2011 Recipients Workshop

1. 2011 Recipients Workshop The CDBG Program and successful completion

2. Congratulations, You’ve won a Grant – Now What? Topics we’ll discuss today: • The Players and their roles • Minimum Property Standards and Building Codes • Housing Inspections • Work Write-ups, Cost Estimates, Scope of Work • Bidding Procedures • Elements of a Construction Contract. • Oversight of the work September 15, 2011

3. The Players and their roles The Program Director • Develop and administer the program • Supervise a competent and efficient staff • Effectively communicate with elected officials, program participients, and contractors • Address local groups and gatherings • Ensure all reports, documents, and paperwork are submitted on time • May or may not be an employee of the local governing body September 15, 2011

4. The Players and their roles The Financial Advisor • Must be experienced and knowledgeable of mortgage services and financial counseling resources • Communicate with all levels of the community • Real Estate experience is an advantage September 15, 2011

5. The Players and their roles The Rehabilitation Advisor • Construction and construction costing experience is a MUST • Proficient in inspection procedures • Develop clear and coherent work write-ups, specifications, and cost estimates. • Knowledgeable of Lead Based Paint regulations • Communicate with all levels of the community – especially contractors • Possess a pleasant and outgoing personality – or at least be able to give that impression for a couple of hours at a time September 15, 2011

6. The Players and their roles The Administrative Assistant • The heart of the program: interview and hire accordingly • He/she must be cognizant of the importance of accurate and timely paperwork submission • Possess a true pleasant and patient attitude – and the ability to maintain if for longer than two hours at a time • Must be able to establish and maintain a quality filing system • Be computer and software proficient September 15, 2011

7. The Players and their roles The Appraiser • The appraiser is not usually a fulltime employee but rather a competent resource • He/she should be well experienced and well respected in the local community • He/she should be certified by the Ga. Real Estate Appraisers Board September 15, 2011

8. The Players and their roles • The Attorney • Again the attorney is not usually a fulltime employee but rather a competent resource • He/she should be familiar, experienced and competent in Real Estate, Wills and Trusts, title searches, and Contract laws • He/she must be an active member of the Ga. Bar and in good standing • Be fully aware of your program goals and objectives • Must be acutely aware of deadlines and the need for timely document submittal September 15, 2011

9. The Players and their roles • The General Contractor • This person can help your program receive national recognition or put you in jail. They can be the best or the worst part of your program • He/she should be a respected member of the community with a good reputation • Construction experience and especially with rehab projects is essential • Due diligence is highly recommended MORE ON THIS PERSON LATER. September 15, 2011

10. The Players and their roles • Is there any one most important person within your staff? September 15, 2011

11. Minimum Property Standards and Building Codes • Georgia Building Codes • The State of Georgia currently follows the International Residential Code for One and Two Family Dwellings, 2006 edition with Georgia Amendments • This is sometimes referred to as 2006 CABO One and Two Family Dwelling Code September 15, 2011

12. Minimum Property Standards and Building Codes Minimum Property Standards (MPS) –Defined. A set of standards, created or adopted by the local governing body, that sets forth minimal conditions specific to property, structures, or environs within the community and describe what is “descent, safe, and sanitary” September 15, 2011

13. Minimum Property Standards and Building Codes Minimum Property Standards may also: • function as a base line of materials used, material properties, structural design, etc. • may exceed Georgia building codes but may not hold a lower standard. September 15, 2011

14. Minimum Property Standards and Building Codes Minimum Property Standards may define: • What materials may and/or may not be used • The properties of the material (e.g. grade of lumber, PSI rating of concrete, durability of roof shingles, etc.) • How the materials will be installed, used, or applied • May be associated with certain zoning regulations September 15, 2011

15. Minimum Property Standards and Building Codes Minimum Property Standards • Sample MPS may be obtained from a variety of sources including some off-the-shelf software programs • You may develop you own MPS, however, make sure that they do not compromise other related standards or Georgia codes September 15, 2011

16. Minimum Property Standards and Building Codes Minimum Property Standards In the absence of a local MPS, you may opt to adopt one of the following model codes: • Uniform Building Code (ICBO) • National Building Code (BOCA) • Standard Southern Building Code (SBCCI) • FHA Minimum Property Standards September 15, 2011

17. Housing Inspections Preliminary work • Have a working knowledge of Ga. Building Codes and local MPS • Do a walk around to get the feeling of the structure • Take lots of photographs of interior rooms – with notations • Take photographs of all four exterior elevations • Depending upon extent of work required, a floor plan is a good idea. Take accurate interior and exterior measurements • If you have the capability, do an CAD drawing of the structure, or do a good quality scaled pencil drawing September 15, 2011

18. Housing Inspections Preliminary work (continued) • Make copious notes, memory joggers, dimensions, and material attributes (e.g. color. material, texture, etc.). You’ll need them later – guaranteed! • Prepare a tool box of tools you’ll likely need: flashlight, good screwdriver set, pliers, pocket knife, probing tools, measuring tape, and writing pad • Treat the owner with utmost respect. Respect the furnishings and décor • Don’t touch anything you don’t intend to inspect September 15, 2011

