Montebello City Council
May 14, 2025

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 160

Environmental Assessment (EA) refers to a category of actions which, either individually or cumulatively, have potential for significant effect on the human environment (40 CFR 1508.4). Therefore, the potential environmental impacts on the human environmen t resulting from the proposed activity must be analyzed and evaluated according to NEPA procedures, as well as the other Federal laws and authorities cited at §58.5.

The environmental assessment (EA) is a public record that, upon completion, documents the City's findings and conclusions about environmental effects, and the reasons for its decision concerning those effects, as well as compliance with Federal laws and authorities.

Actions that may be funded by HOME and that fall into the category requiring an Environmental Assessment (EA) would include, but are not limited to:

1. New construction of five or more residential units on a single site;

2. New construction of five or more single family units on scattered sites that are less than 2,000 feet apart;

3. Major rehabilitation or reconstruction of residential units that increases or decreases the unit density more than 20 percent;

4. Expanding the footprint of a single -family unit into the floodplain or wetland area;

5. Conversion of a non-residential structure to create a residential use;

6. Acquisition of land for development of a housing subdivision; and

7. Categorical exclusions with “extraordinary circumstances” -i.e., actions that are unique or without precedent, actions that are substantially similar to those that normally require an Environmental Impact Statement (EIS), actions that are likely to alter ex isting HUD policy or HUD mandates, or action that, due to unusual physical conditions on the site or in the vicinity, have the potential for a significant impact on the environment or in which the environment could have a significant impact on users of the facility.

Content of ERR – Environmental Assessment (EA)

The City will complete a written determination that the project falls within this category.

The EA includes the following information and analysis, according to NEPA regulations (40 CFR 1500-1508):

1. Determination of existing conditions;

2. Identification, analysis, and evaluation of all potential impacts on the human environment (i.e., social, economic and natural resources);

3. Examination and recommendation of feasible ways to eliminate or minimize adverse environmental impacts;

4. Examination of alternatives to the proposed action;

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 161

5. Compliance determination for all other Federal laws and authorities cited in §58.5; And Determination as to a finding of no significant impact (FONSI) or a finding of significant impact (FSI), which requires the execution of an Environmental Impact Statement (EIS).

The City will use the Environmental Assessment form in evidence of compliance with NEPA and the Federal laws and authorities cited in § 58.5.

Upon completion of the environmental assessment, the City will make either a finding of no significant impact (FONSI), or a finding of significant impact (FOSI) determination.

In the event that a FONSI is made, the City must issue two public notices, submit a release of funds request and certification to HUD, and receive a release of funds from HUD before funds are committed or spent.

The ERR must also contain:

1. Supporting documentation used to prepare the review.

2. Copy of public Notice of Intent to Request Release of Funds, if project did not convert to exempt.

3. Copy of the Request for Release of Funds and Certification (HUD form 7015.15); and

4. Copy of the Authority to Use Grant Funds (HUD form 7015.16) issued by the City of Montebello (or HUD.)

In addition, the City must also determine whether the project triggers any of the other requirements at 24 CFR 58.6, which are the Flood Disaster Protection Act; the Coastal Barriers Resources Act; and HUD’s requirement for disclosure of properties located in airport runway clear zones.

6. Environmental Impact Statement (EIS)

It is not typical for a HOME project to trigger the Environmental Impact Statement requirements. If the City believes that a project it is contemplating as a possible HOME project may in fact trigger these requirements, it should consult with HUD immediately before taking any further action.

COMPLIANCE WITH NEPA AND RELATED FEDERAL LAWS AND AUTHORITIES

The following section provides guidance to assist the City in compliance with NEPA and the related Federal laws and authorities cited at § 58.5.

1. Historic Preservation (36 CFR Part 800)

Section 106 of the National Historic Preservation Act requires the City to:

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 162

a. Consider the effects of their undertakings on historic properties; and b. Provide the Advisory Council on Historic Preservation with a reasonable opportunity to comment with regard to such undertakings.

Compliance with Section 106 is achieved by initiating procedures the Advisory Council on Historic Preservation has outlined at 36 CFR Part 800. Section 800.2(a) recognizes the City's certifying officer as having authority to carry out these procedural responsibilities.

The focus of Part 800 is on the City making a determination whether a proposed project will affect buildings, structures, or places that are listed on or are eligible for listing on the National Register of Historic Places (NR). In making this determination, the City must follow a detailed review process in consultation with the State Historic Preservation Officer (SHPO). This process also provides an opportunity for interested persons, agencies, and Indian tribes to be part of the City's decision concerning historic properties that may be affected.

It is important to remember that before approval is given to proceed with HOME-funded projects, the environmental review record must show the Part 800 consultation process was completed.

Basic steps for compliance with the Section 106 Review Process (36 CFR Part 800) include:

1. Determine whether the project is an undertaking, or has no potential to cause effects on historic properties;

2. Define the area of potential effects (APE) for the undertaking;

3. Identify and evaluate historic properties in the APE;

4. Determine the effect of the undertaking;

5. Assess the effects on listed and/or eligible properties; and

6. Resolve any adverse effects.

Compliance Documentation Required – Historic Preservation

The ERR should contain one of these types of documentation:

1. Letter from SHPO that no historic properties will be affected;

2. The City adequately documented its finding of no historic properties affected and SHPO does not object within 30 days;

3. City documents that the project meets stipulations of a Programmatic Agreement executed with the SHPO; or

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 163

4. Memorandum of Agreement has been executed between the City and SHPO regarding mitigations measures that will be implemented to resolve adverse effects.

2. Floodplain Management (Executive Order 11988 and 24 CFR Part 55)

The purpose of Executive Order 11988 is to require the City to consider alternatives to developing projects in floodplains when other alternatives are available that achieve the same objective. This is to avoid risking lives and loss of property that resul ts from occupying a floodplain, and to avoid losing the beneficial values of floodplains. Naturally vegetated floodplains can provide a broad area to spread and slow floodwaters, thereby reducing velocities and flood peaks. Slower floodwaters help maintain water quality because the slowed runoff allows sediments to be deposited. Floodplains are also important for recharging groundwater. Rainwater and surface water infiltrate through the generally porous soil of the floodplain into the groundwater.

The City of Montebello is required to avoid floodplain development whenever there are practicable alternatives to development in the floodplain. According to HUD regulation 24 CFR Part 55, floodplains are those land areas identified on maps published by FEMA as 100-year floodplain (Zones A or V). If the project is a “critical action,” the regulation also applies to areas in the 500-year floodplain (Zone B). Coastal high hazard areas are subject to high velocity waters, such as hurricane wave wash. FEMA maps designate these as Zones V1-30, VE, or V.

Most, if not all, communities in the U.S. have been mapped by FEMA. However, if a community has not been mapped by FEMA, the City must establish whether or not the area is subject to one percent or greater chance of flooding in any given year [Section 6(c) of the Executive Order]. The City must research the best available information to determine whether buildings or structures could be damaged by floodwaters because of their location.

The City may contract to have a special study completed or, use the following sources of information:

1. U.S. Corps of Engineers,

2. Community Flood Administrators;

3. U.S. Geological Survey Maps;

4. U.S.D.A. Natural Resources Conservation Service (formerly Soil Conservation Service); state departments of water resources;

5. county public works; or

6. Local flood control or levee districts.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 164
The City of Montebello must follow and comply with the Basic steps for compliance with floodplain management requirements located at Section 55.20, which identifies the “eight-step” decision making process.

Executive Order 11988:

Step 1 Determine whether the proposed action is located in a 100-year floodplain; Step 2 If the project is in a floodplain, publish notice of the proposal to consider an action in the floodplain (15 calendar day comment period); Step 3 Evaluate practicable alternatives to locating the proposed action in a floodplain (“Practicable” means capable of being done within existing constraints);
Step 4 Identify the potential impacts associated with occupancy and modification of the floodplain;
Step 5 Design or modify the action to minimize adverse impacts and preserve the beneficial values of the floodplain;
Step 6 Reevaluate whether the proposed action is practicable; Step 7 If the RE decides to proceed with the project, it must publish a notice of the decision, addressing why there is “no practicable alternative”, the alternatives that were considered, and the mitigation measures being adopted. (Seven calendar day comment period.); and
Step 8 Implement the proposed action with mitigation measures.

HUD has determined that certain activities are excluded from the 8 -step decision - making process, including:

1. HUD assistance for purchasing,

2. mortgaging or refinancing one-to four family properties, and

3. minor repairs or improvements on one-to four-family properties [§ 55.12].

NOTE: Part 55 is not applicable if FEMA has issued a Letter of Map Revision (LOMR) or Letter of Map Amendment (LOMA) for the subject site in a floodplain.

Compliance Documentation Required – Floodplain Management

The ERR should contain one of these types of documentation:

1. Evidence the proposed action is not within a special flood hazard area mapped by FEMA (i.e., 100-year floodplain or 500-year floodplain for critical actions);

2. Documentation of the decision-making process is not applicable (§ 55.12); or

3. The 8-step decision making process was completed and a decision made that there is no practicable alternative

3. Wetlands Protection (Executive Order 11990)

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 165

The purpose of the Executive Order 11990 (Wetlands Protection, May 24, 1977) is to:

1. Avoid, if possible, any long and short -term adverse impacts associated with destruction or modification of wetlands; and

2. To avoid direct or indirect support of new construction in wetlands whenever there is a practicable alternative.

Compliance Requirements for Wetlands Protection

1. If new construction or conversion of vacant land is being proposed in a designated wetland, the RE should follow the decision-making process in § 55.20 (24 CFR Part 55) and conclude whether there is a practicable alternative to destroying or modifying the wetland.

NOTE: A permit from the U.S. Army Corps of Engineers is required if the wetland is within or adjacent to navigable waters of the U.S. or within the jurisdiction of the Corps.

Compliance Documentation Required – Wetlands Protection

The ERR should contain one of these types of documentation:

1. The proposed action does not include new construction or expanding the footprint of a building;

2. Evidence the new construction will not occur in a designated wetland or expand the footprint of a building into a wetland; or

3. There is no practicable alternative , according to the completed 8 -step decision making process. (U.S. Army Corps of Engineers has issued a permit where they have wetland jurisdiction.)

4. Endangered Species (Endangered Species Act and 50 CFR 402)

Section 7 of the Endangered Species Act requires that, when Federal assistance is used for a project, a determination must be made whether continued existence of Federally- listed endangered or threatened species is likely to be affected, and whether it will result in their Critical Habitats being destroyed or adversely modified. The regulation implementing compliance with the Act is 50 CFR 402, issued by the Departments of Interior (U.S. Fish and Wildlife Service) and Commerce (U.S. National Marine Fisheries).

The regulation also covers species or critical habitat that is proposed for Federal -listing and is likely to be jeopardized by the project.

Compliance Documentation Required – Endangered Species

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 166
The ERR should contain one of these types of documentation:

1. Evidence the habitat will not be altered or species affected.

2. If the proposed action may affect species or their habitat, there is evidence the USFWS or NMFS has reviewed the biological assessment and agrees with the findings of no effect.

3. If the proposed action will likely adversely affect species or their habitat, the USFWS or NMFS has issued either a “no jeopardy” or “jeopardy” biological opinion.

5. Coastal Zone Management Act

If the City chooses to use HOME funds for physical changes to properties or land within or adjacent to the coastal zone, the City must make a determination whether the project is consistent with the state’s approved coastal management program.

Compliance Documentation Required – Coastal Zone Management

1. The ERR should contain a general location map or statement establishing there are no coastal zone management areas in the community or State of California, or use other documentation that may be available.

6. Sole Source Aquifers

Aquifers are underground geological formations that yield a significant amount of water to a well or spring. The regulations at 40 CFR Part 149 requires the City to:

1. Determine whether a project is within a Critical Aquifer Protection Area designated by EPA; and

2. Whether project activities have the potential to contaminate the aquifer. For example, drilling water wells and constructing water treatment and industrial facilities have the potential of contaminating aquifers.

Compliance Documentation Required – Sole Source Aquifers

The ERR should contain one of these types of documentation:

1. Documentation the proposed action is not within the boundaries of an EPA designated SSA;

2. Documentation the action is not a regulated activity within the boundaries of a SSA; or

3. Documentation that EPA has reviewed and commented on the proposed action within a SSA.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 167

7. Wild and Scenic Rivers Act

Entire river systems or portions of rivers may be designated wild, scenic, or recreational and included in the National Wild and Scenic Rivers System (NWSRS) either by Act of Congress, or may be designated by a state or states if the U.S. Secretary of Interior finds it meets the criteria established by the Act.

In order to be in compliance with this Act, the City must:

1. Determine whether any river listed in the NWSRS, or that is designated for inclusion in the NWSRS, would be directly and adversely affected by development activities associated with the project; and

2. If the project is located above or below a listed river, the City must determine whether the project will impact the river management area or could unreasonably diminish the scenic, recreational, and fish and wildlife values present in the area.

Compliance Documentation Required – Wild and Scenic Rivers

The ERR should contain one of these types of documentation:

1. Evidence the proposed action is not within one mile of a designated Wild, Scenic, or Recreational River (http://www.nps.gov/rivers/wildriverslist.html); or

2. Documentation that contact was made with the Federal (or State) agency that has administrative responsibility for management of the river and that the proposed action will not affect river designation.

8. Clean Air Act

The Clean Air Act is a Federal law; however, the states do much of the work to carry out most of the Act. Each state develops state implementation plans (SIP) that contain its objectives and regulations for carrying out the Clean Air Act.

The purpose of an implementation plan is to ensure that ambient concentrations of any of six air pollutants are within the established levels of the National Ambient Air Quality Standards (NAAQS). The six pollutants are:

1. ozone,

2. carbon monoxide,

3. particulate matter,

4. sulfur dioxide,

5. lead, and

6. nitrogen

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 168
Sources for pollutants include transportation vehicles, industrial facilities, and farming operations.

Asbestos removal and abatement is a part of the Clean Air Act. Refer to 40 CFR 61, Subpart M, National Emission Standards for Hazardous Air Pollutants (NESHAP.)

Compliance Documentation Required – Clean Air Act

The ERR should contain one of these types of documentation:

1. A resource expert has determined the proposed action is not of a type that would contribute air pollution;

2. The proposed action is within an area in attainment with the NAAQS for all six pollutants; or

3. The proposed action is within a non- attainment area for one or more of the pollutants but is in conformance with the State Implementation Plan (SIP).

9. Farmland Protection Policy Act (7 CFR Part 658)

The purpose of the Farmland Protection Policy Act is to minimize the effect of Federal programs on the unnecessary and irreversible conversion of farmland to nonagricultural uses. The Act does not apply to lands already in, or committed to, urban developme nt (i.e., 30 structures per 40 acres or water impoundment). However, land that meets the definition of prime or unique farmlands or is determined to be of statewide or local significance (with concurrence by the U.S. Secretary of Agriculture) is subject to the Act.

If the City cannot determine whether or not the land is classified as prime or unique, it should request the USDA Natural Resources Conservation Service (NRCS) to make the determination by submitting Form AD -1006, the Farmland Conversion Impact Rating form. These forms are available at NRCS offices.

Compliance Documentation Required – Farmland Protection

The ERR should contain one of these types of documentation:

1. Evidence the current zoning classification is not for farmland use (i.e., residential use, commercial use, etc.);

2. Information from NRCS that shows the site is not prime or unique farmland; or

3. Evidence from NRCS shows the site is classified prime or unique agricultural land, and the RE completed and submitted form AD- 1006 to NRCS and received its comments.

10. Environmental Justice (Executive Order 12898)

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 169
The Executive Order on Environmental Justice directs each Federal agency, and in the case of Part 58 the RE, to make achieving environmental justice part of its mission by "identifying and addressing as appropriate disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority populations and low -income populations." Presently, there aren’t any regulations for implementing the Executive Order. However, HUD has issued a Strategy Plan for Implementing Environmental Justice, which it uses as guiding principle in deciding whether the project could result in disproportionate high and adverse effects on these populations.

During the environmental review process, health and environmental issues may arise concerning the suitability of the project site for its intended use, particularly its suitability for human habitation. The City should document how the Executive Order was given consideration in its final decision.

Compliance Documentation Required – Environmental Justice

The ERR should contain ALL these types of documentation:

1. The proposed action is compatible with surrounding land uses;

2. The site or surrounding neighborhood does not suffer from adverse environmental conditions;

3. The proposed action would not create a negative environmental impact or aggravate an existing impact.

11. Site Contamination from Hazardous and/or Radioactive Materials [§ 58.5(i)(2)]

Section 58.5(i)(2) states that all properties receiving HUD assistance must be free of hazardous materials, contamination, toxic chemicals and gases, and radioactive substances that “could affect the health and safety of the occupants of conflict with the intended utilization of the property.”

Properties having clear health risks for the occupants or inhabitants should be rejected.

For multifamily housing (5 or more dwelling units) compliance with this policy requires efforts to identify any hazardous substances and radioactive materials that ma y be on site or off site that could harm inhabitants, as well as an evaluation of previous uses of the properties.

Compliance Documentation Required – Site Contamination

The ERR should contain one of these types of documentation:

1. Evidence the site is not contaminated (For multifamily housing projects this includes on-site and off-site contamination and previous uses of the site);

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 170

2. Evidence supporting a determination the hazard will not affect health and safety of the occupants or conflict with the intended use of the site

12. Explosive/Flammable Operations (24 CFR 51, Subpart C)

The purpose of this HUD regulation is to ensure there is an acceptable separation distance between people and buildings from stationary aboveground storage tanks more than 100 gallons in size and that contain materials that are explosive or flammable in nature (e.g., gasoline, fuel oil, kerosene, crude oil, propane). This is to prevent injury to people and damage to property from industrial accidents.

The City must determine if there are hazardous liquids and gases being stored within one mile of the project, and within line-of sight of the project.

The regulation does not apply to rehabilitation of buildings that will not increase residential densities, convert buildings for habitation, or makes vacant buildings habitable (§ 51.201).

Neither does the regulation apply to individual fuel supply for one to four family housing units (Memorandum from Office of Environment and Energy, HUD, October 3, 1992).

Compliance Documentation Required – Stationary Aboveground Storage Tanks

The ERR should contain one of these types of documentation:

1. Document the proposed action does not meet the definition of a “HUD assisted project” (§ 51.201);

2. Field review documentation or aerial photos show no aboveground tanks within one mile;

3. If tanks are within one mile:

4. There’s an effective barrier;

5. There’s an acceptable separation distance for people and buildings;

6. The people and buildings can be protected with mitigation measures.

7. Noise Abatement and Control (24 CFR 51, Subpart B)

13. Noise Abatement and Control (24 CFR 51, Subpart B)

The purpose of this HUD regulation is to encourage suitable separation between noise sensitive lands uses, particularly housing, and major noise sources (i.e., roadways, railroads, and military and civilian airports).

The City must determine whether there are any major roadways with 1,000 feet, railroads within 3,000 feet, and military or civilian airports (regulated by the Federal Aviation Administration) that are within 15 miles of the project.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 171

HUD’s noise standards are based on the Day-Night Average (DNL) Sound Level System- --a system of calculating noise exposure instead of measuring it with instruments. This system is a 24 -hour average sound level (expressed in decibels), with an additional 10 decibels added for nighttime noise. The calculation is based upon projected conditions that are expected at least 10 years beyond the project approval date.

Noise is considered Acceptable when the exterior noise level is 65 DNL or less .

Otherwise, attenuation measures must be incorporated into construction plans ( 66-75 DNL, Normally Unacceptable). If the exterior noise level is above 75 DNL (Unacceptable), the project requires special approval from the certifying officer, or it should be disapproved [24 CFR 51.104(a)(2)].

The City must determine whether the exterior noise level at the project site is within HUD’s standard for acceptability, or whether noise attenuation is required or another site should be selected for the project. Making this determination may require completing a nois e calculation for roadways, railroads, and/or airports according to guidelines provided in The Noise Guidebook [HUD- 953-CPD ( 1)]. This guidebook is issued by and available from HUD online.

Compliance Documentation Required – Noise Abatement and Control

The ERR should contain one of these types of documentation:

1. Documentation the proposed action is not:

2. A noise sensitive land use, according to [§ 51. 101(a)(2)] (i.e., housing);

3. Within 1000 feet of a major roadway, 3,000 feet of a railroad, or 15 miles of a military of FAA-regulated civil airfield.

4. If within those distances, documentation shows there’s an effective noise barrier;

5. If within those distances, documentation shows the noise level is Acceptable (at or below 65 DNL);

6. Documentation shows the noise generated by the noise source(s) is Normally Unacceptable, and noise attenuation requirements are identified and will bring the interior noise level to 45 DNL and/or exterior noise level to 65 DNL.

14. Airport Clear Zones (24 CFR 51, Subpart D)

Clear Zones, Runway Clear Zones, and Accident Potential Zones are designated areas at the end of airport runways where the greatest number of airplane accidents occur (about 75 percent). This HUD regulation prohibits using HUD assistance for:

1. New construction; and

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 172

2. Major or substantial rehabilitation and modernization activities if projects are located within a Clear Zone or Runway Clear Zone.

It also prohibits using HUD assistance for these activities in an Accident Potential Zone, if such activities would:

1. Change the current use of the facility;

2. Significantly increase the density or number of people at the site; or

3. Introduce explosive, flammable, or toxic materials to the area.

However, this prohibition does not apply to the purchase, sale, or rental of existing properties, nor to minor rehabilitation/modernization or emergency assistance activities.

NOTE: (Minor rehabilitation/modernization would mean, for Clear Zones and Runway Clear Zones, it does not significantly prolong the physical or economic life of a building. for Accident Potential Zones, it does not change its use, increase density, or intr oduce explosive, flammable, or toxic materials. See § 51.302.)

Compliance Documentation Required – Airport Clear Zones

The ERR should contain one of these types of documentation:

1. Documentation there are no FAA -regulated airports within 2500 feet and/or Department of Defense airfields within 15,000 feet (about 2.8 miles) of the proposed project;

2. There’s documentation the rule is not applicable to the proposed project (i.e., acquisition of an existing building, “minor” rehabilitation, or emergency action);

3. The project is within the specified distances, but the map of the airport/airfield shows the proposed action is not located within a Runway Clear Zone, Clear Zone, or Accident Potential Zone.

Compliance with NEPA

The focus of NEPA is on addressing potential impacts related to the human environment (i.e., social, economic and natural resources). So, not only must the Environmental Assessment (EA) address compliance with the Federal laws and authorities (§ 58.5) that were previously discussed in this chapter, but the City must also address additional environmental factors.

The City must determine the effects of the proposed project on the character, features and resources of the project area. Determinations of impact should be based on:

1. site observations,

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 173

2. information from relevant documents and reports,

3. special studies, or

4. Correspondence with the appropriate government agencies.

The City of Montebello will visit the project site to assess or determine the presence/absence of the following factors included in the Environmental Assessment Checklist that includes:

1. Unique and natural features;

2. Site suitability, access, and compatibility with the surrounding environment;

3. Soil stability, erosion, and drainage;

4. Nuisances and hazards (manmade or built); and

5. Commercial/retail and transportation.

The City must contact the appropriate local agencies to assess the impact that the project will have on the areas listed in the checklist. Detailed guidance is provided in the HUD publication entitled Environmental Review Guide for Community Development Block Grant Programs under Title I of the Housing and Community Development Act of 1974, as Amended (HUD-CPD-782(2), September 1991).

A summary of some of this guidance is includes:

1. Unique and natural features. To supplement the determination of unique and natural features, contact your state agency that deals with natural resources to determine if any designated Natural Areas or Rare Species Habitats will be affected by the project.

2. Site suitability, access, and compatibility with the surrounding environment.

To supplement the determination of site suitability, accesses, and compatibility with the surrounding environment, contact the local planning agency or board.

3. Soil stability, erosion, and drainage. To supplement the determination of soil stability, erosion and drainage, refer to the Natural Resource Conservation Service (NRCS) County Soil Survey to determine if engineering restraints are indicated. The Soil Survey may be obtained by contacting the lo cal NRCS office.

Provide comments from the site engineer or local development department if engineering restraints are indicated based on the Soil Survey. Where applicable, a review of a geologic map produced by the s tate geological surveys may be required.

4. Water supply/sanitary sewers. To assess water supply/sanitary sewers, contact the local public works department.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 174

5. Solid waste disposal. To assess solid waste disposal, contact the local public works department.

6. School services. To assess school services, contact the local school board.

7. Parks, recreation, and social services. To assess parks, recreation, and social services contact the local planning department, parks and recreation department, and social services department.

8. Emergency health care, fire and police services. To assess emergency health care, fire, and police services contact the local fire department, police department, and emergency management organization.

9. Transportation. To assess transportation, contact the state or city transportation department.

Once determinations have been made, the appropriate impact code must be entered from the list provided in the EA that signifies:

1. No impact anticipated;

2. Potentially beneficial;

3. Potentially adverse;

4. Requires mitigation; and

5. Requires project modification.

The City must note names, dates of contact, telephone numbers and page references as well as any mitigation measures required. Attach additional source documentation to the EA as appropriate.

1. OTHER REQUIREMENTS (§ 58.6)

The following section outlines other Environmental Review requirements.

A. Flood Insurance

Section 202 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4106) requires that Federal funds shall not be provided to an area identified by the Federal Emergency Management Agency (FEMA) as having special flood hazard areas unless:

1. The community is participating in the National Flood Insurance Program, or it has been less than a year since the community was designated as having special hazards; and

2. Flood insurance is obtained.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 175
The City of Montebello is responsible for ensuring that property owners receiving HOME assistance take flood insurance on properties located in a 100 -year floodplain.

Flood insurance must be taken for the life of a loan, or the useful life of an improvement funded by a grant.

B. Coastal Barriers

HUD Assistance may not be used for HOME assisted activities proposed in the Coastal Barrier Resource System. The Act prohibits Federal assistance for development or improvement of barrier islands that are subject to frequent damage by hurricanes and high storm surges.

C. Runway Clear Zone or Clear Zone

1. The City must advise buyers of existing property whether the property is located in a runway clear zone or clear zone.

2. The City must inform the buyer of the implications of such a location, and that there is a possibility that the property may, at a later date, or be acquired by the airport operator.

3. The buyer must sign a statement acknowledging receipt of this information. (A copy of this disclosure statement, Notice to Prospective Buyers of Properties Located in Runway Clear Zones and Clear Zones/Accident Potential Zones, is contained in the EA form.)

2. RELEASE OF FUNDS AND APPROVAL PROCESS

The City of Montebello will adhere to the following steps related to the release of funds and approval process.

Public Notification

The public notification process is an integral part of the environmental review process that allows the public, interested persons, and agencies to voice their opinions about the project’s potential environmental impact and the City's environmental findings.

Public notices are required when the City determines that:

1. a project which is categorically excluded subject to § 58.5 cannot convert to exempt, or

2. when the City prepares an environmental assessment (EA) or environmental impact statement (EIS).

A. Categorical Exclusions That Cannot Convert to Exempt

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 176
The City must issue a Notice of Intent to Request Release of Funds if:

1. the proposed activity triggers compliance with any of the Federal laws and authorities, and

2. There is documentation supporting the finding, Publish or post/mail a Notice of Intent to Request Release of Funds (NOI/RROF), according to §§ 58.45 and

58.70. Public Comment

1. A minimum of 7 calendar days must be allowed for public comment if the notice is published in a newspaper of general circulation in the affected community, or

2. A minimum of 10 calendar days if the notice is posted and/or mailed, according to established citizen participation procedures.

NOTE: If the notice is published, it only needs to appear once in the newspaper and does not have to be published again for each of the 7 days of the comment period.

