USDA mabe. United States Department of Agriculture Rural Development Salt Lake City, Utah June 1, 2005 The City of Monticello PO Box 457 17 North 100 East Monticello, UT 84535 ATTN: GREG MARTIN SUBJECT: LETTER OF CONDITIONS $ 28,000 BUSINESS ENTERPRISE GRANT (RBEG) WIND RESOURCE ASSESSMENT FEASIBILITY STUDY This letter establishes the conditions that must be understood and agreed to by the City of Monticello before further consideration can be given to funding a Rural Business Enterprise Grant (RBEG) in the amount not to exceed $28,000. This letter of conditions does not constitute grant approval, nor does it ensure that funds are or will be available for the project. ‘This letter of conditions addresses only the $28,000 of $64,600 of the RBEG request. This $28,000 RBEG is funded from the Utah State FY2005 allocation. USDA will attempt to fund the additional $36,600 of RBEG funds requested from the National Office Reserve in July 2005 & subsequent funding cycles in FY 2006 if needed to complete the required funding for this project. None of the $28,000 RBEG funds can be disbursed until all project funding is in place. Please complete and return the attached Form RD 1942-46 "Letter of Intent to Meet Conditions" if you desire that further consideration be given to your application. Please note that USDA-Rural Development reserves the right to discontinue processing this request, and withdraw your application if Form RD 1942-46 “Letter of Intent to Meet Conditions” is not executed by the City of Monticello within 1 week of the date of this letter of conditions. Please also complete and return the attached Form RD 1940-1 "Request for Obligation of Funds" if you desire that further consideration be given to this RBEG request, Please only remit to this office Form RD 1940-1, and keep the attached RD Instruction 1942-G, Attachment 1, Section B “General Requirements for Administration of Rural Business Enterprise and Television Demonstration Grants” for your reference. This RBEG will be considered approved on the date a fully executed and signed copy of, Form 1940-1, "Request for Obligation of Funds" is retumed to you by this office. You 125 South State St, #4311, Salt Lake Gily, UT 84188, Phone (801) 524-4320, Fax (801) 524-4408 Commitod tthe ture ofl conennitos ural Development s an Equal Opportunity Lender, Provider, and Employer. Complaints of ciscrimination should be sent To USDA, Director, Office of Civil Rights, Washington, D. C. 20250-9410‘Throughout this letter or any form or document used in connection with the grant, whenever the words "Farmers Home Administration" (FmHA) or "Rural Economic and Community Development" (RECD) may appear, the words "United States of America” or "USDA -Rural Development” or “agency” may be substituted. Any changes in project cost, source of funds, scope of work or any other significant changes in the project or entity must be reported to and approved by USDA-Rural Development by written amendment to this letter. Failure to obtain prior approval of changes to the project cost, source of funds, scope of work or budget can result in suspension or termination of RBEG grant funds. This Grant request is subject to the following: PURPOSE CITY OF MONTICELLO must use RBG proceeds to promote the economic development of multiple small and emerging rural businesses, except as noted below in accordance with section 6014 of the 2002 farmbill. Businesses assisted with this RBEG must be located in, and primarily serve a rural area. Rural areas for the RBEG program are defined as communities with a population of 50,000 or less, and not located adjacent to urban areas of more than 50,000 population. For the State of Utah, itis easier to list communities that are not eligible for the RBEG program. The following communities are considered urban (50,000 or more population as listed in the 2000 census) and are NOT eligible areas for this program: Ogden, Layton, Salt Lake, Sandy, West Valley, West Jordan, Taylorsville, Orem, and Provo. Also, the following listed communities are adjacent to the above listed urban areas, and are also ineligible areas for this program: North Ogden, South Ogden, Harrisville, Washington Terrace, Riverdale, East Layton, Clearfield, Syracuse, Kaysville, Centerville, Woods Cross, Bountiful, North Salt Lake, South Salt Lake, Magna, Kearns, Taylorsville, Holladay, Sugar House, Murray, Midvale, Jordan, West Jordan, South Jordan, Draper, Pleasant Grove, Lindon, Lakeview, Ironton, and Springville. All other communities in Utah are eligible rural areas for this program. ‘Small and emerging businesses for the RBEG program are defined as having fewer than 50 new employees, and less