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Caradco Building Contract Amendment No. 1_ECIAMasterpiece on the Mississippi Dubuque All- America City II 111! 2012 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Amendment Number 1 for 2010 CDBG Grant Administration with ECIA DATE: February 12, 2013 Economic Development Director Dave Heiar recommends City Council approval of an amendment to the contract with East Central Intergovernmental Association to assist the City with grant administration for the 2010 Iowa Department of Economic Development Community Development Block Grant for the Caradco Building, LLLP project in an amount up to $32,500, which exceeds the current contract limit of $7,500. I concur with the recommendation and respectfully request Mayor and City Council approval. brit44 krt., italy, Michael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager David J. Heiar, Economic Development Director Masterpiece on the Mississippi Dubuque kard All-America City '1111! 2007 TO: Michael Van Milligen, City Manager FROM: David J. Heiar, Economic Development Director DATE: February 11, 2013 SUBJECT: Amendment Number 1 for 2010 CDBG Grant Administration with ECIA INTRODUCTION This memo transmits for City Council review and approval, a proposed amendment to the contract with East Central Intergovernmental Association (ECIA) to assist the City with grant administration for the 2010 Iowa Department of Economic Development Community Development Block Grant (CDBG) for the Caradco Building, LLLP project. BACKGROUND In 2010, The Iowa Department of Economic Development (IDED) awarded to the City of Dubuque a Supplemental Community Development Block Grant (CDBG) of $8.9 million to help fund the construction of 72 residential units at the Caradco Building, at 900 Jackson Street in Dubuque's Historic Millwork District. The City of Dubuque worked with Caradco Building, LLLP in submitting two grant applications totaling $8.9 million. The Iowa Department of Economic Development has prepared one contract to cover both awards. The grant will assist with the development of 72 workforce housing units: 42 two - bedroom units and 30 one - bedroom units. Monthly rents are expected to range from $650 to $850. Income guidelines will apply for a portion of the workforce housing units. Projects constructed with this funding will likely result in mixed - income projects, in that, only a percentage of the total number of units are required to meet the activity income and rent requirements (i.e., the "assisted" units). The total estimated cost for the rehabilitation of the structure is $28.3 million. The Carr, Ryder & Adams Company (Caradco) Main Plant Building, a former millwork factory, occupying an entire city block, was built between 1880 and 1906. The renovation of this building is expected to act as a catalyst for the revitalization of the Historic Millwork District. With its foundation of historic, architecturally unique warehouses, the district will become an urban mixed -use development containing mixed - income housing, commercial space, and public gathering places, incorporating sustainable and energy- efficient technologies. In February of 2011, the City Council approved a contract with ECIA to assist the City with the administration of the grant. The City would be billed for actual staff time up to $7,500. The scope of work to be performed by ECIA included the following activities as outlined in the attached Scope of Services. • Conduct and review activities related to the compliance of federal regulations. • Meet with General Contractor and subcontractors as needed to assure compliance of federal regulations and in particular Davis Bacon regulations. • Provide a report of project completion to City staff and provide all available information for compliance audit. DISCUSSION Prior to the developer starting the Caradco Building Project, City Staff requested a clarification from the IEDA on what part of the project would require Davis Bacon prevailing wages. The directive from the State was that if the Developer was able to separate the residential portion of the construction project from the Commercial portion of the construction that Davis Bacon would only apply to the residential rehabilitation work since the CDBG funds were provided for housing. In order to comply with this directive, the Developer delayed the start of the project for nearly two months to rewrite the bid documents. As the residential portion of the Caradco IEDA, the City, ECIA, the Department of Labor, the Department of Housing and Urban Development (HUD) and the developer about the necessity of additional CDBG program compliance requirements beyond the original contract scope of the project. Based on those discussions, it was determined that the DOL and HUD did not agree with the information provided to City Staff by IEDA and that Davis Bacon prevailing wages would also apply to the core and shell rehabilitation work. During these discussions, it was also agreed that the IEDA would provide additional funding for the extra costs associated with these compliance requirements. Therefore, on February 4, 2013 the City Council authorized an amendment to the CDBG Supplement Funds award in the amount of $1,299,000 to cover the additional costs. The amendment included CDBG funds to cover legal and administrative costs as well as a potential contingency to cover unanticipated costs associated with these changes. ECIA staff, in particular Mark Schneider, was very helpful in discussions and negotiations related to changes in the Caradco Project. They participated in conference calls, attended extra meetings in Des Moines and researched past practices. The changes to the scope of work required a substantial amount of