MONTANA
STATE
This "cover" page added by the Internet Archive for formatting purposes
Montana
Community Development
Block Grant Program
1983 Grant Administration
Manual
STATE DCCUMEMTS COLLECTION
SEP 2 7 1994
p
■" C "^V i' ■ i; "•■ Pi I 1515 E. 6th AVE
MONTANA STATE LIBRARY
1515 E. 6th AVE.
HELENA, MONTANA 59620
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ii 6
i\/iontana Department Of Commerce
Buih ^^_
Montana
Gary Buchanan, Director
Nancy L. Leifer, Administrator
Community Development Division
Cogswell Building, Room C-211
Capitol Station
Helena, Montana 59620
406-444-2488
FEBRUARY 1984
S3o.re?^sl3'*.'^3i!T''^E LIBRARY
3 0864 00091145 6
MONTANA COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
1983 GRANT ADMINISTRATION MANUAL
TABLE OF CONTENTS
Page
INTRODUCTION i
Federal and Stnfc Requirements ii
Manual and Training Format iii
Department of Commerce - CDBG Staff Contacts iii
CHAPTER I ~ PROGRAM START UP
Incurring Start-Up Costs I-l
Establishing a Plan for Project Administration 1-2
Administration by Public Employees 1-3
Management by Contractor 1-4
Designating Local Project and Fiscal Contacts 1-6
Developing the Contract 1-6
Establishing Project Files 1-8
Establishing Method for Payment T-I3
Conflict of Interest I-IA
State Monitoring of Grantees I-I4
Checklist for Start-up Activities 1-16
Exhibits :
I-A Designation of Local Project and
Fiscal Contracts
I-B CDBG Contract for Housing Rehabilitation
I-C CDBG Contract for Public Facilities
I-D Signature Certification
I-E Designation of Depositary
CHAPTER 11 - ENVIRONMENTAL REVIEW
Overview II-l
Local Recipient Responsibilities II-2
Step 1 — Designate Environmental
Certifying Officer II-2
Step 2 — Request Authorization to
Incur Administrative Costs II-3
Step 3 — Determine if all Project Activities
Are Exempt II-4
Step 4 — Determine if the Project
is Categorically Excluded II-5
Step 5 — Preparation of an Environmental
Assessment 11-10
Summary 11-13
Exhibits:
II-A Designation of Environmental Certifying
Officer
II-B Finding of Exemption for Reimbursable Activities/
Request to Incur Administrative Costs
II-C Finding of Exemption
II-D Finding of Categorical Exclusion
II-E Preliminary Environmental Review (PER)
II-F Statutory Checklist
II-G Eight-Step Decision Making Process
II-H Early Public Notice for (Floodplains and/or Wetlands)
II-I Notice of Explanation for (Floodplains and/or Wetlands)
II-,] Notice to State Historic Preservation Office
II-K Historic Preservation Explanation
II-L Notice of Intent to Request Release of Funds (NOI/RROF)
II-M Request for Release of Funds (RROF)
II-N Environmental Assessment (EA) Form
II-O Finding of No Significant Impact aiid Notice of
Intent to Request Release of Funds (FONST /NOI/RROF)
II-P FONS I /NOI/RROF Distribution List
CHAPTER III — PROCUREMENT STANDARDS
Procurement Regulations III-l
Conflict of Interest I1I-2
Small and Minority Businesses III-3
Maximum Open and Free Competition III-3
Selection Procedures 1 1 1-4
Methods of Procurement IIT-6
Small Purchase Procedures ITT-6
Competitive Sealed Bids (Formal Advertising) ITI-6
Competitive Negotiation III-7
Non-competitive (Sole Source) 111-8
Contract Provisions ITI-9
Bidding Documents 111-12
Design Requi rements III-I 2
Equal Opportunity Requirements III-l 3
Labor Standards and Requirements Ill-IA
Other Federal Requirements TII-15
Real Property Management Standards 111-15
Exhibits :
III-A Types of Procurement Methods
III-B Required Contract Provisions
D
CHAPTER rv — FINANCIAL MANAGEMKNT
Overview
Applicable Laws I^~^
Local Grantee Responsibilities
Overview ^^"^
Step 1 — Discuss Project with Local Fiscal Of f icer . . lV-7
Step ? — Establish Depository for Federal Funds IV-8
Step 3 — Establish CDBG Budget/Fund IV-8
Step h — Establish and Maintain Document Files
and Records lV-9
Request Payment from the State IV-IO
TV-1 J
Summary ^^ ^^
Exhibits:
IV-A Using BARS to Account for Community Development
Block Grants
IV-B Using the Town System to Account for Community
Development Block Grants
IV-C Cash Control Register
IV-D SF 183 - Request for Payment
IV-E Budget Summary Form
IV-F Project Progress Report
CHAPTER V — CIVIL RIGHTS
Overview
Applicable Laws, Requirements and Policies V-2
Local Grantee Responsibilities
V-5
Overview
General Project Benefits ^"^
V-9
Employment
Business Opportunities V-10
V-1?
Fair Housing "
Other Civil Rights Issues V-13
Monitoring of Local Grantees ^^-13
V-15
Summa ry
Exhibits :
V-A Outline for Affirmative Action Plan
V-B Minorities Benefit Report Form
V-C A Human Rights Guide for Employers
V-D Sample Application for Employment
V-E EEOC Guide to Pre-Empl oyment Inquiries
V-F Interview and Hiring Form
V-G Grantee Employment Summary
V-H Contractor's Section 3 Plan and Related Forms
V-I Minority Business Enterprise Form
V-J List of Acceptable Actions to Promote Fair Housing
CHAPTER VI — LABOR STANDARDS
Overview VI-1
Applicable Laws VI-1
Local Grantee Responsibilities VI-4
Step 1 — Request Wage Rate Determination VI-4
Step 2 — Include Wa^o Rate In Solicitation of Bids.. VI-4
Step 3 — Include Labor Standards Provisions and
Certifications in Solicitation of Bids
and Contract Document VI-5
Step 4 — Verify Bidder Eligibility VI-5
Step 5 — include Instructions Related to Labor
Standards in Pre-Construction Conf erence . . . Vl-6
Step 6 — Monitor Contractor Performance VI-7
Step 7 — Investigate Labor Standards Violations VI-7
Step 8 — Maintain Labor Standards Files VT-8
Exhibits:
VI-A Request for Wage Determination
VI-B Request for Verification of Bidder Eligibility
CHAPTER VII — ACQUISITION/RELOCATION
Overview VII-1
Applicable Laws VI 1-2
Acquisition: Local Grantee Responsibilities
Step 1 ~ Obtain a Copy of HUD Handbook 1376.17 -
Relocation and Real Property Acquisition .. .VII-3
Step 2 — Determine Whether Each Acquisition is
Governed By Title III of the Uniform Act... VII-3
Step 3 — Notify Property Owner of Intent of Acquire. VII-3
Step 4 — Have Property Appraised to Determine
Fair Market Value VII-4
Step 5 — Determine Just Compensation for the
Property VII-4
Step 6 — Make Written Offer to Owner VII-4
Step 7 — Review Any Additional Materials Related
to Determination of the Purchase Price VII-5
Step 8a — Make Pajmient , or VII-5
Step 8b — Make Final Offer Before Initiating
Condemnation Procedures VII-5
Step 9 — Initiate Condemnation Proceedings VII-6
Step 10 — Maintain Acquisition File for Each
Property VII-6
Other Acquisition Considerations VII-6
Relocation: Local Grantee Responsibilities
Step 1 — Obtain a Copy of:
- HUD Handbook 1376.17 - Relocation and
Real Property Acquisition
- HUD Publication CPD 674 - Looking Beyond
tbe Walls: A Guide to Relocation VII-8
Step 2 — Determine Relocation Workload and Costs ... .VII-8
Step 3 — Design Relocation Procedures VII-8
Step 4 — Determine Eligibility of Relocatee for
Benefits VII-9
Step 5 — Provide Relocatee with Notice of Dis-
placement or Notice of Right to Continue
Occupancy VII-9
Step 6 — Interview Displaced Person to Determine
Housing Needs VI I- II
Step 7 — Prepare Site Occupant Record Card for
Displaced Person VII-11
Step 8 — Assist Displaced Person to Identify
Replacement Housing and Provide Other
Services as Needed VII-11
Step 9 — Issue Ninety-Day and Thirty-Day Notices
to Vacate VII-12
Step 10 — Approve Identified Replacement Dwelling. .. .VII-12
Step 11 — Determine Relocation Payment VII-13
Step 12 — Process Moving Expense and Housing
Replacement Payments VII-15
Step 13— Follow-Up VII-16
Step 14 — Maintain Records and Documentation of
Each Relocation Case VII-16
Other Relocation Considerations VII-16
Exhibits:
Vll-A Uniform Real Property Policies Act of 1970/Notice of
Exemption
VII-B Preliminary Acquisition Notice
VII-C Written Offer to Purchase
VII-D Final Notice to Acquire by Negotiations
VII-E Family Survey Guide
VII-F Ninety-Day Notice to Vacate
VII-G Thirty-Day Notice to Vacate
VII-H Inspection Report Format
VII-I Letter to Relocatee in a Substandard Unit
VII-J Letter of Acknowledgement for Services and Payment
Rendered
CHAPTER VIII ~ PUBLIC FACILITIES PROJECTS
Overview VIII-1
Applicable Laws V1II-]
Local Grantee Responsibilities
Step 1 — Prepare Engineering and/or
Architectural Design and Specif ications. . .VIIT-3
Step 2 — Prepare Bid Package VlII-4
Step 3 — Advertise Bid Solicitation VIII-5
Step 4 — Log Each Bid VIII-6
Step 5 — Conduct Bid Openings VIII-6
Step 6 — Review Low Bid VIII-7
Step 7 — Award Contract VIII-7
Step 8 — Hold Pre-Construction Conference VIII-8
Step 9 — Issue Notice to Proceed VIII-8
Step 10 — Monitor Contractor Activities VIII-9
Step 11 — Conduct Final Inspection VTII-10
Step 1? — Maintain Records VITI-IO
Exhibit!
VIII-A
VIII-B
VIII-C
VIII-D
VIII-E
VIII-F
VIII-G
VIII-H
VIII-I
VIII-J
VIII-K
VIII-L
VIII-M
VIIT-N
Architect's Certification: Compliance with Minimum
Standards for Accessibility by the Physically
Handicapped
Transmittal of Contract Document Checklist
Advertisement for Bids
Instructions to Bidders
General Conditions
Supplemental General Conditions
Bid for Lump Sum Contracts
Bid for Unit Price Contracts
Bid Bond
Performance and Payment Bonding Requirements
Contractor Certifications
Contract
Notice of Contract Award and Pre-Construction
Conference
Monthly Employment Utilization Report
CHAPTER IX — HOUSING REHABILITATION PROJECTS
Overview IX- 1
Applicable Laws IX- 1
Local Responsibilities
Step 1 — Establish Management System IX-2
Step 2 — Establishing Local Project Guidelines IX-4
Step 3 — Select Assistance Recipients IX-7
Step 4 — Prepare Work Write-Ups and Cost Estimates. . IX-9
Step 5 — Contract for Rehabilitation Construction. .. IX-10
Step 6 — Inspect the Rehabilitation Work IX-13
Step 7 — Maintain Records IX-15
Exhibits:
IX-A CDBG Housing Rehabilitation Issues
IX-B Rehabilitation Assistance Project Guidelines
IX-C Family Survey Guide
IX-D Request for Verification of Employment
IX-E Request for Verification of Deposit
IX-F Notice of Disposition
IX-G Residential Inspection Report
TX-H Work Wrlte-Up and Cost Estimate
IX-I Request for Verification of Contractor Eligibility
IX-J Contract Package for Rehabilitation
IX-K Notice of Acceptance of Work
IX-1. Release of Lien Forms
IX-M Benefits Reporting Form
CHAPTER X ~ ECONOMIC DEVELOPMENT PROJECTS
Overview X- 1
Applicable Laws X-2
Local Grantee Responsibilities
Execute Assistance Agreement X-3
Plan for Use of Program Income X-4
Incurring Costs X-5
Monitor Project Activities X-5
Maintain Records X-6
Exhibits :
X-A Assistance Agroement
CHAPTER XI — PROJECT CLOSE-OUT
Overview XI-1
Local Grantee Responsibilities
Step I — Prepare Substantive Performance Report XI-2
Step 2 — Request State Monitoring Visit XI-3
Step 3 — Arrange for Audit XI-4
Step 4 — Complete Close-Out Forms XI-6
Exh 1 b i t s :
XI-A Project Completion Report
XI-B Response to DOC Letter of Findings
XI-C Common Audit Findings
XI-D Audit Report
XI-E Response to Audit Report
XI-F Certification of Completion
INTRODUCTION
The procedures described in this manual and during the training
sponsored by the Montana Department of Commerce (DOC) are designed to
serve several purposes. The administration manual provides
information that will assist you in managing the grant so as to
successfully complete your project and comply with federal and state
requirements.
The management system outlined in the manual will allow the State
to meet its responsibility for assuring compliance by local grantees
of federal and state laws that govern the CDBG program. It will
assist DOC in the performance of its various functions as the granting
agency, including release of grant funds, review of project
activities, determination of project progress, disbursement of funds
to the local recipient, and close-out of completed activities.
The reporting and monitoring procedures will be used by the State
CDBG staff to determine the on-going technical assistance needs of
local grantees. The monitoring system adopted by DOC is intended to
help avoid, identify, or correct potentially serious problems in
project activities before there are major problems or legal
implications.
In many instances the information required by the State is
directly tied to monitoring of the State program by the U.S.
Department of Housing and Urban Development (HUD) . This information
will also be incorporated in the annual performance report which DOC
must provide to HUD in order to assure Congress that the states and
their grantees are administering the CDBG program as it intended.
The manual identifies information the local grantee should be
collecting on a continuing basis to avoid situations where the State
would have to ask the localities to reconstruct reporting materials
such as time sheets, evidence of public notices, or records of bidding
and contract procedures.
FEDERAL AND STATE REQUIREMENTS
Perhaps the most controversial and misunderstood aspect of the
CDBG program is the set of legal and regulatory requirements that
govern the use of CDBG monies. The sources of these requirements
include:
Provisions contained within the federal Housing and
Community Development Act (HCD) of 1974, as amended;
Regulations adopted by HITD (24 CFR 570) which govern
the state-administered program;
Other laws and regulations which apply to the use of
any federal assistance, generally labelled "other
applicable federal laws and regulations;" and
Applicable state laws and regulations.
Upon accepting federal or state assistance for a community or
economic development activity, many local officials are surprised at
the number of applicable laws, sometimes called "strings," attached to
the use of these resources. The sum total of state and federal rules
represents a set of guidelines with which expenditure of public funds
must be consistent. For example, few of us would disagree that use of
public dollars should be free from conflicts of interest or that
efforts should be made to mitigate negative environmental impacts.
More often, it is not the principles involved, but the extensive
web of procedures and paperwork that local officials find
discouraging. However, experience has shown that local officials have
been the primary beneficiaries of these procedures. This has been
particularly true in terms of legal challenges to CDBG activities.
For example, by following generally accepted procedures of competitive
awarding of construction contracts, the grantee greatly reduces the
possibility of a legal suit by an unsuccessful bidder that might delay
or disrupt the timely completion of the project.
MANUAL AND TRAINING FORMAT
This manual and the grant administration training to be conducted
are divided into two major components. The first part of the training
covers chapters in the manual which are geared toward grantee
preparations prior to the actual start of CDBG project activity-
Start-up elements will be covered during an initial two-day training
session for grantees. This preliminary instruction is covered In
Chapters I, Project Start-up, II, Environmental Review, and III,
Procurement Standards, of this manual.
The second major component of the grant administration training
will be a two-day workshop which focuses on the range of federal and
state program requirements such as financial management, labor
standards, civil rights, and acquisition of property. These areas are
covered in Chapters IV - XI of the training manual. An accompanying
Requirements Notebook will be provided as a supplement and will
include key requirements referenced throughout this manual.
DEPARTMENT OF COMMERCE-CDBG STAFF CONTACTS
Throughout the process of administering a grant under the Montana
CDBG Program, local officials and staff will be working closely with
Montana Department of Commerce staff for the CDBG Program. If you
have any questions, please contact any of the following Individuals:
Nancy L. Leifer, Administrator, Community Development Division
David C. Cole, CDBG Program Manager
Bobbi Balaz, CDBG Project Manager
Larry Curran, CDBG Project Supervisor
Bill Duffey, CDBG Project Suptervisor
Montana Department of Commerce
Community Development Division, CDBG Program
Capitol Station, Cogswell Building, Room C-211
Helena, Montana 59620
(406) 444-2488
♦
Chapter i
Project
Start-up
CHAPTER I
PROJECT START-UP
This chapter of the manual explains important administrative
steps which precede project implementation and construction
activities:
— incurring start-up costs;
— establishing a plan for project administration;
— designating local project and fiscal contacts;
— developing the contract;
— establishing project files; and
— establishing method of payment.
Chapter I also addresses conflict of interest and State
monitoring of grantees. As a summary, a checklist of start-up
activities is included.
Another critical administrative step which must precede project
implementation is the environmental review process, which is covered
in Chapter II.
INCURRING START-UP COSTS
The announcement of the CDBG awards does not authorize the grant
recipient to begin incurring costs. Also, funds cannot be used to
reimburse the local general funds for any costs incurred prior to the
award of the grant, such as expenditures associated with application
preparation or previous engineering work. Expenditure of CDBG dollars
or local funds to be reimbursed later with CDBG funds can occur only
after the local government has reviewed the various sub-activities of
the project to determine their possible effects on the environment,
and received a notice from the Department of Commerce indicating that
a specific CDBG-related cost has been authorized.
Only the costs for those sub-activities which are defined as
environmentally exempt under federal law can be incurred. Examples
include administrative travel costs to attend the grant administration
I-I
training, and costs associated with selecting a consultant to assist a
local government in managing a CDBG grant , Before any costs are
incurred for the administration of the grant, the grantee should
review the environmental review procedures discussed in Chapter II.
These expenses must be paid out of local government funds which
will subsequently be reimbursed after a contract has been executed and
arrangements made for drawdown of grant funds. Procedures by which
grantees will establish the method of payment and be reimbursed are
discussed later in this chapter.
At this stage, only administrative costs can be reimbursed.
Under no circumstances may the local grantee expend any grant funds
for actual project construction until the environmental review is
completed and DOC issues a release of funds as provided in Chapter II.
ESTABLISHING A PLAN FOR PROJECT ADMINISTRATION
The Montana CDBG Program requires -that grantees have the capacity
to undertake and satisfactorily complete the project. Therefore,
grantees will need to develop a plan to specifically demonstrate to
DOC how project management will be accomplished.
An initial decision that must be made is establishing local
project structure. Local administration of CDBG projects generally
takes one of several forms. In some cases, the local governing body
designates a public employee (such as planning director, engineer or
clerk) as the CDBG project manager. In other instances, the locality
will contract with a third party to manage the grant activities. If
you foresee the need to make another arrangement for grant
administration, such as contracting with an existing agency such as a
local housing authority, contact the CDBG liaison for guidance. An
interlocal agreement and other special steps are necessary in such
cases .
1-2
DOC recognizes the above-described arrangements as acceptable for
project management with reasonable and appropriate costs eligible for
reimbursement with CDBG administrative funds as provided in the
contract between the grantee and DOC. Regardless of the option
selected, responsibility for completion of grant activities and
compliance with federal and state requirements rests with the grantee,
the governing body. The local administering agency should create a
file specifically for records related to hiring and employment
practices associated with CDBG project management.
Administration by Public Employees
When using existing staff or hiring additional public employees,
called force account labor, the responsibilities of local officials
include accurately documenting all costs and ensuring that hiring and
employment are consistent with federal and state equal employment
opportunity (EEC) and non-discrimination provisions. The provisions
are discussed in detail in Chapter V, Civil Rights.
In general, when using existing staff or hiring additional staff
on the local payroll, the local governing body should assure that:
the locality has written personnel and employment policies which
specifically prohibit discriminatory practices based on race,
national origin, religion, creed, color, sex, age, or physical or
mental handicap, or marital status;
EEO guidelines are followed in advertising for new employees;
sufficient records are maintained related to persons interviewed
and hired with specific data on sex, race, handicap, and/or
national origin; and
sufficient records are maintained related to training for,
promotion of, or compensation to any individual paid with CDBG
administrative funds.
When using local employees for CDBG project management, the key
is to document all expenditures of time and dollars associated with
the administrative activities. Samples of documentation include:
1-3
— employees' time and attendance sheets;
copies of travel vouchers with accompanying documentation;
documentation of all other direct expenses (e.g. printing);
documentation of indirect costs (e.g. telephone and rent) or
evidence of an approved costs allocation plan for claiming
indirect costs; and
— copies of all cancelled checks for CDBC related
expenditures .
Management by Contractor
When opting to contract for professional services for grant
administration, the local government is required to follow certain
procedures to ensure compliance with applicable federal and state
standards for procurement of services. Federal standards are
outlined in 0MB Circular A-102, Attachment 0, which is provided in the
Requirements Notebook. These procedures are designed also to protect
the locality and guarantee that it receives the services for which it
solicits and awards the professional services contract in accordance
with federal and state law.
All contracts are subject to strict requirements providing for a
free and open competition. Most professional services contracts are
done through non-competitive negotiation procedures as described in
Attachment 0. There are several ways to obtain professional services.
Request for Qualifications (RFQ)
If your community Is uncertain of the specific details involved
with administering the grant, the RFQ may be an appropriate option.
The locality requests interested bidders to submit information related
to their ability and expertise in project management. The locality
the ranks the potential contracts and selects from among the two most
qualified candidates. Then discussions will begin regarding approach,
costs, schedules, contract formats, etc.
1-4
Request for ProposaTs (RFP)
Rofore requesting proposals for a professional services contract,
be sure that you know exactly what you want the contractor to do. For
example, will the contractor be responsible for periodic inspections
of construction work? If so, how often should the inspections be made
and are the inspections to cover only physical improvements or is the
contractor also responsible for monitoring compliance with program
requirements such as fair labor standards?
With the RFP, the locality prepares an invitation for contractors
to compete for providing the desired services. The RFP contains
information describing the scope of desired services, the type of
payment (e.g. cost reimbursement or fixed price), information that the
locality needs from each interested party to make the contract
selection, and the method by which proposals will be evaluated. It is
important to note that cost plus contracts are not legal under the
CDBG program.
Upon selecting the successful candidate, the locality executes a
contract which sets for the specific activities to be performed by the
contractor, the amount of compensation the locality will provide the
contractor, and other terms and conditions of the contract. At a
minimum the contract should include the provisions discussed in
Chapter III, Procurement Standards.
Chapter TIT includes greater detail regarding different methods
of procuring services and explains regulations which must be adhered
to regarding provisions which must be included in contracts. Equal
employment opportunity and conflict of interest are particularly
important .
A useful guide containing more information is Working With
Consultants, published by DOC in May 1983. Contact the CDBC liaison
if you would like to obtain a copy.
1-5
DESIGNATING LOCAL PROJECT AND FISCAL CONTACTS
Once the grantee has decided on a local project administration
structure the grantee will be asked to designate, by letter to the
CDBG liaison, an individual associated with the local jurisdiction or
CDBG administering agency to serve as a project contact during the
effective period of the grant contract. (See sample in Exhibit 1-A.)
In most cases the project contact should be either the public employee
or head of the public agency designated by the locality to administer
the project. In some cases, the locality may want to designate an
elected official. In either instance the person should have a working
knowledge of the day-to-day activities associated with the project.
All requests for information or notices related to CDBG activities
from the State CDBG staff will be channeled through the project
contact.
In the same letter, the locality should designate a contact for
fiscal matters related to the disbursement of funds to the grantee and
expenditures for project activities. The fiscal contact in many cases
may be the local fiscal officer, particularly in those cases where the
grant funds are being disbursed through the locality's regular
disbursement process. This need not be the case however. The only
criteria for designation of the fiscal contact is that the person has
knowledge of all receipts and expenditures associated with the
CDBG-funded activity.
DEVELOPING THE CONTRACT
The CDBG staff will coordinate with local officials to discuss
the details of the contract between the locality and DOC. The
contract will reflect the terms, conditions, and timetables as
proposed in the application and submitted to DOC. Because the
application as submitted was the basis for the award of the grant, the
grantee may not make substantial changes in the project. If changes
are proposed when the contract is being developed, DOC will consider
whether the modification is substantial enough to necessitate
1-6
re-evaluatlng the project's ranking. If necessary, the DOC committee
which evaluated and ranked the applications may be asked to consider
the proposed modification and its impact on the scores originally
assigned the application.
Each contract consists of language common to all CDBG contracts,
generally labelled "boilerplate." Each contract also contains
language specific to each contract, such as amount of the grant, scope
of work, conditions, budget, and project schedule. Each provision is
legally enforceable and designed to protect both the grant recipient
and the State.
The contracting process can be expedited if the locality prepares
a draft contract for review by DOC. The CDBG liaison will send a
packet to the local project contact, including a sample contract
appropriate to the type of project. (Sample contracts for housing
rehabilitation and public facilities projects are included as Exhibits
I-B and I-C.) Contracts for economic development and comprehensive
projects usually have other specific sections, although much of the
"boilerplate" will be common. To modify a sample contract, pay
particular attention to sections addressing grant amount, scope of
work, conditions, budget, and project schedule. As noted earlier, be
sure the draft contract reflects project details as represented in the
application.
As the contract is legally binding on the locality, local
officials should insist that any "understandings" between the State
and locality be written into the contract. The city, town, or county
attorney should be involved in the development of the contract to
assure accuracy and consistency with local powers and authorities.
For example, if the locality has an approved local building code, all
housing rehabilitation activities must conform to the local code
requirements. Under the Montana CDBG program, any agreement which
provides CDBG funds for housing rehabilitation loans or grants should
specify that any improvements to the property must conform to local
1-7
building codes and standards. It is the grantee's responsibility to
include provisions related to local project requirements in any
contract or agreement through which CDBG funds are passed to the final
beneficiary.
The legal counsel for the grantee should also carefully review
the scope of work outlined in the grant contract to ensure that the
locality has the legal authority under Montana law to undertake all of
the activities described in the contract document. For instance, if
an economic development project includes a loan to a for-profit
entity, the county or municipal attorney should provide the Montana
Code Annotated citation which enables localities to engage in this
activity.
Upon receiving your draft contract, DOC wil] review it and have
further discussion with the local contacts and resolve discrepancies.
Once agreement is reached on the contents, the CDBG liaison will
prepare three copies of the contract. All necessary signatures will
then be obtained from DOC and from the mayor or all three county
commissioners .
If, at a later date it is necessary to amend the contract,
contact DOC for guidance. Proposed changes will be evaluated for
conformance to the application to determine whether re-ranking would
be necessary.
ESTABLISHING PROJECT FILES
This section provides a general outline of a suggested file
system that will meet DOC monitoring requirements. Through the
establishment and continuous updating of the project files, the
grantee should have gathered and organized all the data and
documentation tliat DOC will require for monitoring purposes.
Monitoring by DOC will be in the form of reports submitted by grantee
and on-site monitoring visits by the CDBG staff. The local project
manager and fiscal contact should work together to establish project
files and discuss their content. This is particularly important with
the financial management file described below. Many of the specific
file entries will be discussed in the remaining sections of the manual
as they relate to specific CDBG project activities and compliance with
state and federal regulations.
Application File
The application file should contain a copy of the grantee's
application as submitted to DOC, all supporting documentation
including the publication notices for and records of the required
public hearings, and any survey or other data used to prepare the
application, such as income surveys or a housing conditions survey.
Contract File
This file should contain the executed copy of the grant contract
between the grantee and DOC including all general terms and
conditions, specific conditions, and attachments. In addition, and
future amendments to the contract would be retained in the file.
Project Timetable
t
A copy of the project schedule from the grant contract with
periodic progress reports should be included in this file. The
purpose of this file is to identify potential project delays and
prepare to make the needed adjustments in project activities.
Hiring Public Employees or Contracting
For Professional Services
If the project will be administered by public employees, hiring
and employment records should be maintained in this file. If the
local project is being administered through a contractual arrangement
for professional services, this file should contain a copy of the
solicitation for services and the agreement between the locality and
the consultant. Chapters III, Procurement Standards, and V, Civil
Rights, provide additional guidance.
1-9
Correspondence
This file should contain all written correspondence between the
grantee and DOC and notes related to any telephone discussions with
the CDBG staff, and other state or federal agencies. It should
contain similar information for contact with private agencies and
general correspondence relating to the project.
Department of Commerce Monitoring
All correspondence from and to DOC regarding monitoring of the
grant should be retained in this file. It is especially important to
include all monitoring letters from DOC along with responses to those
letters from the chief elected official or others.
Legal File
A file including legal opinions from the grantee's attorney or
from DOC should be maintained. Records of any other legal contacts
should also be retained.
Special Directives
Periodically. DOC will send directives to grantees to address
issues of policy, procedure, etc. Whether these originate from DOC or
from another state or federal agency and are forwarded to you from
DOC, they should be retained. Additionally, applicable
locally-generated directives should be included.
Complaints
This file will contain all written correspondence and notes of
complaints which local citizens or others may have lodged in regard to
any aspect of the local CDBG project.
I
I-IO
Conflict of Interest
A copy of any inquiry concerning potential conflicts of interest
or requests to DOC for determinations concerning this issue should be
retained in this file.
Environmental Review File
This file should contain all data and documentation prepared in
response to environmental review requirements including all notices,
the environmental assessment, the request for release of funds, and
the DOC notice that funds have been released, (See Chapter II for a
more detailed listing of documentation to be included in the file.)
Financial Management File
Unlike the other files, a financial management file may be
maintained by both the project manager and the clerk/treasurer, in
which case there is likely to be some duplication in the file. It
may be kept in the clerk/treasurer's office if it will be readily
available for review by DOC. The financial management file should
consist of several sub-files, Including:
Copies of the Signature Certification and Designation of
Depositary forms;
A copy of the general ledger;
Documentation of all expenditures including invoice vouchers
and supporting documentation;
Source documentation such as cancelled checks and bank
deposits ;
Payroll records for local staff administering the CDBG
program including time and attendance records;
Monthly bank statements;
Audit reports including both the financial audit and the
compliance and program audit.
Chapter IV provides additional information.
I-ll
Civil Rights File
The civil rights file should contain all documentation related to
grantee responsibilities for compliance with state and federal laws.
(See Chapter V, Civil Rights.)
Labor Standards File
This file will contain all documentation related to grantee
responsibilities for compliance with applicable state and federal
laws. (See Chapter VI, Labor Standards.)
Acquisition/Relocation File
This file should contain a copy of records on any acquisition
activities and of locally established procedures for relocating of
displaced households and/or businesses. (See Chapter VII, ^
Acquisition/Relocation.) Additionally, the grantee must keep a
separate file on each relocation case Including copies of all notices,
case information, and evidence of successful relocations with
appropriate compensation.