than $1 million in gross revenues, EXCEPT that the small and emerging limitation will not apply to businesses with a principal office that is located on the land of an existing or former Native American Reservation and located in a city, town, or unincorporated area that has a population of not more than 5,000 inhabitants. ‘The specific purpose of this RBEG is to assist CITY OF MONTICELLO fund a “Wind Resource Assessment” project that will provide accurate and reliable wind resource data, which hopefully lead to a wind power project. Project will be used to purchase and install four (4) towers with anemometers for a total project cost of $68,000. The City of ‘Monticello is working with several land owners RBEG proceeds will be used to purchase and install equipment needed to install four towers with anemometers for wind resource assessment. (1) The funding is also contingent upon “The City of Monticello’ being verified as a duly organized and recognized public body, with the legal authority to operate, maintain, and manage the project funded in whole or in part with this grant.SOURCES AND USE OF FUNDS SOURCE OF FUNDS USDA-Rural Development (RBEG) FY 2005 State Office Funds ~ Additional funds needed to complete the project ~ Total USDA RD funds -- CITY OF MONTICELLO (Matching Funds-Cash)~ Total — ‘A. CITY OF MONTICELLO will maintain a separate ledger on the construction, contracts, equipment, labor, etc. funded with this RBEG. All matched funds for this project must deposited into this separate account at the same time the RBEG is closed. .. Matched funds will be expended before, or as equitably pro-rated with RBEG proceeds for like purpos . The City of Monticello will provide matching funds of $3,400 will be in the form of cash. The City of Monticello will have to provide appropriate permits, licenses, etc. necessary in order to purchase, build and operate the Wind Resource Assessment towers and show that is in compliance with zoning, local, state & other applicable Jaws, ordinances, etc. 0 mo A No grants funds will be disbursed unless all of the funds necessary to fund the total project are available, USE OF FUNDS Construction & Installation of Equipment for 4 anemometer towers: 1. Four towers with anemometers @ $12,000 ea.- 2. Labor, installation of 4 towers @ $4,000 e: 16,000 3. Land contracts @ $500/yt/tower for 2 yrs— 4,000 TOTAL PROJECT COST: — $ 68,000. $ 48,000 ORGANIZATION Eligible applicants for the RBEG program are limited to public bodies, private non-profit organizations, or Federally-recognized Indian Tribes. A. This letter of Conditions is issued on the basis that the City of Monticello is a duly organized and recognized public body, with the legal authority to operate, maintain, and manage the project funded in whole or in part with this grant. 1. The City of Monticello must provide USDA-Rural Development with a legal opinion (multi-opinion letter) ensuring that the City of Monticello is a duly organized and recognized public body, and has the legal authority to operate, maintain, and manage the project funded with this request. 2. The City of Monticello must provide USDA-Rural Development with a current Certificate of Good Standing (or equivalent Certificate of Existence) from the State of Utah.OFFICE OF GENERAL COUNSEL REVIEW A. The Office of General Counsel (OGC) (legal counsel for USDA-Rural Development) is required to review the organizational documents and legal opinion (multi-opinion letter), for the City of Monticello, and render an opinion to this office that the City of Monticello is a duly formed, organized and recognized and has the legal authority to operate, maintain, and manage the project funded with this request. B. OGC will also provide this office with grant closing instructions. C. OGC requires a minimum of 30 days to conduct this review and issue grant closing instructions. GRANT DISBURSEMENT This letter of conditions addresses only the $28,000 of $64,600 of the RBEG request. ‘This $28,000 RBEG is funded from the Utah State FY 2005 allocation, USDA will attempt to fund the additional $36,600 of RBEG funds requested from the National Office Reserve in July 2005 & subsequent funding cycles in FY2006 if needed to complete the required funding for this project. None of the $28,000 RBEG funds can be disbursed until all project funding is in place. Grant funds will be disbursed to CITY OF MONTICELLO by Electronic Funds Transfer (EFT) through the Automatic Clearing House (ACH) network. USDA Rural Development will request funds disbursement through the EFT/ACH, system after acceptable review of Form SF-270 "Request for Advance or Reimbursement" from CITY OF MONTICELLO as discussed