extra time to review payroll records dating back to the start of the project. In an effort to finalize this project in a timely fashion, ECIA Staff worked long hours including many weekends. There is no question that their commitment and their expertise were invaluable to closing out this project. RECOMMENDATION I recommend that the City Council approve the attached resolution to amend the current contract for up to $32,500 with ECIA to administer the CDBG grant for the Caradco Building, LLLP project, and authorize the City Manager to sign the enclosed proposal on behalf of the City. Enclosures F: \USERS \Econ Dev \CARADCO \RIO -CDBG Round 3 \ECIA Contract for Services CDBG Grant Admin\20130215 Memo Amendment 1 CDBG Grant Administration with ECIA.doc Prepared by: David J. Heiar, ED Director, 50 West 13th Street, Dubuque IA 52001 563 589 -4393 Return to: David Heiar, ED Director, 50 West 13th Street, Dubuque IA 52001 563 589 -4121 RESOLUTION NO. 48 -13 A RESOLUTION OF THE CITY OF DUBUQUE APPROVING AMENDMENT NUMBER 1 FOR 2010 CDBG GRANT ADMINISTRATION WITH EAST CENTRAL INTERGOVERNMENTAL ASSOCIATION WHEREAS, THE CITY OF DUBUQUE, Iowa is party to the Agreement creating the East Central Intergovernmental Association (hereinafter called the ECIA) and is a member in good standing; and WHEREAS, THE CITY OF DUBUQUE, Iowa wishes to engage the ECIA to provide certain technical and professional services for grant administration of the City of Dubuque's 2010 Iowa Department of Economic Development Community Development Block Grant (Contract #08 -DRH -212) Program; and WHEREAS, Articles II, III (12), and VIII (2) and (3) of the Articles of Agreement of the East Central Intergovernmental Association gives the ECIA the authority to perform services under consideration. NOW, THEREFORE, BE IT RESOLVED, that the East Central Intergovernmental Association is hereby authorized to provide staff assistance as prescribed in the attached Contract for Services and Scope of Services. PASSED, APPROVED, AND ADOPTED this 18th di y of February 2013. Roy Buol ATTEST: ayor CONTRACT FOR SERVICES WITH EAST CENTRAL INTERGOVERNMENTAL ASSOCIATION Amendment #1: Dubuque 2010 Caradco Building Renovation Project Administration Contract THE CONTRACT, entered into by and between the East Central Intergovernmental Association (hereinafter called ECIA) and the City of Dubuque, approved by a Dubuque Resolution on February 22, 2011 authorizing ECIA's assistance in carrying out the City's Community Development Block Grant Contract #08-DRH-212 and approved by ECIA on March 30, 2011 is hereby amended as follows. Revise the following Section. SECTION 3. Method of Payment Payment shall be due upon receipt of a monthly bill for services. The payment shall be based on the actual costs incurred by the agency in administering the contract, including labor and overhead, all according to OMB Circular A122. Total payment shall not exceed $32,500. PASSED AND APPROVED: Grantee: City of Dubuque February 18, 2013 Date Roy D. Bt} 1, Mayor Attest: K h Firnstahl, ity erk East Central Intergovernmental Association 347/, 3 Date Attachment A SCOPE OF SERVICES The East Central Intergovernmental Association (ECIA) shall assist in compliance with requirements set forth by the Iowa Department of Economic Development; maintenance of required records and documents; and other required actions not specifically listed, but requested by the local government, including, but not limited to the following activities; 1. General Activities A. Be responsible for conducting and review of activities related to the compliance of federal regulations pertaining to the Davis-Bacon Act, as amended (40 U.S.C. 276a to a7), Copeland "Anti-Kickback" Act (18 U.S.C. 874 and 40 U.S.C. 276c), Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333) and Section 3. B. Meet with Gronen Restoration and/or their project architect and contractor/subcontractors to review and assure understanding of terms and conditions of the above regulations, if requested. C. Assist in meeting(s) pertaining to the above regulations and ensure documentation with state/federal officials during site visits. D. Immediately advise the owner and the City if the contractors fail to comply with Davis Bacon regulations. It PROGRAM ADMINISTRATION A. Files 1. ECIA shall review files regularly and insure that required information is contained in each. 2. The files shall be located in the office of ECIA during construction and will remain the property of and provided to City of Dubuque upon contract completion. B. Project Specific Activities 1. Review project specifications and bid documents for compliance with above regulations. 2. Review construction contract(s) for compliance. 3. Obtain contractor clearances, if not completed. 4. Obtain wage determinations, if needed. 5. Meet with General Contractor and subcontractors as needed to assure compliance. 6. Provide labor standards information to contractor and sub-contractors. 7. Make construction site visit to assure posting of wage detertnination, labor standards provisions and required jobsite posters. 8. Receive and review contractor payroll forms (weekly) and follow up with necessary parties to ensure compliance. 9. Conduct jobsite employee interviews and verify pay compliance with payrolls. 10. Verify Anti-kickback statements from contractor(s). 11. Provide verification of contractor/subcontractor payroll compliance to City Staff prior to City issuance of contractor payments. 12. Obtain Section 3 reports from contractors and subcontractors and verify compliance. C. Program Close-Out 1. Provide a report of project completion to City staff in a format prepared by the City. 2. Assist auditor as needed by providing all available information for compliance audit.