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SR-06-10-2014-3ICity Council Meeting: June 10, 2014 Agenda Item: 3° 1 To: Mayor and City Council From: Andy Agle, Director of Housing and Economic Development Subject: Residential Rehabilitation Program Guidelines Recommended Action Staff recommends that the City Council adopt the attached updated Residential Rehabilitation Program Guidelines to provide grants for eligible repairs to properties occupied by low- income tenants or owners. Executive Summary The Residential Rehabilitation Program (RRP), using federal Community Development Block Grant (CDBG) funds, provides financial assistance to rehabilitate properties occupied by low- income renters and low- income senior homeowners. The current Residential Rehabilitation Program Guidelines (Guidelines) have been in use since 1996. Proposed updates include increasing maximum grant amounts, updating income eligibility limits and reformatting the Guidelines to streamline descriptions of the grant process and eligibility criteria. Background The City has operated the RRP since 1996 to provide financial assistance for a variety of repairs to multifamily properties occupied by low- income tenants and low- income senior homeowners. This federally funded program requires that eligible properties be occupied primarily by low- income households. City implementation has further targeted those properties with low- income seniors and persons with disabilities. Since July 2004, the Residential Rehabilitation Program has been used to benefit 120 low- income households citywide. Eligible repairs include such items as fixing health and safety code violations; testing for and remediating environmental hazards such as lead -based paint, unsafe or inoperable 1 electrical wiring or fixtures, unsanitary plumbing fixtures, leaking roofs, peeling interior /exterior paint; making accessibility improvements such as installing ramps; making improvements to increase energy or water efficiency; upgrading permanent fixtures; and making other general repairs. Discussion The current RRP goal reflected in the FY2014 -15 Action Plan adopted by Council on April 22, 2014, is to fund the rehabilitation of 20 low- income units. In conjunction with this goal, staff seeks to update the Guidelines to reflect modern construction costs, income - eligibility limits, sustainability goals, and the actual demand experienced by the RRP. CDBG regulations permit local discretion regarding program implementation, provided that national objectives and regulatory mandates are met and costs are reasonable. Staff works diligently at every stage of the grant approval and rehabilitation process to ensure compliance with CDBG parameters. This includes evaluating the grant request for eligibility, inspecting the property to confirm the necessity of repairs, evaluating bids and determining reasonable costs, negotiating the grant agreement and rehabilitation budget, reviewing general contractors' and subcontractors' qualifications, and scrutinizing cost documentation before authorizing disbursement of grant funds. Maximum Grant Amount The initial 1996 RRP pilot program, approved by Council in December 1996 established a guideline grant limit of $4,000 per unit to rehabilitate buildings, which currently remains in effect. Rehabilitation costs have increased significantly since 1996 and adhering to prevailing wage requirements also increases total costs. The FY2014 -15 Action Plan has allocated $300,000 to the RRP. Increasing the per -unit grant limit to $15,000 to reflect current costs of materials, labor, and compliance with building codes is consistent with the Action Plan goal of rehabilitating 20 units and would allow greater flexibility to assist low- income households. Although full -scale rehabilitation of buildings would cost considerably more than $15,000 per unit, the RRP 2 is limited in financial resources and the recommended per -unit limit would achieve essential repairs and improvements to buildings occupied by low- income households. In the event that there is excessive demand for grant funds, the Guidelines contain a provision that would allow the City to require or prioritize applications that include matching contributions from property owners to stretch the limited funding of the RRP. Income Eligibility Limits The United States Department of Housing and Urban Development (HUD) annually publishes income - eligibility limits for participation in CDBG- funded programs. The RRP benefits tenants with low incomes, which HUD defines as, "households with incomes at or below eighty percent of the area median income." The RRP Guidelines include a table of these limits for each household size from $47,850 for a one - person household up to $90,200 for an eight - person household. Income limits have increased considerably since the 2005 Guidelines and should be updated at this juncture to reflect the HUD - published limits. In subsequent years, staff will update the income limits administratively to accurately reflect the HUD - published figures. Streamlining Guidelines The existing 2005 RRP Guidelines were organized into three components: multifamily property rehabilitation, owner - occupied rehabilitation, and lead -based paint remediation. Each rehabilitation category had a separate description of the grant process, eligible repairs and uses of funds, and other program requirements. Since threshold requirements are uniform for federal CDBG funding eligibility regardless of local implementation approach, the Guidelines have been simplified to eliminate redundancy. Additionally, in practice, lead -based paint testing and remediation typically has not been provided as a stand -alone grant and is instead included in general rehabilitation. Therefore, the proposed Guidelines have been streamlined to reflect this experience. Given the significant reformatting of the proposed Guidelines to achieve the streamlining, the previous version and the proposed revised version of the Guidelines are attached, rather than presenting the changes in a redlined format. 91 Financial Impacts & Budget Actions There is no financial impact or budget action necessary as a result of the recommended action. The RRP budget is included as part of the CDBG One -Year Action Plan for each fiscal year and is included in each annual City budget. Prepared by: Jonathan Carr, Administrative Analyst Approved: Andy Agle, Dire for ) Housing and Economic Development Attachments: Forwarded to Council: Rod Gould City Manager Attachment A. Proposed Residential Rehabilitation Guidelines Attachment B. Existing 2005 Residential Rehabilitation Guidelines G! Attachment A CITY OF SANTA MONICA [ell I III] ;IIl ki l � City of sruffita sin Proposed June 2014 TABLE OF CONTENTS Paqe I. MULTIFAMILY REHABILITATION ........................................ ..............................1 II. OWNER- OCCUPIED REHABILITATION .............................. ..............................2 III. ELIGIBLE REPAIRS / IMPROVEMENTS ................................ ..............................3 IV. INELIGIBLE REPAIRS / IMPROVEMENTS ............................ ..............................4 V. GRANT PROCESS ............................................................... ..............................5 Vi. DEFINITIONS ........................................................................ ..............................9 Residential Rehabilitation Program City of Santa Monica Guidelines revised June 2014 RESIDENTIAL REHABILITATION PROGRAM The purpose of the Residential Rehabilitation Program (RRP) is to provide financial assistance in the form of grants for eligible repairs through the following two (2) options: 1. Multifamily rental properties occupied primarily by low- income tenants; and 2. Single- family properties occupied by low- income owners. Low - income eligibility is based on the U.S. Department of Housing and Urban Development (HUD) income requirements for low- income families in the Los Angeles area and is defined as incomes of no more than 80 percent of median income. MULTIFAMILY REHABILITATION A. Description: This option provides financial assistance to owners of multifamily rental properties in which at least 51 percent of the apartments are occupied by low- income tenants. Such assistance will fund a variety of eligible repairs and upgrades, including structural, health and safety, plumbing, electrical, accessibility and sustainability improvements, painting and other needed repairs. Grants: The City will provide one of two types of grants: Full or Matching. a. Full Grant: The City will provide a Full Grant for an eligible property in combination with a written agreement to continue the occupancy of a majority of the apartments by low income tenants (i.e., at least 51 percent), for a period to be negotiated in conjunction with the grant amount. Maximum Amount: $15,000 per apartment. b. Matchinq Grant: The City will provide a Matching Grant for an eligible property in combination with a written agreement to continue the occupancy of a majority of the apartments by low income tenants (i.e., at least 51 percent), for a period to be negotiated in conjunction with the grant amount. The affordability period will be shorter than otherwise required for the equivalent amount of a Full Grant, in consideration for the matching contribution by the property owner. Maximum Amount: $3 of Matching Grant for every $1 of property owner financial contribution. The Matching Grant should not to exceed $12,000. B. Eligibility Requirements: Eligible multifamily properties, at the time of the grant and in future years pursuant to a grant agreement, must be occupied by at least 51 percent low- income households based on the current income limits for low - income households in the Los Angeles area, as published by HUD. The income limits are updated annually and posted on the City website. Limits for 2014, for example, are as follows: HOUSEHOLD INCOME GUIDELINES* (80 PERCENT OF MEDIAN INCOME) 1 person $47,850 2 persons $54,650 3 persons $61,500 4 persons $68,300 5 persons $73,800 6 persons $79,250 7 persons $84,700 8 persons $90,200 * Includes incomes for all persons living in dwelling, including retirement income, Social Security benefits, other unearned income, etc. Eligible multifamily properties may only receive a maximum of one (1) grant every five (5) years. OWNER- OCCUPIED REHABILITATION A. Description: This option provides financial assistance to single - family homes and mobile homes, which are owner - occupied by low- income households. Such assistance will fund a variety of eligible repairs and upgrades, including structural, health and safety, plumbing, electrical, accessibility and sustainability improvements, painting and other needed repairs. 1. The City will provide a grant to eligible owner - occupied properties in combination with a written agreement that some or all of the grant funds would have to be repaid to the City in the event the owner sells the property within 3 years receiving the grant. Maximum Amount: $15,000 per eligible household. B. Eligibility Requirements: Eligible single - family homes or mobile homes, at the time of the grant and in future years pursuant to a grant agreement, must be occupied by a low- income homeowner, based on the current income limits for low- income households in the Los Angeles area, as published by HUD. The income limits will be updated annually and posted on the City website. 1. Eligible owner - occupied homes may only receive a maximum of one (1) grant every five (5) years. 2 2. Priorities: Grants will be prioritized as follows: a. Homeowners who are sixty -two (62) years of age and over; b. Households with a permanently disabled member; and c. Other low- income owner - occupants (who do not meet either of the criteria above). 144[e]IgIm a 4ail1 - 111U1a:101T /4Iril����� Eligible repairs /improvements include but are not limited to the following: • Correction of health and safety code violations; • Repair /replacement of unsanitary plumbing fixtures, leaking roofs, unsafe /inoperable electrical fixtures /wiring, and worn, deteriorated floor coverings; • Replacement of principal fixtures and existing structure components, such as plumbing, heating, electrical, or connections to water and sewer distribution lines; • Improving energy efficiency by replacing doors, windows, siding and insulation, using solar, or upgrading the heating and cooling equipment; • Improving water usage efficiency by installing water saving faucets and shower heads; • Disabled access improvements, such as ramps; • Treatment of pest infestation; • Relocation: If necessary, the City will follow all of the requirements of the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA); • Testing and abatement for environmental hazards such as lead hazards, asbestos, molds, fungus and other air carried toxins; • Installing security devices such as smoke detectors and dead -bolt locks; • Other general repairs as approved by the City. 3 IV. INELIGIBLE REPAIRS/IMPROVEMENTS The following improvements are ineligible per federal guidelines: • Barbecue Pits; • Bathhouses; • Burglar Alarms; • Burglar Protection Bars; • Dumbwaiters; • Fire Extinguishers; • Greenhouses; • Hangars (airplanes); • Kennels; • Kitchen appliances, except stoves, which are designed and manufactured to be freestanding and are not built -in and permanently affixed as an integral part of the kitchen in a residential structure; • Outdoor Fireplaces or Hearths; • Penthouses; • Photo Murals; • Radiator Covers or Enclosures; • Steam Cleaning of Exterior Surfaces; • Swimming Pools; • Television Antenna, Cable or Satellite Dishes; • Tennis Courts; • Valance or Cornice Boards • Waterproofing of a structure by pumping or injecting any substance in the earth adjacent to or beneath the basement or foundation or floors; and • Other items as determined by the City. 151 V. GRANT PROCESS The Santa Monica City Council annually allocates federal Community Development Block Grant funds be used for the Residential Rehabilitation Program. Grant applications may be submitted throughout the year to the Housing Division of the Housing and Economic Development Department. Grant applications are reviewed by the Housing Division, evaluated by a review committee, and considered for approval administratively in conformance with these Guidelines and regulations. Grants which are approved are subject to a Grant Agreement, which is then approved by the Grantee and the City Manager, as well as attested to by the City Clerk. The Housing Division then works with the Grantee to coordinate, manage and complete the rehabilitation. Compliance with federal regulations occurs throughout the process. The following is a step -by -step outline of the grant process: A. Application Intake and Processing: Applications can be submitted year -round and are processed pending funding availability. 