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05-F Owner Occ Program DesignDRAFT F:kAttorney\LisahO. esolutions\CURRENT\Owner Occupied Program Design.wpd August 6, 2003 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, APPROVING OWNER-OCCUPIED REHABILITATION PROGRAM DESIGN, CONTRACT NO. 723038, UNDER THE TEXAS HOME INVESTMENT PARTNERSHIP PROGRAM ASSISTANCE GRANT; AUTHORIZING THE CITY MANAGER TO EXECUTE THE AFORESAID PROGRAM DESIGN; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Paris did heretofore, on the 6th day of February, 2003, in Resolution No. 2003-053, authorize an application to be made to the Texas Department of Housing and Community Affairs for the Owner-Occupied Assistance Fund Grant under the Texas Home Investment Partnership Program; and, WHEREAS, said Resolution No. 2003-053 also authorized acceptance of said grant upon notice of award thereof; and, WHEREAS, the City of Paris is in receipt of the City of Paris Owner-Occupied Rehabilitation Program Design, Contract No. 723038, which should, in all things, be approved, and the City Manager should be authorized to execute the same; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS: Section 1. That the findings set out in the preamble to this resolution are hereby in all things approved. Section 2. That the Owner-Occupied Rehabilitation Program Design, Contract No. 723038 be, and the same is hereby, approved. Section 3. That the City Manager, be, and he is hereby, authorized and directed to execute, on behalf of the City of Paris, the Owner-Occupied Rehabilitation Program Design, Contract No. 723038. Section 4. That this resolution shall be effective from and after its date of passage. PASSED AND APPROVED this 1 lth day of August, 2003. ATTEST: Curtis Fendley, Mayor Mattie Cunningham, City Clerk ATTEST: Larry W. Schenk, City Attorney CITY OF PARIS OWNER OCCUPIED REHABILITATION PROGRAM DESIGN CONTRACT No: 723038 AUGUST, 2003 EXHIBIT ,Z~, CITY OF PARIS Table of Contents I~EAD/NG PAGE Introduction 1 General Definitions 2 Chapter 1 Eligibility Requirements 3 City Map 5 Chapter 2 Cost Allowable in Loans 6 Chapter 3 Limitations on Loans 7 Chapter 4 Solicitation, Submission and Processing of Applications 8 Chapter 5 Terms and Conditions Underwhich Loans are Made 11 Chapter 6 Determination of Work to be Done 13 Chapter 7 Contracting for Rehabilitation Work 14 Chapter 8 Contractor Requirements 16 Chapter 9 Inspection, Close-Out and Final Payment 17 Chapter 10 Applicants Eligibility to Appeal 18 Chapter 11 Conflict of Interest 19 Chapter Reconstruction 20 CITY OF PARIS HOME REHABILITATION LOAN PROGRAM DESIGN INTRODUCTION The purpose and objective of this Rehabilitation/Reconstruction Program of owner occupied housing is to assist low to moderate income families to obtain decent, safe and sanitary housing. Further, through revitalization and conservation of existing housing stock, the City seeks to restore and preserve environmentally pleasing neighborhoods, encourage additional home maintenance, and provide incentive for redevelopment. In the event it is not economically feasible to rehabilitate existing structures, replacement housing will be considered as a viable option. -1- GENERAL DEFINITIONS OWNER-OCCUPIED RESIDENCE- A property occupied by the owner which is used by a single family for residential purposes only. REHABILITATION STANDARDS- Standard Building Code as adopted by the City Council, or Texas Minimum Construction Standards, Cost Effective Energy Measures. REHABILITATION COSTS- The future costs of repairs, improvements, and other incidentals incurred by an applicant for the rehabilitation of eligible property financed by loan funds. ELIGH~ILITY INCOME- Actual annual income from all sources as stipulated and based upon 50%, and 30% of median income for the area, for all members 18 and over. ELIGIBILITY CONDITIONS- Applicants must provide the City with proof of home ownership as well as a tax statement which demonstrates taxes are either current or there is an agreement to pay back taxes in order to be grant eligible. PROGRAM GOVERNING BODY- a Housing Board established by Mayor and Council HANDICAPPED PERSON-An eligible applicant or family member who has a physical handicap(s) which disallows them the full access to their home, e.g., use wheel chair, walker or cain to get around in a home which does not accommodate this condition. REPLACEMENT HOUSING - In cases where rehabilitation of existing housing is not economically feasible, replacement housing might be constructed when owner agrees to voluntarily accept said housing on another area of their property or will voluntarily locate elsewhere so construction