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HomeMy WebLinkAboutRES 07-133 RESOLUTION NO. 07-133 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City Council hereby approves the revised Housing Program Guidelines for Disaster Recovery Programs. The Guidelines are substantially in the form attached hereto as Exhibit "A" and made a part hereof for all purposes. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 8th day of May, 2007. __ 0 U � Mayor Guy N. Goodson - ........... � � Hurricane Rita Housing Assistance Housing Guidelines 2006 1. PURPOSE OF PROGRAM A. The purpose of the Community Development Block Grant Disaster Recovery Program (Program) is to provide housing assistance to 80%Area Median Family lincome (AMFI) and below households directly affected by Hurricane Rita that occurred on September 20', 2005. Financial assistance will be provided for the repair, rehabilitation, or reconstruction of substandard homes whose owners have remaining unmet- needs. The focus of the repair, rehabilitation, or reconstruction is to provide safe, decent, and sanitary housing by bringing existing Rita affected housing units into compliance with all health and safety codes. When repairs are completed the minimum standard for repairs will be compliance with all applicable local codes and ordinances including the International Residential Code (IRC) (with windstorm provisions) which will be used as required and as appropriate. When new construction is completed, the IRC including windstorm measures and appropriate energy codes will be utilized. B. In special cases, and only when extant conditions would mean that replacing a housing unit on the same site would continue or exacerbate an unsafe condition, homeowners, who otherwise meet the requirement of being owners of a permanent residence, will be given assistance to acquire and newly construct a housing unit on a safe site. Examples of unsafe conditions shall include, but not be limited to, housing located in a special flood hazard area, unsafe soil conditions, environmental hazards that cannot be mitigated; or other conditions that cannot be changed and would continually put occupants in harm's way. Southeast Texas Regional Planning Commission shall make every effort to ensure that after-rehabilitation repairs and improvements supplement the structurally sound-housing stock in the area served and that the housing is of fitting design and quality so as to improve the neighborhood in which they are completed. C. South East Texas Regional Planning Commission and its sub-contractors will administer the Program in accordance with these Housing Guidelines (Guidelines) based solely on information available at this time. The Administrator reserves the right to re-allocate program funds and program components (i.e. emergency repair, rehabilitation, reconstruct) within SETRPC's service area as the program is administered if it becomes evident that doing so would better serve the affected communities and their residents. These re-allocation decisions will be presented to the CDBG Disaster Recovery for Housing Advisory Board for approval. If such a change would exceed a 5% variable in program funds or program components, SETRPC must submit an amendment request to the Texas Department of Housing and Communities Affairs (TDHCA), the grantor of these funds. Page 1 of 22 I EXHIBIT "A" 2. DESIGNATED AUTHORITY TO ADMINISTER PROGRAM I This program shall be governed by the State of Texas Action Plan for CDBG Disaster Recovery Grantees (Action Plan) and operated in accordance with all applicable rules and regulations of. I. The US Department of Housing and Urban Development("HUD"); ii. The Texas Department of Housing and Community Affairs("the Department"); iii. The South East Texas Regional Planning Commission(the Administrator"); The Program shall be under the direct supervision of Michael Foster or his designee. 3. TYPE OF ASSISTANCE AND ACTIVITIES /�. ELIGIBLE ACTIVITIES i. Emergency Repair — Emergency repair shall be defined as limited necessary repairs completed to alleviate issues of health and safety such as thermal environment, water leaks, unsafe plumbing conditions and unsafe electrical hazards or, altematively, as repairs necessary to secure a structure from further exposure and degradation caused by such things as exposure to the elements. Such repairs will not be designed to bring an entire structure into conformance with any standard or code except the health and safety codes. However, codes, standards, and specifications will be applied to individual repairs and all repairs should be considered permanent. For example, a leaking roof creates health and safety issues and exposes the structure to further degradation. Replacing a roof will not require that additional insulation be added or a heater repaired. However, the roof itself will meet the applicable codes including windstorm requirements. ii. Rehabilitation — Rehabilitation shall be defined as bringing an entire structure into conformance with a pre-determined set of specifications and standards that address the entire condition of the structure. At a minimum, the rehabilitated portion must comply with local building codes and standards, and upon completion, the entire structure must comply with housing quality standards (HQS)and local health and safety codes. Rehabilitation shall be limited to"stick built"structures that have been deemed feasible for rehabilitation. iii. Reconstruction — Reconstruction shall be defined as the demolition, removal, and disposal of an existing housing unit and the replacement of that unit on the same lot with a unit that complies with the universal design features in new construction established by §2306.514, Texas Government Code, energy standards as verified by a RESCHECK certification, and the International Residential Codes, as required by Subchapter G, Chapter 214, Local Government Code. Reconstruction of a housing unit should be of a similar type structure. For example, a stick built housing unit may be replaced with a stick built unit and a manufactured one with a manufactured unit. iv. Replacement — Replacement shall be defined as the replacement of housing taken or demolished by government action as a direct result of Hurricane Rita. Page 2 of 22 Replacement will be for a comparable unit, not to exceed three bedrooms, two baths, at a location that is not within the 100 year flood plain. If the replacement unit is newly