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HomeMy Public PortalAboutA 2009-03-04 - CDBGAGENDA COMMUNITY DEVELOPMENT BLOCK GRANT ADVISORY BOARD COMMISSION WEDNESDAY, MARCH 4, 2009 6:00 P.M. LYNWOOD CITY HALL COUNCIL CHAMBERS 11330 BULLIS ROAD, LYNWOOD, CA 90262 Iris Pygatt, Chairperson Antonio Mungua, Commissioner Kim Battle, Commissioner Patricia Carr, Vice Chairperson Evelia Hernandez, Commissioner OPENING CEREMONIES: A. CALL T;,O ORDER B. FLAG SALUTE C. ROLL CALL D. CERTIFICATION OF AGENDA POSTING E. MINUTES -February 4, 2009 F. PUBLIC ORALS: (ITEMS ON AGENDA ONLY) /C../Ltl~l~-8\/ FEB 2 6 2009 CITY OF LYNWOOCI CITY CLERK6 OFFICE Qh-~R. G, NEW BUSINESS: Presentations by Service Providers ~,(.'~7~- Requesfs/Proposals for Fiscal year 2009-10 CDBG and HOME funds ((~~ • Annette-Potts, CDBG Administration • Josef Kekula, Public Works Department- Public Improvement Program • Dr. Matthew Harris -Project Impact • Yolanda Lopez, Program Director -Sunshine Daycare Computer Program • Nancy De Lira from St. Francis Career College • Juan and Grace Bautista, Kenjatsurya Karate Program • Rita Maiibusan, Code Enforcement • Other Program Proponents • Ernie Nishi, Home Program and Section 108 Loan Repayment H. HOME Program Status Report I. STAFF ORALS Special Meeting for Funding Selection -March 18, 2009 @ 6pm J. BOARD ORALS Lc.t i2Uf'vF~ GuD. K. ADJOURNMENT DATE: February 25, 2009 TO: CDBG Commission FROM: Annette Potts, Deputy Director of Administration SUBJECT: CDBG/HOME PROGRAM FUNDS FOR FY 2009-10 The Department of Housing and Urban Development (HUD) has not released funding applications for fiscal year 2009-10, however CDBG funds have been declining for the past several year. For fiscal year 2009-10, the City expects to receive approximately $1,500,000 in CDBG funds and approximately $700,000 in HOME program funds. HUD regulations state that the amount of CDBG funds that may be used for public services can not exceed 15 percent of the grant amount, which results in approximately $225,000 for FY 2009-10. HUD defines public services as services concerned with employment, crime prevention, child care, health, drug abuse, education, fair housing counseling, energy conservation, welfare. To be eligible for CDBG assistance, a public service must be either a new service or a quantifiable increase in the level of an existing service. Below is a CDBG five-year analysis of allocations. Fiscal Year HOME Allocations CDBG Allocation 15% Public Service Allowance (These amounts were made available to Public Service Providers) 2004-2005 696,933 1,922,634 288,395 2005-2006 668,108 1,819,754 272,963 2006-2007 285,319 1,635,674 245,351 2007-2008 280,281 1,628,231 244,234 2008-2009 603,578 1,568,954 235,000 If you should have any questions or need additional information, please call me at extension 269. Thank you. MINUTES OF A REGULAR MEETING OF THE COMMUNITY DEVELOPMENT BLOCK GRANT ADVISORY BOARD COMMISSION WEDNESDAY, FEBRUARY 4, 2009 CALL TO ORDER: Chairperson Pygatt called the meeting to order on the above captioned date at 6:07 p.m. FLAG SALUTE: All those present participated ROLL CALL: Present Chairperson Pygatt Commissioner Carr CERTIFICATION OF AGENDA POSTING: Staff stated that the agenda was posted per the Brown Act. APPROVAL OF THE MINUTES: None NEW BUSINESS: 1. Swearing In Of New Commissioners Maria Quinonez, Lynwood City Clerk was in attendance to swear in Lynwood residents that were appointed by Lynwood City Council, as new Commissioners. The following residents were sworn in: Ms. Kim Battle Mr. Antonio Munguia Ms. Evelia Hernandez After the ceremony, Commissioners took appropriate seats. 2. Public Hearing-FY 2009-10 Housing and Community Development Needs Motion to open the public hearing was made by Commissioner Carr, seconded by Commissioner Munguia, motion carried unanimously. The public hearing was opened at 6:11 p.m. Ms. Potts explained to the Commission that this process occurs yearly and the Commission will have an opportunity to hear from those requesting funding. Commissioner Munguia asked if the Commission will have the opportunity to review the applications for the request for funding. Staff replied yes and the information will be submitted to the Commission prior to the next meeting. Commissioner Carr requested an update on the guidelines for the Housing programs. She requested that staff submit a summary on the fund balances, outstanding projects, qualifications and guidelines for the program. Ms. Potts replied that the Housing Manager would be requested to attend the next meeting to answer any questions that the Commission may have. Commissioner Carr stated that Ernie Nishi, Housing Manager should bring the requested information with him to the next meeting. There being no further comments from the public, motion to close the public hearing was made by Commissioner Munguia, seconded by Commissioner Carr, motion carried unanimously. The public hearing closed at 6:17 pm. STAFF ORALS: Staff welcomed Commissioners, Battle, Munguia and Hernandez to the Commission. BOARD ORALS: Commissioner Pygatt welcomed the new Commissioners and stated that she looks forward to working with everyone. Commissioner Carr welcomed the new Commissioners and stated that she looks forward to working with everyone. She also stated that the CDBG Commission is a good Commission and they would learn a lot relative to the HUD regulations and the programs that the City offers through the federal government. Commissioner Munguia thanked everyone for the welcome. He stated that he is looking forward to working with the Commission and learning new things. He stated that he has an open mind and will do his best as a Commissioner. Commissioner Hernandez thanked everyone for the welcome. Commissioner Battle also thanked everyone for the welcome. ADJOURNMENT: Motion to adjourn was made by Commissioner Carr, seconded by Commissioner Battle, motion carried unanimously. The meeting adjourned at 6:25 pm to the next regularly scheduled meeting. Chairperson Date March 17, 2009 Honorable Commission APPROVED BY: Roger Haley, City Manager PREPARED BY: Ernie Nishii, Housing Manager Leaonna DeWitt, Sr. Rehabilitation pecialist SUBJECT: STATUS OF THE HOME PROGRAM Recommendation: Staff recommends that the CDBG Committee receive and file the status of HOME program. Background: For your review is a status report for the HOME Program for the current period from July 1, 2008 to present. This report summarizes the overall program allocations, expenditures and accomplishments. The City receives an annual allocation from Housing and Urban Development (HUD), for affordable housing activities. The City is allowed to spend up to 10% of the allocation on administrative costs (salaries and benefits) and required to set aside a minimum of 15% of its allocation towards a Community Housing Development Organization (CHDO). The following chart provides a summary of the total allocations received from fiscal year 2004 to present. .