Rehabilitation Review Committee

MINUTES OF THE REHAB REVIEW COMMITTEE MEETING September 9, 2009 8:45 AM Members Present: Rodney Bowie, Joe East, Susan Goldman, Kevin Lin, Jim Roberts, and Jim Troeger Others Present: Denise Blake, Wayne Sharkey Chairman Rodney Bowie called the meeting to order at 8:49 AM. Motion was made by Jim Roberts to accept the minutes of the June 10, 2009 meeting. Jim Troeger seconded the motion. The motion carried unanimously. Old Business Halfway/Boarding Houses Wayne Sharkey stated that the topics discussed at the previous meeting had been resolved. No one had anything further to add. New Business Wayne Sharkey updated the committee on the changes in the terms of the Lead Grant. Following the Lead Grant award, HUD notified this office that all projects under the Recovery Act (costing more than $2,000.00) are subject to Davis Bacon wage rates. This caused Community Development to reevaluate the budget, leading to a revision of cost per project, staffing and benchmarks. Wayne said that as a result, Community Development expected a 15-20% increase in construction costs and the original cost of $9,000 per unit was increased to $13,000 per unit; one administrative position was also eliminated. This proposal was submitted to HUD and approved. Jim Troeger inquired as to whom will monitor Davis Bacon wage rates. Wayne stated this will be his (Wayne’s) responsibility to monitor and ensure certified payrolls are submitted. Regarding lead work specifically, Wayne stated that the rates under Davis Bacon are lower than what contractors are typically paying right now. There may be potential problems on the rehab side; since HUD stated that anything co-funded with the Lead Grant is subject to Davis Bacon wage rates as well, resulting in more expensive projects. Wayne went to say that creativity among contractors will play an important role in helping to make this work. This is not an issue for sole proprietors, only their employees. This will be reflected in their bids. Wayne went on to explain the adjustments in benchmarks. Originally, this office expected to complete 90 units over three years. This number has been adjusted to 72 units. At year two, HUD will give this office its 24-month review, which will determine future funding. The program is on schedule to exceed benchmarks at this point. Joe East asked if Community Development is seeing a difference in the level of conditions of projects. Wayne tended to agree, citing higher population and more housing being used. Rodney Bowie added that most projects in the past have been driven by Uncas Health District (UHD), as they keep a list of lead-condemned properties/poisonings, and refers people to Community Development when possible. Wayne Sharkey announced that effective early in 2010, investor owners will be mandated to attend a 7-hour lead awareness class. This training will be offered through Boston Lead. Children are also being mandated to receive blood lead level testing, though we are unsure yet where this will be done. Wayne assumes it will be through the school system, since schools require vaccination verifications for enrolment. Elevated levels would then be reported to UHD, who would in turn cite the property and forward the information to Community Development. Since this is still in its early stages, Wayne will update the committee as he receives more information. At Jennifer Gottlieb’s request, Wayne Sharkey spoke to the committee about the Neighborhood Stabilization Program (NSP). Jennifer has some people in NSP interested in the lead program. In this particular case, it is a non-profit; through the Lead Grant this would be considered an investor owner. Their intention is to buy the property and then transfer it to homeowners who are having difficulties purchasing a home through a bank. According to the lead program guidelines, the lead funding would need to be paid back at the time of transfer/sale. Jennifer would like the committee to consider an amendment to eliminate the non-profit’s payback, and transfer the lien to the new homeowner. Sue Goldman added that the two non-profit agencies that Community Development works with are ECHO, Inc. and NeighborWorks. The reason for this request is due to the fact that one aspect of NSP is for individuals to receive down payment assistance when purchasing a foreclosed home; however, in many cases, an established investor will show up with cash and purchase the property, making it ever more difficult for individuals who are trying to purchase these homes through a bank. If this amendment were to be approved, it would need to be applicable to all non-profits. Currently, if an investor owner utilizes lead funding and makes the property Section 8 eligible, the lead loan is forgiven anyway. Wayne said that Jennifer will speak about this at the next RRC meeting. Joe East indicated that one issue to protect against is the potential for “flipping” properties. Sue Goldman stated that the lien would go on the property for the lead, and there is a lien on the property for NSP that stays on the property for 10 years. Wayne said that if this were to be amended, Corporate Counsel Mike Driscoll would need to formulate something to clearly address these concerns. New Applications All projects listed as RLP/LP were given rehab funds and qualify for lead funds and have met all taxes paid, income requirements and are recommended for approval. Joe East made a motion seconded by Jim Troeger to approve the following applications for the maximum lead/rehab funding as follows: LP 0814 $39,000 (Lead), $30,000 (Rehab) RLP 0815 $13,000 RLP 0811 $13,000 Motion carried unanimously. Joe East made a motion seconded by Jim Troeger to approve the following amended award limits to the following projects: RLP 0812 from $9,000 to $13,000 RLP 0813 from $9,000 to $13,000 Motion carried unanimously. Joe East made a motion seconded by Jim Troeger to deny an application due to applicant exceeding income limits, and to de-obligate $40,000 in rehab funds for RLP 0807 per the owner’s request. Motion carried unanimously. Adjournment Motion made by Rodney Bowie to adjourn. Jim Roberts seconded the motion. The motion carried unanimously. The Rehab Review Committee meeting adjourned at 9:28 a.m.