below. Except for grants for revolving loan funds, grant funds will be disbursed by the USDA-Rural Development ona reimbursement basis. All matching funds for this project will be expended before, or as equitably pro rated with RBEG proceeds for like purposes. A. CITY OF MONTICELLO must provide USDA-Rural Development with a properly completed SF-3881 "Electronic Funds Transfer Payment Enrollment Form" necessary to establish a ACH electronic funds transfer system a minimum of three weeks before grants funds will be required: B. USDA-Rural Development will request funds disbursement through the EFT/ACH system after acceptable review of Form SF-270 "Request for Advance or Reimbursement" from CITY OF MONTICELLO. 1. Form SF-270 "Request for Advance or Reimbursement” must be completed by CITY OF MONTICELLO and submitted to USDA-RURAL_ DEVELOPMENT to request RBEG funds. 2. USDA-Rural Development will request funds disbursement through the EFT/ACH system after acceptable review of Form SF-270. Funds will be sent to CITY OF MONTICELLO via EFT within 30 days after receipt of a properly completed SF-270 form. 3. Form SF-270 “Request for Advance or Reimbursement” must be supported with a invoice for services funded with this request in accordance with the “Use of RBEG Funds’ section of this letter of conditions. 4. Requests cannot exceed one advance every 30 days. C. CITY OF MONTICELLO shall provide effective control and accountability of all RBEG funds.CONTRACTS FOR PROFESSIONAL SERVICES, A. Any contracts or other forms of agreement between CITY OF MONTICELLO and other professional and technical representatives for this project are subject to Rural Development's concurrence. B. Fees for such services must be reasonable i.e., not in excess of those ordinarily charged by the profession for similar work when Rural Development financing is not involved. RECORDS AND REPORTS A. CITY OF MONTICELLO must ensure that this project is completed in accordance with the scope of work and this letter of conditions. B. CITY OF MONTICELLO will provide a financial management system which will: 1. Provide accurate, current, and complete disclosure of the financial result of the RBEG. 2. Include records, which adequately identify the source and application of funds for the RBEG supporting activities, together with documentation to support the records. Those records shall contain information pertaining to the RBEG award and authorizations, obligations, un-obligated balances, assets, liabilities, outlays, and income, 3. Provide effective control over and accountability for all funds. CITY OF MONTICELLO shall adequately safeguard all such assets and shall assure that RBEG proceeds are used solely for authorized purposes. C. CITY OF MONTICELLO shall constantly monitor performance to ensure that time schedules are being met, projected work by time periods is being accomplished, and other performance objectives are being achieved. D. CITY OF MONTICELLO must submit Form SF-269 "Financial Status Report’ on this project on a quarterly basis (due 15 working days after the end of each quarter) until all project funds have been disbursed, and the project has been completed B. CITY OF MONTICELLO must submit a project performance activity report on this project on a quarterly basis (due 15 working days after the end of each quarter) until all project funds have been disbursed, and the project has been completed. There is no standardized form for the project performance report. However, project, performance reports shall include the following: 1. A comparison of actual accomplishments to the objectives established for that period. 2. Reasons why established objectives were not met. 3. Problems, delays, or adverse conditions, if any, which have affected or wiil affect attainment of overall project objectives, prevent meeting time schedules or objectives, or preclude the attainment of particular project work elements during established time periods. This disclosure shall be accompanied by a statement of the action taken or planned to resolve the situation. 4, Objectives and timetable established for the next reporting period. F. A final project performance report will be required with the final SF-269 ‘Financial status report’. G. The Agency will also require CITY OF MONTICELLO to prepare a report suitable for public distribution describing the accomplishments made through this RBEG. This report should include an assessment of actual or potential jobs created/saved, and businesses assisted through this RBEG.H. This request is subject to audit requirements of 7 CFR 5052--AUDITS OF STATES, LOCAL GOVERNMENTS, AND NON-PROFIT ORGANIZATIONS. 