can take place on their lot. VOLUNTARY RELOCATION- An eligible applicant may agree to take up temporary residence in another location during rehabilitation or replacement construction. Owner will certify in writing they waive any and all benefits under the Act since the City will not be forcing the rehabilitation or replacement construction. -2- CHAPTER 1 ELIGIBILITY REQUIREMENTS 1.1 Applicant Requirements For A Loan To be eligible for a rehabilitation loan, all applicants must be at or below the income levels stated below and owns and occupies a single family dwelling used for residential purposes only, located within the City limits. In addition, the property must have at least one condition which constitutes a code violation as stipulated in the Local Building Code and/or TMCS. 1.2 Validation of Ownership Applicants must supply a Deed, Deed of Trust, or Warranty Deed to verify ownership. Contracts of Sale or Contracts of Deed will not be accepted. 1.3 Establishing Eligibility For A Loan a. Applicant must reside in a single family dwelling located within the City limits. b. The following table shall be used to establish a applicants eligibility based upon gross family annual income at the time of application: NUMBER 30%MEDIAN 50 % MEDIAN 80 % 1 8,750 14,600 23,350 2 10,000 16,700 26,700 3 11,250 18,750 30,000 4 12,500 20,850 33,350 5 13,500 22,500 36,050 6 14,500 24,200 38,700 7 15,500 25,850 41,350 8 16,500 27,500 44,050 1.4 Income Verification The applicants statement of income shall be verified by a year to date check stub, or their most recent tax return. Other acceptable documentation includes: Social Security, SSI Statement of Benefits, Statement from DHHS for AFDC, Unemployment Insurance Statement, etc. Income from all sources for each member residing in the unit over 18 must be verified. -3- 1.$ Rehabilitation/Reconstruction Loan Approval Units will be rehabilitated following the Rating System listed below: 1. Income Level (30% AMFI will score higher than 50% AMFI). 2. Date of the registration (more points for earliest applicants). 3. Most in Need (generally the worst housing conditions will be ranked highe0. 4. Special Populations (elderly and or handicapped; at least $ units will be assisting handicapped ). 5. Availability of Funds (homes will be selected based upon cost'balance of funds). 6. First time Grant Recipient (will be selected before a previous grant recipient). An inspection of each eligible applicant's house will be made in order to establish the general condition of the unit. Those units which demonstrate deterioration beyond feasibility to repair under this loan: the scope of work necessary to meet codes exceeds the average allowable amount provided by the loan, will be notified reconstruction would be the recommended method of approach. Or, appropriate referral will be made if alternative funding is available. When, in the concurring opinion of inspector(s), the initial inspection demonstrates the applicant's disregard for minimal sanitation and housekeeping activities based upon verifiable living conditions which could represent a health and safety threat to City staff and workmen: and when this condition causes inspectors to reasonably expect non-compliance with (3.4), the applicant may be notified in writing of the his/her ineligibility for program funds. Those whose house shows signs of only light deterioration may be referred to the Weatherization Program for repairs. The remainder of applicants, who are eligible to receive loans, will be addressed as described above until all funds have been spent. Persons residing in homes located in the flood plain must be willing to obtain flood Insurance. All applicants must provide fire and extended Insurance coverage. Due to limited funding, applicams who have not been served by a previous grant will be awarded ahead of those who have received housing rehabilitation assistance from a previous loan. In situations where applicant housing was constructed prior'to 1978, the Lead Based Paint Poisoning Act may require inspection and testing by certified personnel, the cost of which is not eligible for an ORCA grant if the project is not done. Because of this, applicants will be notified that these units may only be rehabilitated if there are circumstances which guarantee the rehabilitation and testing, if any, can be done within program limits. Otherwise these units will be considered for reconstructed. -4- CITY MAP -5- CHAPTER 2. COSTS ALLOWABLE IN REHABILITATION LOANS 2.1 General A rehabilitation loan will be made only to cover the cost of reconstruction or rehabilitation necessary to make owner-occupied, single-family residential property accessible and to conform to local codes, and other costs as provided in this section. 