N.Y. Comp. Codes R. & Regs. tit. 14 § 521.10

Current through Register Vol. 46, No. 45, November 2, 2024

Section 521.10 - Assurances from the applicant

In addition to any other requirements imposed by law, each State aid grant, Facilities Development Corporation mortgage loan and Housing Finance Agency mortgage loan shall be subject to the condition that the applicant will furnish and comply with the following assurances and conditions, execute the documents necessary to assure such compliance and secure the interests of the OMH in the property upon which the facility is, or will be, located.

(a) Project operation.

(1) The facility will furnish a community mental health service as stated in the application for the State aid grant, Facilities Development Corporation mortgage loan or Housing Finance Agency mortgage loan as subsequently amended with and upon the approval of the Office of Mental Health.

(2) The applicant will operate and maintain the facility, or cause its operation and maintenance, to be in accordance with standards prescribed by the OMH for the operation and maintenance of such facilities.

(3) The applicant will conform to all the applicable requirements of the local services or the unified services plan as well as the applicable requirements of this Title.

(4) All portions and services of the entire facility for which a State aid grant under this act is sought will be made available without discrimination because of age, creed, color, national origin, sex, disability, marital status, or arrest or criminal accusation not presently pending against that individual which was followed by a termination of that criminal action or proceeding in favor of the individual, as defined in subdivision two of section 160.50 of the Criminal Procedure Law, unless such discrimination is in fact a segregation based upon legitimate clinical needs and concerns and not a complete denial of the provision of services.

(5) No professionally or otherwise qualified person will be discriminated against on account of age, creed, color, national origin, sex, disability, marital status, or arrest or criminal accusation not presently pending against that individual which was followed by a termination of that criminal action or proceeding in favor of that individual, as defined in subdivision two of section 160.50 of the Criminal Procedure Law with respect to the privilege of professional practice or employment in the facility.

(6) The applicant will operate the community mental health program, described in the application as subsequently amended with and upon the approval of OMH, in the facility constructed, reconstructed, rehabilitated or acquired with a State aid grant, Facilities Development Corporation mortgage loan or Housing Finance Agency mortgage loan for a 20-year period or the term of the Facilities Development Corporation mortgage loan, whichever is greater. The applicant shall not make any changes in the nature of the program within the aforementioned period without the prior written approval of the OMH.

(b) Site ownership. The applicant may not transfer, sell, assign, lease or encumber, in whole or in part, the real property acquired through a State aid grant, or, transfer, sell, assign or hypothecate, in whole or in part, the shares of stock of the cooperative corporation or the proprietary lease or leasehold or contractual agreement acquired with a State aid grant without the prior written approval of the OMH.

(c) Physical plant.

(1) The OMH's approval of the final working drawings and specifications will be obtained before the project is advertised or placed on the market for bidding. The final working drawings and specifications shall be in conformity with the general standards of construction and equipment as prescribed by the OMH.

(2) The applicant will cause the acquisition, construction, reconstruction or rehabilitation of the facility to be brought to final completion in accordance with the final drawings and specifications or the application as subsequently amended with and upon the approval of the OMH.

(3) The applicant will provide and maintain competent and adequate architectural or engineering supervision and inspection at the construction site to insure that the completed work conforms with the approved plans and specifications.

(d) Construction contracts. The applicant will comply with the following conditions in regard to all construction contracts:

(1) The actual construction work will be performed pursuant to the lump sum (fixed price) contract method.

(2) Adequate measures will be employed to obtain competitive bidding prior to awarding the construction, rehabilitation, or reconstruction contract either by public advertisement and/or circularizing three or more prospective bidders. The contract will be awarded to the responsible bidder submitting the lowest bid that substantially conforms to the request for bids. This requirement may be waived for contracts whose total cost is anticipated to be, and is in fact, below $10,000.

(3) Where Housing Finance Agency mortgage loan is not involved, the purchase and installation of equipment which is unique to the facility, as well as kitchen, laundry and laboratory equipment, need not be considered construction work for the purpose of this section except that if open competitive bidding is employed to obtain any or all of these items, the award shall be made to the responsible bidder submitting the lowest acceptable bid.

(4) The applicant will not enter into any construction contract in excess of the estimated cost approved in the application as subsequently amended with and upon the written approval of the OMH.

(5) The applicant will not make any changes from the project as approved in the application as subsequently amended with and upon the written consent of the OMH.

(6) The following conditions and provisions will be included in all construction contracts:

(i) The inclusion of the provisions of the General Municipal Law, the State Finance Law and the Public Authorities Law, in relation to statement of noncollusion in bids and proposals.

