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HomeMy WebLinkAbout1988-02-09 ResolutionN RESOLUTION N0, 88-20 RESOLUTION TO ISSUE DANCING PERMIT BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY, IOWA, that a Dancing Permit as provided by law is hereby granted to the following named person and at the following described locations upon his filing an application, having endorsed thereon the certificates of the proper city officials as to having complied with all regulations and ordinances, and having a valid Class "B" Beer Permit or liquor control license, t0 wit: R.T.'s, 826 S. Clinton Street (9'x17') it was moved by Ambrisco and seconded by Dickson that the Resolution as reade adopted, and upon rol ca t ere were: AYES: NAYS: ABSENT: Ambrisco X Courtney X Dickson X Horoivitz Larson x McDonald X Strait Passed and approved this 9th day of r0ruary 19 88 � , yor Attest:^� „�/ -LAA) City Clerk rrr� 4 Y RESOLUTION NO. 88-21 RESOLUTION ADOPTING SUPPLEMENT NUMBER 34 TO THE CODE OF ORDINANCES OF THE CITY OF IOWA CITY, IOWA WHEREAS, the Municipal' Code Corporation has prepared the 34th supple- ment to the Code of Ordinances of the City of Iowa City, Iowa, and, WHEREAS, it is deemed appropriate to adopt supplement number 34 by resolution as a part of the said Code of Ordinances, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA: 1. That supplement number 34 to the Code of Ordinances of the City of Iowa City, Iowa, attached to this Resolution as Exhibit A, and by this reference made a part hereof, is hereby officially adopted as a part of the said Code of Ordinances. 2. That the Mayor is authorized to' sign, and the City Clerk to attest, this Resolution. It was moved by q,,,b,isco and seconded by Dickson the Resolution be adopted, and upon ro call there were: AYES: NAYS: ABSENT: X Ambrisco _ Courtney _ Dickson X liorowltz �- Larson McDonald Strait Passed and approved this 9th day of February 1988 OR ATTEST: n <� i% Ilan CITY CLERK A FOPiW LEGAL DEPARTME►J� /93 RESOLUTION NO. 88-22 RESOLUTION ESTABLISHING POLICY FOR MICROFILMING AND DESTRUCTION OF RECORDS AND DOCUMENTS IN THE CITY CLERK'S OFFICE. WHEREAS, Chapter 372.13(5) of the Code of Iowa expressly authorizes reten- tion of documents, or accurate reproductions; and WHEREAS, subsequent chapters of the Iowa Code, 303.14, 304.13, 321.31(2), 331.703, and 622.30(2) expressly mention microfilming; and WHEREAS, microfilming greatly reduces storage requirements and microfilm reproductions satisfy statutory retention requirements; and WHEREAS, the Council wishes to formally establish a policy for the City Clerk's office regarding microfilming and destruction of records and documents after microfilming. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA: That records and documents in the City Clerk's office be microfilmed and destroyed after microfilming according to the schedule attached. It was moved by�lmbrisco and seconded by Dickson the Resolution be a opted, and upon roll call there were: AYES: NAYS: ABSENT: X AMBRISCO X_. COURTNEY X DICKSON X HOROWITZ _ LARSON _ MCDONALD — X STRAIT Passed and approved this 9th day of FchIl, , 1988. ATTEST:��� T L RK Appr as o orm a»�rizN a9 � LEGAL DhPARIM /9� ITEM MICROFILMED Meeting Folders (Council Proceedings) Every 3-6 months, depending on return time of documents requiring outside signature. Ordinances End of each calendar year. Resolutions Projects Proof of Publications (minutes/notices) 1. End of each calendar year 12 months after final Council action. End of each calendar year DESTROYED Present Proposed Random checked. Same Held thru calendar year and destroyed. Permanent Destroy after Permanent Hard copy documents held by microfilm company, not returned to City. Random checked, letter authoriza- tion signed to destroy. Random checked and destroyed. random check. Destroy after random check. Same Same City of Iowa City MEMORANDUM Date: February 5, 1988 To: Mayor and City Council From: Marian Karr, City Clerk Re: Microfilm and Destruction of Records and Documents During the past several years, the Clerk's office has made an effort to reduce hard copy storage by microfilming. With the acquisition of a Kodak reader/printer and the decision to "address" each document, we are gaining ground. We are at a position now to formalize a microfilm and document destruction schedule for records and documents. Section 372.13(5) states "that ordinances, resolutions, council proceedings, and records and documents relating to real property transactions or bond issues shall be maintained permanently." Currently, Council proceedings (meeting folders) are microfilmed, random checked, and destroyed. Ordinances and resolutions are microfilmed, random checked, and the hard copy held on permanent retention. Our proposal is to destroy ordinances and resolutions, in the same manner as meeting folders, after they are random checked. The resolution outlines the schedule for microfilming and the present and pro- posed destruction schedule. The Legal Department has reviewed the matter and has assured us accurate reproductions of records and documents may be used to meet statutory reten- tion requirements. /sp J I RESOLUTION NO. S8_2 RESOLUTION SETTING PUBLIC HEARING ON THE OPERATING BUDGET ESTIMATE FOR THE FISCAL YEAR JULY 1, 1988 THROUGH JUNE 30, 1989 AND THE PROPOSED THREE-YEAR FINANCIAL PLAN WHICH INCLUDES THE CAPITAL IMPROVEMENTS PROGRA14 FOR FISCAL YEARS 1989-1991. be held BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY, IOWA, that a Public Hearing 23, taxpayer oto bthe heard for Civic for againster at 0 the proposedrFY89 Operratito Bd the proposed FY89-FY91 Financial Plan which includes the Capitng Budget and Improvements Program. The City Clerk is hereby directed to give notice of public hearing and the time and place thereof by publication in the Iowa City Press -Citizen, a newspaper of general circulation in Iowa City, at least four ays a ore the time of such hearing. It was moved by Ambrisco the Resolution be adopted, and upon roll caldl therre were: Dickson AYES: NAYS: ABSENT: X X Ambrisco X Courtney Dickson X X Horowitz X Larson McDonald X Strait Passed and approved this 9th day of _ Pebilui_1988. OR ATTEST: "�--- AAr d to Form ,,,' � V U , CITY CLERK �3�88 Legal Department /7_5o V a RESOLUTION NO. 88-24 RESOLUTION AUTHORIZING THE MAYOR TO SIGN A CERTIFIED LOCAL GOVERN- MENT GRANT APPLICATION FOR FY88 FUNDS. WHEREAS, the City of Iowa City has requested Certified Local Government status as support for and recognition of its efforts to preserve the heritage of Iowa City; and WHEREAS, the State Office of Historic Preservation has federal funds which must be allocated to local governments to support local preservation pro- jects; and WHEREAS, the City recognizes the valuable resource in its historic buildings in the Central Business District and wishes to complete and update a survey of this resource in anticipation of developing a facade renovation plan; and WHEREAS, the Iowa City Historic Preservation Commission and the Design Review Committee both support this project. NOW, THEREFORE, BE IT RESOLVED: 1. That the City Council of the City of Iowa City authorizes the Mayor to sign the application for a Certified Local Government Grant consisting of approximately $4,000 in federal funds and $1,500 in in-kind local match to complete and update an existing survey of buildings in Blocks 80 and 66 in the Central Business District to determine their architectural and historic significance. It was moved by AmbrIsco and seconded by Dickson the Resolution be adopted, and upon ro call there were: AYES: NAYS: ABSENT: X Ambrisco X Courtney X Dickson X Horowitz Larson X McDonald X Strait Passed and approved this 9th day of February 1988. UK Approved as to Form ATTEST:Ct.c✓.J 61 IT L. Legw Uepartment Aes City of Iowa City MEMORANDUM Date: February 4, 1988 To: City Council From: Barry Beagle, Associate Planner lb Re: Certified Local Government Grant Included in the Council packet is a resolution authorizing the Mayor to sign an application to the State Office of Historic Preservation for a two phase project intended to ultimately provide incentives to downtown building owners to renovate the facades of their structures. The program plan is not regula- tory; no obligations will be imposed on property owners. Phase I of the project involves completing and updating a survey of all the buildings in Blocks 80 and 66 (see attached map) to determine their architectural and/or historical significance. It is intended that this phase will be completed by graduate research assistants from the University under the guidance of Mr. Bob Alexander, Professor of Architectural History, who has consented to contribute his time. Completion of the survey may result in a National Register district or site nomination. Designation on the National Register carries with it no obligation; property owners may, however, take advantage of a 20% tax break program in connection with any qualified renova- tion they choose to undertake. The second phase of the project for which FY89 funds will be sought will consist of developing a facade renovation and streetscape plan for Blocks 80 and 66 which can be generalized to other commercial properties. The plan will be offered to property owners to provide them guidance in the renovation of the facades of their buildings in a manner which is in harmony with the underlying structure and the streetscape of their blocks. Funding for Phase I, which is the subject of the current application, is comprised of approximately $4,000 of Federal funds and a local match consist- ing of in-kind contributions valued at approximately $1,500. The in-kind contribution includes Professor Alexander's time and administrative and secretarial tasks provided through existing operating funds of the City; no local cash match is included. Phase I of the project will begin in May, 1988, and be completed by June 30, 1989, if the application is accepted. bc4-1 Enclosures 0?/r DOWNTOWN IOWA CITY Date Received Grant d �hh rgnrc LI [�? �y 4 CERTIFIED LOCAL GOVERNMENT APPLICATION FOR HISTORIC PRESERVATION GRANT-IN-AID Section I: Applicant Information Name of CLG City of Iowa City Contact Person Barry Beagle Title Associate Planner Address 410 E. Washington Street, Iowa City, Iowa 52240 Telephone (319) 356-5240 Project Director Title Name of person legally authorized to obligate the applicant John McDonald. I4avor Signature Typed name and title Telephone (319) Section II: Project Information A. Type of project (circle one) 1. Survey/Evaluation aa.. Architectural/Historical b. Archeological C. Inter -Disciplinary 2. National Register Nomination 3. Planning 4. Public Education AIr B. Is the proposed project part of a multi-year effort? Yes If so, briefly describe the other project segments. Each year's project must be able to stand alone. Funding of one segment does not guarantee funding of future phases. Subsequent phases of the project include site or district designation on the National Register and development of a model facade renovation and street- scape plan for the central business district and other commercial areas based on the information base derived from the initial survey phase. Section III: Narrative Pro'ect Proposal attach extra sheets as necessary) A. Background and Objectives. Describe how this project will serve your local historic preservation plan. If a detailed, long-range plan has not been developed, briefly indicate the present preservation objectives of the organization and demonstrate how the project will advance those objectives. Iowa City has for years, since adoption of its 1978 Comprehensive Plan, recognized the value of preserving its older structures and neighborhoods. Cognizant of the fact that the function of buildings changes over time, reference was made in the 1978 Plan to the desirability of at least preserving the exterior facades of build- ings which contributed to the character of neighborhoods. In 1984, the Summit Street and Woodlawn Avenue Historic Districts were designated National Register districts in which exterior modification to structures would be reviewed by the Historic Preservation Commission prior to issuance of a building permit. A North Side Residential Historic District is currently under consideration and a North Side Commercial Historic District has been suggested. In 1985, on the advice of the Iowa City Urban Environment Ad Hoc Committee, the Council adopted an amendment to the 1983 Comprehensive Plan Update which expanded the concept of neighborhood to public areas in the downtown and stated that it was the policy of the City, to preserve or protect the unique attributes of Iowa City's public and private neighborhoods...." The eservation protection) and renhancement Cofmstructures owith uhistorrical, architectuinoal is to ral, orhe cultural values...." and encourage .persons and organizations to become involved in preservation activities" (Annual Report, 1987). In line with this goal, the Historic Preservation Commission and the City Council wish to provide an incentive to the owners of historic buildings within the Central Business District to renovate the facades of their buildings. The proposed project attempts in its two phases to establish the historic and/or architectural merit of the buildings in two blocks north of the City's urban renewal area and provide with National Reguster district or site designation and an infor- mational plan or model from Phase 11, and incentive to building owners to w renovate the facades of their buildings in a manner which is compatible with the original structure's lines and architectural details. B. Scope of Work. Provide a detailed description of what you are going to do and how you are going to do it, step by step. Be sure your description includes the required items for the type of project proposed, as outlined in Part III, pages 2 through 6. Phase I, for which FY88 funds are requested, will consist of completing and up- dating an existing survey of the central business district including an evalua- tion of the historical and architectural significance of each structure. The survey area consists of approximately 50 buildings in Blocks 80 and 66 of down- town Iowa City (see attached schematic map). Following the Secretary of Interior's Standards for Identification, graduate research assisstants will be selected from the University of Iowa Departments of Art, Urban and Regional Planning and American Studies to conduct the field surveys and research concerning the historical and architectural significance of each building in the survey area. It is intended that selection of the graduate assisstants will take place under the guidance of Robert Alexander, Professor of Architectural History at the University of Iowa. Any necessary training of the graduate assistants in the techniques of historical/architectural surveying will also be contributed by Professor Alexander. When the survey of the buildings is completed, the information will be evaluated to determine if National Register district or site nomination is appropriate. In addition to field surveys, research will interviews with local historians concerning the growth and development of the downtown; library research through the State Historical Socity (Iowa City), Johnson County Historic Society, and public library; and local newspaper accounts. Phase II, for which FY89 funds will be sought, will include contracting for architectual services to devise a streetsca a and facade renovation plan for Blocks 80 and 66 which can be utilized as 1) technical assisstance to encourage the renovation of building facades in these particular blocks, 2) a model for facade renovation in other commercial areas, and 3) a public relations tool to demonstrate positive approaches to historic preservation. C. Project Completion Schedule. Project a monthly progress schedule. See Attachment D. Proposed Work Products. Itemize any publications, workshops, audio-visual materials, reports, survey materials, nominations, etc. that will be completed as part of the proposed project. Refer to the required products as outlined in Part III, pages 2 through 6. See Attachment E. Personnel. Specify qualifications for key personnel involved in the project and certify that the professional qualification standards will be met. These standards are enclosed with this packet. REMINDER: No sub -contractors (consultants) may be contacted or negotiated with until after notification of grant award. All sub -contract bids must be obtained through procedures as required by National Park Service. The major participants will be Barry Beagle, Associate Planner with the Iowa City Planning Department and Robert Alexander, Professor of Architectural History at the University of Iowa. Nr. Beagle will act as Project Director and be responsible for administration of the grant. Professor Alexander will oversee the work of graduate assistants who will carry out the actual survey work. The research assistants will be selected from graduate students in Architectural History, Urban and Regional Planning or American Studies; survey experience will be preferred. Enclosed is an article on vernacular architecture prepared by Professor Alexander. W CERTIFIED LOCAL GOVERNMENT HISTORIC PRESERVATION GRANT-IN-AID: DOWNTOWN FACES HISTORIC BUILDING SURVEY AND FACADE RENOVATION PLAN (PHASE I) C. Project Completion Schedule. May 1988 - Select and train graduate assistant(s). June 1988 - May 1989 - Complete and update the survey done in 1981; include evaluation of the architectural and historical each structure, research significance of further materials which describe or show the original facade information on the buildiof the buildings, and update current ngs. June 1989 - Compile site inventories. D. Proposed Work Products. Phase I - Publication - Site Inventory: Central Business District North, Iowa City, Blocks 80 and 66. Nominations - Central Business District North Historic District (National Register), or - Site nominations to the National Register of Historic Places. Phase II - Publication - Central Business District North Facade Renovation/ Streetscape Plan. - Downtown Faces - a brochure or pamphlet demonstrating in a general fashion methods for facade treatments which are in harmony with the underlying structure and the streetscape. A'r CLC GranL Application Fonn F. Budget. Applicant's (latch Project Expenditure Classification Federal ApplicannL Gash in— and Source tla t c h Hatch Hatch Kind llonaLed Surveyors - 50 bldus. @ 8 hrs./bldg. = 400 hrs. @ $10/hr. $4,000 Robert Alexander. - 20 hrs.@ $34.03/hr. $680.60 X Barry Beagle - 50 hrs.@ $12.86/hr. $643.00 X Secretarial - 8 hrs.