1. Application: Property owners will submit a program application and include the following information: a. Owner's name and property address; b. Grant deed /Proof of ownership; c. Proof of tenants' (or homeowner's) income eligibility; d. Proposed scope of rehabilitation and rough estimate of cost; and; e. Overall rehabilitation budget. 2. Eligibility Determination: Staff will review the application for completeness and determine eligibility regarding income limits and qualifying repairs and improvements. 3. Environmental and Historic Preservation Review: All eligible properties will comply with the National Environmental the historic preservation regulations found in the Code of Federal Regulations at 36 CFR Part 800. B. Review Committee: City shall convene a Review Committee to review and approve any grants. The Review Committee shall consist of the staff program administrator, the Housing Administrator, the Housing Manager, and the Redevelopment Successor Agency Administrator. C. Property Inspection: All properties will be inspected by the City to determine eligible improvements. 1. City will inspect eligible properties, including individual units to determine eligible repairs /improvements. 2. Licensed Contractors will prepare a scope of work and cost estimate. D. Contractor Selection /Bidding: Property owner will review and approve the scope of work and cost estimate, in conjunction with the City, before selecting a contractor to perform the work. 1. The owner is to obtain three (3) bids. 2. City will review the selected bids and advise owner as to cost reasonableness. 3. Owner will select the contractor and enter into a written agreement with the selected contractor. The City will review and approve the contract prior to owner signing; a copy of the executed contract will be submitted to the City. 4. Contractor must include in his /her bid the cost of any waste disposal, such as storage, waste profile testing, transportation, and disposal fees. E. Rehabilitation Work: The property owner and contractor will comply with the following requirements as part of any eligible scope of work: 1. Attend a pre- construction meeting, conducted by the City, prior to the start of work. 2. Prevailing Wages (Davis -Bacon Act; if applicable); City may require owner to hire a consultant, as part of the grant budget, to monitor compliance with prevailing wages. 3. City will determine when owner may issue a Notice to Proceed to the contractor. 4. City will monitor rehabilitation work during construction as well as compliance with Davis -Bacon Act (if applicable). 5. City will conduct final inspection for program compliance and contract completion upon notification by property owner and contractor that all rehabilitation work is completed. F. Contractor Guidelines: All contractors must be eligible to participate in CDBG- funded contract work for the length of the contract. 1. The contractor must comply with all applicable Federal and State regulations, including: a. Resource Conservation Recovery Act; b. California Department of Toxic Substance Control; and c. Department of Transportation Regulations. X_ G. Grant Disbursement: The City will disburse Grant funds on a percentage complete basis after receiving appropriate documentation of actual costs. 1. The contractor must submit proof of payment to any subcontractors for all completed work. 2. Contractor must submit proof of Building and Safety Division's final approval for all required permits. 3. The contractor must submit all required prevailing wage records (if applicable). H. File Close -Out: City will verify that all case files contain the following: 1. Completed Application Form; 2. Evidence of Property Ownership; 3. Activity Record Sheet; 4. Historic Clearance Documentation; 5. Inspection Report; 6. Work Write -up on Plans and Specifications; 7. Copies of Bids; 8. Construction Contracts; 9. Full Warranties; 10. Notice to Proceed; 11. Permits (if applicable); 12. Progress Inspection Reports; 13. Change Order Requests (if applicable); 14. Notice of Completion — Certificate of Final Inspection; 15. Lien Releases and Payment Records; 16. Davis -Bacon Act Reports and Wage /Salary Information (if applicable); 17. Section 3 documentation; and 18. Monitoring Reports. I. Summary Records: City staff will maintain records summarizing the following information, and enter the information into the federal Integrated Disbursement and Information System (IDIS): 1. Names of property owner and tenants; 2. Address of property assisted; 3. Number of units involved; 4. Year property built, if known; 5. Income level of tenants; 6. Race /ethnicity of tenants; 7. Number of female- headed households; 7 8. Loan /Grant amount; 9. Type of rehabilitation; and 10. All directly - related costs. J. Waiting List: Depending on availability of Program Funds, the City may establish a waiting list for participation in the program. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] VI. DEFINITIONS APPLICANT: Any person or legal entity that applies for a grant under the Residential Rehabilitation Program. APPLICATION PACKET: Forms disbursed to potential participants that are used to submit their applications. CONTRACT: A legally binding, standardized form that specifies, in detail, the entire scope of work, specific quality of materials, and all other data pertinent to the rehabilitation of the property, including the insurance coverage required for the grantee and the contractors, and the timeline for the work to be performed. The Contract must be signed by both the contractor and the applicant. CONTRACTOR: An eligible contractor is a person licensed in compliance with State regulations to do the necessary rehabilitation work and is not debarred from working on federally funded projects. No contractor may be utilized who has been debarred or suspended by order of any County or State in the United States. DISBURSEMENT: The amount that is paid the grantee to cover the direct and indirect costs of the rehabilitation work, on a percentage complete basis, including instances requiring advance deposits. Prior to disbursement, the work accomplished must be in accordance with the contract Scope of Work as detailed in the Work Write -Up. ELIGIBLE IMPROVEMENTS: All improvements required to bring the dwelling unit up to Federal Housing Quality Standards (safe, sanitary, and decent) and in compliance with local building codes, or otherwise allowable under CDBG regulations. GRANT: Amount of financial assistance provided for the purpose of rehabilitation, the conditions of which are specified in a grant agreement between the City and a property owner. INCOME VERIFICATION: The process used to determine gross household income, including the submittal of the most recent income tax returns, employer verification of wages, W -2 Forms, Social Security verification, profit/loss statements, etc. OWNER /OCCUPIED UNIT: A single - family dwelling of mobilehome used entirely for residential purposes and occupied by the owner household. PARTICIPANT: Any person or legal entity that has applied for and is in the process of rehabilitating a unit through the Program. PERSON: One or more persons who occupy a unit that is to be rehabilitated PROGRAM ADMINISTRATOR: The City staff member having the primary day -to- day responsibility for administering and coordinating the projects for the Program. REHABILITATION COST: The total direct and indirect cost of repairs and improvements and other costs for rehabilitation to be incurred by the participant that is paid with Grant funds. SCOPE OF WORK: A detailed description of the repairs and improvements to be completed as the rehabilitation project, including quantities and materials specifications. 