Public Facilities Contract Files
For each construction contract, a separate file should be
established which contains the request for bid, bid document, contract
document, minutes of the pre-construction conference, and other
related materials. (A more detailed listing of file entries is
included in Chapter VIII, Public Facilities Projects.)
Housing Rehabilitation Files
This file should contain a copy of the locally established procedures for
conducting the housing rehabilitation project. Additionally, a ■
separate file for each rehabilitated unit should be maintained. The
1-12
file should Include the agreement between the locality and the
assistance recipient, copies of al] work write-ups, bids, contracts,
and inspection reports. (See Chapter IX for further detail.)
Economic Development File
Where applicable, this file would contain a copy of the agreement
between the locality and any recipient of CDBG assistance. (Required
provisions for the agreement are discussed in Chapter X, Economic
Development . )
Close Out
See Chapter XI, Close Out, for a listing of the reports and local
responses to be provided in the Close Out File.
ESTABLISHING METHOD FOR PAYMENT
DOC has reserved the full amount of funding for each grant as
contained in the contract. Before any CDBG funds can be requested,
several forms must be completed and submitted to DOC to establish the
mechanism for requests for payment, "drawdown" of funds. The
Signature Certification (Exhibit I-D) provides that only certain
officials are authorized to sign requests for payment.
The Designation of Depositary card (Exhibit I-E) provides that
the payment will be wired directly to the designated bank. The
Designation of Depositary must Indicate the name and/or number of a
non-interest bearing account in which DOC will authorize direct
deposit of funds. Federal regulations provide that local grantees
cannot collect interest on advances of federal funds deposited into
the local government's account for the grant. Additionally, every
effort should be made to deposit the funds in a bank located within
the project area (defined as the boundaries of the recipient
jurisdiction) .
I-I3
Two original copies of each form should be completed by the
grantee. Mail one copy to the CDBG liaison and retain the other copy
for your records. It is Important that there be no erasures or
corrections on either copy, or DOC will be required to reject the
forms, delaying the locality's ability to receive payment of CDRG
monies. If the grantee needs to change the authorized signatories or
depository, a new set of forms will need to be submitted to DOC.
CONFLICT OF INTEREST
Whenever the local CDBG project requires the selection of
contractors or beneficiaries (e.g., housing rehabilitation assistance
recipients) , the locality must ensure that these decisions are free
from actual or potential conflicts of interest. As a general rule,
any person who might potentially receive benefits from CDBG assisted
activities may not participate in the decision making process. At the
least, this prohibition on receiving project benefits extends to the
decision-maker's immediate family, including spouse and children.
Conflict of interest research provisions apply not only during the
term of office or emplo3Tnent, they also are in effect for one year
thereafter. For additional information, see Chapter III, Procurement,
and the HUD guidelines on Conflict of Interest Provisions provided in
the Requirements Notebook. Whenever there is any question regarding
conflict of interest, contact the CDBG liaison for guidance.
Additionally, all local public elected officials and employees
are bound by state laws related to conflicts of interest. These
provisions can be found in sections of state law and attorney
general's opinions referenced in Chapter III.
STATE MONITORING OF GRANTEES
During the course of the local CDBG project, DOC will monitor
grantees through progress summaries which must accompany requests for
1-14
payment, nnd through on-site monitoring visits. The State CDBG
liaison will schedule at least one monitoring visit for each grantee.
The liaison's role will be to assist grantees in achieving timely and
efficient grant management.
Following the release of project funds it is important for the
grantee to ensure that administrative procedures have been developed
and are in place. Approximately three or four m.onths after the
release of funds, it is important for the recipient to compare project
progress with the approved budget and schedule. A site visit by DOC
related to project close-out is designed to review all aspects of the
project ranging from general project performance to monitoring of
compliance with federal and state requirements.
Prior to a monitoring visit the CDBG liaison will contact the
local project administrator concerning the timing and scope of the
monitoring visit. The local project contact will be responsible for
setting up interviews and meetings as required for the State liaison
to accomplish his or her monitoring objectives.
Each monitoring visit will include entrance and exit interviews.
The entrance interview is designed to outline the scope of the
monitoring visit. The exit interview provides an opportunity to
clarify and elaborate on any outstanding issues identified during the
site visit. Every effort will be made to informally resolve any
monitoring findings during the exit interview.
Within 30 days DOC will submit a written report to the grantee.
The grantee then has 30 days to respond to the report describing
actions taken to resolve any monitoring findings. At all times, the
State CDBG staff will offer and provide technical assistance to
grantees to resolve any monitoring findings.
1-15
CHECKLIST FOR START-UP ACTIVITIES
In summary. Chapter I sets forth the following activities which
the grantee must undertake to start-up the grant:
1. Receive approval from DOC to incur administrative costs.
a. review environmental requirements
b. receive DOC letter of authorization
NOTE: The environmental review process is a critical
and sometimes complex start-up activity, and is
discussed in Chapter II.
2. Establish a plan for project administration.
a. determine whether a public employee or a private
contractor will manage the grant activities
b. follow federal and state law regarding hiring and
employment practices
NOTE: Hiring staff or retraining professional services
through contracting is another critical and
complex activity. It is further discussed in
Chapters III, Procurement Standards, and V, Civil
Rights.
3. Designate local project and fiscal contacts. See form in
Exhibit I-A.
4. Develop the contract.
a. coordinate with CDBG liaison
b. modify sample contract in Exhibit I-B for housing
projects or T-C for public facilities projects
c. obtain review by city, town, or county attorney
1-16
5. Establish project files for the following. Those indicated
with an "*" may or may not be applicable for your project.
a. application
b. contract
c. project timetable
*d. hiring of public employees or contracting for
professional services
e. correspondence
f. DOC monitoring
g. legal
h. special directives
i. complaints
j. conflict of interest
k. environmental review record
1. financial management
m. civil rights
*n. labor standards
*o. acquisition/relocation
*p. public facilities contracts
*q. housing rehabilitation
*r, economic development
s. close out
6. Establish method for payment.
a. complete signature certification form. Exhibit I-D
b. complete designation of depositary form. Exhibit I-E.
7. Beware of possible conflicts of interest.
8. Anticipate DOC monitoring of your grant.
T-17
(
CHAPTER I
EXHIBITS
I-A - Designation of Local Project and Fiscal
Contacts
I-B - CDBG Contract for Housing Rehabilitation
I-C - CDBG Contract for Public Facilities
I-D - Signature Certification
1-E - Designation of Depositary
l-U
EXHIBIT I-A
DESIGNATION OF LOCAL PROJECT AND FISCAL CONTACTS
(Type of letterhead of grantee)
Date
Montana Department of Conmerce
Community Development Division, CDBG Program
Capitol Station, Cogswell Building, Room C-211
Helena, Montana 59620
This is to notify you that the following individuals will be the local
government contact persons for the (name of grantee: City, Town or
County) FY 1983 CDBG grant:
*LOCAL GOVERNMENT
PROGRAM CONTACT: name
*FISCAL CONTACT:
complete mailing address
telephone number(s)
complete mailing address
telephone number (s)
Sincerely,
**signature
typed name
*NOTE: The project and fiscal contacts designated on this form should
be local government employees or elected officials, not
private consultants retained to assist the local government in
grant administration.
**NOTE: This should be signed by the chief elected official (mayor or
chairperson of county commission) , or by another elected
official if the chief elected official has been designated as
one of the contact persons.
I-A-1
EXHIBIT 1-B
CDBC CONTRACT FOR HOUSING REHABILITATION
NOTE: This is an example only. Each contract will require its ovm
specific information.
COMMUNITY DEVELOPMENT BLOCK GRANT CONTRACT
CONTRACT // MT-CDBG- 83-
This Contract is entered into by (City. Town. or County
of ), Montana, herein referred to as "the Grantee and the
State of Montana Department of Commerce, Helena, Montana, herein
referred to as "the Department."
WITNESSETH THAT the Grantee and the Department mutually agree as
follows:
1 PURPOSE. The purpose of this Contract is to provide for funding
for project activities approved by the Department under the Montana
Community Development Block Grant Program for FY 1983.
2 EFFECTIVE DATE AND TIME OF PERFORMANCE. This Contract takes
effect on . 198_. The activities to be performed by the
Grantee will be completed no later than • Activities
shall conform to the implementation schedule included as Attachment A,
which by this reference is made a part hereof.
3 SCOPE OF ACTIVITIES AND LEVEL OF FUNDING. The Grantee will engage
In 3cti"lrir- ^— ^>-° r^"]''^'- pni-it-^e^ the (name of community) Housing
Rehabilitation Project. The major components of the project include
the rehabilitation of a minimum of residential structures, the
demolition of structures, and the administration of this Con-
tract "RehabiTitition" will include using CDBG funds to make repairs
to the substandard residential units to the extent that each meets or
exceeds requirements as listed in the 1983 Montana Community Develop-
ment Block Grant Program Description, which by this reference is made
a part hereof. Recipients of assistance under the program will meet
the guidelines for eligibility, and the conditions set forth in the
Grantee's CDBG application dated . 198_. which by this
reference is made a part hereof.
The total amount of this Contract is not to exceed $ _ ^•
The Grantee will commit program income from the Grantee s prior CDBG
Housing Rehabilitation Project as outlined in the application. A copy
of the project budget is included as Attachment B to this Contract,
and by this reference is made a part hereof. The Grantee is
authorized to make adjustments between line Items in Attachment B, in
a total amount not to exceed five percent of the total Contract
amount, without prior written approval from the Department as long as
the transfers do not violate the conditions upon which the grant was
awarded. However, transfers between the administration and project
categories may be made only upon prior written approval by the Depart-
ment .
I-B-1
4. COMPENSATION AND METHOD OF PAYMENT. The Department will authorize
the Grantee to draw up to $ against the funding reserved for
it by the Department. In drawing against the reserved amount the
Grantee will follow the instructions supplied by the Department. If
the Department determines that the Grantee has failed to satisfac-
torily carry out its responsibilities under this Contract, the Depart-
ment may revoke the Grantee's authority to draw against the reserv-
ation described herein until such time as the Department and the
Grantee agree on a plan to remedy the deficiency.
5. LIAISON. , CDBG Project Supervisor, is the
Department's liaison with the Grantee.
6. ACCESS TO RECORDS. The Grantee will maintain reasonable records
of its performance and will allow access to these records at any time
during normal business hours by the Department, the U.S. Department of
Housing and Urban Development, the Controller General and, when
required by law, the Montana Legislative Auditor and Legislative
Fiscal Analyst. These records will be kept in the Grantee's offices
in , Montana.
7. PERFORMANCE REPORTING. The Grantee will submit status reports on
project performance at the request of, and in the format prescribed
by, the Department.
8. AVOIDANCE OF CONFLICT OF INTEREST. No employee of the Department
and no officer, member, employee or public official of the governing
body of the localities in which the grant project is situated or being
carried out who exercises any functions or responsibilities in the
review or approval of the undertaking or carrying out of this project,
may participate in any decision relating to this Contract which
affects his or her personal interest or the interest of any corpo-
ration, partnership, or association in which he or she is, directly or
indirectly, interested, or have any personal or pecuniary interest,
direct or indirect, in this Contract or the proceeds thereof.
9. ASSURANCES. The Grantee will comply with the Statement of Assur-
ances, as signed and submitted with the Grantee's CDBG application.
The Grantee will also comply with all other applicable federal and
state statutory and regulatory requirements, administrative directives
issued by the Department, and local ordinances and resolutions. Any
contracts entered into by the Grantee for the completion of the
activities described in Section 3 hereof must contain special pro-
visions requiring contractors to comply with all applicable assur-
ances.
10. ARTICLES INCORPORATED BY REFERENCE. The Grantee's application
for CDBG grant assistance, the applicable HUD regulations at 24 CFR
Part 570, as now in effect or as they may be amended during the term
of this Contract, and Title I of the Housing and Community Development
Act of 1974, as amended, are incorporated in this Contract by this
reference and are binding upon the Grantee.
I-B-2
11. MODIFICATION AND ASSIGNABILITY OF CONTRACT. This Contract
contains the entire agreement between the parties, and no statements,
promises, or inducements made by either party, or agents of either
party, which are not contained in or authorized by this written
Contract, are valid or binding. This Contract may not be enlarged,
modified, or altered except upon written agreement, and does not imply
any continuing commitment by the State of Montana beyond the termin-
ation date noted herein. The Grantee accepts responsibility for
adherence to the terms of this Contract by subcontractor or subreci-
pient entities and by public or private agents or agencies to which it
delegates authority to carry out portions hereof.
12. SPECIAL CONDITIONS. (1) The Grantee will not obligate or
utilize funds for any activities provided for by this Contract until:
a) The Grantee completes an Environmental Review Record and the
Department issues a Notice of Release of Funds.
b) The Grantee submits to the Department evidence of the firm
commitment of the other resources necessary for the com-
pletion of the project as defined in Section 3 hereof.
The Department may issue a letter to the Grantee providing for the
incurring of specific administrative costs prior to the removal of the
above conditions.
13. CONSTRUCTION AND VENUE. This Contract will be construed under
and governed by the laws of the State of Montana. In the event of
litigation concerning it, venue is in the District Court of the First
Judicial District in and for the County of Lewis and Clark, State of
Montana.
14. INDEMNIFICATION. The Grantee waives any and all claims and
recourse against the Department and the State of Montana, including
the right of contribution for loss or damage to persons or property
arising from, growing out of, or in any way connected with or incident
to this Contract except claims arising from the concurrent or sole
negligence of the Department or its officers, agents, or employees.
Further, the Grantee will indemnify, hold harmless, and defend the
Department and the State of Montana against any and all claims,
demands, damages, costs, expenses, or liability arising out of this
Contract except for liability arising out of the concurrent or sole
negligence of the Department or its officers, agents, or employees.
In the event the Department or the State of Montana is named as a
codefendant in any action relating to activities to be performed under
this Contract, the Grantee will notify the Department of such fact and
will represent the Department in such legal action unless the Depart-
ment undertakes to represent itself as a codefendant in such legal
action in which case the Department will bear its own litigation
costs, expenses, and attorneys' fees.
I-B-3
15.
TERMINATION OF CONTRACT.
This contract may be terminated as
follows :
a) Termination Due to Loss of Funding
This Contract will terminate in whole or in part, at the dis-
cretion of the Department, in the event that the Department suffers a
].oss of funding or termination of the federal grant which permits it
to fund in whole or in part the Grantee so that it is unable to make
payment to the Grantee. In this event, the Department will give the
Grantee written notice setting forth the effective date of full or
partial termination or, if a change in funding is required, setting
forth the change in funding and changes in the approved budget.
b) Termination for Cause
If the Department determines that the Grantee has failed to
comply with the special conditions or the general terms and conditions
of this Contract, and if upon notification of the defect the Grantee
does not remedy the deficiency within a reasonable period of time to
be specified in the notice, the Department may terminate this Contract
in whole or in part at any time before the date of completion. The
Department will promptly notify the Grantee in writing of the decision
to terminate, the reasons for the termination, and the effective date
of the termination. Payments made to the Grantee or recoveries by the
Department will be in accord with the legal rights and liabilities of
the parties.
IN WITNESS THEREOF, the parties hereto have caused this Contract to be
executed ,
(City, Town, or County
of )
Department of Commerce
(Mayor, or all three
County Commissioners)
Gary Buchanan, Director
Date
Date
Nancy L. Leifer, Administrator
Community Development Division
Date
DOC Fiscal Review
DOC Legal Review
I-B-4
ATTACHMENT A
Project Schedule
PROJECT START-UP
1. Begin Project Planning
2. Establish Project Files
3. Preparation of ERR
4. Publish Notices
5. Clear Release of Funds
October, 1983
October, 1983
November, 1983
November, 1983
December, 1983
PROJECT IMPLEMENTATION
1. Advertise Site for Sale
2. Sale of Site to Developer
3. Developer Mortgage Commitment
4. Rehabilitate Project Start-up
5. (2) Rehab Units Contracted
6. Site Demolition Plans
7. (2) Rehab Units Contracted
8. Developer Plans Final
9. Site Bid and Award
10. (3) Rehab Units Contracted
11. Developer Financing Secured
12. Site Cleared and Ready
13. (3) Rehab Units Contracted
14. Begin New Rental Construction
15. (4) Rehab Units Contracted
16. (4) Rehab Units Contracted
17. (4) Rehab Units Contracted
18. (4) Rehab Units Contracted
19. Demolition Bid and Award
20. (4) Rehab Units Contracted
21. Demolition Work Completed
22. (2) Rehab Units Contracted
23. (1) Rehab Unit Contracted
24. (1) Rehab Unit Contracted
25. (2) Rehab Units Contracted
26. Complete New Rental
27. (2) Rehab Units Contracted
28. New Rental Occupancy
29. (2) Rehab Units Contracted
December, 1983
January, 1984
January, 1984
January, 1984
February, 1984
March, 1984
March, 1984
April, 1984
April, 1984
April, 1984
May, 1984
May, 1984
May, 1984
June, 1984
June, 1984
July 1, 1984
August, 1984
September, 1984
October, 1984
October, 1984
November, 1984
November, 1984
December, 1984
January, 1985
February, 1985
March, 1985
March, 1985
April, 1985
April, 1985
PROJECT CLOSE-OUT
1. Begin Project Close-Out
2. Project /Evaluation
3. Project Audit
4. Final Administration Payment
5. Close-Out Report Final
April. 1985
May, 1985
May, 1985
May, 1985
June, 1985
T-B-5
ATTACHMENT B
CDBG HOUSING PROJECT BUDGET
ADMINISTRATION
Personal Services
(Includes all salaries;
wages & fringe benefits)
Supplies
Office Supplies: (Small
items of equipment only)*
Purchased Services:
Postage, Printing
& Publications, etc. i
Audit
Legal
Other
Consulting Services:
(List each Contract)
Telephone:
Travel and Training:
Rent:
Total CDBG Administrative Costs
PROJECT
Acquis it ion /Demo lit ion:
Rehabilitation:
Total CDBG Program Costs $_
TOTAL CDBG BUDGET $
TOTAL PROJECT BUDGET
TOTAL CDBG BUDGET $
OTHER RESOURCES:
FmHA Loan
CDBG Program Income
etc.
TOTAL OTHER RESOURCES:
TOTAL PROJECT COST:
* If you intend to purchase any item which is considered a capital
good as defined by your community (e.g. typewriter) please contact the
CDBG liaison. These purchases require special accounting procedures
outlined in OMB Circular A-87) .
I-B-6
EXHIBIT I-C
CDBG CONTRACT FOR PUBLIC FACILITIES
NOTE: This is an example only. Each contract will require its own
specific information.
COMMUNITY DEVELOPMENT BLOCK GRANT CONTRACT
CONTRACT # MT-CDBG- 83-
This Contract is entered into by (City, Town or County
of ) , Montana, herein referred to as "the Grantee" and the
State of Montana Department of Commerce, Helena, Montana, herein
referred to as "the Department."
WITNESSETH THAT the Grantee and the Department mutually agree as
follows:
1. PURPOSE. The purpose of this Contract is to provide for funding
for project activities approved by the Department under the Montana
Community Development Block Grant Program for FY 1983.
2. EFFECTIVE DATE AND TIME OF PERFORMANCE. This Contract takes
effect on , 198_. The activities to be performed by the
||.^ Grantee will be completed no later than , 198_.
A copy of the preliminary project schedule is included as Attachment
A, which by this reference is made a part hereof. The Grantee will
submit a final project schedule to the Department prior to the initi-
ation of construction.
3. SCOPE OF ACTIVITIES AND LEVEL OF FUNDING. The Grantee will engage
in activities for the project entitled the (name of community)
The major components of the project include;
Installation of a chemical injector process to neutralize iron
content ;
Remodeling of the water pump and treatment building to accommo-
date new system and automated pump;
Extend main along Highway 89;
Install fire main to school and install 3 hydrants;
Install 23 hydrants at various locations;
Eliminate all deadends by completion of loop system;
Construct new 100,000 gal. water storage reservoir;
Meter and connect all users to system; and
Drill new well to insure yield.
The end product of these activities will be a new water supply,
treatment, storage and distribution system for the district. The
project will be constructed as described in Engineering Plans and
Specifications to be submitted to and approved by the Water Quality
Bureau, Montana Department of Health and Environmental Sciences.
I-C-1
The total amount of this Contract is not to exceed $
A copy of the preliminary project budget is included as Attachment B
to this Contract, and by this reference is made a part hereof. The
Grantee will submit a final project budget to the Department following
the award of the contract for construction. The final project budget
will determine the actual amount of the grant award.
The Grantee is authorized to make adjustments between line items In
Attachment B, in a total amount not to exceed five percent of the
total Contract amount, without prior written approval from the Depart-
ment as long as the transfers do not violate the conditions upon which
the grant was awarded. However, transfers between the administration
and project categories may be made only upon prior written approval by
the Department .
A. COMPENSATION AND METHOD OF PAYMENT.
5. LIAISON.
6. ACCESS TO RECORDS.
7. PERFORMANCE REPORTING.
8. AVOIDANCE OF CONFLICT OF INTEREST.
9. ASSURANCES.
10. ARTICLES INCORPORATED BY REFERENCE.
11. MODIFICATION AND ASSIGNABILITY OF CONTRACT.
12. SPECIAL CONDITIONS.
13. CONSTRUCTION AND VENUE.
14. INDEMNIFICATION.
15. TERMINATION OF CONTRACT.
(Signatures by grantee and Department of Commerce.)
NOTE: The content of contract sections 4-15 listed above, along
with format for required signatures, are the same as shown
in the preceding Exhibit I-B. Section 12, Special Con-
ditions, may vary from project to project.
I-C-2
ATTACHMENT A
PRELIMINARY PROJECT SCHEDULE
PROJECT START-UP
1.
2.
3.
h.
5.
6.
7.
8.
9.
10.
II.
12.
13.
Advertise administration services December, 1983
Award administrative contract January, 1984
Attend environmental workshop January, 1984
Begin preparation of ERR January, 1984
Implementation workshop February, 1984
Begin project planning February, 1984
Advertise for engineering services March, 1984
Award engineering services April, 1984
Begin preliminary engineering April, 1984
Publish ERR and notice of release April, 1984
Sign contracts between County and
the Department, engineer, and
project administration June, 1984
Complete preliminary engineering report July, 1984
Clear release of funds July, 1984
PROJECT IMPLEMENTATION
1. Initial drawdown for engineering/
administration
2. Compliance reports
3. DHES engineering review
4. Complete final plans and specifications
5. Prepare & advertise bid for construction
6. Bid opening
7. Bid award
July, 1984
July, 1984
July, 1984
August, 1984
August, 1984
September, 1984
September, 1984
CONSTRUCTION
1. Pre-contract meeting
2. Start construction on source development
3. Start construction on distribution system
4. Inspection
5. Compliance monitoring
6. Complete all construction
7. Final inspection
8. Final payment to contractor
9. In-service system training
10. Final payment to engineer
PROJECT CLOSE-OUT
1. Project close-out begins
2. Project/evaluation
3. Close-out report
4. Final payment for administration
5. Project audit
September,
, 1984
September,
, 1984
September,
, 1984
September
-
November,
, 1984
September
-
November ,
, 1984
November,
1984
November,
1984
November,
1984
November,
1984
November,
1984
December,
1984
December,
1984
December,
1984
December,
1984
December,
1984
I-C-3
ATTACHMENT B
CDBG PUBLIC FACILITIES BUDGET
('§
ADMINISTRATION
Personal Services
(Includes all salaries;
wages & fringe benefits)
Supplies
Office Supplies: (Small
items of equipment only)*
Purchased Services:
Postage, Printing
& Publications, etc. $
Audit _
Legal
Other ~
Consulting Services:
(List each Contract)
Telephone:
Travel and Training:
Rent:
Total CDBG Administrative Costs
CONSTRUCTION
Acquisition:
Engineering: (^
Construction Activities:
(List by Contract)
Contingencies:
Total CDBG Construction Costs $
TOTAL CDBG BUDGET
TOTAL PROJECT BUDGET
TOTAL CDBG BUDGET $
OTHER RESOURCES:
FmHA Loan
DNRC or CDBG Program
Income
Etc.
TOTAL OTHER RESOURCES:
TOTAL PROJECT COST:
* If you intend to purchase any item which is considered a capital .^
good as defined by your community (e.g. typewriter) please contact the -^
CDBG liaison. These purchases require special accounting procedures
outlined in 0MB Circular A-87) .
I-C-4
EXHIBIT I-D
SIGNATURE CERTIFICATION
(Type on letterhead of grantee )
Date
Montana Department of Commerce
Community Development Division, CDBG Program
Capitol Station, Cogswell Building, Room C-211
Helena, Montana 59620
This is to certify that the following officials are authorized to
sign requests for payment of Montana Community Development Block Grant
(CDBG) funds for the (name of grantee: City, Town, or County) FY 1983
CDBG grant:
^(signature) (title)
(Typed name)
2. *(signature) (title)
(Typed name)
3. *(signature) (title)
(Typed name)
I undersstand that any two of the above three signatures must sign
each request for payment submitted.
I hereby certify that I have witnessed the signing of the above named
signatures .
**(signature)
(Typed name of Witness)
(Date)
SUBSCRIBED AND SWORN TO before the undersigned. Notary Public for the State of
Montana, on the day of , 1983.
(Notary Seal)
Notary Public for the State of Montana
Residing at
My commission expires
*NOTE: Suggested signatories include chief elected official (Mayor or
Chairperson of County Commissioner) , city or county clerk or
treasurer, and CDBG program manager.
**NOTE: Suggested witness is an elected official other than one of the
three signatories.
I-D-1
(»
m
(#
EXHIBIT I-E
Preparation of Designation of Depositary Card
Block
Number Instructions
1. Enter "Community Development Block Grants - Department of HUD".
2. Enter name, address and zip code of depositary designated to receive
federal funds.
3. Leave blank.
4. Enter name of recipient organization's bank account and/or number.
5. Enter name of recipient organization, (City or Town of , or
County.)
6. Enter complete address of recipient organization.
7. Enter title of Executive Officer for recipient organization.
(Mayor or Chairperson, County Commission)
8. Signature of Executive Officer for recipient organization.
9. Enter date form signed by Executive Officer of recipient organization.
10. Enter name of recipient organization's bank account and/or number.
11. Leave blank.
12. Enter name of recipient organization's bank.
13. Enter complete address of recipient organization's bank where federal
funds will be wired.
14. Enter title of authorized bank officer for recipient organization's
bank.
15. Enter signature of authorized bank officer for recipient
organization's bank.
16. Enter date form signed by authorized bank officer for recipient
organization's bank,
NOTE; Two original copies should be completed. Mail one copy to the CDBG
liaison and retain the other copy for your records. It is important that
there are no erasures or corrections on either copy, or they will have to
be redone before DOC can accept them.
I-E-1
m
#
U.S. OLl'A(nMF:NT OF HOUSINl; and UHIIAN OEVKLOt'MKNT
DESIGNATION OF DEPOSITARY FOR DIRECT DEPOSIT OF LOAN AND OR GRANT '=UNDS
SECTION I (To hr Cumplrted hy rrrifurrjl orgitnizalmn I
NAMC Of PrtOGRAM
(1)
The (2)
(Name, Address and ZIP Code of Bank^or Local Government Treasury)
has been designated as the depositary for all (unds to be received directly from the M.S. Treasury Department
resulting from contract number C^)
executed with the U.S. Department of Housing
and Urban Development for deposit to: (4)
(Account Name o'd/or NurrtberJ
(5)
(61
(Name)
(7)
(8)
(Title of Executive Officer)
(Signature of Executive Officer)
(Address and ZIP Code)
C2I
(Date)
SECTION II (To be completed by the depositary)
The account identified in Section I has been established with this bank (or treasury as applicable). All necessary
document cition, including a power of attorney where necessary, which will legally enable this depositary to receive
US. Government checks directly from the U.S. Treasury Department for deposit to:
XHU-
^
(Account Name and/or Number)
without the payee's endorsement have been received and are in this depositary's custody. This depositary's
deposits are insured by: (11)
(12)
(13)
(Name of Hank or Treasury)
(Address and ZIP Code where checks should be mailed)
The Depositary hereby agrees to immediately notify the Recipient Organization when a deposit is
iiijtle 111 (lie abo\o account.
(14)
(15)
(16)
( Tf.lc of Autl.orited liar.k Officer) (Signature of Authorized Bank or Treasury Officer)
(l).ue)
hbD-274 vJ-70
HDD-Woih., O.C.
I-E-2
• CPO: 1579-677.000/ J4
248042.P
($
Chapter ii
Environmental
Review
CHAPTER II
ENVIRONMENTAL REVIEW
OVERVIEW
This chapter discusses the requirements that CDBG grantees must
follow to insure protection of the environment. The National Environ-
mental Policy Act of 1969 (NEPA) establishes national policy, goals
and procedures for protecting, restoring and enhancing environmental
quality. Federal regulations for compliance with the environmental
requirements of the Community Development Block Grant Program are
found generally in 24 CFR Part 58 and 40 CFR Part 1500-1508. A copy
of 24 CFR Part 58 is provided for your reference in the Requirements
Notebook, along with a copy of other applicable federal environmental
requirements. Regulations at 40 CFR Part 1500-1508 primarily pertain
to environmental impact statements; a copy is available upon request
to the CDBG liaison.
Additionally, the Montana program is subject to the Montana
Environmental Policy Act (MEPA) of 1971. Although MEPA is similar to
the federal legislation in terms of purpose and intent, there are some
differences in procedures for complying with the State law. There-
fore, it has been necessary to make some minor additions to the
federal environmental review forms in order to assure that CDBG
grantees meet both state and federal requirements through a single
procedure. The Montana Department of Commerce (DOC), acting as the
designated state agency responsible for reviewing and approving
environmental assessments prepared by grantees, has established the
following environmental review system for the Montana CDBG Program.
The environmental review is a critical aspect of grant
administration. No project costs can be incurred or obligated and no
funds can be released to grantees until the environmental requirements
have been satisfied. Under federal regulations DOC may not release
any funds to grantees until the recipient of a CDBG grant award
certifies that an assessment of the project activities demonstrates no
significant environmental impacts or that actions have been initiated
that would mitigate such impacts to the extent practicable.
II-l
Each CDBG program must prepare and maintain a written record of
the environmental review undertaken. This written record or file Is
called the Environmental Review Record (ERR) and must be available for
public review. It must contain a description of the project and of
each of its component activities, as well as any other documents,
notices, information, and public comments received pertinent to the
environmental review carried out by the grantee. Public comments and
concerns, as well as their appropriate resolution by the grantee, are
extremely important and must be fully documented in the ERR.
