All recipient organizations must be not-for-profit organizations organized under New York State law or registered to do business in New York State.
Recipients of City capital funding for acquisition of real property, construction or reconstruction must have a separate, pre-existing contract with the City for operating funds in the City’s current fiscal year (i.e., fiscal year 2019 ending June 30, 2019) and the preceding two fiscal years (i.e., fiscal years 2018 and 2017, ending June 30, 2018 and June 30, 2017, respectively) in an amount of at least $50,000 in each such year. Recipients of City capital funding for Moveable Property must have a contract with the City for operating funds in the current fiscal year (i.e., fiscal year 2019 ending June 30, 2019) of at least $25,000. Hospitals and clinics may receive capital funds for Moveable Property although they have no operating contract with the City. Please note that such operating contracts are for City expense funds, including discretionary allocations from elected officials.
City capital funds may only be used for capital assets pursuant to Generally Accepted Accounting Principles and the directives of the City Comptroller. Examples of items that do not constitute capital assets include the following:
The City contribution to a Project involving real property (i.e, land or a building) must be at least $500,000. The 2.5% administrative fee may be included in meeting the $500,000 minimum threshold.
The minimum City contribution for Moveable Property that is not attached to real property is $35,000. Any items that do not serve the same logical purpose and are not physically connected are considered separate Projects, each of which must meet the $35,000 minimum cost threshold. However, in the case of Initial Outfitting (i.e., the outfitting of a defined area that has been newly acquired, leased or constructed or is the subject of a comprehensive reconstruction), items that are not physically connected may be combined to meet the $35,000 minimum as long as each item has a minimum cost of $110 and as long as such items are ordered within six months of the first use of such area. The 2.5% administrative fee may not be included in meeting the $35,000 minimum threshold.
Any Moveable Property that is attached in any way to real property will be treated as real property and will be subject to the real property requirements set forth in these Guidelines unless the owner of the real property in which such items are to be installed acknowledges in writing by amending its lease that such items are not considered part of such real property and are not subject to such ownership. Additionally, any party holding a mortgage or other lien on such real property must acknowledge in writing that such items are not subject to such mortgage or other lien. In order for the City to fund such attached Moveable Property, the total City capital funding for the Project must be at least $250,000.
The City may waive the ownership requirement for leasehold improvements to senior centers provided that there are no liens or mortgages on the property.
Applicants must demonstrate financial resources sufficient to support the Project on an ongoing basis throughout its useful life. Audited financials must be provided for the immediately preceding three fiscal years of the Applicant demonstrating the ability to support the ongoing operation of the Project for a City purpose. In addition, applicants must provide a projected plan of operations for the upcoming five fiscal years. Funding will not be provided to startup organizations, organizations with no current, paid, full-time staff or organizations that cannot demonstrate a history of operating those services proposed to be provided to the satisfaction of the City.
Recipient must demonstrate that the Project will comply with all applicable Federal, State and local laws. No funds shall be provided to Projects that support political activity, that conflict with the requirements of the First Amendment, that fail to meet access requirements, or that otherwise violate the laws of the United States, the New York State Constitution and other State laws, or local laws, rules or regulations, including all those concerning zoning, building or licensing. It is the responsibility of the applicant, not the City, to identify all such zoning, building or licensing requirements and to ensure compliance with them and with all other applicable laws.
The capital project should fit the organizations needs and intended City purpose. All costs reimbursed by the City must be reasonable, based on the standards of a prudent person. The City will not provide funding for any project that is so unique that the project would only be useful to the recipient under any reasonable circumstances.
Furthermore, the City will not provide funding for Moveable Property that is not easily transportable and reusable in another location if the City is forced to take possession of such
Moveable Property. Similarly, the City will not provide funding for Moveable Property if its value would not justify the cost of relocating and reusing such Moveable Property if necessary.
Please note that many items of equipment in addition to computers contain software, including medical equipment and telephone systems. The City will not fund such software (or equipment embedded with such software), unless such software license(s) are transferrable to the City and/or the City’s designee. It is the sole responsibility of the applicant to negotiate with the software licensor(s) to ensure the transferability of such license(s) on terms acceptable to the City.