1. Audits completed in accordance with the Generally Accepted Government Auditing Standards (GAGAS) will be acceptable if CITY OF MONTICELLO expends less than $300,000 in Federal funds in any fiscal year. GAGAS standards are set forth in the "Government Auditing Standards, 1994 Revision’ (commonly referred to as the ‘yellow book’) a. GAGAS audits must be submitted to this office within 150 days of the "as is" audit date. 2. Audits completed in accordance with OMB Circular A-133, AUDITS OF INSTITUTIONS OF HIGHER EDUCATION AND OTHER NONPROFIT INSTITUTIONS will be required if CITY OF MONTICELLO expends $300,000 or more in Federal funds in any fiscal year. a. OMB Circular A-133 audits must be submitted to this office within 9 months after the end of the grantee's fiscal year. 3. Applicable audits are required in the fiscal year in which RBEG proceeds are received and years in which work is accomplished that will be paid for with RBEG proceeds. 1. CITY OF MONTICELLO will retain financial records, supporting documents, statistical records, and all other records pertinent to the grant for a period of at least 3 years after grant closing, or termination of the project, except that the records shall be retained beyond the 3 year period if audit findings have not been resolved or if directed by the United States. Microfilm copies may be substituted in lieu of original records. The Agency and the Comptroller General of the United States, or any of their duly authorized representative, shall have access to any books, documents, papers CITY OF MONTICELLO may have pertinent to the RBEG for the purpose of making audit, examination, excerpts, and transcripts. COMPLIANCE WITH SPECIAL LAWS AND REGULATIONS. A. CITY OF MONTICELLO shall keep records and submit to the agency, upon request, timely, complete and accurate compliance reports as the agency may determine to be necessary to ascertain compliance with the Civil Rights laws and Equal Opportunity laws and program regulations. B, CITY OF MONTICELLO must keep and provide data on race, gender, and national origin and any such records, accounts, and other sources of information and facilities as may be pertinent for the agency to determine whether CITY OF MONTICELLO has complied or are complying with regulations. C. CITY OF MONTICELLO must comply with the following: 1. Title VI of the Civil Rights Act of 1964- a. Title VI states that no person shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subject to discrimination under any program or activity receiving Federal financial assistance. 2. Title IX of the Education Amendments of 1972- a, Title IX prohibits discrimination on the basis of sex in education programs and activities receiving Federal financial assistance. 3. Section 504 of The Rehabilitation Act of 1973 as amended (29 U.S.C. 794) and7 CFR Part 15b- a. No qualified individual with a disability and solely by reason of their disability may be excluded from using or participating in the benefits of any facility receiving Department of Agriculture (USDA) Rural Development assistance. 4. Age Discrimination Act of 1975- a. Prohibits discrimination based upon age. 5. Other Equal Opportunity and Nondiscrimination Requirements- a. Beneficiaries of Federal financial assistance must comply with all additional Federal Civil Rights laws and requirements as applicable to the entity, service, or program. D. COMPLIANCE REVIEW REQUIREMENTS 1. To ensure that these requirements are met, we are obligated to complete periodic Civil Rights Compliance reviews, and document these reviews on Form RD 400-8 “Compliance Review” on all RBEG financed projects. 2. Compliance reviews will be performed before the grant is closed, and at least every 3 years thereafter, as long as the RBEG financed project is used for the original or similar purpose for which assistance was intended. a. To assist us in this process, we request that you complete the enclosed “Civil Rights Compliance Review” check-sheet. Please complete and return this check-sheet to our office as soon as possible, so that we can complete the required compliance review prior to grant closing. 3. In order for the agency to properly complete civil rights compliance reviews, you must provide racial/ethnic and gender data for CITY OF MONTICELLO and borrowers/clients served by CITY OF MONTICELLO. a. Racial data shall be categorized by: American Indian or Alaska Native, Asian, Black or African American, Native Hawaiian or other Pacific Islander, and White. b. Ethnicity data shall be categorized by Hispanic ot Latino, Not Hispanic or Latino. 4. CITY OF MONTICELLO must set up an internal process to collect this, required data from your clients to provide to the agency upon request. 