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HomeMy WebLinkAbout14 - Utility Connection Grant Program PolicyCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 14 August 10, 2010 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Planning Department Kathlyn Bowden, AICP, Economic Development Coordinator 949 - 644 -3230, kbowden(o)newportbeachca.gov SUBJECT: Utility Connection Grant Program Policy ISSUE: Staff is requesting approval of the policy document associated with the proposed Utility Connection Grant Program to be funded with FY 2010 -2011 Community Development Block Grant (CDBG) funds. RECOMMENDATION: Review and approve the policy document associated with the proposed Utility Connection Grant Program, thereby allowing staff to move forward with the creation and implementation of the program. DISCUSSION: Background: On December 12, 2009, the City published a Notice of Funding Availability (NOFA) in the Daily Pilot newspaper to announce the availability of CDBG funds and solicit proposals from tax - exempt nonprofit organizations that provide eligible CDBG services or projects that benefit Newport Beach residents. The City's Planning Department submitted an application for a Utility Connection Grant Program for low- income owner - occupants within proposed utility undergrounding Assessment Districts due to concerns about the impact on low- and moderate - income owner - occupants. On April 27, 2010, the City Council approved the 2010 -2011 CDBG Action Plan, allocating $65,922 to a Utility Connection Grant Program. Since that time, staff has worked in concert with the City's CDBG consultants, LDM Associates, to develop a Utility Connection Grant Program Policy August 10, 2010 Page 2 program that will reduce the financial burden of an Assessment District on low- income owner - occupants within an Assessment District. The attached policy document describes the general framework of the program, its administration, and procedures. Program Summary: As proposed, the Utility Connection Grant Program will cover a portion of the cost of utility hook -ups to income- qualified owner- occupants within an Assessment District. Program grants are limited to actual costs up to a maximum of $5,000 and must be approved by the City's Screening Committee consisting of the Economic Development Administrator, Economic Development Coordinator and the Program Consultant. Homeowners are eligible for one (1) grant in any ten (10) year period. A grant of $5,000 is expected to be an ample amount for utility connection work to most residential properties. Should utility connection costs exceed $5,000, the homeowner will need to show proof of additional funding to complete construction costs in excess of the grant. Program funds may be used to complete utility connection projects only, inclusive of costs for the construction contractor performing the utility connection work, City permits and inspection fees, hazardous materials testing fees and any document recordation fees that may be applicable. Subsequent to the completion of work, the homeowner has no financial obligation to the City in connection with this program. The City expects to assist 10 or more low- and moderate - income owner - occupants with utility hook -ups to the new underground utilities to be installed as part of the assessment district(s). "Owner- occupants" are those individuals holding title to a dwelling as their principal and sole residence. Environmental Review: The program policy accompanying this staff report is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Public Notice: A Notice of Intent to Request Release of Funds was published in the Daily Pilot on July 24, 2010 informing the public that the City will submit a request to the U.S. Department of Housing and Urban Development (HUD) for the release of CDBG funds to undertake the Utility Connection/ Residential Rehabilitation Grant Program. All comments Utility Connection Grant Program Policy August 10, 2010 Page 3 received by August 9, 2010 will be considered by the City of Newport Beach prior to authorizing submission of a request for release of funds. To date, staff has received no public comment regarding the proposed Utility Connection/ Residential Rehabilitation Grant Program. Funding Availability: The City will receive a 2010 -2011 allocation of $385,189 in CDBG Funds. On April 27, 2010, the City Council approved $65,922 in funds for the Utility Connection Grant Program as part of the 2010 -2011 CDBG Action Plan. Funds for this program are included in City Budget Account No. 2730 -8556. Prepared by: Submitted by: xCiA A4'4�� athlyn Bow AIC Sharon Wood Economic Development Coordinator Special Projects Consultant Attachments: Utility Connection Grant Program Policy UTILITY CONNECTION GRANT PROGRAM POLICY July 1, 2010 4 1 Keith D. Curry - Mayor Michael F. Henn - Mayor Pro -Tern Leslie Daigle - Council Member Nancy Gardner- Council Member Steven Rosansky -Council Member Edward D. Selich - Council Member Don Webb - Council Member Utility Connection Grant Program I. PROGRAM DESCRIPTION The purpose of the Utility Connection Grant Program (UCP) is to assist low- and moderate- income owner - occupants of single - family detached dwellings, town homes, condominiums and mobile homes with the preservation of decent safe and sanitary housing. The UCP makes improvements considered necessary to eliminate blight, promotes the construction of healthy, sustainable and resource - efficient housing, and corrects building, health and safety code violations. Program funds may be used to complete utility connection projects only, inclusive of costs for the construction contractor performing the utility connection work, City permits and inspection fees, hazardous materials testing fees and any document recordation fees that may be applicable. II. SOURCE OF FUNDS UCP projects will be funded from the City's annual allocation of Community Development Block Grant (CDBG) funds. The City of Newport Beach receives these