No funding will be provided to private elementary or secondary schools, except schools where one-hundred percent of the student body consists of special education students with disabilities whose tuition costs are covered by the City’s Department of Education, provided that any such school is not located in the building of another school. Only schools that are approved by the New York State Education Department for the provision of services to students with disabilities will qualify for funding, and the funding of such schools must comply with all other requirements. This shall not prohibit the appropriation of capital funding to neutral, broad-based programs (rather than individual schools) that provide direct aid to students, provided that such funding complies with all applicable laws.
The 2.5% administrative fee will be based on total amount of the City appropriation and will be deducted from the total appropriation available for the Project (i.e., it will not be available for use by the recipient organization). The 2.5% administrative fee will not be available to pay cost overruns. For example, a Project with a $1 million City appropriation will only receive $975,000 after deducting the administrative fee. Project budgets submitted as part of the Request Form must include the 2.5% administrative fee.
The City will also require that the Project contain a 15% contingency for all remaining Project costs. For example, if a funding recipient has already spent $1 million out of a total Project cost of $4 million, a 15% contingency based on the remaining $3 million (i.e., $450,000) must be included in the Project budget. This contingency may be funded through City or non-City sources. The recipient organization will be responsible for all cost overruns that exceed the 15% contingency. Project budgets for real property Projects submitted as part of the Request Form must include the 15% contingency.
Please note that funds will be paid only as reimbursements upon requisition by the recipient. Requisitions must include invoices along with proof of payment of those invoices in order to be reimbursed. It will be the responsibility of the recipient organization to advance funds from its own sources and provide proof of payment prior to reimbursement from the City for eligible costs. The City has no obligation to reimburse an organization until a Funding Agreement is executed between the City and the organization and registered with the City Comptroller. Although an organization may spend its own funds prior to the execution and registration of a Funding Agreement (provided such spending is after the date of appropriation), any such prior expenditure is at the organization’s sole risk and may not ultimately be reimbursed.
Expressions of intent to fund a Project are not conclusive until an appropriation has been made through the City’s legislative process.
The City will not fund recipients that have not complied with prior agreements with the City. However, such non-compliance may be cured to the satisfaction of the City. Any cases of non-compliance must have been cured prior to appropriation of additional funds and prior to payment of funds.
Projects in New York City Housing Authority property and housing Projects identified with a housing loan program of the City’s Department of Housing Preservation and Development are not subject to these Guidelines. Some of such loans may be “forgivable” and, as such, are not repayable. Funds requested for housing development (new construction) or rehabilitation can be used for construction hard or soft costs. Funds can be used for acquisition only if the project has all funding in place and is assured to move to completion.
Some of the requirements described above do not apply to Cultural Projects. Cultural Projects may receive capital funds although the funding recipient has no operating contract with the City. The provisions that set the maximum City contribution, that require recipients to have a certain amount of funding in hand and that require that space be used only for Front Line Services do not apply to Cultural Projects. In addition, the City may improve property leased by cultural organizations, provided that (i) the recipient provides documentation from its landlord and any lienholders that they will agree to the recordation of the City Purpose Covenant on its property in a senior position and (ii) the lease is at least as long as the useful life of the property. Also, please note that under certain circumstances, the Department of Cultural Affairs may elect to purchase equipment for an organization, thereby avoiding the need for the organization to make equipment purchases and seek reimbursement from the City.
The Funding Agreement will reflect terms including, but not limited to, those listed below.
In the case of acquisition, construction or reconstruction of real property (including fixtures thereto) a declaration of restrictive covenant constituting the City Purpose Covenant (as further described above) will be recorded as a senior lien against the recipient’s property and will run with the land for the useful life as determined by the City.
In the case of acquisition of Moveable Property, a security agreement will be entered into requiring that the property be used in compliance with the City Purpose Covenant. UCC-1 forms will be filed reflecting the existence and priority lien position of this security agreement with respect to non-vehicular Moveable Property. New York State Department of Motor Vehicles Notices of Lien will be filed reflecting this security agreement for vehicles. The City’s priority lien must be in full force and effect throughout the entire performance term of the City Purpose Covenant..