5. The following will be reviewed for compliance: a, Various types of racial/ethic and gender data on applicants to CITY OF MONTICELLO and clients served from the RBEG request, and racial/ethic and ‘gender data on employees of CITY OF MONTICELLO. 1. This can be accomplished by revising CITY OF MONTICELLO’s admissions application to include statistical data and a disclosure statement. a. The statistical data should include racial/ethnic and gender data. ‘There should be a category for a statement such as, “I do not wish to furnish this information.” b. The disclosure statement should read, “The following information is requested by the Federal Government for certain types of Federal ‘Assistance, in order to monitor compliance with equal credit opportunity laws. You are not required to furnish this information, but are encouragedtodo so. The law requires that CITY OF MONTICELLO may neither discriminate on the basis of this information nor on whether you choose to it, However, if you choose not to furnish it, under Federal regulations, CITY OF MONTICELLO is required to note race/ethnicity on the basis of visual observation or surname, If you do not wish to furnish the above information, please check the box below.” 1, CITY OF MONTICELLO must review the above material to assure that the disclosures satisfy all requirements to which CITY OF MONTICELLO is subject under applicable State law for the particular type of program. 2. Each application will carry the equal opportunity logo, “This is an Equal Opportunity Program. Discrimination is prohibited by Federal Law. Complaints of discrimination may be filed USDA, Director, Office of Civil Rights, Washington, D.C. 20250”. the . A summary of actions for each application (rejected, withdrawn, etc.) 1. Records should be maintained on an annual basis. d. User fees or charges for service- including reasons that certain individuals are charged different or higher rates than others. e. Racial/ethnic and gender data of CITY OF MONTICELLO employees, board members. For example, what efforts have been made to attract minority and persons with disabilities to the board of directors or similar governing body. f. Methods used by CITY OF MONTICELLO to inform the community of the availability of services. All written materials, such as pamphlets, brochures, letterhead, handouts, newspaper articles and ads should have the non-discrimination statement printed on them. Example: “Equal Opportunity Lender/Agency ”. §. Methods whereby special accommodations are made by CITY OF MONTICELLO to persons with disabilities, for example, accessible by wheelchairs or access to TDD or relay service for persons with hearing impairment. Facility should have an accessible route through common use areas to meet the Americans with Disabilities Act/Accessibility Guidelines (ADA/AG) or Section 504 of the Rehabilitation Act of 1973. (Refer to the Uniform Federal Accessibility Standard (UFAS) and ADA/AG, Section 4.3). 1. The ADA/AG handbook may be accessed through the internet at the following address: www.access-board gov/ufas/ufas-htm! 2. Accessibility guidelines may be accessed through the internet at the following address: www.access-board.gov/adaag/htmV/adaag.htm 3. In accordance with 7 CFR Subtitle A, Section 15b.8, if your organization has not complied with accessibility standards, a self- evaluation has to be conducted with the assistance of person(s) knowledgeable of accessibility issues. a. The self-evaluation should address but not be limited to ramp. and parking, entrance to an office, and restroom(s).b. A Transition Plan should be developed outlining your plan of action by which all accessibility requirements will be met. If applicable, RBS will request a Self-Evaluation and Transition Plan, c. Accessible parking spaces shall be designated as reserved for persons with disabilities by a sign showing the symbol of accessibility. A vehicle parked in the space shall not obscure such signs. 4. CITY OF MONTICELLO should have a designated accessible restroom for persons with disabilities. The restroom must be accessible in accordance with the Uniform Federal Accessibility Standard (UFAS) and ADA/AG, Section 4.22. h, Bulletin board(s) displayed in a public area(s) with “And Justice for All” and an “Equal Employment Opportunity is the Law” posters. i. You are reminded that you may be subject to additional civil rights Jaws and regulations. Although Rural Development does not enforce these laws, if, in the course of a compliance review, Rural Development detects a potential violation of these laws, Rural Development is obligated to refer the potential violation to the appropriate enforcement agency. 