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Step by Step IDED AuditTHE CITY OF DUB E Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Step by Step - IDED Audit DATE: July 27, 2009 Dubuque An-An~ica Cltlt ./•~ 2007 Housing & Community Development Director David Harris has received the audit report from the Iowa Department of Economic Development for the Step by Step Project giving the City high marks for program compliance and performance. Mi ael C. Van Milligen MCVM:Iw Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David Harris, Housing & Community Development Director THE CITY OF Dubuque DUB E ""~'~'~~~" 1 1 Masterpiece on the Mississippi 2007 TO: Joleen Patt ~~ n; Rehab Programs Supervisor FROM: David`lrris SUBJECT: Step by Step -IDED audit DATE: 24 July 09 The attached audit report, received from the Iowa Dept of Economic Development (IDED) gives this project high marks for program compliance and performance. This was a very difficult project to put together; you'll remember we initially submitted a request to IDED for HOME funds in 2005. It took four years to bring this to completion. You and your staff are to be congratulated for this accomplishment, as is Kevin and the lead paint program. Congratulations! cc: Kevin Hirsch, Lead Program Supervisor Bob Boge, Inspections Programs Supervisor Janet Walker, Assisted Housing Program Supervisor June 30, 2009 The Honorable Roy D. Buol, Mayor City of Dubuque 350 West 6th Street, Suite 312 Dubuque, IA 52001 SUBJECT: Agreement Number 06-HM-198-29 (City of Dubuque) Dear Mayor Buol: This letter is a follow-upon the monitoring and site visit made May 13, 2009 at the project (Step-by-Step) in Dubuque. I appreciate all the time and effort committed by David Harris and Jolene Patterson and thank them for making my visit so productive. The purpose of the visit was to review the status of the project, examine the records associated with the use of HOME funds provided by IDED and to assure that those funds were used in accordance with IDED and federal rules. As a result of the visit, the below listed comments and observations are offered for your consideration. GENERAL The visit on May 13, 2009 involved a general review of the applicable HOME Program requirements as documented among the projectfiles and as observed at the site and newly completed building. The project is a very attractive rehabilitation of an existing apartment building with unique amenities for persons with disabilities. The City of Dubuque advanced IDED funds to Step-by-Step, Inc., acommunity-based non-profit corporation, which developed and will own and operate the project. As of the date of my visit, the project was completed. There have been two amendments to the IDED contract. Each were for time extensions to December 31, 2008 and April 30, 2009 respectively. PROGRAM PROGRESS Activity 29: Acquisition with Rehab (Rental) greater than $40,000. At the time of my visit, construction work at the project was complete and units were available for occupancy. No households had been approved for occupancy. Chester J. Culver,Govemor IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT PattyJudge,LieutenantGovemor Mike Tramontina, Director • 200 East Grand Avenue, Des Moines, Iowa USA 50309 • Phone: 515.2424700 • Fax 515.2424809 a wannr.iowalifechanging.com NATIONAL OBJECTIVE OR PROGRAM GOALS The City of Dubuque received a HOME award of $350,000 (a grant) from the Housing Fund program year 2006. The project involved the rehabilitation of seven (7) apartments at 759 Bluff Street in Dubuque, Iowa. All seven are one (1) bedroom units and all are HOME assisted. Five of the units will be affordable to households at or below 60% AMI and two units will be affordable at or below 50% AMI. The IDED Housing Fund assistance was provided to the City of Dubuque who, in turn, provided it to Step-by-Step, Inc. acommunity-based non-profit corporation and originally proposed for combination with other financing included investment via State and Federal Historic Tax Credit Program ($537,701), State of Iowa Enterprise Zone Program ($121,684), Federal Home Loan Bank Affordable Housing Program ($149,975), City of Dubuque ($264,600), Iowa Finance Authority State Housing Trust Fund ($105,636), Deferred Developer Fee ($160,000) and a Woodward Foundation Grant of ($5,000). AREAS OF SATISFACTORY COMPLAINCE Environmental The environmental assessment, notices and files were properly completed as required and were properly documented in project files. SHPO provided its clearance and IDED released funds as of July 28, 2006. No negative comments were received and no project activities were occurring in a floodplain. Financial Management At the time of the site visit, all of the $350,000 of the IDED HOME funds had been requested, released and expended. It appears that HOME funds have been managed properly and in accordance with IDED rules and the HOME Management Guide. A review of documents associated with the expenditure of IDED HOME and other funds demonstrated both adequate financial controls and the HOME/IDED program compliance were being achieved. All eligible work was inspected, approved and accepted prior to the authorization of payments to contractors. It was noted that there has been clear separation of account duties, the approval of expenditures and the payment of claims. Please note that financial records must be retained for a minimum of five years. Labor Standards Labor Standards did not apply to the project. Procurement and Contract Management The City of Dubuque does have an established procurement policy and a written Code on Conduct. The IDED recipient, the City of Dubuque, provided the HOME assistance to Step-by-Step, Inc. which is afor-profit entity. Civil Rights and Fair Housinq An affirmative marketing plan is in place and is followed by the City of Dubuque. It appeared that Section 109 and Title VI requirements are being met. The project tenant files were not available at the time of my visit but will record demographics of the households benefitting from this project. MBE/WBE -Section 3 Records and file documents available during the visit did not include information regarding the involvement of MBE and WBE business. However, the project used inmates for the Elm Street Correctional Facility which provided training. The time invested was a donation of hours for community service. A final Section 3 report should be completed at project closeout and submitted to IDED with other final documents. Lead-Based Paint Regulations Lead based paint was totally abated using a Lead Program Grant from the City of Dubuque. Affordability No tenant files were available for review. These will be provided in the near future. ISSUES TO BE RESOLVED Provide a copy of one tenant file when rent-up begins. Otherwise, my examination of the records associated with the project demonstrated compliance with the requirements, laws and rules of the HOME Program and those required by IDED. I enjoyed the opportunityto review this project. The projectwill become a beautiful, very highlyfunctioning home to seven households for persons with disabilities. If you have questions, or if I may offer any assistance, please feel free to contact me by phone at (515) 725-3082 or by a-mail at Julie.Lunn@iowalifechanging.com. Sincerely, Julie M. Lunn Project Manager cc: David Harris, City of Dubuque File (JL)