constructed, the unit must at a minimum comply with the universal design features in new construction established. by Government Code, energy standards as verified by a RES HECKScertification, and the International Residential Codes, as required by Subchapter G, Chapter 214, Local Government Code. V. Elevation — Shall be defined as the piers necessary in Zone A of the 100 year flood plain to rebuild a housing unit to meet the flood zone requirements. A. Demolition — Shall be defined as activities necessary to alleviate conditions in slum and blighted areas. SETRPC or its sub-contractors will use all available resources, including Housing Authorities, Habitat for Humanity, Community Housing Development Organizations, and other non profit organizations, to provide displaced persons with access to decent, safe, sanitary, and affordable housing in SETRPC's service area. B. FINANCIAL ASSISTANCE 1. Assistance provided in a floodplain will be in the form of a three(3)year, zero percent interest, deferred forgivable loan. All other assistance will be provided in the form of a grant. ii. The maximum amount of CDBG Disaster Recovery Fund assistance to be provided to a homeowner.("applicant) for Emergency Repair shall be $25,000 (Twenty-five thousand Dollars). ill. The maximum amount of CDBG Disaster Recovery Fund assistance to be provided to an applicant for Owner Occupied Rehabilitation shall be $65,000 (Sixty-five-five th Y ousand dollars). iv. The maximum amount of CDBG Disaster Recovery Fund assistance to be provided to an applicant for Single Family Rental Rehabilitation shall be$23,000 (Twenty-three thousand dollars). v. The maximum amount of CDBG Disaster Recovery Fund assistance to be provided to an applicant for Reconstruction shall be $100,000 (One hundred thousand dollars). vi. The maximum amount of CDBG Disaster Recovery Fund assistance to be provided to an applicant for Replacement housing shall be identical to that of reconstruction. vii. The maximum amount of CDBG Disaster Recovery Fund assistance to be provided to an applicant for elevation shall be$35,000. Elevation funds may not be used if manufactured or modular housing will be placed on the resulting piers. Elevation funds may be combined with replacement or reconstruction funds if, and only if, the property is located in flood zone A. If assistance for elevation is requested, the total amount of assistance to an applicant cannot exceed the maximum amount for reconstruction or replacement. Page 3 of 22 e- viii. The maximum amount of funding available for Demolition activities shall be $5,000(Five thousand dollars)per lot. i C. INSPECTIONS 1. In order to document the physical condition of the home that will be repaired, rehabilitated or reconstructed through the CDBG Disaster Recovery Fund; a thorough inspection will be required. This inspection will be documented in writing, with drawings and photographs as needed. All items needing repair will be documented with specific measurements and locations sufficient to create a work-write up and cost estimate. 1). PROGRAM PARAMETERS I. The minimum amount of CDBG Disaster Recovery Fund assistance that may be provided to any applicant shall be One Thousand Dollars($1,000.00). E. FEASIBILITY ANALYSIS I. For each unit assessed under the Program,a preliminary budget will be prepared to indicate the potential cost of emergency repairs, rehabilitation, or reconstruction. This budget, including any inspection checklist, notes, photographs and drawings will be called the "feasibility analysis". This budget should include all major systems but need not detail individual items of cost. If the cost of rehabilitation, including lead hazard inspection and reduction, demolition, and site improvements required by environmental conditions: (1) Is less than$19,250 for hard costs,the Administrator will offer emergency repair services to the applicant. Reconstruction will not be an option and the Administrator will prepare a detailed work write-up and cost estimate for emergency repairs adequately documented to be used as bid documents. (2) Is more than $19,250 and less than $51,250 for hard costs, the Administrator will offer rehabilitation services to the applicant. Reconstruction will not be an option and the Administrator will prepare a detailed work write-up and cost estimate for rehabilitation adequately documented to be used as bid documents. (3) Is more than $51,250 for hard costs, the Administrator will offer reconstruction to the applicant. ii. If feasibility analysis indicates a budget in excess of$51,250 based on the above estimate for rehabilitation and the applicant does not desire reconstruction, the Administrator should "walk away" from the project after notifying the applicant that the project is not feasible and offering an explanation in writing. Page 4 of 22 6' 4. PARTICIPANT ELIGIBILITY A. INCOME LIMITS 'To be eligible for assistance,all applicants must meet the following criteria. i. Total household annual gross income may not exceed 80%Area Median Family Income(AMFI),adjusted for family size, as published annually by HUD. ii. All income will be verified utilizing third party verifications. iii. Administrator will conduct income verifications in accordance with 24 CFR Part 5 requirements using procedures as stated in the Technical Guide for Determining Income and Allowances,3rd Edition(HUD-1780-CPD). The most current income limits, published annually by HUD, shall be used to verify the income eligibility of each household applying for assistance. Under no condition can a household that exceeds 80%AMFI be served with the CDBG Disaster Recovery Fund. B. PROPERTY OWNERSHIP REQUIREMENTS i. An applicant must own the property and occupy the property as his or her principal place of residence. Eligible forms of ownership include:: (1) Fee simple title to the property; (2) Ownership or membership in a cooperative or mutual housing project that constitutes homeownership under Texas law (3) Warranty Deed to the property; (4) Recorded life estate in the property; or (5) 99-year leasehold interest on the property; ii. Contracts for Deed and/or Contracts for Sale are NOT acceptable forms of ownership. iii. In the absence of proof of property ownership described above, to be eligible for assistance,the applicant household must provide: (1) Proof of paid property taxes (dated as of the billing cycle that included 9/24/2005) (2) Proof of paid homeowner's insurance (for the year that included 9/24/2005) Page 5 of 22 C. PROPERTY TAXES I. All delinquent property taxes shall be paid prior to the award for rehabilitation/reconstruction assistance; or the property owner must have qualified for and received a tax deferral as allowed under Section 33.06 of the Texas Tax Code. A written verification of the tax status must be placed in each applicant's file. For verifications conducted via telephone, a telephone confirmation form must be completed including, but not limited to,date of contact, name of contact,and phone number of contact. 