6. Since we are required by law to report non-compliance in these requirements, please ensure that you have a mechanism in place to capture this required data. 7. In addition, all RBEG’s used for construction projects are subject to the Americans with Disabilities Act, Title Ill of 1990, OTHER CONDITIONS Debarment certifications- A. CITY OF MONTICELLO is required to comply with Rural Development Instruction 1940-M with respect to debarment procedures. Forms AD-1047, "Certification Regarding Debarment, Suspension, and Other Responsibility Matters-Primary Covered Transactions" and Form AD-1048, "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transactions" will be used for this purpose. 1. CITY OF MONTICELLO must obiain certifications on Form AD-1048 “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transactions" from any person or entity you do business with as a result of this government assistance certifying that they are not debarred or suspended from government assistance. a. AD-1048 certifications will need to be executed by contractors for business development technical assistance, and all presenters utilized by CITY OF MONTICELLO for this project. B, Fidelity bond coverage will be required on all persons of CITY OF MONTICELLO authorized to receive and/or disburse Federal funds. Coverage may be provided either for all individuals or persons, or through a "blanket" coverage providing protection for all appropriate persons.C. CITY OF MONTICELLO further agrees to the terms and conditions of the enclosed. RD Instruction 1942-G, Attachment 1, Section B. ‘The following items attached for your reference and use: a. Form RD 1942-46, "Letter of Intent to Meet Conditions" b. Form RD 1940-1, "Request for Obligation of Funds" c. RD Instruction 1942-G, Attachment 1, Section B “General Requirements for Administration of Rural Business Enterprise and Television Demonstration Grants” Scope of Work Form SF-270 "Request for Advance or Reimbursement" Form SF 3881 “Electronic Funds Transfer Payment Enrollment Form” Form SF-269 "Financial Status Report” Form RD 400-1 “Equal Opportunity Agreement” Form RD 400-4 “Assurance Agreement” Form RD 400-8 “Compliance Review” “Civil Rights Compliance Review” checksheet “And Justice For All” poster . “Equal Employment Opportunity is the Law” poster Form AD-1048 "Certification Regarding Debarment, Suspension, Ineligibility and ‘Voluntary Exclusion-Lower Tier Covered Transactions" PROT HER mee Please contact Roger Koon, if you have any questions. Roger may be contacted by phone at 801.524.4301 Richard Carrig Rural Business and fooperative Programs Director USDA-Rural Development Ce: Roger Koon 10RD Instruction 1942-¢ Attachment 1 Page 8 (Revision 2) M. Grant cancellation. Grants may be cancelled by the grant approval official by use of Form RD 1940-10, "Cancellation of U.S. Treasury Check and/or Obligation." The State Director will notify the applicant by letter that the grant has been cancelled. A copy of the letter will be sent to the applicant's attorney and engineer and to the Regional Attorney, 06C, if the Regional attorney has been involved. N. Grant servicing. Grants will be serviced in accordance with Subpart E of Part 1951 of this chapter. ©. Subsequent grants. Subsequent grants will be processed in accordance with the requirements set forth in this subpart. Section B III. Responsibilities of the Grantee This section contains information regarding the responsibilities of the grantee for receipt of monies under the RBE/television demonstration grant Program. This section shall become a permanent attachment to Form RD 1940-1 as outlined in Section A, paragraph TT. H. of this Attachment. These requirements do not supersede the requirement for receipt of Federal funds as stated in Parts 3015, 3016, and 3019 of the Uniform Federal Assistance Regulations; however, specific areas related to the RBE/television demonstration grant program are cited below. (Revised 07-16-03, PN 361.) Grantee agrees t A. Comply with property management standards established by 7 CFR Parte 3015, 3016, and 3019 for real and personal property. “Personal property" means property of any kind except real property. It may be tangible - having physical existence - or intangible - having no physical existence; such as patents, inventions, and copyrights. | "Nonexpendable personal property" medns tangible personal property having a useful life of more than 1 year and an acquisition cost of $300 or more per unit. A grantee may use its own definition of nonexpendable personal property provided that such definition would at least include all tangible personal property as defined