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HomeMy WebLinkAboutAGENDA REPORT 1994 0720 CC REG ITEM 08LTO: CITY OF MOORPARE AGENDA DEPORT The Honorable City Counf l I i FROM: Donald P. Reynolds Jr. 4dminist:rative Services Manager DATE: July 14, 1994 (CC Mtg,. 20/94,! SUBJECT: Consider the Use of CDBG Earthquake Relief Funds The following report recommends the use of $50,000 made available to the City from CDBG, to address urgent health and safety needs related to the January 17, 1994, earthquake. Staff is recommending that the City procure architecture_ and engineering services, and pay for other predevelopment costs associated with the rebuilding of the market at 105 F. High Stref (Mayflower Market). Background On January 24, 1994, the City was made aware of the opportunity to use CDBG funds to address recent earthquake needs. On February 1, 1994, the Council adopted Resolution 94- •1007 stating the City's interest in participating in the use of these funds, and making exceptions to the existing funding distribution formula in the current three year Cooperative Agreement. It was understood that this CDBG resource would be targeted to the greatest need in the County based on an assessment of Earthquake damage.. On February 9, 1994, the City sut)mitted a summary of earthquake damages to the County to assist them in assessing CDBG needs. This letter contained damages to res;identia:L as well as commercial properties, totalling $800,000, of which, it. was estimated $90,100 would be eligible for CDBG assist,lf)ce. Between February 9 and May 18, 1.994, staff learned that if a property owner is eligible for ether primary types of federal assistance, but did not request r.r receive this aide, that CDBG could not be used. This limited r.he City's use of funds to only those property owners which app i_ed for and are using Federal Emergency Management Administrati ri FEMA) and /or Small Business Administration (SBA) assistancE:.. On June 7, 1994, the County held o public hearing to consider the appropriating CDBG funds to address the county -wide earthquake relief needs. Moorpark ranked third on the priority list behind Fillmore and Piru, and received ati appropriation of $50,000 to pay for professional services related L:.o the rehabilitation of 105 E. High Street, and 173 and 169 E. �N ::Lh Street. Recently, staff has confirmed thaTr the property owner at 105 E. High Street had applied for and received an SBA loan for the demolition and rehabilitation of t.hEe Mayflower Market, and that the property owner at 169 and 173 E. H :Th Street. refused SBA assistance for the rehabilitation of this property. This left one eligible project; assistance for 105 E. High Street. Discussion Staff is recommending that the Council approve direct assistance to the property owner at 105 E. High Street, via a City managed professional service contract to design a replacement structure. Attachment "A" is a draft timetable for the project that could be expedited by allowing the City Manager to have the authority to monitor the procurement of professional. services. Additional project costs identified in Attachment "B" may also be considered if funds are available. This recommendation is based upon the considerations outlined below. Special CDBG Considerations Eligibility The earthquake relief funds are to be used for one of the three CDBG national objectives to address a particular urgent health and safety need. Under this criteria, all. considerations related to the objective of serving low and moderate income needs and the objective to serve a slum and t:)lighted neighborhood are not applicable. The County approved the use of CDBG in Moorpark within the eligibility criteria applicable to administration and professional services, not project costs or public service costs. This includes all aspects of City and property owner expenses related to the design and engineering work for a r -ew building. Because the funds were not provided for project related and /or demolition costs, Moorpark's CDBG cannot be used .fr) these purposes. Use of Funds CDBG will reimburse the City for cjxrect staff expenses related to the administrative function, and a_:.L professional services procured within the guidelines provided by HUD. The HUD procurement guidelines require that the City solicit bids and award the design and engineering contract to the mast qualified party. This can be accomplished under the authority f the City Council, or the City Manager. When the request for proposals (RF'P) process has been concluded, before awarding the contract, the City will know if funds will be available for other predevelopment: costs. If the cost estimated in Attachment "B" for design costs is close to $25,000, there should be funds available for permit fees,, plan check and other associated items. If the cost to design the building exceeds $50,000 (less the City's administrative costs), then