5. PROGRAM MARKETING A. The availability of the Program funds shall be publicized via: 1. Press releases in the local newspapers, including but not limited to the following: (1) Beaumont Enterprise; (2) Hardin County News; (3) Orange Leader, (4) Silsbee Bee ii. Public Service Announcements (PSAs), which are developed and distributed to local broadcast media,including but not limited to the following: (1) KLVI , KOGT,and KOLE radio stations; (2) KFDM, KBMT, KJAC and FOX television stations. iii. Informational pamphlets, public notices, and outreach targeting special needs groups distributed by public or non-profit organizations, including but not limited to the following: (1) Catholic Charities; (2) United Board of Missions; (3) Orange Christian Services; (4) Hardin County Indigent Health Services; (5) Advocacy, Inc.; (6) Rebuilding Together; (7) UMCOR. Page 6 of 22 a iv. Informational pamphlets, public notices, and outreach, distributed by business groups including but not limited to: (1) Chambers of commerce; (2) Economic development corporations; (3) Mortgage companies; (4) Real estate companies; (5) Rotary Club and other civic groups v. Administrator is strongly committed to providing information in English, Spanish, and Vietnamese. Every effort will be made to make applications available in English, Spanish, and Vietnamese. An interpreter of both Spanish and Vietnamese will be made available to assist in the application process. B. AFFIRMATIVE MARKETING PLAN I. In addition to marketing through widely available media outlets,Administrator will take additional measures to affirmatively market the CDBG Disaster Recovery Fund program services,as follows: (1) Administrator will contact and market to the following local organizations that provide unique access for persons who are considered members of a protected class under the Fair Housing Act: (a) L-----------------------------------------------INN= (b) Advocacy, Inc.; (c) Silver-haired legislature; (d) League of United Latin American Citizens(LULAC); (e) Vietnamese churches; (f) Catholic Charities (2) Administrator will advertise with the following media outlets which provide unique access for persons who are considered members of a protected class under the Fair Housing Act including: (a) Ethnic newspapers and/or radio stations (3) In addition, Administrator will take the following measures to make the program accessible to persons who are considered members of a protected class under the Fair Housing Act: (a) Hold informational meetings in buildings that are compliant with the Americans. with Disabilities Act (ADA), provide sign language assistance when requested, and provide special assistance for those who are visually impaired when requested. ii. Documentation of all marketing measures used, including copies of all advertisements and announcements, will be retained by Administrator and made available to the public upon request. Page 7 of 22 Ill. Whenever possible, Administrator will use the Fair Housing logo in advertising, ` post Fair Housing posters and related information, and, in general, inform the public of its rights and obligations under Fair Housing regulations. iv. Administrator will accept applications as follows: (1) In person at addresses to be announced in press releases and on SETRPC's website. (2) Length of time, days, and hours that applications will be available, including but not limited to: (a) Online 24 hours a day; (b) During regular business hours at Administrator's place of business; (c) At sites and times listed on the website. (3) Via regular mail at 2210 Eastex Freeway, Beaumont,TX 77703. (4) Special arrangements: Arrangements can be made for persons with special needs, language interpretation needs, or for persons needing alternate times and locations b telephoning or emailing a request to Administrator. V. Administrator may select applicants from an existing waiting list. The next eligible applicant on the waiting list will be offered CDBG Disaster Recovery Fund assistance, if funds are available, after the applicant before them on the waiting list either declines assistance or is deemed ineligible. (1) The Administrator shall notify all applicants in writing of their eligibility status. (2) Administrator shall notify the applicant in writing if the requested emergency repair, rehabilitation, or reconstruction is deemed ineligible or not feasible. (3) Administrator shall be the sole arbiter of the applicant's eligibility and the feasibility of any activity provided under the program. (4) The decisions of Administrator shall be final. (5) Financial assistance to the applicant will be provided in the form of a grant. 6. METHOD OF APPLICATION A. The CDBG Disaster Recovery Fund Program Administrator and/or his/her designee shall be responsible for advertising the availability of the program and for accepting applications. Applications from households in the city limits of Page 8 of 22 Beaumont and Pt. Arthur, will be forwarded to the Administrators of those programs as sub-contractors for this program. I E3. The Administrator will accept applications from interested consumers for at least 90 days or until funds are expended or reserved, whichever comes first. All applications will be reviewed for completeness in the order in which they are received. C. Upon receipt of the applications for assistance, applications will be screened for completeness and all information related to employment, income, assets and liabilities will be verified to determine the applicant's eligibility. The Local CDBG Disaster Recovery Fund Supervisor and/or his/her designee and the administrator identified by each sub-contractor shall be responsible for determining the eligibility of each applicant. D. A review team will rate each completed and eligible application according to a predetermined ranking system. The review team shall be responsible for reviewing the