above. ‘*sxpendable personal property* refers to all tangible personal property other than nonexpendable property. when xeal property or nonexpendable property is acquired by a grantee with project funds, title shall not be taken by. the Federal Government but shall be vested in the grantee subject to the following conditions: (Revised 07-16-03, PN 361.)1. RD Instruction 1942-¢ ‘Attachment 1 Page 8A (added 07-17-02, PN 348) Right to transfer title. For items of real or nonexpendable personal property having a unit acquisition cost of $1,000 or more, the Agency may reserve the right to transfer the title to the Federal Government or to a third party named by the Federal Government when such third party is otherwise eligible under existing statutes. such reservation shall be subject to the following standard: (08-20-92) a. The property shall be appropriately identified in the grant or otherwise made known to the grantee in writing. b. The Agency shall issue disposition instructions within 120 calendar days after the end of the Federal support of the project for which it was acquired. If the Agency fails to issue disposition instructions within the 120 calendar day period, the grantee shall apply the standards of Section B, paragraphs TIT. A. 2. and 3. of thie Attachment. ¢. When the Agency exercises its right to take title, the personal property shall be subject to the provisions for federally owned nonexpendable property discussed in Section B, paragraphs III. A. 2. and 3. of this Attachment. SPECIAL PN(08-20-92) RD Instruction 1942-6 Attachment 1 Page 9 a. When title is transferred either to the Federal Government or to a third party and the grantee is instructed to ship the property elsewhere, the grantee shall be reimbursed by the benefiting Federal’ agency with an amount which is computed by applying the percentage of the grantee participation in the cost of the original grant project or program to the current fair market value of the property, plus any reasonable shipping or interim storage costs incurred, 2, Use of other real or nonexpendable personal property for which the grantee has title. a. the grantee shall use the property in the project or program for which it was. acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When it is no longer needed for the original project or program, the, grantee shall use the property in connection with its other federally sponsored activities in the following order of priority: 4. Activities sponsored by FniA. ii. Activities sponsored by other Federal agencies: Db. Shared use. During the time that nonexpendable personal property is held for use on the project or program for which it was acquired, the grantee shall make it available for use on other projects or programs if such other use will not interfere with the work on the project or program for which the property was originally acquired. First preference for such other use shall be given to projects or programs sponsored by FmHA; second preference shall be given to projects or programs sponsored by other Federal agencies. If the property is owned by the Federal Government, use for other activities not sponsored by the Federal Government shall be permissible if authorized by FnHA. User charges should be considered, if appropriate. 3. Disposition of real or nonexpendable personal property. When the grantee no longer needs the property as provided in Section B, paragraph III A 2 of this Attachment, the property may be used for other activities in accordance with the following standards: 4. Personal property with a unit acquisition cost of less than $1,000. The grantee may use the property for other activities without reimbursement to the Federal Government or sell the property and retain the proceeds SPECIAL PNRD Instruction 1942-6 Attachment 1 Page 10 b. Real or nonexpendable personal property with a unit acquisition cost of $1,000 or more. The grantee may retain the property for other use provided that compensation is made to FuHA or its successor. The amounts of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to current fair market value of the property. If the grantee has no need for the property and the property has further use value, the grantee shall request disposition instructions from’ the original grantor agency. ¢. FmHA shall determine whether the property can be used to meet the agency's requirenents. If no need exists within FmaA, the General Services Administration's Federal Property Management. Regulations (FPMR) will be used by Fria to determine whether a need for the property exists in other Federal agencies. FnHA shall issue instructions to the grantee no later than 120 days after the grantee