~ Fiscal;t Year'~~ '~ f, ~` ~ ~' .,Annual Allocatioh',= ~'~ '~Ex ~enditures ~_ , _ Balance ~ , Expenditure v., ~ . Deadlines ~ ~• 2004 696,933.00 572,094.00 124,839.00 Jul 31, 2009 2005 668,108.00 167,027.00 501,081.00 Jul 31, 2010 2006 285,319.00 71,329.00 213,990.00 Jul 31, 2011 2007 280,281.00 39,378.39 240,902.61 Jul 31, 2012 2008 603,578.00 - 603,578.00 Jul 31, 2013 . ... ~ TotaF-w _. ,. 5 ' 2,534;219!00' _, Y '. ".849,828:39 _. ~ .. 1,684;390:61; m ``,~ ~ ~ ~" ` Page 1 of 3 a The City is on target with spending the balance of the FY 2004 allocation, FY 2005 allocation, and FY 2006 allocation and exceeding the minimum expenditure requirements by July 31, 2009. These expenditures will bring needed improvements to the housing stock of this City. Since the beginning of this fiscal year, the City has expended over $1.3 million on the various owner occupied rehabilitation projects and new construction throughout the city. The Housing Rehabilitation Program has expended $266,165 on needed repairs and correcting code violations and is on track for spending an additional $300,000 by the end of the fiscal year. This is a highly popular program and provides an immediate positive impact on tl~e community. The Housing Rehabilitation Program is set forth in the attachment. This year the program was amended to allow homeowners to apply a second time if the homeowner had not taken full advantage of the program previously. The amendment allows a qualifying household that had previously acquired a grant to now acquire a loan or vice versa. The qualifying income is set forth in the attached chart. In a joint effort of the City of Lynwood, the Lynwood Redevelopment Agency and Habitat for Humanity purchased a property located at 4237 Imperial Highway expending over $1.1 million of HOME funds. This will be the first "green" project funded with HOME funds in the City of Lynwood. This project will create 10 new homes and a park for ten Lynwood families. The City has also entered into an agreement with The Win Project to purchase several bank owned properties, rehab the properties, and have said properties re-occupied with Lynwood residents. This project will reduce the "empty" homes in the community which can be magnets of blight. The City anticipates the acquisition within the next month. Similarly, Habitat has purchased two vacant properties located at 5525 Clark and 3076 Redwood utilizing HOME funds, rehabilitating said properties and re-selling the properties at an affordable price to Lynwood residents. These projects will supplement the City's efforts to acquire additional Neighborhood Stabilization Program (NSP) funds to purchase more foreclosed homes for Lynwood residents. Below is a more comprehensive list of accomplishments occurring within the last year utilizing primarily HOME funds. The chart identifies the property location, amount of assistance and the status of the project. The City has made major progress in expending HOME funds and creating affordable housing for Lynwood residents. Page 2 of 3 Accomplishments: ` ' < -' Location ` Housing Rehabilitation City Wide New Construction 3927 Louise Avenue 3254 Palm 4267 Fernwood Avenue 4237 Imperial Hwy Acquisition & Rehabilitation 3250 Magnolia 3076 Redwood Avenue 5525 Clark Avenue Total CHDO and Entitlement 'Amount ~ ~ . Status` ' . r ~ .. $332,445 5 projects completed to date $75,000 $497 694 Completed - FY 07/08 , $391 108 DDA Approval March 17, 2009 , $1,045,268 Complete-July 09 Ground Breaking June/July 09 $497,694 $201 295 Corplete , $201 295 Under Construction , Rehab completed 799 Attached: HOME Rehabilitation Program Guidelines HOME Income Limits Page 3 of 3 HOUSING REHABILITATION PROGRA~/I GUIDELINES AND PROCEDURES Introduction A• General The Housing Rehabilitation Program has been adopted by the City Council of the City of Lynwood to meet the City's Community Development goals of providing its residents with decent, safe and sanitary housing and a suitable living environment as outlined in the City's approved 5-Year Consolidated Plan. The Housing Rehabilitation Program provides technical and financial assistance to qualifying owners of residential properties in designated target areas in the City of Lynwood. The primary funding of the Program is through the Home Investment Partnership Program (HOME Program), a federal program under which the City is allocated funds directly from the United States Department of Housing and Urban Development (HUD) for affordable housing purposes. The primary purpose of the HOME Program is to expand the supply of decent, safe and sanitary and affordable housing. Since November 1975, the Housing Rehabilitation Program has provided assistance to numerous property owners. B. Description-of-Assistance 1. Technical Assistance Program staff provides assistance to qualified applicants in: loan counseling code compliance • property rehabilitation preparation of cost estimates preparing of bids and contracts • selection of contractors • construction monitoring 2. Financial Assistance The Rehabilitation Program offers qualifying property owners financial assistance in the form of Grants and Loans. At the City Council's direction, program components may be added, revised and/ or deleted, depending on particular requirements. C. Program Regulations This manual sets forth the policies and procedures under which the City of Lynwood's Housing Rehabilitation Program will operate. The policies and procedures contained herein can only be revised, amended and or deleted by the City Council of the City of Lynwood. This manual becomes effective immediately upon approval by the City Council of the City of Lynwood. 