LOCAL RECIPIENT RESPONSIBILITIES
Step 1 — Designate Environmental Certifying Officer
As the first step in the process, all grantees must designate in
a letter to DOC a certifying official who is responsible for all
activities associated with the environmental review. The certifying
official may be any resident of the recipient jurisdiction and should
be capable of defending any Information provided to the public or DOC
as part of the environmental review process. In some instances, a
local government employee with technical expertise to conduct the
review will receive this designation. In other cases, the local
government may choose to designate a local elected official who is
then responsible for monitoring the technical work performed by
consultants or public employees and then signs off on the appropriate
certifications.
Regardless of the approach taken, the designated certifying
officer will be considered a federal official under 24 CFR 58.13 who
is responsible for all of the environmental requirements, and who will
represent the recipient in any litigation that might arise from
challenges to compliance with environmental requirements. (Exhibit
II-A provides a sample form for Designation of Environmental Certify-
ing Officer.)
II-2
Step 2 — Request Authorization to Incur
Administrative Costs
If the grantee so desires, it may submit to DOC a request for
authorization to incur administrative costs. However, only certain
administrative costs can be authorized to be incurred, such as costs
associated with completion of the ERR. Furthermore, it is important
to note that expenditures for such costs will be borne by the grantee
until reimbursement at a later date by DOC. As emphasized in Chapter
I, reimbursement is contingent upon the grantee's completion of the
ERR, release of funds by DOC, the grantee's development of a grant
management plan, and the signing of a grant contract between the
grantee and DOC. If all of these items are not completed, DOC cannot
reimburse the local government for any costs incurred.
If the grantee elects to request from DOC authorization to incur
administrative costs, the format in Exhibit II-B, Finding of Exemption
for Reimbursable Activities/Request to Incur Administrative Costs
should be followed. Exhibit II-B provides a cover letter and form for
the request. Only the following activities can be included in the
request. These activities are considered exempt under 24 CFR 58.34,
and are defined as reimbursable by HUD under Section 570.200(h).
Only costs for the following administrative activities can be
incurred;
Environmental studies or assessments required by 24 CFR Part
58;
Preliminary engineering and design costs that may be neces-
sary to determine project feasibility or project scope; and
— Administrative costs such as:
. bringing on administrative staff
. travelling to DOC workshops for CDBG training
. establishing an office (e.g., supplies, rent)
• publishing legal notices
. incurring other administrative expenses required for
capacity building.
II-3
Step 3 — Determine If All Project Activities Are Exempt
Grantees do not have to comply with environmental requirements of
NEPA or other applicable federal environmental laws if the entire
project is determined to be exempt as defined under 24 CFR 58.34.
Examples of exempt activities Include:
environmental studies;
— project planning;
administrative costs;
most engineering and design costs associated with eligible
projects;
interim assistance to respond to imminent threat or physical
determination, provided that the assistance does not alter
environmental conditions; and
— certain public service activities.
If all project activities are determined by the certifying
official to be exempt under 24 CFR Part 58.34, the certifying official
must prepare a Finding of Exemption (Exhibit II-C) which lists the
exempt activities and cites the appropriate statutory authority. The
Finding is then submitted to DOC and a copy is retained for the ERR
file. DOC will then send a letter to the grantee concurring with this
finding and releasing project funds. A copy of this letter must be
retained in the ERR.
Most grants funded under the Montana CDBG Program involve activ-
ities in addition to those listed above as exempt, and will need to go
to Step 4 for further instruction.
In the unlikely circumstance that your grant involves exempt
activities only, the ERR file need only contain the exhibits listed
below and all accompanying documentation and applicable correspondence
to and from DOC, such as a letter of authorization to incur costs.
11-4
Exhibit II-A - Designation of Environmental Certifying
Officer; and
Exhibit II-B - Finding of Exemption.
Step 4 - Determine if the Project is Categorically Excluded
Unless the project is documented in the ERR as being exempt, the
grantee must determine if it is categorically excluded from NEPA
requirements. To be considered categorically excluded, all activities
must meet the definition contained in 24 CFR 58.35.
Examples of categorically excluded activities as defined in 24
CFR 58.35 include:
— acquiring facilities that are in place and will be retained
for the same use;
replacing or upgrading of facilities with only a minimal
change in use , size, capacity or location;
— projects which will not change the use, size, capacity, or
character of the site;
— projects involving fire protection equipment;
projects which reduce or eliminate material and architec-
tural barriers; and
— rehabilitation which does not increase population density by
more than 20 percent, does not require a change in land use,
residential class, or zoning, and costs less than 75 percent
of the replacement cost following rehabilitation.
Although projects that are "categorically excluded" do not
require preparation of either an Environmental Assessment (EA) or an
Environmental Impact Statement (EIS) , they remain subject to federal
executive orders and other applicable laws and require completion of a
Statutory Checklist and other forms. Additionally, MEPA requires
preparation of a Preliminary Environmental Review (PER) prior to the
release of funds by DOC. If DOC determines that there is some
continuing impact that requires mitigation, DOC can direct the grantee
to complete either an EA or an EIS.
II-5
If all of the project activities are classified as exempt or
categorically excluded, follow the instructions below. However, if
your project involves one or more activities which are neither exempt
nor categorically excluded, an environmental assessment (EA) as
described in Step 4 is required.
When the project activities are determined to be categorically
excluded, the certifying official must prepare and submit to DOC a
Finding of Categorical Exclusion (Exhibit II-D) which lists each
activity identified as categorically excluded and gives the statutory
authority for that determination.
MEPA requires the State agency, DOC, to make initial determin-
ations of potential impacts on the physical environmental. A Prelimi-
nary Environmental Review (PER) (Exhibit II-E) must be completed and
submitted to DOC for review. A copy must be retained in the grantee's
ERR file.
While exempt from further federally mandated environmental
review, the certifying official must present evidence that the project
activities meet the environmental requirements contained in other
applicable laws (24 CFR 58.35). This is achieved through the com-
pletion of the Statutory Checklist (See Exhibit 11-F for the Statutory
Checklist format and a listing of applicable federal laws and execu-
tive orders. The Requirements Notebook contains copies of these
documents.) For each compliance factor (air quality, historic pro-
perties, etc.) the certifying official must determine whether the
factor:
— is not applicable to the project;
requires further consultation;
requires additional review;
requires issuance of a permit;
requires permits and such permits have been obtained; or
— requires compliance with conditions and/or the undertaking
of mitigation actions.
II-6
Situations which require additional consultation are those in
which contact with the appropriate federal or federally authorized
agency is necessary. The consultation can result in no further action
or the placement of conditions on the grantee prior to the release of
funds. If permits are required, a listing of the specific permits
needed and the procedures by which they will be obtained should be
attached to the Statutory Checklist. If mitigating actions are
required, the certifying officer should describe the actions the
grantee will take to assure compliance.
In conjunction with the Statutory Checklist, special attention
must be paid to requirements related to floodplains and wetlands. The
grantee must determine whether the project is in or will affect a
floodplain. If so, the grantee must follow the Eight-Step Decision
Making Process to achieve compliance. (See Exhibit II-G) If you need
assistance in determining whether the project is located in or would
affect a floodplain, see Exhibit II-G for the name and telephone
number of the State agency to contact.
The authority for grantee responsibilities related to floodplains
and wetlands appears in Executive Orders 11988 and 11990, respec-
tively. These documents are included in the Requirements Notebook.
If the project activities will be situated in floodplains or wetlands,
the locality is required to publish two notices related to determin-
ation of the impact of the project in the local newspaper. In
communities that do not have a local paper the notice should be posted
in public buildings such as city hall, post offices, schools, and/or
libraries. The first notice is called an Early Public Notice (for
Floodplains and/or Wetlands, Exhibit II-H) which identifies the nature
of the project activity and solicits comments for a period of a
minimum of 16 days. The second notice, the Notice of Explanation (for
Floodplains and/or Wetlands, Exhibit II-I) , must be published a min-
imum of 16 days after the Early Public Notice and should Include the
determination as to the Impacts of the proposed project and whether
there are any reasonable alternatives to the proposed activity.
II-7
In conjunction with the Statutory Checklist, special attention
must also be paid to requirements related to historic preservation.
To comply with the National Historic Preservation Act of 1966 and
Executive Order 11593, which are included in the Requirements Note-
book, the certifying official should provide notice to the State
Historical Preservation Officer (SHPO) indicating the nature of the
project, local historic preservation surveys and solicitation of
public comment, any potential areas of impact, and actions prescribed
to mitigate the impacts. (Exhibit II-J provides a sample notice from
the locality to the SHPO.) Be sure to include a cut-off date for
response by the SHPO, generally 30 days. Additional guidance on
meeting historic preservation requirements is provided in 36 CFR 800 -
Protection of Historical and Cultural Properties. (Exhibit II-K,
Historic Preservation Explanation, provides additional guidance for
CDBG projects other than housing rehabilitation.)
Additional required steps involved for environmental clearance
for projects that are categorically excluded are:
Publication and distribution of a Notice of Intent to
Request Release of Funds (NOI/RROF) ; and
— Submission of the Request for Release of Funds (RROF) and
the Environmental Certification to DOC.
The NOI/RROF (Exhibit II-L) indicates the grantee's intention to
submit to DOC a Request for Release of Funds no sooner than seven days
following the publication of the notice. This gives the public at
least seven days to submit comments to the grantee before any other
action is taken, and establishes a minimum of 15 days during which the
public may comment to DOC.
Seven days after the publication of the NOI/RROF, the locality
should submit the RROF (Exhibit II-M) to DOC. The RROF also contains
a Certification which must be signed by the Environmental Certifying
Officer indicating that the environmental review has been conducted in
the prescribed fashion.
Il-f
In summary, for projects involving exempt and categorically
excluded activities only, the ERR file must include exhibits included
in the following list. All accompanying documentation, evidence of
publication of notices, and any comments received with your responses
must also be included as part of the ERR file. Also include a copy of
applicable correspondence to and from DOC, such as a letter of author-
ization to incur costs (discussed in Step 2) and the release of funds
(discussed at the end of this section) . With the exception of fur-
nishing copies of all of the documentation gathered and all of the
comments received, most of the information contained in the ERR must
be submitted to DOC. DOC may request that some or all of the documen-
tation or comments be submitted, particularly in regard to floodplains
and historic preservation.
The following must be sent to DOC:
Exhibit II-A, Designation of Environmental Certifying
Officer;
If applicable. Exhibit II-B, Finding of Exemption for
Reimbursable Activities/Request to Incur Administrative
Costs;
Exhibit II-C, Finding of Exemption;
Exhibit II-D, Finding of Categorical Exclusion;
Exhibit II-E, Preliminary Environmental Review (PER);
Exhibit II-F, Statutory Checklist;
If applicable. Exhibit II-G, Eight-Step Decision-Making
Process; Exhibit II-H, Early Public Notice; and Exhibit
II-I, Notice of Explanation;
Exhibit II-J, Notice to State Historic Preservation Officer;
Exhibit II-L, Notice of Intent to Request Release of Funds
(NOI/RROF); and
Exhibit II-M, Request for Release of Funds (RROF) .
II-9
DOC will review the information listed above including the
NOI/RROF and the RROF. If all of the required review periods as
provided in the NOI/RROF have expired, and no basis for not releasing
funds is found, DOC will send a letter of release of funds to the
grantee. Assuming that the contract has been executed, a management
plan has been developed, and the method of payment established, the
grantee can then submit a drawdown request to DOC.
Step 5 - Preparation of An Environmental Assessment
If the grant involves one or more activities which are neither
exempt nor categorically excluded, the grantee must prepare an
Environmental Assessment (EA) as discussed in 24 CFR 58.36. (See
Exhibit II-N for EA form. To assist you in the preparation of the EA,
an Environmental Assessment Guideline is included in the Requirements
Notebook.) Examples of grant activities which require preparation of
an EA include:
Rehabilitation which requires a change in land use;
Demolition; and
Installing public facilities such as a first-time
community-wide sewage collection and treatment system.
The EA consists of the following components:
project identification;
— project narrative;
comparison with applicable plans;
environmental assessment checklist, including special
considerations under MEPA;
summaries and conclusions, including assessment of
alternatives, any additional studies performed, or miti-
gation measures needed; and
level of clearance finding (such as the finding of no
significant impact.)
11-10
The Summary of Environmental Conditions section of the EA should
elaborate on those factors in the checklist where the certifying
officer Indicated that the project would have potentially adverse
impacts. The "Assessment of Alternatives" should always include the
option of not carrying out the project. Under this option, the
certifying official should describe the impact on the community if the
construction or improvements did not occur. A brief description of
procedures by which the locality intends to obtain additional
information should be provided under the section on "Additional
Studies Needed or Performed." Likewise, a short narrative on actions
chosen by the local grantee to resolve potential adverse impacts
should be provided under "Mitigation Measures Needed."
Based on the information provided in the Environmental Assess-
ment, the certifying official must make one of two findings. Either
the project "...is not an action significantly affecting the quality
of the human environment, and no Environmental Impact Statement (EIS)
is required," or the project "...is an action significantly affecting
the quality of the human environment, and an EIS is required."
If completion of the EA results in a finding of no significant
impact the certifying official can proceed with preparing the notices
and certifications required to remove the contract conditions related
to environmental considerations. The Montana CDBG program uses a
combined Finding of No Significant Impact and Notice of Intent to
Request Release of Funds (FONSI/NOI/RROF) as provided for under 24 CFR
58.70. Under this procedure a minimum of 15 days for public comment
must be provided at the local level. Copies of the FONSI/NOI/RROF
(Exhibit II-O) must be provided by the certifying official to DOC.
As in the case of NOI/RROF for categorically excluded projects,
if there is no general circulation newspaper in the locality, the
notice must be prominently displayed in appropriate public buildings.
The FONSI/NOI/RROF and evidence of publication and posting, including
a distribution list of all agencies, groups, and individuals receiving
a copy should be included in the ERR. Exhibit II-P lists the agencies
and groups which 24 CFR 58.43 requires the grantee to provide with a
copy of the FONSI/NOI/RROF.
11-11
At the end of the comment period extending a minimum of 16 days,
the locality should submit a Request for Release of Funds and the
Environmental Certifications (RROF) (Exhibit TI-M) to DOC. After all
of the required review periods have expired and DOC has reviewed the
environmental information and found no basis for not releasing funds,
DOC will send a letter of release of funds to the grantee. Assuming
that the contract has been executed, a management plan has been
'^developed, and the method of pa3nnent established, the grantee can
submit a drawdown request to DOC.
The ERR file must include exhibits listed below, along with all
accompanying documentation, evidence of notices of publication, and
any comments received. A copy of applicable correspondence to and
from DOC, such as a letter of authorization to incur administrative
costs as discussed in Step 2 and the release of funds as discussed in
Step 4 should be included.
Most of the information contained in the ERR must also be sent to
DOC. However, it is usually not necessary to include a copy of all of
the documentation and all of the comments received. DOC may request
that some or all of the documentation or comments be submitted,
particularly in regard to floodplains and historic preservation.
The following must be sent to DOC;
— Exhibit Il-A, Designation of Environmental Certifying
Officer;
If applicable. Exhibit II-B, Finding of Exemption for
Reimbursable Activities/Request to Incur Administrative
Costs;
Exhibit II-C, Finding of Exemption;
If applicable. Exhibit II-G, Eight-Step Decision-Making
Process; Exhibit II-H, Early Public Notice; and Exhibit
II-I, Notice of Explanation;
Exhibit II-J, Notice to State Historic Preservation Officer;
Exhibit II-N, Environmental Assessment (EA) Form;
11-12
— Exhibit II-O, Finding of No Significant Impact and Notice of
Intent to Request Release of Funds (FONSI/NOI/RROF) ;
Exhibit II-M, Request for Release of Funds (RROF) ; and
Exhibit II-P, FONSI/NOI/RROF Distribution List.
If there is a Finding of Significant Impact, immediately contact
DOC for further instruction. DOC will work with the grantee directly
to determine a course of action for fulfillment of the environmental
requirements.
Even if there is a finding of no^ significant impact and an EIS is
not required, there could be circumstances which cause the grantee to
voluntarily prepare an EIS. For example, it may be advisable to do so
for a very controversial project.
SUMMARY
It is important to remember the following:
1. The grantee cannot incur or obligate costs and DOC cannot release
funds to the grantee until the environmental requirements have
been satisfied. Step 1 of this chapter explains this in detail.
2. An Environmental Review Record (ERR) must be maintained for all
projects.
3. An environmental certifying official must be designated for all
projects, as discussed in Step I.
4. If you need to incur costs to conduct certain administrative
activities before the environmental review is complete and DOC
releases funds, you must request authorization to incur these
costs. Step 2 provides more detail.
11-13
5. Exempt projects do not need to satisfy environmental laws and
regulations, but documentation that they are exempt must be
maintained. Step 3 discusses exempt activities in greater
detail.
6. Categorically excluded projects are exempt from NEPA but are not
exempt from other applicable environmental laws and regulations.
Step 4 explains the forms which must be completed, notices which
must be published, time periods which must be allowed for public
comment, and information which must be submitted to DOC.
7. Projects that are not exempt or categorically excluded must
undergo a formal environmental review, either in the form of an
Environmental Assessment (EA) or Environmental Impact Statement
(EIS) . Step 5 explains the forms which must be completed,
notices which must be published, time periods which must be
allowed for public comment, and information which must be submit-
ted to DOC,
8. If a Finding of No Significant Impact (FONSI) results, a FONSI
notice must be prepared and disseminated in combination with a
Notice of Intent for Request for Release of Funds (NOI/RROF)
before funds may be released by DOC.
11-14
CHAPTER II
EXHIBITS
II-A - Designation of Environmental Certifying Officer
II-B - Finding of Exemption for Reimbursable Activities/Request to Incur
Administrative Costs
II-C - Finding of Exemption
II-D - Finding of Categorical Exclusion
II-E - Preliminary Environmental Review (PER)
II-F - Statutory Checklist
II-G - Eight-Step Decision Making Process
II-H - Early Public Notice for (Floodplalns and/or Wetlands)
II-I - Notice of Explanation for (Floodplalns and/or Wetlands)
II-J - Notice to State Historic Preservation Office
II-K - Historic Preservation Explanation
II-L - Notice of Intent to Request Release of Funds (NOI/RROF)
II-M - Request for Release of Funds (RROF)
II-N - Environmental Assessment (EA) Form
II-O - Finding of No Significant Impact and Notice of Intent to Request
Release of Funds (FONSI /NOI/RROF)
II-P - FONSI/NOI/RROF Distribution List
11-15
EXHIBIT II-A
DESIGNATION OF ENVIRONMENTAL CERTIFYING OFFICER
(Type on letterhead of grantee)
Date
Montana Department of Commerce
Community Development Division, CDBG Program
Capitol Station, Cogswell Building, Room C-211
Helena, Montana 59620
The is to notify you that (name) ^ (title)
Is designated as the Environmental Certifying Officer responsible for
all activities associated with the environmental review process to he
completed in conjunction with the CDBG grant awarded to (name of
grantee: City, Town or County of )_, Montana, for a (brief
project description) .
(signature*)
Typed name
*NOTE: This should be signed by the chief elected official (mayor or
chairperson of county commission.
II-A-1
EXHIBIT II-B
FINDING OF EXEMPTION FOR REIMBURSABLE ACTIVITIES/
REQUEST TO INCUR ADMINISTRATIVE COSTS
(Type on letterhead of grantee)
Date
Montana Department of Commerce
Community Development Division, CDBG Program
Capitol Station, Cogswell Building, Room C-211
Helena, Montana 59620
It is the finding of the (name of grantee: City, Town, County) of
( ), Montana, that the following activities approved for
funding under the Montana Community Development Block Grant program
are defined as exempt under 24 CFR 58.34 of the Environmental Review
Procedures for Title I Community Development Block Grant Programs, and
that the costs associated in conducting these activities are defined
as reimbursable by the Montana Department of Commerce:
(List applicable activities, for example:
1. Planning and Management Coordination
2. Environmental Review Activities
3. Engineering and Design Activities)
(For each activity listed above, provide a more detailed explanation
of what the grantee intends to do. Examples Include: travel expenses
to attend training for CDBG grantees, install telephones, purchase
office supplies, and publish notices for environmental review.)
(signature)
Typed Name
Environmental Certifying Officer
Il-B-1
(Type of letterhead of grantee)
Date
Montana Department of Commerce
Community Development Division, CDBG Program
Capitol Station, Cogswell Building, Room C-211
Helena, Montana 59620
The (name of grantee: City, Town or County) of ( )^ hereby
requests the Montana Department of Commerce to authorize the incurring
of administrative costs described in the attached Finding of Exemption
for Reimbursable Activities. I understand that in the event that the
contract is not executed, the environmental review is not completed,
or the Department of Commerce does not issue a release of funds for
the grant, any costs incurred pursuant to the Department's
authorization requested herein are the responsibility of the grantee
and will not be reimbursed by the Department.
(signature)
Typed Name
Chief Elected Official
II-B-2
EXHIBIT II-C
FINDING OF EXEMPTION
(Type on letterhead of grantee)
Date
Montana Department of Commerce
Community Development Division, CDBG Program
Capitol Station, Cogswell Building, Room C-211
Helena, Montana 59620
It is the finding of the (name of grantee; City, Town, County) of
( )^, Montana, that the following activities approved for
funding under the Montana Community Development Block Grant program
are defined as exempt under 24 CFR 58.34 of the Environmental Review
Procedures for Title I Community Development Block Grant Programs.
(List applicable activities, for example:
1 . Planning and management studies
2. Certain public service jobs
(signature)
Typed Name
Environmental Certifying Officer
II-C-1
EXHIBIT II-D
FINDING OF CATEGORICAL EXCLUSION
(Type on letterhead of grantee)
Date
Montana Department of Commerce
Community Development Division, CDBG Program
Capitol Station, Cogswell Building, Room C-211
Helena, Montana 59620
It is the finding of the (name of grantee: City, Town or County)
of ( )_, Montana, that the following activities approved
for funding under the Montana CDBG program are defined as
categorically excluded under 24 Part 58.35 of the Environmental Review
Procedures for Title I Community Development Block Grant Programs, and
that these activities are in compliance with the environmental
requirements of related federal authorities. The activities and the
statutory authority for exclusion are listed below:
(List applicable activities, descriptions, and authority. For
example:
1. Second Street Improvements — Paving of previously gravelled
road.
Authority — Section 58.35(a)(1): improvements replace or
upgrade existing facilities.
2. Local Residential Rehabilitation Grant Program —
Rehabilitation of 15 owner-occupied, single-family homes.
Authority — Section 58.35(a)(4): rehabilitation and
improvements within the specified guidelines.)
Compliance with MEPA requirements are met through the preparation of
the attached Preliminary Environmental Review. Compliance with the
environmental requirements of other related federal authorities is
indicated on the attached Statutory Checklist.
(signature)
Typed Name
Chief Elected Official
II-D-1
Exhibit II-E
Date:
Montana Department of Commerce
Community Development Division, CDBG Program
Capitol Station, Cogswell Building, Room C-211
Helena, MT 59620
PRELIMINARY ENVIRONMENTAL REVIEW
Grantee/Applicant
Contract #:
Project Name/Title
Description of Project
POTENTIAL IMPACT ON PHYSICAL ENVIRONMENT
Comments on
Major Moderate Minor None Unknown Attached Pages
1 ." Terrestrial & aquatic
life and habitats
2. Water quality, quantity
and distribution
3. Geology & soil quality
stability and moisture
4. Vegetation cover, quant-
ity and quality
5. Aesthetics
6. Air quality
7. Unique, endangered,
fragile, or limited
environmental resources
8. Demands on environmen-
tal resources of land,
water, air, and energy
9. Historical and archaeo-
logical sites
II-E-1
POTENTIAL IMPACTS ON HUMAN ENVIRONMENT
1. Social Structures and
mores
2. Cultural uniqueness
and diversity
3. Local and state tax
base and revenues
4. Agricultural or in-
dustrial production
5. Human health
6. Quantity and distri-
bution of community
and personal income
7. Access to and quality
of recreational and
wilderness activities
8. Quatity and distr-
bution of employment
9. Distribution and
density of population
and housing
10. Demand for government
services
11. Industrial & commercial
activity
12. Demands for energy
13. Locally adopted environ-
mental plans & goals
14. Transportation networks
& traffic flows
Major
Moderate
Minor None
Comments on
Unknown , Attached Pages
!
1
1
1
i ■ :
Other groups or agencies contacted or
which may have overlapping jurisdiction
Individuals or groups contributing to this PER
Recommendations concerning preparation of EIS
PER Prepared by:
Date
ii-E-2
Exhibit II-F
Checklist of Applicable Statutes
— and Regulations
Project Name and Identification No.
Statutory Checklist
Area of Statutory— Reguiatorv,
Compliance
(Precise citations for applicable
statutes and regulations are printed
on the back of this Checklist. / ...
Reference to \oies Providing
Documentation Sources and
Correspondence
Air Quality
Historic Properties
Floodplain Management
Wetlands Protection
Co«BlnJ Zone
Water Quality -
Aquifers
Noise
Endangered Species
'Attach evidencp that required actions have been taken.
li-K-1
page 1
statutory Checklist
Checklist of Applicable Statutes
and Regulations
Permits, Licences/ Forms of
Compliances Under Other Laws
C FEDEPAL, STATE AND LOCAL LAWS AND KI'.CHI.A'I' I DNS)
OTHER AREAS OF STATUTORY ANd/<^ / / / /^ ^/'^ /
REGULATORY COMPLIANCE /^ /^ / / /^ ^/^ /
APPLICABLE TO PROJECT /^ /^ A A /^•//i^i./
/s? /C* /S /p /a" ^i / •? j? /
/e // /J" //' /fj//f/
/^ Zj? /^ /^ /i? _^ /j? ^/ Reierence to \oies f>ro\icUn^
/■S /^ /-jr" /^ / C ^ /^ ■^/ Documeniarion Sources and
/o" /.S Af /,4* /l,i" jSv//"^/ Correspondence
Uaier Qualin.
Solid Waste Disposal
Fish and WUdlile
Stale or LocaJ Statutes
ito be added by locaJ
commumrv :
1
1
II-F-2
Statutory Checklist
Summary of Findings
and Conclusions:
Summary of
Environmental
Conditions:
Project Modificadons
and Alternatives
Considered:
II-F-3
39
Statutory Checklist
Checklist of Applicable Statutes
and Regulations (Federal)
\oise
HUD Regulations I24 CFR Part 51, Subpart Bi
Air Quality
Clean Air Act of 1970 as Amended i42 L' S.C.
7401-76 421 EPA Regulation 40 CFR Part 50. and
Partially 40 CFR Part 51. 52, 61.
Historic Properties
National Historic Presenation .Act of 1966. Section
106 1 16 U.S.C. 470 -470+1
P^eser^'ation of Historic and .\rchaeologicai Data
Act of 1974 1 16 US.C. 489-4690
Executive Order 11593 — Protection and
Enhancement of the Cultural En\-ironmenl
"Protection of Historic and Cultural Properiies
L'nder HUD Programs i24 CFR Part 59i avhen
Issued)
Floodplain
Flood Disaster Protection Act of 1973 iPL 93-2341
and Implementary Regulations
Title 24, Chapter X. Subchapter B. .\ational Flood
Insurance Program 144 CFR 59-751
E-xecutive Order 11988 and HUD PiDcedui^ for
Floodplain Manaaement i24 CFR Part 551 H\ hen
Issuedi
Wetlands
E-xecutive Order 11990. Protection of Wetlands
and Applicable State Legislation or Regulations.
.Uso 24 CFR Pan 55 (When Issuedi
Coastal Zone
Coastal Zone Management .Act of 1972 as
Amended (16 US.C. 1451-14641
Water Quality
Fedei^ Water Pollution Control Act. as Amended
133 U5.C. 1231-13761
Safe Drinking Water Act of 1974 i42 VS.C. 300f-
300i-10) as Amended
U.S. EmironmentaJ Protection .Agency ERA'
Implementing Regulations 40 CFR Pans 100-149
Solid Waste Disposal
Solid Waste Disposal Act as Amended by the
Resource Consenation and Recoverv Act of 1976
142 U.SC. 6901-69871
U.S. Environmental Protection Agency lEPAi
Implementing Regulations 40 CFR Parts 240-265
iMan-made Hazartls.
HUD Regulation 124 CFR Part 51, Subpart C iVXhen
Issuedi HUD Notice 79-331 Indefinite Notice.
September 10, 1979. .Also 24 CFR Part 51 and
Subpart D iWhen Issued'
Pish and Wildlife
Fish and Wildlife Coordination .Act il6 U.S.C.
661-666CI
Endangered Species
Endangered Species Act of 1973 as Amended ' 16
U.S.C. 1531-15431
Prepared By
Title
Date
II-F-4
EXHIBIT II-C
EIGHT-STEP DECISION-MAKING PROCESS
1. DETERMINE IF ACTION IS IN OR AFFECTS A FLOODPLAIN.
For information on floodplains or insurance, contact:
Montana Department of Natural Resources and Conservation
Water Resources Division, Engineering Bureau
Floodplain Management Section
Capitol Station
Helena, Montana 59620
(406)444-6601
2. INVOLVE PUBLIC IN DECISION-MAKING PROCESS.
Refer to Exhibit II-H Early Public Notice for (Floodplains and/or
Wetlands) , regarding the public hearing to discuss the proposed
project .
3. DETERMINE IF THERE IS A PRACTICABLE ALTERNATIVE.
4 IDENTIFY IMPACTS.
5. MITIGATE ADVERSE IMPACTS.
6. RE-EVALUATE ALTERNATIVES.
7. ANNOUNCE AND EXPLAIN DECISION TO THE PUBLIC.
Refer to Exhibit II-I, Notice of Explanation for (Floodplains
and/or Wetlands) , informing citizens of intent to undertake the
project .
8. IMPLEMENT ACTION WITH APPROPRIATE MITIGATION,
II-G-1
EXHIBIT II-H
EARLY PUBLIC NOTICE FOR (FLOODPLMNS AND/OR WETLANDS)
Date of Publication of Notice
The (name of grantee: City, Town or County) of ( ) ,
Montana, is considering a (describe proposed project, for example:
housing rehabilitation program for residences along Second Avenue
between Main Street and Broadway Street) as a CDBG project under the
Montana CDBG program. The project is located in the 100 year
floodplain. The (City, Town or County) is interested in discussing
alternatives to this project and securing public perceptions of
possible adverse impacts that could result from the project and
possible minimization measures. A public hearing is scheduled on
(date) to discuss the proposed project. Please attend or send
written comments to: (name of Environmental Certifying Officer and
complete mailing address) . Comments will be received until (date,
same as public hearing date) .
(name)
Environmental Certifying Officer
NOTE: A minimum of 16 days following the publication of the Early
Public Notice, a Notice of Explanation (Exhibit II-I) must be
published .
II-H-1
EXHIBIT Il-I
NOTICE OF EXPLANATION FOR (FLOODPLAINS AND/OR WETLANDS)
Date of Publication of Notice
The (name of grantee: City, Town, or County) of , Montana
intends to undertake a project located in the 100 year floodplain.