2.2 Includable Costs a. Requirement of the City: (1) The repair or removal and replacement of elements of the dwelling structure, including basic equipment and other improvements to the property such as attached garage and steps. The term "basic equipment" includes such items as heating furnace, water heater, stove, refrigerator, electrical and plumbing systems and sanitary fixtures, the replacement of all unrented space heaters. (2) The provision ofsanita~ or other facilities, including provision, expansion, and finishing of space necessary to accommodate those facilities. (3) Structural modification to allow accessibility by owner in wheel chair or walker. b. Incipient Violations An incipient violation exists if, at the time of the inspection, it is determined that the condition of an element in the structure will deteriorate into an actual violation within one year. c. Building Permits And Construction Administration The cost of building permits, fees and specific construction inspection may be waived by the City. Filing fees and the cost of legally binding documents shall be eligible under the grant. 2.3 Costs Not Includable Materials, fixtures, equipment or landscaping of a type or quality which exceeds that customarily used in the locality for properties of the same general type as the property to be rehabilitated. -6- CHAPTER 3. LIMITATION OF REHABILITATION LOANS 3.1 Limitation Of Loan Amount The mount of rehabilitation/replacement loan shall not exceed the actual cost &the repairs and improvements necessary to make the property handicapped accessible and/or conform with local codes. From loan sources the maximum rehabilitation amount is $25,000. Private funds may be used to increase this amount. Loans exceeding this average will be evaluated on a case-by-case basis by the City's Housing Board. No more than $30,000 of ORCA funds may be spent to replace a single unit without approval of the Board. 3.2 Rehabilitation Exceeding Program Limits For units which cannot be replaced or made accessible and brought to local codes with the expenditure of the maximum grant amount, the following procedure will be followed: Applicant will be notified in writing of the infeasibility of their application. Appropriate referral for rehabilitation assistance will be given the applicant. 3.3 Contingency Funds There will be no contingency funds. Aay change in the contract amount, individually and cumulatively, will be approved by the City Inspectors, in writing, and prior to the modification of scope of work. Change Orders over $500 will be approved by ORCA prior to City approval. 3.4 Owner Responsibility Owner agrees to maintain housing unit to local building codes for the term of the lien. Failure to comply by the owner may be cause for the City to require pro rata amount of the original Forgivable Loan to become due and payable. Owner agrees to provide Fire and Extended insurance coverage on replacement homes at least for the ORCA lien period of 5 years. -7- cHAPTER 4. SOLICITATION, SUBMISSION AND PROCESSING OF APPLICATIONS 4.1 Solicitation Of Application And Records a. All notices, interviews and application activities will be carried out in facilities located within the community. b. All official records will be kept on file within city offices for at least 5 years after close. c. Processing and maintenance of records will comply with existing legislation. 4.2 Processing And Submissions For A Rehabilitation/Reconstruction. Listed below are the functions to be performed with a rehabilitation/reconstruction loan: a. Notice to signed applicants will be made first, followed by a public notice. Applicants will be interviewed and advised of the objectives of the program. Applications will be taken at the Lamar County Human Resource Center for at least 1 week. Letters will be sent to the local agencies. Reconstructed housing will be in compliance with SB 623 and the Model Energy Code as well as the City Code or TMCS. Applicants may send a representative to apply. Public service announcements and cable TV notices may be made where available. b. Applicants will be advised of the availability and benefits and responsibilities of a loan. c. Eligibility of applicant will be determined. Official verification of income and ownership will be obtained as well as any special needs condition. d. Property will be inspected. e. Work Write-Up/Cost Estimate of required work will be done. f. Amount of loan necessary to complete unit will be determined. g. Applicant will be advised of the conditions underwhich a loan will be made. -8- h. Selection of contractor will be bid or from a City established list and made by Owner. Contractor will bid on specifications. It:bid is within 15% of estimate, a contract will be drawn up between owner and contractor. If bid is greater than 15% above estimate contractor will have the opportunity to modify bid. If not, Owner will select another contractor from the list. i. Completed application package is presented to Housing Board for approval. j. Construction contract and all closing documents are prepared and signed. k. Owner issues Notice To Proceed to contractor. 