10 Attachment B CITY OF SANTA MONICA Crlgli•7��I City of Santa s, Revised August 2005 TABLE OF CONTENTS Residential Rehabilitation Program (RRP) OVERVIEW: The purpose of the Residential Rehabilitation Program (RRP) for low - income households is to provide financial assistance for a variety of repairs through the following two (2) programs: (1) the Multi- Family Rehabilitation Program for owners of multifamily rental properties occupied by low- income tenants, and (2) the Owner Occupied Rehabilitation Program for low- income owners. Eligible repairs include such items as health and safety code violations, testing and remediation of environmental hazards such as lead based paint, unsafe or inoperable electrical wiring or fixtures, unsanitary plumbing fixtures, leaking roofs, peeling interior /exterior paint, accessibility improvements such as ramps, and other general repairs approved by the City of Santa Monica. Low - income property owners and owners of rental properties operating housing for low- income tenants are eligible to participate in the RRP. Low - income eligibility is based on the U.S. Department of Housing and Urban Development (HUD) income requirements for low- income families in the Los Angeles area and is defined as incomes of no more than eighty percent (80 %) of median income. Priorities for participation in the 2005 -6 RRP 1. Owners who are currently housing Section 8 tenants to address potential lead - based paint hazards in their Section 8 assisted units; 2. Rehabilitation grants to residential property owners when the property owner is a non - profit or a public entity or the property is fifty -one (51 %) percent occupied by tenants qualifying as low- income. 3. Low - income owner - occupants that are senior citizens over 62 years old 4. Low - income disabled households 5. Low - income mobilehome owner - occupants Paqe MULTIFAMILY RENTAL REHABILITATION PROGRAM ..............................2 (a) Financial assistance in the form of matching grants for property owners whose buildings are fifty -one (51 %) percent occupied by low- income tenants and (b) grants for testing and remediation of specific hazards in units occupied by Section 8 households with children under six (6) years. II. OWNER OCCUPIED REHABILITATION PROGRAM .......... .............................18 Financial assistance in the form of grants to (a) elderly low- income homeowners (over sixty -two (62) years old) and (b) low- income households with a disabled family member, and (c) low- income mobilehome owner /occupants to make necessary minor repairs. III. DEFINITIONS ........................................................ .............................24 2 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 MULTIFAMILY RENTAL REHABILITATION PROGRAM A. Program Description: This program will provide financial assistance to owners of multifamily rental properties in which fifty -one (51 %) percent of the units are occupied by low- income tenants. Such assistance will pay for a variety of repairs, including structural, health and safety, plumbing, electrical, painting and interior repairs as necessary. Grants: The City will provide two (2) types of grants, full and matching. Full Grant: The City will provide a full grant to a non - profit or a public entity and whose tenants (if any) also qualify as low income. Maximum Amount: $4,000 per eligible unit. Matching Grant: The City will provide a matching grant to a property ownerwho does not qualify as low income, butwhose tenants qualify as low income. Maximum Amount: 75 percent of up to $4,000 (City portion $3,000) per eligible unit. 2. Review Committee: City shall convene a Review Committee to review and approve any grants in excess of the program limits. The Committee shall consist of the City's consultant, the staff program administrator, the Housing Administrator and the Housing Manager and Redevelopment Manger. B. Eligibility Requirements: Owners of rental units, public entities and non - profit organizations operating housing for qualifying low- income tenants are eligible to participate in this program provided that fifty -one percent (51 %) or more of the tenants in their property qualify as low income households based on the current HUD income guidelines for low- income families in the Los Angeles - Long Beach metropolitan area. The 2004 income limits are as follows: HOUSEHOLD INCOME GUIDELINES* (80 PERCENT OF MEDIAN INCOME) 1 person $36,700 2 persons $41,900 3 persons $47,150 4 persons $52,400 5 persons $56,600 6 persons $60,800 7 persons $65,000 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 8 persons $69,150 *Includes incomes for all persons living in dwelling, including retirement income, social security benefits, etc. 1. Eligible rental property owners may receive a maximum of one (1) property matching grant per eligible property. a. These grants may be in addition to a lead hazard grant. b. Eligible rental property owners may reapply for an additional grant after a minimum of five (5) years from receipt of the first grant. 2 Priorities: Grants will be provided on a first -come, first - served basis. 3. Waiting Lists Depending on Program Funding: The City may establish a waiting list for participation in the program. C. Eligible Improvements: Eligible improvements include but are not limited to the following: 1. Correction of health and safety code violations 2. Repair /replacement of unsanitary plumbing fixtures 3. Repair /replacement of leaking roofs 4. Repair /replacement of unsafe /inoperable electrical fixtures /wiring 5. Replacement of worn, deteriorated floor covering 6. Disabled access improvements, such as ramps 7. Relocation: If necessary, the City will follow all of the requirements of the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA). 8. Testing for environmental hazards such as lead hazards, molds, fungus and other air carried toxins 9. Other general repairs as approved by the City D. Ineligible Improvements: The following improvements are ineligible per federal guidelines: 1. Barbecue Pits 4 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 2. Bathhouses 3. Burglar Alarms 4. Burglar Protection Bars 5. Dumbwaiters 6. Fire Extinguishers 7. Greenhouses 8. Hangars (airplanes) 9. Kennels 10. Kitchen appliances, except stoves which are designed and manufactured to be freestanding and are not built -in and permanently affixed as an integral part of the kitchen in a residential structure 11. Outdoor Fireplaces or Hearths 12. Penthouses 13. Photo Murals 14. Radiator Covers or Enclosures 15. Steam Cleaning of Exterior Surfaces 15. Swimming Pools 16. Television Antenna, Cable or Satellite Dishes 17. Tennis Courts 18. Valance or Cornice Boards 19. Waterproofing of a structure by pumping or injecting any substance in the earth adjacent to or beneath the basement or foundation or floors, and 20. Other items as determined by the City. E. Application Intake and Processing: Applications will be accepted on first- come, first - served basis. Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 Application: Rental property owners will complete a program application that will include the following information: Owner's name and property address b. Grant deed /Proof of ownership C. Proof of tenants' income qualifications 2. Eligibility Determination: The City's Consultant will review each application and determine the rental property owner's eligibility as well as individual tenants' eligibility. 3. Historic Preservation Review: All eligible properties will be submitted for historic preservation. 4. Project Tracking: All eligible projects will be monitored by the City's Consultant to verify directly related costs (see Summary Records). 5. The rental property owner will review and approve the work write -up. Property Inspection: All properties will be inspected by City's Consultant to determine eligible improvements. City's Consultant will inspect eligible properties, including individual units to determine eligible improvement 2. City's Consultant will prepare a work write -up and cost estimate. 3. Owner to review and approve work write -up and cost estimate. G. Contractor Selection /Bidding: Rental property owner will review and approve work write -up and cost estimate before selecting a contractor to perform the repair 1. The owner is to obtain a reasonable bid. 2. City's Consultant will review the selected bid and advise owner as to reasonableness. 3. Owner will select the contractor and enter into agreement with selected contractor. The City's Consultant will approve contract prior to signing and a copy will be filed with City. 4. Workload Limitations: No contractor may be awarded contracts for more than two (2) separate contracts at any one time. Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 H. Rehabilitation Work: The property owner and contractor will comply with the following requirements as part of any eligible repair work: 1. City's Consultant will conduct a pre- construction meeting prior to the start of work. a. Federal requirements, including Davis -Bacon Act (if applicable) may be required, if necessary. 2. City's Consultant will issue a notice to proceed to the contractor. 3. City's Consultant will monitor rehabilitation work during construction. 4. City's Consultant will monitor rehabilitation work during construction for compliance with Davis -Bacon Act (if applicable). a. City's consultants will conduct final inspection for program compliance and contract completion upon notification by property owner and contractor that all rehabilitation work is completed. I. Owner Reimbursement: There will be no owner reimbursement for this grant. J. Direct Payment to Contractor: The City's Consultantwill authorize payment to contractor. 1. The contractor must submit proof of payment to any subcontractors for all completed work. 2. Contractor must submit proof of Building Department's final approval for all required permits. 3. Staff will review, and approve all submitted documents prior to authorizing rebate to property owner. a. Staff will determine percent of matching grant for final payment. K. File Close -Out: City's Consultant will verify all case files contain the following: 1. Completed Application Form 2. Evidence of Property Ownership 3. Activity Record Sheet 4. Historic Clearance Documentation 7 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 5. Inspection Report 6. Work Write -up on Plans and Specifications 7. Copies of Bids 8. Construction Contract 9. Full Warranties 10. Notice to Proceed 11. Applicable Davis -Bacon Act Reports and Wage /Salary Information 12. Permit (if applicable) 13. Progress Inspection Reports 14. Change Order Requests (if applicable) 15. Notice of Completion — Certificate of Final Inspection 16. Lien Releases and Payment Records L. Summary Records: City's Consultant will maintain the following summary records: 1. Names of property owner and tenants 2. Address of property assisted 3. Number of units involved 4. Year built, if known 5. Income level of tenants 6. Race /ethnicity of tenants 7. Female- headed households 8. Grant amount 9. Type of rehabilitation 10. All directly related cost 8 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 Ib. SECTION 8 LEAD EASED PAINT REMEDIATION PROGRAM A. Program Description: This program will provide financial assistance for the testing and remediation of lead hazards. The primary focus of the program will be directed toward those rental units that are occupied by tenant households that have children six (6) years of age or under and do not pass a HQS inspection under the City's Section 8 Voucher Choice Program. Testing: The City, through its Consultant, will provide a qualified lead abatement test of all common areas and eligible low- income units. Prior to the City providing a testing grant, a property owner must agree that if the testing reveals lead hazard levels and /or conditions that are hazardous, the owner will correct the hazard through the Remediation Grant Program. 2. Remediation: Eligible property owners will hire a qualified lead hazard abatement contractor to abate or manage all lead hazards that are detected during testing. 3. Grants: The City will provide grants for testing and remediation. a. Testing Grant: The City will provide a grant to cover the costs of testing the common areas and eligible units and developing a remediation plan and cost estimate. b. Remediation Grant: The City will provide a grant to cover the costs of the removal of the lead hazard. The City will pay the full cost of remediation up to $4,000 per unit and $20,000 for common areas. To receive a grant, a Voucher Choice tenant household must currently occupy the unit receiving the grant. 4. Review Committee — City shall convene a Review Committee to review and approve all grants. a. The Committee shall consist of the City's Consultant, the staff program administrator, the Housing Administrator and the Housing Authority Administrator. b. The Committee will review and approve grant applications. Eligible Properties - Properties that received common area assistance must be fifty -one (51 %) percent occupied by low- income tenants. The 2005 income limits are as follows: Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 C. 13 HOUSEHOLD INCOME GUIDELINES* (80 PERCENT OF MEDIAN INCOME) 1 person $36,700 2 persons $41,900 3 persons $47,150 4 persons $52,400 5 persons $56,600 6 persons $60,800 7 persons $65,000 8 persons $69,150 * Includes incomes for all persons living in dwelling, including retirement income, social security benefits, etc. Eligible property owners may receive a maximum of one (1) testing grant and one (1) remediation grant per eligible property. Priorities: While grants will be provided on a first -come, first - served basis, priority in funding will be given to the following: Property owners with current Voucher Choice tenant households with children six (6) years of age and under. 