The project involves (describe proposed project and reasons to
proceed, for example: housing rehabilitation of residences along
Second Avenue between Main Street and Broadway Street. This program
will provide improved housing conditions for 25 low and moderate
income families. Proposed housing improvements cannot be undertaken
in any other location as relocation costs would exceed available
program resources. Failure to provide the rehabilitation assistance
would result in the continued unsafe and unhealthy living conditions
for the 25 families.)
It is the (City, Town's or County's) judgement that the proposed
improvements outweigh consideration of Executive Order
. A more detailed description of the project and the
FEMA flood maps are available for citizen review at (name of public
office, such as City Hall or Planning Department, name of City or
Town) , Montana.
(Name)
Environmental Certifying Officer
Complete Mailing Address
NOTES: Publish a minimum of 16 days following publication of Early
Public Notice (Exhibit II-H) .
2
For a situation involving floodplains, enter number 11988.
For a situation involving wetlands, enter number 11990.
Il-I-l
EXHIBIT II-J
NOTICE TO STATE HISTORIC PRESERVATION OFFICE
(Date)
State Historic Preservation Office
Montana Historical Society
225 North Roberts Street
Helena, Montana 59601
Re: Consultation under 36 CFR 800. A(a)
Community Development Block Grant Program
The (name of Grantee) has approval for a Montana Community Development
Block Grant (CDBG) of (amount) from the Montana Department of
Commerce. This grant will dnvolve (include description of project,
for example: replacing water lines, or providing housing
rehabilitation grant assistance to low/moderate income families in 25
owner-occupied, single-family houses. The target area is Second
Avenue between Main and Broadway Streets.
Pursuant to the procedures established by the Advisory Council on
Historic Preservation (36 CFR Part 800) and adopted by the U.S.
Department of Housing and Urban Development (HUD) for compliance with
Section 106 of the National Historic Preservation Act of 1966 and
Executive Order 11593, we have enclosed a vicinity map, general
information and legal description of the proposed project.
We request that you review the enclosed data and notify us of any
sites, structures or districts listed in or eligible for inclusion in
the National Register of Historic Places which could be affected by
the proposed undertaking. A determination of effect on any eligible
property you list or we Identify will be discussed with you at a later
date.
To the best our knowledge there (are, or are no) structures or sites
associated with the project which are of historic significance.
(Discuss reasons for the above statement. For example, reasons for no
significance might include, the site of the water main improvements
has no historic significance as the initial grading of the present
gravel road in 1912 would have destroyed any subsurface remains that
existed. Or, the 25 units to be rehabilitated are single level, one
and two bedroom frame units constructed between 1920 and 1930. As you
can see from the representative photographs attached, these units are
of little or no architectural interest and the local preservation
society concurs that they are of no historic or cultural significance.
I am attaching a copy of their letter for your information.)
II-J-1
Due to the limited processing time permitted by HUD regulations for
this type of project, we request that you reply within 10 days from
receipt of this letter. If we do not receive a reply within 30 days,
we will assume that you know of no properties which are included in or
eligible for inclusion in the National Register which may be affected
by the proposed undertaking. Also, if we do not identify any cultural
property during our review process, we will proceed with the project
assuming that cultural resources have been adequately addressed.
Sincerely,
(signature)
Typed Name
Environmental Certifying Officer
Mailing Address
Telephone Number
II-J-2
EXHIBIT II-K
HISTORIC PRESERVATION EXPLANATION
HISTORIC PRESERVATION REQUIREMENTS: An Explanation for CDBG Recipients
They are a function of Federal law (National Historic Preservation Act
of 1966) and regulation (36CFR800), not state regulations.
They outline a process for considering cultural resources in planning
the use of Federal funds or making Federal decisions. A Federal agency
can be sued for not fulfilling the procedures. They cannot be sued for
a particular decision on whether or not to affect a cultural resource.
Three organizations outside the community office that recieves CDBG
funds participate in the process:
The State Historic Preservation Office
Montana Historical Society
225 North Roberts Street
Helena, MT 59620
Comments to local community
office on known cultural re-
sources, likelihood of cultural
resources being there; value
of resources found; impact of
project on significant historic
or prehistoric sites.
Jerry Rogers
Keeper of the National Register
National Register of Historic Places
National Park Service
Washington, D.C. 20240
Makes final decision on whether
a property could be eligible for
listing in the National Regis-
ter of Historic Places.
Advisory Council on Historic Preservation Makes final decision on impact
Mr. Louis Wall of the project on a significant
730 Simms Street, Room 450 resource and on whether mitigation
Golden, CO 80401 or consideration procedures have
been adequate.
The process outlined in the regulations is best understood as having
two components. Each component consists of answering a single major
question, through answering of a series of smaller questions. In the
majority of cases, the requirements are fulfilled at the completion of
steps in the first component.
Prepared by SHPO
Jai.uary /, I'J^^
II-K-l
HISTORIC PRESERVATION REQUIREMENTS: A QUESTIONNARIRE
In the 1982/83 round of grant awards, this questionnaire has been written
solely for projects other than housing rehabilitation.
Please read the "Historic Preservation Requirements: An Explanation for
CDBG Recipients" first.
The information that we will draw from answers to the following questions
should take us through step I.e. as described in the explanation.
If the maps or information that we are seeking is clearly in your applica-
tion materials, please direct us to that. However, our review of the ap-
plications did not usually produce information precise enough to end our
review.
Note that question #3 lets you use annotated maps to supply information
needed in the first two questions if that is easier.
We know that, in many cases, you will be affecting only ground surfaces
that have experienced major disturbance in the past. Hence, your consid-
eration of cultural resources can be concluded quickly. It is important,
though, that the file indicates that you demonstrated that fact rather
than assumed it.
Please 8ive the legal location of all land surfaces that might be affected
by your project. Please mark those, if any, that fall within town limits.
Please describe the condition/prior use of land surfaces that might be af-
fected by the project. (farmed to depth, used for grazing, graded city
street since 1910, unimproved rural land, etc.)
3. Please attach a map which illustrates or provides the infoirmation requested
above.
A. Have any prehistoric materials been found in the vicinity of your project
to your knowledge?
Does your project involve construction of buildings, dams, power poles,
new dumpster yards (etc. — facilities which are clearly visible above-
ground)? If so, will those new facilities be within site of buildings
built prior to 1940. If so, again please describe the buildings (giving
age, especially and/or provide polaroids of the buildings.
1/7/JJ
•
II-K-2
FIRST COMPONENT
Are significant historic or prehistoric properties likely to be affected
by the project?
That question can be resolved by answering this series of smaller questions:
a. Have any cultural resources (historic or prehistoric) been found in or
close to the project area before? SHPO does a file search, based on
request from CDBG office with legal location.
b. If not, what is the likelihood of there being cultural resources in or
near the project area?
SHPO comments based on Information from CDRG office about age of build-
ings if they are involved or degree of previous ground disturbance if
dealing with changes to ground areas.
c. Does an archaeologist or historian need to survey the area?
SHPO recommendation.
Agency makes the decision, with decision needing to be defensible to
professionals and public.
d. If cultural resources exist in the project area (Identified by someone
much earlier or through survey information just gathered) are they sig-
nificant?
CDBG office comments •
SHPO office comments-
If either office thinks they are significant, CDBG office requests the
opinion of the Keeper of the National Register, on whether the property
would likely be eligible for listing In the National Register.
This step is completed when CDBG office has either a letter from SHPO agree-
ing that there are no properties in the area which are likely to be Nation-
al Register eligible or a letter from the Keeper of the National Register
evaluating the eligibility of any properties which were found in the project
area.
II-K-3
SECOND COMPONENT
What is the effect of the project on significant (Register eligible) cul-
tural resources?
The regulations offer three answers to that question: no effect, no adverse
effect, or adverse effect.
Again, the major question is resolved by working through a series of smaller
questions.
a. Will the project change any of the qualities that make the cultural pro-
perty significant?
CDBG office comments.
SHPO office comments.
If both agree that there will be no effect, the process has been com-
pleted. (For instance, a sewer line running down the alley behind a
historically significant house would not likely affect the qualities
that make the house important.)
b. If the project looks as if it might affect the qualities that make the
property significant, can the impact be handled in such a way that the
effect need not be adverse?
CDBG office comments and offers suggestions for insuring no adverse effect.
SHPO office comments .
Advisory Council on Historic Preservation concurs in or disagrees with
measures to avoid adversity.
For instance, window changes to an eligible house will affect the arch-
itectural qualities of the house that contribute to its value, but can
be treated as having no adverse effect if they are handled so as to re-
tain primary original appearance. Changes to a prehistoric site can be
treated as having no adverse effect if a plan for retrieving significant
historic materials is executed prior to disturbance.
c. If an adverse effect appears likely to occur (demolition of historic
buildings, etc.) what actions can be taken to minimize adversity or at
least record property value before loss?
CDBG offer proposals in the form of a case report. •
SHPO office comments.
Advisory Council determines whether mitigation or consideration measures
are adequate.
II-K-4
FXHIBTT II-L
NOTICE OF INTENT TO REQUEST A RELEASE OF FUNDS CNOI/RROF)
Date of Publication of Notice
(Name of grantee: City, Town or County of )
(Mailing Address)
(City, Montana Zip)
(telephone number of grantee)
TO ALL INTERESTED AGENCIES. GROUPS AND PERSONS:
On or about (date*), the above-named (City, Town, or County) will
request the Montana Department of Commerce to release funds under
Title T of the Housing and Community Development Act of 197A as
amended, (PL93-383) for the following project:
(for example. Second Avenue Housing Rehabilitation Program)
(PROJECT, TITLE OR NAME) ~
(for example, rehabilitation of 25 owner-occupied, single-family
homes) ~" -^ —
(PURPOSE OR NATURE OF PROJECT)
(for example. Second Avenue between Broadway Street and Main Street,
name of City and County, Montana) ~ ~
(LOCATION— CITY, COUNTY, STATE)
(for example. $400,000)
(ESTIMATED COST OF PROJECT) ~
An Environmental Review Record documenting review of all project
activities in respect to impacts on the environment has been made by
the above-named (City. Town, or County). This Environmental Review
Record is on file at the above address and is available for public
examination or copying, upon request.
J^^^ (^i^y. Town, or County of )_ will undertake the project
described above with Community Development Block Grant funds provided
by the Montana Department of Commerce, under Title I of the Housing
and Community Development Act of 1974. as amended. The (City, Town,
or County of -)_ ts certifying to the Department of Commerce
that the (City, Town, or County of )_ and (Mayor
or Commissioner ), !„ his or her official capacity
^^ (Mayor or Chairperson of the County Commission), consent to accept
the jurisdiction of the federal courts if an action is brought to
enforce responsibilities in relation to environmental reviews,
decision-making, and action; and that these responsibilities have
been satisfied. The legal effect of the certification is that upon
Its approval, the (City, Town, or County) may use the CDBG funds, and
II-L-]
the Department of Commerce will have satisfied its responsibilities
under the Environmental Policy Act of 1969 as delegated to the State
of Montana through the 1981 Amendments to the Housing and Community
Development Act. The Department of Commerce will accept an objection
to its approval of the release of funds and acceptance of the
certification only If it is on one of the following bases: (a) The
the certification was not in fact executed by the chief executive
officer or other officer approved by the Department of Commerce; or
(b) that the applicant's environmental review record for the project
indicates omission of a required decision, finding, or step
applicable to the project in the environmental review process.
Objections must be prepared and submitted in accordance with the
required procedures (24 CFR Part 58) and may be addressed to the CDBG
Program Staff, Department of Commerce, Capitol Station, Cogswell
Building, Room C-211, Helena, Montana 59620.
Objections to the release of funds on bases other than those stated
above will not be considered by the Department of Commerce. No
objection received after (Date**) will be considered by the
Department of Commerce.
Mayor or Commissioner
City or Town Hall or County Courthouse
, Montana Zip
(Name and Address of Chief Executive Officer of Applicant)
NOTES: *This date must be a minimum of eight days following the
Date of Publication.
**This date must be a minimum of 16 days following the
anticipated date that the grantee will request release of
funds from the Department of Commerce as provided for in
Paragraph One of this Notice. It is advisable to allow 18
or 19 days to allow several days for mailing time.
II-L-2
Exhibit n-n
MONTANA DEPARTMENT OF COMMERCE
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
REQUEST FOR RELEASE OF FUNDS AND CERTIFICATION (RROF)
(Pursuant to Section 104(f) of Title I of the Housing and
Community Development Act of 1974 as Amended)
ENVIRONMENTAL
1. NAME OF GRANTEE
2. GRANT NUMBER
3. ADDRESS (include Street,
City, State, ZIP Code)
4. REQUEST DATE
REQUEST FOR RELEASE OF FUNDS. Release of approved grant funds for the
following project is requested:
PROJECT
GRANTEE
(If Other Than Applicant)
6. CERTIFICATION. With reference to the above project, I the undersigned officer
of the applicant, certify:
That the applicant has at least seven (7) days prior to submitting this request for
release of funds and certification, published and disseminated, in the manner
prescribed by 24 CFR 58.16(b), a notice to the public (a copy of which is attached)
in accordance with 24 CFR 58.30(a);
That the applicant has fully carried out its responsibilities for environmental
review, decision-making and action pertaining to the project named above; that
the applicant has complied with the National Environmental Policy Act of 1969;
that the applicant has complied with environmental procedures, permit
requirements and the statutory obligations of the laws cited in 24 CFR 58.5(a)(2);
and that the applicant has taken into account the environmental criteria,
standards, permit requirements and other obligations applicable to the project
under the other related laws and authorities cited in 24 CFR 58.1(a)(3);
Page 1 of 3 pages
II-M-1
That the level of environmental clearance carried out by applicant in connection
with this project ( ) did ( ) did not require the preparation and dissemination of an
environmental impact statement;
That the dates upon which all statutory and regulatory time periods for review,
comment, or other response or action in regard to this clearance began and ended
as indicated below, applicant is in compliance with the requirements of 24 CFR
Part 58;
ITEM COiMMENCE EXPIRE
MO/DAY/YR MO/DAY/YR
Notice of No Significant
Impact: Publication
Same: Comment Period
Notice of Intent to Prepare
EIS: Publication
Draft EIS: Comment
Period
Same: 90-day period
(NEPA Regulations)
Final EIS: 30-day period
(NEPA Regulations)
7-Day Notice of Intent to Request
Release of Funds:
Publication
15-day DOC Decision
Period
Other (Specify)
That I am authorized to, and do, consent to assume the status of responsible
federal officer under the National Environmental Policy Act of 1969 and each
provision of law specified in 24 CFR 58.1(a)(3) insofar as the provisions of these
laws apply to state and federal responsibilities for environmental review,
decisionmaking and action assumed and carried out by the applicant; that by so
consenting, I assume the responsibilities, where applicable, for the conduct of
envrionmental review, decisionmaking, and action as to environmental issues,
preparation and circulation of draft, final and supplemental environmental impact
statements, and assumption of lead agency or cooperating agency responsibilities
for preparation of such statements on behalf of State and Federal agencies, when
these agencies consent to such assumption.
-^
Page 2 of 3 pages
II-M-2
That I am authorized to consent to, and do, accept on behalf of the applicant and
personally, the jurisdiction of the Federal courts for the enforcement of all these
responsibilities, in my official capacity as certifying officer of the applicant.
(Signature, Title and Address of Certifying
Officer)
WARNING — Section 1001 of Title 18 of the United States Code and Criminal Procedures
shaU apply to this certification. Title 18 provides, among other things, that whoever
knowingly and willfully makes or uses a document ot writing containing any false,
fictitious, or fraudulent statement or entry, in matter with the jurisdiction of any
department of agency of the United States, shall be fined not more than $10,000 or
imprisoned not more than five years or both.
Page 3 of 3 pages
II-M-3
Exhibit n-»
ENVIRONMENTAL ASSESSMENT FORM
Project Identification
Recipient: (City, Town, or County of ) Date: (Submitted)
Chief Elected Official:
Contract #: (As provided by Montana DOC)
Project Name: (Ex: Water Distribution System)
Project Narrative
Should include the following:
Brief description of activity including construction and end-product
Scheduled construction timeframe
Purpose of project (Ex: replacement of deteriorating facility)
Project funding from all sources
Project plans and studies conducted
Public review process
Description of project site (with attached map)
including geology and previous use
Description of surrounding areas
Comparison with Applicable Plans
Factor
Local Comprehensive Plans
Including Land Use and Growth
Management Elements
Area and Regional Plans
Local Zoning Ordinances
Project Is.
In Compliance
Yes No
Not Applicable
II-N-1
Environmental
Assessment
Environmental Assessment Checklist
Project Name and Identification No.
M / / f/ J ft^ /
A // At -•^/c ^/n* /^ /
/t /^ / "^Ov "^ "V^^ /4'* / Source or Documentation
/^ /^' /^&'/^'-'V*^ A* / l.\ote dale oi" contact or
/^ /i? /^■^/^'■^y^ A^ / page reference 1
/^ /»? A? .Cy -^ .>V ^ /^ / Adciitional materiaJ mav be
Impact Categories/^? /c'' /^r ^/-i- ^/^ /** / attached.
Land Oevciopment
Conformance With
Comprehensive
Plans and Zoning ( 1 )
Compatibility and
Urban Impact
Slope
Elrosion
Soil Suitability
Hazards and
Nuisances. Including
Site Safety
Energy
Consumption
Noise 1
Effects of Ambient
Noise on Project and
Contribution to Com-
munitv N'oise Le\-els
page 1
II-N-2
Environmental
Assessment Checklist
icontinued. page 21
Project Name and Identification iN
[n
/l 72/3/4/5/6/7
/ / / f'f / / i /
/l/i/imi/f/
/■^ /sj' /^ ^/^•^/« / <? / Source or Documentation
/$■ /^- A^SM'-T/-^ /S' / (Note date of contact or
/<f /f /f.4'M^/f A* / pagerefei^nce)
/"^ /^ />f ^X?" ^/^ / ^ / Additional material may be
Impact Categoriesy^® /^ /C-^/4*^/^* /^ / attached.
Air Quail t>'
Effects of Ambient Air
Quality on Project and
Contribution to Com-
munity Pollution Levels
Environmental Oesij^n and Historic N'alues |
Visucil Quality —
Coherence, Diversity.
Compatible Use. and
Scale
Historic, Cultural,
and .Archaeological
Resources
Socioeconomic j
Demographic/
Character Changes
Displacement
Employment and
Income Patterns
(2)
Community Facilities and Services |
Educational Facilities
Commercial Facilities
Health Care
Social Services
II-N-3
Environmental
Assessment Checklist
icontinued, page 3i
Project Name and Identification No.
/J /i ifLf/ /f /
/■S /^ /^'^/^'^/iS A^ / Source or Documentation
/p /^ yy',»/^'.«V^ Z* / (Note dale of contact or
/}f /$? /^■4'/'^4'/» A^ / page reference!
/«? /^ X* a* X^ Cy ^ / <? / Additional material may be
Impact Categories/^^ /^ /t^ ^/sc' 4^/4 /^ / attached.
Community Facilities and Services IContinuedl
Solid Waste
Waste Water
Storm Water
Water Supply
Public Salety Police
Fire
Emergency
Medical
Open Open Space
Space and
Recreation ( 3 )
Recreation
(3)
Cultural
Facilities
Transponation
II-N-4
Environmental
Assessment Checklist
I continued, page 41
Project Name and Identification No.
vl/2/3/4/5/6/7
/i /f /i//if/i /! /
/j? /* /'T^/s'^/^ /Cs? / Source or Documentation
/S" /■^ /^ « /S^' ^/i^ /« / irVote date of contact or
// /f /f-^/f-^A$ // / page reference.
/•^ /^ /^ ^ /^ $/ i' / $ / Additional material mav be
Impact Categories A* /^ /^ ^/^ ^/4' /^ / attached.
\atural Features
Water Resources
& Aquifers
Surface Water
Floodplains
Indicate where floodplain map
is on file.
Wetlands
Coastal Zone
Unique .\atural
Features and . .
Agricultural Lands V '■ >
Vegetation and
Wildlife, Fish,,-,,,
Endangered ^'^ '
Soeci f^.p.
SPECIAL IMPACT CONSIDERATIONS AS REQUIRED UNDER THE MONTANA ENVIRONMENTAL
POLICY ACT
(1) Special attention should be paid to impacts on Agricultural/Industrial
Production.
^ (2) Consideration of this factor must specifically address the impacts on
9 Local /State Tax Base and Revenues.
(3) In reviewing these factors, also address the extent to which the project
activities impact on access to as well as the quality of recreational and wilderness
activities.
II-N-5
Environmental
Assessment Checklist
(continued, page 51
Summary of Findings
and Conclusions:
Summary of
Environmental
Conditions:
Project Modifications
and .Alternatives
Considered:
II-N-6
Environmental
Assessment Checklist
icontlnued, page 61
Additional Studies
Performed (Attach
Study or Summary)
Mitigation Measures
\eeded:
II-N-7
Environmental
Assessment
Project Name and Identification No.
1. Is project in compliance with applicable laws and
regulations? D Yes D No
2. Is an EIS required? D Ves D No
3. A Finding of No Significant Impact ( FONSI) can be made. Project will not
significantly affect the quality of the human environment. D Yes D No
Prepared by Title
Date
II-N-8
ENVIRONMENTAL ASSESSMENT CHECKLIST
Page
Level of Clearance Finding:
Based on the foregoing environmental review, it is concluded that:
( ) FINDING: A request to the Montana Department of Commerce for
release of funds for the within project is not an action significantly
affecting ihe quality of the human environment, and no EIS is required.
( ) FINDING: A request to the Montana Department of Commerce for
release of funds for the within project is an action significantly
affecting the quality of the human environment, and an EIS is required.
Prepared by:
Name (Typewritten):
Title:
Signature:
II-N-9
<eondnuad. page
Checklist of Applicable Statutes
and Regulations
.\oi6e
HUD Regulations i24 CFR Part 51. Subpart Bi
Air Quality
Clean Air Act of 1970 as Amended '42 U.S.C.
7401-76 421 EPA Regulation 40 CFR Part SO, and
Partially 40 CFR Part 51.52,61.
Historic [Properties
National Histonc Preservation Act of i966. Section
106 1 16 use. 470 -470+1
Presers'ation of Historic and .Archaeological Data
Act of 1974 116 U5.C. 469-469ct
Lxecutivc Order 11593 — Protection and
Enhancement of the Cultural En\ironment
"Protection of Histonc and Cultural Properties
Under HUD Programs ' i24 CFR Part 59' avhen
Issued!
Floodplain
Flood Disaster Protection Act of 1973 i PL 93-2341
and Implementary Regulations
Title 24, Chapter X. Subchapter B. National Flood
Insurance PiDgram i4-; CFR 59-75i
E.\ecuti\e Order 11988 and HUD Prrjcedure for
Floodplain Management i24 CFR Part 551 iw hen
Issuedi
U'etlands
Executive Ortier 11990. Protection of Wetlands
and Applicable State Legislation or Regulations.
.Vlso 24 CFR Part 55 When Issuedi
CoastaJ Zone
Coastal Zone Management Act of 1972 as
Amended il6 VS.C. 1451-1464i
Water Quality
Feder^ Water Pollution Control Act. as Amended
133 U5.C. 1251-13761
Safe Drinking Water Act of 1974 i42 VS.C. 300f-
300i-10) as Amended
U5 Emironmental Protection Agencv' lEP.A'
Implementmg Regulations 40 CFR Parts 100-149
SoUd Waste Disposal
Solid Waste Disposal Act as Amended bv the
Reiourre ConseiA-ation and Recoverv Act of 1976
142 U5.C. 6901-69871
U.S. Environmental Protection Agency lEPAi
Implementing Regulations 40 CFR Parts 240-265
Man-made Hazards
HUD Regulation i24 CFR Part 51, Subpart C iWhen
Issuedi HUD Notice 79-331 Indefinite Notice.
September 10, 1979 Also 24 CFR Part 51 and
Subpart D iWhen Issuedi
Fish and Wildlife
Fish and Wildlife Coor-dination Act 1 16 VS.C.
661-666CI
Endangered Species
Endangered Species Act of 1973 as Amended '16
use. 1531-15431
Prepared By
Tide
Date
II-N-10
EXHIBIT II-O
COMBINED NOTICE
NOTICE OF FINDING OF NO SIGNIFICANT IMPACT and
NOTICE TO PUBLIC OF REQUEST FOR RELEASE OF FUNDS
(FONSI/NOI/RROF)
Date of Publication of Notice
(City, Town or County)
(Mailing Address)
(City, State, Zip Code) (Telephone)
TO ALL INTERESTED AGENCIES, GROUPS AND PERSONS:
On or about (date)* the above-named (City, Town, or County) will
request the Montana Department of Commerce to release funds provided
under Title I of the Housing and Community Development Act of 1974, as
amended (PL 93-383) for the following project:
(Project Title or Name)
(Purpose of Nature of the Project)
(Location — City, County, State — of Project)
(Census Tract (s))
Finding of No Significant Impact
It has been determined that such request for release of funds will not
constitute an action significantly affecting the quality of the human
environment and accordingly the above named (City, Town, or County)
has decided not to prepare an Environmental Impact Statement under the
National Environmental Policy Act of 1969 (PL 91-190).
NOTE: *Earliest date for submittal of REQUEST FOR RELEASE OF FUNDS
AND CERTIFICATION (Exhibit 2-M) is one day after termination
of public comment period set for the Finding of No
Significant Impact.
II-O-l
The reasons for such decision not to prepare such Statement are as
follows :
(Set forth reasons for decision.)
An Environmental Review Record documenting review of all project
activities in respect to Impacts on the environment has been made by
the above-named (City, Town, or County). This Environmental Review
Record is on file at the above address and is available for public
examination and copying upon request between the hours of
__^ and ,
No further environmental review of such project is proposed to be
conducted prior to the request for release of CDBG project funds.
Public Comments on Findings
All interested agencies, groups and persons disagreeing with this
decision are invited to submit written comments for consideration by
the (City, Town, or County) to the (office of the undersigned/other
specified place) on or before (date*) . All such comments so received
will be considered and the (City, Town, or County) will not request
release of funds or take any administrative action on the project
prior to the date specified in the preceding sentence.
Release of Funds
The (City, Town, or County of )_ will undertake the project
described above with CDBG funds provided by the Montana Department of
Commerce (DOC) under Title I of the Housing and Community Development
Act of 1974, as amended. (City, Town, or County) is certifying to
DOC that (City, Town, or County and chief executive officer/other
certifying official as approved by DOC), in his or her official
capacity as (office) consent to accept the jurisdiction of the Federal
courts if an action is brought to enforce responsibilities in relation
to environmental reviews, decision-making, and action; and that these
responsibilities have been satisfied. The legal effect of the
certification is that upon its approval, the (City, Town, or County of
)_ may use the CDBG funds and DOC will have satisfied its
responsibilities under the National Environmental Policy Act of 1969.
Objections to State Release of Funds
DOC will accept an objection to its approval only if it is on one of
the following bases: (a) that the certification was not in fact
executed by the certifying officer or other officer of applicant
approved by DOC; or (b) that the applicant's environmental review
record for the project Indicates omission of a required decision.
NOTE: *A minimum of 16 days after publication of this notice.
II-0-2
finding, or step applicable to the project in the environmental review
process. Objections must be prepared and submitted in accordance with
the required procedures (24 CFR Part 58) and may be addressed to:
Department of Commerce, Community Development Division, Cogswell
Building, Room C-211, Capitol Station, Helena, Montana 59620.
Objections to the release of funds on bases other than those stated
above will not be considered by the Department of Commerce. No
objection received after (date*) will be considered by DOC.
(Name of Certifying Officer)
(Street Address)
(City, County, State, Zip Code)
NOTE: *Estimate this date as a minimum of 16 days after the date
that the Grantee anticipates DOC will receive the request.
See 24 CFR Part 58.31. It is advisable to allow 18 or 19
days to allow several days for mailing time.
11-0-3
♦1
EXHIBIT II-P
NOTICE OF FINDING OF NO SIGNIFICANT IMPACT/
NOTICE OF INTENT TO REQUEST RELEASE OF FUNDS
(FONSI/NOI/RROF)
DISTRIBUTION LIST
The combined Notice of Finding of No Significant Impact/Notice of
Intent to Request Release of Funds was:
— *Published at least once in the:
(name of newspaper)
Montana. OR Prominently displayed at the (name of
post/office)
— *Prominently displayed at the following other public
buildings: (list names and locations)
— Sent to the following agencies and individuals:
(Examples include:)
^Montana Department of Commerce
Helena, Montana 59620
^Montana Environmental Quality Council
Helena, Montana 59620
Montana Department of Health and Environmental Sciences
Helena, Montana 59620
State Historic Preservation Officer
Helena, Montana 59620
*U.S. Environmental Protection Agency
Regional Office
Denver, Colorado
*U.S. Environmental Protection Agency
National Headquarters
Washington, D.C.
*Indivlduals and groups known to be Interested in the
activities ,
Local Planning Departments
Local Preservation Society
Universities
NOTE: 24 CFR 58.43 provides that at a minimum, the distribution
of the notice includes those Indicated by an asterisk (*) .
II-P-1
<f
Chapter ill
Procurement
Standards
')
CHAPTER III
PROCUREMENT STANDARDS
This chapter provides standards for use by grantees in estab-
lishing procedures for the procurement of supplies, equipment, con-
struction, and professional or other services with Montana CDBG
program funds. These standards are furnished to Insure that such
materials and services are obtained efficiently and economically and
in compliance with the provisions of applicable federal and State laws
and regulations.
0MB Circular A-102 Attachment 0, is adopted by reference for the
Montana CDBG program. Attachment 0 directs that supplies, equipment,
construction and services be acquired efficiently and economically,
through open and fair competitive awards. Grantees are to use sound
business judgment, not only in the acquisition of supplies, equipment,
construction and services, but in the settlement of all contractual
and administrative issues, protests, disputes, and claims. Circular
A-102 is included in the Requirements Notebook.
The grantee is the responsible authority under its contracts, and
without recourse to the Department of Commerce regarding the
settlement and satisfaction of all contractural and administrative
issues arising out of procurements entered into in connection with a
CDBG program. Matters concerning violation of law are to be referred
to such local. State or federal authority as may have proper
jurisdiction. However, grantees are encouraged to contact DOC for
assistance in any procurement matter.
PROCUREMENT REGULATIONS
Recipients may use their own procurement regulations which
reflect applicable federal, State and local law, rules and regulations
provided that all procurements made with CDBG funds meet the following
standards:
III-l
Conflict of Interest
The recipient must maintain a written code or standards of
conduct to govern the performance of its officers, employees or agents
in contracting with and expending CDBG funds. The grantee's officers,
employees, or agents shaJl neither solicit nor accept gratuities,
favors or anything of monetary value from contractors or potential
contractors. No employee, official or agent of the grantee can
participate in selection or award of administration of a contract
supported by CDBG funds if a conflict of interest, real or apparent,
would be involved. Pursuant to Title 1, Chapter 2; Title 2, Chapter
2; Title 7, Chapter 3; Title 7, Chapter 5, MCA and Attorney General
Opinions Volume 37, No. 104; Volume 38, No. 55; and Volume AO, No. 78.