applicants and making recommendations to the Local CDBG Disaster Recovery Fund Supervisor. The review team for South East Texas Regional Planning Commission shall consist of members of the Community Development Department working on the Disaster Relief Program. The review team shall be an ad hoc committee and will serve until the Program is completed. At least 3 members of the team must be present at each review. The two sub- contractors, the cities of Beaumont and Pt. Arthur, will have their own review committees and predetermined ranking system. While the ranking systems can differ among these groups, all must follow locally established priorities. Written priorities,team members and ranking information will be available upon request. E. Upon receipt of the recommendations from the review team, the Local CDBG Disaster Recovery Fund Supervisor shall approve, disapprove or modify such recommendations. The funding decisions of the Local CDBG Disaster Recovery Fund Supervisor shall be final. F„ All applicants selected for assistance shall then be counseled by the Local CDBG Disaster Recovery Fund Supervisor and/or his/her designee, regarding his or her housing needs and in determining the type of eligible repairs. A written agreement will be executed between the Administrator and the applicant that outlines the responsibilities of the applicant and the Administrator, and the terms of the assistance. 7„ FIRST COME, FIRST SERVE WAITING LIST A. All Eligible Participants ii. All eligible applicants will be rated on a first come, first serve basis so that a priority of funding might be established. Based on the resident's need, SETRPC will determine which funding source best fits that need and how and when the assistance is granted in accordance with applicable program guidelines. With this understood, priority will be given to applicants who are: Page 9 of 22 (1) Uninsured/Underinsured medically fragile(e) (2) Uninsured/Underinsured elderly<b)and/or disabled) I (3) Uninsured/underinsured single head of household (4) Uninsured/Underinsured Furthermore, SETRPC (and its subrecipients) will not give preference to or discriminate against any person on the basis of race, color, religion, national origin,sex,disability,or familial status. (a) Medically Fragile: Household member(who must currently living in the home) has a medical condition(s) that is compromised due to Hurricane Rita-related damage: • Pregnant women • Immune compromised individuals (chemotherapy patients; liver disease;; transplant recipients, post surgical,etc.); • Individuals with respiratory problems and/or lung disease; • Individuals on oxygen; • Heart disease;and/or • Individuals with severe allergies (b) Elderly: age 62 or over (c) Disabled: • If the applicant is under age 62 and is receiving Supplemental Security Income (SSI), this is sufficient evidence of disability. The Verification of Eligibility for Disability Special Needs (Form 14.27) is NOT required. Retain a copy of the SSI award letter in the activity file. • If the applicant is 62 or over and is receiving SSI, this does not necessarily indicate a disability.The Verification of EligibiW for Disability Special Needs(Form 14.27) is REQUIRED. Additionally, retain a copy of the SSI award letter in the activity file. • If the applicant's disability is apparent, then staff may certify as to the applicant's disability by signing the Verification of Eligibility for Disability Special Needs(Form 14.27)and: 1. documenting the disability was observed by staff;and 2. indicating the applicant meets the stated definition of disability. If staff does not or cannot certify as to the applicant's disability, a Form 14.27 must be obtained. Additionally, documentation verifying the applicant's income must be obtained and retained in the activity file. B. In addition, repairs that prevent further damage to selected homes will be completed first,when possible. C. Incomplete applications will not be placed on a waiting list until all required documents for the application are provided to the Administrator and the application is verified and certified as program eligible. Page 10 of 22 1 D. Applicants will be given a reasonable time frame to complete all application documents. Deadlines for returning required documents will be clearly noted on I application packages. Documents received after the deadline date will not be considered. Incomplete applications will not be included on the waiting list. 8. USE OF AN EXISTING WAITING LIST. A. The Cities of Beaumont and Port Arthur may use existing waiting lists in accordance with the parameters above(section 7). i. The above cities having previously administered a recent(past two years)CDBG or similar program, and having successfully marketed and affirmatively marketed the program to residents within the described service area, may use an existing waiting list in order to serve persons who have previously applied and proven they were eligible. ii. In the case of disasters,a list of all disaster victims may supplant other marketing efforts. iii. A fi I e of the previous marketing and affirmative marketing efforts will be made available to the public upon request. iv. All applicants who are on an existing waiting list must submit new application materials,updated income information, proof of ownership and, in general, be re- qualified as eligible for the CDBG Disaster Recovery Fund program. V. All applicants who exist on a current waiting list will be considered in the order in which they existed on that waiting list, however,after a reasonable period of time of at least 30 days has been given to all applicants to submit new materials for purposes of re-qualification, applicants with incomplete applications may be dropped from the waiting list. 9. PROPERTY REQUIREMENTS A. The property must be a single-family dwelling located within Hardin,Jefferson, or Orange County.. B., Under the Flood Disaster Protection Act of 1973 (42 U.S.C. 4001-4128), CDBG Disaster Recovery Fund funds may not be used with respect to the acquisition, new construction,or rehabilitation of a project located in an area identified by the Federal Emergency Management Agency (FEMA) as having special flood hazards,unless: ii. The community where the area is located is participating in the National Flood Insurance Program, or less than a year has passed since FEMA notification regarding such hazards;and ii. Flood insurance is obtained as a condition of approval of