If posted, the notice must be maintained in place until after the public comment period has expired.

3. The public comment period begins at 12:01 a.m. local time on the day following the publication or posting/mailing date of the notice (§ 58.21).

The City must consider and respond to any comments received, and resolve any outstanding issues before signing and submitting a Request for Release of Funds and Certification to HUD.

4. A copy of the public notice must accompany this request.

5. HUD has 15 calendar days from the date it receives the City's request (or 15 days from the date that it appears in the notice, whichever is later) before it may approve release of funds, (Authority to Use Grant Funds is issued).

Additionally, the City must when publishing or posting/mailing the notice, at minimum distributes a copy of the notice, to:

1. individuals and groups known to be interested in the project/activities,

2. to the local news media,

3. to the appropriate tribal,

4. local, state and Federal agencies, and

5. Regional Office of the Environmental Protection Agency having jurisdiction, and to HUD (§ 58.45).

Environmental Assessments

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 177

Upon completion of the EA, the City will make either:

1. A finding of no significant impact (FONSI), or

2. A finding of significant impact (FOSI) determination.

In the event that a FONSI is made, the City must issue two public notices:

1. Finding of No Significant Impact (FONSI) and

2. Notice of Intent to Request Release of Funds (NOI/RROF).

NOTE: These notices may be published concurrently.

When there is a combined FONSI/NOI-RROF notice:

1. A minimum of 15 calendar days must be allowed for public comment if the notice is published in a newspaper of general circulation in the affected community, or

2. A minimum of 18 calendar days if the notice is posted and/or mailed, according to established citizen participation procedures.

NOTE: If the notice is published, it only needs to appear once in the newspaper and does not have to be published again for each of the 15 days of the comment period. If the notice is posted, it must be maintained in place until after the public comment pe riod has expired.

The public comment period begins at 12:01 a.m. local time on the day following the publication or posting/mailing date of the notice (§ 58.21).

1. The City must consider and respond to any comments received and resolve any outstanding issues before signing and submitting a Request for Release of Funds and Certification to HUD.

2. A copy of the public notice must accompany this request.

3. HUD has 15 calendar days from the date it receives the City's request (or 15 days from the date that appears in the notice, whichever is later) before it may approve release of funds, (Authority to Use Grant Funds is issued.)

In the event that a FOSI is made:

1. The City must initiate an Environmental Impact Statement (EIS) in accordance with Subparts F and G of Part 58.

An EIS has additional public involvement and notification requirements.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 178
Additionally, the City must at minimum when publishing or posting/mailing the notice distribute a copy of the notice, to:

1. Individuals and groups known to be interested in the project/activities, to the local news media,

2. To the appropriate tribal,

3. Local, state, and Federal agencies,

4. To Regional Office of the Environmental Protection Agency having jurisdiction, and to HUD (§ 58.45).

NOTE: All projects involving the rehabilitation of existing buildings or structures must be free of friable asbestos. Testing by a state -certified asbestos testing company or individual for the presence of friable asbestos must be conducted before HOME assistance can be approved.

EXHIBIT 11—SUMMARY OF ENVIRONMENTAL REVIEW ACTION BY ACTIVITY

Activity Action Documentation/Form Notes
Administration Exempt § 58.34
(a)

Complete Certification of
Exemption
Under HOME rules,
funds must be
associated with a
specific project to be
considered a project
cost rather than an
administration cost.

TBRA Cat. Ex. Not
subject to §

58.5 § 58.35 (b)(1)
Complete Certification of
Categorical Exclusion (not
subject
to § 58.5)
Public notification
and HUD approval is
not required.

Homeowner-
Rehabilitation
Cat. Ex. Subject
to § 58.5
§ 58.35 (a)(3)(i)
Complete Certification of
Categorical Exclusion
(subject to 58.5), Statutory
Checklist, and Compliance
Documentation Checklist
(58.6)
If project does not
convert to exempt,
public notification
and HUD approval is
required prior to
committing and
expending funds.

Homeowner-
Reconstruction
Cat. Ex. Subject
to § 58.5
§ 58.35 (a)(4)(ii)
Complete Certification of
Categorical Exclusion
(subject to 58.5), Statutory
Checklist, and Compliance
Documentation Checklist
(58.6)
If project does not
convert to exempt,
public notification
and HUD approval is
required prior to
committing and
expending funds.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 179
Homebuyer
Acquisition existing
unit
Cat. Ex. Subject
to § 58.5
§ 58.35 (a)(5)
Complete Certification of
Categorical Exclusion
(subject to 58.5), Statutory
Checklist, and Compliance
Documentation Checklist
(58.6)
If project does not
convert to exempt,
public notification
and HUD approval is
required prior to
committing and
expending funds.

Homeowner-New
Construction
development (single
family 1-4 units)
Cat. Ex. Subject
to § 58.5
Complete Certification of
Categorical Exclusion
(subject to 58.5), Statutory
Checklist, and Compliance
Documentation Checklist
(58.6)
If project does not
convert to exempt,
public notification
and HUD approval is
required prior to
committing and
expending funds.

New Construction
development (5 or
more single-family
units on scattered
sites:
• The scattered sites
are more than
2,000 feet apart,
and
• No more than 4
units per site
Cat. Ex. Subject
to § 58.5
§ 58.35 (a)(4)(ii)
Complete Certification of
Categorical Exclusion
(subject to 58.5), Statutory
Checklist, and Compliance
Documentation Checklist
(58.6)
If project does not
convert to exempt,
public notification
and HUD approval is
required prior to
committing and
expending funds.

Acquisition,
Rehabilitation and
Resale (single family
1- 4 units)
Cat. Ex. Subject
to § 58.5
Complete Certification of
Categorical Exclusion
(subject to 58.5), Statutory
Checklist, and Compliance
Documentation Checklist
(58.6)
If project does not
convert to exempt,
public notification
and HUD Approval is
required prior to
committing and
expending funds.

Rental Acquisition
existing building
(single family 1-4
units or multifamily)
Categorically
Excluded
Subject to §

58.5 Complete Certification of
Categorical Exclusion
(subject to 58.5), Statutory
Checklist, and Compliance
Documentation Checklist
(58.6)
If project does not
convert to exempt,
public notification
and HUD approval is
required prior to
committing and
expending funds.

Rental Rehabilitation
(multi-family 5 or
more units):
 Unit density will
not change more
Categorically
Excluded
subject to §

58.5 Complete Certification of
Categorical Exclusion
(subject to 58.5), Statutory
Checklist, and Compliance
If project does not
convert to exempt,
public notification
and HUD approval is
required

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 180
than 20% as a
result of rehab;
 Current use will
not change from
residential to
nonresidential;
and/or
 Estimated cost of
rehab is less than
75% of
replacement cost
after rehab
Documentation Checklist
(58.6)
prior to committing
and expending
funds.

Vacant Land
Acquisition for New
Construction (Rental
or Single Family, 5 or
more units on a site)
Environmental
Assessment
Complete Environmental
Assessment (which includes
NEPA and related Federal
laws and authorities at §

58.5, as well as § 58.6
requirements)
Public notification
and HUD approval is
required prior to
committing and
expending funds
New Construction
development (5 or
more single-family
units on scattered
sites):
 The scattered sites
are less than 2,000
feet apart, and/or
 There are more
than 4 units per
site
Environmental
Assessment
Complete Environmental
Assessment (which includes
NEPA and related Federal
laws and authorities at §

58.5, as well as § 58.6
requirements
Public notification
and HUD approval is
required prior to
committing and
expending funds
Homeowner-
Rehabilitation
 Footprint of
building is
increased in a
floodplain or
wetland.

Environmental
Assessment
Complete Environmental
Assessment (which includes
NEPA and related Federal
laws and authorities at §

58.5, as well as § 58.6
requirements)
Public notification
and HUD approval is
required prior to
committing and
expending funds
Rental Rehabilitation
(multi-family 5 or
more units):
 Unit density is
changed more than
20% as a result of
rehab;
Environmental
Assessment
Complete Environmental
Assessment (which includes
NEPA and related Federal
laws and authorities at §

58.5, as well as § 58.6
requirements)
Public notification
and HUD approval is
required prior to
committing and
expending funds

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 181
 Current use will be
changed from
residential to
nonresidential or
vice versa; and/or
 Estimated cost of
rehab is more than
75% of
replacement cost
after rehab

NOTE: Except for administrative costs, combinations of activities above that make up a project must be evaluated in a single environmental review. Whichever of the project activities requires the highest level of review dictates the type of review required for the entire project.

PROCEDURE

1. The City of Montebello City Manager is the designated Certifying Official. The City Manager will sign all appropriate HUD certifications and the like.

2. The City's environmental review process will be completed by the Planning and Community Development Department Director and/or his/her designator.

3. The City will ensure the proper classification, completeness, and accuracy of the environmental review preparation.

4. The HOME Program Consultant or Housing Manager will execute the request of release of funds (RROF), and submitting it to HUD, which issues the environmental clearance, if applicable.

5. By the City's Certifying Official (CO) signing the RROF, he/she is certifying the City:

a. Request of Release of Funds and Certification— has carried out its responsibilities for environmental review, decision -making and action pertaining to the proposed HOME-funded project
b. Has assumed responsibility for and complied with and will continue to comply with, the National Environmental Policy Act of 1969 (NEPA), as amended, and the environmental procedures, permit requirements and statutory obligations of the laws cited in 24 CFR §58.5; and also agrees to comply with the authorities in 24 CFR §58.6 and applicable State and local laws.
c. Has, after considering the type and degree of environmental effects identified by the environmental review completed for the proposed project, found that the proposal did not require the preparation and dissemination

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 182
of an environmental impact statement (EIS). (Note: If it is an EIS is needed, contact the HOME Program immediately for further guidance.)

NOTE: In certain limited instances, a project that is considered Categorically Excluded, and Subject to 24 CFR Part 58.5, may convert to exempt after the Statutory Checklist has been completed. For more information, go to

http://housing.mt.gov/content/HM/docs/HMAdminManual/Chap2/2011/HMChap02Exh2G2 CESTInstruct.doc

d. Has disseminated and/or published in the manner prescribed by 24 CFR §§58.43 and 58.55 a notice to the public in accordance with 24 CFR §58.70 and evidenced by the copy (copies) or evidence of posting and mailing procedure attached to the environmental rev iew package submitted to the HOME Program.
e. Is in compliance with procedures and requirements of 24 CFR Part 58 relating to the dates for all statutory and regulatory time periods for review, comment, or other action.
f. Has, in accordance with 24 CFR §58.71(b), advised the recipient (if different from the responsible entity) of any special environmental conditions that must be adhered to in carrying out the project.
g. As the duly designated certifying official of the responsible entity, the CO is also certifying that:
i. He/she is authorized to and consents to assume the status of Federal official under the National Environmental Policy Act of 1969 and each provision of law designated in the 24 CFR §58.5 list of NEPA -related authorities insofar as the provisions of these laws apply to the HUD responsibilities for environmental review, decision -making, and action that have been assumed by the responsible entity.
ii. He/she is authorized to and accepts on behalf of the recipient personally, the jurisdiction of the Federal courts for the enforcement of all these responsibilities, in his/her capacity as certifying officer of the responsible entity.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 183
CHAPTER 6: ADMINISTRATIVE REQUIREMENTS

PART 1: GENERAL REQUIREMENTS

Eligible Administrative and Planning Costs

The City of Montebello will implement the following general administrative procedures:

1. Charge no more than the allowed maximum of 10 percent of the HOME allocation for reasonable administrative and planning costs including staff costs as well as other administrative costs.

2. Charge no more than the 10 percent cap for certain soft costs incurred that is project - related.

a. If a consultant is used, the consultant fee, if any, must be included in an amount not to exceed ten percent (10 percent) of the requested HOME Program allocation in the proposed development budget.

b. If a consultant is not used the amount must not exceed ten percent (10 percent) of the requested HOME Program allocation as reimbursement of project delivery costs.

c. The HOME Program allocation may not include both a consultant fee and a project delivery cost reimbursement.

3. Utilize ONLY one of the two following options when charging eligible administrative and planning costs that include expenditures for salaries, wages, and related costs of City staff responsible for the HOME Program administration:

Option 1: Include the entire salary, wages, and related costs of each person whose primary responsibility involves program administration assignments.

OR
Option 2: Determine the pro rata share of salary, wages, and related costs of each person whose job includes any program administration assignments for each person.

4. Restrict charging other planning and administrative costs to include:

a. Goods and services necessary for administration (utilities, office supplies, etc.); b. Administrative services under third party agreements (e.g., legal services); c. Providing public information;
d. Fair housing activities;

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 184
e. Indirect costs under a cost allocation plan prepared in accordance with applicable Office of Management and Budget (OMB) Circular requirements and approved by the City of Montebello; and
f. Complying with other Federal requirements.

5. Restrict charges of eligible project -related soft costs to include Staff and overhead costs:
incurred by the City or a third -party contractor that are directly related to carrying out specific HOME projects that include:

a. Appraisals;
b. Preparation of work specifications;
c. Loan processing and underwriting;
d. Construction inspections and oversight;
e. Inspections for the presence of lead hazards or defective paint; f. Advisory and other relocation services;
g. Project-specific environmental reviews; and

6. Administrative costs charged to the project will not be included in the loan to the project owner.

7. If the project does not go forward, project costs must be charged as administrative costs.

Uniform Administrative Requirements

Sub-part K (24 CFR 92.500 - 92.509)

The City of Montebello will comply with the following administrative requirements pertaining to the financial management and audit standards.

1. OMB Circular A- 87 “Cost Principles for State, Local, and Indian Tribal Governments”: This circular establishes principles and standards to provide a uniform approach for determining allowable costs under Federal grants and other agreements with states and local governments and Indian tribal governments.

2. Certain provisions in 24 CFR Part 85: These regulations set forth uniform requirements for financial management systems, procurement, reports and records, and grant close-outs for Recipients of Federal grant funding.

3. OMB Circular A-133 (Audit Requirements): Audit thresholds and requirements are outlined in OMB Circular A-133.

4. OMB Circular A- 122, “Cost Principles for Non -Profit Organizations,” or, for institutions of higher education, OMB Circular A -21 “Cost Principles for Educational Institutions”: This circular establishes principles for determining allowable costs under grant s, contracts and other agreements with nonprofit organizations.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 185

5. Certain provisions of 24 CFR Part 84: The regulations at 24 CFR Part 84 implement OMB Circular A-110 and set forth uniform requirements for nonprofit organizations, including financial management systems, property standards, procurement standards, reporting and record-keeping. Attachment 3-1 lists the applicable provisions.

6. The requirements at 24 CFR 84.21, “Standards for Financial Management Systems” applies to CHDOs who are acting as an owner, developer or sponsor of HOME assisted housing.

Written Agreements

Written agreements are important legal documents that assist the City of Montebello to protect investments and enforce HOME Program rules, for verifying compliance and monitoring performance, and methods of enforcing program requirements.

The City of Montebello’s written agreement will serve as a concise statement of the relationship between the City and a funded entity/beneficiary of HOME funds. It will also clearly state the conditions under which the HOME funds are provided.

1. Required provisions

The City of Montebello HOME agreements will include at minimum provisions based on the Final Rule (24 CFR Part 92) that details the specific HOME provisions that must be included in written agreements for beneficiaries that may receive HOME funds. The provisions are:

a. Use of funds: Description of tasks to be performed, schedule for completing tasks, a budget in sufficient detail to effectively monitor performance and the period of the agreement. (For nonprofit and for-profit housing owner, sponsor, or developers, the duration of the agreement will be in a separate clause.)

b. Reversion of assets/program income requirements : States whether program income, unexpended funds, or other assets will be returned to the City.

c. Uniform administrative requirements : Compliance with applicable Federal administrative requirements (OMB Circular A-87 and applicable provisions of 24 CFR Part 85 for governmental entities, or OMB Circular A- 122 and applicable provisions of 24 CFR Part 84 for non-profit entities).

d. Other Federal requirements: Requirements regarding non-discrimination and equal opportunity; affirmative marketing and minority outreach; environmental review; displacement, relocation and acquisition; labor standards; lead -based paint; and conflict-of-interest.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 186
e. Affirmative marketing: Requirements for affirmative marketing in projects of five or more HOME-assisted units.

f. Requests for disbursements of funds : Requirement that HOME funds may not be requested until funds are needed for payment of eligible costs. The amount of each request must be limited to the amount needed. Program income must be returned to the City of Montebello before any new funding requests will be provided.

g. Records and reports : Enumeration of records that must be maintained, and information and reports that must be submitted.

h. Enforcement of the agreement: This provision is in the agreement with all parties, including owners, and is the means of enforcing the provisions of the written agreement.

2. Template agreements

a. The City's template contracts, agreements and other legal documents as provided by the City's Planning and Community Development staff must be used.

3. Duration of agreements

a. The agreement must specify the duration of the agreement. If the housing assisted under the agreement is rental housing, the agreement must be in effect through the affordability period required by the City of Montebello. If the housing assisted under this agreement is homeownership housing, the agreement must be in effect at least until the completion of the project and transfer of ownership to a low- income family.

4. Amending the documents

Written agreements may be amended by mutual agreement of the parties when regulations and requirements change, or when adjustments to funding levels or other conditions related to a specific project are needed.

EXHIBIT 12

WRITTEN AGREEMENT REQUIRED PROVISIONS
REQUIRED PROVISION (§92.504) SUBRECIPIENTS

OWNERS,

SPONSORS,

DEVELOPERS
(CHDOS)

CONTRACTORS HOME
OWNERS
Use of HOME Funds    

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 187
Affordability (§92.252 or
§92.254)

Program Income 
Uniform Administration
requirements (§92.505)

Project requirements (as
applicable in Subpart F)
 2.254 (b)
only
Property Standards (§92.251 and
(§92.355)

Other Program Requirements
(Subpart H except (§92.252 and
(§92.357)
  Except 92.505,

92.506, 92.352

Affirmative Marketing ((§92.351)  
Requests for Disbursement of
Funds
 
Reversion of Assets  
Records and Reports  
Enforcement of the Agreement
(§92.252 and 24 CFR Part 85 as
applicable)
 
Duration of the Agreement  
CHDO Provisions ((§92.300 and
(§92.301)

Suggested Provisions (not HOME
Requirements)

Roles and Responsibilities  
Description of the Project  
Performance Standards  
Conflict of Interest   
Monitoring  
Close-out Requirements  
Non-Compliance   

PROCEDURE:

1. Before any City of Montebello HOME funds are committed or disbursed the City will enter into a written agreement.

2. For all development activities, the City of Montebello will select and/or approve a closing entity to provide closing services for all HOME Program transactions using the City's approved documents.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 188

3. The City of Montebello Planning and Community Development staff will provide closing instructions for all HOME Program funded transactions to the closing entity.

4. The City of Montebello will be responsible for payment of costs associated with closing the HOME Program portion of the transaction on both homeowner and rental activities.

The City's HRGP Agreement is detailed on the following page (Exhibit 13):

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 189
EXHIBIT 13

HOME PROGRAM AGREEMENT AND CITY AFFORDABILITY AGREEMENT BETWEEN THE CITY OF

MONTEBELLO AND THE APPLICANT FOR THE OWNER -OCCUPIED HOUSING REHABILITATION

PROGRAM

HOMEOWNER NAME(S) & PHONE
NO.:

PROPERTY
ADDRESS:

CONTRACTOR NAME, ADDRESS,
PHONE NO.:

This HOME Investment Partnerships Program Housing Rehabilitation Agreement (“Agreement”) is entered into by the City of Montebello, California (“the City”) and (hereinafter called “Homeowner” whether one or more persons). This Agreement applies only to the Homeowner and dwelling unit (“Property”), as identified above. This Agreement describes the HOME Program rules and the City affordability requirements that pertain to the assistance provided through the City’s HOME Housing Preservation Program (HH PP). The duration of the HOME portion of this Agreement is thirty (30) days from the date of completion of rehabilitation work as defined herein. The duration of the City’s affordability period and the deed of trust shall continue until a change in title occurs, as defined herein.

By initialing the items listed below, Homeowner and Contractor confirm that each item has been read and Homeowner and Contractor understand and agree to comply with each item, as applicable:

1. USE OF HOME PROGRAM FUNDING

_____ The City will provide HOME Program funding in the amount of $ ___as a deferred loan with a HOME compliance period of thirty (30) days; _____ A City imposed affordability period will run concurrent to the HOME compliance period and extend forward until there is a transfer of title for any of the following reasons: The property is sold; the property is foreclosed on; the property is refinanced; the property is leased; the applicant(s) fail(s) to occupy the property as their primary residence; _____ In the event that one of the Homeowner’s dies, ownership as stipulated by California Real Estate law transfers to the surviving individual. This procedure is not a transfer of title.

Consequently, the remaining Homeowner will assume the loan pursuant to t he original terms of the loan.
_____ At the time Homeowner is approved for HOME Program assistance, Homeowner has an ownership interest in and occupies the Property to be rehabilitated as his/her principal residence. Homeowner agrees to continue to occupy the Property as his/her principal residence for the HOME Compliance Period and the City’s Affordability Period.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 190
_____ At the time Homeowner is approved for the HOME Program assistance, the Homeowner qualifies as a low -income household with a gross household income that does not exceed 80% of the area median income as established by the U.S. Department of Housing and Urban Development for the Los Angeles MSA adjusted for household size, and as updated annually.
_____ The City Affordability Period will be secured by a promissory note and recorded subordinate deed of trust (no lower than second position). Monthly payments will not be required on this portion of the assistance. This assistance will be provided at 0% interest, _____ If, during the City’s Affordability Period, the Homeowner sells or transfers title to the Property, rents or leases the Property, refinances the Property, or if Homeowner no longer lives in the Property as his/her principal residence, all of the deferred payment loan will be due and payable to the City. However, in the event the Homeowner sells the Property, and the net proceeds after repayment of the first mortgage and the costs of sale of the Property are less than the amount of City’s loan, the amo unt due shall be reduced to the amount available.
_____ Housing rehabilitation work will provide general rehabilitation necessary to bring the structure into compliance with the City’s applicable building codes; the City’s adopted property standards (if applicable); the City’s housing rehabilitation program standards; and applicable lead-based paint (LBP) regulations (24 CFR 92.251 & 92.355). Rehabilitation work to be completed will only be as specified in the approved written work specification for the Property and fully executed and approved change order s. All codes, standards, and regulations noted are incorporated herein by reference. _____ The maximum after -rehab value of Property must not exceed the current 203(b) FHA Mortgage Limits for a single unit structure in the Los Angeles Metropolitan Statistical Area.

The estimated after-rehab value is: $_______________
The 203(b) Mortgage limit is: $_______________ as of (Insert Date) ______________________________
Estimated Start Date: _______________________
Estimated Completion Date: _________________
_____ After the notice to proceed is issued by the City, the Homeowner has a three (3) day Right of Rescission Period. If Homeowner does not exercise their Right of Rescission, the Contractor has ten (10) calendar days to begin work;
_____ Upon completion of rehabilitation work, the Contractor shall furnish warranties as fully described in Section XV of the Housing Rehabilitation Program Policies (incorporated herein by reference).

2. DISBURSEMENT OF FUNDS

______ Funds will be disbursed on a reimbursement basis and only. ______ During the course of the work if any partial or in -progress payments are made, the Contractor shall furnish fully executed and dated lien releases/waivers for the specified amount(s) paid to himself/herself AND from all subcontractors receiving proceeds from such partial or in-progress payments.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 191
_____ Upon completion of the rehabilitation work, final inspections, and a qualified building official inspection, the Contractor will submit a written invoice for the amount of the contract, plus change orders, less ten percent (10%) retainage. _____ Upon completion of rehabilitation work, the Contractor shall furnish fully executed and dated lien releases/waivers for the specified amount(s) paid to himself/herself AND from all subcontractors receiving proceeds from the final payment/draw. _____ Retainage funds will be held for twenty (20) days. After twenty (20) days, the Contractor will submit a written invoice for the final payment accompanied by the required Bill Paid Affidavit and a fully executed Release of Lien for his/her ten percent (10%) retainage. Upon approval by the City and the Homeowner the final ten percent (10%), payment will be made to the Contractor.

3. ROLES AND RESPONSIBILITIES

_____ Roles and responsibilities of the Homeowner include, but are not limited to: Submission of true and accurate financial and other eligibility documentation; selection of the contractor; review and execution of the work write -up, contract, and associated do cuments; and accommodating the schedules of the Contractor and the City to facilitate timely completion of rehabilitation work and inspections.
_____ Roles and responsibilities of the Contractor include, but are not limited to: Communicating with Homeowner and the City regarding status of the work during the construction period; notifying the City, in writing, including a justification delineating and supporting the need for any change orders (including itemized cost information); completing any items identified on the final inspection prior to execution of the Certificate of Completion; and providing and adhering to warranty agreements in a timely manner. _____ Roles and responsibilities of the City, include, but are not limited to: Ensuring payment to Contractor as set forth in the rehabilitation contract; communicating with the Homeowner and Contractor regarding all administrative procedures that affect complet ion of rehabilitation work; advising the Homeowner regarding city property standards, building code requirements, local property standards and housing rehabilitation standards which may affect the prioritization of work items; and documenting project files in compliance with all applicable HUD regulations.
_____ Roles and responsibilities of the City, the Homeowner, and the Contractor are more specifically outlined in the City’s HOME Policies and Procedures, incorporated herein by reference.
_____ Homeowner has responsibility to select the contractor to complete the rehabilitation work from any eligible bid, as long as the price quoted is within a range of no more than ten percent (10%) below or ten percent (10%) above the cost estimate of scope of rehabilitation work prepared by the City. Eligible bids may be obtained from a list of City pre -approved contractors or other contractor s selected by Owner. The selected Contractor and his/her subsequently selected subcontractors must not be debarred or suspended from the Housing Rehabilitation Program, federally funded programs, or state funded programs; must carry the required insurance; submit or have submitted a completed Contractor Information Form to the City and a statement of non -use of lead -based paint; pass a

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 192
criminal background check; and all other program requirements of the HRGP as outlined in the program policy, incorporated herein by reference.

4. PROPERTY STANDARDS

_____ All rehabilitation work will be completed in compliance with the Housing Rehabilitation Program’s locally written and adopted property standards and all applicable written local building and property codes and standards.
_____ Housing rehabilitation assistance will only be provided to cover the cost of rehabilitation necessary to bring the property in compliance with locally adopted, written building and property standards, Rehabilitation Program standards and, applicable Federal and State building and property standards.

5. WRITTEN AGREEMENT PROVISIONS

_____ Homeowner will enter into a written agreement with the Homeowner- selected, qualified Contractor for the completion of rehabilitation work. The written agreement shall include the scope of work, the cost of the work to be completed, and the time frame during which the scope of work must be completed, all of which have been reviewed and approved by Homeowner, City, and Contractor at the preconstruction conference. Said written agreement, work specifications, and any subsequent change orders are incorporated herein by reference.
_____ Except for the purpose of affording protection against any emergency endangering life or property, no modification of the written agreement shall be made except by written instrument, signed by the Contractor, approved by Homeowner, and accepted and dated in writing by City. Change orders may be authorized for necessary work items that were initially overlooked or which could not be determined until the course of the rehabilitation or reconstruction work had already begun. Change orders must be reques ted prior to commencement of the proposed changed work in order for such costs to be reimbursable. _____ Homeowners or Contractors with concerns about the administration or operation of the Housing Rehabilitation Program should communicate these concerns to the City, if concerns cannot be negotiated or resolved successfully between the parties, they may file an appeal with the (“INSERT APPROPRIATE LOCAL AUTHORITY”).
_____ Homeowner agrees to abide by the HOME regulations as set forth in 24 CFR Part 92 which is incorporated as a part of this agreement by reference.