Such conflict arises when:
the employee, officer or agent;
— any member of the immediate family;
his or her partner; or
— an organization which employees, or is about to employ, any
of the above, has a financial or other interest in the firm
selected for award.
The grantee's officials, employees or agents shall neither
solicit nor accept gratuities, favors or anything of monetary value
from contractors, potential contractors, or parties to subagreements.
Grantees may set minimum rules where the financial interest is
not substantial or the gift is an unsolicited item of nominal
intrinsic value.
To the extent permissible by State or local law, rules or
regulations, the grantee's standards must provide for penalties,
sanctions, or other disciplinary actions to be applied for violations
of such standards by either the grantee's officers, employees, or
agents, or by contractors or their agents. Additional information is
provided in the conflict of interest section of Chapter I.
III-2
Small and Minority Businesses
It is national policy to award a fair share of contracts to small
and minority business firms. Accordingly, affirmative steps must be
taken to assure that small and minority businesses are utilized where
possible as sources of supplies, equipment, construction and services.
Affirmative steps shall include the following:
including qualified small and minority businesses on
solicitation lists;
assuring that small and minority businesses are solicited
whenever they are potential sources;
when economically feasible, dividing total requirements into
smaller tasks or quantities so as to permit maximum small
and minority business participation;
— where the requirement permits, establishing delivery
schedules which will encourage participation by small and
minority business;
using the services and assistance of the Small Business
Administration, the Office of Minority Business Enterprise
of the Montana Department of Highways and the CDBG staff as
required;
if any subcontracts are to be let, requiring the prime
contractor to take the affirmative steps described above;
— grantees shall take similar appropriate affirmative action
in support of women's business enterprises; and
Grantees are encouraged to procure goods and services from
labor surplus areas.
Maximum Open and Free Competition
All procurement transactions entered into by the grantee
regardless of whether negotiated or advertised and without regard to
dollar value shall be conducted in a manner so as to provide maximum
open and free competition, as provided by 0MB Circular 102,
I1I-3
Attachment 0. The grantee must be alert to organizational conflicts
of interest or non-competitive practices among contractors which may
restrict or eliminate competition or otherwise restrain trade.
Examples of what is considered to be restrictive of competition
include, but are not limited to:
placing unreasonable requirements on firms in order for them
to qualify to do business,
non-competitive practices between firms,
organizational conflicts of interest, and
unnecessary experience and bonding requirements.
Selection Procedures
Grantees must have written selection procedures in their files
which provide, as a minimum, the following procedural requirements.
Solicitation of offers, whether by competitive sealed bids or
competitive negotiation, must:
incorporate a clear and accurate description of the
technical requirements for the materials, product, or
service to be procured. Such description must not, in
competitive procurements, contain features which unduly
restrict competition. The description may include a state-
ment of the qualitative nature of the material, product or
service to be procured and, when necessary, set forth
minimum essential characteristics and standards to which it
must conform to be satisfactory. Detailed product speci-
fications should be avoided if at all possible. When it is
impractical or uneconomical to make a clear and accurate
description of the technical requirements, a "brand name or
equal" description may be used as a means to define the
performance or other important requirements of a procure-
ment. The specific features of the named brand which must
be met by offerors must be clearly stated; and
III-4
•
#
clearly set forth all requirements which offerors must
fulfill and all other factors to be used in evaluating bids
or proposals.
Awards shall be made only to responsible contractors who possess
the potential ability to perform successfully under the terms and
conditions of a proposed procurement. Consideration must be given to
such matters as contractor integrity, compliance with public policy,
record of past performance, and financial and technical resources.
Proposed procurement actions must be reviewed by recipient
officials to avoid purchasing unnecessary or duplicative items. Where
appropriate, an analysis must be made of lease and purchase alterna-
tives to determine which would be most economical and practical
procurement. Consideration should be given to consolidation or
breaking out to obtain a more economical purchase.
To foster greater economy and efficiency, grantees are encouraged
to enter into State and local intergovernmental agreements for
procurement or use of common goods and services.
Grantees must perform some type of cost or price analysis in
connection with every procurement action including contract modifica-
tions and must only permit allowable costs to be included. The cost
plus a percentage of cost method of contracting shall not be used.
Grantees must maintain records sufficient to detail the signif-
icant history of a procurement. These records must include, but are
not necessarily limited to, information pertinent to rationale for the
method of procurement, selection of contract type, contractor
selection or rejection, and the basis for the cost or price.
Grantees must maintain a contract administration system that
insures that contractors perform in accordance with the terms, con-
ditions, and specifications of their contracts or purchase orders.
I1I-5
METHODS OF PROCUREMENT
There nre four methods of procurement which can be used by
grantees if authorized by locally adopted standards. (Also see
Exhibit III-A, Types of Procurement Methods.)
Small Purchase Procedures
Small Purchase Procedures can be used for procurements under
$10,000 and which require that price or rate quotations be obtained
from an adequate number of qualified sources. There quotations should
be clearly documented in the grantee's files.
Competitive Sealed Bids (Formal Advertising)
This method is appropriate where sealed bids are publicly
solicited and a firm-fixed-price contract (lump sum or unit price) is
awarded to the responsible bidder whose bid, conforming with all the
material terms and conditions of the invitation for bids, is lower in
price. In order for formal advertising to be feasible, appropriate
conditions must be present, including, as a minimum, the following:
a complete, adequate and realistic specification or purchase
description is available;
two or more responsible suppliers are willing and able to
compete effectively for the grantee's business; and
The procurement lends itself to a f jrm-f Ixed-price contract,
and selection of the successful bidder can appropriately be
made principally on the basis of price.
If formal advertising is issued for a procurement under a grant,
the following requirements apply:
a sufficient time prior to the date set for opening of bids,
bids must be solicited from an adequate number of known
suppliers. In addition, the invitation must be publicly
advertised;
III-6
•
— the invitation for bids, including specifications and
pertinent attachments, must clearly define the items or
services needed in order for the bidders to properly respond
to the invitation;
— all bids must be opened publicly at the time and place
stated in the invitation for bids;
— a firm-fixed-price contract award must be made by written
notice to that responsible bidder whose bid, conforming to
the invitation for bids, is lowest. Where specified in the
bidding documents, factors such as discounts, transportation
costs and life cycle costs must be considered in determining
which bid is lowest; and
— any or all bids may be rejected when there are sound docu-
mented business reasons that to do so would be in the best
interest of the program.
Competitive Negotiation
With this method of procurement, proposals are requested from a
number of sources and the Request for Proposal or quotation is
publicized, negotiations are normally conducted with more than one of
the sources submitting offers, and either a fixed-price or
cost-reimbursable type contract is awarded, as appropriate.
Competitive negotiation may be used if conditions are not appropriate
for the use of formal advertising. If competitive negotiation is used
for procurement under a grant, the following requirements apply:
— proposals must be solicited from an adequate number of
qualified sources to permit reasonable competition consis-
tent with the nature and requirements of the procurement.
The Request for Proposals must be publicized and reasonable
requests by other sources to compete must be honored to the
maximum extent practicable;
— the Request for Proposal must identify all significant
evaluation factors, including price or cost where required
and their relative importance;
III-7
— the grantee must have mechanisms for technical evaluation of
proposals received, for determinations of responsible
offerors for the purpose of written or oral discussions, and
for selection for contract award;
— award may be made by the responsible offeror whose proposal
will be most advantageous to the procuring party. Unsuc-
cessful offerors should be notified promptly; and
— grantees may utilize competitive negotiation procedures
for procurement of architectural or engineering professional
services, whereby competitors' qualifications are evaluated
and the most qualified competitor is selected, subject to
negotiation of fair and reasonable compensation.
Non-competitive (Sole Source)
This procurement method requires prior DOC approval if over
$10,000 and may be used when:
— the item or service is available from only one source;
— urgent public need will not allow for the delay caused by
advertising;
— although a number of bids were solicited, only one response
was received;
such contracts shall be made only with responsible contrac-
tors who possess the potential ability to perform success-
fully under the terms and conditions of a proposed procure-
ment. Consideration shall be given to such matters as
contractor integrity, record of past performance, financial
and other technical resources, or accessibility to other
necessary resources;
— procurement records or files shall provide at least
pertinent information Including justification for the use
of negotiation in lieu of advertising, contractor selection,
and the basis for the cost or price negotiated;
•
III-8
— a system for contract administration must be maintained by
the grantee to assure contractor conformance with terms,
conditions, and specifications of the contract or order, and
to assure adequate and timely follow up of all purchases;
or
— an engineering firm has already been selected on a prior
phase of a federally funded project and where CDBG funds
will be used in completing a pre-existing and continuing
project (e.g.. Environmental Protection Agency (EPA) or
Farmers Home Administration (FmHA) grants) .
CONTRACT PROVISIONS
The grantee must include, in addition to the provisions needed to
define a sound and complete agreement, the following provisions in all
contracts and subgrants. (Also see Exhibit III-B, Required Contract
Provisions.) Refer to the Requirements Notebook for copies of the
federal regulations referenced below. Refer to Chapters V, Civil
Rights; VI, Labor Standards; and VIII, Public Facilities Projects for
exhibits providing sample forms to use in complying with the
requirements discussed in this section.
contracts other than small purchases must contain such con-
tractual provisions or conditions which will allow for
administrative, contractural or legal remedies in instances
where contractors violate or breach contract terms, and
provide for appropriate sanctions and penalties;
all contracts in excess of $10,000 must contain provisions
for termination "for convenience" by grantee. Including when
and how termination may occur and the basis for settlement.
In addition, all contracts must describe conditions under
which the contract may be terminated for default as well as
conditions where the contract may be terminated because of
circumstances beyond the control of the contractor;
III-9
all contracts awarded by grantees and their contractors or
subgrantees having a value of more than $10,000 must contain
a provision requiring compliance with Executive Order 11246,
entitled "Equal Employment Opportunity", as amended by
Executive Order 11375, and as supplemented in Department of
Labor regulations (41 CFR Part 60);
all contracts and subgrants for construction or repair must
include a provision for compliance with the Copeland
"Anti-Kickback" Act (18 U.S.C. 874) as supplemented in
Department of Labor regulations (29 CFR Part 3). This act
provides for each contractor or subgrantee shall be
prohibited from inducing, by any means, any person employed
in the construction, completion, or repair of public work,
to give up any part of the compensation to which he is
otherwise entitled. The grantee must report all suspected
or reported violations to DOC;
all construction contracts awarded by grantees in excess of
$2,000 must include a provision for compliance with the
Davis-Bacon Act (40 U.S.C. 276a to a-7) as supplemented by
Department of Labor regulations (29 CFR Part 5). Under this
Act, contractors shall be required to pay wages to laborers
and mechanics at a rate not less than the minimum wages
specified in a wage determination made by the Secretary of
Labor. In addition, contractors shall be required to pay
wages not less often than once a week. Copies of the Act are
available upon request to the CDBG liaison;
the grantee must place a copy of the current prevailing wage
determination issued by the Department of Labor in each
solicitation and the award of a contract must be conditioned
upon acceptance of the wage determination. The grantee
must report all suspected or reported violations to DOC.
Contracts entered into for the rehabilitation of 7 or less
residential units within one structure are exempt from
compliance with the provision of the Davis-Bacon Act;
III-IO
where applicable, all contracts awarded by grantees in
excess of $2,000 for construction contracts which involve
the employment of mechanics or laborers must include a
provision for compliance with Sections 103 and 107 of the
Contract Work Hours and Safety Standards Act (40 U.S.C.
327-330) as supplemented by Department of Labor regulations
(29 CFR Part 5). Under Section 103 of the Act, each
contractor shall be required to compute the wages of every
mechanic and laborer on the basis of a standard work day of
eight hours and a standard work work of 40 hours. Work in
excess of the standards workday or work week is permissible
provided that the worker is compensated at a rate of not
less than one and one-half times the basic rate of pay for
all hours worked in excess of eight hours in any calendar
day or 40 hours in the work week. Section 107 of the Act is
applicable to construction work and provides that no laborer
or mechanic shall be required to work in surroundings or
under working conditions which are unsanitary, hazardous, or
dangerous to health and safety as determined under
construction, safety, and health standards promulgated by
the Secretary of Labor. These requirements do not apply to
the purchase of supplies or material or articles ordinarily
available on the open market;
all negotiated contracts except those of $10,000 or less
must include a provision that DOC, HUD, the comptroller
General of the United States, or any of their duly
authorized representatives, shall have access to any books,
documents, papers, and records of the contractor which are
directly pertinent to a specific grant program for the
purposes of making audit, examination, excerpts, and
transcriptions for three years after final payment of the
grantee and all pending matters are closed; and
contracts, subcontracts, and subgrants of amounts in excess
of $100,000 must contain a provision which requires
compliance with all applicable standards, orders, or
IIl-ll
requirements issued under Section 306 of the Clean Air Act
(42 U.S.C. 1857(h) or Section 508 of the Clean Water Act (33
U.S.C. 1368). Executive Order 11738, and Environmental
Protection Agency regulations (40 CFR Part 15), prohibit the
use of facilities included on the EPA list of Violating
Facilities. The provision shall require reporting of
violations to DOC and to the U.S. EPA Assistant Administrator
for Enforcement.
BIDDING DOCUMENTS
Design Requirements
Invitations for bids, requests for proposals, or specifications
shall be based upon a clear and accurate description of the technical
requirements for the material, product, or service to be procured.
An architect or engineer will normally prepare the technical bid
specifications. During the process of project design, the following
requirements will apply and must be included in the bidding documents
or project file;
— architect or engineer certification of compliance with the
"American Standard Specifications for Making Buildings and
Facilities Accessible to, and Useable by, the Physically
Handicapped," Number A- 117 . 1-Rl 97 1 , subject to exceptions
contained in 41 CFR 101-19.604;
— depending upon the nature of the project, the working
drawings may have to be approved by other State agencies,
i.e.. Department of Health and Environmental Sciences. Such
approvals must be on file at the local level;
— lead-based paint shall not be specified or used;
•
III-12
— all projects shall be designed to meet the thermal insul-
ation standards of the American Society of Heating, Refrig-
eration, and Air Conditioning Engineers, Inc., Standard
90-75;
all housing rehabilitation projects shall meet Section 8,
Housing Rehabilitation Minimum Standards and all other
Standards required; and
— improvements proposed in floodplains must be flood-proofed
and flood insurance purchased.
Equal Opportunity Requirements
In addition to the design requirements to be incorporated into
the bidding/contracting documents, the following additional require-
ments must be incorporated.
The grantee must develop procedures for securing and monitoring
contractor compliance with various federal equal opportunity
requirements. The applicable language must be included in the bid
specifications and contract documents; the contractor's eligibility
must be verified; required contractor documentation must be secured;
and contractor compliance must be monitored.
The grantee must include the following equal opportunity
provisions and contractor certifications in the bid documents:
— Contractor's Certification Regarding Equal Employment
Opportunity;
Contractor's Certification Regarding Section 3 and Segre-
gated Facilities;
Subcontractor's Certification Regarding Equal Employment
Opportunity;
— Subcontractor's Certification Regarding Section 3 and
Segregated Facilities;
III-13
E.O. 11246 clause (all seven paragraphs if above $10,000 or
first three paragraphs of Equal Opportunity provisions if
$10,000 or under);
When over $10,000, Notice of Requi reirent for Af f 1 rinative
Action to Ensure Equal Employment Opportunity (E.O. 11246);
When over $10,000 Standard Federal Equal Employment
Opportunity Construction Contract Specifications (E.O.
11246);
— Segregated Facilities clause;
Title VT clause;
Section 109; and
— Section 3, Housing and Urban Development Act of 1968.
The law provides that to the greatest extent feasible, training
and employment opportunities shall be made available to lower-income
residents of project areas and that contracts be awarded to small
businesses located within the project area or owned in substantial
part by project area residents.
Labor Standards and Requirements
The grantee must develop construction contracting procedures that
comply with all federal and State labor standards and compliance
procedures. The grantee must follow applicable wage rate decisions
from the U.S. Department of Labor. In addition, the grantee must
include labor standard provisions in the bid specifications and
contract documents, and monitor contractor compliance.
Procedures for obtaining wage rate decisions, labor standards
provisions, and required contractor certifications concerning the
Davis-Bacon Act are available from the CDBG liaison.
Required provisions include:
— Contractor's Certification Concerning Labor Standards and
Prevailing Wage Requirements;
III-14
— Subcontractor's Certification Concerning Labor Standards and
Prevailing Wage Requirements;
Davis-Bacon provisions for contracts of $2,000 or more;
— Contract Work Hours and Safety Standards Clause;
— Emplojonent of Apprentices/Trainees Clause;
Copeland Anti-Kickback Clause; and
— Applicable wage rate determinations.
Other Federal Requirements
In addition to the Labor Standards and Equal Employment
Opportunity provisions and documents previously discussed, the
following federal provisions must be included when applicable:
Bonding and Insurance Requirements Clause. (Federal bonding
requirements apply for contracts in excess of $100,000.
Smaller contracts must comply only with local bonding
requirements . ) ;
— Conflict of Interest;
Access Records/Maintenance of Records;
Clean Air/Water;
— Special Conditions pertaining to Hazards, Safety Standards
and Accident Prevention (including Lead-Based Paint Prohibi-
tion) ; and
Flood Insurance, if applicable.
REAL PROPERTY MANAGEMENT STANDARDS
This section prescribes standards governing the utilization and
disposition of real property acquired in whole or in part with CDBG
grant funds. Further information is contained in 0MB Circular 102,
Attachment N, which is included in the Requirements Notebook,
III-15
"Real property" is defined as land, including land improvements,
structures and appurtenances thereto, excluding movable machinery and
equipment. The grantee shall have title to real property subject to
the condition that the grantee shall use the real property for the
authorized purpose of the original grant as long as needed.
The grantee shall obtain approval from DOC for the use of the
real property in other projects when the grantee determines that the
property is no longer needed for the original grant purposes. Use in
other projects must be consistent with the provisions of Circular 102
Attachment N.
When the real property is no longer needed, the grantee shall
request disposition instructions from DOC. Income derived from the
sale or other disposition of property shall be considered as program
income, and as such is subject to requirements in Circular 102,
Attachment E.
III-16
Chapter III
EXHIBITS
III-A — Types of Procurement Methods
III-B — Required Contract Provisions
TII-17
»
EXHIBIT III-A
Types of Procurement Methods
PROCUREMENT
METHOD
DESCRIPTION
Small Purchases
Small purchases are made using purchase orders. Compe-
tition should be sought through oral or written price
quotations. The ceiling for small purchases should be
established by each State. Circular A-102 sets the
ceiling for small purchases at $10,000.
Formal
Advertising
Sealed bids are publicly solicited through formal adver-
tising. A firm fixed-price contract is awarded to the
responsible contractor whose bid is responsive and low-
est in price.
I
Competitive
Negotiation
Proposals are requested from qualified vendors or
through advertising. Negotiations are conducted with
those bidders who are within competitive range based
on an evaluation of bidders' pricing and technical
proposals. After negotiations, bidders may submit a
"best-and final" offer. A contract is awarded to the
bidder whose "best-and final" offer scores the most
points on a predetermined evaluation criteria.
Noncompetitive
Negotiation
Noncompetitive negotiation may be used under limited
circumstance. Please contact the CDBG liaison if
this option is being considered.
II 1-A-l
r
EXHIBIT III-B
REQUIRED CONTRACT PROVISIONS
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III- B-1
f
Chapter iv
Financial
Management
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CHAPTER IV
FINANCIAL MANAGEMENT
OVERVIEW
This chapter provides guidelines for the financial management of
CDBG funded activities. The purpose of the guidelines is to ensure
that the grantee maintains an accurate and complete financial manage-
ment system that complies with all applicable State and federal laws,
regulations, and procedures
Most of the recordkeeping and reporting requirements of CDBG are
consistent with the presently operating accounting systems of
Montana's local governments: the Budgetary, Accounting, and Reporting
System (BARS) for cities and counties, and the Town Accounting System
(TAS) for towns. The following discussion of financial management
procedures assumes grantees are familiar with the accounting and
reporting procedures and policies of these systems.
APPLICABLE LAWS
In addition to the Montana statutes that specifically outline the
financial management procedures cities, towns, and counties must
follow, CDBG grantees must also comply with specific federal require-
ments. These key federal regulations and requirements include the
objectives set forth in Office of Management and Budget (0MB)
Circulars A-102 and A-87, which are included in the Requirements
Notebook. In summary these requirements include:
— 0MB CIRCULAR A-102, ATTACHMENTS C, G, and H — RECORDKEEPING
Attachment C requires that the grantee maintain program records
for a period of three years following close-out of the CDBG activities
or until any liens, claims, or litigation related to the expenditure
of the funds are resolved. (Montana law. Sections 7-5-2132 and
7-5-4124, MCA provide guidance for record retention.)
IV- 1
Attachment C prescribes standards for financial management
svstems of grant-supported activities of local governments. Specif-
ically, grantee financial management systems must provide for:
— accurate, current and complete disclosure of the financial
results of each grant program. (This includes reporting on
an accrual basis when required) ;
— records that adequately identify the source and application
of funds for grant-supported activities;
— effective control and accountability for all funds, property,
and other assets purchased with grant funds;
— comparison of actual outlays with budgeted amounts for each
grant;
— procedures which minimize tlie time elapsing between the
transfer of funds from the U.S. Treasury (through the State)
and the disbursement by the grantee;
— procedures for determining reasonableness, allowability, and
allocability of costs in accordance with the provision of
0MB Circular A-87 (discussed later);
— accounting records that are supported by adequate source
documentation; and
— a systematic method to assure timely and appropriate resolu-
tion of audit findings and recommendations.
Attachment H prescribes uniform reporting procedures for grantees
to follow. Under the Montana CDBC. program, grantees are not required
to use an accrual system if they are presently operating under a cash
basis sj'Stem. However, the grantee must be prepared to develop
accrual data when State reporting requirements mandate inclusion of
all costs.
— 0MB CIRCULAR A- 102 ATTACHMENT E — PROGRAM INCOME
Attachment E outlines the standards set forth to account for
program income related to projects financed in whole or in part with
federal grant funds.
IV-2
As defined in Attachment E and the related sections of the CDBG
regulations at 24 CFR Part 570, the term "program income" includes,
but is not limited to, the following:
— proportional shares of proceeds of the sale of real pro-
perty, to the extent to which the original purchase was
funded with CDBG monies (e.g., if 50% of the original
purchase price of a house was paid for with CDBG funds, then
50% of the proceeds from the sale of that house becomes
program income) ;
— interest earned from investment or program income;
— proportional shares of special assessments, to the extent to
which the initial costs were paid with CDBG monies;
payments of principal and/or interest on loans made from
CDBG funds; and
— interest income earned on rehabilitation "escrow" accounts.
Also refer to CPD Notice 79-27 in the Requirements Notebook
for further guidance on the use of escrow accounts.
According to the provisions of the attachment, all program income
earned during the grant period must be retained by the grantee, and
added to funds committed to the project unless otherwise provided for
in the grant agreement. In addition, the attachment specifically
states that any interest earned on advances drawn from the U.S.
Treasury (including those drawn through the State) is not program
income and cannot be retained by the grantee.
~ 0MB CIRCULAR A- 102 ATTACHMENT L — GRANT CLOSE OUT PROCEDURES
Attachment L specifies uniform close-out procedures for grantees
and includes the following requirements:
— prompt processing of final drawdown requests of grants being
closed out;
— an immediate refund by the recipient of any funds
unobligated which may not be used on other CDBG grants;
IV-3
— the submission within 90 days of all required financial,
performance, and other reports required as a condition of
the grant;
— the submission of an accounting for al] property acquired
with CDBG funds; and
— retention by the State of the right to recover appropriate
amounts after considering recommendations on disallowed
costs resulting from n final audit.
— 0MB CIRCULAR A- 102, ATTACHMENT N — PROPERTY STANDARDS MANAGEMENT
This attachment prescribes uniform standards governing the
utilization and disposition of real, personal, and non-expendable
property acquired in whole or in part with federal funds, or whose
cost was charged to a project supported by a federal grant. The
attachment authorizes grantees to use their own property management
standards and procedures provided the provisions of the
attachment are included.
~ 0MB CIRCULAR A- 102 ATTACHMENT 0 — PROCUREMENT STANDARDS
Attachment 0 provides an overview of grantee procurement stan-
dards. Chapter III, Procurement Standards, provides an in-depth
discussion.
~ 0MB CIRCULAR A-102, ATTACHMENT P — AUDIT REOUTREMENTS .
Attachment P establishes audit requirements for state and local
governments that receive federal assistance. The requirements are
established "to ensure that audits are made on an organization-wide
basis, rather than on a grant-by-grant basis." A partial effect of
this Attachment is the requirement that CDBG dollars be audited
whenever the regular city or county audit is performed. The Audit
Bureau of the Local Government Services Division, Montana Department
of Commerce, can provide additional guidance for compliance to
Attachment D.
IV-4
— OMR CrRCULAR A-87 — COST PRINCIPLES FOR STATE AND LOCAL
COVF.RNMENTS
A-87 establishes the basic principles for determining whether
specific costs are allowable under CDBG, Any costs incurred or
expended by a grantee for n CDBG funded activity must:
— be necessary and reasonable for the proper and efficient
administration of the grant activities;
— be allocable to the grant;
— be authorized or not prohibited under State or local law;
and
— conform to any limitations or exclusions set forth in
federal laws and regulations.
— U.S. TREASURY CIRCULAR 1075 — REGULATIONS GOVERNING WITHDRAWAL OF
CASH FROM THE U.S. TREASURY FOR ADVANCES UNDER FEDERAL GRANTS AND
OTHER PROGRAMS
Treasury Circular 1075 requires that:
— "Cash advances to a recipient organization shall be limited
to the minimum amounts needed and shall be timed to be in
accord only with actual , immediate cash requirements of the
recipient organization in carrying out the purpose of the
approved program or project. The timing and amount of cash
advances shall be as close as is administratively feasible
to the actual disbursements by the recipient organization
for direct program costs and the proportionate share of any
allowable indirect costs;" and
— "Cash advances made by primary recipient organizations
(e.g., states) to secondary recipient organizations (e.g.,
localities) shall conform to the same standards of timing
and amount as apply to cash advances by federal program
agencies to primary recipient organizations."
IV-5
LOCAL GRANTEE RESPONSIBILITIES
Overview
Grantees have the responsibility for employing a fiscal organ-
ization and management system that assures proper and efficient
administration of the grant. The following three basic principles
should guide the development of such systems:
procedures for the financial administration of the grant
should be formalized so that they can be applied uniformly
and consistently;
procedures should be designed to ensure adequate internal
control of funds; and
financial transactions should be documented to create an
audit trail.
Typically, the majority of the State and federal financial
requirements are satisfied through the operatioTi of the grantee's
central accounting system, BARS or TAS. The Local Government Services
Division of DOC has prepared comparisons of BARS and TAS to an
acceptable CDBG accounting system. (These comparisons appear as
Exhibits A and B respectively.)
In the event a grantee is operating on a system other than BARS
or TAS, or if the grantee is uncomfortable with the additional
requirements of the CDBG Program, the grantee should immediately
contact the State CDBG liaison who will work with the grantee to
determine what steps are required to ensure that the grantee can
adequately handle the financial management requirements tied to the
grant award.
The following steps may be followed by grantees as a guide to the
establishment of the financial administration of the CDBG grant.
IV-6
Step 1 — Discuss Project with Local Fiscal Officer
The CDBG project manager and staff should meet with the grantee's
fiscal officer to discuss the division of responsibilities for the
program. Typically, the local CDBG staff will:
— review all expenditures through contracts, invoices, and/or
purchase orders;
— ensure proper coding of expenditures; and
— review and process requests for payments by contractors.
The local fiscal officer will typically:
— maintain records;
prepare financial reports; and
— prepare checks for approved expenditures.
The fiscal officer and local CDBG office should also outline the
internal controls necessary to eliminate the potential for fraud and
abuse of CDBG funds. A Fraud Information Bulletin is included in the
Requirements Notebook to illustrate some of the problems grantees may
encounter. The system of internal controls should meet the following
criteria :
— no single person should have complete control over every
phase of a significant transaction. For example, the person
who authorizes payments to contractors should not also sign
and issue the payment check;
— fiscal recordkeeping should be separate from other program
management operations;
— monthly bank reconciliations should be made by someone who
is not responsible for handling cash or issuing checks; and
— preparation of payrolls and issuance of paychecks should be
handled by different individuals.
IV-7
Step 2 — Establish Depository for Federnl Funds
To be In compliance with Treasury Circular 1075 and OMR Circular
A-102, Attachment E, grantees must either:
establish a non-interest bearing checking account to serve
as the depository for CDBG funds; or
establish a mechanism to record any interest earned on CDBG
advances and return this Interest to the U.S. Treasury.
The State encourages grantees to establish a non-interest bearing
account.
In addition to the cash receipts journal, the grantee must also
maintain a cash control register which summarizes the balance of grant
funds available, drawdowns from the State, funds received, disburse-
ments, and balance of cash on hand. This Information is needed in
preparing requests for payments from the State and is useful as a
monitoring tool for the grantee and the State in determining whether
cash draws have been kept to the minimum amount needed. (A sample
cash control register is provided as Exhibit TV-C.)
Step 3 — Establish CDBG Budget/Fund
Grantees should utilize the uniform account numbers set forth by
BARS or TAS for the establishment of the accounts necessary for the
recording of the CDBG funds. In order to distinguish CDBG funds from
all other local resources, grantees must establish a separate Special
Revenue account for CDBG assurances. For BARS communities, fund //2740
is suggested; for Towns, fund #274 may be assigned. Please refer to
Exhibits IV-A and IV-B for additional guidance.
In addition, Grantees must obtain budgetary authority to expend
CDBG dollars. Immediately following approval of the CDBG contract,
the governing body of the Grantee must by formal resolution adopt a
CDBG budget and appropriate the entire amount authorized in accordance
with the terms of the contract.
IV-8
Step 4 — Establish and Maintain Document Files and Records
The ease with which a CDBG project can be audited often depends
on the degree to which source documentation was maintained and filed.
Proper source documentation which provides the details of each finan-
cial transaction allows recreation of audit trails even in those
instances where summary records and reports may not have been comp-
leted properly. Examples of source documentation include: verific-
ation of deposits through the letter of credit, employee time and
attendance sheets, purchase orders, travel vouchers, invoices, and
contractor requests for payments. Typically, this material is
attached to the claim for payment.