1. Interim inspections are made as necessary. m. Final inspection is made. n. Contractor provides owner with; 1 year warranty, releases from all sub contractors and suppliers. o. City will provide payment to Contractor on behalf of Owner. p. Aid applicant in exercising a 1 year warranty made by the contractor when necessary. 4.3 Approval Of Loan Application If the rehabilitation/reconstruction amount is sufficient to repair the structure to local codes, the application shall be presented to the Housing Board. When signed it will be considered approved. 4.4 Loan Cancellation An approved rehabilitation loan may be canceled because the applicant has requested cancellation, or is unwilling or unable to proceed with the rehabilitation work. The City may cancel a rehabilitation loan if it is determined that information given is incorrect or incomplete. In either event the City will prepare a letter of cancellation and mail to owner. City will retain a copy. -9- 4.5 Loan Repayment Eligibility for receiving a rehabilitation loan is based on the non-sale or transfer of the property for a period of five (5) years following construction completion. The City will file a lien, (first or subordinated), against the subject property which states should the property be sold prior to the end of the fifth year, the owner will be required to repay the principal amount of the loan in the following way: a. If sold within the first year, the total amount is due. b. If sold during the second year, 80% is due. c. If sold during the third year, 60% is due. d. If sold during the fourth year, 40% is due. e. If sold during the fifth year, 20% is due. f. After the fifth anniversary of completion of construction, the loan is forgiven and the lien is considered null and void by the City. g. If funds have been expended and loan is canceled prior to completion, owner must reimburse City for expenditures. City will return funds to TCDP Program. -10- CHAPTER TERMS AND CONDITIONS UNDERWHICH LOANS ARE MADE 5.1 Rehabilitation/Reconstruction Conditions The specific terms and conditions with respect to a rehabilitation/replacement loan are incorporated into the application. The applicant shall agree, and by signing does agree to: a. Civil Rights: Comply with ail DHUD requirements with respect to Title VI of the Civil Rights Act of 1964, to not discriminate on the basis of Color, Religion, Handicap, Faxnilial Status or Nationai Origin. b. Cancellation of Loan: Return of the grant proceeds with no right, interest, or claim in the proceeds, if the loan is canceled before the rehabilitation/replacement work is started. c. Use of Proceeds: Use of loan proceeds only to pay for costs ofmateriais and services necessary to carry out the rehabilitation/replacement work for which the loan will be approved. d. Completion of Work: Assure the rehabilitation/replacement work shail be carried out promptly and efficiently through written contract but with the prior concurrence of the Program Governing Body. e. Ineligible Contractors: Not award any contract for construction to be paid for in whole or in part with the proceeds of the loan to any contractor appearing on the federal debarment list. f. Inspection: Inspection by the City or it's designee of the property, the construction work and all contracts, materiais, equipment, payrolls, and conditions pertaining to the work. 11 g. Records: Keep such records as may be required by the City. h. Interest: Not permit any member of Congress or City official to share in the proceeds of or any benefit arising from the loan. i. Relocation: Temporary or voluntary relocation may be approved as detailed in (2.3). It is understood The Act does not apply to housing rehabilitation/reconstruction. -12- CHAPTER 6 DETERMINING WORK TO BE DONE WITH A CONSTRUCTION LOAN 6.1 Property Inspection The Building Inspector or construction manager shall inspect the property along with the owner and, shall prepare an inspection report which identifies each deficiency with respect to local codes or TMCS, or other deficiencies which may be corrected through