@ $10.89/hr. $87.12 X Benefits: Beagle - $128.60 X Secretarial - $17.42 x Photocopies $58.00 Film and Film Processing $25.00 Eguimnent Rental 24.00 X Totals (n) $4,083.00 (b) 1 580.74 CCR'riPICATION STATEMENT: 1 certify LhaL the matching share proposed for this project. does not include funding from nther Federal sources except as allowed by regulation and that these funds are not- bell, used as match againsL any other federal grant. Authorized Signature COIn1011 (a) must unL exceed column ([))(except for survey/evaluation projects. For survey/evaluation projects. Lhe federal ! share most not exceed 10% of tlue total project costs. Applications uiuich combine survey/ evaluation with other Project components can not request federal funds in excess or tho applicant mat,[). I DOWNTOWN IOWA CITY Bijrlinpton Street Street To --P-- Civic ►Civic Center RESOLUTION NO. 88-25 RESOLUTION AUTHORIZING EXECUTION OF AMENDATORY AGREEMENT N1 TO ANNUAL CONTRIBUTIONS CONTRACT BETWEEN THE CITY AND THE FEDERAL GOVERNMENT RELATING TO FUNDS FOR PUBLIC HOUSING. WHEREAS, the City of Iowa City (herein called the "Local Authority") proposes to enter into an Amendatory Agreement which revises the contract (herein called the "Annual Contributions Contract") with the United States of America (herein called the "Government") with respect to any "Project" as defined in the Annual Contributions Contract and which at any time now or hereafter is incorporated under the terms of such Contract. BE IT RESOLVED BY THE LOCAL AUTHORITY, as follows: Section 1. The Amendatory Agreement in substantially the form hereto at ace and marked as "Exhibit A" is hereby approved and accepted both as to form and substance and the Mayor or Mayor Pro Tem is hereby authorized and directed to execute said agreement in four copies on behalf of the Local Authority, and the City Clerk is hereby authorized and directed to impress and attest the official seal of the Local Authority on each such counterpart and to forward said executed counterparts, or any of them, to the Government together with such other documents evidencing the approval and authorizing the execution thereof as may be required by the Govern- ment. Section 2. Whenever the following terms, or any of them, are used in this Resolution, the same, unless the context shall indicate another or differ- ent meaning or intent, shall be construed, and are intended to have mean- ings as follows: (1) The term "Resolution" shall mean this resolution. (2) All other terms used in this Resolution and which are defined in the Annual Contributions Contract shall have the respective meanings ascribed thereto in the Annual Contributions Contract. Section 3. All resolutions or parts of resolutions heretofore adopted by Te Low Authority which authorize the issuance and/or delivery of Ad- vance Notes (sometimes called "Advance Loan Notes") pursuant to the Annual Contributions Contract remain in full force and effect. Section 4. This Resolution shall take effect immediately. O( 4 M M Resolution No. 88-25 Page 2 It was moved by Dickson and seconded by enbrisco the Resolution be adopted, and upon roll call there were: AYES: NAYS: ABSENT: X AMBRISCO X COURTNEY Y DICKSON HOROWITZ X LARSON r MCDONALD X STRAIT Passed and approved this 9th day of February 1988. 17 M ATTEST: IY CLERfC Approved as to Form Legal Department Pt • I� I. • •� • M'IpD 17 • • I I• •• 1• • •• RECEIVED MAR ? 1C-88 No. IA022003 IA05PO22004 IA05PO22005 Contract No. KC -9166 THIS AGFTQD T, entered into as of the 29th day of FEBRUARY 19 88, between the URI UNITED STATES OF AMECA (herein called "Government" , and — (herein called "Local Authority") : IagA CITY HOUSING AUTHORITY WITNESSETH: 1. LMILS, pursuant to the United States Housing Act of 1937, as mended (42 USC 1437, et seq.), and the Department of Housing and Urban Development Act (42 USC 3531), the Government and the Local Authority entered into an Annual Contributions Contract on the 18111 day of OCTOBER , 19 85 , for the purpose of financing low -inane housing and o er purposes; and 2. AHEREAS, Section 5(a) of the United States Housing Act provides that the Wverhurent may take annual contributions to public housing agencies to assist on achieving and maintaining the low-ineam character of their projects over a period not to exceed forty years; and Section 9(a) provided that the Secretary may make additional annual contributions to public housing agencies for the operation of low -inose housing projects; and 3, MOS EAS, Section 211(a) of the Housing and Community Development AmendTren' of 1979 (Public law 96-153) amended Section 9(a) of the United States Housing Act to provide that any contract for contributions for the operation of low-income housing "shall provide that no disposition of the low-income housing project, with respect to which the contract is entered into, shall occur during and for ten year: after the period when contributions were made pursuant to such contract unless approved by the [Goverrnlent];" and further amended Section 9(a) to provide that th- Government nay provide assistance for the operation of a low-income housing projec as long as the low-income nature of the project is maintained. ,�I•,a • v In order to ooWly with the above amendments to the United States Housing Act, the contract is amended as follows: Notwithstanding any other provision of this contract, no disposition of any lam-inoano housing project covered by this contract shall occur during and for ten years after the period when contributions were made for the operation of the proje unless approved by the Government. In addition, the Government agrees to provide assistance for the operation of any such project, as provided by Section 415 of th contract, as long as the Im-income nature of the project is maintained. The provisions of Articles II, III, IV and V of this contract, relating to operation, hereby extended for the duration of such assistance. IN WIRi•IFSS MUMWF, the parties have caused this Agreement to be executed in their respective names and the 1=1 Authority has caused its seal to be hereunto affixed and attested as of the date first above written. •,r CITY HOUSINGAUTHORITY BYI / 5r'{: '$'{• itOR (SEAL) ATTEST: Secretary/Ul ty Clerk UNITED SPATES OF AMERICA Secretary of Housing and Urban Development / ones "Oifice� ((0 V RESOLUTION N0. 88-26 RESOLUTION AUTHORIZING AND DIRECTING THE SOLICITATION OF OFFERS A14D RECEIPT OF BIDS TO PURCHASE CERTAIN LAND FOR PRIVATE REDEVELOPMENT, KNOWN AS PARCELS B, C, AND 0, LOCATED IN THE LOWER RALSTON CREEK AREA OF IOWA CITY, AND DIRECTING THE CITY CLERK TO PUBLISH NOTICE OF SUCH ACTIONS. WHEREAS, the City of Iowa City is empowered under Chapter 403 of the Code of Iowa (1987) to engage in the sale or transfer of land acquired and cleared by it for private redevelopment, and WHEREAS, the City of Iowa City wishes to offer for private redevelopment cer- tain parcels of land known as Parcels B, C and D located in the Lower Ralston Creek Area of Iowa City. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA: 1. That the City Manager or his designee is hereby authorized and directed to solicit offers to purchase Redevelopment Parcels B, C and D, located in the Lower Ralston Creek Area of of Iowa City, as shown on the map attached. 2. That the City Clerk is hereby authorized and directed to publish notice as required by law of the aforementioned solicitation of offers to purchase said Parcels B, C and D for private redevelopment. 3. That offers to purchase said Parcels B, C and 0 are to be received at the Iowa City Department of Planning and Program Development, 325 E. Washington Street, Iowa City, Iowa until 1:30 PI -I on March 14, 1988, and thereafter publicly opened by the City Manager or his designee. It was moved by Ambrisco and seconded by Courtney the Resolution be adopted, and upon roll call there were: AYES: NAYS: ABSENT: X AMBRISCO X_— COURTNEY X DICKSON X HOROWITZ LARSON x MCDONALD X STRAIT Passed and approved this 9th day of ATTEST:�� CIT CLERK Pcbruaiv , 1988. /0 �� \ M YOR Approved as to Form R zjyo eg epar m n al?/7 LOWER RALSTON CREEK NEIGHBORHOOD t/i N a fD w o w p o � A o m0 o Vi X 3 <C) D m T O y=7m0 y w � m r T Q Q A r o •• 0 comAmm u o�141%1 �J M 41 CLINTON > o ST. m � c:� ff—ffl'z - O 'T1�1I z y U1LL.� �En nn o m xm_z (n g�` VAN BUREN ST 00 m0 o <C) w m °0i x O y=7m0 y n r T Q Q A r o •• 0 0 'o o `s u 0 O NAD I^TI �0 m m '1 ip o OQQ z 0 z Z > n mv ^ 0 v m IOU Z> M 41 CLINTON > o ST. m � c:� ff—ffl'z - O 'T1�1I z y U1LL.� �En nn o m xm_z (n g�` VAN BUREN ST V RESOLUTION NO. 88-27 RESOLUTION AUTHORIZING THE CITY OF IOWA CITY TO IMPLEMENT A REVISED REHABILITATION PROGRAM FOR OWNER -OCCUPIED AND RENTAL PROPERTIES IN IOWA CITY. WHEREAS, the City is the recipient of funds granted by the U.S. Department of Housing and Urban Development (HUD) under Title I of the Housing and Community Development Act of 1974, as amended (Public Law 93-383); and WHEREAS, the City Council has budgeted funds from the Community Development Block Grant for rehabilitation of owner -occupied properties, and also received formula grants under Section 17 of the United States Housing Act of 1937 for Rental Rehabilitation; and WHEREAS, the City Council wishes to revise certain policies and procedures for said rehabilitation programs; and WHEREAS, the Administrative Policies and Procedural Manual for Housing Reha- bilitation Programs attached to this resolution and hereby made a part thereof, outlines the policies and procedures for said rehabilitation programs; and WHEREAS, said new program manual supersedes previous program descriptions and manuals for Housing Rehabilitation Programs and provides new streamlining procedures for all rehabilitation assistance. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, that the City Council hereby approves the revised programs, procedural manual, policies and methods of financing, and authorized implementation as outlined in the Administrative Policy and Procedural Manual for Housing Reha- bilitation Programs. It was moved by Ambrisco and seconded by Courtney the Resolution be adopte , id upon ro call there were: AYES: NAYS: ABSENT: X AMBRISCO �- COURTNEY X _— _ DICKSON X HOROWITZ X LARSON X _ MCDONALD _ X STRAIT Passed and approved this 9th day of February 1988. 7"MAYO ERr2 7(/ Approved as to Form Lega Departmen I V City of Iowa City MEMORANDUM Date: February q, 1988 To: City Council and City Manager \_�A From: Marianne Milkman, CDBG Program Coordinator Re: Amendments to the Housing Rehabilitation Manual and Programs Last October, during discussions of allocations for the 1988 CDBG budget, staff recommended that rehabilitation projects involving human service agencies' residential facilities (such as grouphomes and the Domestic Violence Project Shelter) be included with the City's overall Housing Rehabilitation Program. Council approved this recommendation, since it will insure that these rehab projects will have requirements similar to those of owner -occupied and rental housing. Accordingly, the Housing Rehab Manual has been revised to include provi- sions for residential facilities. Since the additions are few in number, I have outlined them below, rather than providing you with another copy of the whole manual. Residential Facilities Rehabilitation Requirements Definition: Residential facility - Any facility owned and operated by an organiza ion which provides temporary or permanent housing principally for persons of low/moderate income. Location: City-wide. Ownership: The operating agency must show legal and equitable interest in the property to be rehabilitated prior to approval of assistance, and must be able to enter into a mortgage or promissory note as security for the loan. Income Requirements: At least 75% of the residents of the facility must be at or below 80% median income for Iowa City. Organizations shall provide information on services provided and the income, race and age of residents. Income Verification: Organizations operating residential facilities are required to provide annual budgets for the current year and the previous year. Such organizations shall also certify that there are no other sources of funds available to them for rehabilitation, and provide docu- mentation to that effect. Loan Terms: Maximum assistance shall not exceed $22,000. Fifty percent of iFe—Tn shall be in the form of a 10 -year depreciating lien, and 50% of the loan shall be a 3%, 15 -year loan. M u I P, OTHER AMENDMENTS TO THE HOUSING REHAB MANUAL (All additions or changes are underlined) 1. Emergency Repair Definition of Emergency Repair: Correction of a major violation of housing standards that creates an immediate threat to the health and safety of the occupant. Such violations shall include: unsafe or hazardous electrical circuits or wiring; unsanitary plumbing; inoperative or dangerous furnace; deeayed; dilapidated; or unsafe structural or roof condition where roof is activel leakin or ceiling is water -damaged and in danger o co apse, or o er suc emergency condition that from to time is so dec tired by the Rehabilitation Officer in consultation with a Building Inspector. 2. Residential Accessibility Program Assistance Categories and Grant Terms: Income of homeowners not to exceed 80 percent of median. Assistance will be in the form of a direct grant. If the applicant's income is between 80-100% of median the homeowner may renupst a 7% lnan fnr a form of 1r, vcare Assistance Limitations: Maximum assistance shall not exceed $5,000. This limit may be waived on a case-by-case basis by the Housing Com- mission d e reaommen a loo o �Fi1P IiirPcf.nr n a anartmannt of 3. Tenant Assistance Policy (TAP) At the January 25, 1988, Council meeting, the TAP for the Rental Rehabilitation Program was reviewed and a public hearing held. This TAP is part of the Housing Rehab Manual, and will be adopted with the Resolution adopting the revised manual. I would like to clarify one item regarding Section 8 vouchers. The City receives additional Section 8 vouchers for the Rental Rehab Program. We wou-TF—noTreceive these vouchers without the Rental Rehab Program. Since opinions on providing housing assistance to single, non -elderly persons were divided both among Council members and between CCN and the Housing Commission, we suggest the following solution. If Council agrees, the TAP will not provide Section 8 Housing Assistance Vouchers to single, non -elderly persons at this time. CDBG staff will investi- gate the use of other funds (possibly CDBG or UDAG to provide housing assistance to independent, single, non -elderly persons, who would be forced to move because of an increase in rent in a unit undergoing rental rehabilitation. Information on how such a program would work will be provided at a later date. The main change in the TAP that is presented for adoption on February 9, 1988, is that landlords will now be responsible for assistance to tenants who are displaced either temporarily or permanently. u v 3 4. Priority Policy for Housing Rehab Programs Since we are now building up waiting lists for our rehab programs, we need to establish a policy for priorities. Staff is recommending the following order of priority in dealing with applications for rehabili- tation programs (except for the Rental Rehabilitation Program): I. Low Income Households (below 50% median income). a. Elderly/handicapped. b. Large family (five or more persons). c. Single parent family (two or more persons). d. Small family (2-4 persons). e. Others according to date of application. II. Moderate Income Households (50-100% median income). a. Elderly/handicapped. b. Large family (five or more persons). c. Single parent family (two or more persons). d. Small family (2-4 persons). e. Others according to date of application. Review by CCN and Housing Commission With the exception of the Tenant Assistant Policy referred to previously, CCN recommends approval of all the changes listed above. The Housing Commission has recommended approval of all changes with the exception of the Priority Policy for Housing Rehab Programs. The Commission will review this policy at its February 9, 1988, meeting, and information on the recommendation will be provided at the Council meeting. bdw2/18 �' i 0 I EXHIBIT 1 TENANT ASSISTANCE POLICY FOR RENTAL REHABILITATION PROGRAM CITY OF IOWA CITY, IOWA 1. Purpose This policy is established to conform to the requirements of the U.S. Department of Reha- bilitation on GrantPr Housing and ban O 1 Program t24 CFR 5111e10(opmnt h)fo )(2), Ittsets forththerelocation assistance and other assistance which the City of Iowa City will provide for displaced tenants who reside or will reside in proper- ties to be rehabilitated under the Rental Rehabilitation Program. 2. Applicability This policy applies only to those residential tenants who lawfully reside or plan to reside in a property to be rehabilitated under the City's Rental Rehabilitation Program. 3. Definitions of Displacement Affordability For purposes of this program the following definitions shall apply: "Displacement" results if a lower income family is forced to move permanently from a project as a direct consequence of rehabilitation assisted under this program. "Affordable rent" means that the sum of the utility allowance and the rent payable monthly by the tenant to the owner after rehabilitation is at or below the greater of the sum of the utility allowance and (1) the tenant's rent prior to rehabilitation or (2) the Total Tenant Payment (as defined in 24 CFR 813.102) For the purposes of this policy, a tenant will not be considered displaced if the tenant is offered a decent, safe and sanitary dwelling unit in the property undergoing rehabilitation at an affordable rent, as defined by HUD. 4. General Policy on Displacement It is the City's policy to minimize, to the greatest extent possible, the displacement of persons from their homes and neighborhoods through the implementation of its housing and community development projects. Consistent with this policy, the City will review each rental rehabilita- tion proposal for its impact on displacement. In particular, the City will review each proposal to determine if it will result in a dispropor- tionate number of persons of a particular race, color, religion, sex, age, handicap or national origin being displaced. A priority will be given toro osals which do not involve tenant dis Iacement. In any case, no proposa wi a accep a it Lfle proposea re a i litation will cause the displacement of very low-income families, as defined by HUD, by families who are not very low-income. alp 5. Current Tenants This section applies to tenants who reside in a property to be rehabili- tated at the time that the application for rental rehabilitation assistance is approved. The period of eligibility for relocation advisory and financial assistance will be from the date of approval for rental rehabilitation assistance through the date of completion of the rehabilitation. Thereafter, the City assumes no responsibility for providing tenant assistance. a. The City will issue a written notice to each tenant who resides in the property, within ten (10) days of loan settlement for rental rehabilitation. Such notice will explain the proposed rehabilitation project, state the tenant's right to continue in occupancy, subject to the terms of any existing lease, and describe the availability of information and counseling about housing assistance provided by the City. Section 8 rental assistance will be offered to those eligible tenants who reside in the unit at the time of approval of the rental rehab loan. Eligible tenants include two or more person families, and single, elderly/handicapped persons. No additional cash assis- tance will be offered to such tenants, nor will financial assistance be offered to other tenants who remain in the property. If, during rehabilitation, temporary tenant displacement is unavoid- able (as determined by City staff), the landlord shall be responsible for any reasonable, additional costs incurred by the tenant due to the temporary displacement. If permanent displacement is unavoidable in order to accomplish a particular rental rehabilitation project, the City will issue a written notice to the tenant(s) to be displaced within ten (10) days of the approval of an application for rental rehabilitation assis- tance. Such notice will explain the proposed rehabilitation project, state that the tenant must be displaced, and describe the availabil- ity of relocation advisory assistance provided by the City. Unless there is an urgent need for the property to be vacated (e.g., because of substantial tenant health or sateleastr90the daystenant advanceevicted notice of the earliest date by which the property must be vacated. Relocation advisory assistance will include, but is not limited to, the following: (1) Information and referral about the availability of comparable replacement housing in the area that is decent, safe and sanitary and that is affordable to the tenant. (2) Information and referral to the staff of the Iowa City Human Rights Commission concerning tenants rights under the federal Fair Housing Law and Iowa City Human Rights Ordinance. (3) Information on how to search for suitable replacement housing. 