The agreement between the department and the applicant shall include but not be limited to the following provisions:
(a) A provision to the effect that the loan will be used for the purpose of developing the project in a continuous and expeditious manner to completion and that the project when completed will be made available and open to all on equal and reasonable terms.
(b) A provision specifying that no loan funds for construction purposes shall be released to an applicant until final plans and specifications for the project (or a particular portion thereof to be constructed with such funds) are approved in writing by the department.
(c) A provision requiring applicant to comply with department approved construction plans and specifications and change orders thereto.
(d) A repayment plan setting forth the provisions for repayment of principal and interest until the loan is repaid in full.
(e) A provision permitting inspection of the project by the department or its agents at any time during construction or after completion, and permitting the inspection and audit of all records of the applicant relating to the project until the loan is paid in full.
(f) A provision that the applicant will provide fire and extended coverage insurance to ninety percent of the value of insurable structures within the project area with the department named as additional insured.
(g) A provision that the applicant will provide insurance, with the department named as additional insured, to cover liability arising from design, planning, construction, maintenance or operation of the project in the following minimum amounts:
(1) Bodily injury $300,000 each person $1,000,000 each occurrence
(2) Property and product damage $500,000 each occurrence $1,000,000 each aggregate
(h) A provision allowing applicant to provide self-insurance in the amounts prescribed in subsection (g), above.
(i) A provision that during the loan repayment period applicant shall not sell, lease, transfer, exchange, mortgage or hypothecate in any manner all or any portion of the real property or improvements within the project area without prior written approval of the department.
(j) A provision requiring applicant to establish and capitalize a reserve fund in an amount and under terms and conditions specified by the department.
(1) The reserve fund shall be an interest-bearing account.
(2) In order to withdraw funds from the reserve fund, the signature of the director, or his or her designee shall be required.
(3) All funds remaining in the reserve fund account shall be returned to the borrower upon full performance of the loan contract. However, unless and until all reserve funds, including accumulated interest, are first committed to improvements at the marina, the borrower may not apply for additional department funding for any project within the marina for a period of five years beginning on the last date any reserve funds are returned to the borrower.
(k) A statement that surplus revenues shall be administered as follows:
(1) The applicant shall retain and invest in reasonable liquid assets all surplus revenues;
(2) Except for the purpose of making capital improvements and at the discretion of the department, no expenditure of surplus revenues other than for the advance repayment of the loan will be permitted until the loan is paid in full;
(3) The applicant shall record all surplus revenues in a separate account and such account shall reflect all receipts by the applicant of revenues originating within the project area.
(l) A provision that the department, the Department of General Services, the Bureau of State Audits, or their designated representative shall have the right to review and copy any records for possible audit for a minimum of three years after final payment, unless a longer period of records retention is stipulated.
(m) A provision that the borrower agrees to allow the auditor(s) access to such records during normal business hours and to allow interviews of any employees who might reasonably have information related to such records.
Credits
Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.4 and 85.2, Harbors and Navigation Code; and General Services, Standard Agreement Language, as found in GTC 699 (as amended 6/99).