an ,agreement will have to be executed between the property owns...,., and '_he City for the property owner to provide the balance of fL,nding. Proposed Budget There are no construction costs associated with the proposed budget. At this time, it is staff's understanding that funding of predevelopment work will not invoke Davis Bacon requirements during construction, which will significantly increase the cost of reconstruction. It is also staff's understanding that the City can only be reimbursed for direct costs associated with regular CDBG activities, ($33 to $40 per hour for work related to proposal preparations and federal environmental filings). However, the City can be reimbursed at the full rate of $78 per hour for permit related expenses. The proposed budget outlines permit fees at current actual deposit amounts, plus 5C percent. The 40 hour estimate is split for 20 hours of Community Development time, and 20 hours of Administrative Sery °i +.F => time, Parking for the new design of the market may require that changes to Walnut Street be considered. :f so, then CDBG may be eligible for this expense. Staff will address this detail after the initial design costs are known. Environmental Regulations The County prefers that the City proceed with this project per the typical HUD regulations, which require that the use of funds be contingent upon first receiving HUD approval of the proposed environmental impact. HUD however has waived the contingency requirement for earthquake funds in order to expedite the process, as long as the proper environmental work is eventually completed. In certain cases, this would leave the project open to HUD refusal if the actual environmental impact is significant. This project however, being near previously approved CDBG projects, is not likely to be subject to this rise Assistance Options As with all CDBG, assistance can be provided within the eligibility standards applicable to administrati..ve activities, either in direct services for the property owner, in a grant, or loan. Staff prefers providing a direct service to the contractor, because loans and grants are too cumbersome for the �)enefit received, and CDBG will pay for associated staff costs. When CDBG is loaned, repayment is considered to be "program income" and subject to special requirements Program income has to be used prior to making other CDBG monies available. Prior to issuing loans, provisions for its re -use have to be provided via public hearing. These funds when returnee, would have to be returned by the City to the County for re- programming. The re- programming of the CDBG could be for any eligible grant project, but it is uncertain if the $50,000 would be returned to Moorpark. If the City granted the funds to r -he property owner, contractual assurances would be written in an attempt to delegate all CDBG regulations and City design specifications. This may place the City in a reactionary enforcement position. This position, although used for other simple CDBG public service projects, is not preferred because it places both the local. and federal requirements at risk of being compromised, and adds a layer of complexity that may further postpone the project Direct assistance and administration of the design of this building is the preferred assistance option. Typical City procedures could be delegated by the Council to the City Manager to assist in expediting the project. City Manager approval of the architect for example, as compared to Council approval, would reduce the time required to award the contract by two weeks or more. The responses to the RFP will det sufficient grant funds available permits, and plan check fees. If it would be staff's recommendation an attempt to fund as much .)f expenses as possible. Summary ermine whether or not there are for structural engineering, CPD there are CDBG funds available, to use them for these costs, in the design and predevelopment Although HUD has provided CDBG with the best intentions of addressing an urgent need, use of C'DBG for this purpose is still a lengthy and cumbersome process. Most importantly however, per HUD regulations, it has been identified that no alternatives exist. If Moorpark does not use these funds, then they will be used in other communities. Staff has attempted to summarize the significant aspects of these regulations in this report, as we.:l as its perceived needs of the property owner. The recommendation for direct City involvement is the most simple and expeditious available, if CDBG is going to be made available as "urgently" as p:,ssibl.e to address this need. Recommendation Staff recommends that the Council authorl.ze staff to complete the following tasks: 1), Amend CDBG revenues h adding $50,000 to line item 018.3.360.3'71; 2). Complete the CDBG proposal to the County specifying City use of funds for the redosign of the Mayflower Market per the budget