By signing below, Homeowner and Contractor acknowledge receipt of this document and understanding of its contents.

Homeowner Date

Homeowner Date

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 193
Contractor Date

Director of Community Development Date

Conflict of Interest

The City of Montebello will comply with the following conflict of-interest provisions:

1. 24 CFR Parts 84 and 85, and CFR 85.36 and 24 CFR 84.42.

2. Provisions not covered by 24 CFR Parts 84 and 85, set forth in the HOME regulations.

Additionally, the HOME regulations include conflict of interest provisions for nonprofit, for- profit owners/developers/sponsors and CHDOs.

3. No employee, officer, agent of the city shall participate in the selection, award or administration of a contract supported by HOME if a conflict- of interest, either real or apparent, would be involved;

4. City employees, officers and agents not accept gratuities, favors or anything of monetary value from contractors, potential contractors or parties to sub-agreements; and

5. Enforce provisions for penalties, sanctions or other disciplinary actions for violations of standards.

6. No person who exercises or has exercised any functions or responsibilities with respect to HOME activities or who is in a position to participate in decisions or gain inside information:

a. May obtain a financial interest or benefit from a HOME activity; or the City of Montebello HOME Program Operations;

b. Have an interest in any contract, subcontract, or agreement for themselves or for persons with business or family ties.

NOTE: This requirement applies to covered persons during their tenure and for one year after leaving the Recipient entity.

7. Include the conflict-of-interest provision in written agreements and other documents with owners, developers, and sponsors.

8. Monitoring of projects will include necessary actions to ensure that the conflict of interest provision is adhered to.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 194
HOME Provisions for Nonprofit and For-Profit Owners, Developers, CHDOs, and Sponsors

The City of Montebello will comply with the HOME Final Rule that includes a conflict -of-interest provision applicable to for- profit and nonprofit owners, developers, and sponsors of HOME - assisted housing. This provision states that:

1. No owner, developer, or sponsor of HOME -assisted housing, including their officers, employees, agents, consultants, or elected or appointed officials, may occupy a HOME - assisted unit in a development.

NOTE: This provision does not apply to:

a. An individual receiving HOME funds to acquire or rehabilitate his/her principal residence, or,

b. An individual living in a HOME -assisted rental housing development where he/she is a project manager or a maintenance worker in that development.

Exceptions: Exceptions to this conflict- of-interest provision (governing owners, developer, and sponsors of HOME-assisted housing) may be granted by the City after obtaining a waiver from HUD on a case-by-case basis based on the following factors as set forth in the regulations:

a. Whether the person receiving the benefit is a member of a group or class of low - income persons intended to be the beneficiaries of assisted housing, and the exception will permit him or her to receive generally the same interests or benefits as are being made available or provided to the group as a whole;

b. Whether the person has withdrawn from his or her functions or responsibilities, or the decision- making process with respect to the specific assisted housing in question;

c. Whether the tenant protection requirements of CFR 92.253 (prohibited lease terms, termination of tenancy and tenant selection) are being observed;

d. Whether the affirmative marketing requirements are being observed and followed; and

e. Any other factor relevant to the City's determination, including the timing of the requested exception.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 195
Religious Organizations

HOME funds may be provided to primarily religious organizations for any activity, excluding inherently religious activities.

1. As of the September 30, 2003 Final Rule for 24 CFR Part 92, HUD identified regulations for eight programs, including the HOME Program, to eliminate barriers and ensure that these programs are open to all qualified organizations regardless of their religious character.

HOME Investment Trust Fund Account

The HOME Investment Trust Fund Account is the account established by the U.S. Treasury and managed through HUD's Integrated Disbursement and Information System for the Program.

1. Establishment

The Secretary shall establish for each participating jurisdiction a HOME Investment Trust Fund, which shall be an account (or accounts as provided in section 12749 (c) of this title) for use solely to invest in affordable housing within the participating jurisdiction’s boundaries or within the boundaries of contiguous jurisdictions in joint projects which serve residents from both jurisdictions in accordance with the provisions of this part.

2. Line of credit

The Secretary shall establish a line of credit in the HOME Investment Trust Fund of each participating jurisdiction, which line of credit shall include:

a. funds allocated or reallocated to the participating jurisdiction under section 12747 of this title, and
b. any payment or repayment made pursuant to section 12749 of this title.

3. Reductions

A participating jurisdiction’s line of credit shall be reduced by:

a. funds drawn from the HOME Investment Trust Fund by the participating jurisdiction, b. funds expiring under subsection (g) of this section, and c. any penalties assessed by the Secretary under section 12754 of this title.

4. Certification

A participating jurisdiction may draw funds from its HOME Investment Trust Fund, but not to exceed the remaining line of credit, only after providing certification that the funds shall be used pursuant to the participating jurisdiction’s approved housing s trategy and in

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 196
compliance with all requirements of this subchapter. When such certification is received, the Secretary shall immediately disburse such funds in accordance with the form of the assistance determined by the participating jurisdiction.

5. Investment within 15 days

The participating jurisdiction shall, not later than 15 days after funds are drawn from the jurisdiction’s HOME Investment Trust Fund, invest such funds, together with any interest earned thereon, in the affordable housing for which the funds were withdrawn.

6. No interest or fees

The Secretary shall not charge any interest or levy any other fee with regard to funds in a HOME Investment Trust Fund.

7. Expiration of right to draw funds

If any funds becoming available to a participating jurisdiction under this subchapter are not placed under binding commitment to affordable housing within 24 months after the last day of the month in which such funds are deposited in the jurisdiction’s HOME Investment Trust Fund, the jurisdiction’s right to draw such funds from the HOME Investment Trust Fund shall expire. The Secretary shall reduce the line of credit in the participating jurisdiction’s HOME Investment Trust Fund by the expiring amount and shall reallocate the funds by formula in accordance with section 12747(d) of this title.

8. Administrative Provision

The Secretary shall keep each participating jurisdiction informed of the status of its HOME Investment Trust Fund, including the status of amounts under various stages of commitment.

a. In general

Any repayment of funds drawn from a jurisdiction’s HOME Investment Trust Fund, and any payment of interest or other return on the investment of such funds, shall be deposited in such jurisdiction’s HOME Investment Trust Fund, except that, if the jurisdiction is not a participating jurisdiction when such payment or repayment is made, the amount of such payment or repayment shall be reallocated in accordance with section 12747(d) of this title.

b. Assurance of repayment

Each participating jurisdiction shall enter into an agreement with the Secretary ensuring that funds invested in affordable housing under this part are repayable

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 197
when the housing no longer qualifies as affordable housing. Any repayment under the previous sentence shall be for deposit in the HOME Investment Trust Fund of the jurisdiction making the investment; except that if such jurisdiction is not a participating jurisdiction when such repayment is made, the amount of such repayment shall be reallocated in accordance with section 12747(d) of this title.

c. Availability

The Secretary shall take such actions as are necessary to ensure that any repayments deposited in a HOME Investment Trust Fund in accordance with this section shall be immediately available to the participating jurisdiction for investment subject to the provisions of this part that apply to funds that are allocated under section 12747 of this title. Actions authorized under the preceding sentence may include authorizing the establishment for a participating jurisdiction of a HOME Investment Trust Fund account outside of the Federal Government that, under arrangements satisfactory to the Secretary, shall be used solely to invest in affordable housing within the participating jurisdiction’s boundaries in accordance with the provisions of this subchapter. Such accounts shall be established in such a manner that repayments are not receipts or collections of the Federal Government.

HOME Program Income

Program income is defined as any revenue received by the City directly generated from the use of HOME funds or matching contributions. Program income includes, but is not limited to:

1. Proceeds from the sale or long -term lease of real property acquired, rehabilitated or constructed with HOME funds or matching contributions;

2. Income from the use or rental of real property owned by a Recipient that was acquired, rehabilitated or constructed with HOME funds or matching contributions, minus the costs incidental to generating that income;

3. Payments of principal and interest on loans made with HOME or matching funds, and proceeds from the sale of loans or obligations secured by loans made with HOME or matching contributions;

4. Interest on program income; and

5. Any other interest or return on the investment of HOME and matching funds.

Note: The City of Montebello requires that all program income is returned to the City.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 198
Pre-Award Costs

With the publication of the Final Rule, the City may incur eligible costs prior to the effective date of its annual HOME Investment Partnerships Agreement, subject to certain conditions:

1. Both administrative/planning and project costs may be incurred. Only costs eligible under the HOME Program rules in effect at the time the costs are incurred are included.

2. Expenditures must meet all regulatory requirements, including environmental review regulations.

HOME Program Draws

HOME funds are available on a reimbursement basis only based on documentation of incurring the expense and payment of the expense.

PROCEDURE

1. The City of Montebello will reimburse funds based upon information submitted by the Recipient. Any expenditures occurring after the effective date of the contractual agreement between the City of Montebello and the Recipient are eligible for reimbursement.

2. Expenditures must be consistent with the approved budget as stated in the contractual agreement between the City of Montebello and the Recipient. Only eligible expenses will be reimbursed.

3. Payments will be adjusted by the City in accordance with program income balances available in sub-recipient accounts, if applicable.

4. In order to ensure accurate billing and fund management sub- recipients should keep track of the following information for activities funded:

a. Funds budgeted.
b. Funds received in City of Montebello.
c. Reimbursements to-date.
d. Funds obligated in the most recent period and to-date. e. Funds expended in the most recent period and to-date. f. Cash on hand (including program income identified as such), if applicable. g. Previous reimbursements requested but not yet received, if applicable.

5. All requests for final reimbursements must be submitted to the Planning and Community Development Department Division within 15 days after the last date of the contract.

To request reimbursement:

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 199

1. The "Reimbursement Request" form must be completed and signed by either the Planning and Community Development Director or another authorized personnel.

2. Provide original invoices for all expenditures to be reimbursed.

3. Payment receipts, copies of checks, and/or all documentation proving that payment has been made prior to requesting reimbursement.

4. For salary reimbursement, time sheets must include total time worked and a breakdown of funding sources covering the salary and benefits associated.

All reimbursements will be made within thirty (30) days of receipt of the request, if proper documentation has been submitted. Please be advised that the City of Montebello will not provide reimbursements if quarterly reports have not been submitted within the time limits stated in the contractual agreement between the City of Montebello and the Recipient.

PART 2: FINANCIAL MANAGEMENT

Policies Regarding Cash Management

All payments under City of Montebello’s Federal programs will be on a reimbursement basis, AFTER costs have been incurred. No cash advances will be allowed. Reimbursements will not exceed actual cash outlays
All payments to subrecipients and for in-house activities will be monitored for compliance with federal regulations and applicable OMB circulars. Prior to payment, subrecipient requests for program funds shall be properly evaluated. The following will be monitored:
a. Bi-weekly employee timesheets
b. Payroll records
c. Cost per capita served
d. Portion of clientele served that is low-income
e. Eligibility of activity
f. Allowable costs
g. Non-Federal funds leveraged (if applicable)
h. Proper allocation of costs to City of Montebello
Drawdown of federal funds through federal reporting system is subject to review and approval by Finance staff. Variances between expected and actual cash disbursements of federal awards and drawdowns of federal funds are reported to an appropriate level of management.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 200
Since federal funds will only be provided on a reimbursement basis, it is anticipated that no interest earnings will accrue to the City or to subrecipients. In the unlikely event interest earnings on federal funds are accrued, they must be paid back to that federal department.

Program income funds will be generated primarily by housing rehab loan repayments and occasionally, housing development activities. Program income received by the City must be deducted from reimbursement requests before drawing down entitlement grant funds.

The federal financial reporting system is capable of scheduling payments for accounts payable and requests for funds from Treasury that enables the City to avoid a time lapse between draw down of funds and the actual disbursement of funds. Montebello’s accounting program, shall be reconciled by the following steps:
1) Invoices are received by Finance Department via email, mail, etc. 2) Twice per month, invoices are coded by purchase order accounting number (account waiting for the money so accounts payable will know where to take it from), where money has been allocated to those activities; codes by stamping invoice with stamp that includes:
vendor number, PO # dollar; after filling out info on stamp, it goes to finance; 3) At the end of the month all expenditures are totaled and drawdowns for the particular activities are reported to the Government agency; Finance and City staff review drawdowns for accuracy and compiles data in a spreadsheet 4) The Housing Manager inputs drawdowns into IDIS
5) The Director of Finance (or Designee) approves vouchers in federal system Staff will carry out periodic independent evaluation (e.g., by internal audit, top management) of entity cash management, budget and actual results, repayments of excess interest earnings, and federal drawdown.

Procedures for Reflecting Prior Period Adjustments and Accruals

In preparation of the CAPER, City staff review the following reports:
- PR09- Program Income Details by Fiscal Year and Program (report generated by IDIS) - PR26- CDBG Financial Summary Report (report generated by IDIS) - Analysis of CDBG Funds- City of Montebello Sources & Uses of Funds spreadsheet (report generated by the Housing Manager)
Director of Finance or Designee reconciles discrepancies between the IDIS reports and the City's Budget and makes the necessary adjustments in the PR26 report. These adjustments are explained as Notes to the PR26, which is included as an appendix to the CAPER. Adjustments may occur when recording is delayed and projects are closed out later in the year for actual costs that occurred in the previous program year.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 201
Policy Regarding Rebates, Refunds and Credits to HUD CPD Programs

All rebates, refunds, and credits to HUD CPD programs will be properly reported. Bid bond forfeiture funds that are not offset by additional costs to select another bidder will be credited to HUD CPD programs at their pro-rata share.

Procedures for Evaluating Travel and Training Costs Charged to the HOME Program

All travel and training expenses charged to the HUD programs must be approved by the Community Development Manager or a Department Director. Prior to approval, travel and training expenses are evaluated based on the following criteria:
- Compliance with 2 CFR 200.472
- Applicability/relevance to CDBG/HOME program goals and objectives - Eligibility under Federal programs
- Within the allocated budget for that program
Procedures for Allocating and Documenting Personnel Costs Charged to HOME Admin Account

1. Personnel costs charged to HUD programs will follow Section 200.430, of 2 CFR 200.

Prior to the beginning of the fiscal year, City of Montebello Staff and the Planning and Community Development Director will evaluate available funding as well as the Admin workload, scope of work and staffing assignments. This evaluation will produce an estimate of staffing needed including an estimate of each Admin staff member's time dedicated to HUD Programs. These estimates will be noted on the employee's action form and transmittal to the City Payroll Department for the affected employee Compensation (including salary and benefits, if eligible) will be charged accordingly to the Admin account based on actual time spent performing eligible activities.

2. All employees whose compensation is charged to Admin will maintain bi- weekly timecards documenting the number of hours charged to various programs. Time cards will represent an after-the-fact distribution of the actual activity of each employee and will account for the total activity for which the employee is compensated. Time cards will be signed by the employee and approved by their Supervisor.

3. Admin staff will conduct a quarterly reconciliation to confirm that employee time cards are consistent with actual time charged to HUD-funded programs. If inconsistencies are found, the costs charges to HUD-funded programs will be adjusted.

Procedures for Allocating and Documenting Personnel Costs Charged to HRGP Account

1. Personnel costs charged to the HRGP will follow Section 200.430, of 2 CFR 200 (including CFDA 14.218 Part Ill)

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 202

2. Prior to the beginning of the fiscal year, City of Montebello staff and the Planning and Community Development Director will evaluate available funding as well as the Rehab work loan, scope of work and staffing assignments. This evaluation will produce an estimate of staffing needed including an estimate of each Rehab staff member's time dedicated to Rehab activities. These estimates factors will be noted on the employee's action form and transmittal to the City Payroll Department for the affected employee.

Compensation (including salary and benefits) will be charged accordingly to the HRGP account based on actual time spent performing eligible activities.

3. All employees whose compensation is charged to HRGP will maintain bi-weekly timecards documenting the number of hours charged to various programs. Time cards will represent an after-the-fact distribution of the actual activity of each employee and will account for the total activity for which the employee is compensated. Time cards will be signed by the employee and approved by their Supervisor.

4. HRGP staff will conduct a quarterly reconciliation to confirm that employee time cards are consistent with actual time charged to HRGP. If inconsistencies are found, the costs charged to HUD-HRGP will be adjusted.

Process for Approval of Reimbursement
Requests for Consultant Services

Based on the terms of the written agreement with the contractor, city staff reviews reimbursement requests for allowability, eligibility, and reasonableness. All reimbursement requests by the contractor shall include a summary detailing expenses and the amount being charged to the City's HUD programs.

The table below outlines what supporting documentation must accompany reimbursement requests.

COST ITEM SUPPORTING DOCUMENTS
Salaries • Requests for reimbursement shall include a summary of the position(s) billed to the contract, the dates
that services were provided, total number of hours
billed by each position per clay, and the hourly billing rate of each position charged to the City of
Montebello activity.

Materials and Supplies • Copies of invoices/receipts
Other expenses • Copies of invoices/receipts/billing statements

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 203
Process for Approval of Payments and Reimbursement Requests

Step Department Person/Position
Project Set Up
AAP Approved Administration City Council
Agreements Executed Administration City Manager
PO established Planning & Community Dev Housing Manager Payment and
Reimbursement Process

Invoice intake Finance Account Payable (under
direction of Deputy Director
of Finance)
Invoice Review for eligibility Planning & Community
Development
Housing Manager
Invoice Approved – Signature Planning & Community
Development
Planning & Community
Development Director
Updated in New World
System (PO/Acct number
assigned)
Planning & Community
Development
Housing Manager
Signed Invoice back to
Finance
Finance Accounts Payable
Check Run and Mailed Finance Accounts Payable
Warrant Register Approved Administration City Council

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 204

FINANCIAL REPORTING

In addition to the budgeting, payment processing, and oversight actions described in other sections, the City will undertake the following actions to ensure accurate, current, and complete disclosure of the financial results of HUD-assisted activities in accordance with the financial reporting requirements of the CDBG and HOME Programs.

FFATA Reports

At the end of each month, the Deputy Finance Director will report on all awards in excess of $25,000 using the FFATA subaward reporting system (FSRS) in order to comply with the Federal Funding Accountability and Transparency Act of 2006. For guidance on data entry, refer to the guidance material on www.onecpd.info entitled “FFATA Subaward Reporting System Webinar for CDBG Grantees”.

Open Balance Review

On a quarterly basis, the Planning and Community Development Director, Housing Manager and Deputy Finance Director will review the Annual Expenditure Work Plan with IDIS PR 08 to identify slow moving projects. The review will include an assessment of the project’s progress and its effectiveness of meeting its objectives. If a project is not on schedule or not effective, staff will develop a workplan and timeline for corrective actions.

Monthly Reconciliation

At the close of each month, the Deputy Finance Director will work with the Housing Manager to reconcile General Ledger expenditures and IDIS drawdowns for all HUD accounts. The information in IDIS, the PR07 Drawdown by Voucher Number, will also be compared to the local Project Report to ensure the IDIS system accurately reflects expenditures and cash balances. All discrepancies will be reported directly to the Finance Director and Planning and Community Development Director who will jointly oversee corrective action.

Federal Cash Transactions Report

Semi-annually, the Housing Manager will prepare and submit the Federal Cash Transactions Report SF-425. The Grant Administrator will take the following steps to reconcile IDIS with the City’s local internal financial records:

STEP 1: DETERMINE DRAWS PER IDIS

1. From IDIS, generate the PR07 Drawdown by Voucher Number Submitted to LOCCS. Limit the report to the time period in question (i.e. Initial Date: 01/01/2014 and End Date:
06/30/2014 for Q2 of 2014).

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 205

2. Import the report into Excel.

3. Filter the report to show Entitlement Draws (EN Fund Type) with a Complete Status.

4. Verify the total amount of Entitlement funds drawn during the quarter by totaling all line items. This is the amount to enter on Line 10a. Cash Receipts of the SF-425.

5. If it is requested by the local HUD field office, the Federal Financial Report attachment can be used to report the amount disbursed from each grant allocation. Sort the PR07 report by the Grant Number field to determine the amount disbursed from each allocation.

STEP 2: DETERMINE EXPENDITURES PER LOCAL SYSTEM

1. From City’s Accounting System, generate the Accounts Payable Invoice Report for the CDBG Fund. When selecting the date range, include the three months prior to the quarter in question. The City works on a reimbursement basis, meaning a draw that occurred in the current quarter may have been paid in the previous quarter.

2. For each drawdown listed on the PR07, identify the corresponding record on the Accounts Payable Invoice Report and initial the line item. Please note that it will not always be a one to one relationship. One IDIS draw could represent several claims and vic e versa. To help with the identification process, reference the Voucher for IDIS Drawdown forms processed during the quarter.

3. Verify that each draw has a corresponding claim. If so, enter the same amount from 10a. on line 10b. of the SF -425 report and enter 0 on line 10c. If there is a discrepancy, report the matter to the the Finance Director for correction.

STEP 3: FILING

1. Complete the remainder of the SF- 425 Report and submit it to the local HUD Field Office within 15 days of the close of the quarter.

2. Maintain a copy of the completed and signed SF-425 Report, the PR07 Report, the Accounts Payable Invoice Report, and any notes or related correspondence in a folder labeled Federal Financial Reports.

Schedule of Federal Expenditures

The Finance Department is responsible for preparing, based on information provided by the Community Development Department, the Schedule of Federal Expenditures (SEFA) as part of the annual auditing process. Regarding HOME, the following procedures will be followed to ensure that the SEFA is reconciled:

1. Department of Finance staff will prepare the SEFA in preparation for the annual audit.

Expenditures shall be determined using the following guidelines:
a. Use the same accounting basis as the City’s Financial Statements. b. Include all expenditures of federal awards for the year, including but not limited to

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 206
i. transactions associated with grants, cost- reimbursement contracts, cooperative agreements, and direct appropriations;
ii. federal awards received directly from a federal agency and indirectly from a state agency;
iii. disbursement of funds passed through to sub-recipients; iv. receipt of loan proceeds under loan and loan guarantee programs; receipt of federal property and surplus property;
v. receipt and use of program income.
c. List all financial assistance from the same federal agency together on the schedule. d. Within each federal agency section, list all direct awards first followed by indirect awards.
e. Provide subtotals for programs with the same Catalog of Federal Domestic Assistance (CFDA) number.
f. Provide subtotals for assistance received directly and assistance received indirectly. g. Provide a total for each federal agency.

2. Deputy Finance Director will provide any and all underlying records, claims, and vouchers needed to verify HOME expenditures and draws.

3. Director of Finance or his designee will review the draft SEFA for:
a. reported expenditures against information from the Eden system; b. the correct CDFA and agency information is provided, including identification of pass-through entities.
c. that the draft version presents the minimum data elements required by 2 CFR 200 Subpart F.

4. Director of Finance will provide the draft SEFA to the outside auditing firm for review.

5. Director of Finance will work with staff and outside auditing firm to address any errors, omissions or weaknesses.

Program Income

Drawdowns of funds through IDIS will occur at least monthly. It is anticipated that monthly IDIS drawdowns of expenditures will greatly exceed monthly program income. Interest earnings on program income that are not offset by monthly expenditures will be credited to the appropriate program.

There are currently two sources of HOME program income.

Program income from the previous HOME Loan program. The loan servicer receives loan repayments and creates a monthly report to the City. The repayments are forwarded to the City and deposited into different accounts used for loan repayments. As described above, this program income is drawn down first when funds are drawn down for any appropriate activity.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 207
Program income from housing activity. A few housing development projects received funds and loan repayments are made when there is surplus cash or residual receipts at the end of the year, as evidenced by the developments' annual financial audits. The amount of program income is determined by the loan terms indicated in the promissory note or appropriate funding agreement. The Planning and Community Development Director records the loan repayment and forwards it to Finance to deposit. As above, the program income is drawn down first when funds are drawn down for any appropriately funded activity.

Reimbursement Process in IDIS

The City will adhere to the following procedure to pay HOME-related claims monthly:
- Within IDIS, the Accountant creates program income receipts based on monies received since the last drawdown
- Accountant reconciles Invoice Report with Draw Schedule and alerts the Finance Department to any discrepancies
- Within IDIS, the Housing Manager will create IDIS draw voucher based on the actual expenditures incurred by the City. Once the drawdown voucher is created, the Housing Manager will print a screenshot of the voucher creation screen from IDIS, record the Voucher Number on the Departmental Budget, and alert the Finance Department that the drawdown is ready for approval
- Finance Director approves drawdown voucher in IDIS. Funds will wire transfer to City designated account in two to three business days
- Upon receipt of wire transfer from the U.S. Treasury, the Finance Department Accountant will alert the Finance Director of receipt by forwarding the report with the HOME disbursements identified. The General Fund will be reimbursed for the HOME costs that were advanced

TIMELINESS REVIEW

On a monthly basis, the Housing Manager will generate and review with Finance Director, the CDBG Timeliness Report and evaluate the timeliness of HOME expenditures.

Internal Controls

The City of Montebello internal controls include a combination of procedures, specified job responsibilities, qualified personnel, and records that together create accountability in an organization's financial system and safeguard its cash, property, and other assets. The City's internal controls make sure that:

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 208

1. Resources are used for authorized purposes and in a manner consistent with applicable laws, regulations, and policies,

2. Resources are protected against waste, mismanagement, or loss, and

3. Reliable information on source, amount, and use of resources are secured up -to-date, and recorded.

Additionally, internal controls will ensure that no single individual has authority of an entire financial transaction.

Specifically, that the City has a separation of power for the following three responsibilities:

1. Authorization to execute a transaction,

2. Recording of the transaction, and

3. Custody of assets involved in the transaction. This type of separation of responsibilities will create a system of checks and balances for grant and general organization expenditures.

4. The City will periodically reconcile its financial records to actual assets and liabilities which will safeguard resources as well as detect instances of fraud or misuse.

Record-Keeping

OVERVIEW

The HOME Program has recordkeeping and reporting requirements to document that HOME funds are used appropriately and that HOME Program objectives are being met.

Under the HOME Program regulations, the City of Montebello is required to meet certain record - keeping and reporting requirements that are designed to:

a. Ensure consistency with HOME program requirements;
b. Clarify the record retention periods; and
c. Include new records that exercise any of the three new options allowed in the Final Rule (i.e., multi- family refinancing, presumption of affordability for homebuyer assistance, and locally-established 95 percent of area median purchase price limits).

PROCEDURE

1. The City of Montebello will maintain records that include:

a. Program records;
b. Project records;
c. CHDO records;
d. Financial records;
e. Program administration records; and
f. Records concerning other Federal requirements.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 209

2. Maintain PROGRAM RECORDS that include:

a. Written agreement with the City of Montebello and documentation of compliance with the written agreement;
b. A copy of the application originally submitted to the City of Montebello; c. Forms of assistance used;
d. Procedures for establishing 95 percent of median value;

3. Maintain Project Records that include:

a. Location (with a map),

b. Form of assistance,

c. Number and identification of units or tenants associated with HOME.

d. Source and application of funds;

e. Compliance with maximum per -unit subsidy limits and subsidy layering guidelines;

f. Compliance with property standards and lead-based paint requirements;

g. Compliance with income-eligibility requirements;

h. For rental projects, compliance with income targeting, affordability and lease requirements;

i. If multi- family or single -family refinancing is provided, compliance with established guidelines and/or requirements;

j. If multi-family new construction, results of the site and neighborhood standards review conducted;

k. For homeownership projects, compliance with maximum property value and affordability requirements; and

l. If pre-award costs, compliance with applicable requirements.