2 ii. GLOSSARY OF HOME TERMS The following terms and definitions shall apply to this Manual: "Adjusted Income": Adjusted income is annual (gross) income reduced by deductions for dependents, elderly households, medical expenses, handicap assistance expenses and childcare (these are the same adjustment factors used by the Section 8 Program). Adjusted income is used in HOME to compute the actual tenant payment in Tenant Based Rental Assistance (TBRA) programs and the low HOME rent in rental projects in which rents are based on 30% of a family's adjusted gross income. "Annual Income": The HOME Program allows the use of one of three definitions of annual income: Section 8 annual income; annual income as reported on the U.S. Census long form; and adjusted gross income as defined for reporting or IRS Form 1040 series shall include, but not be limited to: Gross Income: means the anticipating income of a person or family for the twelve-month period following the date of determination of income. (1) The gross amount, before any payroll deduction, of wages and salaries, overtime pay, commissions, fees, tips and bonuses. (2) The net income from operation of a business or profession or from rental or real or personal property (for this purpose, expenditures for business expansion or amortization of capital indebtedness shall not be deducted to determine the net income for a business); (3) Interest and dividend income from estates or trust; (4) The full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disabilities or death benefits and other similar types of periodic receipts; (5) Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay. (b) The following items shall not be considered as income. (1) Casual, sporadic or irregular gifts; (2) Amounts which are specifically for or in reimbursement of the cost of medical expenses; (3) Lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident 3 insurance and worker's compensation), capital gains and settlement for personal or property losses; (4) Amounts of educational scholarships paid directly to the student or to the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books, and equipment. Any amounts of such scholarships, or payments to veterans not used for the above purposes of which are available for subsistence are to be included in income; (5) The special pay to a serviceman head of household that is away from home and exposed to hostile tire; (6) Relocation payments made pursuant to federal, state, or local relocation law; (7) Foster child care payments; (8) The value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which is in excess of the amount actually charged the eligible household; (9) Payments received pursuant to participation in volunteer programs. "Assisted Unit": means those units which directly benefit from funds from the Housing Rehabilitation Program. "Borrower": means a property owner receiving rehabilitation loans from the Program pursuant to provisions of this Manual. "Department": means the City of Lynwood's Redevelopment Department. "Director": means the Director of the Redevelopment. "HOME Funds": All appropriations for the HOME Program, plus all repayments and interest or other returns on the investment of these funds. "Household": one or more persons who are very low or low income household owner occupants. "Housing Cost": of a person or family rehabilitating a housing unit shall include all the following monthly costs associated with that housing unit: (a) Principal and interest on a mortgage loan including any rehabilitation loans or any loan issuance fees associated therewith. (b) Property taxes and assessment. 4 (c) Fire and casualty insurance covering replacement value of property improvements. (d) Property maintenance and repairs. (e) A reasonable allowance for utilities are including garbage collection, sewer, water, electricity, gas and other heating, cooling, and refrigerating fuels. Utilities do not include telephone service. Such an allowance shall take into consideration the cost of an adequate level of service. (f) Homeowner association fees. (g) Space rent, if the housing unit is situated on rented land. "HUD": means the Federal Department of Housing and Urban Development "Low Income Household": means persons and families whose gross incomes do not exceed 80% percent of the area median income, adjusted for family size and other adjustment factors by the United States Department of Housing and Urban Development (HUD) and are subject to change. HUD issues periodic updates of income guidelines (see Appendix for most recent update). "Minor": means a member of the family household (excluding foster children) other than the family head of the household who is under 18 years of age or is a full time student and lives at home. "Owner": means any individual that owns a residential property by: fee simple title, maintain a 99-year leasehold interest, ownership or membership in a cooperative and do not have any restrictions or encumbrances that would unduly restrict the good and marketable nature of the ownership interest. "Owner-Occupant": means an owner of a one to four unit residential properties who uses one of the units as a principal residence. "Rehabilitation": means repairs and improvements to a substandard structure necessary to make it meet local codes and rehabilitation standards. "Rehabilitation Contract" or "Contract": means a duly executed agreement between the property owners and the selected contractors setting forth the scope of work to be performed by the fatter, containing the consideration and method of payment and any other terms and conditions necessary to accomplish the stipulated property rehabilitation