Upon receipt and while processing each typo of source
documentation, the materials should be filed. A suggested set of
files would include:
— open purchase order file -- represents encumbrances on
program funds as the result of purchase orders that are
pending fulfillment by vendors;
— open contracts file — documentation of requests for pay-
ment. The grantee may include a summary sheet in the file
to determine the financial status of each open contract;
— pending payments file — documents such as approved invoices
which will result in a cash disbursement;
— pending billings file — copies of documents such as
requests for payment from the State which will result in a
cash receipt;
— personnel payroll file — copies of each employee's time and
attendance sheet and summaries for each payroll period
showing allocation of time to CDBG related activities and
rate of pay; and
— journal entrv voucher file — copies of vouchers for any
journal entries (e.g., transfer of funds) for which there is
no other source documentation. Each journal entry voucher
should contain explicit information about the transaction
and justification.
IV-9
Access to the source documentation files should be limited to
avoid arbitrary and unnecessary removal of documents. When a file of
documents is required, the file system should include a log that
specifies what was removed, by whom, when, and when it was returned.
The grantee should also be prepared to account for any property
acquired with CDBG funds, and to dispose of, at project close-out, any
property no longer needed.
Requesting Payment from the State
Following successful completion of the Environmental Review
Record and any other special grant conditions that may have been
imposed, the grantee may submit a request for payment from DOC. In
contrast to past years, beginning with the 1983 Program Year, the
State will obtain funds under the Letter of Credit — Treasury Finan-
cial Communications System (LOC-TFCS) . The LOC-TFCS is a funds
transfer system that provides for the electronic transfer of funds
between the U.S. Treasury and the State. Under this system, grantees
submit their payment requests directly to DOC. All requests received
by the close of business on Wednesday of each week are consolidated
and a single electronic transfer of funds is requested from the
Treasury Disbursing Office in San Francisco. Individual State war-
rants are then prepared and the requested amounts transmitted to
grantees. Based on past experience, the process takes approximately
ten to fourteen days to complete.
All request for payment packages must be submitted to the State
CDBG liaison for processing. The package must contain:
a federal Standard Form 183 - Request for Payment (Exhibit
IV-D) ;
— a Budget Summary Form (Exhibit IV-E) ; and
— a Project Progress Report (Exhibit IV-F) .
The request for pa^^inent package will not be processed if any of these
forms is omitted, incomplete, or contains errors.
IV-IO
Preparation of SF 183 must be consistent with the instructions
provided in Exhibit IV-D. Additionally, the form must contain two of
the three signatures authorized to draw funds (Sec Exhibit I-D in
Chapter T).
DOC will bo comparing the authorized signatures, depositary
account numbers, and mailing addresses submitted with the request for
payment package to that submitted on the Signature Certification
(Exhibit I-D) and the Designation of Depositary Card (Exhibit I-E) .
All information must match exactly. If there are any changes to
signatures, account numbers, or addresses, notify the CDBC liaison
immediately in order to avoid a delay in drawing funds.
The budget summary form (Exhibit IV-F) has been designed to allow
grantees to report detailed administrative and project expenditure one
request late. Primarily this is to accommodate those grantees who are
requesting cash advances but are uncertain of precisely where the
detail of the expenditure will be posted.
For the initial draw, the grantee need only complete the last
column "G - Amount Requested this Drawdown," and submit a project
progress report (Exhibit IV-G) containing a narrative description of
expected use of funds. However, subsequent draws must detail the
actual expenditures of the previous draw in the column," D - Amount
Expended Last Drawdown."
The project progress report must provide sufficient detail for
the CDBC liaison to gain a general understanding of the progress of
the project. A paragraph or two explaining the type of expenditures
anticipated and the progress made to date for both the administrative
and project portions of the grant should be sufficient.
A critical factor in requesting and expending federal funds is
the timing of receipt and disbursement of funds. Treasury Circular
1075 states, "Cash advances to a recipient organization shall be
limited to the minimum amounts needed and shall be timed to be in
IV- 11
accord only with actual, immediate cash requirements of the recipient
organization in carrying out the purpose of the approved program or
project. The time and amount of cash advances shall be as close as is
administratively feasible to the actual disbursements by the recipient
organization for direct program costs and the proportionate share of
any allowable indirect costs." In addition, grantees should attempt
to avoid submitting a new request until receiving funds for the
previous one.
The easiest way to meet this requirement is to request payment as
a reimbursement for funds expended or to cover costs associated with
pending contract payment requests, purchase orders, etc. However, the
cash position of many smaller local governments makes this impossible.
In these cases the grantee may request advance payment of anticipated
disbursement requirements. The requests should be no less than $5,000
except for the final request for payment. If a draw of less than
$5,000 is needed, please contact the CDBG liaison for guidance.
The grantee should continually monitor the Cash Control Register
(Exhibit IV-C) to determine whether estimates of anticipated costs are
accurate. At no time may more than $5,000 remain in the CDBG bank
account for a period exceeding three days.
SUMMARY
1. The grantee is responsible for employing a fiscal organization
and management system that assures proper and efficient adminis-
tration of the grant.
2. The following provides a checklist of the key federal require-
ments which must be adhered to for the financial administration
of CDBG funds:
— Financial Management and Recordkeeping
0MB Circular A-102, Attachments C, G. and H
IV-12
Cost Allowability
0MB Circular A-87, Attachments A and B
Bonding and Insurance
0MB Circular A- 102, Attachment B
— Program Income
0MB Circular A-102, Attachment E
Monitoring and Reporting
0MB Circular A-102, Attachment I
Grant Payment Procedures
Treasury Circular 1075
Grant Closeout
0MB Circular A-102, Attachment L
— Property Management Standards
0MB Circular A-102, Attachment N
— Procurement Standards
0MB Circular A-102, Attachment 0 (See Chapter III, Procure-
ment Standards)
Audit Standards
0MB Circular A-102, Attachment P (See Chapter XI, Grant
Closeout) .
3. Grantees must establish a non-interest bearing checking account
as the depository for federal funds, or develop an adequate
system to identify and return to the U.S. Treasury any interest
earned on federal deposits.
4. In addition to typical BARS or TAS accounting records, the
grantee must maintain a federal Cash Control Register to document
compliance with Treasury Circular 1075.
5. Each Request for Payment Package must include a completed:
— federal Standard Form 183;
Budget Summary Form; and
Proiect Progress Report.
IV- 13
m
CHAPTER IV
EXHIBITS
IV-A - Using BARS to Account for Community Development Block Grants
IV-B - Using the Tovm System to Account for Community Development
Block Grants
IV-C - Cash Control Register
IV-D - SF 183 - Request for Payment
IV-E - Budget Summary Form
IV-F - Project Progress Report
IV-14
•
Exhibit IV-A
USING BARS TO ACCOUNT FOR COMMUNITY
DEVELOPMENT BLOCK GRANTS
Prepared by:
Local Government Services Division
Montana Department of Commerce
IV-A-1
INTRQPVCTXON H^
With the receipt of federal monies for Community Development
Block Grant Programs comes increased responsibility to account for
the revenue and expenditure transactions linked with the programs.
The Office of Management and Budget Circular A-102, Attachment G and
the HUD Office of Community Planning and Development publication
entitled "Small Cities Block Grant Program - A Financial Management
Manual" describe accounting and reporting procedures for CDBG.
These procedures are provided for in the Budgetary, Accounting and
Reporting System (BARS) established and administered by the Montana
Department of Commerce, Local Government Services Division and used
by most Montana counties and cities. This discussion will explain
the interface between the requirements set forth in the 0MB and HUD
publications and BARS. ^^1
It should be noted at this time that there is no requirement to
change to a new account numbering structure nor is it necessary for
an entity administering a CDBG project to maintain a separate or
parallel accounting system in order to report the CDBG transactions.
The existing accounting structure including policies and procedures
should be followed. The procedures set forth in the HUD manual
should supplement but not replace those of BARS. This discussion is
then, a supplement to the accounting chapter in the HUD publication
and is intended for use by those entities accounting and reporting
under BARS.
?TANPARPg
The standards for CDBG accounting are outlined in the HUD
publication. Current standards (the National Council on ^P
IV-A-2
Governmental Accounting (NCGA) Statement 1 and Generally Accepted
Accounting Principles (GAAP)) upon which BARS is based or the
applicable Montana Laws either equal or exceed the CDBG standards as
outlined below.
CDBG BARS/Montana Law
1 , Retain records for a minimum of 1 . Cities retain certain records
three years.
2. Accounting records must make
it possible to identify all
sources and uses of fund.
Sound internal control pro-
cedures and effective control
to safeguard physical assets
must be maintained.
An audit is conducted at
least every two years.
five years (7-5-^124, MCA)
counties retain certain
records twenty-five years
(7-5-2132, MCA).
2. BARS requires that revenues
be classified by sources,
expenditures should be clas-
sified by fund, function
activity, sub-activity, and
classes of object.
3. Internal control is built
into the system through sepa-
ration of duties, fixed asset
inventories and General
Ledger controls over receiv-
ables and payables. Fund
accounting is also a basic
method of control.
4. Montana local governments
must be audited at least
every two years (2-7-503,
IV-A-3
Costs incurred in CDBG
activities are allowable
only under certain conditions.
MCA).
5. By definition, Special Reve-
nue funds in which CDBG
activities are recorded ac-
count for the proceeds of
specific revenue surces that
are legally restricted to
expenditures for specific
purposes. The allowable ex-
penditures are defined in the
grant agreement.
6. Revenue, expenditure and trial
balance reports are required
monthly. An annual report is
to be prepared within two
months of year end. Accrual
and encumbrance accounting
will be discussed later in
this report.
ACCOUNTING PROCEDURES
The intention of this discussion is not to provide a
step by step procedures manual with instructions on recording and
posting transactions. It is assumed that the users of this report
are on BARS and are familiar with the accounting and reporting
policies and procedures of the system.
A separate Special Revenue fund entitled "Community Development
Block Grant Fund" should be established in order to begin accounting
(•
6. Financial reports are to be
prepared in a timely manner
and reports to HUD or DOC are
to be on an accrual basis.
IV-A-4
for CDBG transactions. There currently is not a number in the BARS
Chart of Accounts for this purpose. It is suggested that Fund #2740
be used for this purpose. (If more than one CDBG fund exists, use
2741, 2742, etc.)
Once the fund is established, an appropriate general ledger
should be built. The following accounts are necessary:
10100
12200
13200
17100
17200
20100
20200
20400
20450
Cash
Accounts Receivable
Due from Block Grant Program
Estimated Revenues
Revenues
Warrants Payable (if Claims Fund is not
used)
Accounts Payable
Contracts Payable (if applicable)
Contracts Payable - Retained Percentage (if
applicable)
20620 Accrued Wages Payable
24100 Appropriations
24200 Expenditures
24300 Encumbrances
24400 Reserve for Encumbrances
27100 Fund Balance
The above is neither an exhaustive list nor will every entity
find it necessary to include all of the account numbers listed. An
effort should be made to maintain all of the accounts necessary to
provide the information for the BARS monthly reports and to meet
grant reporting requirements.
IV-A-5
The HUD manual requires that CDBG revenues be segregated by
source. It is especially important that any local contributions
(or matching portion) be recorded separately from State draws. The
following revenue source numbers are suggested for the revenue
received from State draws.
331030 Housing and Urban Development
or
331230 Community Development Block Grant
The manner in which any local contribution may be financed will
determine the revenue source number to be used. If, for example,
the local money is to come from another fund in the form of a
transfer, the number 383OIO - Transfers from Fund may be
used. (This transfer could possibly be made from the General,
Revenue Sharing or PILT funds for example.) In the event revenues
that may be used at the discretion of the local governing body are
deposited directly into the CDBG fund, use the revenue source number
for that particular revenue. Two of these discretionary revenues
are 334065 Severance Tax and 337014 Payments in Lieu of Taxes.
Depending on the purpose of the grant, there is probably
sufficient detail available in the existing expenditure accounts
and object numbers to provide an adequate description of CDBG
expenditures. Care should be taken when choosing expenditure
account numbers so that reporting requirements will be met. It may
be necessary for the administering entity to make use of more
detailed expenditure levels than it is accustomed to. If, for
example a grant is given to expand a sewer system, the following
expenditure accounts may be used :
430620 Facilities - to account for a new office or shop
IV-A-6
430630 Collection and Transmission - to account for cost of
sewer lines
430640 Treatment and Disposal - to account for cost of
sewage lagoons and treatment facilities
The object of expenditure used with the above expenditure
accounts should also include enough detail to enable reporting to be
done as required by the grantor.
ACCOUNTING RECORDS
The accounting records required for CDBG are essentially the
same as those required for BARS. Those records are listed and
discussed below. Two main types of records are included in the
discussion. Books of original entry are those records in which
various transactions are formally recorded for the first time, such
as the Cash Receipts Journal, Cash Disbursements Journal and the
General Journal Voucher. Where mechanized bookkeeping methods are
used, it may happen that one transaction is recorded simultaneously
in several records, one of which may be regarded as the book of
original entry. Books of final entry are the summary records in
which accounting information is accumulated for financial reporting
such as the General Ledger and the Fixed Asset Ledger. The
following is only a discussion of the required records already in
use by entities on BARS.
Casll Receipts Journal - all receipts for cash that are
deposited to a fund are recorded in this journal.
Cash Disbursement Journal or Journal of Treasurer's
Disbursements - all cash disbursements are recorded in this
journal. The method in which claims are processed will cause
the means by which expenditures are recorded to vary.
IV-A-7
Encumbrance accounting will be explained later in this
discussion.
General Journal Voucher - a voucher provided for the recording
of certain transactions or information in place of or
supplementary to the journals or registers. The General
Journal Voucher usually contains an entry or entries,
explanations, references to documentary evidence supporting the
entry or entries, and the signature or initials of one or more
properly authorized officials. General Journal Vouchers are
usually maintained in a file or loose leaf binder.
General Ledger - A book of final entry which contains the
accounts needed to reflect, in summary and in detail, the
financial position and the results of financial operations of a
governmental unit.
Fixed Asset Ledger - a listing or card-file inventory of all
fixed assets acquired using CDBG monies. Since under BARS,
fixed assets are not accounted for in Special Revenue Funds, it
will become necessary, at the end of the reporting period to
properly account for any property acquired under the CDBG
program to which the local government retains title. Any fixed
asets recorded in the ledger should meet all criteria
established in the local govermental unit's capitalization
policy. This is explained in more detail later in the
discussion.
State accounting records that should be maintained:
CDBG Federal Cash Control Register - This register, though not
IV-A-8
provided for in BARS, is used to summarize the status of
federal cash on hand. It will document and control the
following:
- requests for payments (drawdowns on the letter of credit);
- U.S. Treasury checks received;
- collections, refunds and miscellaneous receipts;
- disbursements; and
- balance of federal cash on hand.
Frequent review of this register will help determine whether an
entity is in compliance with the $5,000/3 day rule. This
register may also serve as a cross-check of certain general
ledger accounts.
gt-atePl?nt — Ol EXPgn«3itVtr9g aM Encumbrances Compared with
Appropriations - This report is required for BARS reporting
and is prepared monthly. Its purpose is to reflect the
unencumbered/unexpended balance of each budgeted account. This
statement is an important analytical tool for control of
expenditures. For instance, it is often used to determine
those expenditure categories which have incurred expenditures
larger than anticipated. This statement, then serves as a tool
for decision making by department heads or executives who
control a program.
?taWw$nt 2f Estimated and Actual Revenue - This report is
required for BARS reporting and is prepared for all budgetary
funds on a monthly basis. It is important that the
governmental unit recognize during the course of the year
whether revenues are being collected at a proper rate. A
IV-A-9
comparison of monthly revenues with past estimates will provide
a prompt notice that actual collections are falling behind
estimates. With this information, management can take the
appropriate steps to satify itself as to the reasons for the
lack of revenue, and if necessary, adjust the rate and/or
amount of expenditures.
Source Documents - The details of accounting transactions are
initially recorded on source documents. Source documents can
be either internally or externally generated. Information from
these documents is used to post to books of original entry.
These documents are filed by document numbers. These files
must be retained for a period of three years after program
close-out. Included among source documents are: purchase
orders; time cards; claims; travel vouchers; and general
journal vouchers.
Files - It is necessary to keep several open files on source
documents to facilitate control. Most entities keep files of
unpaid claims, employee payroll records, contracts and purchase
orders. Maintaining the open files will enable an entity to
accumulate information for year-end accruals. After source
documents have been processed, they should be transfered to
permanent files where they are filed numerically by document
type.
APPinONAL gQN?XPERATXQNS
Because its resources are authorized by a governing body and
destined for public purposes, the primary responsibility of local
government is to provide essential information and controls to
IV-A-10
assure the local governmental governing body, the local taxpayer,
and other governmental agencies that the local entity has carried
out executive and legislative intent. In addition, full disclosure
of the financial operations of the governmental unit is necessary.
Legal compliance with pertinent restrictions and information needs
mandate an accounting system that will adequately meet those
requirements. The following are additional considerations that will
enable an entity to meet CDBG accounting and reporting standards.
Recording the Budget - Though most entities do record their
adopted budgets in the revenue and expenditure subsidiary
ledgers, recognition of the budget is not given in the general
ledger. During the fiscal year actual revenue collections need
to be compared periodically with budgeted collections in order
to evaluate both actual performance and budgeting techniques.
Similarly, the actual expenditures need to be compared with
appropriations. Two basic requirements must be accomplished to
record the budget's provisions:
1) The total amount of expenditures authorized by the
legislative body must be recorded by a credit to
Appropriation i^2H^00.
2) The resources provided or contemplated by the legislative
body for financing the authorized expenditures must be
recorded by a debit to Estimated Revenues #17100.
Estimated Revenues and Appropriations are control accounts
supported by the subsidiary ledgers in which local government
entities have been recording their adopted budgets. At the
time the budget is adopted and recorded in the general ledger,
IV-A-11
it may be necessary to record any difference between Estimated
Revenues and Appropriations as an offset to Fund Balance. For
example, if an entity adopts a revenue budget totaling $57,000
and appropriations totaling $60,000, the following entry will
be used to record the budget in the CDBG Fund:
DR CR
2740-17100 Estimated Revenue $57,000
2740-27100 Fund Balance $ 3,000
2740-24100 Appropriations $60,000
Closing entries are made at year-end to reverse the above entry.
Encumbrance Accounting - To avoid exceeding the amount
authorized to be spent for goods and services, it is important
to maintain a record, not only of expenditures already
incurred, but also of commitments made against expenditure
accounts. Hiring employees, issuing purchase orders, or signing
contracts give rise to contingent liabilities which will become
actual liabilities when goods or services are received. In
order to keep track of purchase orders and contracts
outstanding it is recommended that an encumbrance system be
established. Since salaries and wages can definitely be
determined in advance, personal service costs are not
encumbered. If, for example, a purchase order is issued for
materials and supplies in the amount of $300,000, the following
entry illustrates the recording of the possible liability:
DR CR
2740-24300 Encumbrances $300,000
2740-24400 Reserve for $300,000
Encumbrances
As the materials are received and claims are paid, the
encumbrance is reversed and the expenditure recognized. In the
IV-A-12
event the claim amount differs from the amount encumbered, the
amount of the original encumbrance is reversed and the actual
expenditure is recognized. An illustration follows assuming
the claim for the above example is $297,000 (which is
immediately paid):
DR CR
2740-24^100 Reserve for $300,000
Encumbrances
2740-24300 Encumbrances $300,000
2740-24200 Expenditures $297,000
(and subsidiary
ledgers)
2740-10100 Cash $297,000
At year end, any balance remaining in the Encumbrance and
Reserve for Encumbrance accounts will be closed with reversing
entries. At this point, liabilities should be recognized for
any encumbrances that will actually be converted to claims
against the entity. Any other encumbrances may be
reappropriated for during the next year.
Year End Accrual - Generally accepted accounting principles for
governmental units require that expenditures should be
recognized in the accounting period in which the fund liability
is incurred. The accrual basis of accounting results in
accounting measurement based on the substance of transactions,
rather than when cash is received or disbursed, and thus
enhances the timeliness, completeness, and comparability of
financial statements. Many accrual entries are presently
handled on BARS through timely entries to various receivable
and payable accounts. These entries are made for revenue
recognition (i.e. taxes and utility charges) and for
IV-A-13
expenditures such as interest and principle on bonded or
contractual debt.
There are other transactions that require the use of accrual
entries, that could be handled on the system in a similar
manner, however, in the interest of time and efficiency these
accrual entries can be adequately handled through year-end
adjustments. Any goods and/or services received prior to close
of business at year-end that will not be paid until the
subsequent period incur a liability of the current period and
should be accrued to reflect the proper expenditure.
As an example, $2,500.00 worth of CDBG vendor invoices and/or
claims is received prior to June 30, 1932, for goods or
services received. The liability represented by these claims
or invoices should be accrued in the 1982 fiscal period as
follows:
DR CR
27M0-2H200 Expenditures $2,500
27^0-20200 Accounts Payable $2,500
(Remember that the appropriate subsidiary expenditure accounts
must also be posted.)
It is also necessary to accrue such items as utility bills and
payroll if these items are not paid for at year-end.
When the warrant is written, the accounts payable is then
liquidated:
DR CR
2740-20200 Accounts Payable $2,500
27110-20100 Warrants Payable $2,500
A similar process is followed when recognizing revenues through
accrual entries. An accounts receivable is established when
the revenue is recognized.
IV-A-14
DR CR
2740-12200 Accounts Receivable $5,000
27^0-17200 Revenue $5,000
(Remember to post to the appropriate subsidiary
revenue accounts.)
The accounts receivable is then liquidated when cash is
received.
DR / CR
27^0-10100 Cash $5,000
2740-12200 Accounts $5,000
Receivable
Purchasing - An effective purchasing system can achieve the
objective of economical and efficient use of available dollars.
A properly implemented purchasing system will, when tied to an
encumbrance system, help to account for the portion of the
budget that has been committed for goods and/or services. The
governing body should legislate a purchasing policy. This
policy will provide information to vendors, salesmen and
department heads as to their individual responsibilities and
methods to be followed when purchasing for the local
government. A purchasing policy should contain the following
elements:
A. Designating person(s) authorized to make purchases and to
determine that the item actually is required and, that it
is required in the quantity ordered.
B. Requiring use of the approved forms for purchasing such as
purchase requisitions, purchase orders, bid requests,
receiving reports, etc.
C. Requiring approval by the accounting department to indicate
that there is sufficient balance in the unencumbered
appropriation and that the expenditure is in accordance
IV-A-15
with the purpose of the appropriation.
D, Outline procedures for emergency and small item purchases
without prior approval.
E. Requiring competitive bids for purchases over a stated
amount as specified by local ordinances or state or federal
law.
Fixed Assets - Local government fixed assets are classified
into two basic categories according to usage:
a. Those related to the revenue-producing activity of an
Enterprise Fund, Internal Service Fund, or Trust Fund which
are directly recorded as assets of the using fund.
b. The General Fixed Assets not related to a specific service,
from which revenue is obtained, are recorded in the General
Fixed Assets Account Group.
As a CDBG Fund is closed, or at year end, those fixed assets
which are retained by the local government should be recorded
according to the above guidelines. Each asset should be
recorded in the subsidiary asset inventory cards following the
criteria established by the local capitalization policy. The
contribution by the CDBG Fund should be noted on the inventory
cards and recognized on the General Ledger. If the asset is to
be recorded in the General Fixed Asset Account Group, the
following entry is made using the acquisition of a piece of
equipment for example:
DR DR
9000-18600 Machinery & Equipment $15,000
9000-28510 Investment in General
Fixed Assets -
CDBG Funds $15,000
IV-A-16
Should the asset be recorded in an Enterprise Fund as would be
water improvements, the following entry is made which
recognizes the CDBG contribution:
5210-189^0 Transmission & Distribution $150,000
5210-26110 Contribution from CDBG
Grant $150,000
Care should be taken to off-set any depreciation expense
related to Enterprise Fund contributed assets against the
contribution accounts.
IV-A-17
Exhibit IV-B
USING TAS TO ACCOUNT FOR COMMUNITY
DEVELOPMENT BLOCK GRANTS
Prepared by:
Local Government Services Division
Montana Department of Commerce
9
iv-n-i
INTRODUCTION
With the receipt of federal monies for Community Development
Block Grant Programs comes increased responsibility to account for
the revenue and expenditure transactions linked with the programs.
The Office of Management and Budget Circular A-102, Attachment G and
the HUD Office of Community Planning and Development publication
entitled "Small Cities Block Grant Program - A Financial Management
Manual" describe accounting and reporting procedures for CDBG. Some
of these procedures are not provided for in the Uniform Accounting
and Reporting System for Incorporated Towns established and
administered by the Montana Department of Commerce, Local Government
Services Division and used by most Montana towns. This discussion
will explain the interface between the requirements set forth in
the 0MB and HUD publications and the Town System and provide
necessary changes for the Town System to comply with the federal
requirements.
It should be noted at this time that there is no requirement to
change to a new account numbering structure nor is it necessary for
an entity administering a CDBG project to maintain a separate or
parallel accounting system in order to report the CDBG transactions.
The existing accounting structure including policies and procedures
should be followed. The procedures set forth in the HUD manual
should supplement but not replace those of the Town System. This
discussion is then, a supplement to the accounting chapter in the
HUD publication and is intended for use by those entities accounting
and reporting under the Town System.
IV-B-2
The standards for CDBG accounting are outlined in the HUD
publication. Standards upon which the Town System is based or the
applicable Montana Laws either equal or exceed the CDBG standards as
outlined below.
gPBG Town System/Montana Law
1 . Retain records for a minimum of 1 . Towns retain certain records
three years. five years (7-5-^124, MCA).
2. Accounting records must make 2. The Town System requires that
it possible to identify all
sources and uses of funds.
3. Sound internal control pro-
cedures and effective control
to safeguard physical assets
must be maintained.
4. An audit is conducted at
least every two years.
5. Costs incurred in CDBG
activities are allowable
only under certain conditions.
revenues be classified by
sources, expenditures should
be classified by functional
purpose and classes of object.
3. Internal control is built into
the system through separation
of duties, fixed asset
inventories and General Ledger
controls over receivables and
payables. Fund accounting is
also a basic method of control.
4. Montana local governments
must be audited at least
every two years (2-7-503, MCA) .
5. By definition. Special Revenue
funds in which CDBG activities
are recorded account for the
proceeds of specific revenue
sources that are legally
IV-B-3
6. Financial reports are to be
prepared in a timely manner
and reports to DOC are to be
on an accrual basis.
restricted to expenditures for
specific purposes. The
allowable expenditures are
defined in the grant agreement.
6. Revenue, expenditure and trial
balance reports are required
monthly. An annual report
is to be prepared within two
months of year end. Accrual
and encumbrance accounting
will be discussed later in
this report.
The intention of this discussion is not to provide a step by
step procedures manual with instructions on recording and posting
transactions. It is assumed that the users of this report are on
the Town System and are familiar with the accounting and reporting
policies and procedures of the system.
A separate Special Revenue fund entitled "Community Development
Block Grant Fund" should be established in order to begin accounting
for CDBG transactions. There currently is not a number in the Town
System Chart of Accounts for this purpose. It is suggested that
Fund #27U be used for this purpose. (If more than one CDBG fund
exists, use 274.1, 274.2, 274.3)
Once the fund is established, an appropriate general ledger
should be built. The following accounts are necessary:
101 Cash
IV-B-4
122 Accounts Receivable
132 Due from Block Grant Program
171 Estimated Revenues
202 Accounts Payable
204 Contracts Payable (if applicable)
204.5 Contracts Payable - Retained Percentage
(if applicable)
206.2 Accrued Wages Payable
241 Appropriations
243 Encumbrances
244 Reserve for Encumbrances
271 Fund Balance
3 Revenue Accounts
4 Expenditure Accounts
The above is neither an exhaustive list nor will every entity
find it necessary to include all of the account numbers listed. An
effort should be made to maintain all of the accounts necessary to
provide the information for the Town System monthly reports and to
meet grant reporting requirements.
The HUD manual requires that CDBG revenues be segregated by
source. It is especially important that any local contributions
(or matching portion) be recorded separately from State draws. The
following revenue source numbers are suggested for revenue received
from State draws:
331.3 Housing and Urban Development
or
331.23 Community Development Block Grant
The manner in which any local contribution may be financed will
IV-B-5
determine the revenue source number to be used. If, for example,
the local money is to come from another fund in the form of a
transfer, the number 383 - Transfers from Fund may be used.
(This transfer could possibly be made from the General fund or
Revenue Sharing fund for example.) In the event revenues that may be
used at the discretion of the local governing body are deposited
directly into the CDBG fund, use the revenue source number for that
particular revenue. Two of these discretionary revenues are 33^.65
Severance Tax and 332.1 Federal Revenue Sharing.
Depending on the purpose of the grant, there is probably
sufficient detail available in the existing expenditure accounts
and object numbers to provide an adequate description of CDBG
expenditures. Care should be taken when choosing expenditure
account numbers so that reporting requirements will be met. It may
be necessary for the administering entity to make use of more
detailed expenditure levels than it is accustomed to. If, for
example a grant is given to expand a sewer system, the following
expenditure accounts may be used:
^30.62 Facilities - to account for a new office or shop
430.63 Collection and Transmission - to account for cost
of sewer lines
430.64 Treatment and Disposal - to account for cost
of sewage lagoons and treatment facilities
The objects of expenditure used with the above expenditure
accounts should also include enough detail to enable reporting to be
done as required by the grantor.
ACCOUNTING RECORDS
The accounting records required for CDBG are essentially the
IV-B-6
same as those required for the Town System. Those records are
listed and discussed below. Two main types of records are included
in the discussion. Books of original entry are those records in
which various transactions are formally recorded for the first time,
such as the Cash Receipts Register, Cash Disbursements Register
and the General Journal Voucher. Where mechanized bookkeeping
methods are used, it may happen that one transaction is recorded
simultaneously in several records, one of which may be regarded as
the book of original entry. Books of final entry are the summary
records in which accounting information is accumulated for financial
reporting such as the General Ledger and the Fixed Asset Ledger.
The following is only a discussion of the required records already
in use by entities on the Town System.
Cash Receipts Register - all receipts for cash that are
deposited to a fund are recorded in this journal.
£ash Disbursement Register or Journal of Treasurer's
Disbursements - all cash disbursements are recorded in this
journal. The method in which claims are processed will cause
the means by which expenditures are recorded to vary.
Encumbrance accounting will be explained later in this
discussion.
General Journal Voucher - a voucher provided for the recording
of certain transactions or information in place of or
supplementary to the journals or registers. The General
Journal Voucher usually contains an entry or entries,
explanations, references to documentary evidence supporting the
entry or entries, and the signature or initials of one or more
IV-B-7
properly authorized officials. General Journal Vouchers are
usually maintained in a file or loose leaf binder.
General Ledger - A book of final entry which contains the
accounts needed to reflect, in summary and in detail, the
financial position and the results of financial operations of a
governmental unit.