4. Maintain CHDO records that include:

a. Written agreement with the City of Montebello;

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 210
b. Documentation of qualification as a CHDO, including:

i. Documentation of nonprofit status;
ii. Current board list that identifies low-income representation; iii. Documentation of low -income community input (e.g. minutes from community meeting);
iv. Documentation of organizational capacity (e.g. resumes of staff members);

c. Documentation of uses of CHDO set -aside funds, including funds for capacity - building (if applicable); and

d. Current project descriptions.

5. Maintain Financial Records that include:

a. Source and application of funds;

b. Treasury and local HOME accounts;

c. Source and application of program income, repayments and recaptured funds; and
d. Budget control measures, including periodic account reconciliations.

6. Maintain Program Administration Records that include:

a. Compliance with written agreements;

b. Compliance with applicable uniform administrative requirements; and

c. Inspections, monitoring reviews and audits, and resolution of any findings or concerns.

7. Maintain Documentation Records that include:

a. Equal opportunity and fair housing;

b. Affirmative marketing and minority/women’s business outreach;

c. Environmental review;

d. Acquisition, relocation, displacement, and replacement of housing;

e. Labor standards;

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 211
f. Lead-based paint;

g. Conflict-of-interest; and

h. Debarment and suspension.

8. RETAIN RECORDS FOR a period is five (5) years including:

a. Housing Rehabilitation:

i. General records must be kept for five years after project completion

b. Rental: For rental housing records:

i. General records must be kept for five years after project completion; and ii. Tenant income, rent and inspection information must be kept for the most recent five years, until five years after the affordability period ends.

c. Homeownership: Homeownership records must be kept for:

i. Five years after project completion; and
ii. For resale/recapture records, five years after the affordability period ends.

d. Written agreements: Generally, all written agreements must be maintained for five years after the agreement ends.

e. Displacement and acquisition: Displacement and acquisition records must be kept for five years after final payment to displacees.

9. ACCESS TO RECORDS

a. Provide citizens and other interested parties with reasonable access to records.

Access will be consistent with applicable state and local laws regarding privacy and obligations of confidentiality.

b. Provide citizens, public agencies and other interested parties with reasonable and timely access to information and records relating to the City's Consolidated Plan and the use of assistance under the programs covered by the Consolidated Plan.

c. Provide access to HUD and the Comptroller General of the United States, or any of their representatives, to any records for auditing, excerpt, or transcript purposes.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 212
Reporting Requirements

OVERVIEW

HOME Program regulations require the City of Montebello to submit an annual report, called the Consolidated Annual Performance and Evaluation Report (CAPER), to HUD within 90 days of the close of City's program year. This is in accordance with the Consolidated Plan regulations at 24 CFR Part 91. The CAPER incor porates not only HOME Program information, but also the reporting requirements for the Community Development Block Grant (CDBG) program.

1. The City of Montebello HOME Program is required to meet certain reporting requirements, which are outlined below, in order to support the City in meeting its annual HOME Program reporting requirements.

2. The CAPER must include:

a. A summary of resources and programmatic accomplishments; and b. The status of actions taken during the year to implement the overall strategy, which includes a self -evaluation of progress during the past year in addressing priority needs and specific objectives.

PROCEDURE

1. The HOME Program Consultant or Community Development Staff will complete a Semi- Annual Status Report as well as Project Set Up and Completion Reports for all projects.

2. The HOME Program Consultant o r Community Development Staff w ill complete a Semi- Annual Status Report for all open projects. This report will include, at a minimum, the following sections:

a. Narrative. A narrative section outlining project milestones achieved;

b. Funding. A funding status update including all draws; and

c. Issues/Concerns. The report should outline any issues or concerns that may require the assistance.

3. The HOME Program Consultant or Community Development Staff will complete a Project Setup and Completion Form with request for retainage payment. The forms used differ by activity (Homeowner Rehab, Rental, and/or Homebuyer).

4. The HOME Program Consultant or Community Development Staff will enter the data into the IDIS system and report completed projects to HUD.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 213
Monitoring

OVERVIEW

To meet reporting requirements, the City must monitor its HOME Program activities for compliance and document the results.

PROCEDURE

The HOME Program Consultant or Community Development Staff will maintain and implement the following:

1. Maintain monitoring reports in each project file.

2. Monitor the HOME Program based on the individual activity.

a. Owner Occupied Projects (Homeowner Rehabilitation and Homebuyer (if applicable): the City’s loan service provider will monitor owner occupied projects for principal residency throughout the affordability period.

b. Rental Projects (if applicable): the City will monitor rental projects for the following factors:
i. Occupancy (income requirements);
ii. HOME Rents; and
iii. Property standards (units must meet HQS.)
iv. Rental property owners must submit an annual Rental Compliance Report to the City to be reviewed.

c. For rental projects, on -site inspections of HOME properties will occur according to the total number of units in a project as follows:
i. 1-4 units – every 3 years
ii. 5-25 units – every 2 years
iii. 26 or more units – annually

d. Sampling Units: large projects only require a sufficient sample to be inspected annually, at least 15-20% of the HOME-assisted units in a project and a minimum of one unit in every building.

HOME PROGRAM RISK ANALYSIS, MONITORING PROCESS, AND PLAN

The Risk Analysis and Monitoring Process

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 214
It is the policy of the City of Montebello HOME Program to monitor all HOME -projects for risk analysis, program compliance, and long-term sustainability. The City’s Monitoring plan will address three HOME components:

1. The structures and infrastructures financed with HOME funds;

2. The actual beneficiaries of HOME program expenditures; and

3. The actual documentation that describes the actions and intentions of program participants (whether subrecipient, developer, or contractor).

PROCEDURE

The City's Monitoring Procedure will include the review of three general areas:

1. Administrative and Financial Monitoring
This monitoring will address program compliance and cross-cutting requirements;

2. Program Monitoring
This monitoring will address overall HOME program performance;

3. Project Monitoring
This monitoring will address specific HOME project compliance.

The goal of the City's monitoring process is to conduct a risk analysis to determine which program areas and specific HOME-funded projects should receive intensive monitoring in a given year. While attention will be paid to “higher risk” projects, the HOME Program will, at a minimum, conduct a “desk monitoring review” of all funded HOME projects on an annual basis.

To the greatest degree possible, the City’s monitoring checklists will incorporate the questions and concerns outlined in the CPD Monitoring Handbook 6509.2, Rev -6, Chapter 7 Program exhibits on the following page:

CPD Monitoring Handbook 6509.2, Rev-6, Chapter 7:

Exhibit 7 - 1 HOME Participating Jurisdiction Pre-Monitoring Information Sheet Exhibit 7 - 2 Guide for Review of Overall Management Systems Exhibit 7 - 3 Guide for Review of Homeowner Rehabilitation Projects Exhibit 7 - 4 Guide for Review of Homeowner Rehabilitation Programs Exhibit 7 - 5 Guide for Review of Homebuyer Projects
Exhibit 7 - 6 Guide for Review of Homebuyer Programs
Exhibit 7 - 7 Guide for Review of Rental Projects
Exhibit 7 - 8 Guide for Review of Rental Programs
Exhibit 7 - 11 Guide for Review of Community Housing Development Organization (CHDO) Qualifications and Activities
Exhibit 7 - 12 12 Guide for Review of Community Housing and Development Organization (CHDO) Procedures
Exhibit 7 - 13 Guide for Review of Match Requirements

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 215
Exhibit 7 - 14 Guide for Review of Beneficiary Written Agreements Exhibit 7 - 15 Guide for Review of Contractor Written Agreements Exhibit 7 - 16 Guide for Review of Owner, Developer, Sponsor Written Agreements Exhibit 7 - 17 Guide for Review of State Recipient Written Agreements Exhibit 7 - 18 Guide for Review of Subrecipient Written Agreements Exhibit 7 - 19 Guide for Review of Subrecipient Management Exhibit 7 - 20 Guide for Review of Financial Management Attachment: Attachment to Exhibit 7 -20 Reviewer's Guide for Financial Management Review of HOME Participating Jurisdictions (PJs) Exhibit 7 - 21 Guide for Review of Cost Allowability
Exhibit 7 - 22 Guide for Review of Procurement
Exhibit 7 - 23 Guide for Review of Equipment and Equipment Disposition

PROCEDURE

Note: While the City of Montebello does not operate all HOME program activities, they are listed here in the possibility that the City of Montebello may decide to operate such in the future.

A. Timing of HOME Monitoring

It is the policy of City of Montebello to conduct HOME monitoring as an ongoing process.

The City will conduct on-going monitoring in three phases:

1. Initial review, analysis, and feasibility of project eligibility during threshold reviews

2. Monitoring during project development , implementation and operation

3. Monitoring for long-term sustainability and project completion

The on-going monitoring process is outlined in the following graphic:

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 216

B. Monitoring Objectives

C. At a minimum, the objectives of the City’s HOME Monitoring process will include the following:

1. Identify and track HOME program and project results;

2. Identify technical assistance needs for HOME, Subrecipient, developer and contractor staff;

3. Ensuring timely and appropriate expenditures of HOME funds;

4. Documenting compliance with all HOME and federal cross -cutting requirements;

5. Guaranteeing that federal funds are spent on eligible, allowable, and allocable costs; and

6. Making programmatic changes as necessary to safeguard the HOME program for the future.

It is the policy of City of Montebello to guarantee that all HOME program participants, whether Subrecipients, developers, contractors, or other HOME - funded entities, will comply with all HOME monitoring policies and objectives.

D. Risk Assessment Process

The City of Montebello monitoring process is based on risk analysis that attempts to quantify certain factors that can diminish the productivity and compliance of a funded HOME activity. To determine the relative risk of a specific HOME funded Conduct Risk Analysis
Monitoring Plan (Choose
Partners/Programs/Projects)
Conduct Desk and On-Site
MonitoringAnalyze Results/Issue Report
Pass Along Results for Future $

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 217
activity, the City of Montebello will use the following HOME Risk factors to help determine those HOME projects and activities that receive both immediate monitoring preference (including on- site visit, greater than normal staff attention) and possible program interventions.

E. HOME Risk Assessment Criteria, City of Montebello

The City of Montebello has adopted the following criteria to be used in determining the relative risk of a HOME project or activity is found on the following page.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 218

Subrecipient/Developer or Project Name Date:

Risk Factor Type of Risk Factor Risk Criteria Comments

Project
Complexity
Type of Program Homeowner
Rehab

Rental
CHDO-set-aside
Other (Specify)
Number of units How many?
Number of beneficiaries How many?
Multi-year project Yes or No?
Multi-financed project HOME only?
# of lenders:

Capacity of
Subrecipient or
Developer

Project staff turnover Last year?
Past staff HOME
experience
List projects
Projects completed Number ________
Current awards $ ______________
Project Completion Est. date
_________

Meeting all timelines Yes or No?
Spending timeliness Yes or No?
Changes in organization Within last year?

Project Capacity
Amount of contract $
Duration of contract # days:

Development Team
findings
Outstanding
findings?

Documentation
Timely Reports Any outstanding?
Audit submissions Always timely?
Any audit
findings?

Project documentation Documents
missing?

Regulatory compliance Outstanding
issues?

Other Concerns
Regulatory Knowledge Yes or no?
Outstanding issues Yes or no?
Beneficiary complaints Yes or no?
General Comments Yes or no?

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 219
EXHIBIT 14 - HOME Project Risk Assessment

F. Monitoring Schedule and Strategy

Based on the risk analysis factors outlined above, the City will conduct HOME monitoring in the following manner:

DESK REVIEWS are conducted throughout the program year as reimbursement requests are submitted and quarterly when status reports are submitted. Desk reviews will include an analysis of all submitted reports, IDIS reports, draw requests and invoices and the risk factors outlined below. When desk reviews trigger “high risk” projects, the City will schedule on -site monitoring. A desk review should pay particular attention to the HOME application and executed HOME written agreement.

ON-SITE MONITORING will involve a site visit to the project to conduct an on- site document review and a physical assessment of any structural expenditure paid for with HOME funds at commencement of construction, completion of project, or when warranted by risk assessment. The on-site monitoring process will include the following steps and sample formats for letters of notification may be found in Exhibit A.

PRE-SITE VISIT PREPARATION is prepared by HOME staff for the on- site visit by reviewing the following in-house information:

a. HOME funding application
b. HOME written agreement
c. HOME progress reports
d. Draw requests and supporting documentation
e. IDIS reports
f. Any HOME project correspondence
g. Any previous monitoring reports
h. The most recently submitted financial audits

1. Pre-Visit Letter prepared by the HOME staff to the project staff outlining the date, agenda, information to be available, staff to be accessible, and any specific areas that the staff plans to monitor on-site.

2. Monitoring Checklist will be provided by the HOME staff will provide the appropriate project monitoring checklists from Exhibit 16, which will be utilized during the site visit. As necessary, HOME staff will use exhibits from the CPD Monitoring Handbook, Exhibit 7, HOME Program.

3. Conducting the Monitoring Visit

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 220

At a minimum, the on-site monitoring visit will consist of the following steps:

1. Entrance conference: to reiterate the purpose and goals of the visit

2. On-site data documentation and research

3. Visits with staff and beneficiaries

4. Exit conference: to present preliminary conclusions and “next steps”

4. Post-site Visit Follow-up

Within two weeks of the exit interview, the HOME monitor will follow -up with the monitoring visit with a follow-up letter that outlines:

a. Projects monitored
b. Monitoring staff who conducted the visit
c. Date(s) of the monitoring visit
d. List of documents reviewed
e. List of individuals interviewed
f. Any conclusions reached from the visit
g. Strengths and weaknesses of the project
h. Any specific areas of non-compliance or findings
i. Suggested corrective actions to “cure” any findings

5. Corrective Actions (if necessary)

The HOME Monitor will establish a date specific for a response to the monitoring letter, for all corrective actions to be completed, and for the City to respond to the corrective actions.

6. Subsequent Follow-up

The City reserves the right to revisit the project to determine compliance and when corrective actions are not undertaken, to use any and all remedies outlined in the HOME written agreement and HUD rules and regulations to enforce compliance.

In the final analysis, the results of City HOME monitoring will be a factor in determining funding in future year’s HOME competition for funding.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 221
EXHIBIT 15 – Sample Monitoring Visit Letters

NOTICE TO SUBRECIPIENT OR DEVELOPER OF COMPLIANCE REVIEW

(Date)

John Doe
35 Street Road
City of Montebello, CA

Dear Mr./Ms. Doe:

Subject: Compliance Review HOME Program

We are planning to conduct a compliance review of your HOME project. This review will cover all aspects of your project administration and operations.

The review will take place on ____________, _________ _____, 20____, at _________a.m. The review will be conducted by ___________________________, our HOME Housing Managers.

It would be appreciated if you and members of your staff could give _____________________ whatever assistance is required to conduct the review. Should timing or scheduling pose a problem, however, ________________________ can be contacted by calling _________________

Sincerely,

Housing Manager

cc: Joe Palombi
Director of Planning and Community Development
City of Montebello

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 222

SAMPLE COMPLIANCE REVIEW

(Date)

John Doe
35 Street Road
City of Montebello, California

Dear Mr./Ms. Doe:

Subject: Compliance Review HOME Program

Reference is made to our letter of ______________________, in which we requested your assistance in our review of compliance under your HOME program. As a result of our review, we have noted the following items which we feel should be brought to your attention. These items are based on our review of __________ projects.

A. Projected Analysis

B. Major Findings

Our review of ___________ projects has revealed the following major problems:

- designated corrective action

Should you have any questions concerning our review, please contact _____________________, _________________ at (__)__________.

Sincerely,

Housing Manager

cc: Joe Palombi
Director of Planning and Community Development
City of Montebello

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 223
EXHIBIT 16 – Monitoring Checklists

Questions to be asked/answered:

Yes/No/
Not
Applicable
/Not
Reviewed
Information
Source
Comments
(Attached)

1. Design program, establish goals and objectives,
establish eligibility criteria, and identify tasks to
be accomplished.

2. Establishment of program files including:
a. Contract file
b. Equal opportunity file
c. Applicant file
d. Service recipient file (clients)
e. Financial file (audit, HOME funds by year,
ESPR's etc.) Files for other funding sources,
expenditures.

f. Quarterly Status Report files
g. Correspondence file
h. City Information Memo to Subrecipients
(CIMS) file

i. Monitoring file

3. Solicitation for clients

4. Program delivery

5. Have the types of assistance/services to be
provided been identified?

6. Has a target area been established?

7. Is there a standardized applicant selection
process?

8. Does the organization maintain records on
recipients to include data on ethnicity, female
head of household?

9. Have applicant eligibility criteria been
established using HUD income levels? Other
criteria?

10. Does the organization require a certification of
income eligibility?

11. Other:

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 224

CONSTRUCTION/PUBLIC IMPROVEMENTS CHECKLIST
Questions to be asked/answered: Yes/No/Not
Applicable
Comments
Architectural and/or Engineering (A/E)
A/E solicitation
- RFP, solicitation letter or notice
- Statement of required qualifications
- Ensure professional's eligibility

Are the following documents on file:
- Selection criteria document and/or selection
procedure
- Acceptable review of proposals/qualifications

Contract provisions
- General administrative provisions
- Scope of services
- Method of compensation
- Federal compliance standards provisions

A/E Documents
- Executed A/E contract
- Verification of Qualifications
- Records of payments and supporting
documentation
- Contract amendments, if any
- Correspondence

Bid Document and Bid procedural documents
Copy of bid document on file?

Bid document contents:

Technical bid specifications
Copy of applicable Federal Wage Determination
Schedule
Section 3 requirements and form

Procedural documents on file
Copy of Invitation to bid (or advertisement) on file?
Letter of Bid Opening
Letter of Award or Notice to Proceed

Pre-Construction Conference:

Was a pre-construction conference held? Date?
Attendance list (sign-in sheet)?
Minutes of the pre-construction conference?

Construction Contract:

Is there an executed contract in the file (with signed
certifications)?

Contract contents
Specification documents (could be Bid Package)

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 225
HUD 4010 “Federal Labor Standards Provisions”
Applicable DOL Federal Wage Determination Schedule
(or reference)
Contract contents (continued)
- Records retention clause
- Contract termination clause
- Cost information
- Timetable including payment schedule
- Bonds (Performance, Labor/Materials, etc.)
- Insurance
- Change order policy

Prime Contractor Documents
Are the following Prime Contractor items on file?
- Prime Contractor’s eligibility (verification)
- Contractor’s authorization form on file for payroll
signature?
- “Certification of Understanding and Authorization”
for unauthorized persons to sign payrolls
- Applicable Federal Wage Decisions (if any) Form
HUD-4230A
“Report of Additional Classification and Rate” (if
any)
- Certification for Applicable Fringe Benefit
Payments for non-State/Federal deductions”
(“Other”, if any) signed by
employee
- Section 3 Reports

Payroll Documents:
- Form WH-347 “Certified Payrolls” on file
- Form WH-348 “Statement of Compliance”
(signed)
- Are the payrolls numbered?
- Is there evidence of staff review and initials?

Do the payrolls include:
- Name
- Address (required on first payroll only)
- Social Security Number (required on first payroll
only)
- Correct classification
- Hourly rates of wages paid
- Daily and weekly number of hours worked
- Deductions made
- Actual wages paid

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 226
Is there a correspondence file containing wage
dispute information, violations, and wage
restitution?

Apprentices
Are all apprentices' part of a registered
apprentice/trainee program verified by
documentation?

Do the apprentice/trainee ratios and wage rates
comply with programs?

Employee interviews
Were employee interviews conducted?
Are Form HUD-11 “Employee Interview” on file?
Are forms complete?
Were sufficient employee interviews conducted?
(One per sub-contractor; 10% of classification, etc.,
which are representative of trades and workers.)

Job site inspections
Are there records of job site inspections for required
signage, i.e., EEO posters, wage determination, etc.?
Pictures of job site verifying signage and posters?

Project Documents:

Change Orders:
- Are copies of all change orders on file?
- Are change order approval letters on file (or
evidence of approval)?

Construction management documents:
- Payment records?
- Proof of payment (copies of checks, etc.)?
- Milestone records?
- Notice of completion?

Project Completion documents:
- Final Inspection and Acceptance
- Completion of Compliance Files
- Close-out Procedures (if any)
- Completion Letter to HUD

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 227

ENVIRONMENTAL CHECKLIST

Questions to be asked/answered: Yes/No/Not
Applicable/
Not
Reviewed
Information
Source
Comments
(Attached)
Is the project in compliance with federal labor
standards provisions?

Have environmental reviews been cleared?
Has the City and HUD issued formal approval to
proceed?

Is there evidence of compliance with CEQA?
Is the project consistent with Citywide
environmental goals?

Has the project been reviewed for:
- Categorical exclusion?
- Applicability of prior environmental reviews?

Does the environmental review process
include:
- Assessment of project environmental effects?
- Assessment of cumulative impacts?
- Assessment of mitigations?
- Implementation decisions?
- Follow-up monitoring and inspection?

Does the file contain:
- A notice of release of funds?
- A request for release of funds and
certification?
- State and local environmental analysis and
reports?

Is there evidence of compliance with NEPA?

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 228

FINANCIAL/ACCOUNTING CHECKLIST

Questions to be asked/answered: Yes/No/
Not
Applicable
/Not
Reviewed
Information
Source
Comments
(Attached)
Does the organization operate on a basis of:
- Cash
- Accrual

Does the organization maintain:
- A double entry accounting system?
- A general ledger?
A cash receipts journal?
- A cash disbursements journal?
- A payroll ledger?

In the cash journal, is the following included:
- Date?
- Receipt number:
- Cash debit columns?
- Income credit columns?

Do income credit columns (above) identify:
- Organization/city payments?
- Contributions?
- Other income?
- Description?

In cash disbursements journal, is the following
included:
- Date?
- Check number?
- Cash (credit) column?
- Expense account name?
- Description?

Does the General Ledger include:
- Assets?
- Liabilities?
- Fund balances?
- Expenditures?
- Revenues?

Does the Payroll Ledger include:
- Name?
- Position?

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 229

- Social Security Number?
- Payment records, including:

Accrual period?
Gross pay?
Itemized deductions?
Check number?
Does Petty Cash include:
- Record of disbursements?
- Supporting receipts?

Are checks filed numerically?
Are invoices filed by date?
Are invoices filed by vendor name?
Are vouchers filed numerically?
Are timecards filed by date?
Are timecards filed alphabetically?
Are purchase orders on file?
Are ESPRs on file?
Are encumbrances/obligations recorded against
HOME funds?

Do the following seem reasonable and necessary:
- Salaries and related costs?
- Administrative services?
- Contracts?
- Travel expenditures?
- Other administrative costs?

Is there program income?
If program income, is there evidence of:
- Revenue accounts?
- Revenue procedures?

Is program income in accordance with contract?
Are any and all advances maintained in interest -
bearing accounts?

Do financial records allow for the following kinds
of disclosure of financial results:
- Current?
- Accurate?
- Complete?

Is there effective control over funds?
Is there effective accountability for funds?
Are costs exceeding the budget?
What procedures are used to allow changes to the
original budget?

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 230

How effective are the financial management
systems?

Is there fiscal integrity of all financial transactions? Is there a procedure to ensure the timely and
appropriate response to and resolution of audit
findings?

Is there analysis of and explanation for cost
overruns?

Is there analysis of and explanation for high unit
costs?

Is there a need for change in the budget
estimates?

FOR PROJECT ACCOUNTS ONLY:
- Are separate account numbers maintained for
each project activity?
- Can project costs be broken out on a line item
basis?
- Can budget line items be compared against
incurred cost?

Are there regular financial status reports?
Are there appropriate controls for accountability?
Is there an approved budget for the project?
Is there reconciliation of financial data and
quarterly status reports?

Is there program income?
Is there evidence of internal monitoring?
Is source documentation collected prior to any
disbursements?

Are independent audits conducted?

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 231

IDENTIFICATION OF GOALS/ELIGIBLITY CHECKLIST

Questions to be asked/answered: Yes/No/
Not
Applicable
/Not
Reviewed
Information
Source
Comments
(Attached)
Has the organization identified:
- A scope of services?
- The number of people to be served?
- The time period in which the project is to be
completed?
- Its intended client group?
- The number and percentage of persons of
lower/moderate income?

What are the measurable goals of this project?
What are the measurable accomplishments of the
project to date?

What are the reasons for goals not having been
met?

Was a needs assessment conducted?
How adequate was the project proposal?
What are the project's strengths?
What are the project's weaknesses?
Is there evidence of compliance with HOME
primary objectives?

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 232

PROCUREMENT CHECKLIST

Questions to be asked/answered: Yes/No/
Not
Applicable
/Not
Reviewed
Information
Source
Comments
(Attached)
Is there an established method for procurement?
Does the procurement method include:
- Small purchases?
- Competitive sealed bids?
- Competitive negotiation?

Are there bonding and insurance requirements
listed?

Is there a procedure to encourage contracting
with:
- Section 3 businesses
- Small businesses?
- Minority-owned businesses?
- Women-owned businesses?
- Labor surplus area businesses?

Is there evidence of affirmative action?
Have written standards of conduct been
established? If yes, has disciplinary action been
defined?

Is there a procedure to avoid conflict of interest?
Is there a procedure for ensuring no unnecessary
or duplicative purchase?

Is there a clear and accurate description of the
technical requirements in all procurement
documents?

In procuring, is there consideration of:
- Contractor integrity?
- Past performance?
- Financial and technical resources?
- Price and/or cost analysis?
- System for contract administration?

Are there established requirements for
professional services?

Is maximized competition encouraged?
Are there complete files on all procurements?

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 233

PROJECT MANAGEMENT CHECKLIST
Questions to be asked/answered: Yes/No/
Not
Applicable
/Not
Reviewed
Information
Source
Comments
(Attached)
Has the project schedule been identified?
Is there appropriate separation of HOME and non-
HOME records?

Is there a procedure for procurement?
Is there a procedure for contracting?
Is there maintenance of client files?
Is the project manager sufficiently involved in the
day-to-day operations of the project?

Is the project in compliance with the following
aspects of the contract:
- Operating budget?
- Scope of service?
- Intended beneficiaries
- Method of payment?
- Performance schedule?
- Use of program income?

Is there any evidence of conflict of interest?
Have procedures for relocation been developed?
Have milestones been established?
Does the organization have insurance coverage?
Is there a sufficient number of people on staff?
Does the organization track the project's physical
progress?

Is the organization aware of civil rights
requirements?

Does the organization attend subgrantee
meetings?

What is the organization's capacity to continue to
use HOME funds?

Is there a listing of officers and directors on file?
Is there a proof of the organization's legal
authority?

Does the organization have a policy on the
disposition of HOME-funded property?

Do the conditions of employment seem
adequate?

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 234

Is there compliance with and knowledge of:
- Environmental requirements?
- Historic preservation?
- Hatch Act?
- National Flood Insurance Program?
- Clean Air Act?
- Federal Water Pollution Control Act?
- Lead-based Paint Poisoning Prevention Act?

Is there any evidence for potential delays or
adverse conditions?

What favorable events have occurred throughout
this project?

Is the project manager sufficiently familiar with
HUD's basic requirements?

Are records kept for a minimum of three years?
Is there evidence of lobbying with HOME funds?

REHABILITATION CHECKLIST
Questions to be asked/answered: Yes/No/
Not
Applicable
/Not
Reviewed
Information
Source
Comments
(Attached)
Rehabilitation Program Administration
Is the program design and administration
adequate?

Has a contracting process been established?
Is there a reasonable relationship between
workload and staffing? (e.g., 25 cases per person)

Is there a lump sum agreement in effect?
Is there a plan for minimizing displacement?
Is this:
- A grant program?
- A direct loan program?
- A leveraged loan program?