work. 5 4 "Rehabilitation Program": means an ongoing program involving construction assistance, financial assistance or technical assistance, in the rehabilitation of residential and commercial property. "Rehabilitation Standards": means applicable State or local Building or Housing Standards adopted by the City of Lynwood pursuant to the State Housing Law, Part 1.5 (commencing with section 17910) of Division 13 of the Health and Safety Code and specifically Section 17959.8 rehabilitation standards including room additions necessary to alleviate overcrowding for eligible households. "Room Additions": means bedrooms or bathrooms which are added to a structure to alleviate documented overcrowding. "Substandard Structure": means any residential building or any portion of a residential building including, but not limited to, any dwelling unit, guest room, or suite of room, or the premises on which the same is located, in which there exists any of the conditions listed in the Uniform Housing Code, latest edition, to the extent that the conditions endanger the life, limb, health, property, safety or welfare of its residents. "Transfer of Property": means to sell, convey, or alienate title, voluntarily or otherwise, to the property, except in the case of the transfer, of the property to an owner-occupant's spouse as a consequence of death or dissolution of marriage. 6 ill. TYPE OF FINANCIAL ASSISTANCE -TERMS, CONDITIONS AND RESTRICTIONS A. Grants A grant in the amount of $10,000 is available to very-low and low income owner-occupants. If a Homeowner previously received a grant only, the Homeowner may be eligible to apply for a loan. 1. Preliminary Determination of Eligibility Rehabilitation staff makes a determination that applicant is income eligible. Staff will also make a determination that improvements are necessary to the health and safety of the applicant. B. Loans o The loan is a zero percent 0% interest rate loan. The maximum loan amount shall be $65,000 per applicant. One-third of the loan amount will be applied to exterior improvements. The loan becomes due and payable upon sale or transfer of the property by any means. Loan funds are borrowed directly from the City to eligible property owners. All loans shall be secured with a recorded Deed of Trust and may be subordinated to prior loans and liens. The City's assistance will not be secured if the City's in third position. The Borrower may repay the full amount at any time with no prepayment penalty. If a Homeowner previously received a loan only, the Homeowner may be eligible to apply for a grant. 1. Preliminary Determination of Eligibility Rehabilitation staff makes a determination that an applicant is eligible and is able to maintain a loan repayment plan. Staff will also make a determination that improvements are necessary to the health and safety of the applicant. 2. Approval Authority The loan will be approved or disapproved by the Program staff. The City will notify applicant of results. An applicant whose application for a loan has been denied may appeal to the City Manager orhis/her designee for a final decision. An applicant who has been denied participation in the program has the opportunity to appeal the decision to the City Manager or his/her designee. The applicant must provide the following information: Request an appeal in writing 7 Reason for the appeal • List repairs needed The applicant must submit the request within 30 days from the date of the denial. 3. Subordination The City will only subordinate if the applicant is requesting to refinance and receive a lower interest rate or provide evidence of financial hardship. If an applicant's intent is to get cash out, the loan is due and payable. Additionally, after proper consideration of the reasons described above, only those requests which provide evidence of sufficient equity may be granted the subordination. a. Information on Applicants Program staff shall prepare a summary sheet stating applicants name and address, income, amount of loan, reason for request and other information needed to establish the propriety of the request. Applicant must demonstrate both, the need for the subordination and his/her inability to pay back the City's loan. b. Protection of the Public Investment Protection of the Public investment shall be of paramount importance to Program staff when evaluating requests for subordination. In those cases in which the applicant's ability to pay back the City's loan has been established, Program staff shall recommend the rejection of the request for subordination. Program staff shall strive to impress upon the applicant(s) both, (1) the impropriety of obtaining windfall profits from public funds, and (2) the need to recapture the public investment for recycling into the property rehabilitation loan pool so as to maximize the benefits of these funds to the community. c. Request for an Assumption of Deferred Payment Loans (loan) Only those persons, who meet the Rehabilitation Program guidelines pursuant to the provisions above, shall be granted the request. K IV. ELIGIBILTY-REQ EIVTS This section sets forth eligibility requirements as to the property and the applicant to obtain a Grant or Loan (loan). A. Property Eligibility Requirements Rehabilitation grants and loans will be made to eligible properties located within the City of Lynwood. That is, property must need rehabilitation in order to comply with the Property Rehabilitation Standards adopted by the City Council (Appendix A.) All HOME assisted properties must meet all local Building and Municipal Codes after rehabilitation. The City will be unable to provide any federal assistance to any applicant who does not comply with the Rehabilitation guidelines. A drive-by appraisal will be performed to determine the after-rehabilitation value. The property must not exceed the after-rehabilitation value set forth by Housing and Urban Development of $433,200. This may be modified based on current market conditions. B. General Applicant Eligibility Requirements To be eligible for a Grant or loan, the applicant must be income eligible. The applicant must provide the following required documentation. • Income documentation (check stubs, retirement etc.) • Tax Returns (previous two years) Bank Statements • Grant Deed • Property Tax Bill • Mortgage Statement Hazard Insurance For a loan the applicant must demonstrate adequate ability to repay the loan and be income eligible. The applicant must sign a certification showing proof of owner occupancy status. A rehabilitation loan will not be approved by the Rehabilitation staff, if the applicant's record indicates disrespect for former obligations, or there is an indication of an inability to make the payments that will be required. 