funds from the U.S. Department of Housing and Urban Development (HUD) because it is a CDBG Entitlement City. Funds for the UCP may be approved by the City Council each fiscal year as part of the City's Annual HUD Action Plan process. III. PROGRAM GRANTS Program grants are limited to actual costs up to a maximum of $5,000 and must be approved by the City's Screening Committee consisting of the Economic Development Administrator, Economic Development Coordinator and the Program Consultant. Homeowners are eligible for one (1) UCP grant in any ten (10) year period. Should utility connection costs exceed $5,000, the homeowner will need to show proof of additional funding to complete construction costs in excess of the grant. Program grants may be made to the income - qualified owner - occupant(s) of residential dwellings located within the city limits of the City of Newport Beach. "Owner- occupant" is defined as holding title to the dwelling as their principal and sole residence. Subsequent to the recordation of the Notice of Completion, the homeowner has no financial obligation to the City in connection with this program. IV. ELIGIBILITY CRITERIA A. Eligible Applicants Eligible applicants are income - eligible owner- occupants of single - family detached, attached, condominium, manufactured, or mobile home properties located within the Newport Beach city limits. Program grants may only be made to owner - occupants with clear title to the property in need of utility connection. As a prerequisite to eligibility, an applicant must be willing to correct all current code violations visible from public right -of -way. City Council Members, Commissioners and any employee, official or agent of the City who exercises any policy or program decision - making function in connection with the Program are ineligible for assistance under the Program. This policy July 1, 2010 1 Program Policy Utility Connection Grant Program extends for a period of two (2) years beyond an individual's disassociation with the City of Newport Beach in such a capacity. B. Eligible Household Income Owner- occupant household income may not exceed 80% of the Orange County Area Median Income adjusted for household size as promulgated by the U.S. Department of Housing and Urban Development. The determination of annual household income shall be made in accordance with the "Annual Income" determination methodology as defined at 24 CFR Part 5. No other method of income determination shall be used. C. Eligible Improvements Program grants may be expended solely for private utility connection / hook -ups and necessary repairs related directly to the utility connection itself. D. Eligible Costs Program grant proceeds may also be used for any Program fees, such as but not limited to permits and other project - related soft costs that are necessary to implement the project. V. IMPLEMENTATION A. Administration The Newport Beach Planning Department - Economic Development Division Staff ( "Staff') shall administer the Program. As used herein, the term "Staff' may include either employees or consultants of the Department under the direction of the City Manager or his /her designee. The administration of the Program including, without limitation, application evaluation procedures, utility connection assessments, cost estimation, bid solicitation, contractor selection, construction management, inspection, disbursement of Program funds and processing of the Notice of Completion will be managed in accordance with this Policy. The City Manager or his /her designee shall be responsible to ensure that UCP Implementation Guidelines are maintained and updated periodically to ensure compliance with all U.S. Department of Housing and Urban Development policies and regulations. The Implementation Guidelines shall conform to this approved Policy. B. Application July 1, 2010 For the 2010 -2011 and the 2011 -2012 CDBG Fiscal Years, income - qualified owner - occupant households in the City's Utility Assessment Districts shall have first priority for grant funds, subject to availability. Applications for participation in the Program shall be distributed by the City of Newport Beach Planning Department — Economic Development Division to households requesting them. Grant funding priority shall be based on a first -come, first - served basis 2 Program Policy Utility Connection Grant Program determined by receipt of completed application. Applications will be reviewed for completeness upon submission. Applicant will then either be informed of materials necessary to complete the application or be given a file number for their completed application. The program application must be completed in its entirety and submitted together with the following documentation: 1. Application Form; 2. Copy of applicant(s) valid government- issued photo identification; 3. Verification of Personal Income, which must include, but is not limited to the Applicant's most recent signed Federal Income Tax Return, three (3) most recent pay stubs, three (3) most recent bank statements, and statements or other acceptable documentation of all other income sources and asset accounts; 4. Proof of ownership of the eligible property such as a copy of the Deed of Trust, Grant Deed or State Mobile Home Registration; 5. Proof of occupancy at the residence by providing a copy of a current utility bill and a copy of a bill that is 6 -12 months old (however not a water or trash bill); 6. A prioritized and itemized list of the construction work requested to be done; 7. Acknowledgement form for Receipt of lead based paint brochure, 8. Copy of latest property tax bill; and 9. Copy of homeowner's current insurance policy to include liability and flood insurance, as applicable. Staff shall review the completed application for income eligibility and owner - occupant status. Applicant shall then be informed of whether they are eligible or ineligible to participate in the Program. Ineligible applicants shall receive a letter stating the reasons