02/20/2001 RA RPT 07 - Laserfiche WebLink

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CITY OF RIVERSIDE CITY COUNCIL/REDEVELOPMENT AGENCY MEMORANDUM Honorable Mayor and City Council Redevelopment Agency Date: February 20, 2001 Item No.: 7 Subject: Request to Amend the City of Riverside Federal Consolidated Plan and the 2000-2001 RHDC Housing Rehabilitation and Technical Assistance CDBG Housing Rehabilitation Agreement to Add a Lead Based Paint Testing Contingency Account for the Riverside Housing Development Corporation as part of Ongoing Implementation of the Lead Based Paint Hazard Reduction Act of 1992 - Funds Transfer Background The federal government has enacted all provisions of the Lead Based Paint Hazard Reduction Act of 1992 ("Act"). The Act places higher standards on recipients of HUD federal grams forthe evaluation, reduction, and/or abatement of lead based paint in dwellings funded with Community Development Block Grant (CDBG), HOME Investment Partnership Act (HOME), Emergency Shelter Grant (ESG), and Housing Opportunities for Persons with AIDS (HOPWA) grant monies. Under the Act, all pre-1978 homes with rehabilitation funded via the above federal grant funds must be fully tested for lead based paint if expenditures on a single project exceed $5,000. The costs of testing an individual housing unit ranges from $800 to $1000. The Riverside Housing Development Corporation (RHDC), the City's sole Community Housing Development Organization (CHDO), is the organization that implements most municipally funded single family rehabilitation programs for Riverside, and will be responsible for the majority of lead based paint testing for the City's federally funded housing programs. Current Issue Most lead based paint testing and abatement costs are added to the loan or grant amount of RHDC's single family rehabilitation program. However, RHDC has alerted staff that approximately 10% of applicants "wash out" of the application process without receiving a loan or grant. Lead based paint testing is one of the first steps in the rehabilitation process (for estimating purposes). If an applicant drops out, RHDC is left with the administrative cost of the lead testing with no means of cost recovery. At this time, staff is requesting the ability to set up a Lead Bused Paint Testing Contingency Account of no more than $20,000 to assist RHDC to meet the administrative costs of lead based paint testing required by the Act, when the applicant's loan is not successfully completed, and no other means of cost recovery is available. Staff intends to amend the 2000-2001 RHDC Housing Rehabilitation and Technical Assistance CDBG Housing Rehabilitation Agreement (executed in October of 2000) in order to provide for the above funding. Analysis As a part of the ongoing implementation procedures required by the Act, the expenditure of CDBG funding in this instance is consistent with both national and local objectives. An amendment to the previously approved annual Consolidated Plan for federal funding must be completed by staff to set up a Contingency Fund. This requested fund trans[er be implemented in the form of a Purchase Order for RItDC to charge-off lead testing for failed projects. Staff approval will be required for all charges incurred by RHDC under this funding request. Fiscal Impact Funds for this request will come from the CDBG Contingency Account # 28351000-453001; there is currently $142,000 in this account. There will be no impact to the municipal General Fund.