3 Relocation financial assistance to be provided by the City includes: Section 8 Certification of Family Eligibility. Eligible tenants will be offered a Section 8 certificate or voucher consistent with the requirements of that program. Relocation financial assistance to be provided by the landlord includes: (1) 1loving expense pa ment. The tenant will be reimbursed for actual, reasonable moving and related expenses according to the following schedule: Number of rooms (excludin hallways and closets) Maximum payment 1 $175 2 $240 3 $295 4 $340 5 $375 6 or more $400 and if the tenant is ineligible for a Section 8 voucher or none are available (2) Cash rental assistance. Tenants who are not offered or eligible to receive a Section 8 voucher, or for whom no vouchers are available, and who cannot afford suitable replacement housing, will be eligible to receive a lump sum payment not to exceed S4,000. This amount is determined in the same manner as a Replacement Housing Payment for Rental Assistance (see 24 CFR 42.453, HUD Uniform Act Regulations). This payment shall also be the responsibility of the landlord. Relocation financial assistance will only be disbursed upon verification that the displaced tenant has secured decent, safe and sanitary replace- ment housing. The City will assist the tenant and the landlord to comply with the requirements of the HUD Uniform Act Regulations relating to tenant relocation. 6. Subsequent Tenants This section applies to tenants who will reside in a property to be rehabilitated after the application for rental rehabilitation assistance has been approved. The period of eligibility for assistance will be from the date of application approval through the date of completion of the rehabilitation. Thereafter, the City assumes no responsibility for providing tenant assistance. Within ten (10) days of receiving notification from the rental property owner that a new tenant has moved into the property, the City will issue a written notice to each new tenant. Such notice will explain the rehabilitation project, state the tenant's right to continue in occu- pancy, subject to the terns of any lease, and describe the availability of information about the rental rehabilitation program. 7. Nondiscrimination This Tenant Assistance Policy will be administered in full compliance with Executive Order 11063, Title VI of the Civil Rights Act of 1964 and Title VIII of the Civil Rights Act of 1968 to ensure nondiscrimination in the provision of information, counseling, referrals or other relocation services to persons displaced and assisted through the Rental Rehabilita- tion Program. 8. Public Notice and Review copies of this Tenant Assistance Policy will be made public and available for citizen review, upon request, in the offices of the City Clerk and the Department of Planning and Program Development. 9. Appeals Any displaced tenant who believes that the City has failed to provide reasonable housing asssistance under the terms of this policy may file a written appeal to the City Manager at any time within 90 days of the date of their move from the property being rehabilitated. Within 30 days of the filing of an appeal, the City Manager will provide the appellant with a written explanation of how the City determined their housing assis- tance and will provide the appellant with an opportunity to have a hearing before the City Manager. Landlord's Understanding I have read and understand the above policies and requirements regarding tenant assistance and the HUD Uniform Relocation Act. Owner Owner i ness Date M .M TENANT ASSISTANCE POLICY CHANGES REQUIRED BY OPTION 1 Page 1 3. Definitions of Displacement AffordabilitZ, Independent Add: "Independent single person" is an individual not claimed by another as a dependent for income tax purposes, and who does not derive any financial support or assistance from a direct relative related by affinity or consan- guinity within the fourth degree. Page 2 Add to paragraph 5a.: Single, non -elderly, non -handicapped, independent tenants may be eligible for a Section 8 voucher, if they reside in a unit to be rehabilitated, at the time of loan settlement. Up to 25% of rental rehabilitation vouchers may be issued to such single persons. Preference for all vouchers will be given to two or more person families and single elderly/handicapped persons. Page 3 Under Section 8 Certification of Fami1 Eli ibilit add at end of paragrap : Sing e, non -e er y, non- an ieapped, inde- pendent, tenants may be eligible for Section 8 vouchers, as under 5.a. M A IV U A L for housing rehab programs rM CITY OF IOWA CITY Administrative Policy & Procedural Manual for Housing Rehabilitation Programs City of Iowa City Prepared by Department of Planning & Program Development 1987 Adopted by City Council R April 7, 1987 Amended February 9, 1988 4' F:cton•:r.l 1t;;ovc: By Tip Lagel Delmr1rnanl Table of Contents Page Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Summary of Requirements . . . . . . . . . . . . . . . . . . . . 2 Chapter 1 Definitions . . . . . . . . . . . . . . . . . . 3 Chapter 2 Eligibility Requirements . . . . . . . . . . . 8 Chapter 3 Assurance that Rehabilitation will be Completed . . . . . . . . . . . . . . . . . . . 14 Chapter 4 Eligible Costs . . . . . . . . . . . . . . . . 15 Chapter 5 Financial Assistance Categories, Loan Terms, Limitations and Conditions . . . . . 20 Chapter 6 Processing and Submission of Rehabilitation Cases . . . . . . . . . . . . . . . . . . . . . 27 Chapter 7 Loan Settlements/Account Management. . . . . . 30 Chapter 8 Terms and Conditions . . . . . . . . . . . . . 36 Chapter 9 Recapture of Rehabilitation Assistance . . . . 41 Chapter 10 Determining Work to be Done. . . . . . . . . . 43 Chapter 11 Contracting for Rehabilitation Work. . . . . . 44 Chapter 12 Inspection of Work . . . . . . . . . . . . . . 49 Chapter 13 Grievance Procedure . . . . . . . . . . . . . . 53 Appendix Exhibit 1 - Tenant Assistance Policy, Rental Rehabilitation . . . . . . . . . . 56 Exhibit 2 - Affirmative Marketing Plan, Rental Rehabilitation . . . . . . . . . . Exhibit 3 - Table of Median Income . . . . . . Exhibit 4 - Program Priorities . . . . . . . . Map 1 - Designated Neighborhood Revitalization Area (403) . . . . . . . . . . . . . . Map 2 - Designated Rental Rehabilitation Target Neighborhoods . . . . . . . . . . . . . All, P Preface This handbook serves as the technical guide to the City's housing rehabilita- tion programs administered by the Department of Planning and Program Develop- ment. The Housing Rehabilitation Programs include: 1. Comprehensive Home Improvement II. Weatherization III. Exterior Painting/Siding IV. Residential Accessibility V. Emergency Repair VI. Rental Rehabilitation VII. Residential Facilities Funding for the various program components under the Housing Rehabilitation Program is authorized by City Council resolution and provided in part by Community Development Block Grant (CDBG) funds. These funds, as part of the City's entitlement under the Federal Housing and Community Development Act, are administered by the Department of Planning and Program Development. Funds for Rental Rehabilitation are provided through a separate federal grant from the Department of Housing and Urban Development (HUD), and are also admini- stered by the Department of Planning and Program Development. Local discretion in developing rehabilitation programs using CDBG funds allows the City greater flexibility in meeting the housing needs of the citizens. This handbook provides a rational approach to managing our housing resources. W toConprehenslve Program lime Improve - Owner Intone (Percentage ment Program SUMMARY OF REQUIREMENTS FOR HOUSING REIIABILIIAIION PROGRAMS Intent of Program Maximum A Minimum Funds Available Owner Intone (Percentage Location Occupancy of Medlanj Rehabllltatlon of structure In liter to meet housing Max: {22,000 Designated (4031 Owner• 5ni or QualStandardse Applies Min: { 1,000 Neighborhood occupied p below to to all major systems, Improvement Inc lud In f Areas 9. urnaces, hot water tanks, fixed electrl- cal equlpnent, sanitary 51-59% fixtures, roofs, etc. 60.79% Below 6S Reatherizatlon, Improving all elements of Max; $ 2,500 Program home Insulation such down Min: S 750 OeNeighborsignated (oda) Owner- e Below 0% insula[ ton, storm windows Neighborhood otcupled 60-BOi and doors, caulking, energy Improvement efflc lent furnaces, and Areas other energy saving devices. ® Painting/ Coverage of all costs asso- Max: { 2,500 for Designated (4031 Owner- Below 60% T Siding Loan elated with protection of 1 story dwelling Neighborhood occupied T Program ex terlor wad and other Max; S 5,000 for Improvement surfaces for enhancement of 2story dwelling Areas netghborhoods. Costs could Min: None 60-80% Include caulking, paint, staln, sld Ino and labor. Resldentlal Improvements to make the Max; { 5,000 Clty-wide Owner - Accessibility properly accessible and Min: None Up to not Program permit the handicapped occupied or disabled homeowner to eo - 100% remain, Independently, in the home. Costs could Include: ramps, doorway widening, grab bars, handl- ' capped toilets, etc, Emergency Correction of major viola- Max; S 3,000 Clty-wide Owner- Below 50% II ❑ Repair tions of housing code Min: None 11 Assistance standards Mich make the occupied 111 Program structure uninhabitable. • • • Rental Rehabilitation and Improve- Max; { 5,000/unit Desigated Renter- No limit • • • Rehabilitation ment of rental units to Nln; { 600/un It • • • Program meet Ilouslng Code standards Pen,tel Occupied Mille maintaining afford- Rehabilitation able rents. Target. Areas in V • Residential Rehabilitation Facilitlestial facilities otormeet an- Max: $22,000 Rehabilitation housing code requirements, Nin: { 1,000 correct incipient viola- ` tions, and provide decent, �1 safe and sanitary housing for clients of human ser- vice agencies. w Loan Terms payback to city 1/1 Life Lien 112 loan amount when on property property is sold; 172 10 yr. for below 50% median depreclatlnq Inconel. lien 1/2 Life Lien Total loan amount with an property varying Interest for 1/2 15 yr, 3% loan intones above 50% 3% 15 yr. loan median. 7% 15 yr. loan Life Lien on property Total loan amount when 5 yr. no Interest property is sold. loan Total loan amount with no Interest. 5 yr, depreciating lien onpe lnlIno Life Lien on std Ing 5 yr, no Interest loan on painting and siding Direct grant (lone If property Is not sold within five Years (painting). Total loan amount when property Is sold (siding)• fatal loan amount with no Interest. None. If cost Is less than None. 11,000, direct grant. II cost is greater Total loan amount If then {1,000. Life property Is sold, Lien on properly, 'Gap Financing'; 10 % payable If property year depreciating Is sold wl thin ten Ile n for up to Sol years, of the cost of rehabilitation, City -Wide Owned by At least 1/2 10 yr.depreclat- organiza- 75% of Ing lien tlon,occu- residents 1/2 3% 15 yr, loan pled by below 80%, clients of human ser- vice organi- zation ISE Chapter 1. Definitions 1. Definitions. Following are definitions of various terms as used with respect to rehabilitation activities. a. Architectural Barrier - A structural condition, existing in a housing unit, that places a physical hardship on the mobility of a handi- capped person in the performance of normal self-care activities. b. C_DBG Program Coordinator - The Coordinator for the U.S. Department of Housing and Urban Development, Community Development Block Grant Programs. c. Depreciating Lien - A self -depreciating lien against the property for a specified term, that will provide supplemental or complete reha- bilitation assistance or serve as a subsidy to lower the effective rate of interest on a hone improvement loan. The balance of a depreciating lien is forgiven upon death or incapacitating illness. d. Director - The Director of the Department of Planning and Program Development. e. Disabled/Handicapped. For the purpose of these programs, a person shall be considered disabled/handicapped when that person has a Physical or mental impairment expected to be of long, continued or indefinite duration or suffers from a disability as defined in Sec- tion 223 of the Social Security Act (42 U.S.C. 423) or in Section 102 of the Development Disabilities Services and Facilities Construction Amendments of 1970 [42 U.S.C. 269(1)]. Any family member who is disabled or handicapped qualifies that family as a disabled/handi- capped family. -4- f. Dwelling Unit - Any room or group of adjoining habitable rooms lo- cated within a dwelling and forming a single habitable unit with facilities which are used or intended to be used for living, sleep- ing, cooking and eating. g. Elderly. For the purposes of these programs any of the property's title holders who is at least sixty-two (62) years of age is consid- ered to be elderly. h. Emergency Repair - Correction of a major violation of housing stan- dards that creates an immediate threat to the health and safety of the occupant. Such violations shall include: unsafe or hazardous electrical service or wiring; unsanitary plumbing; inoperative or dangerous furnace; unsafe structural or roof condition where roof is actively leaking or ceiling is water -damaged and in danger of col- lapse; or other such emergency condition that from time to time is so declared by the Rehabilitation Officer in consultation with a Build- ing Inspector. i. Equitable Interest - Owner shows sufficient value in the property to provide security for the addition of another lien. j. Fair Market Rent - The amount that would be needed to rent privately owned, decent, safe and sanitary rental housing of a modest (non -luxury) nature in the area. Such rents are established annually by HUD and include the cost of utilities. k. Family - Usually two or more persons who constitute a legal family relationship (blood, marriage, adoption or operation of law). The term also includes: an individual who is at least 62 years of age or an individual between the ages of 18 and 62 who is disabled or handi- capped as defined herein; two or more unrelated individuals who are at least 62 years of age or disabled or handicapped; or one or more elderly, disabled or handicapped individuals living with one or more persons who are determined by a medical doctor to be essential to such individual's care and well-being. 4Q/t 4 M -5 - Flood Insurance - Insurance coverage available to those areas par- ticipating in the National Flood Insurance Program to compensate for damages incurred due to flooding, thus reducing the overall impact and financial loss to affected property owners or tenants. Flood insurance coverage must be in an amount at least equal to the project cost. m. Grant - A direct subsidy for home improvement to a homeowner requir- ing no lien or payback. n. Homeowner - A person who both owns and occupies the home for which assistance is sought. Ownership is determined by legal or equitable title or by a land sales contract. o. Housing Code Standards - The Municipal Housing Code of the City of Iowa City (Chapter 17). P. HUD - U.S. Department of Housing and Urban Development. q. Incipient Violation - The state or physical condition of an element of the structure required to meet a Housing Quality Standard, that at the time of inspection is in such a state of deterioration that if left uncorrected, it will further deteriorate into an actual viola- tion within the next two years. r. Income Guideline - The median income level as determined by the U.S. Department of Housing and Urban Development for the City of Iowa City. s. Investor Owner - An owner of residential property of which one or more units are rented. /t Y w t. Land Sales Contract - Any transaction in which the purchaser obtains fee title from the seller only if he/she completes a series of in- stallment payments over a term of years. The form of a land sales contract may vary according to the circumstances of each sale. u. Lien - A right given by law to a certain creditor to have its debt paid out of the property revenues. v. Life Lien - A recorded lien against real property which must be repaid upon transfer of title or sale of the property. w. Liquid Assets - Property that can be readily converted into cash without appreciable loss in value such as, but not limited to: sav- ings accounts, and/or stocks and bonds. Equity in the property to be rehabilitated or a motor vehicle when used for transportation to and from employment or school is not considered when computing liquid assets. x. Loan Subsite - A contribution made by the City to a qualified bor- rower to reduce the effective interest rate for a home improvement loan made from a private source. y. Major Code Violation - A housing standards violation involving the following categories of deficiency: electrical, heating, plumbing, roofing and structural. Structural violations are to be considered as deficiencies only when they involve the major structural systems of the property, including roof, floor girders and joists and the foundation. z. Operating Agency '- The Department of Planning and Program Develop- ment. aa. Rehabilitation Cost - The total cost of repairs and improvements and other costs for rehabilitation to be incurred by the applicant that are eligible for rehabilitation assistance, whether or not financed in part with funds from other sources. 4 a -7 - bb. Rehabilitation Officer - An employee of the City's Department of Planning and Program Development charged with the duties of admini- stering the specific aspects of the rehabilitation program. cc. Residential Facility - Any facility owned and operated by an organi- zation, which provides temporary or permanent housing principally for persons of low/moderate income. V .Y ME Chapter 2. Eligibility Requirements General. This chapter sets forth eligibility requirements as to the property and the applicant for a rehabilitation loan or grant. The property must need rehabilitation to meet the Housing Code Standards. Neither an individual family nor a structure may participate more than once in this program except under circumstances specified for individual programs. A. Location Location requirements differ for individual programs as shown below: Program 1. Comprehensive Home Improvement Loan 2. Weatherization 3. Paint/Siding 4. Residential Accessibility 5. Emergency Repair 6. Rental Rehabilitation 7. Residential Facilities Location Designated neighborhood revitalization area (403) Designated neighborhood revitalization area (403) Designated neighborhood revitalization area (403) City wide City wide Designated Rental Rehabilita- tion target neighborhoods City wide V -9- B. Ownership 1. Owner -occupied Dwelling. The owner -occupant of a single-family dwelling must meet the definition of a homeowner. 