for their ineligibility and a copy of the letter will be put in their file. Staff shall place the eligible property owner's name on a list of eligible projects in the order of application receipt and approval. Therefore, those applicants who submit all requested documents with the Application in the shortest time frame will have the highest priority for assistance under the Program. Actual grant funding is subject to CDBG funding availability. Staff's eligibility determination is not a commitment of funds. Funds shall only be committed upon the approval of the Screening Committee and full execution of the Grant Acceptance Agreement. C. Pre - qualification. Evaluation and Screening Committee Review July 1, 2010 Pre - qualification and Property Evaluation — Each application filed will be dated and processed in the order received. Staff will review applications for completeness and verify property eligibility. Incomplete applications will be returned to the applicant. Staff shall notify all ineligible applicants of their status by letter. Prior to consideration by the Screening Committee, Staff shall schedule an appointment with each pre - qualified applicant at the subject property to review the work requested and to inspect the premises. Based on this, Staff shall prepare a Utility Connection Inspection Report that Program Policy Utility Connection Grant Program will establish the type and level of utility connection required. Subsequent to the inspection, a complete work description shall be prepared with an internal cost estimate. 2. Screening Committee Review — The Screening Committee shall consist of the Economic Development Administrator, Economic Development Coordinator and the Program Consultant. The Screening Committee will consider complete application packages for approval. In order to proceed, all Screening Committee members must approve all Program grants. 3. Owner Approval and Work Scope Changes — The owner shall review and provide an approval signature on the Work Description and Bid Proposal Form prior to the preparation of bid packages by the City. D. Bidding and Contractor Selection Procedures July 1, 2010 The applicant shall solicit bids (in accordance with the Implementation Guidelines) from contractors for completion of the utility connection work. Owners shall solicit bids from general B- Licensed contractors for Work Descriptions involving more than one specialty. Bid solicitations can be made of licensed specialty contractors if the Work Description involves a single specialty (i.e. roofing, electrical, plumbing, etc.). Once the owner has received three (3) or more bids from qualified contractors, the owner shall submit three (3) or more bids to the City for review. The bid evaluation shall result in the contract award to the lowest responsible, responsive bidder. Prior to contract award, Staff will confirm contractor eligibility by: 1. Checking the contractor's license status with the Contractors State License Board (www.cslb.ca.gov); 2. Checking the contractor's Federal debarment status with the Excluded Parties Listing System (www.epls.gov); 3. Obtaining a copy of the contractor's current City of Newport Beach Business License; and 4. Obtaining additionally insured General Liability ($1 million general aggregate coverage) and Workers Compensation (statutory coverage) insurance certificates. Pre - Construction Meeting, Contractor Agreement Notice to Proceed and Construction Phase Staff will convene a pre- construction meeting with the owner and selected contractor to review the Contractor Agreement, Work Description and Bid Proposal Form, and to answer site - specific questions. Three (3) calendar days following the execution of the Contractor Agreement, Staff will issue the Notice to Proceed. Subsequent to obtaining the required permits, the contractor will carry out the required work. Generally, work shall commence no later than seven (7) days from the date the last Agreement is executed by the affected property owners and work must be completed no more than 30 -60 days after the start date (or as agreed upon by the owner and contractor). Program Policy Cl Utility Connection Grant Program Property owners and Staff shall authorize the release of program funds in accordance with the Improvement Agreement between the property owner(s) and the City as well as the Contract Agreement between the property owner(s) and the construction contractor as further detailed in the Implementation Guidelines. F. Project Closeout Individual utility connection projects will be financially closed subsequent to Staff approval of the work performed and the property owner's execution of a Notice of Completion. To prevent persons or businesses associated with the project from filing a lien against the property after the City has released all project funds, the City shall withhold ten percent (10 %) of the construction contract from the prime contractor until such liens may not longer be filed, which, in accordance with California Civil Code Section 3116 is 30 calendar days following the recordation of the Notice of Completion with the County Recorder's Office. To allow for the receipt of mailed notification of any recorded liens, the City shall withhold the ten percent (10 %) retention until 35 calendar days following the recordation of the Notice of Completion. G. Approval of Program Legal Documents All Program legal documents shall be approved as to form by the City's legal counsel prior to their use. H. Authority to Administer July 1, 2090 The preparation and use of all required Program Implementation Guidelines, manuals, forms, documents and agreements shall be administered by the Planning Department — Economic Development Division under the direction of the City Manager, or his /her designee, in accordance with this Policy. The City Manager, or his /her designee, has the authority to waive eligibility requirements and loan limits at his /her discretion to address critical home improvement needs. 5 Program Policy