(2) The status of a Section 3 worker shall not be negatively affected by a prior arrest or conviction.
(3) Nothing in this part shall be construed to require the employment of someone who meets this
definition of a Section 3 worker. Section 3 workers are not exempt from meeting the
qualifications of the position to be filled.
Section 8-assisted housing refers to housing receiving project-based rental assistance or tenant-
based assistance under Section 8 of the 1937 Act.
Service area or the neighborhood of the project means an area within one mile of the Section 3
project or, if fewer than 5,000 people live within one mile of a Section 3 project, within a circle
centered on the Section 3 project that is sufficient to encompass a population of 5,000 people
according to the most recent U.S. Census.
Small PHA means a public housing authority that manages or operates fewer than 250 public
housing units.
Subcontractor means any entity that has a contract with a contractor to undertake a portion of
the contractor's obligation to perform work in connection with the expenditure of public housing
financial assistance or for a Section 3 project.
Subrecipient has the meaning provided in the applicable program regulations or in 2 CFR 200.93.
Targeted Section 3 worker has the meanings provided in §§75.11, 75.21, or 75.29, and does not
exclude an individual that has a prior arrest or conviction.
Very low-income person means the definition for this term set forth in section 3(b)(2) of the 1937
Act.
YouthBuild programs refers to YouthBuild programs receiving assistance under the Workforce
Innovation and Opportunity Act (29 U.S.C. 3226).
Subpart C—Additional Provisions for Housing and Community Development
Financial Assistance
§75.19 Requirements.
(a) Employment and training. (1) To the greatest extent feasible, and consistent with existing
Federal, state, and local laws and regulations, recipients covered by this subpart shall ensure that
employment and training opportunities arising in connection with Section 3 projects are provided to
Section 3 workers within the metropolitan area (or nonmetropolitan county) in which the project is
located.
(2) Where feasible, priority for opportunities and training described in paragraph (a)(1) of this
section should be given to:
(i) Section 3 workers residing within the service area or the neighborhood of the project, and
(ii) Participants in YouthBuild programs.
(b) Contracting. (1) To the greatest extent feasible, and consistent with existing Federal, state, and
local laws and regulations, recipients covered by this subpart shall ensure contracts for work awarded
in connection with Section 3 projects are provided to business concerns that provide economic
opportunities to Section 3 workers residing within the metropolitan area (or nonmetropolitan county)
in which the project is located.
(2) Where feasible, priority for contracting opportunities described in paragraph (b)(1) of this
section should be given to:
(i) Section 3 business concerns that provide economic opportunities to Section 3 workers residing
within the service area or the neighborhood of the project, and
(ii) YouthBuild programs.
§75.21 Targeted Section 3 worker for housing and community development financial assistance.
(a) Targeted Section 3 worker. A Targeted Section 3 worker for housing and community
development financial assistance means a Section 3 worker who is:
(1) A worker employed by a Section 3 business concern; or
(2) A worker who currently fits or when hired fit at least one of the following categories, as
documented within the past five years:
(i) Living within the service area or the neighborhood of the project, as defined in §75.5; or
(ii) A YouthBuild participant.
(b) [Reserved]
§75.23 Section 3 safe harbor.
(a) General. Recipients will be considered to have complied with requirements in this part, in the
absence of evidence to the contrary if they:
(1) Certify that they have followed the prioritization of effort in §75.19; and
(2) Meet or exceed the applicable Section 3 benchmark as described in paragraph (b) of this
section.
(b) Establishing benchmarks. (1) HUD will establish Section 3 benchmarks for Section 3 workers
or Targeted Section 3 workers or both through a document published in the FEDERAL REGISTER. HUD
may establish a single nationwide benchmark for Section 3 workers and a single nationwide
benchmark for Targeted Section 3 workers, or may establish multiple benchmarks based on geography,
the nature of the Section 3 project, or other variables. HUD will update the benchmarks through a
document published in the FEDERAL REGISTER, subject to public comment, not less frequently than
once every 3 years. Such notice shall include aggregate data on labor hours and the proportion of
recipients meeting benchmarks, as well as other metrics reported pursuant to §75.25 as deemed
appropriate by HUD, for the 3 most recent reporting years.
(2) In establishing the Section 3 benchmarks, HUD may consider the industry averages for labor
hours worked by specific categories of workers or in different localities or regions; averages for labor
hours worked by Section 3 workers and Targeted Section 3 workers as reported by recipients pursuant
to this section; and any other factors HUD deems important. In establishing the Section 3 benchmarks,
HUD will exclude professional services from the total number of labor hours as such hours are
excluded from the total number of labor hours to be reported per §75.25(a)(4).
