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GOOK 108 PAGE 122 <br />a. Preparing a Participating Party Agreement that outlines the <br />responsibilities of the county to the business and the business' responsibilities to the <br />county. Some of these requirements are fairly standard and are established by the <br />Department during the application review. Other requirements are established based <br />on the uniqueness of the application; <br />b. Preparing and recording the loan and collateral documents; <br />C. Undertaking a Financial Underwriting Analysis as explained in the <br />CDBG Rule and 24 C.F.R. 570; and . <br />d. Conducting a loan dosing. <br />3. The county may use up to eight (8%) percent of the grant award for <br />administrative costs that are required to effectively administer the grant. This may be <br />used by the county to offset its own grant related costs, to hire a consultant, or for a <br />combination of self -administration and consultant administration. <br />4. The county is not required to guarantee repayment of the CDBG funds <br />should the assisted business go bankrupt and the loan or any part thereof never be <br />repaid by the business. <br />5. Should the business fail, the county is expected to foreclose (if it is <br />financially wise to do so), attempt to recover and secure any assets against which the <br />county has a mortgage or lien, and make a good faith effort to use the assets to create <br />additional jobs. The cost of such actions would be deducted from the resulting <br />recovery. The Department does not expect a local government to expend more funds <br />attempting recovery than recovery would provide. Nor would the Department expect a <br />local government to spend a large sum to buy out a first mortgage to recover only a <br />small second mortgage, or a second mortgage that had little if any real value. The few <br />tunes that failures have occurred where a loan had been made, the Department and the <br />local government have always been able to readily agree on a prudent course of action. <br />To my certain knowledge over the past nine years, this has never been a contentious <br />issue. <br />Should you have further questions or desire additional technical <br />assistance in this matter, please contact me at (850) 922-1892. <br />Sin , <br />Rids Stauts <br />Planning Manager <br />CC. Bob Keating, Community Development Director <br />,�er Radke, County Planner <br />JANUARY 19, 1999 <br />