2. Investor-owned Dwellin . An investor -owner of a rental unit must show legal and equitable interest in the property to be rehabilitated prior to the date of approval of assistance, and must be able to enter into a mortgage or promissory note as security for a loan. 3. Contract Holder. In order for a purchaser under a land sales con- tract to be eligible for rehabilitation assistance to cover rehabili- tation costs, at a minimum, all of the following requirements must be met. a. The contract shall be a written, legally binding instrument involving property that will be for residential use after reha- bilitation. b. The seller may not convey any interest in the property to any other party unless the conveyance is subject to the land sales contract, except that the seller may retain the right to mortgage the property for an amount that does not exceed the unpaid por- tion of the contract purchase price. c. Under the contract, the seller and any subsequent holder of the title to the property must be obligated, without qualification, to deliver to the purchaser fee simple title and a deed to the property upon full payment of the contract price, or some lesser amount. d. Under the terms of the contract, the purchaser shall have: .....Full use, possession, and quiet enjoyment of the property. 0719 V -1D - .....Equitable title to the property. e. The purchaser shall have possession and use of the property under the contract prior to the date of approval for rehabilitation assistance, and must be a homeowner as defined in Chapter 1, or be otherwise qualified to participate in the program for which assistance is being sought. f. The contract shall have been filed for record prior to approval of assistance. 4. Residential Facility - The operating agency must show legal and equitable interest in the property to be rehabilitated prior to approval of assistance, and must be able to enter into a mortgage or promissory note as security for a loan. C. Occupancy. A homeowner shall verify the property to be rehabilitated as his/her principal place of residence prior to the date of approval of assistance. Residential Facility - Organization shall verify property is used as residential facility for its clients. D. Income. 1. Income Limits Median income levels for Iowa City are determined by HUD as shown in Exhibit 3. The income of an applicant may not exceed the limits set forth in each program category. Terms of loans vary for different income levels (see Chapter 5): Y -11 - Programs Maximum Income (1) Comprehensive Home Improvement 100% median (2) Weatherization 80% median (3) Exterior Paint/Siding 80% of median (4) Residential Accessibility 80% of median (5) Emergency Repair 50% of median (6) Rental Rehabilitation No limit (7) Residential Facilities 80% of median for 75% residents Items to be included for income consideration are listed on the interview form. 2. Income Adjustments and Exclusions Grants 8 Loans. The following amounts are deducted from monthly gross income: (a) $40.00 per child per month (child must be living in the home, be under 18 years of age, or be a full-time student dependent). (b) 10% of gross earned income is deducted for taxes, for persons not retired or disabled or see (3). (c) 25% of fixed income is deducted for retired and/or handi- capped/disabled persons. Fixed income consists of retirement benefits, disability benefits and/or social security benefits. (d) The following adjustments are allowed only for the Residential Accessibility Program: deductions of average monthly costs of prescriptions, over the counter medications, medical fees and other special health and support services. Y MPA 3. Liquid Assets Applicant shall have liquid assets not in excess of: a. Applicant under 62 years of age $15,000 for a one person household $20,000 for a two person household $25,000 for a three or more person household b. Applicant over 62 years of age and/or any applicant who is dis- abled/handicapped $25,000 for a one person household $30,000 for a two or more person household E. Ownership & Income Verification I. Ownership a. For all applications, documentation must be obtained showing evidence of recorded ownership. Such documentation may be in the form of an ownership computer print-out obtained from the Johnson County Assessor, a copy of a deed to the property or a title certificate. When there is uncertainty as to the adequacy of documentation, the case shall be referred to the Legal Department which may require other supporting documentation. 2. Income a. For comprehensive home improvement loans detailed documentation in support of income eligibility must be obtained and reviewed by the Operating Agency prior to application approval. A short income statement from the owner is required on other small ate W W mom loans/grants except for Rental Rehabilitation loans. Organiza- tions operating Residential Facilities are required to provide annual budgets for the current year and the previous year. F. Additional Requirements for the Rental Rehabilitation Program 1. Pre and post rehabilitation rents shall be at or below the fair market rent (FMR) set annually by HUD. These rents include cost of utilities. 2. At least 70% of tenants in units to be rehabilitated must be low/moderate income persons/families according to HUD's income guide- lines. 3. Preference is given to units with two or more bedrooms. (At least 70% of total grant funds received by the City must be allocated to units with 2+ bedrooms.) 4. Preference is given to structures containing 1-11 units. Structures with 12 or more units are eligible for the program. Davis -Bacon requirements must be met for all rehabilitation work in projects with 12 units or more. 5. Owner shall provide tenant income information. 6. Owner shall provide pre- and projected post -rehabilitation rents. G. Additional Requirements for Residential Facilities 1. Organizations shall provide information on services provided, and the income, race and age of residents. 2. Organizations shall certify that there are no other sources of funds available to them for rehabilitation, and provide documentation to that effect. 1 Y -14 - Chapter 3. Assurance that Rehabilitation will be Completed A. General. Before funding may be reserved for any rehabilitation project funded through the Operating Agency, the applicant being served must assure that all work included in the work write-up and subsequent change orders will be completed. In cases where the rehabilitation costs exceed the amount of assistance, the loan assistance will not be provided unless the applicant can provide whatever additional amount is needed to assure the completion of the work. B. Rehabilitation Assistance on Residential Property. If the applicant for rehabilitation assistance is obtaining supplemental financing, the City's loan application shall not be approved until the Operating Agency has secured evidence that the applicant has obtained an adequate and satis- factory supplemental loan commitment. When the loan is obtained from a recognized lending institution, evidence furnished to the Rehabilitation Officer shall consist of a bona fide commitment to lend money for the rehabilitation work. The loan shall be in an amount which, when added to the rehabilitation assistance and any other funds the applicant furnishes, will be sufficient for completing the required work. For rental rehabilitation projects, the investor owner shall provide written evidence of his/her ability to pay the owner's share of rehabili- tation costs. C. Failure to Complete Rehabilitation Work. Should the applicant being assisted fail to have rehabilitation work completed, the City may declare the applicant in default and require the full amount of rehabilitation assistance due and payable. 4Q /V V M -15 - Chapter 4. Eligible Costs A. Eligible Costs for the Comprehensive Home Improvement, Residential Fa- cilities and the Rental Rehabilitation Programs. Eligible costs include the costs of meeting the requirements of Housing Code Standards, correcting incipient violations, energy conservation and fire safety measures, general property improvements and related fees as described below: 1. Requirements of Housing Code Standards. When necessary to meet a specific requirement of housing standards, rehabilitation assistance - may be used to the extent necessary for: a. The rehabilitation, removal, or replacement of elements of the dwelling structure, including basic systems, and of other im- provements to the property such as garages, fences, steps, walk- ways and driveways. The term "basic systems" includes such items as heating furnaces, hot water tanks, fixed electrical equipment, sanitary fixtures and other appliances required to meet Housing Code Standards. b. The provision of sanitary or other facilities, including the provision, expansion and finishing of space necessary to accommo- date those facilities. c. The provision of additional or enlarged bedrooms, if required by Housing Code Standards. d. Grading, filling or landscaping of the ground, if required by Housing Code Standards. u .I -16- 2. Energy Conservation and Fire Safety. Rehabilitation assistance may be provided to purchase and install insulation, storm windows and doors, caulking and related energy saving devices or measures. The installation of smoke or fire detector and related fire safety items are also eligible costs. 3. Incipient Violations. In order that a property may be brought up to and maintained to Housing Code Standards, rehabilitation assistance may be provided to correct incipient violations. 4. General Property Improvements. Items which substantially protect or improve the basic livability of the property, including: renovation of the plumbing or electrical systems, the installation of approved heating or air conditioning systems, additions, or finishing of unfinished spaces where these are required to meet Housing Code Standards, the renovation of items which will result in reduced main- tenance, or the installation of permanent worksaving elements which benefit the health and safety of the borrower, will be eligible costs. Also eligible are exterior improvements which enhance the appearance of the property and contribute to neighorhood conserva- tion. Note: The cost of a general property improvement shall not exceed 40% of the cost of correcting Code items. B. Eligible Costs for the Weatherization Program include insulation, storm windows and doors, caulking, energy efficient furnaces and related energy saving devices and measures. C. Eligible Costs for the Paint/Siding Program include all costs associated - with the protection of exterior wood surfaces such as caulking materials, paint, stain, siding and labor. When necessary to meet the Iowa City Housing Code, costs may also include the repair, replacement or removal of wood elements such as siding, soffit, fascia and porch work and re- placement of broken glass and cracked sections of putty. ON -v - D. Eligible Costs for Residential Accessibility Program. Limited to improve- ments making the property accessible and permitting the handicapped/dis- abled homeowner to remain independently in the home. Eligible items include ramps, doorway widening, grab bars, handicapped toilets and similar items. For mobile homes, some of these improvements or modifications may not be feasible. Determination of feasible modifications will be made on a case-by-case basis. E. Eligible Costs for the Emergency Repair Program include the correction of major violations of the Housing Code Standards which make a structure uninhabitable. Repairs which exceed local codes are not normally eligi- ble for funding. II. CERTAIN RELATED COSTS FOR ALL PROGRAMS AS NOTED. Certain costs related to rehabilitation are eligible, as listed below: A. Loan Application processing costs: appraisal fee; title reports; fees for recording and filing; abstracting; termite inspection; bank servicing charge; hazard or flood insurance; architectural fees; current accruals for: insurance and special assessments; credit reports; lead-based paint analysis (structural or for indi- viduals). B. Building Permits and Related Fees: A rehabilitation loan may provide funds to cover the cost of building permits and related fees that are required to carry out the proposed rehabilitation work. However, since the construction contract documents will require the contractor to pay for them, this cost ordinarily would w be included in the contract amount. C. Lead-based Paint Hazard Elimination. Such hazards shall be elimi- nated in all programs according to regulations implementing Section 302 of the Lead -Based Paint Poisoning Prevention Act. V a -18- 1. The cost of correction may be included in the Emergency Repair or Residential Accessibility programs, if this does not cause the total grant/lien to exceed the maximum allowed. 2. If the inclusion of the cost to correct the lead-based paint hazard causes the Emergency Repair or Residential Accessibility costs to exceed the maximum assistance allowed, the cost shall be excluded from the calculation for total assistance eligibil- ity. 3. An additional grant/lien may be made to correct a lead-based paint hazard. Funds for this purpose shall be taken from the component budget effected. III. Advance of Funds. As necessary, the City may advance funds to pay for appraisal fee, title reports, termite inspection, lead based paint analysis and credit reports prior to formal commitment on the rehabili- tation loan application. If the loan is approved, the City shall be reimbursed from the proceeds of the loan at the time of loan settle- ment. If the loan is not approved, and the application withdrawn, the City advances shall be regarded as eligible project costs. IV. Death of Applicant. No project funds shall be used for reimbursement for repairs commenced after the death of an applicant who is not sur- vived by a spouse. Should the death of such an applicant occur after commencement of work for which project funds have been approved, reim- bursement shall be made for all work necessary to complete that phase of the work being carried out at the time of the applicant's death. Reimbursement shall be pro -rated based on the completed work. Uh -19- V. Ineligible Costs. Except as otherwise provided in this manual, reha- bilitation assistance shall not be provided for: A. New construction, substantial reconstruction, expansion of the structure, or the finishing of unfinished spaces not required to meet Housing Code Standards. B. Materials, fixtures, equipment or landscaping of a type or quality which exceeds that customarily used for properties of the same general type as the property to be rehabilitated. C. Acquisition of land. D. Refinancing of existing debt. a Y P -20 - Chapter 5. Financial Assistance Categories, Loan Terms, Limitations and Conditions SECTION I. COMPREHENSIVE HOME IMPROVEMENT PROGRAM AND RESIDENTIAL FACILTIIES. A. General. This part sets forth the assistance categories, terms, and limitations for providing rehabilitation assistance to owner/occupants. B. _Assistance Categories and Loan Terms. Eligibility for home improvement loans will be determined by certain "Assistance Categories." Such cate- gories will be defined by the annual adjusted gross income of the appli- cant. I. Comprehensive Home Improvement Assistance Cagtegory Intone Level 1 Income 50% of the median or below 2 Intone between 51-59% of the median 3 Intone between 60-79% of the median 4 Income between 80-100% of the median Eligible for Effective Interest Rate of: 50% Life Lienl 50% - 10 Yr. Depreciating Lien 50% Life Lien 50% 3% - 15 yr. loan 3% - 15 year loan 7% - 15 year loan --------------- -Applicant makes no monthly repayment. However, 50% of the amount becomes a Life Lien and 50% becomes a Depreciating Lien where 10% of the lien is for- given per year. Relatives assuming title to a property may reimburse the life lien over a period of 10 years if income is below 50% median. Y w -21 - Median income for the Iowa City MSA is established by HUD and is based on the number of persons per household. The current income chart is at- tached as Exhibit 3. II. Residential Facilities Income Level Type of Loan/Lien 75% of residents must be below 501.-10 yr. Depreciat- 80% of the median ing Lien 50%-3% 15 yr. loan C. Assistance Limitations. Under general conditions, the maximum subsidized loan shall not exceed $22,000 per unit. The minimum subsidized loan shall be not less than $1,000. These limits may be waived on a case- by-case basis by the Director. In addition: I. Funds provided through the City's rehabilitation programs may not exceed 50% of the appraised value of the property after rehabilita- tion. 2. No rehabilitation loan may exceed the difference between the dollar value of the mortgage and the after rehabilitation value of the property. 3. For single family owner -occupied property, a special exception may be granted to item C.I. by the Housing Commission if the structure is listed in the National Register of Historic Places, listed in a state or local inventory of Historic Places, or designated as a state or local landmark or historic district by appropriate law or ordinance. -22- D. Assignability. 1. Title Holder. All comprehensive Home Improvement Loans are not assignable and shall be due upon sale or transfer of the property. If during the course of the Lien/Mortgage the property would become not owner -occupied, the City has the option of calling the lien due. 2. Land Contract Holder. The title holder shall approve a lien against the property in the amount of the rehabilitation loan. Sale or transfer of the property by use of a land contract shall be construed as a transfer of property and the loan shall be payable in full at that time. E. LoanIn_ std s. Market rate home improvement loans shall be secured by instruments individual lenders commonly use for loans of like kind and term. Depreciating liens will be secured by a Property Rehabilitation Lien and be subordinate to a Lender Lien or Mortgage filed on behalf of the City. Life liens shall be recorded at the Johnson County Recorder's Office. SECTION II. WEATHERIZATION PROGRAM. A. General. This part sets forth the limitations, terms for providing a weatherization loan to owner -occupants. B. Assistance Categories and Loan Terms. Income Loan Terms Below 60% of median Life Lien on property 60%-80% of median No interest - 5 year loan W Alt 0 v -23- C. Assistance Limitations. Under general conditions, the maximum assistance shall not exceed $2,500.00. The minimum subsidized loan shall not be less than $1,000.00. These limits may be waived on a case-by-case basis by the Director. 