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HomeMy WebLinkAbout14 - Utility Connection Grant Program Policy AmendmentCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 14 October 26, 2010 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Planning Department Kathlyn Bowden, AICP, Economic Development Coordinator 949 - 644 -3230, kbowden(a)newportbeachca.gov SUBJECT: Utility Connection Grant Program Policy Amendment ISSUE Staff is requesting Council approval of a minor amendment to the Community Development Block Grant ( "CDBG ") funded Utility Connection Grant Program Policy ( "Policy "). Housing and Urban Development ( "HUD ") funding became available after some eligible residents had already commenced work. The proposed amendment allows for reimbursement to eligible homeowners that can provide qualifying documentation. Review and approve the proposed amended Policy ( "Attachment A ") to allow for the participation of eligible households on a reimbursement basis subject to submission of qualifying documentation. DISCUSSION The Utility Connection Grant Program ('Program ") was authorized by Council on April 27, 2010, as part of the CDBG Action Plan to alleviate resident concerns about the impact of private connection costs for eligible households. The Policy to implement the program was adopted August 10, 2010. The Council approved Policy defines eligible households as owner - occupants of properties located in an undergrounding .Assessment District with household incomes at or below 50% of Area Median Income. To ensure cost - reasonableness, eligible households must obtain and submit not less than three (3) contractor bids to the City for the work to be performed. Grant assistance is capped at a not to exceed $5,000 and must be approved by the program Screening Committee consisting of the Economic Development Administrator, Economic Development Coordinator and the Program Consultant. Utility Connection Grant Program Policy October 26, 2010 Page 2 Policy Amendment As originally conceived the applicant would start the grant process prior to soliciting bids and hiring a contractor. Due to delays in the HUD approval of the grant program and the continued implementation and construction of Assessment District 103, potentially eligible households could not get grant approval prior to initiating construction. Staff has received inquiries from Assessment District 19 where residents have begun the process in advance of grant approval. Strict application of the current grant policy would suggest that potentially eligible households could not receive the grant. Staff believes it prudent to amend the Program Policy to allow for eligible applicants to participate in the program via reimbursement, provided that the procurement, contracting and owner - contractor payment process was carried out and documented in accordance with the CDBG requirements. The proposed amendment establishes a secondary procedure for reimbursement while retaining the original procedure for subsequent Districts. Program Status As of the date of this report, the City has received six (6) applications, of which one (1) is eligible to participate, two (2) were denied because the households exceed the income limits, and three (3) applications are pending further review upon receipt of required supporting documentation from the applicants. Environmental Review The program policy amendment 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 This agenda item shall be noticed according to the Brown Act (72 hours in advance of the public meeting at which the City Council considers the item). Utility Connection Grant Program Policy October 26, 2010 Page 3 Funding Availability The City's 2010 -2011 CDBG allocation is $385,189. 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. No additional funds are necessary to continue program implementation Prepared by: l G�ce/�X Kathlyn Bowden, AICP Economic Development Coordinator Submitted by: Ja es W. Camp ell Acting Planning Director Attachment A: Amended Utility Connection Grant Program Policy Attachment A Amended Utility Connection Grant Program Policy UTILITY CONNECTION GRANT PROGRAM POLICY Au 00ctober 26, 2010 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, attached, condominium, manufactured, or mobile home properties and duplexes located within the Newport Beach city limits 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 and duplexes 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 August 190ctober 26 2010 1 Program Policy w�� Utility Connection Grant Program with the Program are ineligible for assistance under the Program. This policy 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 50% 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 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. 4ugust 4 )October 26 2010 Program Policy Utility Connection Grant Program Grant funding priority shall be based on a first -come, first - served basis 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 1. Pre - qualification — 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. 2. Screening Committee Review — The Screening Committee shall consist of the Economic Development Administrator, Economic Development August 1 9October 26 2010 3 Program Policy Utility Connection Grant Program 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. D. Bidding and Contractor Selection Procedures for Contracts Paid on Behalf of Applicant E. 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 C -10. A, or general -B- Licensed contractors4or RidRid 1' 'f..4' be S^vncnucror^1^�- can-oc rnade Of IiGensed specialty GentFactor6 f the Work DeGGFiptiGn involves a single . 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.epIs.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. 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). 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. Bidding and Contractor Selection Procedures for Reimbursement to Applicant August - 100ctober 26 2010 Program Policy Utility Connection Grant Program In the event that a UCP grant is approved by the Screening Committee subsequent to the date when an applicant shall have reasonably contracted and the eligible costs incurred Under this scenario the procurement contracting and performance of work has already been carried out by the owner - occupant and their selected contractor prior to UCP involvement In cases where reimbursement is appropriate applicant approval by the Screening Committee shall be determined subsequent to the receipt and review of copies of the following documents from the applicant • Three (3) bids from C -10 A or B- licensed contractors for the same scope of work: • A contract with the lowest responsive responsible bidder (Please note that reimbursement will not be possible in circumstances where the applicant entered into a contract with a bidder other than the lowest responsible bidder.): • The contractor's City of Newport Beach business license and • The City of Newport Beach electrical permit Prior to reimbursement Staff will confirm contractor eligibility by 1. Checking the contractor's license status with the Contractors State License Board (www.cslb.ca.gov) and 2. Checking the contractor's Federal debarment status with the Excluded Parties Listing System (www epls dov) G. Project Closeout Individual utility connection projects will be financially closed subsequent to Staff approval of the work performed receipt of a written warranty from the contractor indicating coverage of workmanship and materials for the work performed up to one (1) year from the completion date as indicated on the signed -off City of Newport Beach electrical permit -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. For grants made on a reimbursement basis utility connection projects will be financially closed (reimbursed to the applicant) upon receipt of the following documents: • Contractor's invoice for payment • Unconditional Waiver and Release of Lien signed by contractor • Signed -off City of Newport Beach electrical permit August 100ctober 26 2010 5 Program Policy Utility Connection Grant Program • Before & after photos of the work performed including the electrical box and the area(s) of your property that were trenched in order to facilitate the underground conversion • Written warranty from the contractor indicating coverage of workmanship and materials for the work performed up to one (1) year from the completion date as indicated on the signed -off City of Newport Beach electrical permit • A copy of the notice of completion; and • Cancelled check(s) (front and back) for all payments to the contractor adding up to the contract price. H. 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. Authority to Administer 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 grant limits at his /her discretion to address critical home improvement needs. Aeggs€1 QOctober 26 2010 Program Policy