(3) Section 3 benchmarks will consist of the following two ratios:
(i) The number of labor hours worked by Section 3 workers divided by the total number of labor
hours worked by all workers on a Section 3 project in the recipient's program year.
(ii) The number of labor hours worked by Targeted Section 3 workers as defined in §75.21(a),
divided by the total number of labor hours worked by all workers on a Section 3 project in the
recipient's program year.
§75.25 Reporting.
(a) Reporting of labor hours. (1) For Section 3 projects, recipients must report in a manner
prescribed by HUD:
(i) The total number of labor hours worked;
(ii) The total number of labor hours worked by Section 3 workers; and
(iii) The total number of labor hours worked by Targeted Section 3 workers.
(2) Section 3 workers' and Targeted Section 3 workers' labor hours may be counted for five years
from when their status as a Section 3 worker or Targeted Section 3 worker is established pursuant to
§75.31.
(3) The labor hours reported under paragraph (a)(1) of this section must include the total number
of labor hours worked on a Section 3 project, including labor hours worked by any subrecipients,
contractors and subcontractors that the recipient is required, or elects pursuant to paragraph (a)(4) of
this section, to report.
(4) Recipients reporting under this section, as well as subrecipients, contractors and
subcontractors who report to recipients, may report labor hours by Section 3 workers, under paragraph
(a)(1)(ii) of this section, and labor hours by Targeted Section 3 workers, under paragraph (a)(1)(iii) of
this section, from professional services without including labor hours from professional services in the
total number of labor hours worked under paragraph (a)(1)(i) of this section. If a contract covers both
professional services and other work and the recipient or contractor or subcontractor chooses not to
report labor hours from professional services, the labor hours under the contract that are not from
professional services must still be reported.
(5) Recipients may report their own labor hours or that of a subrecipient, contractor, or
subcontractor based on the employer's good faith assessment of the labor hours of a full-time or part-
time employee informed by the employer's existing salary or time and attendance based payroll
systems, unless the project or activity is otherwise subject to requirements specifying time and
attendance reporting.
(b) Additional reporting if Section 3 benchmarks are not met. If the recipient's reporting under
paragraph (a) of this section indicates that the recipient has not met the Section 3 benchmarks
described in §75.23, the recipient must report in a form prescribed by HUD on the qualitative nature of
its activities and those its contractors and subcontractors pursued. Such qualitative efforts may, for
example, include but are not limited to the following:
(1) Engaged in outreach efforts to generate job applicants who are Targeted Section 3 workers.
(2) Provided training or apprenticeship opportunities.
(3) Provided technical assistance to help Section 3 workers compete for jobs (e.g., resume
assistance, coaching).
(4) Provided or connected Section 3 workers with assistance in seeking employment including:
drafting resumes, preparing for interviews, and finding job opportunities connecting residents to job
placement services.
(5) Held one or more job fairs.
(6) Provided or referred Section 3 workers to services supporting work readiness and retention
(e.g., work readiness activities, interview clothing, test fees, transportation, child care).
(7) Provided assistance to apply for/or attend community college, a four-year educational
institution, or vocational/technical training.
(8) Assisted Section 3 workers to obtain financial literacy training and/or coaching.
(9) Engaged in outreach efforts to identify and secure bids from Section 3 business concerns.
(10) Provided technical assistance to help Section 3 business concerns understand and bid on
contracts.
(11) Divided contracts into smaller jobs to facilitate participation by Section 3 business concerns.
(12) Provided bonding assistance, guaranties, or other efforts to support viable bids from Section
3 business concerns.
(13) Promoted use of business registries designed to create opportunities for disadvantaged and
small businesses.
(14) Outreach, engagement, or referrals with the state one-stop system as defined in Section
121(e)(2) of the Workforce Innovation and Opportunity Act.
(c) Reporting frequency. Unless otherwise provided, recipients must report annually to HUD
under paragraph (a) of this section, and, where required, under paragraph (b) of this section, on all
projects completed within the reporting year in a manner consistent with reporting requirements for the
applicable HUD program.
§75.27 Contract provisions.
(a) Recipients must include language applying Section 3 requirements in any subrecipient
agreement or contract for a Section 3 project.
(b) Recipients of Section 3 funding must require subrecipients, contractors, and subcontractors to
meet the requirements of §75.19, regardless of whether Section 3 language is included in recipient or
subrecipient agreements, program regulatory agreements, or contracts.
Subpart D—Provisions for Multiple Funding Sources, Recordkeeping, and
Compliance
§75.29 Multiple funding sources.