the commitment. Page 11 of 22 k (1) The costs of a flood insurance policy for properties located within a floodplain is an eligible project cost during the term of the houshold's deferred/forgivable loan period. SETRPC must be provided with at least thirty(30)days notice of cancellation for any reason. C. The applicant must provide evidence of homeownership. D. After assistance is provided, at a minimum, the dwelling must be in compliance with local building codes and zoning ordinances and applicable construction or livability standards. i. Newly constructed homes(including reconstructs)must meet: (1) Energy standards as verified by a RESCHECK TM certification. The certification must be available in the Administrator's file prior to purchase. (2) The International Residential Code as 11 of the IRC as required by Chapter 388 of the Health and Safety Code as applicable. E. The purchased property can not be valued at more than 95% of the median purchase price as specified in Section 203 (b) of HUD's FHA single family mortgagee insurance program. F. Any housing unit built before 1978 must be inspected for hazards associated with the presence of lead-based paint or may be presumed to have lead-based paint hazards. Proof of notifications, work completed and clearance examination must be available for the Administrator's file. G. Housing units located in an area where Federal Assistance is not permitted by the Coastal Barriers Resource Act or within runway clear zones of either a civil or military airport are not eligible properties. 10. ELIGIBLE IMPROVEMENTS & EXPENSES A. All repairs must be for unmet need and must address structures that were damaged as a result of Hurricane Rita. Non-Rita related damage may be addressed on structures that have storm related damage. B. Emergency repairs are eligible as long as all health and safety standards are addressed. C. Rehabilitation funds shall be used for those repairs and/or replacements that are necessary to bring the structure into compliance with applicable local codes or standards and HQS. D.. As required to complete construction services, necessary"project soft cost" and administration cost as defined by the Department and not exceeding the Department's pre-set program limits are allowable costs. E. All sites must be cleaned before any construction activity can begin. Page 12 of 22 n F. Rehabilitation funds may also be used for general improvements that are "reasonable and customary" except as excluded herein. All improvements must be physically attached to the property and be permanent in nature. G. CDBG Disaster Recovery Funds may not be used for luxury items including, but not limited to: swimming pools, fences (other than those required for security), television satellite dishes,and dishwashers. H. Air conditioners and heating systems, water heaters, stoves, and refrigerators are eligible for replacement under the CDBG Disaster Recovery Program. Appliances and housing components that are not integral to the structure of the home such as washers,dryers,detached garages and carports are not eligible. I. The use of lead-based paints is prohibited. Any units built prior to 1978 will be inspected and assessed for any hazards associated with the presence of lead- based paint by a State of Texas certified lead inspector/assessor as required. Each family will be notified as to the hazards of lead based paint. Where any hazard has been detected, the owner shall be notified. Feasibility analysis of reducing the lead hazards will be included as part of any feasibility analysis that is conducted. If rehabilitation and lead hazard reduction is not feasible a reconstruction may be proposed. �I. All city building permits shall be obtained by the contractor at his/her expense and may be included as part of the bid. 111. PARTICIPANT APPROVAL AND RESPONSIBILITIES A. After the applicants have been approved for assistance by the Local CDBG Disaster Recovery Fund Supervisor or his/her designee, a property inspection must be conducted to determine the work necessary to upgrade the structure to minimum Program standards. All work done must meet local building codes and HQS at a minimum. Newly constructed housing must also meet IRC and energy code requirements. Work write-ups will be required for all applicants awarded. Reconstruction and replacement projects will also require plans and specifications. "Before" pictures shall be taken by the Administrator photographic record of the necessary structure and improvements and mu provide be submitted with all work write-ups and copies of the initial property inspection. B. Applicants will be given the opportunity to accompany the Local CDBG Disaster Recovery Funds Supervisor, or his/her designee on the work write-up inspection in order to discuss the proposed work items. When the work write-up has been completed and a cost estimate prepared, the Local CDBG Disaster Recovery Fund Supervisor or his/her designee shall discuss the scope of the work and the effect of the cost estimate with the applicant. If the applicant agrees with the scope of work and to his/her responsibility regarding any additional funding, the applicant shall sign off on the final work write-up that is used in the bidding process. The Local CDBG Disaster Recovery Fund Supervisor or his/her designee shall agree not to omit any work items that are necessary to bring the structure up to program standards as previously established herein. Page 13 of 22 C. Upon completion of the work write-up, the administrator, and/or its designee, shall solicit competitive bids for the proposed work from a list of contractors interested in Program participation. The administrator, and/or its designee, shall select the qualified contractor and shall forward the bids to the Administrator for review. The bid must be within 15% of the initial cost estimate. If the bid is too high, one of the following will occur: 1)request the bidder to review his or her bid to determine if any items were priced inappropriately and to revise his/her bid accordingly; 2) agree to pay the difference;or 3) re-bid the project in its entirety. If errors are confirmed in the original cost estimate, appropriate estimate adjustments shall be made to effectively compare the bids to this estimate. All contractors must meet all Administrator requirements and must be approved by the Department prior to execution of the rehabilitation contract. The contractor must meet and comply with all of the contractor requirements as hereinafter established for this Program. D. After the work write-up has been completed, a before-rehabilitation appraisal valuation will be obtained from the County Central Appraisal District in order to determine that the after-rehabilitation value does not exceed the maximum allowed(203 b limits). 