2. CDBG/HOME Grant Management PlanC.D.B.G. AND H.O.M.E• MANAGEMENT PLAN
FOR
THE CITY OF KALISPELL
FIRST TIME HOME BUYER PROTECT
INTRODUCTION
The City of Kalispell and the Department of Commerce have entered
into a contract to provide forty-four (44)units of low and very
low income home ownership opportunities for Kalispell area
residents by utilizing Community Development Block Grant Program
(CDBG) and the Home Investment Partnerships Program (HOME) grant
dollars. It is a requirement of the contract that the Kalispell
City Council adopt a "Management Plan" which identifies how the
City will administer its fiscal and fiduciary responsibility
while assuring compliance with state and federal requirements,
and ensure an effective and timely start-up and completion of
project activities.
I. ADMINISTRATIVE STRUCTURE
The project outlined above will be administered by the City of
Kalispell in accordance with all applicable rules and regulations
as promulgated by the National Affordable Housing Act of 199n,
which have not been cited herein, and any other applicable
federal laws and regulations. In addition, the project will
comply with all requirements established by the Department of
Commerce and applicable State laws, regulations and admini-
strative procedures.
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The City of Kalispell, Montana, is a municipality incorporated as
a City Manager/City Council form of government. As such, the
City Council establishes policy and direction which in turn is
implemented by an appointed City Manager who has overall admini-
strative and supervisory responsibility and is the City's Chief
Executive Officer. This MANAGEMENT PLAN, will become a policy
document to guide the City Manager and persons delegated to
administer the City's FY-94 Community Development Block Grant
(CDBG) and Home Investment Partnership Program's (HOME) housing
project. At this time, the following persons are designated to
be responsible for program implementation.
Mr. Bruce Williams, City Manager, has overall responsibility for
all official contacts with the Montana Department of Commerce
(DOC). The City Manager has authority and responsibility for the
management of project activities and the expenditure of CDBG/HOME
funds. Mr. Williams will provide direct supervision of the two
Department Heads listed below. Mr. Williams may be contacted at:
Telephone:(406)758-7701,FAX:(406)758-7758.
Mrs. Amy Robertson, Finance Director, is the City's Chief
Financial Officer and responsible for the management and
accounting for the CDBG/HOME funds and any other funds involved
in the financing of the project. Mrs. Robertson may be contacted
at: Telephone:(406)758-7755, FAX:(406)758-7758.
Mr. Lawrence Gallagher, Director of the City's Planning,
Economic, and Community Development Department (PECDD), has
overall responsibility for all of the activities of the PECDD and
supervisory responsibility over the staff listed below who will
be assigned specific project management tasks. Also,
Mr. Gallagher will review and sign all claims and fund drawdown
requests prepared by the Project Manager. Mr. Gallagher may be
reached at: Telephone:(406)758-7741, FAX:(406)758-7739.
Ms. Susan Moyer, Housing Division Manager for the Planning,
Economic, and Community Development Department, is the designated
Project Manager. She is responsible for overall project
management and will ensure compliance with all applicable Federal
and State requirements for the CDBG/HOME housing project. The
designated Project Manager will serve as the City's liaison with
DOC for the project and as the Labor Standards Officer.
Ms. Moyer may be reached at: Telephone:(406)758-7743,
FAX:(406)758-7739.
Mr. Ross Plambeck, Redevelopment Manager for the Planning,
Economic and Community Development Department, serves as the
Environmental Certifying Officer and as the State Historic
Preservation Office Liaison. Mr Plambeck may be reached at:
Telephone:(406)758-7742, FAX:(406)758-7739.
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Ms. Carol Grigg, a Clerk Typist with the Planning, Economic, and
Community Development Department, will become the Project
Coordinator, assisting the Project Manager with the application
and verification process and loan coordination with the
participating financial institutions. The Project Coordinator is
responsible for overall files, tracking of expenditures,
performing liaison duties between the office and the contractors
involved in both the on and off -sight improvement construction as
well as the actual construction of the individual housing units.