0. Assignability. The Weatherization Loan is not assignable and shall be due upon sale or transfer of the property. Selling the property by use of a land contract shall constitute a transfer of property and the Weatherization Loan shall be payable in full at that time. Also, if during the term of the lien the property should become not owner -occu- pied, the City has the option of calling the lien due. E. Loan Instruments. A Weatherization Loan shall be secured by a Promissory Note that is duly recorded. Life liens shall be recorded at the office of the Johnson County Recorder. SECTION III. PAINTING/SIDING LOAN PROGRAM. A. General. This part sets forth the limitations, and terms for providing a painting/siding loan to owner -occupants. B. Assistance Categories and Loan Terms. (1) Paint Income Loan Terms Below 60% of median 5 year Depreciating Lien 60-80% of median No interest - 5 year loan -2a- (2) Siding Income Loan Terms Below 60% of median Life Lien 60%-80% of median No interest - 5 year loan C. Assistance Limitations. Under general conditions, the maximum assistance shall not exceed $2,500.00 for a one-story house and $5,000.00 for a two-story house. When complex work is required to prepare the surfaces for painting, the total cost may exceed the maximum cost by an additional $1,000. D. Assignability. The Painting/Siding Loan is not assignable and shall be due upon sale or transfer of the property. Selling the property by use of a land sales contract shall constitute a transfer of property and the Painting/Siding Loan shall be payable in full at that time. Also, if during the term of the lien the property should become not owner -occu- pied, the City has the option of calling the lien due. E. Loan Instruments. Life liens shall be recorded at the office of the Johnson County Recorder. Loans shall be secured by a Promissory Note that is duly recorded. SECTION IV. RESIDENTIAL ACCESSIBILITY PROGRAM. A. General. This part sets forth the limitations, eligibility and terms for providing a residential accessibility grant to owner -occupants. B. Assistance Cate ories and Grant Terms. Income of homeowners not to exceed 80% of median. Assistance will be in the form of a direct grant. If the applicant's income is between 80-1001 of median, the homeowner may request a 7% loan for a term of 15 years. .I. DI&T C. Assistance Limitations. The maximum assistance shall not exceed $5,000. This limit may be waived on a case-by-case basis by the Housing Commis- sion at the recommendation of the Director. SECTION V. EMERGENCY REPAIR PROGRAM. A. General. This part sets forth the limitations, eligibility and terms for providing emergency repair assistance to owner -occupants. B. Assistance Categories and Loan Terms. Income Loan Terms Below 50% of median, cost below $1,000 Direct grant Below 50% of median, cost above $1,000 Life lien C. Assistance Limitations. The maximum assistance shall not exceed $3,000. D. Loan Instruments. Life liens shall be recorded at the office of the Johnson County Recorder. SECTION VI. RENTAL REHABILITATION PROGRAM. A. General. This part sets forth the eligibility requirements, subsidy mechanism, terms, limitations and conditions for providing rehabilitation assistance to investor -owners. B. Subsidy Computations. Program funds will be used to subsidize the prin- cipal amount of rehabilitation costs so as to reduce the effective inter- est rate on privately originated loans. a? /00 w -26 - The amount of subsidy will be individually calculated under the "gap financing" method. This method determines the dollar amount of debt service that is available to rehabilitate an individual building based on the economics of a particular property. Calculating the subsidy under this method requires an analysis of each building's "pro -forma" to determine the gross effective income of the property, subtracting out the expenses required to operate the property and the cash flow required from the property. The remaining balance is the amount available to support new debt service. The amount of a con- ventional loan that could be supported is then calculated. The differ- ence between the rehab costs and the new debt service is the subsidy required. C. Assistance Limitations. Under general conditions, financial assistance shall not exceed: the lesser of $5,000 or an amount determined by HUD per dwelling unit or 50% of the cost of rehabilitation. The minimum loan subsidy shall be $600.00 per dwelling unit. D. Loan Instruments. Owners' market rate apartment improvement loans shall be secured by instruments individual lenders commonly use for loans of like kind and term. The City's depreciating liens shall be secured by a Property Rehabilitation Lien and be subordinate to a Lender Lien or Mortgage filed on behalf of the City. M P -27 - Chapter 6. Processing 8 Submission of Rehabilitation Cases A. General. This chapter outlines the functions to be performed in connec- tion with rehabilitation financial assistance and sets forth the policies and procedures to be followed in preparing, processing and approving an application. B. Outline of Staff Functions. Listed below are the functions to be per- formed by the rehabilitation staff or designee in connection with reha- bilitation financial assistance. I. a. Initial intake and pre -application. b. Determination of priority of applicant (see Exhibit 4). 2. Interview and advise applicant of program objectives and benefits, complete application, inspect property. 3. Verify ownership; establish level of assistance; submit structure for preliminary historical/architectural significance review and clear- ance. 4. Prepare deficiency list. 5. Prepare feasibility analysis. 6. Review deficiency list with homeowner; receive approval to proceed; if structure was identified as having historic and/or architectural significance, submit for final clearance. 7. Owner receives bid packets, solicits and reviews bid proposals. 8. Request an as -is appraisal where appropriate. -28- 9. Deliver case to CDBG Program Coordinator for submission to Housing Commission for comnitment. Include the following papers: a. As -is appraisal. b. Two copies of accepted bid. C. "Before" pictures. 10. Once case is approved, order title and lien search and abstract updated if applicable. I 11. Notify owner of approval and schedule Loan Closing. 12. Close loan, file liens. 13. Preconstruction conference, issue proceed orders, execute contract. 14. Inspect work in progress, authorize release of partial payments. 15. Final inspection, punch list and certification; contractor provides manufacturer's and supplier's warranties and release of liens. 16. Issue inspection certificate; authorize final payment; close out file. C. Processing and Preliminary Approval of Assistance Application. Process- ing consists of completing a preliminary application and submitting all supporting documents. Staff reviews the file to determine eligibility. The Iowa City Housing Commission shall approve all home improvement loans and rental rehabilitation loans. The CDBG Program Coordinator or his/her designee shall approve all weatherization, paint/siding, residential w accessibility and emergency repair loans/grants. 1. If the rehabilitation assistance is to supplement a private loan, the loan subsidy shall not be considered approved until after private loan approval. -29- 2. Projects meeting all eligibility criteria shall be approved unless extenuating circumstances prevail. If it is determined that an application cannot be approved, a written statement of the reasons for the determination shall be provided to the applicant and a copy placed in the case file. 3. In the case of special circumstances, the CDBG Program Coordinator or the Rehabilitation Officer may ask the Housing Commission to recon- sider their previous determination disapproving an application, along with the documentation necessary to support the request for reconsid- eration. D. Cancellation. An approved application may need to be cancelled because the applicant has requested cancellation or is unwilling or unable to proceed with the rehabilitation work, or for other reasons. An owner may be liable for certain fees associated with the processing of a loan. 1. To cancel an approved application, the rehabilitation staff or desig- nee shall prepare a letter of cancellation to be provided to: a. The applicant b. Case file and, if necessary c. Lender. E. Rejection of Application. If, within ten days of a written request by the operating agency, the applicant has not offered information necessary for an application, the agency shall notify the applicant that the appli- cation has been rejected. F. Conditions for Providing Assistance. An applicant shall agree, in writ- ing, to the terms and conditions with respect to rehabilitation assis- tance. 0 -30 - Chapter 7. Truth in Lending/Loan Settlement/Account Management A. General. This chapter sets forth staff responsibilities with respect to loan settlement for Rehabilitation Loans. B. Truth in Lending Requirements. 1. This section describes the Truth in Lending Act and its procedural and disclosure requirements which must be followed in the settlement of City of Iowa City rehabilitation loans. 2. Background. a. The Act. The Truth in Lending Act is Title I of the Consumer Credit Protection Act (Public Law 90-321); title 15, U.S. Code 1601 et, seq.), enacted by Congress on May 29, 1968. The act requires that borrowers in "consumer credit transactions" be vested with certain rights and protections in connection with the transaction and receive specified written information from their lenders. The disclosures must be made before credit is extended and before the borrower becomes obligated in connection with the transaction; i.e., before execution of a note or mortgage. Among the required disclosures are: (1) The amount of credit a borrower will have for his actual use (the AMOUNT FINANCED); and (2) The FINANCE CHARGE (consisting primarily of interest) ex- pressed both as a dollar amount and as an ANNUAL PERCENTAGE RATE. 4 -31- b. Three-day Rescission Provision. In addition, the act enables a borrower, within three days following the loan transaction, to rescind the transaction, if the loan is secured by a lien on the borrower's residence. 3. Truth in Lending Disclosure Statement: Use in Rehabilitation Loan Settlements. Form CDR -7640, Truth in Lending Disclosure Statement, shall be given to all borrowers of rehabilitation loans. a. Applicability. A complete Disclosure Statement shall be given to all borrowers of rehabilitation loans. b. Time of Furnishing Disclosure Statement to Borrower. The Disclo- sure Statement shall be given the borrower at loan settlement but prior to the time he/she executes the promissory note obligating his/her repayment of the loan. c. Receipted Copy of Disclosure Statement Retained by Rehabilitation Officer. When the Disclosure Statement is given to the borrower, he/she shall be requested to sign and date an identically completed Disclosure Statement in the presence of an employee or other authorized representative of the City who shall also sign as witness. The signed and witnessed copy of the Disclosure State- ment shall be retained by the City in the loan application file. 4. Borrower's Right of Rescission: Secured Loans. Under the law, certain borrowers have the right, within a three-day period, to rescind the entire loan transaction. The right of rescission applies to rehabilitation loans or liens recorded at the office of the John- son County Recorder. -32- 5. Notice of Opportunity to Rescind Transaction. Borrowers entitled, by the preceding paragraph 4, to rescind the loan transaction shall receive a properly completed Notice of Opportunity to Rescind Trans- action. a. Furnishing Notice to Borrower at Loan Settlement. The Rehabili- tation Officer shall give the borrower two copies of the notice at loan settlement, and prior to execution of the note. The notice's nature and purpose shall be explained. An additional third copy of the notice shall be signed by the borrower so as to evidence his/her receipt of two copies of the notice. The receipted copy shall be retained by the City in its loan applica- tion file. b. Three-day Rescission Period. To compute the running of the three-day rescission period for entry on the notice, the date of loan settlement on which the borrower receives the notice shall be treated as Day Zero and the next business day thereafter as Day 1, etc. Three business days must elapse following loan set- tlement date to complete the rescission period. A business day is any calendar day except Sunday and the following holidays on the dates established by Federal law: New Year's Day, Washing- ton's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving and Christmas. c. No Disbursements. The Rehabilitation Officer shall make no disbursement from the rehabilitation escrow account, with respect to the borrower, during the three-day rescission period. d. Prompt Recordation. In every case, the Rehabilitation Officer shall record promptly after loan settlement the promissory note and all instruments necessary to perfect the loan security with- out waiting for expiration of the three-day rescission period. W -33- 6. Cancellation of Loan Transaction by Borrower. The loan transaction shall be considered cancelled if the borrower's notice to that effect is given within the required three-day period. Notification by mail shall be considered given at the time mailed as indicated by the postmark; notification by telegram shall be considered given at the time filed for transmission; and notification by any other writing shall be considered given at the time delivered to the Civic Center. 1. Accomplishment of Rescission. It is expected in most cases that the borrower's rescission will be accomplished by his mailing or delivery of the notice, bearing his signature and date under the cancellation recital. However, rescission may be accomplished by any written communication signed by the borrowers or a telegram sent by the borrower. Oral communications cannot accomplish rescission, but they should be followed up by the Rehabilitation Officer to obtain written rescission. C. Preparing for Loan Settlement. The following actions shall be taken in preparation for loan settlement: 1. Establish a date for loan settlement. 2. Prepare a promissory note and/or lien in accordance with the form of promissory note approved by the City Attorney's office. Also prepare the following documents: a. Truth in Lending Statement. b. Right of Rescission. c. Public Body's Certification for compliance with Truth in Lending Act. d. Terms/Conditions. e. Affirmative Marketing Plan/Tenant Assistance Plan (applies only to rental property). f. Contract with Proceed to Work. g. Lead-based Paint - notification. -34- 3. Instruct the borrower to obtain: a. Receipt of current property tax payment. b. Original and memorandum copy of insurance policies for fire and extended coverage that provides coverage in accordance with the City's requirements. Where appropriate, the binder shall show that the City is mortgage/lien holder. D. Advise the borrower with regard to: I. Name of the loan servicer to whom monthly payment checks shall be made payable, where to send the first and subsequent monthly pay- ments, and the obligation to remit the first monthly payment even though the borrower may not receive a payment notice. 2. Need to make all monthly payments on the date due to avoid legal action. E. Obtain borrower's signature on proceed order and hold until the borrower's Right of Rescission has expired. F. The rehabilitation staff or designee shall record all recordable instru- ments after expiration of the Right of Recision. G. Disposition of Funds Statement. After all funds have been disbursed from the rehabilitation escrow account and the account has been closed, the rehabilitation staff shall prepare a Disposition of Funds Statement in which the Rehabilitation Officer shall account for the disposition of the full loan amount and any other funds deposited in the rehabilitation escrow account for the borrower. V .M c?I/F U P M16a H. Transmittal Requirements. After final payment for all rehabilitation costs, the rehabilitation staff or designee shall transmit the following documents to the applicant: 1. Disposition of Funds. 2. Certificate of Final Inspection. 3. Owner's Acceptance of Completed Rehabilitation. I. Adjustment and Closeout of Rehabilitation Escrow Account. If unutilized funds remain in the rehabilitation account because the actual rehabilita- tion costs were less than anticipated or for other reasons, the unutilized funds shall be disbursed as follows: 1. If all the funds were provided by a depreciating lien, the unutilized funds shall be returned to the CDBG General Account. 2. If all funds were provided by a combination of a depreciating lien and private lender loan and/or private funds, the unutilized funds shall be disbursed to apply on a proportional basis to the private lender loan and/or private funds and the CDBG General Account. 0 -36 - Chapter 8. Terms and Conditions Under Which Rehabilitation Loans and Grants are Made A. General. This chapter sets forth City requirements with respect to terms and conditions to which an applicant must agree in order to obtain a rehabilitation loan. B. Rehabilitation Loan Conditions. The specific terms and conditions with respect to rehabilitation loans to a residential property are incorpo- rated in Form CDR -7631, the mortgage or other security instruments as applicable, and the promissory note. 1. Cancellation Provision. The City has a right to cancel a loan or grant if within 60 days from the note's execution the rehabilitation work has not commenced. The City may extend the 60 -day period by not more than 30 days, due to unforeseen and extenuating circumstances. 2. Additional Extension. The Rehabilitation Officer shall not grant any further extensions of time without prior written concurrence by the CDBG Program Coordinator. If the loan or grant is to be canceled because of failure to begin anticipated rehabilitation work within the allowed period of time, the Rehabilitation Officer shall initiate cancellation. C. Interest Rate. The interest rate to the borrower shall be as stated in Chapter 5. 0. Term of Loan. The maximum term for a City rehabilitation loan shall be as stated in Chapter 5. E. Points of Agreement. The applicant shall agree, as required by the related documents, to abide by the following terms and conditions: Y -37 - Civil Rights. Comply with all Federal and City requirements with respect to the Civil Rights Act of 1964 and the Civil Rights Act of 1968, to not discriminate upon the basis of race, color, creed, religion, national origin, age, sex, marital status, disability and sexual orientation, presence or absence of dependents, or public assistance source of income, in the sale, lease, rental, use or occupancy of the subject property. 2. Use of Proceeds. Use the loan proceeds only to pay for costs of services and materials necessary to carry out the rehabilitation work for which the loan will be approved. 3. Completion of Work. Assure that the rehabilitation work shall be carried out promptly and efficiently through written contract. 4. Ineligible Contractors. Not award any contract for rehabilitation work to be paid for in whole or in part with the proceeds of the loan to any contractor, who, at the time, is ineligible under the provi- sion of any applicable regulation issued by the Secretary of Labor to receive an award of such contract. 5. Inspection. Permit inspection by the City or its designee of the property, the rehabilitation work, and all contracts, materials, equipment, payrolls, and conditions of employment pertaining to the work. 6. Records. Keep such records as may be required by the City with respect to the rehabilitation work. 7. Bonus, Commission, or Fee. Not pay any bonus, commission, or fee for the purpose of obtaining the City's approval of the loan application, or any other approval or concurrence required by the City or its designee to complete the rehabilitation work, financed in whole or in part with the rehabilitation loan. Y -38- 8. Interest of the City. Allow no member of the governing body of the City who exercises any functions or responsibilities in connection with the administration of the concentrated rehabilitation project, and no other officer or employee of the City who exercises such functions or responsibilities to have any direct interest in the proceeds of the rehabilitation loan, or in any contract entered into by the applicant for the performance of work financed, in whole or in part, with the proceeds of the rehabilitation loan. 9. Preservation of the Security. Maintain the property according to the requirements of the Housing Code and permit the City or its designee to inspect the property during the term of the loan. 10. Hazard Insurance. Maintain hazard insurance on the property with a loss payable clause to the City as applicable. 