112. CONTRACTOR SELECTION A. CONTRACTOR QUALIFICATIONS i. Contractors are responsible for, and must meet minimum requirements as follows: (1) All contractors shall carry and provide proof of a current general liability policy of at least one hundred thousand dollars ($100,000). This policy should cover all work done under the CDBG Disaster Recovery Fund Program and be pre-paid throughout the contract period. No geographical, time or other limitation that excludes the CDBG Disaster Recovery Fund Program will be acceptable. (2) The contractor and sub-contractors must not be debarred, suspended, or ineligible according to the U.S. General Services Administration's List of Parties Excluded from Federal Procurement or Non-Procurement Programs. Verification of contractor eligibility from the Texas Department of Housing and Community Affairs is not required prior to awarding any contract to the contractor unless federal labor standards requirements apply. (3) All contractors must be able to provide proof of performance and/or payment bonds. (4) Whenever possible,the Administrator will give opportunities to Historically Underutilized Businesses (HUBs) and will make an affirmative effort to encourage bids from such contractors. Page 14 of 22 s (5) Whenever possible, opportunities shall be given to locally owned businesses and low-income residents of a given area. ii. In addition to these requirements, the Administrator may establish their own fair and evenly applied criteria for contractor selection. These may include but are not limited to: (1) Workers compensation insurance; (2) Verification of quality of work references; (3) Verification of credit references;and (4) Verification of established line of credit. iii. An approved contractor list will be created and will be accessible to all applicants who meet the fair and reasonable criteria pre-established by the Administrator. Such criteria will be made available in writing upon demand by interested parties. This criteria along with an advertisement to bid will be posted in a public place. Any advertisement to bid should allow reasonable time for an interested party to meet the criteria required by the Administrator. '13. CONTRACTOR PROCUREMENT A. Contractors will be selected through an itemized bid process.A sealed bid is the preferred method of selecting bids The administrator, and/or its designee, may select any bid that is within 15% of the cost estimate. However,the low qualified bid is always preferred. El. Contractors will adhere to the terms of the rehabilitation contract including performance standards and the general specifications. Whenever the need for clarification results in a change, such issues will result in a written change order prior to any work being completed. No work will be approved except that which is established in the contract and in written approved change orders. Any unforeseen or hidden condition should be reported to the Administrator immediately. Any item that conflicts with these standards should be reported immediately by the contractor. C. Whenever possible the contractor will make an effort to minimize the impact of the construction on the applicant. Work shall be carried out swiftly and directly. Electric,water,sewer and gas service will not be interrupted for more than twelve (12) hours without written approval by the applicant being assisted with CDBG Disaster Recovery funds. Heat will be provided at all times during winter months. Doors, windows and any other large openings or air leaks will be repaired on the same day.The work area shall be secured at all times. D. The work area shall be left clean and free from clutter at the end of each day and the contractor, not the applicant, will be responsible for storage of materials and tools. Page 15 of 22 s IE. Prior to the commencement of construction, the applicant will arrange to move and store any valuable personal property that might be damaged during the course of construction. If property is damaged through negligence of the contractor, arrangements will be made by the contractor to reimburse the applicant. F. The contractor shall use the site and its facilities only for specified construction. The electrical,water, sewer and gas systems shall be used only for construction purposes and during the construction phase only. G. Any discrepancy in the contract documents shall be brought to the attention of the program Administrator immediately. H. Failure of contractors to meet the Department's criteria can result in: I. Contractors not being eligible for payment, and should not become party to any CDBG Disaster Recovery Fund Program funded project. 1•. The contracting sequence for housing rehabilitation projects shall be: Invitation to Bid, Bid Opening,and Contract Award. I. Within ten (10) days of notification of the contract award, the successful bidder shall provide the program Administrator with: (1) a list of sub-contractors, and (2) certificates of insurance. (a) certificates of insurance from the issuing company will show current coverage in the amount stipulated in the contract documents and with a thirty (30) day notice of cancellation of insurance to the Administrator for: general liability with completed operational coverage, vehicle liability, and statutory workman's compensation (as required). J. The contractor shall begin work within ten (10)days of receiving the issuance of the Notice to Proceed. 14. CONTRACTOR REQUIREMENTS A. The number of work days shall be set out in the contract. Upon completion of the work acceptance by the Administrator and applicant, the Certificate of Final Inspection is issued and the Warranty Period begins. B. Thirty(30)days after the Certificate of Final Inspection date,the statutory amount retained is released to the contractor,except in cases where it is determined that the retained should not be released. Page 16 of 22 F f I �C. It is recommended that payments are made when a project reaches 40%, 70%, and 100% completion and at 30 days after a Certificate of Final Inspection is y issued. D. All payment requests will be made in writing by the contractor to the Administrator and will include a list of items, their costs, and a sum of the item costs. 