Are the following tracking system documents
maintained:
- Property inspection?
- Loan processing status?
- Approved projects?
- Construction status?

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 235

- Record of cases?
Are the procedures and documentation for
ensuring low/mod benefit adequate?

Is there a clear record of administrative costs?
Is there compliance with and knowledge of:
- Environmental requirements?
- Historic preservation?
- National Flood Insurance Program?
- Lead-based Paint Poisoning Prevention Act?

Have the following steps been taken:
1) Establishment of goals and objectives?
2) Program design/procedural requirements
established:
- Eligibility criteria (property, applicant,
types of improvements
- Maximum grant/loan amount
- Contracting requirements
3) Management organization and staffing?
4) Solicitation for clients/preliminary screening
of applicants?
5) Work write-ups, cost estimates and selection
of recipients?
6) Rehabilitation contracting?

Individual Rehabilitation Files and Cases
Do the individual rehabilitation case files include
the following:
- Case activity log?
- Applicant data sheet?
- Title/deed?
- Income verification?
- Property description?
- Occupancy data?
- Tenure?
- Work write-up?
- Executed contracts?
- Change orders?
- Inspection reports?
- Payment requests?
- Certificate of completion?
- Liens and/or waivers?

Is the following material on file:
- Contract package for rehabilitation projects?

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 236

- Notice of acceptance of work?
- Release of lien forms?
- Evidence of historic preservation data on each
property rehabilitated?
- Evidence of flood control insurance for each
property rehabilitated?
Code Enforcement Program Checklist
Is there a Code Enforcement program that
coordinates with the Housing Rehabilitation
Program?

How are code enforcement cases identified?
How are the cases recorded? Categories?
How are closed cases recorded and reported for
HOME?

What is the staffing for the Code Enforcement
Program?

Does the City have a Code Enforcement program
for non -HOME eligible areas? How is it kept
separate?

Integrated Disbursement and Information System (IDIS)

The City of Montebello is required by HUD to use the IDIS system to accomplish two key objectives:

1. To manage and account for disbursements of HOME funds; and

2. To collect, consolidate and report information regarding HOME Program performance.

The City of Montebello will implement the following general IDIS procedures:

1. Complete all HOME Program Set-up forms to ensure that all HOME Program requirements have been met, no work shall begin until all documentation has been executed and a Notice to Proceed is issued by the City of Montebello.

2. Disburse HOME Program funds only when all of the following conditions have been met:

a. Required environmental review process has been satisfactorily completed.

b. Project closing documents are finalized.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 237

c. The City has approved the timing of HOME Program fund disbursements (e.g., how the funds will be disbursed: at the beginning of the project or on a prorated basis, or as final funds are disbursed); and

d. Disburse funds according to the payment details including timeline for reimbursement outlined in the project closing documents, specifically the HOME Written Agreement.

e. Retainage will be released thirty (30) days after the final inspection is approved and upon the City's receipt of pay request and all completion documentation.

3. If any HOME Program funded project has an available balance after development completion and release of retainage, City of Montebello will de-obligate those funds and reallocate such balance of HOME Program funds to other eligible activities according to City of Montebello adopted HOME Program allocation process.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 238

CHAPTER 7: OTHER FEDERAL REQUIREMENTS

The Federal requirements addressed in this chapter are non -discrimination and equal access, employment and contracting, environmental requirements, lead-based paint, and relocation.

While the HOME Program has its own regulations, there are additional cross -cutting federal requirements that must be identified and complied with at the appropriate point in project management.

a. Exhibit 17 presents guidance on the impact of these additional requirements on the HOME project; and

b. Exhibit 18 describes how the City may demonstrate compliance with applicable requirements.

EXHIBIT 17: Managing A Project Subject to Other Federal Requirements Requirement Impact on the Project
Environmental review of
activities
A City cannot commit funds to a project until the appropriate level of environmental review is completed and a Release of Funds is received.

Section 3 Construction contracts of $200,000 or more must include language regarding best efforts to include businesses and low-income residents in the project area. This applies to the hiring of additional workers and training them, and using project-area suppliers for materials. The City of Montebello may set specific goals based on additional requirements set by HUD that may impact how quickly the project can get under construction.

Women/Minority Business
Enterprise
All competitive bidding must include Women and Minority Businesses, including sub-contracts. The City must ensure that these firms have a fair opportunity to participate and current lists of W/MBE firms must be maintained.

Contractor selection The City must check the website at www. sam.gov to determine if a contractor has been suspended or disbarred before awarding HOME funds to any firm . All building projects in excess of $100,000 must be designed by a state-licensed architect and all infrastructure projects in excess of $25,000 must be designed by a state licensed engineer.

Procurement The City's procurement policies specify bidding requirements for construction, including competitive and formal bidding.

Conflict of interest The City need be fully aware of parties involved in a contract and seek legal counsel if there is the potential for real or perceived COI.

Equal Employment
Opportunity
The City must ensure that all construction contracts over $10,000 (including sub -contracts) have language prohibiting employment discrimination based on race, color, religion, sex, or national origin.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 239

Lead Safe Housing
Requirements
(rehab of pre-1978 units)
When there is HOME assistance involving pre-1978 properties, the City must have qualified staff (or hire them for the project) to notify occupants of the hazards of LBP and take the appropriate approach for various activities; qualified staff must be invol ved in inspections and clearance actions and report preparation.

Cost reasonableness The City must have qualified cost estimators available to assist in bid preparation and contract awards, as well as reviewing payment requests.

Americans with Disabilities
Act (ADA)
The City must make an internal review of its programs and communications to ensure they are accessible to and usable by persons with disabilities. This may include working with advocacy groups to achieve compliance.

Fair Housing requirements The City must determine if there are under -served populations who are eligible for HOME assistance, and if they are non -English speaking or have literacy challenges, the agency may work with advocacy groups to translate or otherwise reach these households.

Affirmative Marketing The City must develop and adopt an Affirmative Marketing Plan and ensure that owners of properties with five or more HOME units are aware of the policy and follow it.

Section 504 The City must ensure that specifications for new construction of multifamily dwellings meet the design and construction standards of the Fair Housing Act to make units accessible and the requirements were included in contracts for substantial rehabilitatio n of buildings with 15 or more units when rehab exceeds 75% of replacement costs.

In other projects, the Recipient should work with the developer/owner to make units adaptable and/or accessible as is financially feasible.

Energy conservation The City must become familiar with the International Energy Conservation Code and include its requirements in all contracts for residential new construction.

Labor requirements,
including Davis-Bacon
Before beginning construction or rehab of projects with 12 or more HOME assisted units, the City must obtain the prevailing wages for various building trades must be obtained from the Department of Labor (DOL); someone must be designated to monitor work on site and payrolls; report as required by D-B and related acts.

Uniform Relocation Act
and Section 104(d)
The City is responsible for ensuring that tenants in properties that may be acquired or rehabilitated receive correct and timely notices and protections; owners of units to be acquired through a Homebuyer assistance program must receive the “Notice to Owne r” for voluntary acquisitions, and tenant living in units purchased with HOME funds are protected by the URA. If units are demolished or converted with HOME funds, 104(d) may be triggered and appropriate notices and assistance must be provided . Since no on e can be forced to move (displaced)

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 240

without at least 30 days’ notice, a project may not meet a developer’s schedule.

Buy America Preference
(BAP); Build America, Buy
America Act (BABA)
The city is responsible for following the implementation guidance for Buy A merica Preference (BAP) imposed by the Build America, Buy America (BABA) Act. BAP does not apply to Federal funds for “pre and post disaster or emergency response ” such as HOME Investment Partnerships American Rescue Plan Program (HOME-ARP).

EXHIBIT 18: Documenting Compliance with Other Federal Requirements Requirement Documentation
Environmental review of
activities
Files demonstrate appropriate level of review, notification, requests for release of funds, publications, and dates for commitments and covered activities were not begun until funds were released.

Section 3 To the greatest extent feasible, efforts were made to include businesses and low -income residents in the project area in construction contracts for workers and suppliers; training programs, as appropriate were developed and used to provide opportunities for construction employment.

Women/Minority Business
Enterprise
Files demonstrate that the City followed its policies for reaching out and including MBE/WBE firms in contracts and invitations for bidding work.

Contractor selection File supports selection of contractor(s) who were not on the list of suspended or de-barred contractors
Procurement There is evidence of free and open competition for funds and contracts according to the City of Montebello policies and program requirements that apply.

Conflict of interest There is no evidence of preferential treatment for developers, beneficiaries, contractors, or suppliers due to relationships to those in decision-making positions.

Equal Employment
Opportunity
Language prohibiting employment discrimination based on race, color, religion, sex, or national origin is included in all construction contracts over $10,000.

Lead Safe Housing
Requirements (rehab of
pre-1978 units)
Appropriate notices and approaches are used for various activities; qualified staff is involved in inspections and clearance actions; reports demonstrate a knowledge of rules and compliance.

Cost reasonableness Cost estimates are prepared prior to bids by knowledgeable persons; bidding and payments are within estimates or documented if they deviated; payment requests are supported by bills, invoices or other documentation.

Americans with Disabilities
Act (ADA)
Programs were accessible to and usable by persons with disabilities, including removing communications barriers.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 241

Fair Housing requirements Files support outreach to all classes; programs were available to all persons and efforts were made to overcome barriers to participation Affirmative Marketing Files demonstrate that projects with five or more HOME -assisted units were affirmatively marketed by following policies, and records document actions taken.

Section 504 Specifications for new construction of multi-family dwellings met the design and construction standards of the Fair Housing Act to make units accessible and requirements were included in contracts for substantial rehabilitation of building with 15 or more units when rehab exceeded 75% of replacement costs. When this threshold was not triggered, to the extent financially feasible, units were made adaptable or accessible.

Energy conservation Drawings and specifications for newly -constructed units must reference the requirements of the International Energy Conservation Code. Structures rated by a certified rater for Energy Star qualifications.

Labor requirements,
including Davis-Bacon
For rehabilitation or new construction of projects with 12 or more HOME assisted units, the prevailing wage must be obtained from the Department of Labor (DOL) and paid for each of the trades; payments must be monitored on site and reported. Wage determination applicable to each project must be included as part of the contract documents.

Uniform Relocation Act and
Section 104(d)
For properties with tenants in occupancy, correct and timely notices and protections were provided and are on file.

Buy America Preference
(BAP); Build America, Buy
America Act (BABA)
The city is responsible for following the implementation guidance for Buy A merica Preference (BAP) imposed by the Build America, Buy America (BABA) Act. BAP does not apply to Federal funds for “pre and post disaster or emergency response ” such as HOME Investment Partnerships American Rescue Plan Program (HOME-ARP).

Non-Discrimination and Equal Access

No person in the United States shall on the grounds of race, color, national origin, religion, or sex be excluded, denied benefits or subjected to discrimination under any program funded in whole or in part by HOME funds.

The City will take the following measures to ensure non-discriminatory treatment, outreach, and access to program resources. This applies to employment and contracting, as well as to marketing and selection of program participants.

1. Fair Housing and Equal Opportunity

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 242

The City of Montebello will comply with all of the following Federal laws, executive orders and regulations pertaining to fair housing and equal opportunity as summarized below.

1. Title VI of the Civil Rights Act of 1964, As Amended (42 USC 2000d et seq.): States that no person may be excluded from participation in, denied the benefits of, or subjected to discrimination under any program or activity receiving Federal financial assistance on the basis of race, color, or national origin . The regulations implementing the Title VI Civil Rights Act provisions for HUD programs may be found in 24 CFR Part 1.

2. The Fair Housing Act (42 U.S.C. 3601-3620): Prohibits discrimination in the sale or rental of housing, the financing of housing or the provision of brokerage services against any person on the basis of race, color, religion, sex, national origin, handicap or familial status. Furthermore, section 104(b)(2) of the Act requires that each grantee certify to the secretary of HUD that it is affirmatively furthering fair housing. The certification specifically requires grantees to conduct a fair housing analysis, develop a fair housing plan, take appropriate actions to overcome the effects of any impediments identified, and maintain records on the analysis, plan, and actions in this regard. Fair Housing Act implementing regulations for HUD programs may be found in 24 CFR Part 100-115.

3. Equal Opportunity in Housing (Executive Order 11063, as amended by Executive Order 12259): Prohibits discrimination against individuals on the basis of race, color, religion, sex or national origin in the sale, rental, leasing or other disposition of residential property, or in the use or occupancy of housing assisted with Federal funds. Equal Opportunity in Housing regulations may be found in 24 CFR Part 107.

4. Age Discrimination Act of 1975, As Amended (42 U.S.C. 6101): Prohibits age discrimination in programs receiving Federal financial assistance. Age Discrimination Act regulations may be found in 24 CFR Part 146.

2. Affirmative Marketing

In the event that the City of Montebello implement a housing program using funds with five or more HOME-assisted units, the City will adopt an affirmative marketing plan that that includes procedures and requirements including:

1. Methods for informing the public, owners and potential tenants about fair housing laws and the City's policies (for example: use of the Fair Housing logo, or equal opportunity language);

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 243

2. A description of what owners and/or the City will do to affirmatively market housing assisted with HOME funds;

3. A description of what owners and/or the City will do to inform persons not likely to apply for housing without special outreach

4. Maintenance of record to document actions taken to affirmatively market HOME- assisted units and to assess marketing effectiveness, and

5. A description of how efforts will be assessed and what corrective actions will be taken where requirements are not met.

3. Handicapped Accessibility

The City will adhere to the HOME regulations governing the accessibility of Federally - assisted buildings, facilities, and programs.

Americans with Disabilities Act (42 U.S.C. 12131; 47 U.S.C. 155, 201, 218, and 225) :

Provides comprehensive civil rights to individuals with disabilities in the areas of employment, public accommodations, state and local government services, and telecommunications. The Act, also referred to as the ADA, also states that discrimination includes the failure to design and construct facilities (built for first occupancy after January 26, 1993) that are accessible to and usable by persons with disabilities. The ADA also requires the removal of architectural and communication barriers that are structural in nature in existing facilities. Removal must be readily achievable, easily accomplishable, and able to be carried out without much difficulty or expense.

Fair Housing Act : Multi -family dwellings must also meet the design and construction requirements at 24 CFR 100.205, which implement the Fair Housing Act (42 U.S.C. 3601 - 19).

Section 504 : Section 504 of the Rehabilitation Act of 1973 prohibits discrimination in Federally assisted programs on the basis of handicap. Section 504 imposes requirements to ensure that "qualified individuals with handicaps" have access to programs and activities that receive Federal funds. Under Section 504, recipients and subrecipients are defined more broadly than under the HOME program . Section 504 recipients and subrecipients include any entity that receives Federal funding (for example, a subrecipient, or CHDO). The specific requirements under Section 504 are summarized in Exhibit 19 below:

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 244

EXHIBIT 19
Section 504 Requirements
Removal of Physical Barriers
 For new construction of multi-family projects, 5 percent of the units in the project (but not less than one unit)
must be accessible to individuals with mobility impairments, and an additional 2 percent of the units (but not
less than one units) must be accessibly to individuals with sensory impairments.  The Section 504 definition of substantial rehabilitation multi -family projects includes construction in a project
with 15 or more units for which the rehabilitation costs will be 75 percent or more of the replacement cost.

In such developments, 5 percent of the units in the project (but not less than one unit) must be accessible to individuals with mobility impairments, and an additional 2 percent (but not less than one unit) must be
accessible to individuals with sensory impairments.
 When rehabilitation less extensive than substantial rehabilitation is undertaken, alterations must, to the maximum extent feasible, make the unit accessible to and usable by individuals with handicaps, until 5 percent
of the units are accessible to people with mobility impairments. Alterations to common spaces must, to the maximum extent feasible, make the project accessible.  Accessible units must be, to the maximum extent feasible, distributed throughout projects and sites, and must be available in a sufficient range of sizes and amenities so as to not limit choice.
 Owners and managers of projects with accessible units must adopt suitable means to assure that information regarding the availability of accessible units reaches eligible individuals with handicaps. They also
must take reasonable non -discriminatory steps to maximize use of such units by eligible individuals.
 When an accessible unit becomes vacant, before offering the unit to a non -handicapped individual, the owner/manager should offer the unit: first, to a current occupant of the project requiring the accessibility feature; and second, to an eligible qualified applicant on the waiting list requiring the accessibility features.
 The usual standards for ensuring compliance with Section 504 are the Uniform Federal Accessibility Standards (UFAS), although deviations are permitted in specific circumstances.

PROVIDE PROGRAM ACCESSIBILITY
 Individuals with handicaps must be able to find out about, apply for, and participate in Federally
assisted programs or activities.
 Special communication systems may be needed for outreach and ongoing communication

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 245

(e.g., Telecommunications Devices for the Deaf (TDD), materials on tape or in Braille, accessible locations for activities and meetings).
 Policies and procedures must be non- discriminatory (e.g., housing providers may not ask people
with handicaps questions not asked of all applicants, screen individuals with handicaps differently or
assess an individual's ability to live independently).

MAKE EMPLOYMENT ACCESSIBLE
 Employers must not discriminate.
 Employers must remove physical and administrative barriers to employment.  Employers must make reasonable accommodations for individuals with known handicaps
(e.g., job restructuring, providing readers or sign interpreters, making facilities accessible).

ADMINISTRATIVE REQUIREMENTS

 If recipients or subrecipients have 15 or more employees, they must:
o designate a Section 504 Coordinator, and
o notify program participants and employees of non-discrimination policies.  All recipients and subrecipients must conduct self- evaluations of compliance with Section 504.

For any recipient or subrecipient principally involved in housing or social services, all of the activities of the agency -- not just those directly receiving Federal assistance -- are covered under Section 504.

Contractors and vendors are subject to Section 504 requirements only in the work they do on behalf of a recipient or subrecipient.

The ultimate beneficiary of the Federal assistance is not subject to Section 504 requirements .

Under Section 504, recipients and subrecipients are not required to take actions that create undue financial and administrative burdens or alter the fundamental nature of the program.

Employment and Contractor

The cross -cutting Federal regulations discussed below govern employment and contracting opportunities, including equal opportunity, labor requirements and contracting/procurement procedures.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 246

1. Equal Opportunity

The City of Montebello has established an “Affirmative Fair Housing Marketing Plan” to ensure that the allocated HOME Funds promote fair housing and ensures outreach to all potentially eligible households, especially those least likely to apply for assistance.

The City's policy is to provide information and attract eligible persons to available housing without regard to race, color, national origin, sex, religion, familial status (persons with children under 18 years of age, including pregnant women), or disability.

The procedures followed are intended to further the objectives of the Equal Employment Opportunity, Executive Order 11246, as amended and Prohibits discrimination against any employee or applicant for employment because of race, color, religion, sex, or national origin.

Note: Provisions to effectuate this prohibition must be included in all construction contracts exceeding $10,000. Implementing regulations may be found at 41 CFR Part 60.

PROCEDURE

Currently, the City of Montebello is not administrating a program containing five or more HOME assisted units. However, in the future it will abide by the HOME Final Rule regarding affirmative marketing procedures and requirements apply to rental and homebuyer projects containing five or more HOME-assisted units.

Should the City decided to implement such program it will commit to the goals of affirmative marketing that will be implemented through the following procedures:

1. Providing equal service without regard to race, color, religion, sex, handicap, familial status, or national origin of any client, customer, or resident of any community;

2. Keeping informed about fair housing laws and practices;

3. Informing clients and customers about their rights and responsibilities under the fair housing laws by providing verbal and written information;

4. Evaluating the effectiveness and compliance of all marketing as it relates to fair housing;

5. Including the Equal Opportunity logo or slogan, and where applicable the accessibility logotype, in all ads, brochures, and written communications to owners and potential tenants;

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 247

6. Displaying the HUD’s fair housing posters (at a minimum, English and Spanish versions) in rental offices or other appropriate locations;

7. Soliciting applications for vacant units from persons in the housing market who are least likely to apply for assistance without the benefit of special outreach efforts; working with the local public housing authority and other service and housing agencies to distribute information to a wide and diversified population;

8. Maintaining documentation of all marketing efforts (such as copies of newspaper ads, memos of phone calls, copies of letters).

9. Maintaining a record of applicants for vacant units with a general profile of the applicant, how the applicant learned of the vacancy, the outcome of the application, and if rejected, why; maintaining this record for two years or through one compliance audit, whichever is the shorter period of time.

ASSESSMENT

In conjunction with the annual on-site compliance reviews, the City of Montebello will:

1. Review and evaluate records of affirmative marketing efforts (advertisements, flyers, and electronic media spots, etc.);

2. Evaluate outcomes and effectiveness of marketing efforts and make changes where needed.

3. Evaluate whether good faith efforts have attracted a diversified cross -section of the eligible population.

CORRECTIVE ACTIONS

Failure to meet affirmative marketing requirements will result in the following corrective actions:

1. For failure to comply, the City of Montebello will set a probationary period for compliance, not to exceed six months, during which time the City will provide more specific guidelines for compliance.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 248

2. Further failure to comply with the affirmative marketing requirements may result in the withdrawal of HOME support.

3. Further failure to take appropriate actions to correct discrepancies in affirmative marketing programs may result in steps to recover all invested HOME funds.

Section 3

Section 3 of the Housing and Urban Development Act of 1968 requires that, to the greatest extent feasible, opportunities for training and employment arising from HOME will be provided to low - income persons residing in the program service area. In addition, to the greatest extent feasible, contracts for work (all types) to be performed in connection with HOME will be awarded to business concerns that are located in or owned by persons residing in the program service area.

Minority/Women's Business Enterprise

Under Executive Orders 11625, 12432 and 12138, the City of Montebello adheres to the HUD requirements for minority outreach to ensure the inclusion, to the maximum extent possible, of minorities and women, and entities owned by minorities and women, in all contracts (See 24 CFR

85.36(e)).

Disadvantaged Business Enterprise

The City of Montebello complies with Federal regulations concerning Disadvantaged Business Enterprise (DBE). Disadvantaged Business Enterprise (DBE) and Small Business Enterprise (SBE) firms are strongly encouraged to participate in the City of Montebello’s contract opportunities.

City projects funded in whole or in part with federal funding sources are subject to DBE requirements set forth in Title 49 of the Code of Federal Regulations (CFR), Part 26, and the State of California Department of Transportation DBE Program Plan, as well as other Caltrans guidelines. For these projects, specific DBE requirements and project goals are detailed in the project's bid specifications.

To search for certified DBEs, visit the following website California Unified Certification Program (dbesystem.com).

PROCEDURE

1. The Subrecipient will use its best efforts to afford small businesses, minority business enterprises, and women’s business enterprises the maximum practicable opportunity to participate in the performance of this contract. As used in this contract, the terms “small

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 249

business” means a business that meets the criteria set forth in section 3(a) of the Small Business Act, as amended (15 U.S.C. 632) and “minority and women’s business enterprise” means a business at least fifty -one (51) percent owned and controlled by minority group members or women. For the purpose of this definition, “minority group members” are Afro-Americans, Spanish-speaking, Spanish surnamed, or Spanish-heritage Americans, Asian-Americans, and American Indians. The Subrecipient may rely on written representations by businesses regarding their status as minority and female business enterprises in lieu of an independent investigation.

Davis Bacon Labor Requirements

The City of Montebello will comply with regulations on wage and labor standards. In the case of Davis-Bacon and the Contract Work Hours and Safety Standards Acts, every contract for the construction of housing (rehabilitation or new) that contains 12 or more units assisted with HOME funds triggers the requirements.

Davis-Bacon and Related Acts (40 USC 276(A)-7)

The Davis-Bacon and Related Acts ensures that mechanics and laborers employed in construction work under Federally assisted contracts are paid wages and fringe benefits equal to those that prevail in the locality where the work is performed. This act also provides for the withholding of funds to ensure compliance and excludes from the wage requirements apprentices enrolled in bona fide apprenticeship programs.

PROCEDURE

1. The City of Montebello requires that any contract for the construction of Affordable Housing with 12 or more units will require that all laborers and mechanics who are employed to perform work on any project, or any contractor or construction work which is financed, in whole or in part, with assistance which is received under the Housing and Community Development Act of 1974 shall be paid wages at rates which are not less than those that prevail in the locality for similar construction and shall receive ove rtime compensation in accordance with the Contract.

2. Work Hours and Safety Standards Act.

3. The contractor and its subcontractors shall also comply with all applicable Federal laws and regulations which pertain to labor standards, including the minimum wage law.

Title I of Housing and Community Development Act of 1974:

The City of Montebello will not:

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 250

1. Discriminate against any employee or applicant for employment on the basis of religion and not limit employment or give preference in employment to persons on the basis of religion; and

2. Discriminate against any person applying for such public services on the basis of religion and not limit such services or give preference to persons on the basis of religion; and

3. provide no religious instruction or counseling, conduct no religious worship or services, engage in no religious proselytizing, and exert no other religious influence in the provision of such public services.

Additional information regarding Executive Orders is available by:

 11625 - Prescribing additional arrangements for developing and coordinating a national program for minority business enterprise,
 12432 - Minority business enterprise development, and  12138 - National Women’s Business Enterprise Policy and National Program for  Women’s Business Enterprise.
 http://www.archives.gov/federal_register/codification/executive_order/11625.h tml
 http://www.archives.gov/federal_register/codification/executive_order/12432.h tml
 http://www.usdoj.gov/crt/cor/byagency/sbaeo12138.htm

Contract Work Hours and Safety Standards Act, as amended (40 USC 327-333)

This ACT provides that mechanics and laborers employed on federally assisted construction jobs are paid time and one-half for work in excess of 40 hours per week and provides for the payment of liquidated damages where violations occur. This act also addresses safe and healthy working conditions.

Copeland (Anti-Kickback) Act (40 USC 276c)

The Copeland Anti -Kickback Act governs the deductions from paychecks that are allowable.

Additionally, it makes it a criminal offense to induce anyone employed on a federally assisted project to relinquish any compensation to which he or she is entitled and requires all contractors to submit weekly payrolls and statements of compliance.

Fair Labor Standards Act of 1938, As Amended (29 USC 201, et. seq.)

The Fair Labor Standards Act establishes the basic minimum wage for all work and requires the payment of overtime at the rate of at least time and one -half. It also requires the payment of

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 251

wages for the entire time that an employee is required or permitted to work and establishes child labor standards.

Site and Neighborhood Standards

Housing provided through the HOME Program must promote greater choice of housing opportunities. Specific rules are as follows:

1. HOME-provided housing must be suitable from the standpoint of facilitating and furthering full compliance with the Title VI of the Civil Rights Act - 1964, the Fair Housing Act and Executive Order 11063.

2. The Final Rule requires only new construction rental projects to meet site and neighborhood standards from 24 CFR 983.6(b), which places limiting conditions on building in areas of "minority concentration" and that are "racially mixed."

PROCEDURE

1. The City of Montebello uses project information provided by owners/developers/sponsors/CHDOs to complete the Site and Neighborhood Standards Review form and document compliance with the Site and Neighborhood requirements.

2. The City reserves the right to request additional clarification and materials from owners/developers/sponsors for adequate documentation of compliance.

Lead-Based Paint Safe Housing Rule

24 CFR part 35, subpart J

On September 15, 1999, HUD issued a new Federal lead -based paint regulation implementing Title X of the Housing and Community Development Act of 1992 . This regulation makes many important changes in the lead -based paint requirements applicable to housing funded through HUD's Community Planning and Development (CPD) programs.