a rehabilitation loan. 6.2 Work Write-Up And Cost Estimate A work write-up and cost estimate is a statement prepared by program administrator based upon the property inspection report that itemizes all the rehabilitation or reconstruction work to be done on the property, and includes an estimate of the cost of each item. The cost estimate shall be reasonable and reflect actual costs prevailing in the locality for comparable work. This document will be reviewed and signed by the City's Building Inspector and the Owner. -13- CHAPTER 7 CONTRACTING FOR REHABILITATION WORK 7.1 Form Of Contract The construction contract will consist of a document signed by the contractor and accepted by the applicant upon approval of the rehabilitation/reconstruction. The contract shall contain a bid and proposal by the contractor as well as specifications for the work to be done. 7.2 Use Of Alternatives The contract document may provide for alternates by which the bidder, as part of his bid and proposal, offers increases or decreases to the lump sum contract price to cover alternates for work to be performed. 7.3 Selection Of Contractor The program administrator will perform outreach/notification of work to contractors. Contractors will make application on forms provided by the City, Work and banking references will be checked. ORCA office will be contacted in order to determine if contractor has been debarred from State and Federal projects. Contractors on bidders list will be selected by owner as applications become eligible. The contractor, using owner/mgr, developed write-up will walk through unit in order to prepare his bid. At a subsequent meeting with stall, the Contractor will present his bid. Bids within 15% of staff estimate will be accepted. Contracts may also be competitively bid. Approved contractors who fail to bid on units selected, and/or continue to demonstrate unrealistically high bids or who demonstrate an unwillingness or inability to perform work as required, will be removed from the list. New contractors, when making application during program, will be added to approved contractor's list and be offered a unit when selected by owner. After the successful completion &their first contract, more than one unit may be assigned to a contractor at one time. -14- 7.4 Labor Performed By Owner The owner may complete some tasks if he/she has the skills required to perform the work involved and if no license is required. If work requkes a license, and the owner has such license, he, or she may perform said work. The loan shall not reimburse the owner or his family for any work performed. This work may not cause the term of the contract to be extended. -15- CRAPTER 8 CONTRACTOR REQUIREMENTS 8.1 Contractor Approval Before a contractor is placed on the approved list the following procedure must be completed: a. Contractor must submit approved application to City. The Contractor must carry Workmen's Compensation Insurance, Automobile Insurance, and General Contractor's Liability in the amount orS100,000/$50,000. b. Contractor must not appear on the ORCA Program or DHUD debarment lists. c. The program administrator must verify a positive history of acceptable performance and/or business practice as demonstrated from 3 previous completed projects, information obtained from contractor's lender, and information from material suppliers. d. Approval by the Housing Board must be obtained prior to letting the contract. 8.2 Provisions For Continuous Eligibility The contractor must continue to perform his work in a satisfactory manner as well as correcting deficiencies on completed jobs in order to remain on the approved contractor's list. 8.3 Removal From The Approved Contractor's List In the event a contractor fails to complete a project, as agreed in the Contract with Owner, or if he submits bids not within the acceptable cost range for the area, he shall be removed from the list for cause by the Housing Board. -16- CHAPTER 9 INSPECTION, CLOSE-OUT, AND FINAL PAYMENT Inspection of construction work shall be made in accordance with the following: a. Progress Inspections: A compliance inspection of the rehabilitation work shall be made as appropriate during the construction period. b. Final Inspection: Upon completion of the rehabilitation work and receipt of the contractor's request, including his certification of satisfactory completion in accordance with the contract and his warranty, a final inspection will be scheduled. c. Final Payment: When the final inspection verifies work required by the contract has been satisfactorily completed, inspector shall obtain from the contractor; Releases of Liens, or Affidavit of Paid Bills, copy of each warranty due, and final permit approval. A request for Payment shall be submitted to the City. The City will issue a check to the owner and contractor for 90% of the contract amount upon completion. A check for the remaining 10% will be issued within 30 days upon verification with the Owner that no deficiencies exist. 