1=. The work to be paid should be based solely on completed items from the schedule of values submitted by the contractor prior to construction or the Itemization of Bid Form if no schedule is submitted. F. The Administrator will inspect such work as soon as possible (usually within one business day)from receipt of such request. G. The Administrator will provide a completed Contractor Request for Payment form to the Contractor to sign for the work which payment is authorized and will then request the applicant to execute the Contractor Request for Payment form. Payments will be made thereafter. H. All materials used shall be new (unless otherwise specified in the Project Manual) and of good quality. All work shall be done with skilled craftsmen and accomplished with care. Contractor shall provide samples to the applicant for selection for all materials as cited in the individual specifications and provide reasonable time to the applicant to make selections. Contractor shall submit a letter to the contract Administrator, signed by the applicant, stating that the applicant approves of colors and quality of items such as,but not limited to:paint, flooring materials, brick, shingles, vinyl siding, door/window/drawer hardware, and counter tops. 1. Upon completion of construction,the contractor will: L remove all construction debris from the site; H. clean and mop all resilient floors; iii. clean all new and existing paint from other finished surfaces including window glass and mirrors; iv. leave all newly installed items in operating condition; V. light gas water heater pilots,stove/oven pilots and gas heater pilots; vi. start all other electrical and mechanical systems; vii. put all hardware in operating condition; viii. deliver new keys to applicants if hardware is installed. J. Discovery of defective elements made known to the contractor before or during the construction process shall be brought to the immediate attention of the Page 17 of 22 Administrator in writing. When repairs are made, the repairs shall reasonably match the surrounding materials in original design and dimension as approved by the Administrator. IK. Where additional work is necessary to make repairs or to correct unforeseen dangerous conditions,the contractor shall submit to the Administrator a proposal consisting of what type of work is needed, the cost of such work, and the time necessary for such work to be completed. Unless it is determined there exists an immediate health and safety danger, NO WORK SHALL BE AUTHORIZED until agreed upon in writing by the applicant, contractor,and Administrator. L. Compensation for additional work will be negotiated in the following manner L the deletion of work proposed, but not started; or if that is not possible, ii. an increase to the dollar amount of the contract(if funds are available). PA. No other work shall be done to the project other than the work agreed upon in writing by the applicant, Administrator and contractor or as necessary to remove immediate health and safety dangers during the construction phase. N. Contractor will be responsible for determining utility needs, to provide adequate sanitary facility(s)and to safely operate equipment on site. 15. PRE-CONSTRUCTION CONFERENCE A. The Administrator shall conduct a pre-construction conference with the contractor and the recipient. The terms of the proposed rehabilitation contract will be explained along with the roles of the Administrator and the applicant.Additionally, the Administrator will explain the inspection procedures, completion requirements, and payment procedures. At the pre-construction conference, the Administrator shall have the following documents properly executed by both the applicant and the contractor: 1) the Notification of Lead-Based Paint form;2)the Pre-construction Conference Report; and 3) the Contractor's Non-Kickback Certification. In addition, exterior and interior"before" pictures will be taken and placed in file. B. Prior to adjourning the pre-construction conference, the Administrator shall present the rehabilitation contract to be executed by the applicant and the contractor. Upon executing the rehabilitation contract, the contractor will be provided with a written Notice to Proceed. This Notice to Proceed will allow for a ten (10) day start period from the date of the notice and shall also stipulate the number of days allowed for completion of the work. C.. Each rehabilitation contract executed with a contractor shall contain a completion date and provide for liquidated damages if the contractor fails to meet such completion date. Page 18 of 22 a '16. INSPECTIONS AND CONSTRUCTION PAYMENTS A. The Administrator will assist the applicant in ensuring that all contracted work is completed prior to payment and that such work was performed in an acceptable manner. To accomplish this, the Administrator will engage Inspector to conduct an initial inspection at work write up and a progress inspection at 50 to 75% completion, any additional inspections deemed necessary, and a final inspection upon completion of all of the work, noting deficiencies in written reports and keeping these reports in the project case files. B. The contractor may submit an initial partial payment request upon completion of 40% of the work. A maximum of three partial payments will be allowed. Final payment may be requested upon full completion of the work. The contractor will only be paid for the work completed, not for stored materials. Advancing CDBG Disaster Recovery Fund funds to a contractor is prohibited. A ten percent(10%) retainage will be withheld from each payment request, and such retainage will not be released until final payment is made or until the 30th day after final payment is made. C. Where applicable, permits may be required for work to be done on Mechanical/ElechicaVPlumbing/Structural (MEPS) systems. Any MEPS work that requires a permit must be performed under the supervision of a licensed tradesman and the work shall be inspected by a licensed inspector for the appropriate trade to ensure that work is in full compliance with applicable local codes. D. Where applicable, building permits will be required for building construction work and the building inspector for that area will inspect the job in accordance with the area's normal building inspection requirements. E. In the event a change order is necessary as determined by the Administrator,the Administrator shall review the proposed change order. A written change order must then be executed between the applicant and the contractor. Change orders above ten percent (10%) of the original contract amount require Department approval. 