19. Housing Inspections Lead Based Paint (LPB) • Consult a certified Lead Based Paint Assessor prior to any rehab if: • The structure was built before 1978 • If you suspect the presence of LPB (e.g. antique doors in newer homes) • If the age of the home cannot be precisely determined and children under 6 or pregnant/fecund females are in residence • If the age of the home cannot be precisely determined and there is an reasonable expectation of such residents in the future September 15, 2011

20. Housing Inspections Who performs a general home inspection? • Your Rehab Advisor • City or county building inspector • Experienced builder or general contractor – Can not bid on work! • Pro Bono engineer or architect • A Certified Home Inspector September 15, 2011

21. Housing Inspections What is inspected? • Basically … everything • Health and safety issues should take first priority • ADA issues • Code and MPS violations • Structural issues • Incipient problems • Site and topographical issues • General Property Improvements (GPI) under certain conditions September 15, 2011

22. Work Write–ups, Cost Estimates, and Scopes of Work What is a Work Write-up? • A Work Write-up (WWU) is a document that provides the home owner and Program Director a complete description of what work will be required – compare this to a “Scope of Work” • A WWU should be created by your Rehab Advisor or a qualified inspector September 15, 2011

23. Work Write –ups, Cost Estimates, and Scopes of Work A WWU should accurately describe: • Each task to be done • Location of each task (e.g. inside closet door, bedroom #2, toilet in bathroom #1) • An estimate of area involved (e.g. square yards, linear feet, squares, etc.) • A WWU should be typed in a good, clear, easy to understand format • List and number each item separately September 15, 2011

24. Work Write –ups, Cost Estimates, and Scopes of Work Cost Estimates • A Cost Estimate is a document that tells the Rehab Advisor the approximate cost of each item on each project • A good deal of experience is required to develop a good cost estimate • Don’t let a potential contractor do the Cost Estimate DUH…. but it happens! • Cost Estimates should never be shown to anyone (except staff) even after job completion September 15, 2011

25. Work Write –ups, Cost Estimates, and Scopes of Work Scope of Work – the Contractor’s list of tasks to be completed • The Scope of Work is basically the same as the Work Write-up and contains the same information without to unit cost. • It’s a good practice to have the home owner sign and date the bottom of each page of the Scope of Work. September 15, 2011

26. Specifications A Specification describes precisely the attributes of any particular component of a task. (Example: a kitchen countertop) • Specific material: Formica, cultured marble, Corian • Color • Texture • Style: Drop-in sink, formed sink • Precise Dimensions • Other relevant information September 15, 2011

27. Specifications • The home owner should have input in the Specification – use caution here! • Specific brand names and model numbers • It’s advisable to have the home owner sign or initial any sample: • Color chip • Carpet or vinyl flooring • Counter top sample • Roof shingles Lack of attribute specifications is the major cause of contractual disputes September 15, 2011

28. Bidding and Procurement Finding Contractors • Advertise your program in local papers • Post ads at locations frequented by contractors Home Depot, Lowes, etc. Building materials supply houses City or county building permits offices Other local communities using grant monies • Create a list of pre-screened contractors and share with other agencies • Publish “Invitation to Bid” in news papers September 15, 2011

29. Bidding and Procurement Contractors: Inspect this person as if you were St. Peter at the Pearly Gates! • Interview potential contractors • Review data on Principle owner • Review financial references • Ensure proof of insurance • Obtain Tax ID number • Research other business names Principle owner may have owned • HUD debarment list…. Mandatory • Obtain past customer list – select some and call MUST HAVE CURRENT STATE LICENSE September 15, 2011

30. Bidding and Procurement Bidding Process Two options given to home owner as to which type of bidding process they prefer • “Open, Free, and Competitive” bid process • “Negotiated” bid process Form 20-A, 20-B, or 20-C should be completed and signed depending upon owners choice of “Open, Free, and Competitive” or “Negotiated” option and whether rehab or reconstruction September 15, 2011

31. Bidding and Procurement “Open, Free, and Competitive” Preparea “Bid Package” to include: • A“Contractors Bid Packet” (See Form 6) • Address of property and Owners name • “General Conditions” and “Special Conditions” (See Exhibit “F2a” & “F2b”) • “Bid and Proposal Form” (Exhibit “F2d”) • Complete Scope of Work • Scale drawings (Exhibit “F2f”) • Date, time, and location of bid opening if appropriate • Terms and Conditions of Rehabilitation Assistance • Draw Schedule September 15, 2011

32. Bidding and Procurement “Open, Free, and Competitive” • Bid Package should preferably be picked-up at program office • Log of contractors showing date and time of receipt • Consider on-site meeting to answer questions • Do not alter “Scope of Work” at this point. Changes will handled with a Change Order later • If you have post meeting questions, inform all bidders Seek out as many contractors as possible Ask those choosing not to bid to provide your office a short note on letter head stating “NO BID” on so-and-so contract September 15, 2011