Fixed Asset Ledger - a listing or card-file inventory of all
fixed assets acquired using CDBG monies. Since under the Town
System, fixed assets are not accounted for in Special Revenue
Funds, it will become necessary, at the end of the reporting
period to properly account for any property acquired under the
CDBG program to which the local government retains title. Any
fixed assets recorded in the ledger should meet all criteria
established in the local govermental unit's capitalization
policy. This is explained in more detail later in the
discussion.
ADDITIONAL ACCOUNTING RECORDS
Among accounting records that should be maintained to enhance
or facilitate CDBG reporting are:
CDBG Federal Cash Control Register - This register, though not
provided for in the Town System, is used to summarize the
status of federal cash on hand. It will document and control
the following:
- requests for payments (drawdowns on the letter of credit);
- U.S. Treasury checks received;
- collections, refunds and miscellaneous receipts;
- disbursements; and
- balance of federal cash on hand.
Frequent review of this register will help determine whether an
IV-B-8
entity is in compliance with the $5,000/3 day rule. This
register will also serve as a cross-check of certain general
ledger accounts.
Statement of Expenditures and EnQMrnbranggg — CPfflPargd — Vlih
Appropriations - This report is required for the Town System
reporting and is prepared monthly. Its purpose is to reflect
the unencumbered/unexpended balance of each budgeted account.
This statement is an important analytical tool for control of
expenditures. For instance, it is often used to determine
those expenditure categories which have incurred expenditures
larger than anticipated. This statement, then serves as a tool
for decision making by department heads or executives who
control a program.
Statement of Estimated and AgtUfll RgYgnu? - This report is
required for the Town System reporting and is prepared for all
budgetary funds on a monthly basis. It is important that the
governmental unit recognize during the course of the year
whether revenues are being collected at a proper rate. A
comparison of monthly revenues with past estimates will provide
a prompt notice that actual collections are falling behind
estimates. With this information, management can take the
appropriate steps to satisfy itself as to the reasons for the
lack of revenue, and if necessary, adjust the rate and/or
amount of expenditures.
Source Documents - The details of accounting transactions are
initially recorded on source documents. Source documents can
be either internally or externally generated. Information from
IV-B-9
these documents is used to post to books of original entry.
These documents are filed by document numbers. These files
must be retained for a period of three years after program
close-out. Included among source documents are: purchase
orders; time cards; claims; travel vouchers; and general
journal vouchers.
Files - It is necessary to keep several open files on source
documents to facilitate control. Most entities keep files of
unpaid claims, employee payroll records, contracts and purchase
orders. Maintaining the open files will enable an entity to
accumulate information for year-end accruals. After source
documents have been processed, they should be transferred to
permanent files where they are filed numerically by document
type.
ADDITIONAL CONSIDERATIONS
Because its resources are authorized by a governing body and
destined for public purposes, the primary responsibility of local
government is to provide essential information and controls to
assure the local governmental governing body, the local taxpayer,
and other governmental agencies that the local entity has carried
out executive and legislative intent. In addition, full disclosure
of the financicil operations of the governmental unit is necessary.
Legal compliance with pertinent restrictions and information needs
mandate an accounting system that will adequately meet those
requirements. The following are additional considerations that will
enable an entity to meet CDBG accounting and reporting standards.
Recording the Budget - Though most entities do record their
IV-B-10
adopted budgets in the revenue and expenditure subsidiary
ledgers, recognition of the budget is not given in the general
ledger. During the fiscal year actual revenue collections need
to be compared periodically with budgeted collections in order
to evaluate both actual performance and budgeting techniques.
Similarly, the actual expenditures need to be compared with
appropriations. Two basic requirements must be accomplished to
record the budget's provisions:
1 ) The total amount of expenditures authorized by the
legislative body must be recorded by a credit to
Appropriations #241 .
2) The resources provided or contemplated by the legislative
body for financing the authorized expenditures must be
recorded by a debit to Estimated Revenues #171.
Estimated Revenues and Appropriations are control accounts
supported by the subsidiary ledgers in which local government
entities have been recording their adopted budgets. At the
time the budget is adopted and recorded in the general ledger,
it may be necessary to record any difference between Estimated
Revenues and Appropriations by an offset to Fund Balance. For
example, if an entity adopts a revenue budget totaling $60,000
and appropriations totaling $57,000, the following entry will
be used to record the budget in the CDBG Fund:
DR CR
274-117 Estimated Revenue $60,000
274-271 Fund Balance $ 3,000
274-041 Appropriations $57,000
Closing entries are made at year-end to reverse the above entry.
Encumbrance Accounting - To avoid exceeding the amount
IV-B-11
authorized to be spent for goods and services, it is important
to maintain a record, not only of expenditures already
incurred, but also of commitments made against expenditure
accounts. Hiring employees, issuing purchase orders, or signing
contracts give rise to contingent liabilities which will become
actual liabilities when goods or services are received. In
order to keep track of purchase orders and contracts
outstanding it is recommended that an encumbrance system be
established. Since salaries and wages can definitely be
determined in advance, personal service costs are not
encumbered. If, for example, a purchase order is issued for
materials and supplies in the amount of $300,000, the following
entry illustrates the recording of the possible liability:
DR CR
274-243 Encumbrances $300,000
274-244 Reserve for $300,000
Encumbrances
As the materials are received and claims are paid, the
encumbrance is reversed and the expenditure recognized. In the
event the claim amount differs from the amount encumbered, the
amount of the original encumbrance is reversed and the actual
expenditure is recognized. An illustration follows assuming
the claim for the above example is $297,000 (which is
immediately paid):
CR
DR
274-244
Reserve for
Encumbrances
$300,000
274-243
Encumbrances
274-4—
(Expenditure
Account)
$297,000
IV-B-
-12
$300,000
27^4-101 Cash $297,000
At year end, any balance remaining in the Encumbrance and
Reserve for Encumbrance accounts will be closed with reversing
entries. At this point, liabilities should be recognized for
any encumbrances that will actually be converted to claims
against the entity. Any other encumbrances may be
reappropriated for during the next year.
Year End Accrual - Generally accepted accounting principles for
governmental units require that expenditures should be
recognized in the accounting period in which the fund liability
is incurred. The accrual basis of accounting results in
accounting measurement based on the substance of transactions,
rather than when cash is received or disbursed, and thus
enhances the timeliness, completeness, and comparability of
financial statements. Many accrual entries are presently
handled on the Town System through timely entries to various
receivable and payable accounts. These entries are made for
revenue recognition (i.e. taxes and utility charges) and for
expenditures such as interest and principal on bonded or
contractual debt.
There are other transactions that require the use of accrual
entries, that could be handled on the system in a similar
manner, however, in the interest of time and efficiency these
accrual entries can be adequately handled through year-end
adjustments. Any goods and/or services received prior to close
of business at year-end that will not be paid until the
subsequent period incur a liability of the current period and
IV-B-13
should be accrued to reflect the proper expenditure.
As an example, $2,500.00 worth of CDBG vendor invoices and/or
claims is received prior to June 30, 1982, for goods or
services received. The liability represented by these claims
or invoices should be accrued in the 1 982 fiscal period as
follows:
DR CR
274-U~ (Expenditure Account) $2,500
27H- 202 Accounts Payable $2,500
(Remember that the appropriate subsidiary expenditure accounts
must also be posted.)
It is also necessary to accrue such items as utility bills and
payroll if these items are not paid for at year-end.
When the warrant is written, the accounts payable is then
liquidated:
DR CR
271-202 Accounts Payable $2,500
27^-101 Cash $2,500
A similar process is followed when recognizing revenues through
accrual entries. An accounts receivable is established when
the revenue is recognized.
DR CR
27^-122 Accounts Receivable $5,000
274 (Revenue Accont) $5,000
The accounts receivable is then liquidated when cash is
received.
DR CR
274-101 Cash $5,000
27M-I22 Accounts Receivable $5,000
Purchasing - An effective purchasing system can achieve the
objective of economical and efficient use of available dollars.
A properly implemented purchasing system will, when tied to an
IV-B-14
encumbrance system, help to account for the portion of the
budget that has been committed for goods and/or services. The
governing body should legislate a purchasing policy. This
policy will provide Information to vendors, salesmen and
department heads as to their individual responsibilities and
methods to be followed when purchasing for the local
government. A purchasing policy should contain the following
elements :
A. Designating person(s) authorized to make purchases and to
determine that the item actually is required and, that it
is required in the quantity ordered.
B. Requiring use of the approved forms for purchasing such as
purchase requisitions, purchase orders, bid requests,
receiving reports, etc.
C. Requiring approval by the accounting department to indicate
that there is sufficient balance in the unencumbered
appropriation and that the expenditure is in accordance
with the purpose of the appropriation.
D. Outline procedures for emergency and small item purchases
without prior approval.
E. Requiring competitive bids for purchases over a stated
amount as specified by local ordinances or state or federal
law.
Fixed Assets - Local government fixed assets are classified
into two basic categories according to usage:
A. Those related to the revenue-producing activity of an
Enterprise Fund, Internal Service Fund, or Trust Fund which
IV-B-15
are directly recorded as assets of the using fund.
B. The General Fixed Assets not related to a specific service,
from which revenue is obtained, are recorded in the General
Fixed Assets Account Group.
As a CDBG Fund is closed, or at year end, those fixed assets in
which title remains with the local government should be
recorded according to the above guidelines. Each asset should
be recorded in the subsidiary asset inventory cards following
the criteria established by the local capitalization policy.
The contribution by the CDBG Fund should be noted on the
inventory cards and recognized on the General Ledger. If the
asset is to be recorded in the General Fixed Asset Account
Group, the following entry is made using the acquisition of a
piece of equipment for example:
DR CR
950-186 Machinery & Equipment $15,000
950-285-1 Investment in General
Fixed Assets - CDBG Funds $15,000
Should the asset be recorded in an Enterprise Fund as would be
water improvements, the following entry is made which
recognizes the CDBG contribution:
510-189.4 Transmission & Distribution $150,000
510-261.1 Contribution from CDBG
Grant $150,000
Care should be taken to off-set any depreciation expense
related to Enterprise Fund contributed assets against the
contribution accounts.
#
IV-B-16
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IV-C-2
SF 183-REQUEST FOR PAYMENT
REQUEST FOR PAYMENT ON LETTER OF CREDIT
AND
STATUS 0» FUNDS REPORT
SECTION I— REQUEST FOR PAYMENT
blAriON SYMBOL | LCnCR OF CNCOir NUMBER I DOCUMENT NUMBER I AMOUNT HIQUESTED
(I) I (?) I (3) ' (4)
kOORtSb or us AGtNCY NAME AND AOOHlS^ Ul UNAWt N PAIO BY //■..»..' j- f'.- < '-.(,
(5)
(7)
(6)
MAKE TREASURV CHECK PAYABLE TO
(8)
VOUCHER APPfiOVEO rTaaaurv Vn Onit)
CHECK NUMBER (TrtasHrv I/m Onl^t
SECTION Jl— STATUS OF^EDERAL FUNJ« (Miwf Be Completed By nrawer)
ESTI-
ITEMS
FEDERAL KUNDS UN HAND ,llij,«<in>ij ..f t-,hnil
ADO ADVANCES RECEIVED. HSCAL YEAR TO DATE
ADD COLLECTIONS. REFUNDS. AND/OR MISCELLANEOUS RECEIPTS
SubloUl
LESS ACTUAL DISBURSEMENTS FISCAL YLAR TO DATE
6. FEDERAL FUNDS ON HAND AT TIME OF THIS REQUEST
ADD AMOUNT OF THIS REQUEST FOR PAYMENT
ADD UNPAID REQUESTS FOR PAYMENT PREVIOUSLY SUBMITTED
MATED
NO. OF
DAYS
TOTAL ■
OUTSTANDING ADVANCES TO SUB-GRANTEES — NUMBER
ay;: 7":
-.oti :_
C7a)---
(S>
-Ca)
TrtoMUTV Um Only
SECTION IIA— REMARKS (Drawers Um)
SECTION III— CLASSIFICATION OF THE AMOUNT OF THIS REQUEST (Mutt Be Completed By Drawer)
NT NO OR OTHER
IDENTIFYING NO.
Admi list. rat ion
Project
ii]
TOTAL (IHuKt Ayr
III// AiiiounI af thin /v't'i/utmr /or I'aymmt)
CO
SECTION IV— CERTIFICATION (Mu»t II, CompUl^d lly Ihuw.r)
I •'iTtiry Ihut IhU U>'<|lli'-<l r<'r I'iiviikui Inix Ih. li ilrilvMi In .iro'nliiiuv tvllli llu' Iiitiin iiiiiI i'iiiiiUIIoiik iif lli<' Li'llii •■!
Credit ciU'd ami that the umounl fur wlii.l. .Iruwn is pruix-r f.ir |.u) in.nt to th.' (Iruvi..r or for <re,lit to thu uicouiU of Ih.- .Irun.-r
at the drawer's bank. I also certify that the data re|...ncd aliove i» iorr.-,l and that Ihe umounl of the Request for I'aym. nl u i.ol
in excess uf current needs.
COUNTERSIGN
OniCINAL— Dr^
will foiwurj this copy to Tn
TV-D-]
#
EXHIBIT IV-D
INSTRUCTIONS - SF 183
Section 1 - Request for Funds
1. AGENCY STATION SYMBOL. Leave Blank.
2. LETTER OF CREDIT NUMBER. Enter 86-00-0007.
3. DOCUMENT NUMBER. Number consecutively beginning with "1".
4. AMOUNT REQUESTED. Must be the snme as Line 7 of Section II and
total of Section III.
5. NAME AND ADDRESS OF ISSUING AGENCY. Enter "U.S. Department of
Housing and Urban Development /Montana Department of Commerce.
6. NAME AND ADDRESS OF DRAWER. Enter grantee's mailing address
exactly the same as shown on the Designation of Depositary Card.
7. NAME AND ADDRESS OF TREASURY DISBURSING OFFICE. Leave Blank.
8. MAKE CHECK PAYABLE TO. Must be exactly the same as on the
Designation of Depositary Card.
Section II - Status of Funds
1. FEDERAL FUNDS ON HAND. Enter the amount of dollars on hand at
the beginning of the project (for most projects this will be
ZERO.)
2. ADD: ADVANCES RECEIVED. Enter the amount of CDBG funds (cash)
received to date.
3. ADD: COLLECTIONS, REFUNDS, AND/OR MISCELLANEOUS RECEIPTS. Enter
any program income or miscellaneous revenue received.
4. SUBTOTAL.
5. LESS ACTUAL DISBURSEMENTS, FISCAL YEAR TO DATE. Subtract the
amount of funds (cash)) expended to date on CDBG projects.
6a. FEDERAL FUNDS ON HAND. Enter the cash balance in the CDBG
federal depositary. (Line 4 minus Line 5.)
6b. ESTIMATED NO. OF DAYS SUPPLY. Give the estimated number of days
it will take to disburse the federal funds on hand.
7a. AMOUNT OF THIS REQUEST. Enter the amount of funds requested.
7b. ESTIMATED NO. OF DAYS SUPPLY. Estimated number of days it will
take to disburse funds requested on this draw.
IV-D-2
8. ADD: UNPAID REQUESTS FOR PAYMENTS PREVIOUSLY SUBMITTED.
9. TOTAL.
10. OUTSTANDING ADVANCES TO SUBGRANTEES. Leave Blank.
Section Ila — Remarks
Leave Blank. This section is reserved for counter-signatures by
DOC officials.
Section III - Classification
1. Enter the amount of cash requested this draw for administrative
expenditures.
2. Enter the amount of cash requested this draw for project expendi-
tures .
3. Enter the total amount of cash requested this draw. (Must agree
with Section I, Line 4, and Section II, Line 7.)
Section IV - Certification
Two of the three authorized signatures from the grantee are
required, along with date signed and titles of the officials. These
must be exactly as shown on the Signature Certification form.
•
IV-D-3
EXHIBIT IV-E
BlJreET SlIMMAKY rORM
A
Line #
1.
B
Line Items
As Shown In
Contract Budget
ADMINrSTKATTON
C
Amount
Budgeted In
CDBG Contract
<^
V
D
Arrount
Expended
Last Drawdown
$
E
Total
Expended
To Date
E
Funds
Remaining
c'-
G
Amount
Requested
This Drawdown
3 .
H.
[>,
I..
v.
H.
n
9.
in.
11.
12.
i:-!.
TOTAL ADMINIS-
IWVTION
$
6
$
$
$
lU.
Percent
0,
MM
5
;';
^^V
:r..
PROJECT
(■;
r^
^H
jn.
^^^^^^^^B
17.
^^^^^^^^H
IR.
^^^^^^^^1
19.
^^^^^^^^1
?0.
^^l^^^^^l
?1.
TOTAL PROJECT
$
$
6
V
$
$
22.
Percent
0.
^^^■1
%
HMB^^^B'
23.
TOTAL PROGRAM
$
6
6
V
$
$
2i|.
Cash On I kind
(All ;;oiirc;es )
,^
r-.
25.
Requests Pre-
viously Submitted
^^H
^H
$
26.
TOTAL
1^
V
$
$
v-i;-i
EXHIBIT IV-F
PROJECT PROGRESS REPORT
NAME:
GRANT /CONTRACT NO.:
DRAW NO.:
TOTAL $
Administration: Amount requested $
(Include a brief explanation of the administrative tasks undertaken to
date. This might Include discussions of: salaries or wages incurred
to date, administrative contract expenses incurred or anticipated,
and/or other related administrative expenses.)
Project : Amount requested $
(Include a brief discussion of progress associated with project
activities. This might include a discussion of: the activities
currently under construction, the amount of work completed to date,
and the problems or difficulties encountered.)
IV-F-1
Chapter v
Civil Rights
m
CHAPTER V
CIVIL RIGHTS
OVERVIEW
The civil rights requirements associated with CDBG funding are
intended to ensure equal opportunity for minorities. In general,
these laws have the basic purpose of protecting specific groups and/or
individuals from discrimination on the basis of:
— race;
national origin;
— religion;
color;
— sex;
age;
physical or mental handicap;
— marital status; and
— political ideas.
Identified groups included under these categories include:
minorities (i.e., Blacks, Hispanics, Asians and Pacific
Islanders, American Indians, and Alaskan Natives);
— women;
groups distinguished by age (e.g., elderly, teenagers);
and
handicapped persons (having mental and/or physical
handicaps) .
For purposes of the CDBG program these groups are protected against
discrimination in the following areas:
V-1
housing;
benefits resulting from activities funded in full or in
part by CDBG dollars;
— employment; and
— business opportunities.
APPLICABLE LAWS, REQUIREMENTS AND POLICIES
Civil rights compliance and monitoring responsibilities are
contained in the following listing of federal laws, executive orders,
regulations and policies. Copies of the following federal
requirements are included in the Requirements Notebook along with
other applicable civil rights requirements which grantees must comply
with.
— TITLE VI OF THE CIVIL RIGHTS ACT OF 1964
Objective — to ensure that no person is excluded from participation
in, denied the benefit of, or subjected to discrimination under any
program or activity receiving federal financial assistance on the
basis of race, color, or national origin.
Relevant Features — The purpose of this Title is to withhold federal
funds from grantees undertaking discriminatory practices.
— TITLE VIII OF THE CIVIL RIGHTS ACT OF 1968, AS AMENDED
Objective — to provide for fair housing within constitutional
limitations. Prohibits discrimination in the sale or rental of units
in the private housing market against any person on the basis of race,
color, religion, sex or national origin.
Relevant Features — Requires that projects be administered in a
manner that affirmatively promotes fair housing. Enforcement
procedures are triggered by a complaint of Title VIII violations.
V-2
— SECTION 3 OF THE HOUSING AND URBAN DEVELOPMENT ACT OF 1968, AS
AMENDED
Objective — to provide training and employment opportunities, to the
extent practicable, to lower-income residents of the project area. To
provide contracts associated with a CDBG funded project to businesses
located in the project area or to businesses owned, in substantial
part, by residents of the project area.
Relevant Features — project area is defined as the "unit of local
government, metropolitan area, or non-metropolitan county" in which
the project Is located.
~ SECTION 109 OF THE HOUSING AND URBAN DEVELOPMENT ACT OF 1974, AS
AMENDED
Objective — to ensure that no person be excluded from participation
in, denied the benefits of, or be subjected to discrimination under
any program or activity funded in whole or in part under Title I of
the HUD Act on the basis of race, color, national origin, age,
handicap, or sex.
Relevant Features — the HUD regional office retains primary
responsibility for compliance monitoring related to civil rights
requirements.
— AGE DISCRIMINATION ACT OF 1975, AS AMENDED
Objective — to prohibit age discrimination in programs receiving
federal financial assistance.
Relevant Features — compliance procedures are triggered by a
complaint. Proof of non-compliance is the responsibility of the
funding agency.
V-3
— SECTION 504 OF THE REHABILITATION ACT OF 1973, AS AMENDED
Objective — to ensure that no otherwise qualified individual is
solely, by reason of his or her handicap, excluded from participation
in, the benefits of, or subject to discrimination under any program or
activity receiving federal financial assistance.
Relevant Feature — HITD retains responsibility for compliance
monitoring.
~ ARCHITECTURAL BARRIERS ACT OF 1968, AS AMENDED
Objective — to ensure that certain buildings, and public conveyances
financed with federal funds are designed, constructed, or altered as
to be accessible to the physically handicapped.
Relevant Features — buildings and facilities are defined as those
intended to be accessible to the general public. Exclusions include
private residential structures and the providing of guaranteed/insured
loans.
— EQUAL EMPLOYMENT OPPORTUNITY — EXECUTIVE ORDERs 11246 and 11375
Objective — to ensure that no employer performing construction work
for a recipient of federal assistance discriminates against any
employee or applicant for employment on the basis of race, color,
religion, sex, or national origin. (E.O. 11375 amended 11246 to
include sex as a basis for discrimination.)
Relevant Features — assistance is defined as a grant, contract, loan,
insurance, or guarantee. Total value of a contract or subcontract is
defined as both federal assistance and other public or private funds.
Exclusions include contracts and subcontracts that do not or are not
expected to exceed a total value of $10,000 over a 12 month period,
and employment preferences for Indians on contracts or subcontracts on
or near an Indian reservation.
V-4
— EQUAL OPPORTUNITY IN HOUSING — EXECUTIVE ORDER 11063
Objective — to prohibit discrimination in housing or residential
property financing related to any federally assisted activity against
individuals on the basis of race, color, religion, sex or national
origin.
~ HUMAN RIGHTS — Title 49, MCA
State law prohibiting discrimination and providing for enforcement.
MINORITY BUSINESS PARTICIPATION
Objective — It is HUD policy for the State to insure that a fair
share of subagreements are awarded to minority businesses.
Relevant features — Grantees are required to take affirmative steps
in utilizing minority businesses on projects involving CDBG funds.
LOCAL GRANTEE RESPONSIBILITIES
Overview
This section provides an overview of the general areas of civil
rights and fair housing compliance for which grantees are respon-
sible. These general requirements apply to the administration of the
grant activities as well as to the three major program areas: public
facilities, housing and economic development.
Grantees are required to take responsible actions directed toward
the following two categories:
non-discrimination and equal opportunity; and
— affirmative action to remedy and overcome the effects of
past discrimination.
V-5
When grantees contract with private or public entities for either
the administration of the CDBG program or for actual project
implementation (e.g. construction of a public facility), the grantee
must provide the contractor with non-discrimination and equal
opportunity inform.ation and must monitor the contractors to ensure
that all required actions are taken. A more detailed list of the
grantee's and contractor's responsibilities is be provided in Chapter
VIII, Public Facilities Projects.
Non-Discrimination
Under the non-discrimination requirements, the grantee must
assure that all CDBG funded activities are conducted in such a manner
that no person or group is denied benefits such as employment,
training, housing, and contracts generated by the local CDBG activity.
Affirmative Action
The purpose of affirmative action is to overcome the effects of
past discrimination. Affirmative actions (presented in an affirmative
action plan) must be taken any time there has been a finding against
the locality as a result of a compliance review conducted by the State
CDBG staff as part of its monitoring responsibilities or as the result
of any discrimination complaint investigation carried out by the HUD
Regional Fair Housing and Equal Opportunity (FHEO) Office. The plan
must identify the effects of the past discrimination and specify those
actions the locality will take in order to overcome the identified
impacts. Exhibit V-A provides an outline format for an affirmative
action plan.
In some cases, even without a formal finding, the grantee should
consider affirmative actions to address self-identified instances of
possible discrimination or where the intent of the equal opportunity
provisions have not been met. For instance, if local government
employment is not representative of the general population of the
V-6
jurisdiction, the CDBG project manager or administering agency should
consider designing an affirmative action program to provide greater
employment, training, and promotion opportunities for members of pro-
tected groups.
General Project Benefits
There are n broad range of issues associated with documenting
that general project benefits are extended to all groups in a
non-discriminatory manner.
They primarily originate from application of Section 109 and
Title VI requirements. (Exhibit V-B provides a form for the
collection of data on protected groups.) The following issues should
be taken into consideration by the grantee.
Were the needs of protected groups included in the needs
assessment prepared as part of the CDBG application? How did the
needs of these protected groups compare with local priorities
identified in the needs assessment?
Was information about the proposed CDBG application available to
a] 1 residents of the community? What efforts were made to ensure that
protected groups were involved in planning CDBG funded activities?
Were members of protected groups adequately informed about any
public meetings on the CDBG project? The Montana CDBG Program
requires that the applicant at the least must hold one public hearing
before preparing the application and one prior to submission. Were
the public hearings held at a location that was easily accessible to
members of protected groups and at reasonable hours?
Were the needs of protected groups included in the individual and
community-wide benefits that would be generated as a result of the
CDBG activities? For example, if the locality is acquiring land for a
V-7
senior citizens center, will the chosen location be equally accessible
to neighborhoods with large concentrations of minority residents as to
those with high concentrations of non-minority households?
Data and Documentation
The grantee should maintain the following:
— socioeconomic data used for project planning;
— records of public hearings;
— evidence of meetings with neighborhood groups;
— evidence of meetings with groups representing minority
interests or women; and
— data on benefits to protected groups (see Exhibit V-B) .
For some projects it is quite simple to document the specific
extent to which protected groups within the community are
participating in and receiving benefits from the block grant activity.
For instance, CDBG funding of a local rehabilitation program is
awarded based on information and targets provided in the grant
application. It is easy to identify the extent to which protected
groups will be impacted by the housing rehabilitation program. It is
equally easy to then report on how many households headed by
minorities, women the elderly, or handicapped individuals were
actually rehabilitated.
For other types of projects, identifying the targets and
beneficiaries may not be as simple. A downtown revitalization program
may be intended to benefit protected groups; however, the extent to
which these groups is actually Impacted is harder to control by the
administering agency. At the minimum, the locality should take those
actions to ensure that members of the protected groups have equal
access to any information related to training and job opportunities
associated with the CDBG-funded project.
V-8
Employment
Civil rights requirements pertaining to employment originate
primarily from Section 109 and Executive Order 11246.
Exhibit V-C provides "A Human Rights Guide for Employers,"
prepared by the Montana Human Rights Commission. Exhibit V-D provides
a "Sample Application for Employment" form, and V-E is an "EEOC Guide
to Pre-Employment Inquiries." Exhibit V-F provides a sample format
for "Interview and Hiring Records." The guidance offered in these
four exhibits should be useful to grantees.
The grantee should consider the following issues:
Does the grantee have explicit written personnel policies which
prohibit discrimination against protected groups? Does the grantee
have a strategy for employment, training, and promotion of protected
groups? Do the job descriptions and organization of the CDBG
administering unit reflect this strategy? When advertising to fill a
vacancy or new position, has the grantee included explicit language
indicating that the locality is an equal opportunity employer?
Have members of protected groups shared in the employment
benefits generated by the CDBG-funded activities?
Has the grantee informed all contractors associated with the CDBG
project that they must adhere to all equal opportunity requirements?
Did the grantee include the required EEO language in all contracts?
Has there been any finding of past discrimination as the result
of a compliance review? If so, has the grantee prepared an
affirmative action plan to overcome the effects of past
discrimination?
V-9
Data and Documentation
The grantee should maintain the following:
— personnel policies;
organization chart of the CDBG administering unit;
interview and hiring records (Exhibit V-F) ;
employee records (training, promotion, salary levels); and
data on overall emplo},Tnent of women and minorities.
(Exhibit V-G provides an acceptable grantee employment
summary form that may be used,)
Business Opportunities
Requirements pertaining to business opportunities originate
primarily from Section 3, 0MB Circular A-in2, Attachment D, and HUD
policy on Minority Business Participation. The grantee should
consider the following issues.
Did the grantee have a strategy for utilizing businesses located
in the project area or owned by residents of the project area?
(Exhibit V-H contains a sample contractor's Section 3 plan and related
forms which may be used.) Was there a strategy for using businesses
owned by members of protected groups? Was information about RFPs and
solicitation of bids equally available to members of protected groups?
To what extent were businesses owned by residents or members of pro-
tected groups actually utilized as part of the CDBG-funded project?
Were there findings of past discrimination or non-compliance as a
result of a compliance review? If so, does the grantee have an
affirmative action plan to address these findings?
Were all required clauses included in both bid packages and
contracts? Has the grantee made provisions for monitoring contractor
performance? Detailed information related to preparing bids and
contracts and monitoring contracts is provided in Chapter VIII, Public
Facilities Projects.
V-IO
Compliance with HUD and DOC policy regarding utilization of
Minority Business Enterprises (MBE) can be achieved if the grantee
takes the following affirmative steps:
— including qualified minority businesses on solicitation
lists;
— assuring that minority businesses are solicitated whenever
they are potential sources;
— dividing total requirements, when economically feasible,
into small taks or quantities to permit maximum
participation of minority businesses;
— establishing delivery schedules, where the requirements of
the work permit, which will encourage participation by
minority businesses;
using the services and assistance of the Montana Department
of Highways, Minority Business Enterprise Section, the Small
Business Administration and /or the resources of any other
State or federal agency in soliciting MBE participation;
requiring each party to any subagreements entered into for
the completion of CDBG funded activities to take the
affirmative steps listed above; and
— maintaining records on the use of Minority Business
Enterprise for CDBG funded contracts and subcontracts.
(Exhibit V-I provides an acceptable format for data
retention. )
Data and Documentation
The grantee should maintain the following:
copies of notices of bids and RFPs;
copies of RFPs and bid packages;
— distribution lists of bids and RFPs;
— copies of contract files;
data on the dollar amount of contract awards; and
data on the awards to businesses located in the project area
or owned by members of protected groups.
V-11
Fair Housing
Civil rights requirements pertaining to fair housing originate
primarily from Title VIII and Executive Order 11063. The grantee
should consider the following issues.
Has the grantee met with representatives of local housing groups?
Does the grantee have a strategy for dissemination of information and
distribution of materials related to fair housing requirements? Does
the grantee provide outreach and counseling services related to fair
housing practices? Are these services equally accessible to members
of protected groups?
If applicable, do local land use and zoning laws have
discriminatory effects on housing patterns? If applicable, has the
grantee previously purchased property and/or structures for assisted
housing projects outside of areas of minority concentration?