9 V. ELIGIBLE IMPROVEMENTS ~4ND DOST This section sets forth, but does not limit the eligible and mandatory improvements under the Housing Rehabilitation Program as well as ineligible improvements. A. Mandatory Improvements Hazardous conditions which are a direct threat to the health, safety and general welfare of occupants. B. Eligible Improvements and Cost 1. Additions and alterations to relieve overcrowding and/or increase the livability or usefulness of existing structures, such as rooms, porches, stairways, closets, bathrooms, and entrances. 2. Exterior work to help preserve or protect structures such as painting, roofing and siding. 3. Interior work to make a structure more livable, such as painting, plastering, new flooring and the work. 4. Repairs, restoration or replacement of important parts of structures such as heating systems, plumbing repairs, and built-in kitchen appliances in residential structures. 5. Demolition, clearance and site preparation where a unit is determined not suitable for rehabilitation. 6. Costs for improvements related to making the housing unit (s) accessible to and usable by the handicapped. 7. The cost of design services for the preparation of plans, drawings, and specifications for the rehabilitation of the property. 8. The cost of building permits and related fees required for the rehabilitation, if not included in the construction contract. 9. Costs of title reports, credit reports, appraisal reports and fees for recording documents related to the financing. 10. The cost of repair and installation of alternative energy conversation systems and weatherization when done in conjunction with other rehabilitation work. 10 C. Improvements and Costs The following improvements are not eligible: barbeque pits, burglar alarms, fire extinguishers, greenhouses, kitchens appliances which are designed and manufactured to be free standing and are not built-in and permanently affixed as an integral part of the kitchen, outdoor fireplace or hearths, swimming pools, television antennae, tennis courts, waterproofing a structure by pumping or interjecting any substance in the earth adjacent to or beneath the basement, foundation, floors, or any other improvements not customarily found in the surrounding dwellings. D. Grants and loans made by the City prohibit the following unauthorized expenses: Real property acquisitions. New construction, except for room additions. Materials, fixtures or equipment of a type of quality which exceeds that customarily is used in for properties of the same general type as a property to be rehabilitated. Appliances not required by rehabilitation standards. The purchase, installation, or repair of furnishing or trade fixtures. ll VI. PROGRAM PROCEDURES This section sets forth the steps which are to be followed in the processing of rehabilitation activities. 1. Initial-Contact Marketing effort/ strategy includes but is not limited to flyers, phone communication, and door to door contacts by Rehabilitation staff. An interest card will be delivered to the applicant. Upon return of the interest card staff will establish preliminary eligibility of the Program. If applicant is found eligible, an appointment will be schedule with the property owner for an inspection by the Rehabilitation Staff. 2. Applicant Processing o Verifying Program eligibility of the applicant. Verify the applicant is owner of property to be improved. o Verification of applicant's income and employment. Income limits are published by Housing and Urban Development and can be provided by program staff. In the event that the applicant is self-employed, the income tax returns for the previous two years will be obtained. Verify property eligibility. o Advise owner in writing of approval or disapproval. 3. Appeal Process If an applicant is denied participation they may appeal to the City Manager or his/her designee. The applicant must provide the following documentation: Request in writing stating the following: 1. Reason for the appeal 2. The types of repairs needed 3. Estimated cost for repairs The applicant will then mail or submit the request to program staff. The appeal will be processed and presented to the City Manager or his/her designee for final approval. 12 4. Property Inspection At the preliminary inspection, items will be identified and a work write-up and cost estimate will be prepared. The Rehabilitation Staff shall identify code violations observed. Participants in the Housing Rehabilitation Program shall provide consent to the City, its agents or employees to enter upon and inspect the lands, buildings and equipment of the applicant at any time before, during or after rehabilitation of their property. 5. Termite Inspection A termite inspection may be required by the City. The property owner will submit the inspection to the Rehabilitation Staff for inclusion in the work write-up and cost estimates. 6. Lead Base Paint Inspection Depending on the type of improvements a lead inspection may be performed to determine the amount of the contamination. The contaminated area will be abated and the repairs will be added to the work write up. 7. Work-Write-Up/Cost Estimate A Work Write-Up/Cost Estimate will be compiled based on the initial inspection and results of the termite inspection report. The Homeowner will be given a copy of the work write-up. The work write-up may include the necessary architectural drawings and pertinent specifications. 