33. Bidding and Procurement “Negotiated” • Home owner may select contractor of their choice so long as contractor meets all program eligibility requirements • Negotiated contractors bid must be within 10% of cost estimate or be negotiated to within that amount OR • Home owner agrees to pay the amount over the 10% limit • Failing to meet these requirements, project must be re-bid September 15, 2011

34. Bidding and Procurement Receiving the Bids: • NEVER OPEN A BID ENVELOPE BEFORE BID OPENING DATE AND TIME! • Upon receiving the bid response, make certain the envelope is sealed • If not sealed, initial across the envelope flap and tape over the initials with clear tape while in view of contractor or other witness • Ensure contractors name, project address, and bid opening date and time are noted on the outside • Write or stamp date and exact time of receipt and sign receivers name • Enter received bid into contractor log September 15, 2011

35. Bidding and Procurement Opening the Bids: • Establish date and time of opening • Invite home owner. Responding contractors or other interested parties should be welcome • Ensure one witnessing staff member is present • Do not award bid at contract opening • You do not have to accept the lowest bid • Be aware of “Low Ball” bids • Home owner should make final decision • Bids in excess of 10% above or below cost estimate should be discarded • Any bid in excess of 20% above cost estimate must have DCA approval prior to contract award September 15, 2011

36. Bidding and Procurement One last thing about bids. Don’t even think about revising cost estimates to match received bids. Contrary to prevailing opinion, none of the DCA staff had a grade point average that began with a decimal! September 15, 2011

37. Awarding the Contract The Contract: • The “Guidelines for Residential Rehabilitation” contains a good section on the elements of a Construction Contract • Exhibits “F1”, “F2a”, and F2b” provide an outline • A “Notice to Commence” or “Notice to Proceed” must be issued prior to starting work (Form 10) • A sample of a “General Contractor Invoice” (Form 11) more frequently called a “Request for Draw” should be included. Expect the contractor to use this format • Include the “Draw Schedule” in the contract • Include a sample of a “Release and Waiver of Claim for Subcontractor or Material Supplier” (Form 11). This is more commonly referred to as a “Mechanics Lien” September 15, 2011

38. Awarding the Contract The Contract: • Federal Contractual Requirements: Contractor should provide certification that he/she will abide by all the regulations and provisions as set forth in: • The Davis/Bacon Act • The Contract Work Hours and Safety Standards Act • The Copeland Anti-Kickback Act • The Health and Safety Act • ; September 15, 2011

39. Contract Oversight • Review work on a regular basis to ensure specifications are met. • Document all site visits and inspections. • Ensure Safety measures have been taken. • NEVER verbally agree to a Change Order. • Change Orders must be signed by all parties • Inspect work prior to approving a Draw Request. • Never vary from the “Scope of Work” without a Change Order. September 15, 2011

40. Grievance and Arbitration • Establish a clearly defined Grievance and Arbitration procedure in your Policies and Procedures Statement. • Include this Statement in the Contract between the home owner and contractor. • 90% of all grievances can be resolved at this level. • IF YOU DON’T HAVE A WELL WRITTEN WORK WRITE-UP: YOU’RE ALREADY IN TROUBLE! September 15, 2011

41. Monitoring for compliance All programs are required to be monitored. • Monitoring are usually scheduled in advance but may be subject to review without notice. • You are responsible for organization and maintenance of all records. • A Contractual obligation between a recipient and a third party (i.e. Consultant) does not absolve the recipient of ultimate accountability for all aspects of the grant. September 15, 2011

42. NEW STUFF There is a revision to the Financial Plan (Exhibit H) that now requires the address of the participant along with the Unit Number and Owner’s Name. The new format is to be found in the Rehab and the Recipients’ Manuals. When applying for a Grant Modification, please use these new forms. September 15, 2011

43. NEW STUFF Grant Modifications – A Grant Modification will be required when seeking: Grant Adjustment Request Modification of Scope Rehabilitation to Reconstruction Addition and/or substitution of a unit Expansion or modification of Target Area September 15, 2011

44. NEW STUFF • And speaking of Grant Modifications. . . • When seeking a Grant Modification, you must now provide a full synopsis of the current status of the entire grant including: • a unit by unit status (complete, in progress, drop out, over income, ineligible, etc.). • if Multi-activity, please provide a current status of other activities. September 15, 2011

45. NEW STUFF • If changing a unit from Rehab to Recon • OR • adding a new Rehab or Recon not previously identified as a target unit, you must: • Submit a “Rehab Feasibility Test Form” • Photographs with narratives • Final Cost Estimates • Seek a “Grant Modification” as noted above September 15, 2011

46. And now for the big Groan Prior to beginning any Housing activity, DCA will now require each grant recipient to submit a final version of their Policies and Procedures Statement to DCA for review and approval. NO DRAWS WILL BE MADE UNTIL APPROVAL IS RECEIVED. September 15, 2011

47. QUESTIONS? Thomas Spinks Sr. Housing Consultant (404) 679-3128 thomas.spinks@dca.ga.gov September 15, 2011