The Lead Safe Housing Rule regulations that apply to rehabilitation activities are found at 24 CFR part 35, subpart J. The rehabilitation regulations distinguish among four approaches depending on the size of the rehabilitation effort. Understanding each approach and how to determine the level of rehabilitation assistance is the first step in deciding what lead safe housing requirements apply to a rehabilitation project . The purpose of the regulation is to identify and address lead- based paint hazards before children are exposed to lead. The regulation is divided into subparts that apply to the HOME program include:

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 252

1. Subpart A: Disclosure

2. Subpart B: General Requirements and Definitions

3. Subpart J: Rehabilitation

4. Subpart K: Acquisition, Leasing, Support Services, and Operations

5. Subpart M: Tenant-Based Rental Assistance

6. Subpart R: Methods and Standards for Lead-Based Paint Hazard Evaluation and Reduction

On April 22, 2008, the EPA issued the Renovation, Repair, and Painting Rule (RRP) a rule requiring the use of lead -safe practices and other actions aimed at preventing lead poisoning. Under the rule, beginning April 2010, contractors performing renovation, repair and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must b e certified and must follow specific work practices to prevent lead contamination. Until that time, HUD and EPA recommend that anyone performing renovation, repair, and painting projects that disturb lead-based paint in pre-1978 homes, child care facilities and schools follow lead-safe work practices.

There are some differences between the EPA RRP Rule and the HUD Lead Safe Housing Rule . A major difference is that the LSHR requires clearance examinations . All housing receiving federal assistance must still comply with the LSHR.

All contractors should follow these three simple procedures:

1. Contain the work area.

2. Minimize dust.

3. Clean up thoroughly.

From December 2008, the rule has required that contractors performing renovation, repair and painting projects that disturb lead- based paint provide to owners and occupants of child care facilities and to parents and guardians of children under age six tha t attend child care facilities built prior to 1978 the lead hazard information pamphlet Renovate Right: Important Lead Hazard Information for Families, Child Care Providers, and Schools (PDF) | en espanol (PDF).

Starting on April 22, 2010, the rule will affect paid renovators who work in pre-1978 housing and child-occupied facilities, including:
 Renovation contractors
 Maintenance workers in multi-family housing
 Painters and other specialty trades.

Under the rule, child-occupied facilities are defined as residential, public, or commercial buildings where children under age six are present on a regular basis. The requirements apply to renovation, repair, or painting activities. The rule does not apply to minor maintenance or repair activities where less than six square feet of lead-based paint is disturbed in a room or where less than 20 square feet of lead-based paint is disturbed on the exterior. Window replacement is not minor maintenance or repair.

For additional guidance, refer to: EPA's Lead Renovation, Repair, and Painting Program Rule.

Additional information on becoming an EPA -certified renovator or training provider is available on EPA's Renovator and Trainer Tool Box site.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 253

HUD defines four approaches to address lead-based paint in HOME funded Projects. The Exhibit 20 on the following page details each approach.

EXHIBIT 20

APPROACHES TO IMPLEMENTING LEAD HAZARD EVALUATION AND REDUCTION APPROACH 1 - DO NO HARM

LEAD HAZARD

EVALUATION
 Paint testing
performed on
surfaces to be
disturbed.

LEAD HAZARD REDUCTION
 Repair surfaces
disturbed during
work.
 Safe work practices
used
when working on areas
identified as
lead-based paint.
 Clearance performed.

Options
 Presume lead-based paint is
present and use safe work
practices on all surfaces being
disturbed.

APPROACH 2 - IDENTIFY AND STABILIZE DETERIORATED PAINT

LEAD HAZARD

EVALUATION
 Visual assessment
performed
to identify
deteriorated paint.

LEAD HAZARD REDUCTION
 Paint stabilization of
identified deteriorated
paint.
 Safe work practices
used.
 Clearance performed.

Options
 Perform paint testing on
deteriorated paint. Safe work
practice requirements only
apply to lead-based paint.

APPROACH 3 - IDENTIFY AND CONTROL LEAD HAZARDS

LEAD HAZARD

EVALUATION
 Paint testing
performed on
surfaces
to be disturbed.
 Risk assessment
performed
on entire dwelling.

LEAD HAZARD REDUCTION
 Interim controls
performed on
identified hazards.
 Safe work practices
used.
 Clearance performed
Options
 Presume lead based paint
and/or lead based paint hazards
are
present and perform standard
treatments.

APPROACH 4 - IDENTIFY AND ABATE LEAD HAZARDS

LEAD HAZARD

EVALUATION
 Paint testing
performed

LEAD HAZARD REDUCTION
 Abatement performed
on
identified hazards.

Options
 Presume lead-based paint and/or
lead-based paint hazards are
present
and perform abatement on all

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 254

on surfaces to be
disturbed.
 Risk assessment
performed on
entire dwelling.

 Interim controls
performed on
identified hazards on
the exterior
that are not disturbed
by Rehabilitation.
 Safe work practices
used.
 Clearance performed.
applicable surfaces –deteriorated,
impact, friction, chewable
surfaces, and
surfaces to be disturbed.

Build America, Buy America Act (BABA)

According to HUD, t he Build America, Buy America Act (BABA) requires that all iron and steel, construction materials, and manufactured products used in federally funded infrastructure projects are produced in the United States. This requirement, known as the "Buy America Preference" (BAP), is detailed in the Infrastructure Investment and Jobs Act, Pub. L. 117- 58 and 2 CFR 184.

Per HUD, City staff must work closely with subrecipients, developers, and contractors to ensure that products used in HUD- funded infrastructure projects are produced in the United States as required. HUD has made Resource documents available on their website to assist CPD grantees and their partners in determining if BAP applies to their specific projects. Staff should refer to the Policy Guidance and Notices regarding BABA I mplementation Guidance for BAP which can be found at the following link: https://www.hudexchange.info/programs/baba/

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 255

CHAPTER 8: HOMEBUYER ASSISTANCE PROGRAM

If the City decides to resume a homebuyer assistance program and the program is implemented, the following requirements should be applied:

PROGRAM OBJECTIVES

The Homebuyer Assistance Program (the “Program”) is a housing program designed to assist low to moderate first-time homebuyers with down payment assistance OR closing cost assistance (whichever is greater) to purchase a home within the city limits of Montebello.

ELIGIBLE ACTIVITIES

The City of Montebello will use funds provided by the Department of Housing and Urban Development (“HUD”) HOME Investment Partnerships Program to provide eligible applicants funds to be used for closing costs or down payment assistance.

INELIGIBLE ACTIVITIES

Homebuyer Assistance funds cannot be used for cash back, realtor’s commissions and/or buy down points.

HOMEBUYER APPLICANT

A. Target Households

The Households served will be a first-time homebuyer who has income at or below 80% of the area median income as determined by the Department of Housing and Urban Development (HUD), (24CFR, 92.2(9)) who will be purchasing a home within the city limits of Montebello.

The property to be acquired must be owner occupied.

B. Income Limits

Total household income cannot exceed 80% of the area median income as determined by HUD (24CFR, 92.2(9)).

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 256

C. Application Process

1. Each applicant must submit an application with the City of Montebello Housing Division. Incomplete application packets will not be accepted.

• All forms within the application packet must be
completely filled out
• All documents listed on the checklist below must be
turned in:

1) City of Montebello Homebuyer Assistance
Program
Application – completed and signed
2) Real Estate Purchase Contract
3) Appraisal Report
4) Truth in Lending Disclosure Statement
5) Lender Loan Pre-Approval and Underwriting
Documents
6) Signed copy of Uniform Residential Loan
Application (1003)
7) Good Faith Estimate
8) Escrow Instructions
9) Proof of Homeowners Insurance
10) Credit Report
11) Certificate of Completion of Homebuyer
Education Workshop
12) Proof of income for the past three (3) months
for all household members over 18 years of
age
13) Pension and/or social security award letter
14) Copy of checking and savings account for the
last six (6) months for all household members
over
18years of age
15) Last three (3) years Federal Tax returns for all
household members over 18
16) Divorce decree (if applicable)
17) Bankruptcy documents (if applicable)

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 257

18) Copies of Driver’s License/State ID for all
household members over 18 years of age
19) Copies of Social Security cards for ALL
household members
20) Proof of U.S. Citizenship or resident alien
status for
ALL household members
21) Race and Ethnic Data Reporting Form (OMB
Approval No. 2502-0204)

2. Upon receipt of all the documents listed above, the Project Coordinator will need 15 business days to review and approve the applicant funding and closing of the loan. If the applicant is not income eligible a denial letter will be prepared.

3. During the 15 business days the City’s Project Coordinator will make an appointment with the realtor or lender to inspect the home to be purchased. The Home must be:

i. Decent, safe, sanitary and in good repair
ii. At a minimum, the housing must meet all
applicable State and local housing quality
standards and code requirements and comply
with the City’s Real Property Report Ordinance. A
Certificate of Compliance is required to be
obtained prior to the close of escrow.

4. During the 15 business days the applicant(s) will need to satisfactorily complete an eight (8) hour homebuyer educational workshop conducted by a HUD approved agency. No online
training will be accepted. A Homebuyer Training Certificate will be accepted for up to one (1) year after the date of training.

5. If the home passes all inspections and the applicant completes the required approved Home Buyer Training, the closing documents will be processed and sent to Escrow for signing and recording.

After copies of signed First Trust Deed, Second Trust Deed, Notice of Default, and original Promissory Note are received; the City of Montebello will process a check/wire to Title for closing to take place.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 258

6. The escrow company is responsible for submitting the following documents to the City of Montebello following closing on the home:

i. Certified Final Settlement Statement
ii. Copy of Title Policy on first trust deed and
second trust deed

7. The City of Montebello reserves the right to postpone a scheduled closing date due to the following:

• Failed Real Property Inspection
• Incomplete/missing paperwork
• Scheduling conflicts
• Falsification and/or alteration of documents
• Processing time for check request is not sufficient

8. All files with no activity for six (6) months will be automatically closed. If the applicant is still interested in the Homebuyer Assistance Program, he/she must re-apply and re-submit all required paperwork.

D. Financing Requirements

The applicant must be able to qualify for a first mortgage loan. All co- applicants must be listed on the mortgage loan and on all applicant documents even if not a part of the household.

The City of Montebello will provide closing cost assistance (reasonably) required for households OR the down payment assistance, not to exceed 50% of downpayment amount required by the first loan lender (whichever is greater). The Program funds cannot be used for cash back, realtor’s commissions, and /or buy down points.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 259

1. Deed of Trust

The City of Montebello loan will be secured by a Deed of Trust which will secure position on title. The Deed of Trust, Notice of Default/Notice of Sale, and Promissory Note will be notarized, recorded and filed at the Los Angeles County Recorder’s Office and a copy will be placed in the applicants file.

2. Breach of Contract

Upon occurrences of any of the below stated items, the City of Montebello and/or its assignee reserves the right to demand the loan due immediately if:

• Any actual or attempted transfer of Deed of Trust,
whether voluntary or involuntary, including by operation of law, or upon death of the undersigned of certain real property used to secure this note pursuant to the Deed
of Trust.

•

Any change in title of the secured property without prior approval of the City of Montebello. These changes
might be, but are not limited to: sale, lease, rent, or abandonment of property.
•

3. Payment

The recipient no longer reside(s) at the secured property as its principal residency.

The City loan will have no monthly payments, but the loan would be due and payable under the following circumstances:
1) when the property is sold or transferred, refinanced with cash out; 2) a change in title occurs; 3) there is a default on the loan; or 4) when failure to use the property as principal residence occurs.

The loans will be forgiven after 15 years of continued owner occupancy.

For Veterans who have qualified for a VA loan and are low to moderate income, the Program would provide closing cost

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 260

assistance as a loan. The City loan will have no monthly payments, but the loan would be due and payable under the following circumstances: 1) when the property is sold or transferred, refinanced with cash out; 2) a change in title occurs; 3) there is a default on the loan; or 4) when failure to use the property as principal residence occurs.

The loan will be forgiven after 10 years of continued owner occupancy.

LIMITATIONS OF HOMEBUYER ASSISTANCE PROGRAM

A. Availability of Funds

The Homebuyer Assistance Program fiscal year begins in July 1st of each year, if the program is available. Funds are processed and distributed on a first come, first serve basis and/or until there has been a depletion of funds.

B. Annual Income

The annual household income of applicants cannot exceed 80% of the area median income as determined by HUD. The annual gross income of the applicant’s household shall be determined in accordance with the Code of Regulations 24 CFR 5.609 of the applicant’s household.

Annual income is defined as the “gross” income of all household members 18 years of age or older.

Annual income includes, but is not limited to:
▪ The full amount before any payroll
deduction of wages
▪ Salaries
▪ Social Security
▪ Overtime pay
▪ Commissions
▪ Fees
▪ Tips

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 261

▪ Bonuses
▪ Other compensation for personal
services
▪ Net income from the operation of a
business or profession
▪ Other income
▪ Interest from bank accounts
▪ Rental Income
▪ Profit from real estate sales
▪ Value of personal property

PROPERTY AND OCCUPANCY

A. Geographic Boundaries

The City of Montebello Homebuyer Assistance loans are provided to income eligible applicants who are purchasing homes located within the city limits of Montebello.

B. Eligible Properties

Existing or newly constructed single-family or condominium/townhomes properties located within the City of Montebello are eligible. Only single- family homes with one (1) dwelling unit on a lot are eligible. Homes with two (2) or more units on a lot are not eligible except for detached condominium homes. Mobile homes and manufactured homes are not eligible under the Program.

C. Inspections

The property must be inspected by the City of Montebello Building & Safety Division under the Real Property Report Program. A copy of the Property Report must be submitted along with a Certificate of Compliance.

A Temporary Certificate of Compliance will not be accepted under the Homebuyer Assistance Program.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 262

D. Occupancy Requirements

The property to be acquired must be owner-occupied. No overcrowding will be allowed. The maximum number of persons allowed in each home is two (2) persons per bedroom plus one (1). The table below shows the number of persons allowable by household unit size:

OCCUPANCY STANDARD
Bedroom Size Max # of Persons
1 3
2 5
3 7
4 9

FEDERAL REQUIREMENTS

A. Lead Disclosure

The City’s Project Coordinator will be responsible for discussing lead paint issues and providing the applicant with a “Protect Your Family From Lead in Your Home” booklet. The applicant will sign a form verifying they have received and discussed the lead information.

B. Fair Housing and Equal Opportunity

There shall be no discrimination based on race, color, religion, sex, marital status, ancestry, or national origin. The Homebuyer Assistance Program will be implemented in conformity with Title VI of the Civil Rights Act of 1964 and the Fair Housing Act and implementing regulations. Fair housing will be further affirmatively, and actions shall be taken to overcome the effects of any impediments to fair housing. It shall be ensured that all persons, including those qualified individuals with handicaps, have access to the Program. The City of Montebello is an equal opportunity provider.

C. Conflict of Interest

No employee, agent, consultant, officer or elected official or appointed official of the CITY who exercises or have exercised any functions or responsibilities with respect to activities relating to this Program or who

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 263

are in a position to participate in a decision-making process or gain inside information with regard to these activities may obtain a financial interest or financial benefit from this Program, or the proceeds from such activity, either for themselves or those with whom they have business or immediate family ties, during their tenure or for one (1) year thereafter.

Immediate family ties include (whether by blood, marriage, or adoption) the spouse, parent (including a stepparent, child (including a stepchild), brother, sister (including a stepbrother or stepsister), grandparent, grandchild, and in-laws of the employee, agent, consultant, officer, elected or appointed official of the CITY.

This policy shall apply to families of Lenders and the loan servicing agent.

D. Anti-Predatory Lending Policy

The City of Montebello is against predatory lending practices. The City complies with all applicable federal, state, and local predatory lending laws and other laws designed to prevent unfair or abusive lending practices.

The City will not knowingly fund a Mortgage Loan which involves unfair and predatory lending practices, including but not limited to, lending without regard to borrower’s ability to make payments on the mortgage; charging prepayment penalties for paying off a loan; including in loan documents mandatory arbitration with respect to dispute resolution. The City will further comply with measures issued by HUD to prevent predatory lending, particularly with respect to low and very low-income homebuyers.

FILE REQUIREMENTS

The City’s Project Coordinator will keep in the files, at minimum, all required documents which verify compliance with policy requirements such as, but not limited to:
• City of Montebello Homebuyer Assistance Program Application – completed and signed
• Real Estate Purchase Contract
• Appraisal Report
• Truth in Lending Disclosure Statement
• Lender Loan Pre-Approval and Underwriting Documents
• Signed copy of Uniform Residential Loan Application (1003)

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 264

• Good Faith Estimate
• Escrow Instructions
• Proof of Homeowners Insurance
• Credit Report
• Certificate of Completion of Homebuyer Education Workshop • Proof of income (Income Eligibility Form)
• Last three (3) years Federal Tax returns for all household members over 18 years of age
• Copies of Driver’s License/State ID for all household members over 18 years of age
• Copies of Social Security cards for ALL household members • Proof of U.S. Citizenship or resident alien status for ALL household members • Race and Ethnic Data Reporting Form (OMB Approval No. 2502-0204) • Final Loan Documents (Executed)
• Applicants/City correspondences

POLICY MODIFICATIONS

When the program is in effect, the City of Montebello shall have the authority to make modifications to this policy as necessary for the continued implementation of the Homebuyer Assistance Program, including but not limited to: 1) policy revisions necessary to do a change in the design of the Homebuyer Assistance Program; and 2) policy changes necessary due to the revisions in the rules and regulations of HOME Funds.

PROGRAM OUTREACH AND MARKETING
All outreach efforts will be done in accordance with state and federal fair lending regulations to assure nondiscriminatory treatment, outreach and access to the Program. No person shall, on the grounds of age, ancestry, color, creed, physical or mental disability or handicap, marital or familial status, medical condition, national origin, race, religion, gender or sexual orientation be excluded, denied benefits or subjected to discrimination under the Program. The City will ensure that all persons, including those qualified individuals with handicaps have access to the Program.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 265

A. The Fair Housing Lender Logo will be placed on all outreach materials.

B. The City will work closely with local real estate agents and primary lenders to explain the Program requirements for eligible housing units and homebuyers, and to review Program processes. Local real estate agents and primary lenders will also be encouraged to have their customers participate in the Program.

C. The city will place flyers and program information at Housing counter and City website

D. Education and information workshops will be conducted

MONITORING

The Project Coordinator will review the Homebuyer Assistance Program files once a year to monitor continued home ownership compliance. An Annual Affidavit will be mailed out to Homeowners to submit verification of continued occupancy.

Requirements for Committing HOME Funds

HUD published an Interim Final Rule on December 2, 2016 implementing a grant-specific method of determining compliance with the statutory 24-month deadline for committing HOME funds. The interim rule is effective as of January 3, 2017.

The HOME statute defines commitment as an executed legally binding agreement for a funded HOME project or activity. And the statute – which is the National Affordable Housing Act of 1990 – at 218(g) also states that a Participating Jurisdiction (PJ) must commit their HOME funds within 24 months of HUD's obligation of their grant.

The HOME regulations at 24 CFR 92.2 also define commitment as all necessary financing that has been secured, a budget and schedule have been established, and underwriting has been completed and under which construction is scheduled to start within twelve months of the written agreement date.

A copy of the CPD notice 15-09 titled “Requirements for Committing HOME Funds” can be found at the following link: https://www.hud.gov/sites/documents/15-09CPDN.PDF

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 266

Four Year Completion timeline Requirement

HUD established deadline requirements to ensure that the expenditure of HOME funds results in timely completion and occupancy of affordable housing units. Under the new rule projects- to which HOME funds are committed on or after August 23, 2013- must be completed within 4 years of the date funds are committed to that project as reflected by the dated signatures to the written agreement. HUD will consider projects that are not completed within this four year deadline to be terminated before completion and the PJ will be required to repay the HOME funds invested in the project to its HOME account. The City of Montebello may request a one-year extension from HUD by submitting information about the status of the project, steps being taken to overcome any obstacles to completion, proof of adequate funding to complete the project, and a schedule with milestones for completion of the project. HUD will consider the likelihood of the project being completed within the 1-year timeframe in deciding whether to grant an extension.

Documenting Income Eligibility

A household that receives assistance from the HOME Investment Partnership Program must be income eligible (tenants and buyers). Income must be calculated by using the Part five (section 8) definition or the IRS 1040 Definition. The Part 5 definition of Income can be found in 24 CFR 5.609 9 (b) & (c).

The IRS 1040 Definition of Income is the adjusted gross income of the household.

Use the following steps when Determining Income Eligibility:

Step 1: Collect & Analyze Application, Release forms and Income and Assets Sources Step 2: Calculate Household Income Using Worksheet & Project forward (12 months) Step 3: Compare Projected Income to HOME Income Limits
Step 4: Document Files. Homebuyer/Homeowner Applicant file should include the following:
• Application
• Number of household members and other eligibility criteria • Income verification documentation
• Income calculation worksheet
• Written Agreement with household

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 267

All documents should be included in the applicant file. City Staff should have a hard copy of the file in the office. A recertification for each household should be completed annually.

For HUD guidance on Determining and Documenting Income Eligibility, staff should refer to the following link: Determining Income for the HOME Program - Session 1 - HUD Exchange

City Staff will review and provide final approval for income eligibility documentation, particularly if a HOME assisted project is managed by a third party such as subrecipient or CHDO.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 268

GLOSSARY OF HOME TERMS

Action Plan: The one -year portion of the Consolidated Plan (see below). It includes the PJ’s annual application for HOME funds.

Adjusted Income: Adjusted income is annual (gross) income reduced by deductions for dependents, elderly households, medical expenses, handicap assistance expenses and childcare (these are the same adjustment factors used by the Section 8 Program).

Affordability: The requirements of the HOME Program that relate to the cost of housing both at initial occupancy and over established timeframes, as prescribed in the HOME Final Rule.

Affordability requirements vary depending upon the nature of the HOME assisted activity (i.e., homeownership or rental housing).

Annual Income: The HOME Program allows the use of one of three definitions of annual income:

Section 8 annual income; annual income as reported on the U.S. Census long form; and adjusted gross income as defined for reporting on IRS Form 1040.

Applicant(s): A person or persons who appear on the title to the property and that apply for a grant under the HOME Rehabilitation Grant Program (HRGP). All persons appearing on the title must agree to apply and execute all documents required.

Borrower: A person or persons who appear on the title to the property, signs the Written Agreement with the City and signs the loan documents with the City, thereby becoming legally responsible for any repayment of the HOME Rehabilitation Grant Program (HRGP).

Building and Safety Code : The City’s residential codes and ordinances pertaining to housing construction, land use, occupancy and maintenance of existing residential properties which are applicable to the property through Code Enforcement action.

Building Inspector: The City employee(s) responsible for inspection(s) of structural, electrical, plumbing, improvements. The inspector assures compliance of work to applicable Building and Safety Codes.

Building Division: The Department of the City responsible for issuance of building permits.

Building Permit : An authorization by the Building Division to commence building repairs or improvements on a specific property; Permits must be issued for most home improvements, including, but not limited to, roofing, electrical, plumbing, structural changes, and foundati ons.

A fee is charged for permits and inspections are included in the permit cost.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 269

California Preliminary Notice: A notice sent to the owner of the dwelling unit by any person or supplier providing labor, services, equipment, or materials for the rehabilitation work. The notice is sent in the event that the primary contractor is listing, as security, the property being rehabilitated with the person or supplier sending notice.

Commitment: Commitment means one of three things: (1) The PJ has executed a legally binding agreement with a State recipient, subrecipient, or contractor to use a specific amount of HOME funds to produce affordable housing or provide tenant -based rental assistance; or (2) has executed a written agreement reserving a specific amount of funds for a CHDO; or (3) has met requirements to commit to a specific local project as defined below.

Commitment to a specific local project: Commitment to a specific local project means that a legally binding agreement was executed meeting one of the following sets of requirements: (1) For rehabilitation or new construction projects, the PJ (or other entity) and the project owner will execute for an identifiable project for which all necessary financing has been secured, a budget and schedule have been established, and underwriting has been completed and under which construction is scheduled to start withi n twelve months of the agreement date. If the project is owned by the PJ, the project must be set up in the disbursement and information system and construction reasonably expected to start within 12 months of the set-up date. (2) If the project consists of acquisition of standard housing by the PJ, the agreement must be a binding contract for the sale of an identifiable property and the property title must be transferred to the PJ (or other entity) within six months of the date of the contract. (3) If the project involves the acquisition of standard housing and the PJ is providing HOME funds to a purchaser, under the agreement, the title of the property must be transferred to the purchaser within six mo nths of the agreement date.

Community Housing Development Organization (CHDO): A private, nonprofit organization that meets a series of qualifications prescribed in the HOME regulations at 24 CFR Part 92.2. A participating jurisdiction must award at least 15 percent of its annual HOME allocation to CHDOs.

Consolidated Plan: A plan prepared in accordance with the requirements set forth in 24 CFR Part 91 which describes community needs, resources, priorities and proposed activities to be undertaken under certain HUD programs, including HOME.

Consortium: Geographically contiguous units of general local government consolidated to be in a single unit of general local government for HOME Program purposes when certain requirements are met.

Contractor: An eligible contractor is a general contractor licensed in compliance with Federal, State, and City regulations to do the necessary housing rehabilitation work. No contractor may be utilized who has been disbarred or suspended by order of the City, State o r Federal

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 270

Government. The City permits contractors to apply to the City for eligibility determination at any time.

Deed of Trust : The legal document which secures the loan with the property that is being rehabilitated. The Deed of Trust is for the same amount as the loan and must be signed by the borrower in the presence of a public notary.

Development: A site or an entire building or two (2) or more buildings, together with the site or sites on which the building is located, that are under common ownership, management and financing and are to be assisted with HOME Program funds-under commitment by the owner-as a single undertaking.

Development Fees: Compensation to the developer for developing the property, includes overhead and profit, consult/processing agent fees, project administration, the value of personal guarantees and a portion of any reserves determined by the housing credit agency to be in excess of industry norms.

Draw-Down: The process of requesting and receiving HOME funds. PJs and authorized state recipients draw down funds from a line of credit established by HUD.

Eligible Improvements: All improvements required to bring the property up to City Codes and the City’s Rehabilitation Standard

Equity: The value of a property less the amount of outstanding debt on it.

Final Rule: The Final HOME Rule was published at 24 CFR Part 92 on September 16, 1996 and became effective on October 16, 1996. It was amended on October 22, 1997.

Financing Plan: The proposed financing for a project.

General Partner: A partner who is liable and responsible for completing a project as proposed, managing the partnership and guaranteeing funding required to complete the project. A general partner oversees construction, leasing, and property management; maintains the books and records of the partnership; and submits periodic reports to the limited partners on the project’s financial status.

General Partnership: A form of ownership in which all partners participate materially in the partnership’s operations and share liability.

Group Home: Housing occupied by two or more single persons or families consisting of common space and/or facilities for group use by the occupants of the unit, and (except in the case of shared one-bedroom units) separate private space for each family.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 271

HOME-Assisted Units: A term that refers to the units within a HOME project for which rent, occupancy, and/or resale restrictions apply. The number of units designated as HOME -assisted affects the maximum HOME subsidies that may be provided to a project.

HOME Funds: All appropriations for the HOME Program, plus all repayments and interest or other returns on the investment of these funds.

HOME Investment Trust Fund: The term given to the two accounts - one at the Federal level and one at the local level - that "hold" the PJ’s HOME funds. The Federal HOME Investment Trust Account is the U.S. Treasury account for each participating jurisdiction. The local HOME Investment Trust Fund account includes repayments of HOME funds, matching contributions and payment of interest or other returns on investment.