8. Property Appraisal A drive-by appraisal will be performed to determine the after-rehabilitation value. The property must not exceed the after-rehabilitation value set forth by the Housing and Urban Development of $433,200. Appeals will only be accepted within six months from the time of denial. 9. Bid Process Bid packages will be prepared and provided to the Homeowner. The Homeowner will obtain bids from qualified contractors. "Qualified": means those contractors who are licensed by the State of California, who have applied to participate in the City's Rehabilitation Program and who have received written approval of their participation in the Program. However, if applicant desires to obtain bids from contractor(s) not on the City's list, applicant must submit names, license number(s) and address (es) of contractor(s) to the Rehabilitation program 13 staff. Program staff shall obtain contractor(s) qualifications. The selected bid must be returned by the homeowner as soon as possible. No contractor shall be awarded a contract if said contractor has more than four (4) incomplete rehabilitation jobs. Prior to the award of the contract, Program staff shall verify with HUD that contractor is not on the list of debarred contractors. 9. Contract Execution As a requirement for funding, a contract agreement must be executed. The contract shall contain (1) the Bid and Proposal by the contractor, and (2) the General Conditions and the Building Specifications for the work to be performed. The Rehabilitation staff will prepare the necessary documents. 10. Pre-construction Meeting The Rehabilitation staff will conduct apre-construction meeting with the homeowner and contractor to execute all documents. 11. Notice to Proceed Property owners will be assisted by staff in issuing a Notice to Proceed for the construction work. 12. Disbursement The City will release funds in the form prescribed by the institution or agency. Disbursement will be made only after completion of inspection and verification of billing and lien releases by Rehabilitation Staff. Proceeds will be disbursed as follows: . The progress payments shall not exceed 90% of the cost of such work items determined by the bid breakdown. Progress payments due contractor shall be paid after City approval of receipt and verification of contractor's invoice(s) and satisfactory Release of Liens, or claims for Liens, by contractor, subcontractor, laborers and material supplies for work completed and materials installed. Ten percent (10%) retention will be disbursed to contractor at expiration of lien filing period, or thirty-five (35) days after filing of the Notice of Completion. This retention may increase or decrease. • Payments may be made in one lump sum at time of completion. Completion consists of passing final inspection and filing required release forms. 14 VII. CONTRACTOR REQUIREMENTS This chapter sets forth the provisions governing participation by contractors in the Housing Rehabilitation Program. CONTRACTORS ELIGIBILITY Contractors wishing to participate in the Housing Rehabilitation Program shall be required to: A. License Be properly licensed in accordance with provisions of Chapter 9 of the State of California Business and Professions Code, as amended. B. Workers Compensation Insurance Carry Workers Compensation Insurance in accordance with the provisions of the California Labor code, with adequate protection from claims under the Workers Compensation Act which may arise from operations under the Contract; C. Manufacturers and Public Liability Insurance Carry Manufacturers' and Contractors' Public Liability Insurance with limits to protect the Owner(s), Contractor; and his subcontractors against claims for injury to or death of one, or more than one person, because of accidents which may occur or results from operation under the Contract; such insurance shall cover the use of all equipment, including but not limited to excavating machinery, trenching machines, cranes, hoists, rollers, concrete mixers, and motor vehicles, in the construction of the work embraced. D. Property Damage and liability Insurance Carry, during the life of the Contract, Property Damage and Liability Insurance in an amount to protect him and his subcontractors from claims for property damage which might arise from operation under this Contract. E. Personnel Employment Record Have and maintain a good. record in personnel employment practices. The Rehabilitation staff will review and document in its project files that any contractor awarded a contract is NOT included on the GSA's List of Parties Excluded from Federal Procurement and Non-Procurement Programs. Contractors debarred by HUD are not eligible for participating in the Program. 15 F. Performance Record Have and maintain a good business and work performance record. Program staff shall verify and if evidence of improper and/ or poor business conduct and work performance is established, the Program may deny Contractor participation in the Program or may require contractor to submit evidence of bonding as required by the Program prior to execution of any Contract. G. List of Approved Contractors The Housing Rehabilitation Program shall maintain a List of Approved Contractors for the purpose of assisting property owners to obtain bids for the proposed rehabilitation work. The program does not recommend or endorse any of the Contractors on said list. The owner(s) is not required to select any of the Contractors on the list. However, any Contractor selected by the Owner must comply with the provisions listed above. Any Contractor(s) may be removed from the list when there is documented evidence of non compliance with the provisions of the Program, and/ or evidence of unprofessional conduct in the performance of his/her duties. 