9.1 Certification Of Final Inspection After it has been determined the rehabilitation work has been fully and satisfactorily completed and the final inspection form obtained, any and all necessary paperwork will be processed and disbursed. 9.2 Close-Out Files The City will receive from the contractor releases of claims on the property and warranties for equipment installed and copies of final permit approval. These documents will be retained in City files. -17- CH~A. PTER 10 APPLICANT'S ELIGIBILITY TO APPEAL 10.1 Applicant's Intent To Appeal: The applicant must make his appeal known by filing a letter to the Housing Board. a. The City will instruct the appellant as to form and content of this letter. b. Applicant will be notified of the time and place of the next appeals hearing and informed that either he or his representative must be present at the appeal. 10.2 Hearing The Appeal The appeals proceeding is designed to allow each person an equitable opportunity to express his/her views and reasons for believing he/she has been treated unfairly or unfairly denied housing rehabilitation assistance, as long as such appeal is made within fifteen (15) days of the decision or notification. Applicants and selected speakers listed on the appeals notice will be allotted five minutes each for his/her statements. In addition, any person may submit written statements on behalf of the applicant. At the conclusion of the appeals presentation, each member of the Appeals Board (Housing Board) will be given the opportunity to ask questions in an effort to obtain pertinent facts. The appeals board will then adjourn. Each person making an appeal will be notified in writing within one week as to the findings of the Board. If the issue cannot be resolved, the complainant may write to the City for an appeal as long as such letter is received by the City within fifteen (15) days of the Housing Board Hearing. -18- CHAPTER 11 CONFLICT OF INTEREST a. The conflict of interest regulations contained in the ORCA contract between the City and ORCA prohibit local elected officials, city employees, and consultants who exercise functions with respect to ORCA activities or who are in a position to participate in a decision making process or gain inside information with regard to such activities, from receiving any benefit from the ORCA activity either for themselves or for those for whom they have family or business ties, during their tenure or for one year thereafter. b. The Office of Rm'al Community Affairs has defined "family" to include parents (including mother-in-law and father-in-law), grand parents, siblings (including sister-in-law and brother-in-law), and children of and official covered under the ORCA conflict of interest regulations 24 CFR Sec. 570.489(h). c. No member, officer, agent, or employee of the City shall be personally liable concerning any matters arising out of, or in relation to, the commitment of ORCA Program funds with regard to the feasibility or validity of the proposed project. d. The City 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 City. Updates will be made available to the Department. -19- CltAP'i'ER 12 RECONSTRUCTION If, in the opinion of City Inspectors, and following an inspection and preliminary work write up, the rehabilitation of the home cannot be done within the budget and in compliance with existing . codes and regulations, the City may offer to reconstruct a home on owner's property. Owner must agree, in writing, to voluntary relocation if the unit must be reconstructed on the same site. If the unit can be reconstructed on the same lot, the owner may remain in the unit until the new unit is completed. The original unit will be demolished in either event. Owner must also agree, in writing, to request the demolition and clearance of the original structure. Reconstructed units will comply with local new construction code and model energy codes. Owner must to provide Fire and Extended Insurance on replacement homes for a period not less than the lien period (5) years. All other conditions, requirements, and eligibility standards previously mentioned will apply to this chapter. PASSED AND APPROVED this 1 lth day of August, 2003 by the designated authorities listed below: Curtis Fendley, Mayor Mattie Cunningham, City Secretary ORCAPD~s -20-