11. Transfer of the Property. Not sell, rent or transfer the property without repaying such portions of the loan as required by the terms of the loan, unless prior written consent of the City is sought and received. 12. Loan Security Requirements. Provide security for the loan, in the form of a mortgage on the property, if applicable. 13. Flood Insurance. If property is located in a designated flood hazard area, the owner agrees to: (1) Purchase the requisite flood insurance coverage. (2) Renew and maintain the coverage so that the flood insurance policy does not lapse during the term of the loan. (3) Provide proof of insurance coverage to the City. A Ir -39- 14. Lead-based Paint. It is understood that under Federal Conditions of Loan that any lead-based paint hazard must be corrected and that this may involve an additional loan or change order to correct the lead- based paint hazard. 15. Non -Discrimination in Contracting. Cooperate with the City to en- courage the use of minority and women's business enterprises and locally owned businesses for the rehabilitation work to be financed with the loan. 16. Historic Preservation. Cooperate with the City in complying with applicable local, state and federal historic preservation laws and ordinances. 17. Preservation of the Security. Maintain the property at the level required by the Housing Code Standards level and permit the City or its designee to inspect the property during the term of the loan. 18. Special Conditions for Rental Rehabilitation Loans. In addition to the above: a. Condominium Conversion. Agree not to convert the units in the project to condominium ownership or any form of cooperative ownership not permitted by applicable federal regulations (24 CFR Part 511) for at least 10 years. b. Tenant Assistance Policy. Cooperate with the City in the provi- sion of assistance and information to tenants of the property as applicable (copy of Policy is attached as Exhibit 1). c. Affirmative Marketing Plan. Comply with the requirements for investor -owners contained in the City's adopted Affirmative v Marketing Plan as applicable (copy of Plan is attached as Exhibit 2). u r -40- d. Discrimination on the basis of handicap. Comply with the re- quirements of Section 504 of the Rehabilitation Act of 1973 prohibiting discrimination against individuals solely by reason of his/her handicap. e. Current Rental Permit. Maintain a current rental permit issued by the Department of Housing and Inspection Services. u -41 - Chapter 9. Recapture of Rehabilitation Assistance A. General. This section sets forth policies for recapturing funds from either a loan, depreciating loan or a life lien in the event the recipi- ent of assistance sells, transfers or ceases to occupy the dwellings during the specified period. B. Applicability. All comprehensive rehabilitation assistance shall be subject to recapture. C. Terms and Conditions. Recapture of funds shall be subject to the follow- ing: 1) All lien documents shall be filed three working days after loan closing. 2) Liens can be subordinate to any private lender's home im- provement loan or mortgage as long as adequate equity exists in the property. 3) Conditions of the liens are as stated in Chapter 5. 2. Upon sale or transfer or termination of occupancy, all of the lien or the declining balance of the lien which remains outstanding shall be reimbursed to the City and a satisfaction of the lien shall be filed for record by the Operating Agency. 3. The lien document shall provide that it is the recipient's duty to notify the City of any sale or transfer of the property and to sat- isfy any outstanding obligation for reimbursement, and that failure to do so shall result in the entire amount of the financial assis- tance becoming due and owing without the benefit of the declining balance provisions of the lien being available to the recipient. aiP V P -42- 4. Funds received from these recapture procedures shall be treated as program income and returned to the Operating Agency to provide addi- tional assistance. X17 V w -43 - Chapter 10. Determining Work to be Done with Rehabilitation Financial Assistance A. General. This chapter sets forth the responsibilities of the Rehabilita- tion Officer for determining the rehabilitation work necessary to bring a property into conformance with Housing Code Standards and for providing assistance in the rehabilitation of the property. In carrying out these responsibilities, the Rehabilitation Officer shall: 1. Inspect the property. 2. Identify the required and desired work to be done to the property. 3. Consult with, advise and review with owner on work to be done and bid proposals. 4. Inspect work in progress prior to owner approving payments to con- tractors. B. Initial Inspection. In the initial inspection, the Rehabilitation Offi- cer identifies deficiencies to be corrected in order to meet housing quality or code standards. The inspection findings are to be reviewed and discussed with the owner. In addition, the Rehabilitation Officer should outline any desirable general property improvements. The defi- ciencies shall be listed in accordance with program requirements, sepa- rating mandatory corrections of deficiencies from general property improvements or owner preferences. -44 - Chapter 11. Contracting for Rehabilitation Work 1. INTRODUCTION. This chapter sets forth requirements and procedures with respect to construction contracts for rehabilitation financed through a rehabilitation loan. Rehabilitation work shall be undertaken only through a written contract between the contractor and the recipient of the loan. Whenever possible the owner shall be encouraged to obtain his/her own bids and enter into the repair contract with little or no City involvement. The Rehabilitation Officer shall assist each applicant as needed, in arranging for and obtaining an acceptable construction contract. a. Procurement of Bids. An acceptable contractor's bid and proposal must be obtained before approval of the rehabilitation loan. b. Form of Contract. The construction contract shall consist of a single document form provided by the City and signed by the contrac- tor and accepted by the homeowner, only following approval of the rehabilitation loan. It shall contain a bid and proposal by the contractor. 2. GENERAL CONDITIONS. The Rehabilitation Officer shall prepare "General Terms and Conditions" (Exhibit B, as provided by the Department of Plan- ning and Program Development) for use in all construction contracts for the rehabilitation of the property. Such contracts shall include hold harmless provisions relating to the contractor(s) and owner(s). 3. SPECIFICATIONS AND DRAWINGS. A deficiency list and illustrative V sketches, if any, covering the specific rehabilitation work for each property on which a rehabilitation loan will be made shall be prepared by the Rehabilitation Officer or a designated professional. Drawings shall be prepared only when essential to show the scope of the work involved so that a fair bid for the work can be obtained, and to avoid misunderstand- M ings with the bidder. The deficiency list and drawings shall be based on V -45 - the inspection of the property and interviews, as indicated, with the applicant. The deficiency list shall clearly establish the nature of the work to be done and the material and equipment to be installed. 4. INVITATION TO CONTRACTORS FOR BID AND PROPOSAL. a. Contractor Selection. The owner shall be asked for the names of contractors he/she would like to bid on the repair of his/her prop- erty. If the owner does not know of any contractors, the staff shall provide the property owner with contractor names from the list of contractors maintained at the Department of Planning and Program Development. Said list shall include the names of minority and women contractors in the area. I b. Invitation to Bid. Once the contractors have been selected according to paragraph 4a. above, the homeowner shall contact the selected contractors and invite them to bid the proposed rehabilitation work. The homeowner shall negotiate with the contractors to obtain an acceptable bid. A minimum of two written bids is required. If the bids submitted are within 5% of one another, the Rehabilitation Officer shall request line item bids front both contractors. c. Bid Review. Upon receipt of all bid proposals from the bidding con- tractors, the homeowner shall review bids for completeness and accu- racy making special note to assure that the deficiency list has been adhered to. d. Acceptable Bid. An acceptable bid is one that fulfills the require- ments of 4c. above and does not deviate from the Rehabilitation Officer's estimate by more than 10%. The bidding contractor shall provide a cost for each repair item. If the costs are not acceptable, the Rehabilitation Officer shall work with the homeowner and contrac- tor to negotiate a cost that is reasonable and acceptable to all parties. a V e. Maintenance of the Contractor's List. (I) The Rehabilitation Officer shall be responsible for maintaining a list of all contractors, including minority and female con- tractors, who have expressed an interest in bidding on repair construction and who can provide the following as contained on Form CDR -7946: (a) Adequate active liability insurance. (b) The name of his/her company bank. (c) The names of his/her usual subcontractors. (d) The names of his/her principal suppliers. (e) The names and addresses of at least two (2) recent residen- tial repair or construction jobs. (f) Iowa City contractor's license as applicable. (2) The Contractor List shall be maintained within the Department of Planning and Program Development office, open to public review. 6. AWARD OF CONSTRUCTION CONTRACT. The contract shall be awarded by having the applicant for the loan properly execute the contract with the assis- tance of the Rehabilitation Officer. a. Award within 30 days of Cutoff Date. In order for the bid and pro- posal to be binding, the award shall be made within a period of 30 days from the cutoff date established by the homeowner for the re- ceipt of the bid and proposal, unless a later date is agreed upon in writing. i i� M J -47- b. Contract Award. The award of a construction contract shall be accom- plished by the owner executing the original and two copies of the contract documents. The homeowner shall distribute the executed contract documents as follows: (1) Executed original retained by homeowner. (2) Executed copy to contractor. (3) Executed copy to the City of Iowa City in care of the Rehabili- tation Officer. c. Issuance of Proceed Offer. At the time the award is made, the Reha- bilitation Officer shall remind the applicant and the successful contractor that the undertaking of the work covered by the contract is subject to issuance by the owner of a proceed to work order, within the number of days stated in the general conditions of the contract from the date of the award. Upon award of the contract, the homeowner shall notify unsuccessful bidders that they have not been awarded the contract. 7. LABOR PERFORMED BY OWNER IN REPAIRING PROPERTY. a. Type of Work and Skill of Owner. A property owner may complete some or all of the tasks required to repair his/her property, if he/she has the degree of skill required to perform the work involved. Self- help is usually appropriate for the accomplishment of tasks of an unskilled nature such as general clean-up, demolition of small build- ings on a property, removal, cartage, and disposal of the debris, and for work that involves minimal use of costly materials and equipment. Work of a skilled nature and work involving the extensive installa- tion of costly materials and equipment are appropriate only if the Rehabilitation Officer is assured the property owner has the ability and experience required to do the work properly without supervision or that he/she has sufficient skill to do the work properly with technical advice and guidance from the Rehabilitation Officer. Y w SRL' b. Provision for Self -Help in Loan. Whenever self-help is necessary or desired and the Rehabilitation Officer considers that, with or with- out technical assistance and guidance, a property owner will be able to perform the work in a reasonably acceptable and expeditious man- ner, he/she may process an application for a loan on that basis. In such a case, the amount of the loan would provide funds to pay for the materials and equipment to be installed by self-help, as well as any additional funds needed to pay for other work to be performed by a contractor. The loan shall not include funds to pay the owner or members of his/her family for their labor. Further, the Rehabilita- tion Officer must exercise good judgement and prudence in order to avoid a situation in which an owner could place himself or herself in financial difficulty through improper use, installation or even de- struction of the materials and equipment purchased with loan funds. For this reason, the owner should understand that payment to the supplier for materials and equipment involved in a self-help will be disbursed from the loan account by the staff, only after the materi- als and equipment have been properly installed. Appropriate liabil- ity insurance is required. 4 /P u O -49 - Chapter 12. Inspection of Rehabilitation Work 1. GENERAL. This chapter sets forth the requirements for the inspection of rehabilitation work financed in whole or in part with a rehabilitation loan. 2. RESPONSIBILITY FOR MAKING INSPECTIONS. The Rehabilitation Officer shall make inspections of construction work in cases involving a rehabilitation loan. To accomplish this, the Rehabilitation Officer shall make: (1) Compliance inspections, as necessary, to assure that the construc- tion work is being completed in accordance with the construction contract. i (2) A final inspection to determine that the construction work has been completed in accordance with the construction contract. The Build- ing Inspector and any specialists from the Building Inspection Division, as may be required, shall accompany the Rehabilitation Officer on the final inspection and shall provide the Rehabilitation Officer with a written report of their findings. 3. INSPECTIONS FOR PAYMENT. Inspection of construction work shall be made in accordance with the following: a. Upon partial and total completion of the repair work and receipt of the contractor's invoice and appropriate lien waivers, the Rehabili- tation Officer shall arrange for inspection of the completed work. b. When the inspection determines that a portion of the work is satis- factorily completed, the contractor can request a partial payment. Partial payment requests shall be accompanied by lien waivers for work that was completed. 4 I -50- c. After receipt of a release of liens, including releases from all subcontractors and suppliers and a copy of each warranty, a request for final payment can be made after the request is approved by the Legal Department. 4. CERTIFICATION OF FINAL INSPECTION. After the Rehabilitation Officer determines that the rehabilitation work has been satisfactorily completed and the final inspection report obtained, the staff shall prepare a Form CDR -7945 (original and one copy). Distribution. Form CDR -7945 shall be distributed as follows: (1) Signed original to the property owner. (2) Signed copy retained in the property file. 5. ONE-YEAR GUARANTEE ON WORK BY CONTRACTOR. All work performed by the j contractor is covered by a one-year guarantee but property owners are not always aware that, for a period of one year, they may require the con- tractor to correct significant defects and inadequacies in the work performed under this contract. For this reason, the Rehabilitation Officer shall inform the owner of the guarantee requirements upon comple- tion of the contract. The contractor must be given written notice of any defects with reason- able promptness. Should the contractor fail to answer or correct the defect(s) within a reasonable time, the City, at owner request, will assist owner in the following manner: (1) Staff members of the Department of Planning and Program Development will investigate the complaint. (2) If the staff finds the complaint to be invalid, owner will be so notified. W_ iA -51- (3) If the staff finds the complaint to be valid, the homeowner will direct the contractor to take necessary corrective action within a specified length of time. (4) If the contractor complies, the staff will reinspect the work and, if it is satisfactory, the owner will be expected to sign a written statement withdrawing the complaint. (5) If the contractor fails to respond to the request within the speci- fied length of time, the staff, upon owner request, will prepare a letter for owner's signature, notifying the contractor a second time that unless the complaint is abated by a specified time, a formal complaint will be filed with the City Attorney for appropriate action. (6) If the contractor fails to respond to the request for correction within the time specified: (a) The homeowner will take any necessary action to have the de- fects corrected, including but not limited to paying the rea- sonable costs of correcting work or materials determined by the homeowner to be defective. (b) The contractor may be prohibited by the City from contracting any other repair work under any loan program administered by the City. 6. REHABILITATION OFFICER - OWNER - CONTRACTOR RELATIONS. Rehabilitation Officer's Responsibility and Authority: The Rehabilitation Officer shall observe the work on behalf of the City, and will provide general assistance during construction insofar as proper interpretation of the loan requirements is concerned. Y -52 - The Rehabilitation Officer and owner shall decide, when necessary, any and all questions which may arise as to the quality and acceptability of materials furnished, work performed, interpretation of work items on the deficiency list and all questions as to the acceptable fulfillment of the Contract on the part of the Contractor. The Rehabilitation Officer will not be on the construction site at all times and as such cannot be responsible for the acts or omissions of the contractor or his/her employees. For the same reason acceptance by the homeowner or the City of the contractor's work performed, does not re- lease the contractor from the responsibility to provide quality perform- ance on all contract specifications. m� V P -53- uhapter 13. Grievance Procedure I. COMPLAINT TO CITY MANAGER The City Manager shall review and hear the complaint of any person ag- grieved by the Department of Planning and Program Development or the Housing Commission in the handling of the application for and processing of assistance under rehabilitation programs funded by the CDBG and Rental Rehabilitation Programs. 