2. Waiting Lists: Depending on program activity, the City may establish waiting lists for actual participation in the Program. Property "owners with current Voucher Choice tenants with children six (6) years of age and under, and have other tenants that meet the current HUD income guidelines will be given priority on any waiting lists that are established. Eligible Improvements — Only testing for and remediation of lead -based paint hazards are eligible under this program. Testing: Only testing for lead hazard abatement is eligible under this Program. Testing results by a California Department of Health Services Department (DHS) certified consultant other than the City's consultant are not eligible for a grant but may be used to obtain a bid for remediation work. 2. Remediation: Only remediation work identified in the lead assessment provided by a certified consultant is eligible for a grant under this Program. Any remediation work identified by a consultant other than the City's consultant must be reviewed and approved by the City's consultant prior to commencement of work and payment of any grant. 10 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 3. Relocation: If necessary, the City will follow all of the requirements of the Federal Uniform Relocation Assistance and real Property Acquisition Policies Act of 1970 (URA). E. Application Intake and Processing: Applications will be accepted on a first - come, first served basis. 1. Application: Property owners will complete a Program application that will include the following information: a. Owner's name and property address b. Grant Deed /Proof of ownership C. Proof of tenant's income qualifications 2. Eligibility determination: Staff will review the application and determine the property owner's eligibility as well as individual tenant household eligibility. 3. Historic Preservation Review: All eligible properties will be submitted for historic preservation review that are fifty (50) years or older. 4. Project Tracking: All eligible projects will be monitored to verify and document directly related costs (see summary records). F. Lead Testing 1. Scheduling a. Contact Apartment Owner /Manager 1) The apartment manager /owner is expected to provide access to the targeted units. The apartment manager /owner will be present when the lead hazard inspection is performed. 2) The inspector will schedule multiple inspections each day based on geographic proximity. b. Tenant Questions 1) A flyer explaining the testing program will be given to each tenant by the landlord. 2) If the tenants have questions after learning about the lead inspections, they can contact their landlord. tt Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 3) The tenant will receive disclosure literature from the City pursuant to Title X's disclosure law. Pursuant to Title X, Section 1018, tenants residing in apartment complexes built before 1978 will be provided with the EPA pamphlet "Protect Your Family From Lead In Your Home." 4) A follow -up letter explaining the test results will be sent to each tenant. Lead Testing: The City's Consultant will conduct a lead hazard inspection pursuant to the protocol detailed in the U.S. Department of Housing and Urban Development's: Guidelines for The Evaluation and Control of Lead -Based Paint Hazards in Housing published in June 1995 (1995 HUD Guidelines). The inspection will identify the levels of lead hazards in the occupied unit. It will document the location of all lead hazards. The report will also identify the strategy to control the lead hazard. The lead hazard inspector will also perform a risk assessment and take dust samples in areas likely to be frequented by young children. The inspector will take dust samples from the floors, windowsills, and window wells or troughs. Lead Inspection a. X -ray Fluorescence 1) An inspector will take XRF readings for each component and average the readings to obtain the final result. 2) XRF instruments expose the painted surface to X -rays with a characteristic frequency (called fluorescence) which the machine converts into a number that represents the amount of lead in the paint. The readings are measured in paint. The readings are measured in paint �er unit area, milligrams per square centimeter (mg /cm ). b. Definition of Lead -Based Paint (LPB) 1) The Residential Lead -Based paint Hazard Reduction Act of 1992 (Title X) defines LBP as 1.0 mg/ cm2. 2) For purposes of this scope of work and referencing Chapter 11 of the Los Angeles Department of Health 12 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 and Human Services Safety Code, the Inspector will consider XRF readings equal to or greater than 0.7 mg/ cm as lead positive. C. Certification/Training 1) The inspector will be certified by the California Department of Health Services Department, Childhood Lead Poisoning Prevention Branch. Moreover, he /she will have attended his /her XRF manufacturer's 8 -hour training class in the proper usage of the XRF machine. XRF Testing Procedure 1.) The inspector will inspect at least one of each component type in each room of each unit housing a child under six (6) years of age (i.e., wall, door case, jamb, window sash, sill, well, baseboard, ceiling, etc.). If the inspector finds one component which tests positive, the inspectorwill test all similar components in that room (i.e., if one wall is positive, inspector will test all four walls). In addition, the inspector will take representative readings in the common areas and exterior of the apartment complex. 2) The lead hazard inspector must have access to every room in the unit. e. Duration of Lead Testing 1) It will take less than forty (40) minutes to inspect each target unit and approximately twenty (20) minutes to inspect the exterior and common areas. G. Property Inspection: All eligible properties will be inspected by the City's consultant. The City's Consultant will prepare a written scope of work for each unit to reduce any existing lead hazards which include: Replacement: The contractor removes and subsequently disposes of components coated with LBP. He /she must abide by all controlling safety regulations. The contractor will then replace the removed components to complete the abatement. b. Removal: The contractor separates the paint form the substrate and legally disposes with the removed paint. The 13 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 removal methods include west scraping, scraping with a heat gun, abrasive removal, and on- or offsite chemical stripping; C. Enclosure: The contractor encloses the painted surface with a durable substance, such as drywall, paneling, metal, siding, or some other construction material; or d. Encapsulation: The contractor coats or seals the LBP surface with a durable coating, which is applies as a liquid. One should not consider lead -free paint as a viable encapsulate. H. Operations and Maintenance Plan Agreement: If no lead hazards exist in the unit(s), but the unit or common area has lead hazards, the City's consultant will recommend in -house management techniques, such as: 1. Periodic visual inspection for the area; 2. Proper cleaning techniques with HEPA vacuums and detergents; or 3. Paint film stabilization. I. Contractor selection /bidding: Property owner will review and approve all test results, remediation plans, and cost estimates before selecting a contractor to perform the approved remediation work. 1. City's Consultant will provide property owner with a list of California Department of Health Services Department (DHS) certified lead hazard abatement contractors. 