Ms Grigg will also assist with preparation of the drawdown
requests and the closeout documentation for all grants involved
in the project. Ms. Grigg may be reached at:
Telephone:(406)758-7744, FAX:(406)758-7739.
II. PROJECT MANAGEMENT
The City Manager has assigned overall management responsibility
to the Director of Planning, Economic, and Community Development,
who has delegated specific project responsibilities as follows:
A. The Project Manager is responsible for:
1. Assuring compliance with applicable acquisition, civil
rights and labor standards requirements. The City has
an Equal Employment Opportunity Plan and a Fair Housing
Ordinance currently in place.
2. Developing both HOME and CDBG contracts with DOC and
assisting the City with all requirements related to
effective project start-up and implementation.
3. Establishing and maintaining complete and accurate
project files and preparing all documentation and
reports incidental to administration of the grant.
4. Conducting the infrastructure contractor selection
process, including the bid advertising, tabulation and
award process for conformance to CDBG/HOME requirements
in cooperation with the architect. The Project Manager
will review the construction contract provisions for
CDBG/HOME compliance and will request DOC clearance of
the lowest and second lowest bidders before a contract
is awarded.
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5. Conducting, in conjunction with the project engineer, a
preconstruction meeting for the infrastructure general
contractor for all applicable subcontractors at which
time they will receive a Prevailing Wage Rate and
Compliance Monitoring packet.
6. Coordination between the engineering firm, the
landscape architect, and the City during construction.
Coordination between the engineering firm and the
architectural firm to facilitate the best building
envelope per lot for the best unit design.
7. Requesting Proposals to select an architect for the
design of the two, three and four bedroom units. Upon
entering into a contract with the architect, the
Project Manager, on behalf of the City, will be
responsible for design selection of the two, three and
four bedroom units. The Project Manager will also work
with the architect on an "as needed" basis for onsite
construction monitoring for each design and builder
involved.
8. Providing project status reports to the City Council at
council meetings and/or workshops. Attend any public
meetings deemed necessary by the City Manager and the
Planning, Economic and Community Development Director
to represent the CDBG/HOME housing project.
9. Preparing all required performance reports and closeout
documents for submittal to DOC for the CDBG and HOME
Grants and to the Federal Home Loan Bank of Seattle,
and assisting the City with the selection of an
independent auditor.
B. The Environmental Certifying Officer/State Historic
Preservation Liaison is responsible for:
1. Preparing the Environmental Review Record (ERR) to
assure full compliance with the National and Montana
Environmental Policy Acts, completion of the statutory
checklist, and any other applicable environmental
requirements. The Environmental Certifying Officer
also is responsible for preparing any legal notices
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required to be published for the ERR process and
conducting any required public hearings or
informational meetings.
2. Securing State Historic Preservation Office clearance
for the housing activity by either district designation
or review of plans.
3. Preparing a Request for Release of Funds (RROF) to DOC.
C. The Project Coordinator will be responsible for:
1. Processing payment requests and preparing drawdown
requests to DOC, including the Request for Payment and
Status of Funds Report and the Project Progress Report.
The invoices and the actual drawdown requests and
reports will be reviewed for accuracy and correctness
of payment and approved by the Project Manager prior to
signature by the Director.
2. Assisting the Project Manager in preparing files,
tracking expenditures, performing liaison duties
between the City and the general contractors.
Additionally, the Project Coordinator will have
responsibility for employee on -site interviews and
payroll verifications during the infrastructure phase
of the construction work to verify actual job
classifications worked and that prevailing wage rates
and applicable fringe benefits are paid to the
construction workers.
3. Assisting the Project Manager in completing all
required performance reports and closeout documents for
submittal to DOC.