2. PROCEDURE a. Filing. A grievance must be filed at the Office of the City Clerk for the City of Iowa City. Grievances shall be filed in a timet manner and must be received by the City of Iowa City within ten days of the denial of an ap lication for rehabilitation funds or within one year of final payment by the City of grant and/or loan subsidy funds in connection with rehabilitation work. The communication of the action shall be in written form and should contain a short, concise statement of the grievance and explanation of action desired. The aggrieved person may seek the assistance of the staff of the Department of Planning & Program Development in filing of an action. No filing or processing fees shall be required of any aggrieved person. b. Notice. The City Manager shall fix a reasonable time for hearing ac- tions and the Department of Planning & Program Development shall give notice in writing of the time and place of the hearing to the ag- grieved person. In no event shall the hearing be held more than 30 calendar days following receipt of the grievance at the Office of the City Clerk. At the hearing, the aggrieved may appear in person, by agent or by attorney. If the grievance is resolved prior to the date of the hearing, the aggrieved party shall request in writing that the grievance be withdrawn. Em 54- 3. REVIEW OF COMPLAINTS a. The City Manager shall review complaints concerning: -The sufficiency of the application for assistance; -The eligibility of the application for assistance under the pro- ject; -The amount of the loan subsidy allocated or received by said per- son ; -The quality and appropriateness of the work designated to be done; -The adequacy of the information and assistance concerning the pro- ject which is furnished by the Department of Planning and Program Development. -The appropriateness of the action of the Housing Commission. b. Standards. In exercising his powers and duties, the City Manager shall be guided by the following standards: 1. Persons eligible for grant or loan subsidies under provisions specified in rehabilitation programs operated by the Department of Planning and Program Development and funded by the Community Development Block Grant Program and the Rental Rehabilitation Program, shall have full right to a grant or subsidized loan sufficient to accomplish the purposes intended by the applicable program within the limitations specified therein. i 2. Eligible persons should be provided adequate assistance in deter- mination of improvements that are needed and eligible, and tech- nical assistance related to cost estimates, contract negotiation and payment of contractors for work completed. -55- 3. Service should be provided by the Department of Planning and Program Development in such a way to assure that the administra- tion of the program will not result in different or separate treatment on account of age, race, color, creed, religion, na- tional origin, sex, source of income, marital status, sexual orientation, disability or handicap, or presence or absence of dependents. 4. Eligible persons should be provided full information and advisory services relating to the programs and the way in which they may benefit from them. 5. Assistance to eligible persons should be provided as promptly as possible within the priority guidelines established by the pro- grams and the time limitations of the staff assigned to the program. 4. COMPLAINT RULING The City Manager shall inform the complainant in writing within ten days of the hearing as to the resolution of the complaint. If the complainant is not satisfied with the outcome of the appeal, he/she may appeal to the U.S. Department of Housing and Urban Development APPENDIX a I s' 4 µ EXHIBIT 1 TENANT ASSISTANCE POLICY FOR RENTAL REHABILITATIO14 PROGRAM CITY OF IOWA CITY, IOWA 1. Purpose This policy is established to conform to the requirements of the U.S. Department of Housing and Urban Development (HUD) for the Rental Reha- bilitation Grant Program at 24 CFR 511.10(h)(2). It sets forth the relocation assistance and other assistance which the City of Iowa City will provide for displaced tenants who reside or will reside in proper- ties to be rehabilitated under the Rental Rehabilitation Program. 2. Applicability This policy applies only to those residential tenants who lawfully reside or plan to reside in a property to be rehabilitated under the City's Rental Rehabilitation Program. 3. Definitions of Displacement Affordability For purposes of this program the following definitions shall apply: "Displacement" results if a lower income family is forced to move permanently from a project as a direct consequence of rehabilitation assisted under this program. "Affordable rent" means that the sum of the utility allowance and the rent payable monthly by the tenant to the owner after rehabilitation is at or below the greater of the sum of the utility allowance and (1) the tenant's rent prior to rehabilitation or (2) the Total Tenant Payment (as defined in 24 CFR 813.102) For the purposes of this policy, a tenant will not be considered displaced if the tenant is offered a decent, safe and sanitary dwelling unit in the property undergoing rehabilitation at an affordable rent, as defined by HUD. General Policy on Displacement It is the City's policy to minimize, to the greatest extent possible, the displacement of persons from their homes and neighborhoods through the implementation of its housing and community development projects. Consistent with this policy, the City will review each rental rehabilita- tion proposal for its impact on displacement. In particular, the City will review each proposal to determine if it will result in a dispropor- tionate number of persons of a particular race, color, religion, sex, age, handicap or national origin being displaced. A priority will be given to proposals which do not involve tenant displacement. In any case, no proposaT—w--1TT-lye­aCLVPLe0 1T the proposed re a i i ation will cause the displacement of very low-income families, as defined by HUD, by families who are not very low-income. 4; It 5. Current Tenants This section applies to tenants who reside in a property to be rehabili- tated at the time that the application for rental rehabilitation assistance is approved, The period of eligibility for relocation advisory and financial assistance will be from the date of approval for rental rehabilitation assistance through the date of completion of the rehabilitation, Thereafter, the City assumes no responsibility for providing tenant assistance. The City will issue a written notice to each tenant who resides in the property, within ten (10) days of loan settlement for rental rehabilitation. Such notice will explain the proposed rehabilitation project, state the tenant's right to continue in occupancy, subject to the terms of any existing lease, and describe the availability of information and counseling about housing assistance provided by the City. Section 8 rental assistance will be offered to those eligible tenants who reside in the unit at the time of approval of the rental rehab loan. Eligible tenants include two or more person families, and single, elderly/handicapped persons. No additional cash assis- tance will be offered to such tenants, nor will financial assistance be offered to other tenants who remain in the property. If, during rehabilitation, temporary tenant displacement is unavoid- able (as determined by City staff), the landlord shall be responsible for any reasonable, additional costs incurred by the tenant due to the temporary displacement. C. If permanent displacement is unavoidable in order to accomplish a Particular rental rehabilitation project, the City will issue a written notice to the tenant(s) to be displaced within ten (10) days of the approval of an application for rental rehabilitation assis- tance. Such notice will explain the proposed rehabilitation project, state that the tenant must be displaced, and describe the availabil- ity of relocation advisory assistance provided by the City. Unless there is an urgent need for the property to be vacated (e.g., because of substantial danger to health or safety) or the tenant is evicted for cause, the tenant will be given at least 90 days advance notice of the earliest date by which the property must be vacated. Relocation advisory assistance will include, but is not limited to, the following: (1) Information and referral about the availability of comparable replacement housing in the area that is decent, safe and sanitary and that is affordable to the tenant. (2) Information and referral to the staff of the Iowa City Human Rights Commission concerning tenants rights under the federal Fair Housing Law and Iowa City Human Rights Ordinance. (3) Information on how to search for suitable replacement housing. Y w 3 Relocation financial assistance to be provided by the City includes: Section 8 Certification of Family Eligibility. Eligible tenants will be offered a Section 8 certificate or voucher consistent with the requirements of that program. Relocation financial assistance to be provided by the landlord includes: (1) Moving expense payment. The tenant will be reimbursed for actual, reasonable moving and related expenses according to the following schedule: Number of rooms (excluding hallways and closets) 1 2 3 4 5 6 or more Maximum payment $175 $240 $295 $340 $375 S400 and if the tenant is ineligible for a Section 8 voucher or none are available (2) Cash rental assistance. Tenants who are not offered or eligible to receive a Section 8 voucher, or for whom no vouchers are available, and who cannot afford suitable replacement housing, will be eligible to receive a lump sum payment not to exceed $4,000. This amount is determined in the same manner as a Replacement Housing Payment for Rental Assistance (see 24 CFR 42.453, HUD Uniform Act Regulations). This payment shall also be the responsibility of the landlord. Relocation financial assistance will only be disbursed upon verification that the displaced tenant has secured decent, safe and sanitary replace- ment housing. The City will assist the tenant and the landlord to comply with the requirements of the HUD Uniform Act Regulations relating to tenant relocation. 6. Subseauent Tenants This section applies to tenants who will reside in a property to be rehabilitated after the application for rental rehabilitation assistance has been approved. The period of eligibility for assistance will be from the date of application approval through the date of completion of the rehabilitation. Thereafter, the City assumes no responsibility for providing tenant assistance. Within ten (10) days of receiving notification from the rental property owner that a new tenant has moved into the property, the City will issue a written notice to each new tenant. Such notice will explain the rehabilitation project, state the tenant's right to continue in occu- pancy, subject to the terms of any lease, and describe the availability of information about the rental rehabilitation program. 7. Nondiscrimination This Tenant Assistance Policy will be administered in full compliance with Executive Order 11063, Title VI of the Civil Rights Act of 1964 and Title VIII of the Civil Rights Act of 1968 to ensure nondiscrimination in the provision of information, counseling, referrals or other relocation services to persons displaced and assisted through the Rental Rehabilita- tion Program. 8. Public Notice and Review Copies of this Tenant Assistance Policy will be made public and available for citizen review, upon request, in the offices of the City Clerk and the Department of Planning and Program Development. 9. Appeals Any displaced tenant who believes that the City has failed to provide reasonable housing asssistance under the terms of this policy may file a written appeal to the City Manager at any time within 90 days of the date of their move from the property being rehabilitated. 'Within 30 days of the filing of an appeal, the City Manager will provide the appellant with a written explanation of how the City determined their housing assis- tance and will provide the appellant with an opportunity to have a hearing before the City Manager. Landlord's Understanding I have read and understand the above policies and requirements regarding tenant assistance and the HUD Uniform Relocation Act. Owner Witness 3. EXHIBIT 2 AFFIRMATIVE MARKETING PLAN FOR RENTAL REHABILITATION PROGRAM CITY OF IONA CITY, IOWA This Affirmative Marketing plan is designed to conform to the require- ments of the U.S. Department of Housing and Urban Development (HUD) published at 24 CFR 511.10(m)(2). The plan sets forth the City of Iowa City's procedures and requirements, as administered by the Department of Planning and Program Development, for affirmatively marketing vacant housing units rehabilitated or proposed to be rehabilitated through the Rental Rehabilitation Program. 2. General It is the City's policy to attract eligible persons from all racial, ethnis ic and gender groups in the Iowa City housing market area to housing that aketed heverypeffortstodassureered thatbi individuals this might not apply for vacant rehabilitated units because of their race, ethnicity, religion, sex or handicap: -know about vacancies, -feel welcome to apply. -have the opportunity to rent the units. The that Citywillirehabil rehabilitated with d participating iPhisn programrental are made available to to ensure Persons on an equal basis. - -- ���, �rmers and Potential Tenants - Cit procedures a. Media. The City will utilize local media to advertise availability of rehabilitation grant assistance for rental properties and (2) the availability of vacant housing units in rehabilitated properties. Press releases will contain the Equal Housing Opportu- nity slogan and a statement of affirmative marketing policy, Display Housing Opportundity logo andlslogan materials will contain the Equal The following media will be used for display advertising: ' Iowa City Press -Citizen and Daily Iowan - newspapers Local government access channel - cable TV Press releases from the City are received by all electronic media. area print and b• Other Means, The City will inform the public. This may utilize other appropriate methods to such as personal and written contact make information on with organizations, s those listed Wow, encouraging them to equal basis. the vacant units available to all persons on an RAF Y z Business organizations - Iowa City Apartment City Board of Realtors, fowe Owners and 'tanagers Association and local lending institutions. University organizations - Housing Clearinghouse and the Protective Association for Tenants, Iowa Memorial Union; the University of Iowa Financial Aid Office, Calvin Hall; and the Housing Assignment Office, Calvin Hall. Other organizations - Crisis Center; HACAP Center and the City of Iowa City Assisted Housing Division. The Assisted Housing Division will be of particular value in that it serves as the local PHA, receives referrals through a network of local human service agencies and maintains a current waiting list of Section 8 eligible tenants. Meetings of the Iowa City Housing Commission and Committee on Community Needs, which are open to the public, will serve as another forum for announcing the availability of rental rehabilitation grant assistance and discussing the City's affirmative marketing policy for the program. Other public meetings will be scheduled to explain the Rental Rehabilitation Program to owners and tenants and discuss the affirmative marketing policy and requirements of local and federal fair housing laws. The staff of the Iowa City Human Rights Commis- sion may be called upon to assist in explaining fair housing laws and to review potential housing discrimination practices. 4. Requirements and Procedures for Owners Property owners who participate in the Rental Rehabilitation Program will be required to comply with the following affirmative marketing practices and procedures with regard to vacant housing units: a. Include the Equal Housing Opportunity logo and slogan or statement in all advertisements for vacant units materials. in local media and printed b. If a rental office is utilized or operated by the owner, whether on or off premises, display fair housing place. posters in a conspicuous c. Use the Assisted Housing Division's waiting list of Section 8 vacant rehabilitated aunits Ce of referrals for the initial rent -up of d. Provide written assurance to the City that vacant units will be made available to prospective tenants on a non-discriminatory basis. e. Maintain records of all efforts to affirmatively market vacant units. For example, copies of newspaper ads and documentation of the owners' contacts with the local business, University and community service organizations and other efforts to publicize the availability of the vacant units. f. Enter into an agreement with the City certifying compliance with items 4a -e above for a period of at least seven years from the date Of comPletinn of the rehabilitation, Y tl 3 5. Special Outreach Efforts If, during the course of administering the Rental Rehabilitation Program, it is determined that special outreach efforts are needed to attract Persons of particular racial, ethnic or gender groups to vacant units in rehabilitated projects, the City will: -determine which groups(s) need additional outreach and contact service organizations, churches, and University clubs servicing these group(s). -notify the business, University and community service organizations listed in Section 31b above of the special outreach needed. -assist owners to locate prospective tenants by making referrals from the Assisted Housing Division's waiting list and target advertising as needed to expand the list. The City will require that owners begin their special outreach efforts immediaat a vacancy hould request tey upon al30 day notice �from ng thcurrent tenants v,planninguto till occr. erminatenersstheir tenancy so that the outreach efforts can begin before advertising to the general public. 6. Recordkeepin Requirements All records pertaining to affirmative marketing efforts of the City aner d the racial, ethnic and gender characteristics of tenants before and aft rehabilitation, as well as those who are displaced, will be maintained er by the City in accordance with HUD Regulations at 24 CFR 511.71. The City will ensure that owners also maintain records to document their affirma- tive marketing efforts. (See Section 4 above.) The City will maintain records of the following: -press releases and newspaper ads. -copies of notices and documentation of contacts with the business, University and community service organizations listed in Section 3b. -documentation of interviews with tenants. 7. Assessment of Affirmative Marketing Efforts The City will conduct an annual assessment of the effectiveness of its affirmative marketing efforts for inclusion in the Rental Rehabilitation Program annual performance report to HUD. At a minimum, the assessment will include: a. A summary of good faith efforts by the City and participating rental property owners to affirmatively market rehabilitative units. 