(a) If a housing rehabilitation, housing construction or other public construction project is subject
to Section 3 pursuant to §75.3(a)(1) and (2), the recipient must follow subpart B of this part for the
public housing financial assistance and may follow either subpart B or C of this part for the housing
and community development financial assistance. For such a project, the following applies:
(1) For housing and community development financial assistance, a Targeted Section 3 worker is
any worker who meets the definition of a Targeted Section 3 worker in either subpart B or C of this
part; and
(2) The recipients of both sources of funding shall report on the housing rehabilitation, housing
construction, or other public construction project as a whole and shall identify the multiple associated
recipients. PHAs and other recipients must report the following information:
(i) The total number of labor hours worked on the project;
(ii) The total number of labor hours worked by Section 3 workers on the project; and
(iii) The total number of labor hours worked by Targeted Section 3 workers on the project.
(b) If a housing rehabilitation, housing construction, or other public construction project is subject
to Section 3 because the project is assisted with funding from multiple sources of housing and
community development assistance that exceed the thresholds in §75.3(a)(2), the recipient or recipients
must follow subpart C of this part, and must report to the applicable HUD program office, as
prescribed by HUD.
§75.31 Recordkeeping.
(a) HUD shall have access to all records, reports, and other documents or items of the recipient
that are maintained to demonstrate compliance with the requirements of this part, or that are
maintained in accordance with the regulations governing the specific HUD program by which the
Section 3 project is governed, or the public housing financial assistance is provided or otherwise made
available to the recipient, subrecipient, contractor, or subcontractor.
(b) Recipients must maintain documentation, or ensure that a subrecipient, contractor, or
subcontractor that employs the worker maintains documentation, to ensure that workers meet the
definition of a Section 3 worker or Targeted Section 3 worker, at the time of hire or the first reporting
period, as follows:
(1) For a worker to qualify as a Section 3 worker, one of the following must be maintained:
(i) A worker's self-certification that their income is below the income limit from the prior calendar
year;
(ii) A worker's self-certification of participation in a means-tested program such as public housing
or Section 8-assisted housing;
(iii) Certification from a PHA, or the owner or property manager of project-based Section 8-
assisted housing, or the administrator of tenant-based Section 8-assisted housing that the worker is a
participant in one of their programs;
(iv) An employer's certification that the worker's income from that employer is below the income
limit when based on an employer's calculation of what the worker's wage rate would translate to if
annualized on a full-time basis; or
(v) An employer's certification that the worker is employed by a Section 3 business concern.
(2) For a worker to qualify as a Targeted Section 3 worker, one of the following must be
maintained:
(i) For a worker to qualify as a Targeted Section 3 worker under subpart B of this part:
(A) A worker's self-certification of participation in public housing or Section 8-assisted housing
programs;
(B) Certification from a PHA, or the owner or property manager of project-based Section 8-
assisted housing, or the administrator of tenant-based Section 8-assisted housing that the worker is a
participant in one of their programs;
(C) An employer's certification that the worker is employed by a Section 3 business concern; or
(D) A worker's certification that the worker is a YouthBuild participant.
(ii) For a worker to qualify as a Targeted Section 3 worker under subpart C of this part:
(A) An employer's confirmation that a worker's residence is within one mile of the work site or, if
fewer than 5,000 people live within one mile of a work site, within a circle centered on the work site
that is sufficient to encompass a population of 5,000 people according to the most recent U.S. Census;
(B) An employer's certification that the worker is employed by a Section 3 business concern; or
(C) A worker's self-certification that the worker is a YouthBuild participant.
(c) The documentation described in paragraph (b) of this section must be maintained for the time
period required for record retentions in accordance with applicable program regulations or, in the
absence of applicable program regulations, in accordance with 2 CFR part 200.
(d) A PHA or recipient may report on Section 3 workers and Targeted Section 3 workers for five
years from when their certification as a Section 3 worker or Targeted Section 3 worker is established.
§75.33 Compliance.
(a) Records of compliance. Each recipient shall maintain adequate records demonstrating
compliance with this part, consistent with other recordkeeping requirements in 2 CFR part 200.
(b) Complaints. Complaints alleging failure of compliance with this part may be reported to the
HUD program office responsible for the public housing financial assistance or the Section 3 project, or
to the local HUD field office.
(c) Monitoring. HUD will monitor compliance with the requirements of this part. The applicable HUD
program office will determine appropriate methods by which to oversee Section 3 compliance. HUD
may impose appropriate remedies and sanctions in accordance with the laws and regulations for the
program under which the violation was found