2. City's Consultant will provide cost protocols for treatment and abatement methods of the property owner for use in hiring contractors. 3. Owner will request bids from at least two (2) contractors. 4. City's Consultant will review bids from contractors and advise the owner as to acceptability /cost reasonableness. 5. Owner will select contractor and enter into agreement with selected contractor. a. City will approve contract prior to signing, and a copy will be filed with City. b. Contracts for remediation of eight (8) or more units will be required to contain Davis -Bacon Act labor standards compliance provisions. 14 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 J. Contractor Guidelines: All contractors must be eligible to participate in CDBG funded contract work for length of the contract. The contractor must comply with all Federal and State regulations, including: Resource Conservation Recovery Act; California Department of Toxic Substance Control; C. Department of Transportation Regulations. 2. Contractor must include in his /her bid the cost of any waste disposal, such as storage, waste profile testing, transportation, and disposal fees. 3. The City of Santa Monica's Household Hazardous Waste Collection Facility will accept hazardous waste (e.g., paint chips, HEPA bag contents, etc.) free of charge if: The contractor has made pre- arrangements with their collection facility stating the abatement project's location and proving the project is part of the Voucher Choice program; or The contractor is charging the program only for the time to take chips /dust to the facility and no other disposal fees. 4. Workload Limitations: No contractor may be awarded contracts for more than two (2) separate contracts at any one time. The limit may be increased to three (3) contracts providing only one (1) contract involves Davis -Bacon compliance requirements. K. Remediation Work: The property owner and contractor will comply with the following requirements as part of any eligible remediation work: City's Consultant will conduct a walk through and pre- construction meeting prior to the start of work. State and Federal requirements, including Davis -Bacon Act (if applicable) will be reviewed. 2. Owner will issue a Notice to Proceed to the contractor. A copy of the Notice to Proceed will be given to the City. 3. City's Consultant will monitor abatement work during remediation. is Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 4. City's Consultant will monitor abatement work for compliance with Davis -Bacon Act (if applicable). 5. City's Consultant will conduct final test clearance upon notification by property owner and contractor that all remediation work is completed. L. Direct Payment to Contractor: The City's Consultant will pay the contractor directly. 1. The contractor must submit proof of payment to any subcontractors for all completed work. 2. Contractor must submit proof of Building Department's final approval for all required permits. 3. The contractor must submit all contractor Davis -Bacon Act records (if applicable). 4. Staff will review and approve all submitted documents prior to authorizing rebate to property owner. M. Close Out: In performing file close out, City's Consultant will verify all case files containing the following required documents and other materials: 1. Completed Application Form 2. Evidence of Property Ownership 3. Activity Record Sheet 4. Historic Clearance Documentation 5. Testing Inspection Report 6. Copies of Bids 7. Construction Contract 8. Full Warranties 9. Notice to Proceed 10. Davis -Bacon Act Reports and Wage /Salary Information (if applicable) 11. Monitoring Reports 12. Change Order Requests (if applicable) 16 Residential Rehabilitation Program - City of Santa Monica Guidelines revised August -05 13. Certificate of Final Test Clearance 14. Copy of Rebate Payment N. Summary Records: The City's Consultant will maintain the following summary records: 1. Names of property owner and tenants 2. Address of property assisted 3. Number of units involved 4. Year built 5. Income level of tenants 6. Race /ethnicity of tenants 7. Female headed households 8. Grant amount 9. Type of rehabilitation 10. All directly related costs 17 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 Ill. OWNER- OCCUPIED REHABILITATION PROGRAM A. Program Description: This program will provide financial assistance to low - income homeowners that are sixty -two (62) years old and older and, or mobilehome owners or disabled households. Such assistance will pay for a variety of repairs, including floor covering, paint, plumbing, and electrical, and other necessary minor repairs. The City will provide a grant to each property owner who qualifies as a low- income household. Maximum Amount: $4,000 per eligible unit. 2. Review Committee: City shall convene a Review Committee to review and approve any grants in excess of the program limits. The Committee shall consist of the City's consultant, the staff program administrator, the Housing Administrator and the Housing and Redevelopment Manager. B. Eligibility Requirements: Low - income homeowners are eligible to participate in this Program. The 2005 income limits are as follows: HOUSEHOLD INCOME GUIDELINES* (80 PERCENT OF MEDIAN INCOME) 1 person $36,700 2 persons $41,900 3 persons $47,150 4 persons $52,400 5 persons $56,600 6 persons $60,800 7 persons $65,000 8 persons $69,150 * Includes incomes for all persons living in dwelling or with name on title, including retirement income, social security benefits, etc. Eligible property owners may receive a maximum of one (1) residential Rehabilitation grant per eligible property. These grants may be in addition to a lead hazard grant. Priorities: Grants will be provided on a first -come, first - served basis, priority in funding will be given to the following: 91 Property owners who are senior citizens over the age of sixty - two (62). to Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 b. Mobilehome owners residing in mobilehome parks located within City limits. C. A household with a disabled member. d. Other owner - occupants who are low- income and meet the current income guidelines. 3. Waiting Lists Depending on Program Funds: The City may establish a waiting list for participation in the program. C. Eligible Improvements: Eligible improvements include but are not limited to the following: 1. Correction of health and safety code violations 2. Repair /replacement of unsanitary plumbing fixtures 3.. Repair /replacement of leaking roofs 4. Repair /replacement of unsafe /inoperable electrical fixtures /wiring 5. Replacement of worn, deteriorated floor covering 6. Disabled access improvements, such as ramps 7. Testing for environmental hazards such as lead hazards, molds, fungus and other air carried toxins 8. Security devices, and 9. Other general repairs as approved by the City D. Ineligible Improvements: The following improvements are ineligible per federal guidelines: 1: Barbecue Pits 2. Bathhouses 3. Burglar Alarms 4. Burglar Protection Bars 5. Dumbwaiters 6. Fire Extinguishers 19 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 7. Greenhouses 8. Hangars (airplanes) 9. Kennels 10. Kitchen appliances, except stoves which are designed and manufactured to be freestanding and are not built -in and permanently affixed as an integral part of the kitchen in a residential structure 11. Outdoor Fireplaces or Hearths 12. Penthouses 13. Photo Murals 14. Radiator Covers or Enclosures 15. Steam Cleaning of Exterior Surfaces 16. Swimming Pools 17. Television Antenna, Cable or Satellite Dishes 18. Tennis Courts 19. Valance or Cornice Boards 20. Waterproofing of a structure by pumping or injecting any substance in the earth adjacent to or beneath the basement or foundation or floors. E. Application Intake and Processing: Applications will be accepted on first - come, first - served basis. 