4 To determine if good faith efforts have been made the City will compare information contained on the records to be kept, as deter- mined by Section 6, with actions that were taken to carry out the procedures in Sections 3 and 5. If the required steps were taken, the City will determine that good faith efforts have been made. b. The results of the affirmative marketing efforts in terms of the race, ethnicity and gender of the heads of households occupying rehabilitated units. To determine results, the City will examine whether or not persons from the variety of racial, ethnic, religious, gender or handicapped groups in the area applied for or became tenants of the units that were affirmatively marketed. If it is found that a variety is repre- sented, particularly the targeted groups determined to be in need of outreach, the City will assume the procedures were effective. If it is determined that a participating rental property owner is not making good faith efforts to affirmatively market vacant units, the City will take the following corrective actions: a. The City will issue a written notice to the owner stating his/her noncompliance with the terms of the rental *rehabilitation grant agreement and corrective actions (e.g., advertising) which must be taken by the owner within a specified period of time, not to exceed 60 days. b. Continued noncompliance within the specified time period and, thereafter, during the term of the rental rehabilitation grant agreement, will result in the City taking legal action to recover 100% of the rental rehabilitation grant assistance for the owner's project. All cases of apparent discriminatory practices by owners will be referred to the Iowa City Human Rights Commission for review and remedial action under the housing provisions of the Iowa City Human Rights Ordinance. R. Public Notice and Review Copies of this Affirmative Marketing Plan will be made public and available for citizen review, upon request, in the offices of the City Clerk and the Department of Planning and Program Development. ' I acknowledge receipt of this marketing plan and hereby will comply with items 4a -e for seven years from the date of completion of the rehabilitation. er IJitness wner Date M Rev. 1-05 V a EXHIBIT 3 TABLE OF MEDIAN INCOME GUIDELINES FOR IOWA CITY % OF MEDIAN INCOME FAMILY SIZE 50% 60% 80% 100% 1 12,000 14,400 19,200 24,000 2 13,700 16,440 21,950 27,400 3 15,450 18,540 24,700 30,900 4 17,150 20,580 27,450 34,300 5 18,500 22,220 29,150 37,000 6 19,900 23,880 30,900 39,800 7 21,250 25,500 32,600 42,500 8 22,650 27,180 34,300 45,300 Y Y I EXHIBIT 4 PRIORITY LIST FOR HOUSING REHABILITATIO14 PROGRAMS The following order of priority will be implemented for all owner -occupied rehabilitation programs. This does not include the Rental Rehabilitation Program. Staff will process applications in the following order as listed below. I. Low Income Households (below 50% median income). a. Elderly/handicapped. b. Large family (five or more persons). c. Single parent family (two or more persons). d. Small family (2-4 persons). e. All others according to date of application. II. Moderate Income Households (50-100% median income). a. Elderly/handicapped. b. Large family (five or more persons). c. Single parent family (two or more persons). d. Small family (2-4 persons). e. All others according to date of application. M I MAP 2 IOWA CITY RENTAL REHABILITATION TARGET NEIGHBORHOODS Expanded Areas RESOLUTION N0. 88-28 RESOLUTION DECLARING DEFAULT BY METCALF AND EDDY, INC. IN THE PERFORMANCE OF ITS CONTRACT WITH THE CITY FOR THE PROVISION OF DESIGN AND PROJECT MANAGEMENT SERVICES IN CONNECTION WITH THE WASTEWATER TREATMENT SYSTEM IMPROVEMENTS PROJECT, AND DEMANDING THE CURE THEREOF. WHEREAS, the City of Iowa City did on June 17, 1986, enter into a contract with Metcalf & Eddy, Inc. (M&E), entitled "AGREEMENT BETWEEN THE CITY OF IOWA CITY AND METCALF & EDDY, INC. FOR PROFESSIONAL ENGINEERING AND PRO- JECT MANAGEMENT SERVICES (hereinafter "the contract"), pursuant to which contract M&E agreed to design certain improvements to the City's waste- water collection and treatment system, to manage the construction of said improvements, and to provide overall project management services to assure that said improvements were constructed so that the City's wastewater system would meet Federal and State wastewater discharge requirements within the timeframes specified by Federal and State regulatory agencies (Federal Environmental Protection Agency (EPA) and Iowa Department of Natural Resources (IDNR)) as set forth in the Master Project Schedule, Section 3 of the contract; and WHEREAS, M&E failed to perform as required by the contract in a number of particulars, including but not limited to, the following: (1) M&E proceeded to the design outline phase of the project without having obtained the required approval by Owner of the Basic Project Development Report, including the initial project budget and timeframe for completion (Sections 2.2.3, 2.3 and 2.3.1 of the con- tract); (2) M&E proceeded to design certain elements of the project without having prepared and submitted, and without having obtained Owner's approval of the Design Outline Documents, and without having prepared and obtained Owner's approval of the Project Budget, the estimated cost of which elements as designed were far in excess of the esti- mates therefore set forth in the initial project budget (Sections 2.3.1 through 2.3.6 of the contract); (3) M&E failed to submit required design documents for certain elements of the project within the timeframes set therefore in the Master Project Schedule; and (4) M&E failed to finalize the form of construction contract to be util- ized in bidding the construction of project improvements (Section 2.4.8); and WHEREAS, due to said non-performance, the City suspended payment to M&E in August of 1987 for amounts billed to the City; and WHEREAS, M&E has suspended its performance of the remainder of the con- tract; and u 2 WHEREAS, due to M&E's failure to perform as indicated above, the City has been and will be prevented from (a) obtaining required IDNR approval of various design elements of the project; (b) obtaining bids and awarding contracts for construction of various elements of the project, and (c) completing construction and commencing operation of various elements of the project, within the timeframes originally mandated by the IDNR and incorporated into the initial Master Project Schedule, or within the timeframes mandated by the IDNR pursuant to its Administrative Order No. 87 -WW -52 dated August 11, 1987; and WHEREAS, the City Manager and his staff have engaged in extensive discus- sions and negotiations with M&E in an attempt to bring M&E's performance into closer conformance with contract requirements; and WHEREAS, a contract Addendum was prepared and presented to M&E, by which the City hoped to obtain M&E's cure of its failure to perform as required by the contract; and WHEREAS, M&E has declined to execute that Addendum. NOW, THEREFORE, BE, AND IT IS HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, that pursuant to Section 12.12 of the contract, default is hereby declared in Metcalf & Eddy's performance of its contrac- tual obligations for the reasons and in the particulars stated, but not limited to those stated, in the preamble hereto. AND BE IT FURTHER RESOLVED that the City Clerk be and is hereby authorized and directed to give notice to M&E of its default and failure in perform- ance of its obligations under the contract, which notice is to be given by sending a copy of this resolution to M&E as provided in Section 12.19 of the contract. AND BE IT FURTHER RESOLVED that this City Council demands that Metcalf & Eddy proceed to cure said default by executing and returning to the City the Addendum attached hereto and made a part hereof on or before February 29, 1988 (within 15 days of the giving of notice of default as provided by Section 12.19 of the contract), thereby committing itself to a course of action which will bring it into closer conformance with its performance obligations under the contract. M-Fo, Y M 3 It was moved by ..Ainhyisco and seconded by Dickson the Resolution be adopted, and upon roll call there dere: AYES: NAYS: ABSENT: X AMBRISCO a COURTNEY X DICKSON X HOROWITZ X LARSON X MCDONALO STRAIT Passed and approved this 9th day of February 1988. MAYOR App o ed as o Form ATTEST: �lLit�tKJ can d� CITP CLERK LEGAL DEPARTMENT Alto H V City of Iowa City MEMORANDUM Date: February 5, 1988 To: City Council From: City Manager Re: Metcalf & Eddy Over the last few months I have provided you with copies of correspondence directed to Metcalf & Eddy concerning their unsatisfactory performance as well as identifying issues that we believe demonstrate they have defaulted on their contract with the City. On Monday afternoon, February 1, I received a telephone call from Robert Maxman, Regional vice -President of Metcalf & Eddy. He had just received my January 29 letter, which advised that we believed a proposed contract amendment by Metcalf & Eddy was totally unacceptable. In my letter of January 29, I included a draft of a contract amendment which we believed would be acceptable. After a lengthy discussion, the position of Metcalf & Eddy was that any further work would require the City to renew its payments under a schedule proposed by Metcalf & Eddy. As you will recall, further payments to Metcalf & Eddy were suspended pending the negotiation concerning their contract perform- ance and possibly a contract amendment. Metcalf & Eddy, through Mr. Maxman, acknowledged that they would accept responsibility to redesign the project and in fact would have to pay approximately $500,000 "out of their own pocket" to satisfy the necessary re -design. I advised that further payments would not be forthcoming and I would not recommend payment of any additional monies until we had seen the final work product. You may recall that an earlier proposal by Metcalf & Eddy suggested postponement of payments by providing for some type of escrow. Our counter proposal would provide payment upon bid award. I advised Mr. Maxman that I consid- ered their current proposal a significant reversal of earlier positions and that it appeared we were getting nowhere in attempting to establish a new contractual relationship. While he continued to pursue their desire to renew our faith in their work, I advised that little had been done to show any such desire. 2L 2 I reminded Mr. Maxman that one of the primary motivating influences that led to their selection, although I was not on staff at the time, was the fact that the City was impressed by Metcalf & Eddy's ability to provide overall program management and relieve the City of that responsibility. Program management, that is, their responsibility to coordinate all the elements of the project (design, administration, etc.) is where I believe they have failed most significantly. The proposed contract submitted by Metcalf & Eddy failed to satisfactorily address the program management issue. As I indicated to him, we have found that the City staff was spending more and more time having our engineers and staff supervise their engineers and in effect, the concept of program management was not being satisfactorily applied and the City was incurring expenses for management that were the responsibility of Metcalf & Eddy. Mr. Maxman further indi- cated that they must have construction management as a part of any amended agreement. At this time in the conversation I had indicated to him that as well as all the other terms being totally unacceptable the City could not obligate itself to construction management with Metcalf & Eddy, based upon the firm's performance. I indicated that I would not recommend initiating any further compensation let alone obligate the City to a construction management component until we could be assured that the work product of Metcalf & Eddy was significantly improved. It was about this time that I advised Mr. Maxman that discussions were futile and it was my intent to initiate a formal recommendation to the City Council through resolution whereby Metcalf & Eddy would be advised of their contract default and should be terminated. The City Attorney has drafted the appropriate language. In the meantime, I have instructed the Department of Public Works to determine how best we might conclude this project and the Director will be contacting other engineering firms in the next few days to determine how best to conclude the project plan. V W It is certainly likely that this issue will generate significant public attention, and it is my judgment that Metcalf & Eddy has failed to perform and that we should pursue damages and seek to recover a portion of the 4 3 fees paid to date. While certain elements of the design are satisfactory and will not require major redesign, other elements are totally unsatis- factory and may require a great deal of additional engineering work. At the very least I would assume our termination and their contract de- fault would be based upon the following: 1. Metcalf & Eddy was retained under contract as a professional engineer- ing firm to provide specific services for our sanitary sewer system which includes design, program management, and construction manage- ment. The initial project estimates, and the two plant concept, were all recommended by Metcalf & Eddy, and they were selected accordingly based upon a project budget of approximately $34 million. Estimates of the actual design that Metcalf & Eddy has prepared indicate that the project would cost approximately $48 million. For example, the north plant improvements had been originally estimated by Metcalf & Eddy to be $6.4 million. Estimates have grown to over $16 million. 2. Metcalf & Eddy failed to provide many of the design documents and other elements of the projects within the timeframes established by contract. These were direct failures and have caused the delays in certain elements of project planning and in part are attributable to some of the difficulties we are experiencing with the DNR. 3. Metcalf & Eddy was selected based upon their professional and techni- cal reputation. Our financing program and bond sale schedule as well as a subsequent rate structure was based upon their recommendations and project design. Their responsibility under program management included satisfying State ONR requirements and other related State and Federal regulations. They have failed to do so. 4. Metcalf & Eddy has proposed that certain elements of the project could be reduced and thereby provide sufficient funds to finance the two plant construction. One element was a reduction of the quality of the neighborhood sewer program as planned and they were advised that this would be totally unacceptable. ME, 4 As I indicated earlier in this memorandum, payments were suspended at which time Metcalf & Eddy also suspended any further work on the project. I suspect at that time they felt we would reach some type of an agreement. I have reminded Maxman that their earlier proposal to receive additional compensation to correct design errors did not demonstrate their sincerity to conclude some new agreement. The bottom line remains that the City developed a financing plan around a proposed sewer construction program prepared and recommended by Metcalf & Eddy, the City accepted the two plant concept with a specified budget, provided financing according to those recommendations, and now Metcalf & Eddy has failed to deliver. We have spent, I believe, an inordinate amount of time attempting to salvage this relationship. Based upon the information we have to date, they appear to be incapable of satisfactory performance. We are also aware that Metcalf & Eddy has a number of con- tracts with local area engineering firms and they have experienced diffi- culties, primarily a failure by Metcalf & Eddy to provide payment for work performed. On February 4, Mr. Maxman came to my office with a further proposal, as well as indicating that Metcalf & Eddy would pursue legal means if we were to terminate. The new proposal was also unacceptable. Based upon the above, it appears that we have no alternative but to termi- nate their services. SJA/sp W M RESOLUTION NO. RESOLUTION DECLARING DEFAULT BY METCALF AND EDDY, INC. IN THE PERFORMANCE OF ITS CONTRACT WITH THE CITY FOR THE PROVISION OF DESIGN AND PROJECT MANAGEMENT SERVICES IN CONNECTION WITH THE WASTEWATER TREATMENT SYSTEM IMPROVEMENTS PROJECT, AND DEMANDING THE CURE THEREOF. WHEREAS, the City of Iowa City did on June 17, 1986, enter into a contract with Mei calf & Eddy, Inc. (M&E), entitled "AGREEMENT BETWEEN THE CITY OF IOWA CITY�AND METCALF & EDDY, INC. FOR PROFESSI/irovements GINEERING D PRO- JECT MANAGEMENT SERVICES, pursuant to which contE agreed o design certain improvements to the City's wastewater tion an treatment system, to manage the construction of said imprts, a to provide overall project management services to assure thi rovements were constructed so that the City's wastewater syste eat Federal and State wastewater discharge requirements within thrames specified by Federal and State regulatory agencies (Federal nmental Protection Agency (EPA) and Iowa Department of Natural ResouDNR)) as set forth in the Master Project Schedule, Section 3 of theyt; and WHEREAS, M&E failed to prf� as required b the contract in a number of mparticulars, including bu t no�limited to „t a following: (1) M&E proceeded to the desi�Q out having obtained the required ppr Development Report, including/ timeframe for completion (Sectio (2) (3) the phase of oval by Owner the initial ps 2.2.3, 2.3 tract); \ M&E proceeded to design// certain 61ements having prepared and submitted, and vNthout approval of the Design'Outline Document , and obtained Owner's' approval of the Pr cost of which elements as designed were mates therefore set forth in the initi 2.3.1) through 2.3.6 of the contract); the project without of the Basic Project project budget and and 2.3.1 of the con - of the project without having obtained Owner's and without having prepared ject Budget, the estimated ar in excess of the esti- project budget (Sections M&E failed to, submit required design documents for certain elements of the project within the timeframes set therefore in the Master Project Schedule; and \ (4) M&E failed to finalize the form of construction contract to be util- ized /in bidding the construction of project improvements (Section 2.4.8); and WHEREAS, due to said non-performance, the City suspended payment to M&E in Augpst of 1987 for amounts billed to the City for services rendered; and WHEREAS, M&E has suspended its performance of the remainder of the con- tract; and 11 2 WHEREAS, due to M&E's failure to perform as indicated above, the City has been and will be prevented from k (a) obtaining required IDNR approval of various design elements of the project; (b) obtaining bids and awarding contracts for construction of various elements of the project, and (c) completing construction and elements of the project, within the ti, rames originally into the iniEia aster Project mandated by the IDN ursuant to dated August 11, 1987; and ing operation of various ated by the IDNR and incorporated edule, or within the timeframes Administrative Order No. 87 -WW -52 WHEREAS, the City Manager an h)s' staff have engaged in extensive discus- sions and negotiations with M in an attempt to bring M&E's performance into closer conformance with , o�tract requirements; and WHEREAS, a contract Addendum was'prepared and presented to M&E, by which the City hoped to obta�M&E's cur of its failure to perform as required by the contract; and WHEREAS, M&E has declined to execute t t Addendum. NOW, THEREFORE, BE,/AND IT IS HEREBY RES LVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, that default 1 hereby declared in Metcalf & Eddy's performance of its contractual obli ations for the reasons stated in the preamble hereto. AND, BE IT FURTHER RESOLVED that this City Cod cil demands that Metcalf & Eddy proceed/to cure said default by imnediat6ly executing the Addendum attached hereto and made a part hereof, thereby,,,committing itself to a course of ,action which will bring it into closer,, conformance with its performance obligations under the original contract. /i Y N 3 It was moved by and seconded by the Resolution be adopted, an upon roll call there were: AYES: NAYS: ABSENT: Passed and approved this ATTEST: AMBRISCO COURTNEY DICKSON _ HOROWITZ 'CARSON MCDONALD / STRAIT day of / . 1988. I as to Form vte_ EPARTMEN