The New York State prevailing wage laws apply to all construction contracts and the recipient organizations must ensure that its subcontractors and consultants pay their staff and laborers in accordance with prevailing wage requirements, titles, and pay rates, consistent with Section 220 of the New York State Labor Law.
New York City Green Buildings Standards may apply. Please refer to New York City Charter Section 224.1 and Title 43, Chapter 10 of the Rules of the City of New York for additional information. As a general matter, such standards are applicable to Projects with at least 50% City funding or with City funding of at least $10 million.
Recipients must comply with all applicable procurement requirements including, among other things: maintenance of insurance; Vendor Information Exchange System (“VENDEX”) questionnaires; multiple bidding requirements, subcontracting limitations.
Applicants must submit to the relevant elected official a complete Request Form. Incomplete Request Forms will not be reviewed. Please note that different elected officials may have different submission deadlines. Please be advised that if funds are ultimately appropriated, recipients may not change Projects to a different location or type of work without submission of a new Request Form and a re-appropriation of funds for the new purpose. After applicants submit the Request Form, it is the applicant’s obligation to provide the City with all information requested about the Project. Failure to expeditiously provide such information will result in rejection of the Project.
Appropriations are made for the fiscal year commencing July 1. The City will not reimburse for costs incurred prior to the date of appropriation.
The process of assigning a managing agency commencing a Project may not occur for several months after the date of appropriation.Recipients of capital grants should not expect to commence work with a City agency prior to such time, when the assigning managing agency will contact the recipients. Although the recipient may commence spending its own funds at the time of appropriation, only the costs deemed to be eligible by the City, and which meet all the requirements of the contract, will be reimbursed at a later date. No City agency will act as the general contractor or construction manager for a construction Project, with the exception of Projects on City-owned property and certain cultural projects designated by the City’s Department of Cultural Affairs.With the exception of the cases identified in the preceding sentence, it is the responsibility of the recipient organization to hire contractors and supervise the completion of Projects. No City agency will act as a buyer for any Moveable Property (except, in limited circumstances, the City’s Department of Cultural Affairs for certain Cultural Projects). The following will be assigned to manage Projects (although OMB may change such assignments):
EDC, DDC or DFTA, as the case may be, will enter into a contract with the recipient organization. Legal counsel for the managing agency will initiate discussion of the contract with legal counsel for the recipient organization. The City contract documents (restrictive covenant, funding and security agreements) will be standard forms and the City will not agree to changes in its standard provisions. Copies of the City’s standard form contracting documents are attached hereto.
OMB must approve and issue a Certificate to Proceed (“CP”) before a Funding Agreement may be entered into. Issuance of a CP by OMB shall indicate OMB’s acceptance of the Project’s compliance with the terms of these Guidelines pursuant to the MOU, including the exceptions thereto.
After all necessary approvals have been issued, a contract may be executed and sent to the City Comptroller for registration. Organizations should refrain from making purchases of Moveable Property or real property until after a contract has been registered. Any purchases made prior to such registration are made at the organization’s risk. The City is under no obligation to reimburse an organization for purchases made prior to the registration of the Funding Agreement if such Funding Agreement is not ultimately registered or if such purchases do not comply with the terms of the Funding Agreement.
Following registration of the contract by the City Comptroller’s Office, and resolution of any title and legal closing matters, disbursement of funds will be made on a reimbursement basis according to the terms of the contract documents. The time from the date the managing agency initiates contact with the recipient to the time disbursement can commence typically takes approximately 10 to 12 months, although that time may vary greatly depending on the complexity of the Project, delivery of information by the recipient, and other factors. Recipient must plan Project finances to accommodate this timetable and it is recommended that the recipient plan for Moveable Property projects at least one year from the expected date of appropriation.
Following the receipt of City capital funds, the recipient organization may be subject to OMB’s compliance review and will be required to submit to the City every year throughout the useful life of the Project the following information: (i) an officer’s certificate attesting to compliance with the City Purpose Covenant; (ii) audited financial statements for the most recently ended fiscal year of the recipient; and (iii) a current year operating budget. Failure to comply may result in denial of future funding, forfeiture of the asset or other legal remedies deemed appropriate by the City.