proposed in Attachment "B "; 3) Appropriate $48,400 foi professional service expenses from 018.3.360.371 tc 01,1.4.131.642; 4) Appropriate $800 to 041.4.131.502 and $800 to 01.4.117.502 for staff time related to preparation of required CDBG documents tc initiate the project; 5) Contingent upon County approval of the CDBG proposal, authorize staff to prepare a Request for Proposals to procure professional services for the design of the new building at 105 E. High treet; and, 6) A) Authorize the City Manager to approve the selection of, and execute agreements for, all professional services related tc the new building at 105 E. High Street., not to exceed 55.0j ♦ O; or,,, B) If the cost of design exceeds $559,$8U, authorize the City Manager t -'� execute an agreement with the property owner prc .aiding the City with additional funding if needed --, complete the design. Attachments: A. Draft Project rime Line and Milestones B. Proposed Budq- A: \CDBGQUAK c. ATTACHMF NT "A" CDBG EARTHQUAF f R EL I E1 FUNDS DRAFT MIL,ES'rON S ' I M1 1, I NE A. Council approval of assistance to be provided B. County Approval of CDBG Proposal C. County /CDBG Environmental. Clearan,_( D. RFP for Architectural and Engineer'r Services E. Council Approval of RFP and Solicitation of Professional Servic(. F. Award of Professional Services contrict. (consider agreement with owner for "st above CDBG if necessary) G. Design H. CPD Process /Council Approval of Deg in I. Structural Engineering J. Construction Agreement /Owner init.i ii -s K. Project Completed ** Can occur concurrently with the RF'�' process waiver of environmental clearancE� rEyquirement to the "Urgent Needs" eligibility (,at- legory of * ** These dates are based on Council j nv: lvement . responsibility to the City Managr,r tft tame reduced. 7/20/94 ** 8/3/94 to 9/1/94 9/7 to 9/30/94 * ** 10/18 * ** 10/20 to 11/15/94 12/6/94 12/7/94 to 1/25/95 2/3/95 Summer 1995 and project progress, per a s provided by HUD, applicable CDBG. If the Council delegates this frame could be substantially Attach.me • t "B" Draft Budget for Pre - development Costs associated with Mayflowej Market Reconstruction 1. Staff Costs for Preliminary Work 40 hrs $ 1,600 (direct costs estimated at $40 /hour for CDBG proposal and Environmental` work, procurement of professional. services etc.) 2. Design (Architectural. and Structura, $25,000 3. Civil Engineer for Street Improvemer s $ 6,000 4. Commercial Planned Development Perms $ 7,020 (includes Negative Declaration file Planning Commissior1 approvals) 5. Landscape Review $ 600 6. Condition Compliance $ 1,020 7. Police :Review Fee $ 300 8. School District Fees $ 8:10 9. Arts in Public Places $ 600 10. City -wide Traffic Mitigation $ 500 11. Sheriff's Facility Fee $ 300 12. Lot Line Adjustment $ 1,000 13. Building Permits /Plan Check $ 3,000 (estimate) 14. County Permits $ 4,500 (water, fire department /health and vifety Total.. $52,250 CDBG EARTHQUAKE. - F;L I EF PROGRAM- STAFF REJ`'OP) PEG l S i ONS Economic Development Activity 1) Rebuilding the Market is an - �Iic{ibl"� rehabilitation activity as defined under 24 CFR 570 . ?02. 'Ipecifically, subpart (a) (1)- privately owned buildiris Within the eligibility 570., e2, is 24 CFR 570.203, defining special economic activities hat are necessary or appropriate to carry -out an economic: levelopment project- including 570.203 (a) reconstruction f commercial buildings, and 570 (b)- (b) makes reference to i Astinc, of ineligible activities of which this act:i.vity is rN i!tei 570.901 (B)- an economic I7,,velopment Activity designed to retain permanent jobs, the m,jority of which are available to low income persons based on the nature and extent of their skills .... and the accessiba qty of the jobs to areas where substantial numbers of low ac "rye persons reside The Mayflower laid D[i income positions. Mor nature will be ava rehabilitated. Mayf.lo% which is 57% low income will be met 4 persons which occupied low than four positions of this Bbl rfter the building if W( =r is located Census Block 5, ,silEn *:s so accessibility factor 2) CDBG can only be used for " ike " 'or "like" replacements - staff is still exploring the lefinitLon of like for like- the building standards were murn Les,,; than currently- e.g., parking requirements etc.- so the staff needs further clarification- are building to uniform standards which are greater than when the kju (a.nq was first constructed considered to be like for I Ke vosts? The owner agrees to rebuild under the "Like for ka� " conditions. 3) FEMA will pay for developer f(yes i_ the City waives them Moorpark has not but the Cou ry �r t a The budget will- change. 4) County has informed the City that. ll NEPA clearances will have to be obtained prior to - oliciting bids. Therefore, the milestones provided in attachirent "B" will be amended, pushing the RFP process into Octnl,c [,-;d design completion into December.