16 VIII. OTO~ER FEDERAL REGULATIONS This chapter sets forth the provisions governing program compliance with other Federal regulations. These provisions shall be adhered to and/or incorporated in all documents used in the provision of any property rehabilitation assistance. A. EQUAL OPPORTUNITY PROVISIONS During the performance of the Program, the City, the Program Participants and the selected contractor(s) agree as follows: The Contractor shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The Contractor shall take affirmative action to ensure that applicants for employment are employed, and that the employees are treated during employment, without regard to their race, color, religion, sex, or national origin. Such actions shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruiting or recruitment advertising, lay off termination; rate of pay or other forms of compensation; and section for training, including apprenticeship. B. CIVIL RIGHTS ACT 1964 Under Title VI of the Civil Rights Act of 1964, no person shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. C. TEMPORARY RELOCATION-ASSISTANCE This section sets forth a description of temporary relocation benefits that may be available to persons and families who are temporarily displaced from their homes as a result of the City's Rehabilitation Program. a. Conditions-Requiring Temporary Relocation If any of the following causes or conditions occur as a result of the Housing Rehabilitation Program, it may be necessary for the persons or families to relocate to another dwelling on a temporary basis: • Water system is shut off for any extended period of days for plumbing repairs. e Electricity service becomes non-operable when make repairs to wiring. 17 Repairs will create dust and other conditions which would aggravate allergic conditions of occupant(s). Structures are to be fumigated for termite control and infestation. o Hazardous living conditions would result from structural changes during construction. • Sanitation facilities, e.g., tub, wash basin, toilet are to be removed and/or become non-operable. Contractor required relocation of people to perform repairs on time at agreed upon price. D. ELIGIBILITY REQUIREMENTS Persons or families of very low and low income who have occupied the property for more than ninety (90) days and who must find temporary commercial accommodations, are eligible for relocation benefits. Persons or families must actually secure and occupy alternative dwelling unit in order to receive payment. E. AMOUNT OF ASSISTANCE Benefits will be made available for a period determined by the Director but not to exceed the contract term. City will pay the cost of the temporary commercial accommodations. The daily maximum amount shall be based on the lowest reasonable rate(s) obtained from at least three (3) different bona fide commercial lodging establishments. It shall be the applicant's responsibility to obtain quotations (bids) from above mentioned establishments and submit said quotation to the Program office. Depending upon the number of persons permitted to occupy one room, the schedule may be adjusted to reflect actual cost. F. PROCEDURES FOR SECURING RELOCATION BENEFITS Contractor must submit letter to Rehabilitation staff requesting the vacating of unit and specifying amount of time that unit must remain vacant. Request for vacating of the premises must be approved in writing by Rehabilitation staff and.authorized by the Director or his/her designee. Rehabilitation staff will present claim form to Finance Department with a request for advance payment. Advance payment will be made payable, jointly, to displaced person and to commercial accommodation. Advance payment will be delivered by Rehabilitation staff. 18 G. SECTION 3 COMPLIANCE The work to be performed on a project assisted with funds from the Department of Housing and Urban Development is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, which requires that, to the greatest extent feasible, opportunities for training and employment be given lower income residents of the City and contractors for work in connection with the project be awarded to business concerns which are located in, or owned in substantial part by persons residing in the area. H. LEAD-BASED PAINT Housing assisted with HOME funds is subject to the Lead-Based Paint Poisoning Prevention Act (42 U.S.C 4821 et sea.) and 24 CFR Part 35. The Rehabilitation staff shall conduct an inspection of defective paint surfaces in all units constructed prior to 1978 which are occupied by families with children under seven years of age. ENVIRONMENTAL REVIEW The environmental effects of the rehabilitation must be assessed in accordance with the provisions of the National Environmental Policy Act of 1969 as follows: • National Flood Insurance Program (S 570. 609) The provisions of the Flood Disaster Protection Act of 1973 and the regulations there under apply. Under that Act no agency shall approve any financial assistance for construction in an area having special flood hazards unless the applicant participates in the National Flood Insurance Program. Compliance with Air and Water Acts. The selected contractor and all subcontractors shall comply with the requirements of the Clean Air Act, as amended 4 USC 1857 et seq., the Federal Water Pollution Control Act, as amended, and the regulations of the Environmental Protection Agency as amended. m Historic Preservation Historic properties and districts are subject by law to special protection and historic preservation processing, which must be performed to comply with the regulations of the Advisory Council on Historic 19 Preservation (36 CFR Part 800). The goal of this regulatory process is to avoid, minimize, or mitigate adverse effects on historic properties. J. HATCH ACT Neither the HOME Program nor the funds provided therefore, nor the personnel employed in the administration of the Program shall be in any way engaged in the conduct of political activities in contravention of Chapter 15 of Title 5, United States Code. K. TRUTH-IN-LENDING REQUIREMENTS 1. General This section describes the Truth In Lending Act and its procedural and disclosure requirements which must be followed in the settlement with a Deferred Payment Rehabilitation Loans. Title 1 of the Consumer Credit Protection Act was enacted by Congress on May 29, 1968 and became effective on July 1, 1969. The Act requires that