Housing Investment Partnerships Act (“HOME Program”): The act that created a formula-based allocation program intended to support state and local affordable housing programs. The goal of the program is to increase the supply of affordable rental and ownership housing through acquisition, construction, reconstruction, and moderate or rehabilitation activities (Title I, National Affordable Housing Act of 1990).

HUD: U.S. Department of Housing and Urban Development.

Household: A household includes all persons living in the unit at the property at the time of application, except persons who are paid caregivers of elderly or disabled individuals.

Household Income Verification : The process used to determine gross household income, including Applicant submittal of most current income tax returns; employer verification of wages; W-2 Forms; Social Security verification, profit/loss statements, etc.

Inspection Card: Card posted at the site of rehabilitation once building permits are issued.

Building Inspector(s) sign off various inspections on Card as job progresses.

Insular Areas: Guam, the Northern Mariana Islands, the United States Virgin Islands and American Samoa.

Interest Subsidy: The amount of subsidy required to reduce the interest rate on a loan to a below- market rate over the term of the loan.

Jurisdiction: A state or unit of general local government.

Limited Partner: A passive investor in a limited partnership who, in exchange for contributing equity to the project, receives a pro rata share of cash flow and tax benefits and the right to

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 272

approve the sale or refinancing of the property and removal of the general partner in the event of gross negligence or breach of contract.

Limited Partnership: An ownership vehicle comprising limited and general partners that allows for central management but has no tax liability, instead passing tax benefits through to its limited and general partners.

Loan Disbursement: The principal amount of the loan which is paid out to the Applicant as the rehabilitation work progresses; The disbursement may be in accordance with a contractual agreement between Applicant and contractor. Prior to disbursement, the work accomplished must be in accordance with the scope of work as detailed in the work the work write -up. If inspection by the Building Division is required for the particular rehabilitation item, the inspector must sign off for said work prior to disbursement.

Loan Documents: All forms relevant to the actual execution of the loan, including a Three Day Right of Recession Notice, Truth-ln-Lending Form, Promissory Note, and Deed of Trust.

Low-Income Families: Families whose annual incomes do not exceed 80 percent of the median income for the area (adjusted for family size).

Match: Match is the PJ’s contribution to the HOME Program -- the local, non-Federal contribution to the partnership. The PJ’s match contribution must equal not less than 25 percent of the HOME funds drawn down for projects in that fiscal year.

New Construction: The creation of new dwelling units. Any project which includes the creation of new or additional dwelling units in an existing structure is considered new construction.

Participating Jurisdiction (PJ): The term given to any state, local government or consortium that has been designated by HUD to administer a HOME Program. HUD designation as a PJ occurs if a state or local government meets the funding thresholds, notifies HUD that they intend to participate in the program, and has a HUD-approved Consolidated Plan.

Program Income: Gross income received by the PJ, state recipient, or a subrecipient directly generated from the use of HOME funds or matching contributions.

Project: A site or an entire building or two or more buildings, together with the site or sites on which the building or buildings is located, that are under common ownership, management and financing and are to be assisted with HOME funds, under a commitment by the owner, as a single undertaking. The HOME Final Rule eliminated the requirement that all buildings fall within a four- block radius.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 273

Project completion: All necessary title transfer requirements and construction work have been performed; the project complies with all HOME requirements; the final drawdown has been disbursed for the project; and the project completion information has been entered in the disbursement and information system established by HUD.

Promissory Note: A form, part of the loan documents, which is the borrower's agreement to pay back the amount borrowed in accordance with the established terms of the loan. The Promissory Note must be signed by all persons on the Title to the Property.

Property Rehabilitation Standards: A standard established by the City to ensure that the housing rehabilitated under HOME Rehabilitation Grant Program meets or exceeds

Recapture: Repayment of HOME funds to the PJ from a homebuyer project during the period of affordability.

Reconstruction (also rehabilitation): The rebuilding, on the same lot, of housing standing on a site at the time of project commitment. The number of housing units on the lot may not be changed as part of the reconstruction project, but the number of rooms per unit may change.

Reconstruction a lso includes replacing an existing substandard unit of manufactured housing with a new or standard unit of manufactured housing.

Rehabilitation Specialist: The person who conducts inspections and produces work write -ups and cost estimates.

Rehabilitation Contract: A legally binding, standardized form which spells out, in detail, the entire scope of work, specific quality, brands of materials, and all other data pertinent to the rehabilitation of the property. The Contract must be signed by both Contractor and Applicant.

Rehabilitation Cost: The total cost of repairs and improvements and other costs for rehabilitation to be incurred by the Applicant that may be included in a Loan.

Right of Recession: The borrower's right within a three-working day period from the date of loan settlement to rescind the entire loan transaction.

Recipient: Any entity under contract with the City to undertake activities funded by the City's HOME Program.

Restrictive Covenant: A limitation placed on a property, which is recorded and attached to the deed, thereby passing to subsequent owners.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 274

Section 8 Tenant- Based Rental Assistance Program: A federal program that provides rental assistance to low-income families who are unable to afford market rents. Assistance is provided in the form of vouchers.

Single-Room Occupancy (SRO): Housing consisting of single -room dwelling units that is the primary residence of its occupant or occupants. The unit must contain food preparation and/or sanitary facilities if the project involves new construction, conversion of non- residential space, or reconstruction. If the units do not contain sanitary facilities, the building must contain sanitary facilities shared by the tenants.

Soft Costs: Development costs exclusive of the cost of acquisition, site improvements, construction, and contingencies.

Soft Second Mortgage: A loan provided by public and nonprofit lenders at below market interest rates and with flexible repayment terms, using as collateral a second mortgage on the project property, to fill a financial gap for a project serving a public purpose (for instance, a ffordable housing.)

Subrecipient: A public agency or nonprofit organization selected by a PJ to administer all or a portion of the PJ’s HOME Program. A public agency or nonprofit organization that receives HOME funds solely as a developer or owner of housing is not a subrecipient.

Substantial Rehabilitation: The cost of a rehabilitation project that costs more than $25,000.

Surplus Cash (Net Operating Income (NOI)): The operating income derived by the project owner from development cash flow that exceeds 1st mortgage loan payments and the following operating expenses: property management fee, grounds maintenance, accounting services, amounts deposited into a replaceme nt reserve account, legal services, taxes and insurance and utility expenses, each specifically related to the development. Developer fees and depreciation of assets may not be included in calculating expenses.

Syndicates: Individuals or firms who arrange for the sale of ownership shares in a project to raise equity from investors.

Targeting: Requirements of the HOME Program relating to the income or other characteristics of households that may occupy HOME-assisted units.

Total Development Cost (TDC): The sum of all costs for site acquisition, relocation, demolition, construction and equipment, interest and carrying charges.

Truth in Lending Statement : The form included in the loan document package which details all terms of the Loan. Applicant must sign receipt of said form.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 275

Very-Low-Income Families: Families whose annual incomes do not exceed 50 percent of the median income for the area (adjusted for family size).

Work Write-up: A form to be completed by a Construction Manager outlining a complete and suggested scope of work to be performed for the rehabilitation of the property

Written Agreement : The Written Agreement defines the terms and conditions of the HOME Rehabilitation Grant Program to the Applicant. The Written Agreement is executed prior to the Applicant engaging a Contractor to complete the defined rehabilitation.

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 276

CITY OF MONTEBELLO LIST OF FORMS

CHAPTER 3: CHDO FORMS

CHDO Application
CHDO Certification Checklist
CHDO Recertification Checklist
CHDO Determination Worksheet
CHDO Pre-Qualifying Letter

CHAPTER 4: HOME Rehabilitation Grant Program (HRGP) FORMS

HRGP Guidelines
HRGP Application
Owner/Contractor Agreement
Agreement between City and homeowner
Preconstruction Conference Record
Notice to Proceed
Work Write up Template for the HOME Program
Home Inspection Checklist
Certifications – plumbing, electrical, HVAC, Release of Liens, and final inspection Verification of Employment
Section 3 Reporting Forms
Certifications – plumbing, electrical, HVAC, Release of Liens, and final inspection City of Montebello Written Rehabilitation Standards
Cost Allocation and Subsidy Layering Analysis

CHAPTER 5: CONSTRUCTION MANAGEMENT FORMS

Sample Bid Package
Sample Advertisement for Bids
Bid Tabulation Sheet
Preconstruction Conference Agenda and Report
Notice to Proceed
Written Change Order
Punch List(s)
Certificate(s) of Final Completion
Final Contractor Estimate(s)
Release of Lien Form for each contractor
Verification of Contractor Eligibility

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 277

CHAPTER 6: ENVIRONMENTAL REVIEW FORMS

Certification of Exemption for HUD funded projects
Certification of Categorical Exclusion (not subject to 58.5) Statutory Checklist
Instructions for Completing the Statutory Worksheet
Compliance Documentation Checklist (58.6)
Environmental Assessment
Public Notice – Notice of Intent to Request Release of Funds Combined Public Notice – Finding of No Significant Impact and Notice of Intent to Request Release of Funds
Request for Release of Funds and Certification (HUD form 7015.15) Authority to Use Grant Funds (HUD form 7015.16)
Instructions for Completing HUD form 1015.15
Insurance Coverage (Flood)
Deficiency Notice

CHAPTER 6: MONITORING

Monitoring Checklist
Compliance Review Letter
Sample Monitoring Visit Letter

CHAPTER 6: PROGRAM ADMINISTRATION AND MANAGEMENT FORMS

IDIS Activity Set Up Forms
IDIS Activity Completion Forms
Homeowner Rehab Set Up and Completion Form HOME Program

City of Montebello
HOME Investment Partnerships Program
Policies and Procedures Manual Page 278

CITY OF MONTEBELLO LIST OF EXHIBITS

EXHIBIT 1 MINIMUM PROPERTY STANDARDS BY ACTIVITY TYPE
EXHIBIT 2 AFFORDABILITY PERIODS
EXHIBIT 3 CHDO DETERMINATION WORKSHEET/APPLICANT INFORMATION EXHIBIT 4 HOME-ELIGIBLE HOMEOWNER REHABILITATION COSTS
EXHIBIT 5 OTHER FEDERAL REQUIREMENTS
EXHIBIT 6 SUMMARY OF HOMEOWNER REHABILITATION RULES AND HOW TO DOCUMENT EXHIBIT 7 STAFFING PLAN
EXHIBIT 8 REHABILITATION STANDARDS
EXHIBIT 9 TIMING AND PURPOSE OF PROPERTY INSPECTIONS
EXHIBIT 10 REHABILITATION OF OWNER-OCCUPIED UNITS
EXHIBIT 11 SUMMARY OF ENVIRONMENTAL REVIEW ACTION BY ACTIVITY EXHIBIT 12 WRITTEN AGREEMENT REQUIRED PROVISIONS
EXHIBIT 13 HOME PROGRAM AGREEMENT/APPLICATION
EXHIBIT 14 HOME PROJECT RISK ASSESSMENT
EXHIBIT 15 SAMPLE MONITORING VISIT LETTERS
EXHIBIT 16 MONITORING CHECKLISTS
EXHIBIT 17 MANAGING A PROJECT SUBJECT TO OTHER FEDERAL REQUIREMENTS EXHIBIT 18 DOCUMENTING COMPLIANCE WITH OTHER FEDERAL REQUIREMENTS EXHIBIT 19 SECTION 504 REQUIREMENTS
EXHIBIT 20 APPROACHES TO IMPLEMENTING LEAD HAZARD EVALUATION AND REDUCTION

CALIFORNIA NEWSPAPER SERVICE BUREAU
CNS

D A I L Y J O U R N A L C O R P O R A T I O N
To the right is a copy of the notice you sent to us for publication in the WHITTIER DAILY NEWS. Please read this notice carefully and call us with any corrections. The Proof of Publication will be filed with the County Clerk, if required, and mailed to you after the last date below. Publication date(s) for this notice is (are):

Daily Journal Corporation
Serving your legal advertising needs throughout California. Call your local Mailing Address : 915 E 1ST ST, LOS ANGELES, CA 90012
Telephone (213) 229-5300 / Fax (213) 229-5481
Visit us @ WWW.LEGALADSTORE.COM

SAMANTHA NEVAREZ

CITY OF MONTEBELLO/CITY CLERK (LEAD)
1600 W. BEVERLY BLVD
MONTEBELLO, CA 90640

HRG NOTICE OF HEARING
Public Hearing Notice - 5-Year Consolidated Plan for the Allocation of CDBG and HOME Investment Partnership
Funds
12/19/2024
BUSINESS JOURNAL, RIVERSIDE (951) 784-0111
DAILY COMMERCE, LOS ANGELES (213) 229-5300
LOS ANGELES DAILY JOURNAL, LOS ANGELES (213) 229-5300
ORANGE COUNTY REPORTER, SANTA ANA (714) 543-2027
SAN FRANCISCO DAILY JOURNAL, SAN FRANCISCO (800) 640-4829 SAN JOSE POST-RECORD, SAN JOSE (408) 287-4866
THE DAILY RECORDER, SACRAMENTO (916) 444-2355
THE DAILY TRANSCRIPT, SAN DIEGO (619) 232-3486
THE INTER-CITY EXPRESS, OAKLAND (510) 272-4747
Notice Type:

Ad Description:

COPY OF NOTICE
3878826
!A000006981127!
An invoice will be sent after the last date of publication. If you prepaid this order in full, you will not receive an invoice.

PUBLIC NOTICE CITY OF

MONTEBELLO PUBLIC

COMMENT AND PUBLIC

HEARING NOTICE
NOTICE IS HEREBY GIVEN that
the City Council of the City of
Montebello will conduct a public
hearing to receive input and provide
direction concerning the draft Five-
Year Consolidated Plan for the
allocation of Community
Development Block Grant (CDBG)
and HOME Investment Partnership
(HOME) program funds, the draft
Analysis of Impediments to Fair
Housing Choice, the 2025-2029 Annual
Action Plan, and the Citizen
Participation Plan. As an
entitlement jurisdiction, the City is
required by the United States
Department of Housing and Urban
Development (HUD) to complete the
Consolidated Plan and Analysis of
Impediments to Fair Housing Choice
every five years.

PUBLIC HEARING
INFORMATION:

Hearing Date: Wednesday, January
8, 2025
Time: 6:30 p.m. or as soon
thereafter as the matter may be
heard
Place: City Hall Council Chambers,
1600 W. Beverly Blvd., Montebello,
CA 90640
PROJECT DESCRIPTION:

Each year the U.S. Department of
Housing and Urban Development
(HUD) provides funding for housing
and community development
programs to the City of Montebello,
specifically Community
Development Block Grant (CDGB)
and Home Investment Partnerships
(HOME) Program funds. In order to
receive these funds, the City must
complete a report every three to five
years called the Consolidated Plan
(ConPlan). The purpose of the
ConPlan is to identify Montebello's
housing and community
development needs, priorities,
goals, and strategies and to stipulate
how funds will be allocated to
housing and community
development activities over the next
five years. The CDBG Program
provides federal funds for local
improvement projects and
programs. Activities assisted with
CDBG funds must meet one of the
three national objectives:
principally benefit low and
moderate-income persons, aid in the
prevention or elimination of slums
and blight or meet other community
development needs having
particular urgency. The HOME
Program provides formula grants -
often in partnership with local
nonprofit groups - to fund a wide
range of activities including

ATTACHMENT E

building, buying, and /or
rehabilitating affordable housing or
providing direct rental assistance to
low -income people. HOM E is the
largest Feder al block grant to state
and local governments desig ned
exclusively to create afforda ble
hou sing for low -income household s.

The Consolidated Pl an is a HU D
required plan assessing afforda ble
hou sing and commun ity
dev elop ment needs for the next five -
yea r 2025 -2029 period. Th e
Consolidate d Plan determ ines ho w
fund s from the U.S. D epartme nt of
Housing and Ur ban Devel opme nt
(HUD) and used.

The Analysis of Impedimen ts to
Fa ir Housing C hoice is a review of
policies,procedures, and practices
wi thin the community that affect the
location, availability and
accessibility of housing and curren t
residential patterns and conditions
related to fairhous ing choice.

The Annua l Act ion Plan is
submi tted to HUD on an annu al
basis and identifies how the C ity
plan s to use the federal mo ney
during the next fiscal year to mee t
the goa l s and ob jectivesapprov ed by
the City C ounci l in the F ive -Ye ar
Consolidate d Plan.

The Citizen Participation Plan sets
forth the C ityof Montebell o'spolicies
and proc edures for citizen
participation in the developmen t of
the Cons olidated Plan D ocuments
and any subsequ ent amend m en ts.

For Fiscal Year 2025 -2026, the City
exp ects to receive approximately
$614,925 in CDBG funds an d
appro ximatel y $270,314 in HOME
funds.

For more information, ca ll
Rosemary Per ich,Hous ing Manag er
for the C ity of Mont ebello,Planni ng
and Co mmun ity Devel opme nt
Department at (323) 887 -1200 Ext.
1454 or via e -mail
rpe [email protected].

EN VIR ONMENTAL: The proposal
is not considered a ‘‘ Project ’’ und er
the California Environ mental
Qual ity Act (CEQA) G uidelines
Section 15378(b)( 4) for f iscal
activities of the gover nment wh ich
do not involve any comm itment to
any specific project whi ch may
result in a po tentially significant
physi ca l impact; and is also exempt
unde r the commonsense exe mption
purs uant C EQA G uidelines Section
15 061(b )(3) as it can be seen with
certainty that there is n o possibility
that the activity in question may
have a significant effect on the
env ironment.

In - Perso n: For those interested in
participating during the P ublic
Comment period(s) or public
testimony period for P ub lic
Hearings of the C ity Counc il
meeti ngs, you may addr ess the C ity
Counc il in person the day of the
meeti ng. Speaker s will be required
to fillout a speaker card provided at
the door and turn itinto the Dep uty
City Clerk prior to each P ublic
Comment announcement period.

Staff wi ll number and call each
spe ak er card in the order rece ived.

Closed Session beg ins at 6 :00 p.m.
and Regular Sess ion begins
immediatel y ther eafter; if there is
no Closed Se ssion, R egular Session
wi llbe gin at 6 :00 p.m .

Via Email: Th e publ ic may also
submi t emai led com ments via the
City's email ad dre ss:
ccpu bliccomment@m ontebelloca .go
v, up unt il the day of the meeting ,
Wed ne sday, Januar y 8, 2025, by
3:00 p.m . Th ese com ments will be
submi tted to allmem bers of the C ity
Counc iland m ay not be read aloud
but w illbe entered into the record of
the proceedi ngs to the exten t they
relate to matters listed on the posted
agen da. Any reques ts to prov ide
publ ic comment w hich is submitted
after the deadlines indicated ab ov e
wi ll not be sub mit te d to the City
Counc il.

Ameri cans wit h Disab ilities Ac t
(ADA): T he City of Montebello , in
compl ying wi th the Americans with
Di sabilities Act (AD A), requests
individuals who requir e spec ial
acco mmodati ons to access , attend
and/ or participate in the City
meet ing due to disability, to please
conta ct the Housing Manager by
ema il rperich@m ontebelloca .gov at
least 6 hours prior to the sch eduled
spe cial meeting to ensur e assistance
isprov ided.

Kim be rly Guillen, Senior Dep uty
City Clerk
Da ted: Dec ember 11,2024
Da t e posted: December 19,2024
12/19/24
CNS -3878826#

WHIT TIER DAI LY NE WS

ITEM # 11

CITY OF MONTEBELLO

CITY COUNCIL AGENDA STAFF REPORT

TO: Honorable Mayor and City Council Members

FROM: Raul Alvarez, City Manager

BY: Cesar Roldan, Director of Public Works

SUBJECT: ADOPT RESOLUTION NO. 25-29 FOR THE INSTALLATION OF AN ALL-WAY STOP AT THE INTERSECTION OF 3RD STREET AND LOS

ANGELES AVENUE

DATE: May 14, 2025

RECOMMENDATIONS:

It is recommended that the City Council:

1. Adopt Resolution No. 25-29 (Attachment A) approving the installation of an all- way stop at the intersection of 3rd Street and Los Angeles Avenue; and,

2. Approve Environmental Assessment pursuant to 14 California Code of Regulations § 15301 as a Class 1 categorical exemption under the California Environmental Quality Act; and

3. Authorize the Public Works Department to place the appropriate pavement markings, advance warning signs and appropriate signage in accordance with the California Manual on Traffic Control Devices. and,

4. Take such additional, related action that may be desirable.

FISCAL IMPACT:

The cost of installing the signs and pavement markings is approximately $1,500 payable from the Gas Tax Fund (Account No. 200-30-310-6000.40, Gas Tax, Public Works, Streets, Supplies-Durable). The installation of the pavement markings and sign warnings will improve safety for all modes of travel at the intersection of 3rd Street and Los Angeles Avenue. The adopted Fiscal Year 2024-25 Capital Improvement Project Budget allocated the necessary funds for street signage and markings. Therefore, no budget amendment is needed as part of the recommended action.

CITY COUNCIL AGENDA REPORT - MEETING OF MAY 14, 2025

BACKGROUND/DISCUSSION:

The City received a request for an all-way stop at the intersection of 3rd Street and Los Angeles Avenue. This intersection is a four-way intersection that is controlled North- South by stop signs. In accordance with the California Manual on Traffic Control Devices (MUTCD), the City’s Traffic Engineer reviewed the request and conducted a stop sign warrant analysis of the intersection.

Regarding the request for installation of an all-way stop intersection at this location, the California MUTCD has established specific requirements for the installation of stop signs.

Three varying warrants are applicable to this specific request; though the requirement is for one of the three warrants to be satisfied before installing stop signs. The warrants are summarized as follows:

1. Collisions - Involving five (5) or more reported crashes in a 12-month period that are susceptible to correction by a multi-way stop installation. Such crashes include right and left-turn collisions as well as right-angle collisions.

2. Volumes - The vehicular volume entering the intersection from the major street approaches (total of both approaches) averages at least 300 vehicles per hour for each of 8 hours of an average day.

3. Sight Distance - Locations where a road user, after stopping, cannot see conflicting traffic and is not able to negotiate the intersection unless conflicting cross traffic is also required to stop reasonably safely. Evidence that sight distance is a contributing factor will be supported by the existence of traffic collisions which could be susceptible to correction by installation of stop signs.

ln terms of traffic volumes, accident history and sight distance concerns, the stop sign warrants were not met. The City of Montebello’s Traffic and Safety Commission reviewed the report (Attachment B) at the regularly scheduled March 31, 2025, meeting and did not concur with the Traffic Engineer’s assessment.

Staff are seeking directions from the City Council on the installation of an all-way stop at the intersection of 3rd Street and Los Angeles Avenue.

LEGAL REQUIREMENT
The installation of a stop sign does not absolve the City from potential liability. The City is exposed to liability whether or not stop signs are installed at this particular intersection.

The primary purpose of stop signs is to control intersection right-of-way. The stop sign is a useful regulatory traffic control device that directs motorists to stop at all times before proceeding through an intersection. A fully justified and properly installed stop sign can facilitate traffic movement, effectively assign right-of-way, reduce vehicle delay and decrease accidents. A stop sign is not a cure-all and is not a substitute for other traffic control devices.

Advantages of Warranted Stop Signs:
• Stop signs that are warranted provide the following:

CITY COUNCIL AGENDA REPORT - MEETING OF MAY 14, 2025

o Assignment of right of way to drivers at an intersection o Improved safety at the intersection

Disadvantages of Unwarranted Stop Signs:
• Stop signs installed that are NOT warranted cause the following:
o Reduce their effectiveness and are largely ignored by drivers o Unnecessarily increases fuel consumption and air and noise pollution o May actually cause an increase in potential accidents

ENVIRONMENTAL:

The proposed project is categorically exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to 14 California Code of Regulations § 15301 as a Class 1 categorical exemption (Existing Facilities). The project results in minor alterations to existing public facilities involving no significant expansion of the existing use. The project is not anticipated to have any significant impacts with regards to traffic, noise, air quality, or water quality. There are adequate utilities and public services to serve the project (Attachment C).

ANALYSIS:

N/A

SUMMARY:

Staff recommends City Council adopt Resolution No. 25-29 for the installation of an all- way stop at the intersection of 3rd Street and Los Angeles Avenue; and approve Environmental Assessment pursuant to 14 California Code of Regulations § 15301 as a Class 1 categorical exemption under the California Environmental Quality Act; and authorize the Public Works Department to place the appropriate pavement markings, advance warning signs and appropriate signage in accordance with the California Manual on Traffic Control Devices.

ATTACHMENT(S)

1. Attachment A - Resolution No. 25-29 - All-Way Stop Sign at 3rd St and Los Angeles Ave

2. Attachment B - Traffic and Safety Commission Agenda Report All-Way Stop Sign 3rd St & Los Angeles Av

3. Attachment C - CEQA Notice of Exemption

RESOLUTION NO. 25-29

A RESOLUTION OF THE CITY COUN CIL OF THE CITY OF

MONTEBELLO, CALIFORNIA, AUTHORIZING THE INSTALLATION OF AN ALL-WAY STOP AT THE INTERSECTION OF 3RD STREET AND LOS

ANGELES AVENUE

RECITALS
WHEREAS, the City of Montebello (“City”) received a request for an all -way Stop intersection at 3rd Street and Los Angeles Avenue; and
WHEREAS, the City’s Traffic Engineer conducted a Stop Warrant Study pursuant to the California Manual on Traffic Control Devices (“MUTCD”); and WHEREAS, the stop sign warrants were not met pursuant to the MUTCD in terms of traffic volumes, accident history and sight distance concerns; and WHEREAS, the City’s Traffic and Safety Commission reviewed the report at the regularly scheduled March 31, 2025 Traffic and Safety Commission meeting and did not concur with the City’s Traffic Engineer’s assessment; and WHEREAS, the MUTCD allows for engineering judgment to be used to consider other factors such as restrictions, or the need to control pedestrian and/or vehicle conflicts; and
WHEREAS, the Traffic and Safety Commission finds the installation of an all-way stop at the intersection of 3rd Street and Los Angeles Avenue is critical to the health , safety, and general welfare of the community in accordance with applicable law s, including the City’s Municipal Code and general traffic engineering principles; and WHEREAS, this Resolution may be enforced pursuant to the California Vehicle Code Section 21450 after the location designated above is properly posted.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF MONTEBELLO HEREBY RESOLVES, FINDS, AND DECLARES AS FOLLOWS:

SECTION 1. The City Council hereby adopts the recitals set forth above as if fully set forth herein.

SECTION 2. Be it further resolved and ordered, that any and all actions, whether previously or subsequently taken by the City, which are consistent with the intent and purposes of the foregoing resolution, shall be, and hereby are, in all respects, ratified, approved and confirmed.

Attachment A

RESOLUTION NO. 25-29

SECTION 3. The City Clerk shall certify to the adoption of this Resolution. This Resolution shall take effect immediately upon its adoption by the City Council and the City Clerk shall certify to the passage and adoption of this resolution.

APPROVED AND ADOPTED THIS 14TH DAY OF MAY 2025.
_______________________________
Salvador Melendez, Mayor
ATTEST: APPROVED AS TO FORM:
________________________________ ________________________________ Christopher Jimenez, City Clerk Arnold M. Alvarez-Glasman, City Attorney

RESOLUTION NO. 25-29

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:

CITY OF MONTEBELLO )
I, Christopher Jimenez, City Clerk of the City of Montebello, County of Los Angeles, State of California, hereby certify that the foregoing Resolution No. 25-29 was passed and adopted by the City Council of the City of Montebello, signed by the Mayor and attested by the City Clerk at a regular meeti ng of said Council held on the 14th day of May 2025 and that said Resolution was adopted by the following vote, to-wit:

AYES:

NOES:

ABSTAIN:

ABSENT:

The undersigned, City Clerk of the City of Montebello, does hereby attest and certify that the foregoing Resolution is a true, full and correct copy of a resolution duly adopted at a meeting of said City which was duly convened and held on the date stated thereon, and that said document has not been amended, modified, repealed or rescinded since its date of adoption and is in full force and effect as of the date hereof.