17. CONTRACT COMPLETION A. Upon completion of the contracted rehabilitation work, the Administrator's Inspector shall conduct a final inspection of the structure when requested by the contractor. If the inspection reveals that corrective work is required on any improvements covered in the contract,the Administrator's Inspector shall prepare a punch list for the contractor. After all work, including the punch list, has been completed to the satisfaction of the Administrator's Inspector and the applicant, and the work is accepted, the Administrator shall issue a fully executed Certificate of Completion and Final Inspection form. B. Upon completion of the Certificate of Final Inspection, contractor shall ensure that the following documents are submitted to the Administrator: Page 19 of 22 I. Statements from all subcontractors involved in the project; ii. Contractor's Final Invoice form; i iii. Contractor's Non-Kickback Certification; iv. Release of Liens;and V. all contractor and manufacturer warranties. fD. After receipt of these documents,the.Administrator shall cause a final joint check (less 10% retainage)to be issued to the owner and contractor. The Administrator shall obtain the applicant's endorsement and deliver the check to the contractor. Upon delivery the contractor shall execute the Receipt of Final Payment, and this will effectively constitute completion of the project. D. After 30 days from final completion, the Administrator shall conduct a post- inspection along with the applicant and contractor. If no discrepancies are found during the post-inspection, the Administrator will approve the release of the 10% retainage to the contractor. However, if discrepancies are noted, the Administrator shall withhold retainage in an amount equal to one and one-half times the value of the work remaining to be done. Upon completion of this work, another post-inspection shall be conducted, and if the work is completed to the satisfaction of the Administrator and the applicant, the Administrator shall approve the release of the withheld retainage; otherwise, the same process is repeated. E. Following the completion and acceptance of the rehabilitation work, the Administrator shall take "after" rehabilitation pictures (interior and exterior) to provide a photographic record of the structure and improvements accomplished. F. Contractor Warranties i. All work performed by the rehabilitation contractor shall be guaranteed for a period of one (1) year. Such warranty shall be stipulated in the construction contract between the contractor and the applicant. For a period of one (1)year, the applicant may require the contractor to correct defects or problems arising from his or her work under this contract: Should the contractor fail to do so, the applicant may take any necessary legal recourse as prescribed in the rehabilitation contract. A reasonable amount of time shall be given to correct the problem, but the contractor shall contact the applicant within two (2) business days. 18. FILES AND RECORDS A. The Administrator shall maintain accurate files and records on each applicant. All pertinent documentation must be maintained for five years after the Department notifies the Administrator that HUD has closed out the Program. Such files shall be open for public inspection in accordance with the Texas Public Information Act,and be available at the Administrator's offices. Page 20 of 22 B. Project Close-Out i. Administrator shall ensure that upon completion of each project, the following closeout forms are submitted to the Department: (1) Request for Close Out of CDBG Disaster Recovery Fund Program Project; (2) HUD's Homeownership Assistance Project Completion Report; (3) the Department's Historically Underutilized Businesses (HUBs) Report; and (4) other forms as may be required by the Department. C. Contract Close-Out i. Administrator shall ensure that upon completion of the contract the Certification of Completion and such other forms as may be required, are submitted to the Department. 119. GRIEVANCE PROCEDURE A. Each applicant or participant shall have the right to appeal any decision in the form of a grievance to the Administrator, provided such appeal is made within fifteen (15) days from when the decision has been rendered or the grievance occurred and/or became known to the applicant. If the applicant/participant is not satisfied with the decision of the Administrator,he/she may then appeal his or her grievance to the TDHCA provided such appeal is made within fifteen (15) days from the date of the decision of the program Administrator. The decision of the TDHCA shall be final. B. Administrator Employees Not To Be Held Liable I. No member, officer, agent, or employee of the Administrator shall be personally liable concerning any matters arising ut of or in relation to of CDBG Disaster Recovery Fund Program funds with regard eto�feasibility t or viability of the proposed project. ii. Changes,Waivers And/Or Conflicts (1) The Local CDBG Disaster Recovery Fund Supervisor shall have the right to change, modify, waive or revoke all or any part of these guidelines in writing by a majority vote taken at an open meeting of the Local CDBG Disaster Recovery Fund Supervisor and approval by the Department. (2) No member of the governing body of the Administrator and no other official, employee, or agent of the Administrator who exercises policy or decision-making functions or responsibilities in connection with the Page 21 of 22 a' planning and implementation of this Program shall be eligible for rehabilitation assistance, in accordance with 24 CFR Section 570.489(h), Conflict of Interest. Addendum Desired changes and/or additions to this program design may be allowed. Please cite the section that is to be replaced along with the proposed and/or alternative language. Only amendments submitted in this way will be considered for Department approval. PASSED and APPROVED this 20th day of June, 2006 by the Executive Committee of the South East Texas Regional Planning Commission. Formerly amended on April 19, 2007 APPROVED: Pete De La Cruz,Acting Executive Director Signature Authority i Page 22 of 22