borrowers in "consumer credit transaction" be vested with certain rights and protections in connection with the transaction and receive specified written information from the lender. The disclosures must be made before credit is extended and before the borrower becomes obligated in connection with the transaction. Among the required disclosures are: (a) The amount of credit a borrower will have for actual use (the amount financed); and (b) The finance charge (consisting primarily of interest but also other fees and charges) expressed both as a dollar amount and as an Annual Percentage Rate. In addition, the act enables a Borrower, within three (3) days following the loan transaction, to rescind the transaction, if the loan is secured by a lien on the borrower's residence. The Truth In Lending Disclosure Statement is to be used at loan closing to meet the requirements of the Truth-In-Lending Act. A statement shall be given to all borrowers of Rehabilitation loans except those borrowers which are corporations, partnerships, or otherwise organized as an independent entity or business firm under local law. 20 The Disclosure Statement shall be given to the borrower at loan closing but prior to the time he/she executes the promissory note obligation for repayment of the loan. When the Disclosure Statement is given to the Borrower, he/she shall be requested to sign and date a completed Disclosure Statement in the presence of authorized representative of the City of (_ynwood and/or Program staff who shall also sign as witness. The signed and witnessed copy of the Disclosure Statement shall be retained by the Rehabilitation Division in the loan application file. L. ACCESS TO PROPERTY-RECORDS MAINTENANCE Borrower agrees to grant the City of Lynwood and the United States Government or their designee permission, to enter and inspect property and to inspect records of Applicant relating to the rehabilitation assistance received from the City of Lynwood. City agrees to retain copies of all records related to the use of Rehabilitation Program funds for a period of seven (7) years from the effective date of the execution of the Rehabilitation Agreement between the Applicant and the City of Lynwood, and to forward copies of originals, as requested. M. COST EFFECTIVE-ENERGY-CONSERVATION-STANDARDS Cost-effective energy conservation-improvement shall be required as applicable. N. PROPERTY REHABILITATION STANDARDS All the residential rehabilitation work shall comply with the adopted Property Rehabilitation Standards (See Appendix A). Any new construction work performed under the Housing Rehabilitation Program shall comply with the City's Building and Safety Codes and Zoning Ordinances. All illegal and/or substandard improvements shall be required to be brought up into compliance with appropriate codes and/or ordinance as determined by the Rehabilitation Specialist. O. CONFLICT WITH PUBLIC INTEREST The property for which rehabilitation assistance is requested may not be situated in a location where it will be in conflict with either existing or proposed redevelopment projects involving the construction or development of public schools, parks, streets, utilities and other public 21 facilities except that, when determined by the Director, a health and/or safety hazard exists which endangers the public health and welfare. P. REQUEST FOR ARBITRATION The Program staff may serve as Arbitrator between the Rehabilitation Program's participating property owners and contractors. Q. REQUEST FOR INTERPRETATION OF REGULATIONS The Program Staff shall serve as Interpreter of the Adopted Housing Rehabilitation Program Regulations when Program participants challenge an interpretation of the Regulations. 22 G.S. DEPARTMENT OF EOD 02/2008 STFTE:CFLI EOdNL __ _______ __________ __ 200E ADIO STED H0:9E IIJC OME LIMITS __________ _________ PROGR.4i9 1 PERSON 2 PEREON 3 ?ERSOH 9 PERSON 5 PERSON c' PERSON 7 PERS OR" 8 PERSON 3a kersfie ld, CF IdSF 308 LIMITS i130C 12500 19550 16150 17550 18750 20056 21300 VERY LOW INCOME 18850 21500 21200 26900 29050 31200 33350 35500 608 LIMITS 22620 25800 29040 32280 398`00 37eg0 90020 92600 LOW INCOME 30156 54950 38750 93050 9`0500 95950 53960 55850 Chiro, CF MSF 308 LIMITS 11950 13100 19700 16350 17650 18950 20250 21600 VERY LOW INCCME 19100 21800 29550 27250 29950 31600 33800 35550 608 LIMNS 22920 26160 29960 32700 35390 37920 90560 <3190 LOW INCOME 30500 39900 35250 93600 97100 SG 600 59050 57550 El Centro, C.A MSA 368 LIMITS 11300 12900 19550 16150 17950 18750 20050 21300 VERY LOW ryCOME 60 18850 21500 29200 26900 29050 31200 33350 35500 8 LIMITS 22620 25800 25050 32260 39860 37940 90020 92600 LOW INCOME 30150 39950 38750 93050 96500 49950 53e 00 56850 Fr esro, CA MS.w 30% LIM i1'S 11300 12506 19550 16150 17450 18750 20050 21300 VERY LOW INCOME 6 18850 21500 29200 26500 29050 31200 33350 35500 08 LIMITS ^ ' 22620 25800 24090 32280 3[860 37990 90020 42600 LO[ ] INCOM c 30150 34950 38750 93050 96500 99950 53900 56850 F.an£ortl-Corcoran, CE MS A 30£ LIMITS 31300 12560 19550 16150 17950 18750 20050 21300 VERY LOW INCOME 18850 21500 29200 26900 29050 31200 33350 35500 6Ga LIMITS 22620 25800 29090 32280 39860 37eg0 90020 92600 LOW INCOME 30150 39950 38750 93050 96500 99950 53900 5n85G Los Angeles-Long Beach, C9 NOD Metro Ei9R Area 30s LIMITS 15950 18200 20500 22750 29550 26600 28200 30050 VERY LOW P1C0[4E 26550 30300 39100 37900 90950 53950 47000 SGOSC 608 LIMITS 31860 3'0360 90920 95480 99190 52790 56900 ' 00` 0 LOW NCOME 92450 98500 59600 60650 65500 70350 75200 0 0 80050 Orange Ccunc}^, CA NOD M etro PMR Idea 308 LrMITS 19550 22300 25100 27500 30150 32350 39600 36850 VE3Y LGr] INCOME 32550 37200 91850 4`0500 50200 53950 57650 614 G0 608 LIMITS T 35060 99690 50220 SSE00 60290 69790 69180 73680 LOW _NCOniE 52100 59500 66956 74900 E0350 86300 92250 98200 Madera, CA MSA 308 LIi9IT5 11300 12900 19550 16150 17950 18750 20050 21300 VERY LOW INCOME 1fi 850 21500 29200 26900 25056 31200 33350 35500 ~ 60€ LIMITS 22620 25800 29040 32280 39860 37990 90020 92600 LOW INCOME 30150 39450 38750 93050 96500 99950 53400 56850 Page 1 of 7