1. Application: Property owners will complete a Program application that will include the following information: a. Owner's name and property address b. Grant deed proof of ownership 2. Eligibility Determination: The City's Consultant will review each application and determine the property owner's eligibility. 3. Historic Preservation Review: All eligible properties will be submitted for historic preservation. 20 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 4. Project Tracking: All eligible projects will be monitored by the City's Consultant to verify directly related costs (see Summary Records), 5. The property owner will review and approve the work write -up. F. Property Inspection: All properties will be inspected by City's Consultant to determine eligible improvements. City's Consultant will inspect eligible properties, including individual units to determine eligible improvement 2. City's Consultant will prepare a work write -up and cost estimate. 3. Owner to review and approve work write -up and cost estimate. G. Contractor Selection /Bidding: Property owner will review and approve work write -up and cost estimate before selecting a contractor to perform the repair. The owner is to obtain a reasonable bid. 2. City's Consultant will review the selected bid and advise owner as to reasonableness. 3. Owner will select the contractor and enter into agreement with selected contractor. The City or Consultant will approve contract prior to signing and a copy will be filed with City. 4. Workload Limitations: No contractor may be awarded contracts for more than two (2) separate contracts at any one time. H. Rehabilitation Work: The property owner and contractor will comply with the following requirements as part of any eligible repair work: City's Consultant will conduct a pre- construction meeting prior to the start of work. 2. The City's Consultant will issue a notice to proceed to the contractor. A copy of the notice to proceed will be given to the City. 3. City's Consultant will monitor rehabilitation work during construction. 4. City's Consultantwill conduct final inspection for program compliance and contract completion upon notification by property owner and contractor that all repair work is completed. I. Owner Reimbursement: There will be no direct owner reimbursement. 21 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 J. Direct Payment to Contractor: The City's Consultant will pay the contractor. 1. The contractor must submit proof of payment to any subcontractors for all completed work. 2. Contractor must submit proof of Building Department's final approval for all required permits. K. File Close -Out: City's Consultant will verify all case files contain the following: 1. Completed Application Form 2. Evidence of Property Ownership 3. Activity Record Sheet 4. Historic Clearance Documentation 5. Inspection Report 6. Work Write -up on Plans and Specifications 7. Copies of Bids 8. Construction Contract 9. Full Warranties 10. Notice to Proceed 11. Permit (if applicable) 12. Progress Inspection Reports 13. Change Order Requests (if applicable) 14. Notice of Completion — Certificate of Final Inspection 15. Lien Releases and Payment Records L. Summary Records: City's Consultant will maintain the following summary records: 1. Names of property owner and tenants 2. Address of property assisted 22 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 3. Number of units involved 4. Year built, if known 5. Income level of tenants 6. Race /ethnicity of tenants 7. Female headed households 8. Grant amount 9. Type of rehabilitation 10. All directly related cost 23 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05 CITY OF SANTA MONICA RESIDENTIAL REHABILITATION PROGRAM DEFINITIONS APPLICANT: Any person/ or legal entity that applies for a grant under the Residential Rehabilitation Program. APPLICATION PACKET: Forms disbursed to potential participants. CONTRACT: A legally binding, standardized form that spells out, in detail, the entire scope of work, specific quality, brands, of materials, and all other data pertinent to the rehabilitation of the property. The Contract must be signed by both the contractor and applicant. CONTRACTOR: An eligible contractor is a person licensed in compliance with State regulations to do the necessary rehabilitation work and is not debarred from working Federally funded projects. No contractor may be utilized who has been disbarred or suspended by order of the County of State. GRANT: Amount made available to a residential unit that is in need of repair or lead hazard control. The maximum grant is $4,000 per eligible unit. ELIGIBLE IMPROVEMENTS: All improvements required to bring the dwelling unit up to Federal Housing Quality Standards (safe, sanitary, and decent) and local building codes. INCOME VERIFICATION: The process used to determine gross household income for a household, including the submittal of most current income tax returns, employer verification of wages, W -2 Forms, Social Security verification, profit/loss statements, etc. DISBURSEMENT: The amount that is paid out to the contractor as the rehabilitation work progressed. The Disbursement may be in accordance with a contractual agreement between the program participant and the selected contractors. Prior to disbursement, the work accomplished must be in accordance with the Scope of Work as detailed in the Work Write -Up. OWNER /OCCUPIED UNIT: A unit used entirely for residential purposes and occupied by the owner household. PARTICIPANT: Any person or legal entity that has applied for and is in the process of rehabilitating a unit through the Program. PERSON: One or more persons who occupy a unit that is to be rehabilitated. PROGRAM ADMINISTRATOR: The City staff member or City consultants having the primary responsibility for administering and coordinating the projects for the Program. CONSTRUCTION MANAGER: The person who conducts inspections and produces Work Write- Ups /Cost Estimates. REHABILITATION COST: The total cost of repairs and improvements and other costs for rehabilitation to be incurred by the participant that is paid with Grant funds. WORK WRITE -UP: A form to be completed by the Construction Manager outlining a suggested scope of work to be performed as the rehabilitation project. It includes the name and address of the applicant and other pertinent information. 24 Residential Rehabilitation Program City of Santa Monica Guidelines revised August -05