8. CDBG/HOME Grant Management Planrm-1 r
O
THE CITY OF KALISPELL
FIRST TIME HOME BUYER PROJECT]
INTRODUCTION
The City of Kalispell and the Department of Commerce have entered into a contract to provide
forty-four (44) units of home ownership opportunities for low and very low income Kalispell
area residents by utilizing Community Development Block Grant Program (CDBG) and Home
Investment Partnerships Program (HOME) grant dollars. The contract requires that the Kalispell
City Council adopt a "Management Plan" identifying how the City will administer its fiscal and
fiduciary responsibilities, comply with all state and federal requirements, and ensure an effective
and timely start-up and completion of the project.
I. ADM[iNISTRATIVE 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 H-ollsing Act of
1990which have not been cited herein, and any other applicable federal laws and regulations.
- Additionally, the project will comply with all requirements established by the Department of
Commerce and applicable state laws, regulations, and administrative procedures.
THE MANAGEMENT TEAM
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 administrative 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
Partnerships 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 the authority and
responsibility for 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.
November 2, 1995
Mrs. Amy Robertson, Finance Director, is the City's Chief Financial Officer and is responsible
for management and accounting of the CDBG/HOME funds and any other project financing.
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 direct supervisory responsibility over the staff listed below who will be assigned
specific project management tasks. Also, Mr. Gallagher will review and sign all financial
claims and 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 PECDD, is the designated Project
Manager and is responsible for overall project management to 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 PECDD 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.
Ms. Carol Grigg, PECDD Clerk, will become 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 project files, tracking of
expenditures, performing liaison duties between PECDD and the contractors involved in both on
and off -site improvement construction as well as the actual construction of the individual
housing units. Ms. Grigg will also assist with preparation of the financing drawdown requests
and project closeout documentation for all of the grants involved. Ms. Grigg may be reached at:
Telephone: (406) 758-7744, FAX: (406) 758-7739.
Ill. 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:
Assuring compliance with applicable acquisition, civil rights and labor
standards requirements. The City has an Equal Employment Opportunity
Policy and a Fair Housing Ordinance (Ordinance No. 936) currently in
place.
November 2, 1995 2
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
grants.
4. Conducting, in conjunction with the project architect and engineer, the
contractor selection process for off -and -on -site improvements, including
the bid advertising, tabulation and award process to assure conformance
with CDBG/HOME requirements. The Project Manager will review the
construction contract provisions for CDBG/HOME compliance and will
request DOC approval of the lowest and second lowest bidders before a
contract is awarded.
5. Conducting, in conjunction with the project architect and engineer, a
preconstruction meeting with the general contractor and all subcontractors
responsible for the infrastructure construction, at which time they will
receive a Prevailing Wage Rate and Compliance Monitoring packet.
6. Coordination of project development 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 on -site
construction monitoring for each design and builder involved.
8. Providing project status reports to the City Council. Attend any public
meetings deemed necessary by the City Manager and PECDD 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.
November 2, 1995
B. The Environmental Certifying Officer/State Historic Preservation Liaison is
responsible for:
Preparing the Environmental Review Record (ERR) to ensure 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 is
also responsible for preparing any legal notices 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.
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 project files, tracking
expenditures, and 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 both 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.
M. FINANCIAL MANAGEMENT
A. The Finance Director's responsibilities will be as follows:
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 supporting documents approved by the Project Manager, to
the architect or contractor. Since the City uses an interest bearing account
November 2, 1995 4
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.
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, PECDD Director. 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
Finance Director's office and Xerox copies retained in the PECDD 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.
F. The Project Manager will work with 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 fixed annual interest rate of 6-7/8%
for 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.
November 2, 1995
4 1 "INKNIA
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:
Developing a payroll check insert flyer with information on the program
for distribution to employees. This insert would include:
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 will be posted in employee lounges
or other meeting places.
E. The City will prequalify applicants under the criteria set forth in § V A-J. In the
event there are more prequalified applicants than home ownership opportunities
the City will conduct a lottery to prioritize applicants. In the lottery, prequalified
applicants shall be categorized into groups based upon family size. Prequalified
November 2, 1995 6
applicants in each group shall be assigned a number and a drawing held. The
names assigned to the number shall be recorded in the order in which they are
drawn. The City shall forward and refer to lending institutions, in the order
drawn, the prequalified applicants from each group in accordance with the units
available in each category. If an applicant is disqualified by a lending institution,
the City will provide an additional applicant from the established list as a
replacement.
.. �, 1; 1 16
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, and who have/has 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 substantially comply with state or locally adopted
building codes relating to health and/or life safety standards. The determination
of whether a unit is or is not safe, decent, and sanitary will be made by a
consensus of the City's Building Official, the lender's appraiser, and/or a
structural engineer retained to evaluate the specific unit.
D. Be able to pay 3% of the purchase price as a down payment or a minimum of 1%
of the purchase price and achieve the remaining 2% through sweat equity. Sweat
equity is herein described as the ability to perform necessary tasks required to
qualify the structure for bank financing.
E. Be able to meet lender minimum qualifications for a mortgage commitment.
F. Own no other real property.
G. Owe no outstanding taxes or service fees or fines 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
Uniform Building Code.
November 2, 1995 7
J. Have a household income from 50% to 80% 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
12
50 to 59% of Median Income
37
60 to 69% of Median Income
15
70 to 79% 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
$17,750 to $28,400
6
$19,100 to $30,550
7
$20,400 to $32,650
8+
$21,700 to $34,750
K. The lending institutions involved in the CBDG/HOME Program shall determine
the final eligibility and credit worthiness of prequalified individual s referred by
the City under § IV (E).
VI. PROGRAM INCOME
Program Income may be generated if and when real estate developed under this project is resold
or refinanced by the individual buyer. All CDBG/HOME grant funds used as an actual subsidy
to either buy down the purchase price or the real estate purchased or to go toward actual home
construction costs, per the terms of the grants, will be accounted for and identified separately in
each transaction. The total CDBG/HOME grant funds identified in each transaction shall be
prorated as a percentage of the total cost of the real estate purchased and will be considered as
November 2, 1995 8
home buyers participating in future low and very low income housing development projects.
Thus, it is the responsibility of the City, or another entity authorized by the City, to ensure that
the original subsidy, plus any prorated percentage of any actual increase above the original
appraised value of the real estate purchased, is accounted for and will continue 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 purchase of a second site and to finance on and off -site improvements
necessary for the development of the second site.
ROMiE 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 property.
The second mortgage loan amount, together with a prorata share of any actual increase in equity
attributable to an increase the appraised value and/or sale price of the real estate, will be due and
payable at the time of resale or refinancing. Any debt or lien filed against the property after the
HOME grant subsidy is provided will be subordinate to the HOME grant second mortgage, and
any net proceeds from the sale of the real 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 low or very low income 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 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 BanCorp 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 real estate 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
repayment to be reduced.
November 2, 1995 9