II. FINANCIAL MANAGEMENT
A. The Finance Director's responsibilities will be as
follows:
1. Establish the CDBG/HOME bank accounts and transfer
CDBG/HOME funds from those accounts to the City's
treasury for disbursements, based on claims and
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supporting documents approved by the Project Manager,
architect and contractor. Since the City uses an
interest bearing account for its general disbursements,
separate non -interest bearing accounts will be
established for the CDBG and HOME funds. Balances in
those accounts will not exceed $5,000 for a period of
three days.
2. Enter all project transactions into the City's existing
accounting system (BARS) and prepare checks for
approved expenditures.
3. With the assistance of the Project Manager, prepare the
final financial reports for project closeout.
B. The Project Manager will review all proposed expenditures
of the CDBG/HOME funds prior to the Project Coordinator's
preparation of vouchers. All disbursements will be
handled in accordance with the City's established claim
review procedures. The City Council will review all
claims before approving them.
C. All drawdown requests will be signed by two of the
following individuals: Bruce Williams, City Manager; Amy
Robertson, Finance Director; and Lawrence Gallagher,
Director of Planning, Economic and Community Development.
No expenditures will be made without the approval of the
City Council at a regular meeting.
D. Financial record keeping will be done in conformance with
the recommendations of the DOC/Local Government Services
Bureau. The original financial documents (claims with
attached supporting material) will be retained in the
Planning, Economic and Community Development Department's
office.
E. The Project Manager will be responsible for ensuring the
matching "Affordable Housing Program" (AHP) grant dollars
from the Federal Home Loan Bank of Seattle are expended
as pledged in "match" dollars for the HOME grant. The
AHP grant of $198,000 has been awarded to the Glacier
Affordable Housing Foundation (GAHF) for down payment and
closing cost assistance in the amount of $4,500 per unit.
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F. The Project Manager will work with the participating
financial institutions in identifying the respective
Montana Board of Housing (MBOH) permanent financing
committed to the respective unit sizes. The MBOH
permanent financing was committed to this project at a 6-
7/80-o interest rate on a fixed thirty (30) year term.
G. Daily time logs will be maintained by the Project Manager
and all other City staff involved to document time worked
on the CDBG/HOME Ownership Project.
IV. MARKETING_ STRATEGY
Marketing will be handled by the PECDD staff and loan officers
from participating financial institutions. The City of Kalispell
and the financial institutions will make every effort to notify
the general public of the program, its purpose, and applicant
eligibility criteria. This will be done through the following
methods:
A. Develop and distribute monthly public information press
releases to area media.
B. The PECDD staff, with CDBG/HOME grant funds, will
purchase advertising space from area print publications.
C. An information packet for distribution to potential
applicants will be prepared by the PECDD staff which will
contain:
1. Program overview and qualifications;
2. Income verification requirements; and
3. Step-by-step information on how to apply for the
program.
D. The PECDD staff will solicit target area employers to
serve as a resource in the notification of their
employees who may be qualified and eligible for the
program. This will be done by:
1. Developing a payroll check insert flyer with
information on the program for distribution to
employees. This insert would include:
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a. Program overview and qualifications and names of
individuals to contact for further information;
b. Income verification instructions;
C. Procedural information on how to proceed with the
program; and
d. Application overview - what the minimum
requirements are.
2. Contacting employers to solicit opportunities to
present information on the program at employee staff
gatherings by the following means:
a. Individual presentations by PECDD staff;
b. Posters describing the program which will be
posted in employee lounges.
IV. PROGRAM ELIGIBILITY
In order to qualify for the program, applicants must meet the
following minimum requirements:
A. Be parents, a single parent, or legal guardian of a minor
child or children or of a disabled, dependent adult who
have not owned a home previously; or
B. A single parent or legal guardian who is legally
separated from a spouse and who has custody or joint
custody of any minor children or disabled, dependent
adult; or
C. Parents, a single parent, or legal guardian who owns or
has owned, as a principal residence during the three-year
period prior to the purchase of this home, a dwelling
unit which does not compy with state or locally adopted
building codes or which cannot be brought into compliance
with such codes for less than the cost of constructing a
safe, decent and sanitary dwelling which will comply with
all applicable codes.