DATE:

Christopher Jimenez, City Clerk

I
TEM # 4
CI

TY OF MONTEBELLO

TRAFFIC AND SAFETY COMMISSION AGENDA STAFF REPORT
T
O: Traffic and Safety Commission Members
FROM: Raul Alvarez, City Manager
BY
: Dennis D. Barnes
S
UBJECT: ALL WAY STOP SIGN STUDY AT THE INTERSECTION OF 3RD

STREET AND LOS ANGELES AVENUE
DAT
E: March 31, 2025
RECOMMENDATION(S):

It is recommended that the Traffic & Safety Commission take the following actions:

1. Receive and file an all-way stop sign study for the intersection of 3rd Street and Los Angeles Avenue;

2. Approve City Traffic Engineer's recommendation to deny the request for an all- way stop sign at this intersection;

3. Approve City Traffic Engineer's recommendation to refresh the existing red curb markings at the intersection approaches of 3rd Street and Los Angeles Avenue.

BAC
KGROUND/DISCUSSION:

A
t the request of Traffic Safety Commission, Public Works staff conducted an updated all-way stop sign study to install all-way stop controls at the intersection of 3rd Street and Los Angeles Avenue. Previous study was reported to the Commission on July 29, 2024.

R
egulatory traffic control signs, including stop signs, must conform to the California Manual on Traffic Control Devices (MUTCD). The current version is Revision 8 of the 2014 Edition. Section 2B.07 of the MUTCD contains provisions on the application of multi-way stop control at an intersection. This multi-way stop warrant analysis considers the following criteria in the California Manual on Uniform Traffic Control Devices (MUTCD) Section 2B.07:

A. Where traffic control signals are justified, the multi-way stop is an interim measure that can be installed quickly to control traffic while arrangements are being made for the installation of traffic control signal.

Attachment B

TRAFFIC AND SAFETY COMMISSION AGENDA REPORT - MEETING OF MARCH 31, 2025

B. Five or more reported crashes in a 12- month period that are susceptible to correction by a multiway stop installation. Such crashes include right-turn and left- turn collisions as well as right-angle collisions.

C. Minimum volumes:

1. The vehicular volume entering the intersection from the major street approaches (total of both approaches) averages at least 300 vehicles per hour for any 8 hours of an average day; and

2. The combined vehicular, pedestrian, and bicycle volume entering the intersection from the minor street approaches (total of both approaches) averages at least 200 units per hour for the same 8 hours, with an average delay to minor -street vehicular traffic of at least 30 seconds per vehicle during the highest hour; but

3. If the 85th-percentile approach speed of the major-street traffic exceeds 40 miles per hour (mph), the minimum vehicular volume warrants are 70 percent of the values provided in Items 1 and 2.

D. Where no single criterion is satisfied, but where Criteria B, C.1 and C.2 are all satisfied to 80 percent of the minium values. Criterion C.3 is excluded from the condition.

INVESTIGATION:

Based on the resident's request, staff did research for any past T&S reports for the intersection to identify all safety issues. The review included available traffic volume and pedestrian counts that may have been collected for this intersection.

The objective of this study investigation was to evaluate the existing intersection's traffic and safety conditions to determine the need and warrants for the installation of additional stop signs at the uncontrolled approaches. To address the request, the following tasks were performed:
• A field investigation of site-specific conditions, sight distance, and potential physical obstructions,
• A review of the traffic collision history for the past three years, • An analysis of applicable multi-way stop sign warrants per the California Manual on Uniform Traffic Control Devices (CA-MUTCD).

EXISTING CONDITIONS:

Los Angeles Avenue is an east -west local residential street with a posted 25 miles per hour (MPH) speed limit. 3rd Street is a two- lane residential street and has existing stop signs installed at its intersection with Los Angeles Avenue. Figure 1 provides an aerial view of the intersection while figures 2 and 3 illustrate the street view conditions on each intersection approach in the North and South Directions, respectively.

TRAFFIC AND SAFETY COMMISSION AGENDA REPORT - MEETING OF MARCH 31, 2025

Figure 1 - Aerial View of 3rd Street at Los Angeles Avenue

Figure 2 - Street View of 3rd Street at Los Angeles Avenue, Looking North

TRAFFIC AND SAFETY COMMISSION AGENDA REPORT - MEETING OF MARCH 31, 2025

Figure 3 - Street View of 3rd Street at Los Angeles Avenue, Looking South

Figure 4 - Street View of 3rd Street at Los Angeles Avenue, Looking West

TRAFFIC AND SAFETY COMMISSION AGENDA REPORT - MEETING OF MARCH 31, 2025

Figure 5 - Street View of 3rd Street at Los Angeles Avenue, Looking East

Figures 4 and 5 illustrate the street view conditions in the west and east directions, respectively.

ANALYSIS:

Staff collected traffic volume counts at the intersection shown in aerial view Figure 1 and retrieved collision data from the TIMS program to conduct the analysis to determine if the intersection met the warrant requirements to install all-way stop controls.

Average Daily Traffic (ADT)
24-hour approach traffic volumes counts (ADT) were collected on Tuesday -Thursday, December 10, 202 4 to December 12, 202 4, at the intersection. The traffic volume warrants were not met.

Collision Data
The most recent available citywide collision records were collected between September 30, 2022, to September 30, 2024, from the California Internet Statewide Integrated Traffic Records System (SWITRS) via the Transportation injury Mapping System (TIMS) online tool. The collision data revealed no accidents at the intersection.

CONCLUSION:

Based on a review of available information, presented facts, and field reviews, the City Traffic Engineer recommends that the Traffic & Safety Commission receive and file the all-way stop sign study; deny the all -way stop request since MUTCD warrants are not satisfied at this intersection and refresh the existing red curb marking at the intersection approaches.

ENVIRONMENTAL IMPACT:

TRAFFIC AND SAFETY COMMISSION AGENDA REPORT - MEETING OF MARCH 31, 2025

FISCAL IMPACT:

N/A

ATTACHMENT(S)

1. Attachment A - All-way Stop Study Warrants Summary and Collision History

Commissioner LaRocca motioned to reject the item and take the recommendation to install an all-way stop sign at this intersection to City Council for final approval, seconded by Commissioner Takeyama; the motion passed with 4 yeses and one absenc e.

PC-Warrants Report
3rd Street and Los Angeles Ave
Study Name: 3rd St and Los Angeles Ave
Study Date : 1/22/2025
Multiway Stop Warrants - Summary
Major Street Approaches
Eastbound: Los Angeles Ave
Number of Lanes : 1
Total Approach Volume: 3,326
Westbound: Los Angeles Ave
Number of Lanes :1
Total Approach Volume: 2,973
Minor Street Approaches
Northbound: 3rd St
Number of Lanes :1
Total Approach Volume: 218
Southbound: 3rd St
Number of Lanes :1
Total Approach Volume: 389
Warrant Summary (Urban Values Apply)
Criteria A - Interim Measure.................................................................................................................................. Not Evaluated If traffic signals are justified, stop signs can be installed as an interim measure.

Criteria B - Crash Experience.................................................................................................................................. Not Satisfied Number of crashes (0) is less than minimum required (5).

Criteria C - Minimum Volumes and Delays.................................................................................................... Not Satisfied Average of 8 highest hours is less than volume criteria.

Criteria D - 80% of Volumes, Delays, and Crashes.......................................................................................... Not Satisfied Number of crashes (0) is less than minimum required (4).

Average of 8 highest hours is less than volume criteria.

Criteria C Volume Summary
Time Major
Total
Major
Avg
Minor
Total
Minor
Avg
Major
Crit
Minor
Crit
Meets?
17:00 - 18:00 696 449.8 39 39.3 300 200 No
15:15 - 16:15 650 59
14:15 - 15:15 439 40
07:30 - 08:30 419 52
18:00 - 19:00 432 26
12:00 - 13:00 357 28
19:00 - 20:00 304 36
13:15 - 14:15 301 34
08:30 - 09:30 293 33
11:00 - 12:00 292 34
06:30 - 07:30 268 47
10:00 - 11:00 248 30
Criteria D Volume Summary
Time Major
Total
Major
Avg
Minor
Total
Minor
Avg
Major
Crit
Minor
Crit
Meets?
17:00 - 18:00 696 449.8 39 39.3 240 160 No
15:15 - 16:15 650 59
14:15 - 15:15 439 40
07:30 - 08:30 419 52
18:00 - 19:00 432 26
12:00 - 13:00 357 28
19:00 - 20:00 304 36
13:15 - 14:15 301 34
08:30 - 09:30 293 33
11:00 - 12:00 292 34
06:30 - 07:30 268 47
10:00 - 11:00 248 30

ATTACHMENT A

Print Form
Revised 2011
Notice of Exemption Appendix E
To: Office of Planning and Research From: (Public Agency): City of Montebello

P.O. Box 3044, Room 113
Sacramento, CA 95812-3044
County Clerk
1600 W. Beverly Boulevard
Montebello, CA 90640
County of: Los Angeles

(Address)
Project Title: All-way stop at the intersection of 3rd Street and Los Angeles Avenue P
roject Applicant: City of Montebello
P
roject Location - Specific: 3rd Street and Los Angeles Avenue P
roject Location – City: Montebello Project Locations – County: Los Angeles Des
cription of Nature, Purpose and Beneficiaries of Project: Place the appropriate pavement markings, advance warning signs and appropriate signage in accordance with the California Manual on Traffic Control Devices.

N
ame of Public Agency Approving Project: City of Montebello Name of Person or Agency Carrying Out Project: Cesar Roldan, Director of Public Works Exempt Status: (check one):

Ministerial (Sec. 21080(b)(1); 15268);
Declared Emergency (Sec. 21080(b)(3); 15269(a)); Emergency Project (Sec. 21080(b)(4); 15269(b)(c)); Categorical Exemption. State type and section number: 15301 Class 1 Statutory Exemptions. State code number:

Reasons why project is exempt: Exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to 14 California Code of Regulations § 15301 as a Class 1 categorical exemption (Existing Facilities).

Lead
Agency
Contact Person: Cesar Roldan Area Code/Telephone/Extension: 323-887-1462 If filed by applicant:

1. Attach certified document of exemption finding.

2. Has a Notice of Exemption been filed by the public agency approving the project? Yes No S
ignature: Date: May 15 , 2025 Title: Director of Public Works Signed by Lead Agency Signed by Applicant
Authority cited: Sections 21083 and 21110, Public Resources Code. Date Received for filing at OPR:

Reference: Sections 21108, 21152, and 21152.1, Public Resources Code.

Attachment C

ITEM # 12

CITY OF MONTEBELLO

CITY COUNCIL AGENDA STAFF REPORT

TO: Honorable Mayor and City Council Members

FROM: Raul Alvarez, City Manager

BY: Cesar Roldan, Director of Public Works

SUBJECT: AWARD PROFESSIONAL SERVICES AGREEMENT NO. 4313 FOR FINAL DESIGN OF STORM DRAIN IMPROVEMENTS ON 4TH STREET,

FROM BEACH STREET TO MINES AVENUE

DATE: May 14, 2025

RECOMMENDATIONS:

It is recommended that the City Council:

1. Find that it would be impractical, useless, or uneconomical in this project to follow the bidding procedures, and that the welfare of the public would be promoted by dispensing said procedures.

2. By a four-fifth vote of the City Council, staff recommend authorizing the dispensing of a formal request for proposal (RFP) procedure and award a professional services agreement for the design of a storm drain system on 4th Street between Beach Street and Mines Avenue, in accordance with Montebello Municipal Code Chapter 3.21.025(C); and,

3. Due to the consultant’s familiarity, experience, intimate knowledge, and dealings with the Los Angeles County Department of Public Works and Flood Control District, award Professional Services Agreement No. 4313 to West & Associates Engineering, Inc. for the amount of $114,800 payable from Gas Tax funds in Account No. 200-30-330-6040.96 (Gas Tax, Public Works, Engineering, Contract Services Engineering Design Services); and,

4. Authorize the City Manager to execute the professional services agreement in good faith;

5. Take such additional, related action that may be desirable.

FISCAL IMPACT:

Staff recommends awarding professional services agreement No. 4313 to West &

CITY COUNCIL AGENDA REPORT - MEETING OF MAY 14, 2025

Associates Engineering, Inc. in the amount of $114,800, utilizing the exception to the procurement process allowed by Montebello Municipal Code Section 3.21.025(C), by a four-fifth vote of the City Council. Agreement No. 4313 provides for the design of a storm drain system on 4th Street between Beach Street and Mines Avenue.

The adopted Fiscal Year 2024-25 Capital Improvement Project (CIP) Budget appropriated the necessary funds for this project (Account No. 200-30-330-6040.96, Gas Tax, Public Works, Engineering, Contract Services Engineering Design Services).

Therefore, no budget amendment is needed as part of the recommended action.

BACKGROUND/DISCUSSION:

On December 14, 2021, the Public Works Department was contacted by Los Angeles County Department of Public Works (LACDPW) Stormwater Maintenance staff notifying the City of damage to the dirt incline due to the stormdrain outlet at the intersection of Beach Street and Bluff Road. LACDPW requested the City’s immediate attention to this matter. The City had an underground contractor, Mike Bubalo Construction Co., on standby to complete emergency repairs. The contractor completed exploratory analysis of the slope to find a solution to stabilize the incline that leads into the Los Angeles County Flood Control District’s spreading grounds. Based on the findings, LACDPW issued a temporary encroachment permit for the repairs of the outlet pipe. The City developed a plan of action for repairs and the County agreed to the proposed temporary repairs. The contractor completed the temporary emergency repairs on January 3, 2022.

LACDPW contacted City staff soon thereafter and informed them of the need to enter into a rental agreement for the temporary use of the Los Angeles County Flood Control District’s property. The City would need to ultimately obtain a permanent easement to keep the outlet pipe’s discharge point. West & Associates Engineering, Inc. (consultant) was contracted as the project design engineer. The consultant performed a hydrological study of the tributary area and presented the findings.

Flood Control personnel reviewed the design and hydrology study and determined that since it discharges into Los Angeles County's Rio Hondo Coastal Basin Spreading Grounds, a Flood Construction Permit was necessary. Upon additional review by the County’s Public Works and Flood Control Departments, County staff stated that it did not normally allow direct discharges into the spreading grounds. Instead, County staff directed the City to redirect flows, via a splitter box and an additional 400 linear feet (LF) of storm drainpipe, from the base of the Rio Hondo Bike Path into the main concrete- lined Rio Hondo Channel that is maintained by the US Army Corps of Engineers (USACE).

Given the time and coordination effort it would take to obtain an USACE permit and/or other applicable permits (i.e. State Water Resources Control Board) for a storm drain connection to the main Rio Hondo Channel, the City is seeking other alternatives to satisfy the 2021 emergency agreement with the County, and to address the drainage needs of the tributary area which the existing storm drain serves (i.e. Lots 92 and 105 of the El Carmel Tract).

CITY COUNCIL AGENDA REPORT - MEETING OF MAY 14, 2025

Based on the positive hydraulic modeling results and the promising preliminary feedback from the County, the City is choosing to connect to the County’s storm drain system on 4th Street and Mines Avenue. Based on West & Associates's experience with this specific project, staff recommends awarding a professional services agreement for design services, as allowed by Chapter 3.21.025(C) of the Montebello Municipal Code:

3.21.025 - Conformance with bidding procedures.

The acquiring of professional/special services shall be made and accomplished in conformity with Section 3.21.050 or Section 3.21.060 except:

A. When an emergency, as determined by the purchasing agent with the written approval of the city manager, is deemed to require that an order be placed with the nearest available source;
B. When the professional/special services needed can be obtained from one source only;
C. When the city council by a four-fifths vote determines to dispense with such bidding and other procedures required by the above-mentioned sections in every individual instance upon a finding by the city council that it would be impractical, useless, or uneconomical in such instance to follow the procedures, and that the welfare of the public would be promoted by dispensing with the same; or D. When the amount of the professional/special services involved is less than two thousand dollars.

E. Compliance with the requirements set forth in the provisions of this chapter shall apply to all contracts awarded after the effective date of this subsection, as may be amended.

F. Notwithstanding the exceptions under this section, no commitment or contract with a definitive term may exceed five years.

Any use or application of the bidding procedure exceptions listed herein for the acquisition of professional/special services shall require the making of a written record of such use or application, including the existence of a valid reason for such use or application. In addition, the exception identified and the reason for applying the exception, along with the written record of such use or application, shall be included and explained in the agenda report submitted to the city council seeking approval of the exception. This written record shall be kept for at least five years.

(Ord. No. 2412, § 3, 2-27-2019; Ord. No. 2447, § 4, 2-9-2022; Ord. No. 2460, § 3, 1-25- 2023)

ENVIRONMENTAL:

N/A

ANALYSIS:

N/A

CITY COUNCIL AGENDA REPORT - MEETING OF MAY 14, 2025

SUMMARY:

Staff recommends that the City Council find that conforming to the bidding procedures with regards to this project would be impractical, useless, or uneconomical as the chosen consultant has experience with this specific project. Additionally, Staff also recommends that the City Council find that the welfare of the public would be promoted by dispensing with said bidding procedures for the same reason.

Staff also recommends that the City Council, by a four-fifths vote, approve waiving the formal procurement process for the design of a storm drain system on 4th Street between Beach Street and Mines Avenue, as allowed by Montebello Municipal Code Chapter

3.21.025(C), and award Agreement No. 4313 to West & Associations Engineering, Inc.

Due to their expertise and prior experience with the Los Angeles County Department of Public Works and Flood Control District, staff further recommend awarding a $114,800 Professional Services Agreement No. 4313 to West & Associates Engineering, Inc.

Funds for this project were appropriated in the adopted Fiscal Year 2024-25 Capital Improvement Project (CIP) in Account No. 200-30-330-6040.96 (Gas Tax, Public Works, Engineering, Contract Services Engineering Design Services). Staff also request that the City Manager be authorized to execute the agreement in good faith.

ATTACHMENT(S)

1. Attachment A - PSA West Associates 4313

PROFESSIONAL SERVICES AGREEMENT NO. 4313

BY AND BETWEEN

THE CITY OF MONTEBELLO
AND
WEST & ASSOCIATES ENGINEERING INC.

FORDESIGN AND ENGINEERING SERVICES
Thi
s Professional Services Agreement (“Agreement”) is made and entered into for the above stated project this 14th day of May, 2025 (“Effective Date”), by and between the City of Montebello, a California municipal corporation (“AGENCY”) and West & Associates Engineering Inc., (“CONTRACTOR”). AGENCY and CONTRACTOR may be individually referred to herein as a “Party” or collectively referred herein as the “Parties.” RE
CITALS
A
. A
GENCY is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California.

B
. C
ONTRACTOR is a corporation duly organized and doing business in the State of California.

CONTRACTOR represents it has the background, knowledge, experience and expertise necessary to provide AGENCY with the equipment, goods and services set forth in this A
greement.

C
. A
GENCY seeks to procure from CONTRACTOR, and CONTRACTOR seeks to provide to AGENCY, Design and Engineering Services (“Project”).

N
OW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, AGENCY and CONTRACTOR agree as follows:

AG

REEMENT
A
RTICLE I. Incorporation of Recitals and other Contract Documents The abov
e-referenced Recitals constitute a material part hereof and shall hereby be incorporated by reference. Moreover, this Agreement consists of the following documents (collectively referred herein as the “Contract Documents”), in order of precedence, all of which are incorporated herein and made part of this Agreement, as though fully set forth herein:

1. This Agreement, including any and all addenda or supplemental agreements.

2. CO
NTRACTOR’s April 3, 2025, Proposal entitled “Proposal for Final Design, Bidding, and Construction Support of Storm Drain Improvements in 4 th Street (from B each Street to Mines Avenue)” attached hereto as Exhibit “A”.

ATTACHMENT A

2 ARTICLE II. Services to be performed by CONTRACTOR

For and in consideration of the payments and agreements to be made and performed by AGENCY, CONTRACTOR agrees to perform the services and furnish all materials necessary to perform all work required for the above stated Project, and to fulfill all other obligations as set forth in the aforesaid Contract Documents. CONTRACTOR covenants with AGENCY to furnish its best skill, judgment and efforts and to cooperate with AGENCY and any other consultants or CONTRACTORS engaged by AGENCY in providing the services necessary for the Project.

CONTRACTOR covenants to use its best effort to perform its duties and obligation under this Agreement in an efficient, expeditious and economical manner, consistent with the best interests of AGENCY. Workmanship throughout the performance of this Agreement shall conform to the highest standard of commercially accepted practice of work and shall result in a neat finished appearance to the satisfaction of AGENCY.

ARTICLE III. Compensation

As full compensation for furnishing all materials, performing all services, and fulfilling all obligations set forth in this Agreement, AGENCY agrees to pay and CONTRACTOR agrees to receive and accept the price set forth in CONTRACTOR’s Proposal dated April 3, 2025 (“Compensation”) attached hereto in Exhibit “A”. The total amount of the compensation shall not exceed the sum of One Hundred and Fourteen Thousand Eight Hundred Dollars and 00/100 Cents ($114,800.00). AGENCY shall pay CONTRACTOR within thirty (30) days of receipt of each invoice and full acceptance of product and services by AGENCY.

Said compensation shall cover all expenses, losses, damages, and consequences arising out of the nature of the work during its progress or prior to its acceptance including those for well and faithfully completing the work and the whole thereof in the manner and time specified in the aforesaid Contract Documents; and also including those arising from actions of the elements, unforeseen difficulties or obstructions encountered in the prosecution of the work, suspension or discontinuance of the work, and all other unknowns or risks of any description connected with the work.

ARTICLE IV. Completion of Work

Time is of the essence. The work and services set forth in this Agreement will be completed in a timely manner, and in accordance with an agreed upon work schedule to be further determined by the Parties. An extension of the period for completion may be granted by mutual agreement by the Parties herein for reasons outside the control of CONTRACTOR including acts of God.

CONTRACTOR shall request an extension by notifying AGENCY in writing at least fifteen (15) days prior to the expected Completion Date.

No extension of time requested or granted hereunder shall entitle CONTRACTOR to additional compensation unless, as a consequence of such extension, additional work must be performed and such additional work is approved in writing. In such event, AGENCY shall in good faith consider any request for additional compensation submitted by CONTRACTOR.

ARTICLE V. Ownership of Written Products

All reports, documents or other written material (“Written Products”) developed by CONTRACTOR in its performance of this Agreement shall be and remain the property of AGENCY without restriction or limitation upon its use or dissemination by AGENCY. CONTRACTOR may take and

3 retain copies of such written products as desired, but no such written products shall be the subject of a copyright application by CONTRACTOR.

ARTICLE VI. Independent Contractor

CONTRACTOR is, and shall at all times remain to AGENCY, a wholly independent contractor.

CONTRACTOR shall have no power to incur and debt, obligation, or liability on behalf of the AGENCY or otherwise to act on behalf of AGENCY as an agent. Neither the A GENCY nor any of its officers, employees or agents shall have control over the conduct of CONTRACTOR or any of CONTRACTOR’s employees or agents, except as set forth in this Agreement. CONTRACTOR shall not represent that it is, or that any of its agents or employees are, in any manner employees of AGENCY.

The Parties further agree that:

A. CONTRACTOR is free from the control and direction of AGENCY in connection with the performance of the work, both under this Agreement for the performance of the work and in fact;

B. CONTRACTOR performs work that is outside the usual course of AGENCY’s business; and

C. CONTRACTOR is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

ARTICLE VII. Confidentiality

All data, documents, discussion, or other information developed or received by CONTRACTOR or provided for performance of this Agreement are deemed confidential and shall not be disclosed by CONTRACTOR without prior written consent by AGENCY. AGENCY shall grant such consent if disclosure is legally required. All AGENCY data, documents, objects, materials or other tangible things shall be returned to AGENCY upon the termination or expiration of this Agreement.

CONTRACTOR agrees that the covenants contained in this Article shall survive the expiration or termination of this Agreement.

ARTICLE VIII. Compliance with State and Local Laws

CONTRACTOR acknowledges the provisions of the State Labor Code requiring every employer to be insured against liability for worker’s compensation, or to undertake self -insurance in accordance with the provisions of that code, and certifies compliance with such provisions. All services required under this Agreement will be performed by CONTRACTOR, or under its supervision, and all personnel shall possess the qualification, permits, and licenses required by the State and local law to perform such services.

CONTRACTOR shall be solely responsible for the satisfactory work performance of all personnel engaged in performing service required by this Agreement, and compliance with all reasonable performance standards established by AGENCY. CONTRACTOR shall be responsible for payment of all employees' and sub -contractor's wages and benefits, and shall comply with all requirements pertaining to employer's liability, workers' compensation, unemployment insurance, and Social Security. CONTRACTOR shall indemnify and hold harmless the AGENCY from any

4 liability, damages, claims, costs and expenses of any nature arising from alleged violations of personnel practices.

ARTICLE IX. Indemnification

CONTRACTOR agrees to indemnify, defend and hold harmless AGENCY and all of its officers and agents against any or all injuries, deaths, losses, damages, claims, suits, liabilities, demands, or causes of action, including reasonable attorneys’ fees and related costs and expenses, which may accrue against AGENCY based on, arising out of, or in any way related to the services undertaken or performed by CONTRACTOR under this Agreement regardless of responsibility for negligence. In addition, CONTRACTOR shall defend, indemnify, and hold harmless AGENCY, from and against any and all claims, liabilities and losses whatsoever, including reasonable attorney's fees and related costs and expenses, occurring or resulting from any action attributable to any and all pers ons, firms, or corporations employed or contracted by CONTRACTOR or its sub-contractors in connection with the services under this Agreement, regardless for responsibility for negligence.

ARTICLE X. Insurance

A. Without limiting CONTRACTOR's indemnification of Indemnities pursuant to Article IX of this Agreement, CONTRACTOR shall obtain and provide and maintain at its own expense during the term of this Agreement the types and amounts of insurance as described below:

i. Commercial General Liability Insurance using Insurance Services Office Commercial General Liability form CG 00 01 or the exact equivalent. Defense costs must be paid in addition to limits. There shall be no cross-liability exclusion for claims or suits by one insured against another. Limits shall be no less than One Million Dollars and 00/100 Cents ($1,000,000.00) per occurrence for all covered losses and no less than Two Million Dollars and 00/100 Cents ($2,000,000.00) general aggregate.

ii. Automobile Liability Insurance for owned, hired and non-owned vehicles utilized by Contractor, its employees or subcontractors, in the amount of One Million Dollars and 00/100 Cents ($1,000,000.00) per accident for bodily injury and property damage. If CONTRACTOR owns no vehicles, this requirement may be satisfied by a non-owned auto endorsement to the general liability policy described in the preceding subsection.

If CONTRACTOR or CONTRACTOR's employees will use personal autos in any way on this project, CONTRACTOR shall provide evidence of personal auto liability coverage for each such person.

iii. Workers' Compensation insurance on a state approved policy form providing statutory benefits as required by law with employer's liability limits no less than One Million Dollars and 00/100 Cents ($1,000,000.00) per accident for all covered losses.

iv. Professional Liability or Errors and Omissions Insurance as appropriate to the profession, written on a policy form coverage specifically designed to protect against acts, errors or omissions of the CONTRACTOR and "Covered Professional Services" as designated in the policy must specifically include work perform ed under this