request and the following procedures shall govern: 4, If so instructed, or if disposition instructions are not issued within 120 calendar days after the grantee's request, the grantee shall sell the property and reimburse FnliA an’ amount computed by applying to the original Project or program. However, the grantee shall be Permitted to deduct and retain from the Federal share $100 or 10 percent of the proceeds, whichever is greater, for the grantee's selling and handling expenses. ii. If the grantee is instructed to dispose of the property other than as described in Section B, paragraphs IIT A 2 and 3 of this Attachment, the grantee shall be reimbursed by FHA for such cost incurred in its disposition. iii. Property management standards for nonexpendable personal property. The grantea's property management standards for nonexpendable personal property shall include the following procedural requirements:1111 a. Property records shall be maintained accurately and shall include: i. A description of the property. ii, Manufacturer's serial number, model number, Federal stock number, national stock number, or other identification’ number.”(08-20-92) SPECIAL PN RD Instruction 1942-6 Attachment 1 Page 11 ii. Sources of the property including grant or other a agreement number. iv. Whether title vests in the grantee or the Federal Governnent. W. Acquisition date (or date received, if the Property was furnished by the Federal Government) and cost. vi. Percentage (at the end of the budget year) df Federal participation in the cost of the project or program for which the property vas acquired. (Not applicable to property fuznished by the Federal Government) . vii, Location, use, and ‘condition of the Property and the date the information was reported. viii. Unit acquisition cost. ‘Gf disposal and sales price or the method used to determine current fair market value where a Grantee compensates the Federal agency for its share. ix. Ultimate disposition data, including date b. Property owned by the Federal Government must be marked to indicate Federal ownership. g. A physical inventory of property shall be taken and the results reconciled with the property records at least once every 2 years. Any differences between quantities determined by the physical inspection and those shown in the accounting records shail be investigated to determine the causes of the difference. The grantee shall, in connection with the inventory, verify the existence, current utilization, and continued need for’ the property.RD Instruction 1942-6 Attachment 1 Page 12 d. A control system shall be in effect to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or the theft of nonexpendable property shall be investigated and fully documented; if the property was owned by the Federal Government, the grantee shall promptly notify nia. g- Adequate maintenance procedures shall be implemented to keep the property in good condition. £. Where the grantee is authorized or required to Sell the property, proper sales procedures shall be established which’ would provide for completion to the extent practicable and result in the highest possible return. g. Expendable personal property shall vest in the Grantee upon acquisition. If there is a residual inventory of such property exceeding $1,000 in total aggregate fair market value, upon termination or completion of the grant and’ if the property is not needed for any other federally sponsored project or program, the grantee shall retain the property for use on nonfederally sponsored activities, or sell it, but must, in either case, compensate the Federal Government for its share. The amount of compensation shall be computed in the same manner as nonexpendable personal property. This Attachment covers the following described personal property and any additional property acquired wholly or in part with grant funds (use continuation sheets as necessary) : When real property is no longer needed as provided above, return all real property, furnished or purchased wholly with Federal grant funds to the grantor. In the case of property purchased in part with Federal grant funds, the grantee may be permitted to take title to the Federal interest therein upon compensating the Federal Government for ite fair share of the property. The Federal share of the property shall be the amount computed by applying the percentage of the Federal participation in the total cost of the grant program for which the property was acquired to the current fair market value of the property. This Attachment covers the following described real property purchased/to be purchased wholly or in part with grant funds (use continuation sheets as necessary):