D. Be able to pay 30 of the purchase price as a down payment
or a minimum of la of the purchase price and achieve the
remaining 2% through sweat equity. Sweat equity is
herein described as the ability to perform necessary
Ef
tasks required to qualify the structure for bank
financing.
E. Be able to meet lender minimum qualifications for a
mortgage commit ent.
F. Own no othe i erty.
G. Owe no outstanding taxes or service fees to the City of
Kalispell.
H. Will occupy the residence on a twelve-month a year basis.
I. Have a family size which is suitable to the size of the
structure as described in the Un-lve sal Building Code.
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J. Have a household income from 50°6 to O% of median income
for Flathead County as applicable to the size of the
family. Preference is given to households with incomes
ranging from 50% to 69% of median income. The following
tables identify the number of home ownership
opportunities targeted for the various income ranges:
# of Units Targeted
By Income Ranges
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50 to 59% of Median Income
37
60 to 69k of Median Income
15
70 to 79t of Median Income
Family Size
Income Ranges
(50% to 80% of Median)
2
$13,150
to
$21,050
3
$14,800
to
$23,700
4
$16,450
to
$26,300
5
$27,750
to
$28,400
6
$19,100
to
$30,550
7
$20,400
to
$32,650
8+
$20,400
to
$32,650
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Program Income will be generated if and when a home(s) sells
again. All CDBG/HOME grant funding used as subsidy to buydown
the purchase price or to go toward stick built construction
costs, per the terms of the grants, will be considered as Program
Income and must remain available to subsequent low to moderate
income home buyers for future units. Thus, it is the
responsibility of the City, or another entity authorized by the
City, to ensure the original subsidy, plus a prorated percentage
of whatever value the home has gained, is accounted for and
continues to be used in a manner consistent with the original
intent of the grants. The Program Income dollars are proposed to
be expended as follows:
CDBG Program Income funds created from the sale of lots in South
Woodland Court will be utilized to assist in the payment of a
second site as well as finance infrastructure development of the
second site.
HOME Program Income funds created from the direct subsidy of the
cost of the home and/or mortgage buy down will be protected
through a second mortgage on each individual home. The second
mortgage loan amount, together with a proportionate share of the
appreciated equity, would be due and payable at the time of
resale. Debts or liens against the property which occur after
the HOME grant subsidies are provided will be subordinate to the
HOME assistance, and the net proceeds from the sale of the
property will be used to repay the HOME assistance first.
HOME grant funding requires new construction units to
either remain affordable for a minimum twenty year
period or for the life of the mortgage - whichever is
more restrictive or to guarantee that sufficient monies
will be available upon resale to assist another LMI
buyer with the purchase of a different structure.
Glacier Affordable Housing Foundation (GAHF) has been registered
with the State of Montana as a corporation whose sole purpose is
providing affordable housing to low -to -moderate income
individuals on an on -going basis and "''not -for -profit status"
has been applied for with the Internal Revenue Service. GAHF was
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founded with a $610,000 "Affordable Housing Program" grant from
the Federal Home Loan Bank of Seattle and is seeking further
federal and private grant dollars to recycle down payment and
closing cost assistance for low -to -moderate income individuals
within the various counties Glacier BankCorp serves. Thus, GAHF
is in a position to assume the City's responsibility for the
tracking and administering of Program Income on the CDBG/HOME
grants and recycling these funds in the proper manner for years
to come.
If the net proceeds from the resale of a unit assisted with HOME
subsidies is not sufficient to recapture the full HOME
investment, plus enable the homeowner to recover the amount of
the homeowner's down payment, principal payments, and any capital
improvement investments the owner may have made, the Foundation,
on behalf of the City, may allow the HOME subsidy to be reduced.
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