(ii) A provision that the contractor shall furnish performance and payment bonds, each of which shall be in the full amount of the contract price, and shall maintain during the life of the contract adequate fire, workers' compensation, public liability, and property damage insurance. Only upon prior written approval of the Office of Mental Health, this provision need not be required in the case of contracts whose lump sum amount is less than $150,000 and where market conditions prohibit the inclusion of this subparagraph. Such approval will be made only after a finding that the contractor has successfully completed a project within the previous two years for a value of at least 75 percent of the project for which the grant is sought, and, that the contractor or a controlling person has not been convicted of any offense involving solicitation in the awarding of bids or bribery within the past five years.

(iii) A provision that representatives of the OMH will have access at reasonable times to the project site during construction for inspection and that the contractor shall assist in such inspections and provide proper facilities for access and inspection.

(7) The applicant may request that the OMH waive, alter or revise any of the construction contract requirements based upon sufficient cause. Sufficient cause shall include, but not be limited to, labor and/or market conditions.

(e) Project review.

(1) The applicant will maintain adequate books and records so as to document, record and summarize the details of all sources of revenue and expenditures of the project. The applicant will maintain accounting and fiscal records in accordance with generally accepted accounting principles and the Office of Mental Health requirements and permit the OMH or their representatives to inspect and/or audit same, and will assist in such inspections and audits.

(2) The applicant will furnish progress reports and such other information, at appropriate intervals, as the OMH may require. Such information may include, but is not limited to, copies of reports by architects and engineers that are required to be made by this Part and the Office of Mental Health.

(f) Applicant's breach of assurance. In accepting a Housing Finance Agency mortgage, a Facilities Development Corporation mortgage loan or a State aid grant, made pursuant to this Part, the applicant agrees to abide by the laws of the State of New York, the rules, regulations and guidelines of the Office of Mental Health, the promises and assurances contained in the application for a State aid grant, a Facilities Development Corporation mortgage loan or a Housing Finance Agency mortgage, and those contained in the documents executed therewith. In the event of the breach of any of the aforementioned, it is agreed that the Office of Mental Health may pursue any and all of the following remedies:

(1) The Office of Mental Health shall have the right to possession and occupancy of the facility for the unexpired term during which the applicant has agreed to operate the facility.

(i) The exercise of this right will be made subject to any rights of the Housing Finance Agency, or any other lienor who acquired its interest in accordance with this Part, pursuant to any mortgage or lien on the facility.

(ii) This shall include the right to sublet or contract with third parties for the operation of the facility without any charge or fee due the applicant therefor.

(iii) Following its taking possession, the Office of Mental Health shall be responsible for all normal maintenance and repairs on the facility.

(2) The Office of Mental Health shall have the right to recover the value of the State aid grant in accordance with the provisions of this section and those contained in such agreements executed pursuant to section 521.13 of this Part.

(i) The Office of Mental Health may declare the value of the State aid grant immediately due upon the substantial breach of any of the aforementioned rules and regulations.

(ii) The value of the State aid grant shall include the following:

(a) the amount of the State aid grant issued on behalf of the applicant in accordance with the application;

(b) the amount of any payments on any mortgage lien, judgment, or other encumbrance upon the facility, incurred by or on behalf of the applicant, which in the sole discretion of the Office of Mental Health, the Office of Mental Health is obligated to make;

(c) the cost of repairs to premises possessed by the Office of Mental Health by operation of this Part, that are capital expenditures, as that phrase is commonly understood; and

(d) the reasonable value of the services provided by the Office of Mental Health in obtaining possession to the premises and collecting the value of the State aid grant.

(iii) A credit equal to five percent of the amount of the State aid grant issued to the applicant will be applied against the obligation of the applicant, for each year the applicant has operated the facility in accordance with the aforementioned rules and regulations.

(3) This obligation of the applicant shall become a lien, analogous to a second mortgage, upon the real property of the facility as soon as the Office of Mental Health disburses the State aid grant. The lien of the State aid grant will be junior only to:

(i) those liens to which the Office of Mental Health has consented to subordination, in accordance with section 521.13(c) of this Part; or

(ii) liens pre-existing the making of the State aid grant.

(4) The Office of Mental Health, in its sole discretion, may elect to pursue any of these remedies without affecting a waiver of any other rights or remedies. Nothing herein contained shall affect the Office of Mental Health's rights regarding repayment of the amount of the applicant's State aid grant, nor create any defense for the applicant in a proceeding to enforce repayment of these amounts, or secure possession of the property.

N.Y. Comp. Codes R. & Regs. Tit. 14 § 521.10