Did members of protected groups receive equal treatment when
applying for and receiving housing assistance? For example, were
terms and rates of housing assistance loans the same for minorities
and non-minorities? Were grant maximums the same for all groups?
Has there been any fundings of non-compliance as the result of
reviews of past activities? If so, has the grantee prepared an
affirmative action plan to overcome the effects of past
discrimination?
Data and Documentation
The grantee should maintain the following:
data on general housing characteristics;
— data on housing assistance provided to minorities (type,
number, dollar amounts, terms and rates;
— data on assisted housing outside of areas of minority
concentrations ;
V-12
— actions taken to promote fair housing (See Exhibit V-J) ;
— copy of local land use and zoning laws;
— data of outreach and counseling efforts; and
— copy of fair housing materials prepared and distributed.
Other specific requirements and samples of materials related to
housing activities are provided in Chapter IX, Housing Rehabilitation
Projects.
Other Civi]. Rights Issues
The following additional issues should be considered, when
applicable :
If a project required displacement or relocation of households or
businesses, were protected groups given equal treatment? Were members
of protected groups offered the same services related to relocation
counseling? Were they given equal treatment in determination of
relocation payments?
Data and Documentation
The grantee should maintain the following:
— data on number of households/business displaced or
relocated;
records of assistance provided; and
— file of documentation for each relocation case (see Chapter
VII, Acquisition/Relocation).
MONITORING OF LOCAL GRANTEES
Monitoring by the State CDBG staff of local grantees will be
tempered by historical and existing conditions or extenuating
circumstances with the jurisdiction. If, for example, local
employment analysis shows that there is a historically low level of
V-13
female participation in the local labor force (e.g., many women have
chosen not to seek emplo^Tnent) , that factor would be taken into
account when monitoring the extent to which women received employment
benefits from CDBG-funded activities.
While the State CDBG staff is responsible for monitoring of
general civil rights and fair housing compliance by grantees, the
Secretary of HUD remains the designated authority for the
investigation and resolution of specific complaints of discrimination
or non-compliance.
A complaint may be filed with the HUD regional FHEO office by any
person or class of persons within 180 days of the alleged
discriminatory action. After contact with the complainant to clarify
the issues, the FHEO investigator will contact the grantee concerning
the complaint and schedule a compliance review visit. Based on
interviews and information gathered during the compliance review the
investigator will prepare a report and analysis of the complaint.
If there is no finding of a Title VI violation, the regional FHEO
will provide notice to the grantee and the complaintant of the finding
and no further action by the grantee is required.
If there is a finding of non-compliance, the regional FHEO office
will inform the grantee of the finding and may first seek an informal
and/or voluntary resolution of the complaint. This is accomplished
through a "Voluntary Compliance Plan" by which the grantee will
resolve the impact of the discriminatory action. The Plan must be
approved by the regional HUD FHEO office.
If an informal solution cannot be reached, the regional office
send the compliance review report and all supporting documentation
related to the case to the Central FHEO for the beginning of formal
enforcement procedures. These procedures can result in the
termination of federal assistance to the grantee and deferral of any
future assistance until the finding is resolved.
V-14
HUD has indicated that every effort will be made to reach
informal solutions to non-compliance findings. Additionally, upon
receipt of a complaint the regional FHEO office will contact the State
CDBG Program staff to assist in seeking an informal solution to the
complaint, if required.
SUMMARY
1. Grantees must assure that all CDBG-funded activities are
conducted in a manner which will not cause discrimination on the
basis of race, color, national origin, religion and creed, sex,
physical or menta] handicap, age, marital status, or political
ideas. This includes action taken directly by the grantee (e.g.
employment) or through contractual or other arrangmeents.
2. Grantees must take affirmative action to overcome the effects of
past discrimination in the administration of CDBG projects which
have been found as the result of a compliance review. This might
include actions such as the development of an affirmative action
plan.
3. a. With regard to employment, grantees must:
to the maximum extent feasible, ensure that lower-income
residents in their communities receive any training or
employment generated by CDBG projects; and
— take affirmative action to ensure that applicants are
employed and the employees are treated during employment
without regard to their race, color, religion, sex, or
national origin.
3.b, With regard to contracting, grantees must:
take affirmative action to utilize businesses located in or
owned in substantial part by persons residing in the project
area:
V-15
— take affirmative action to encourage contracting with
minority business enterprises; and
— maintain documentation of contract and subcontract awards.
4, Grantees should take positive steps to promote fair housing.
5. Grantee should maintain the following information as
documentation of compliance with civil rights requirements.
— Population: Demographic data by census tract or smaller
geographic area. The data should include prevailing
population characteristics relating to race, ethnic group,
sex, age, and head of household.
— Employment : Data which record affirmative action in equal
employment opportunity. These data would include but not be
limited to employment, upgrading, demotions, transfers,
recruitment or recruitment advertising, layoffs or
terminations, pay or other compensation, and selection for
training.
— Section 3 Employment and Business Opportunities: Data which
record special efforts to identify, train, and/or hire
lower-income residents of the project area and to utilize
business concerns which are located in or owned in
substantial part by persons residing in the area of the
project.
— Program Beneficiaries: Individual and site-specific data on
the racial, ethnic, and gender characteristics of
beneficiaries showing the extent to which minorities,
nonminorities , women, and handicapped persons have
participated in or benefitted from programs and activities.
Numerical data should be maintained by CDBG project,
program, and activity.
Minority Business Participation: Data which record special
efforts to identify, solicit bids from, and provide
contracting and investment opportunities to minority
businesses .
V-16
Project Information; Data which indicate types of projects
funded (e.g., economic development, housing, public
service), location of projects, amount of funds budgeted and
expended, and funding cycle and/or dates of project
approval.
6. All contracts funded in whole or in part with CDBG funds must
contain references to the civil rights provisions outlined in
Chapter III, Procurement Standards.
V-17
CHAPTER V
EXHIBITS
V-A - Outline for Affirmative Action Plan
V-B - Minorities Benefit Report Form
V-C - A Human Rights Guide for Employers
V-D - Sample Application for Employment
V-E - EEOC Guide to Pre-Employment Inquiries
V-F - Interview and Hiring Form
V-G - Grantee Employment Summary
V-H - Contractor's Section 3 Plan and Related Forms
V-I - Minority Business Enterprise Form
V-J - List of Acceptable Actions to Promote Fair Housing
V-18
EXHIBIT V-A
OUTLINE: AFFIRMATIVE ACTION PLAN
SECTION I. PURPOSE AND AUTHORIZATION:
E.O. 11246 and 11375
SECTION II. DEFINITIONS:
1 . EMPLOYER
2. EMPLOYEE
3. AFFECTED CLASS
4 . EMPLOYMENT AREA
5. AFFIRMATIVE ACTION
6. CONTRACTOR
7 . DEPARTMENT
8. DOC
SECTION III. SCOPE
SECTION IV. OBJECTIVES:
"SAMPLE"
AFFIRMATIVE ACTION TO ADVERTISE JOB,
MONITOR SUCCESS, DEVELOP TRAINING/
UPGRADING, SECTION 3, EQUAL WAGE, COMPLIANCE
WITH STATE/FEDERAL ACTS.
SECTION V. POLICY:
TO MAKE PLAN KNOWN, SEEK AFFECTED CLASS,
NON-DISCRIMINATORY RECRUITMENT, COMPENSATION
EQUAL, SUB-CONTRACTORS AND CONTRACTOR TO IMPLEMENT
SECTION VI. IMPLEMENTATION:
sect:
WHO IS RESPONSIBLE
CONTACT PERSON
VI I. METHODOLOGY:
HOW TO IMPLEMENT:
PUBLISH NOTICES TWO WEEKS
BEFORE EMPLOYMENT
ASSIST AFFECTED CLASS IN
COMPLETING APPLICATION
CONTACT MINORITY EMPLOYMENT GROUP
NOTIFY MONTANA JOB SERVICE
V-A-1
AFFIRMATIVE ACTION PLAN OUTLINE CONT .
SECTION VI
DOCUMENTATION:
HOW TO VERIFY
* KEEP JOB APPLICANT LISTS
* MINORITY CONTRACTORS LIST
* KEEP NOTICES
* LIST TRAINING DEVELOPED
SECTION IX. GRIEVANCE PROCEDURE:
FORM: WRITING
PLACE :
TIME OF FILING: NOT LESS THATN 9 0 DAYS AFTER ACTION
PROCEEDING:
INVESTIGATE
RESOLVE PROBLEM
HEARING
SECTION X. GOALS
CAN BE EXPRESSED IN TERMS OF PERCENTAGES IF THE
% IS LIKELY TO BE UNEQUAL, PROVIDE JUSTIFICATION
V-A-2
0) e </i <->
.— <u
a. ■
Q.T-
CL-r-
T3 -r-
V-B-1
IiONTANA HU. AfJ Pir-lT^^ CO ' IVI 5S ION
P'v C-317 CD!.:5JUELL E'l^DfJu EXHIBIT V-C
hlLE^a,-:- '"^ :"ri
^ A HUMAN RIGHTS GUIDE FOR EMPLOYERS
ANY EMPLOYMENT
PRACTICE WHICH HAS THE EFFECT
OF
EXCLUDING
PERSONS
BECAUSE
OF THEIR
AGE
PHYSICAL OR MENTAL HANDICAP
RELIGIO;^
SEX
MARITAL STATUS
CREED
RACE
NATIOiML ORIGIN
COLOR
MAY BE
EUUIVALENT TO UNLAWFUL DISCRIMINATION
Some FMPLOYMrNT Practices Forbidden By Law:
TU PRINT OR PUBLISH JOB NOTICES OR ADVERTISEMENTS WHICH INDICATE
A PREFERENCE FOR A CERTAIN AGE, SEX, RACE, COLOR, RELIGION,
NATIONAL ORIGIN OR MARITAL STATUS, UNLESS A BONA FIDE OCCUPATIONAL
QUALIF ICATIONi
TO ALLOW HARASSMENT OF MINORITIES OR WOMEN BY FELLOW WORKERSi
TO REFUSE TO HIRE WOMEN BECAUSE THEY HAVE PRE-SCHOOL CHILDREN
OR TO FIRE THEM BECAUSE OF PREGNANCYj
TO ESTABLISH PHYSICAL LIMITATIONS SUCH AS HEIGHT OR WEIGHT
WHEN THEY ARE NOT ABSOLUTELY ESSENTIAL TO THE PERFORMANCE OF
THE JOB;
TO REFUSE rO ACCOMMODATE HANDICAPSi
TO ESTABLISH A MANDATORY RETIREMENT AGE UNLESS THE REASONABLE
DEMANDS OF THE JOB REQUIRES IT (E.G. AIRLINE PILOTS);
TO REQUIRE FLUENT KNOWLEDGE OF ENGLISH WHEN THE JOB DOES NOT
REQUIRE LANGUAGE SKILLS.
Some Employment Practices You iIay Uant To Examine:
Recruitment, Application Forms, Interviewing Techniques,
Qualifications Required, Testing. Selection Procedures,
Placement. Pay Rates, Benefits, Management Attitudes,
Promotions, Leave Policies and Terminations.
IJHY Ixm. INE Your Practices?
Complaints cost time and money.
You WILL identify A LARGER AND BETTER
qualified workforce.
When more people are fairly empioyfd,
governmlnt costs kor human se- r^ v i c f
SHnULD r f)PRF SPOND I NGLY DF<REAsr.
If A Complaint is Filed
Be careful NOT TO RETALIATE.
You WILL RECEIVE PROCEDURAL
INFORMATION FROM THE
Dl VI SION.
Ynn WILL RECEIVE AN OPPORTUNITY
TU PRESENT YOUR SIDE.
QUEST Iin,
I I RHl I) I [1 .
IHE BULjINI
V-C-1
Ri
'f, ) iii^li 2 6R'i
MONTANA
LAW
PROHIBITS
DISCRIMINATION
IN
Creed or Religion
Age
Sex
Race, national origin, or color
l-landicap, physical or mental
Political belief .r ,v,, „„».,„ invniv,!,
Mantal Status
AREA
Enriployment
Training or education
Housing
Public accommodations
Financing
Government services
Retaliation';,-;:;'-;^;,,,,.,,,
FOR
INFORMATION
CALL
(406)-444-2884
mONTANA
humAN
RiqhTS
commissiON
Room C-317, Cogswell Building, Helena, MT 5952'0
V-C-2
TELEPHONE 406/444-2884
._JjiiU£ijj-ji„
No. 388
443:221
APPROA<1IKS It) AKFniMAnVK ACTION
Sample Application For Employment
Folhmng is a sample applicatum fur employment, whifh 7oas designed with federal
EEO considerations in mind.
Application for Employment
The Company
Namp
lilir.t
City
Stale
PLEASE PRINT
Soci.ll Sec No.
Date
.■'ipCode
Area Coflp
Ari'.i Code
How wero y(
Bu-iinns'. Telpphone
Homo Tplcphonu
u relcrrcd liiu'.'' NcwspaptT ,irt School
On my own
Other
Name of relr
Please note:
Co fcrnployae Aqeiicy
rral source-
This application form was designed for use by persons apptyi
with Co — clerical, professional, technical, and administrative
the best of your ability All information will be treated tonlident
PLEASE PniNT
Tg for various types o
Please answer Iheqi
ally
positions
eslions to
The Company
AN EQUAL OPPORTUNITY EMPLOYER
IVhIialMd by Thr Uurmu of NsIioikiI Affalra, In
V-D-1
443:222
APPROACHES TO AFFIRMATIVE ACTION
No. 388
TYPE OF WORK DESIRED
Indicate the position Inr which you are applying
What Is your minlTiuai weekly salary requiiemenf
Date available for work
Do you have any commitments to another employer which might atfect your employment with us?
SKILLS
Typing speed words per minute; Sleno speed.
Can you transcribe machine dictation?
Business machines you can operate
Other
EDUCATIONAL DATA
.words per minute
Schools
Pont Name, Numt>er and Streel City Slate,
an/l Zio Code for each School L isttng
Dates
or M»|or
Gradudlrri''
D-Or^
Reci.iveil
High
--
School
College
r.n.n
To
G'aduate
F,o^
School
Trade. Bus .
Night Of
Corres
From
To
From
Jo
MILITARY EXPERIENCE
Were you In U.S. Armed Forces? U Yes I I No It yes, what Branch?
Dales of duly: From: To: ,^__ Rank at Separation ,
Briefly describe your duties
V-D-2
f.
No. 388
EMPLOYMENT HISTORY
APPLICATION FOR EMPLOYMENT
443:223
List present employer or mosf recent employer first (use other side of tfiis application, If necessary). May we
contact tfiese employers? . ' yes r| no
Employer
__
Ffom
Employed
Mo'Vf
Mo/Yf
Supen^'S' '
■; Name
Your Job T
Totpphone
Yout Salary
Duties
Slart
End
Reason Inr leaving
[mi.lovoi
Finm
To
Eniplovotl
Mo/Vr
'-.uf^otimm hNi)
""
A.W.,S,
Yourjol. Tillo
Telephono
VoiirSattiry
tlullPS
Slail End
Roasoti tof I-Oaving
Reason for Loav.nfl
Emplover
From
To
Employed
_Mo/yi
Mo/Yr
Supen/isor's Name
Address
Telephone
Your Salary
Duties
Start
End
Reason (or Leaving
tinirloyei
From
To
Fnii>lnyn<t
Mo/y
Mo/Yr
Supervisors Name
y.iui Jot)Illlo
Telephone
YourSal.iry
Duties
Sl.i.l
Fn,1
PubUdwd liT Th« Bonau of Nadoiul A/filra, Inc.
V-D-3
443:224 approaches to affirmative action No. 388
GENERAL INFORMATION
Are you a US Clllzen'' 1 yes no II no. whal type ol visa do you Mold'
Are you between the ages ot 18 and 70'' ^ yes no
Present state of health
Are you willing to undergo d pre employmeni physical exam'' yes no
Hdveyou previously applied toi empki^mpni 8t Co? Ijyes: no llyes.when?
Have you previously been employed at Co or its subsidiaries'' i yes ; no If yes, when?
Areanyot your relatives employed by Co? yes no II yes, please list name and department
rorson to be nolllied in case ol emr-rgency
Name —
Please include any other information you think would be helpful to us in considering you for employment, such
as additional work experience, articles/books puDlisheo. activities, accjmplishments. etc (You may exclude all
Information indicative of age, sex, race, religion, color, national origin, and handicap )
AGREEMENT (Please read the following statements carefully)
I hereby affirm that the in'ormation provided on this application land accompanying resume. If any) is true and
complete to the besi of my knowledge and agree that falsified information or signiflcani omissions may
disqualify me from further consideration for employment and may be considered luslificalion for dismissal if
discovered at a later date
I authorize persons, schools, current employer (if applicable) and previous employers and organizations
named in this application (and accompanying resume, if anyl to provide Co with any rolevani information that
may be required to arrive at an employment decision
Fmir Rnploymmt Prartina
V-D-4
EXHIBIT V-E
No. 443
443:65
AITROACHKS TO AFI' IKMA TIVK ACTION:
RKCKUITMENT AND SELECTION
EEOC Guide to Pre-Employment Inquiries
Following is the text of EEOC s Guide
to Pre-Employrnent Inquiries, lus revised
in August. 1981. Subscribers should w.s-e
the f^iiide in conjunction with similar
guides issued by individual stales and
with the text of federal laws as most
recently amended.
Pre-Employment Inquiries
Employment application forms and
pre-employment interviews have tradi-
tionally been instruments (or eliminat-
mg, at an early stage, "unsuited" or
"unqualified" persons from consider-
ation for employment and often have
been used in such a way as to restrict or
deny employment opportunities lor
women and members of minority
groups.
The law, interpreted through court
rulings and EEOC decisions, prohibits
the use of all pre-employment inquiries
and qualifying faclorj. which di.spropor-
tionately screen out members of minori-
ty groups or niembers of one sex and are
not valid predictors of succe.s.-<ful job
performance or cannot be justified by
"business necessit v. "'
In devismg or reviewing application
forms or in seeking information from job
applicants, employers should ask them-
selves: (1) Will the answers to this
question, if used in making a selection,
have a disparate effect in screening out
minorities and/or members of one sex
(i.e. disqualify a significantly larger per-
centage of members of a particular
group than others)? (2) Is this informa-
tion really needed to judge an appli-
cants competence or qualification for
the job in question?
' Crifig.^,' I)iikrPim;rC„..W\ (IS 4;;i(l<l7Ji
' ^•^W.^ r Dukr l',m;r C„. supra, H„h,n>.m i
lAirillanl Crp. 444 K2d 791 (C A 4. 1!)71). II..S. t: .Si
••.<(i.s-.S-,jn hVnnnsc,, Hit C, 4(il K J.l .1111. .WW (C A H
• Jnn.s r /,,.,. H„v .M.,l.,r /■>,,«/,/. /„, , 431 |.' 2d 24.'i
'•>7I)I
Business Necessity and Job
Relatedness
The concept of business necessity has
been narrowly defined by the courts.
When a practice is found to have dis-
criminatory effects, it can be justified
only by showing that it is necessary to
the safe and efficient operation of the
business, that it effectively carries out
the purpose it is supposed to serve and
that there are no alternative policies or
practices which would better or equally
well serve the same purpose with less
discriminatory impact.*
An employer should be able to demon-
strate through statistical evidence that
any selection procedure, which has a
"disparate effect" on groups protected
by the law, is job related, (i.e. validly
predicts successful performance in the
tyfje of job in question.) If this cannot be
shown or if the employer cannot or does
not wish to perform a technical valida-
tion study, the use of that procedure
should be discontinued or altered in
such a way that there is no longer a
discriminatory effect ' Even when a pro-
cedure having an adverse impact can be
validated, it may not be used if there are
other procedures which would accom-
plisli the same goal and have less of a
discriminatory effect.
Specific Issues Addressed by
Court and EEOC Decisions
Race, Color, Religion Sex or
National Origin
Under Title VII, pre-employment in-
quiries concerning race, color, religion,
sex or national origin are not considered
violations- of the law in and of them-
selves. However, inquiries which either
directly or indirectly disclose .such infor-
KK(X: (iui.lflirica uii Kmplo>ic SflccUon I'roce-
dures. ('«)<• of Kedcnil Keguiutiiins, Tillr 2H ChiipUr
XlV.l'art I(ill7
l'iil)liNh,,.l l,y Th.. Iliir
»r Nitthiiial Arfiii
V-E-1
443:66
APPROACHES TO AFFIRMATIVE ACTION
No. 443
mation, unless otherwise explained,
may constitute evidence of discrimina-
tion prohibited by Title VII.
Some state fair employment practice
laws expressly prohibit inquiries on em-
ployment applications concerning the
applicant's race, color, religion, sex or
national origin. In some states it may
also be considered illegal to seek related
data (e.g. former name, past residence,
names of relatives, place of birth, citi-
zenship, education, organizational activ-
ities, photograph, and color of eyes and
huir) which could indirectly reveal simi-
lar information.
Denial of equal opportunity to individ-
uals because of marriage to or itssocia-
tion with persons of a specific national,
ethnic or racial origin, or because of
attendance at schools or churches, or
membership in organizations identified
with particular racial or ethnic groups,
may be considtrod a violation of Title
VII. ■* Charges presented to EEOC alleg-
ing such discrimination will be exam-
ined with particular concern to deter-
mine if, indeed, the alleged discrimina-
tion was based on national origin. These
determinations will be made according
to general Title VII principles, such as
disparate treatment and adverse im-
pact.
An employer may justifiably and le-
gitimately seek and obtain information
needed for implementation of affirma-
tive action pnigrains, court-ordered or
other government reporting or record-
keeping requirements, and for studies to
identify and resolve possible problems in
the recruitment and testing of members
of minority groups and /or women to
insure equal employment for all per-
sons.
However, the employer must be able
to demonstrate that such data were
collected for legitimate business pur-
poses. Such information should be kept
• F:E(X' Guidelines ..n Disrr.minol.nn Fk-rause of
Nutional Oriijin. Code of Fedenil K-KulBtiuiis. Tille 29.
Chapter XIV, Part IGDti. KK<K' Utisioii No 71-969
(19701.
' Ajiui ( Cnimlyofl^Ls An^rlrs. K,'i.5 F.2d 1.TM (C A 9
19771. vacated and remanded as moot on other Krounds.
separate from the regular permanent
employee records to insure that it is not
used to discriminate in making person-
nel decisions.
Height and Weight
EEOC and the courts have ruled mini-
mum height and weight requirements to
be illegal if they screen out a dispropor-
tionate number of minority group indi-
viduals (e.g Spanish-surnamed or Asian
Americans) or women, and the employer
cannot show that these standards are
essential to the sale performance of the
job in (luestioii.^
Marital Status, Number of
Children and Provision
for Child Care
Questions about marital status, preg-
nancy, future child-bearing plans, and
number and age of children are fre-
quently used to discriminate against
women and may be a violation of Title
VII if used to deny or limit employment
opportunities for female applicants. Em-
ployers are cautioned against use of
such non-job-related questions. Informa-
tion needed for tax, insurance or Social
Security purposes may be obtained after
employment.*
It is a violation of Title VII for em-
ployers to require pre-employment in-
formation about child-care arr.inge-
ments from female applicants only. The
U.S. Supremo Court has ruled that an
employer may not have different hiring
policies for men and women with pre-
school children."
English Language Skill
When the use of an English language
proficiency test has an adverse effect
upon a particular minority group and
English language skill is not a require-
440 us. 62.5 119791; IMhanl t: Rouhnaun. 4,13 U.S .321
(19771.
' See section on Data Required for Legitimate
Businees Purposes."
" Phillips I. Martin Murutta C«rp. 400 US .'i42
(19711.
Kair Employment Practices
V-E-2
No. 443
RECRUITMENT AND SELEtTION
443:67
ment of the work to be performed, there
is a violation of Title VII.'
Eklucational Requirements
The U.S Supreme Court has found an
employers requirement of a high school
education discriminatory where statis-
tics showed such a requirement oper-
ated to disqualify blacks at a substan-
tially higher rate than whites and there
was no evidence that the requirement
was significantly related to successful
job performance. This standard applies
to all groups protected under Title VII
and is relevant to all questions relating
to educational attainment, where no
direct job related requirement or busi-
ness necessity can bo proven."
Friends or Relatives Working
for the Employer
Information about friends or relatives
working for an employer is not relevant
to an applicant's competence. Request-
ing such information may be unlawful if
it indicates a preference for friends or
relatives of present employees and the
composition of the present workforce is
such that this preference would reduce
or eliminate opportunities for women or
minority group members." However, a
"nepotism" policy which prohibits or
limits employment opportunity of a
spouse or other relative may also be
illegal if it has an adverse impact on job
opportunities for either women or men
as a group.'"
Arrest Records
Because members of some minority
groups are arrested substantially more
often than whites in proportion to their
numbers in the population, making per-
sonnel decisions on the basis of arrest
records involving no subsequent convic-
tions has a disproportionate effect on
the employment opportunities of mem-
bers of these groups. The courts and the
commission accordingly have held that
' KEtX' Ci.i.leliiics on l>is, ririi.nu'.mn Itocause »(
National Origin, supra L'r 'orin Guidelinfa on Etnploy-
w Selection Pnncilun-s i lOTHi
" Ori^s ('. Duke Power Or. supra
" iM-al 53, Inll Asniw nf Heal and Frml Inaulaliin
and AHbeslKS Workers i Vonler. 407 F 2d 1047 (C A, 5,
19691; Lea u. Cane Mills Corp.. 438 F 2d 86 (C.A. 4. 1971),
without proof of business necessity an
employer's use of arrest records to dis-
qualify job applicants is unlawful dis-
crimination." EEOC has ruled that
even if an employer does not consider
arrest information, the mere request for
such information tends to discouraiie
minority applicants and is therefore
illegal.
Conviction Records
Federal courts have held that a con-
viction for a felony or misdemeanor may
not by itself lawfully constitute an abso-
lute bar to employment, but that an
employer may give fair consideration to
the relationship between a conviction
and the applicant's fitness for a particu-
lar job.'^ These decisions indicate that
conviction records should be cause for
rejection only if their number, nature
and recentness would cause the appli-
cant to be unsuitable for the position. If
such inquiries are made, they should be
accompanied by a statement that a
conviction record will not necessarily be
a bar to employment, and that factors
such as age and time of the offense,
seriousness and nature of the violation,
and rehabilitation will be taken into
account.
Discharge From Military Service
Employers should not, as a matter of
policy, reject applicants with less than
honorable discharges from military ser-
vice. According to a Department of De-
fense study, minority service members
receive a higher proportion of general
and undesirable discharges than non-
minority members of similar aptitude
and education.
Thus, an employer's requirement that
to be eligible for employment, exmem-
bcrs of the armed services must have
been lionorably discharged has a dispa-
ul!« .'KM K Supp ii7 (DCNC, I'Kiyi; ElifX' Dtci.sion
No 74 i:! 1 1973)
"'KK()fl)<.r,h,.,nNo 7.''i-L'.iy (19751,
" larler ,: (lolliiglier. 4C1' K.2d 315 (C.A. «. 1971 1.
(Iregory r. I.idon. 472 F.2d 631 IC.A 9. 19721.
" <^rter i: Gallagher. Hupru; Green v. Mi^it:ourt
PacifUH.R. Co.. 523 F2d 1290 (C.A. 8, 197.''; I.
Publuhed by The Bureau of National AfTairs, In
V-E-3
443:68
APPROACHES TO AFFIRMATIVE Acn^ION
Niv 443
rate effect upon minoritie.s and may bo a
violation of Title VII."
One Federal district court has held
that an employer may in()uire into an
applicant's military service record if
information regarding dischar^io status
is usi'd not ill making a hiring decision
but in deciding whether further investi-
gations should be made into the appli-
cant's background and qualifications. If
further inciuiry reveals iion discrimina-
tory grounds for denying employment,
the employer may then refuse to hire
applicant.'''
Since .1 re(iuest fur this information
may discourage minority workers from
applying and therefore be grounds for a
discrimination charge. employers
should avoid such questions unless
"business necessity" can be shown. As in
the case of conviction records discussed
above, questions regarding military ser-
"vice should be accompanied by a state-
ment that a dishonorable or general
discharge is not an absolute bar to
employment and that other factors will
affect a final decision to hire or not to
hire.
Age
The Age Discrimination in F^mploy-
menl Act of 1967. as amended, prohibits
discrimination on the basis of age with
respect to individuals 40 to 70 years of
age.
A request that an applicant state his
age may tend to delir older applicants
or may otherwise indicate discrimina-
tion based on age. Consequently, em-
ployment application I'orms which re-
quest such information will be closely
scrutinized to assure that the request is
for a permissible purpose and not for
purposes proscribed by the Age Discrim-
ination in Employment Act. Permissible
purpo.ses are limited to when the age
requirement or limit is a bona fide job
quaiincation (e.g., actors required for
' ' EEOC Dwision No 74-25 ( 19731.
" Uwts V. Western Airlines. 379 F. Supp. 6«4, (l).C
ND Cai , 1974); Partial summary denied. 10 FEP Cases
.xTUnCND Cat. 19751
youthful roles) or is based on rea.sonable
factors other than age.
F'urther information on age discrimi-
nation is contained in EEOC pamphlet
Prrsorui 4U-70 Note: Afj:c Discrimirtattoii
IS Af^dinsl the Imhk This pamphlet is
available from EEOC at any of its dis-
trict or area offices or from EEO{;'s
Office of Public Affairs, Washington,
DC. 20.506.
Citizenship
EEOC iiuidelines on DisvriminatUm
Hrcausf iif MaliotutI Orif^in indicate that
consideration of an applicant's citizen-
ship may constitute evidence of discrim-
ination on the basis of national origin.
The law clearly protects all individu-
als, both citizens and non-citizens iomi-
ciled or residing in the United States,
against discrimination on the basis of
race, color, religion, sex or national
origin.
Where consideration of citizenship
has the purpose or effect of discriminat-
ing against persons of a particular na-
tional origin, a person who is a lawfully
immigrated alien, legally eligible to
work, may not be discriminated .igainst
on the basis of his/her citizi-nshi[). ex-
cept in the interests ol national security
or determined under a United States
st.'itiile or presidential e.xccutive order
respecting the particular position or
[iri'mi.ses in question.
If states have enacted laws prohibit-
ing the employment of non-citizens that
are in confiict with Title VII. the laws
are superceded bv Section 708 of Title
VM."^
The U.S. Supreme Court has found
that a state civil service law which
restricted state employment to U.S. citi-
zens was unconstitutional and a denial
of equal protection and benefit of the
laws. A Hat ban on employment of
aliens without regard to the type of
position or to the characteristics of the
'• EE(K.' Cuidrlines on Discrimination IJeciiusp of
National Orif^in, supra.
Fair Employment Practices
V-E-A
No, 4-(:
RKCKIMTMKNT AND SHI.ECTION
443:69
L
applicaiii involved was not jusliliaMi- on
grounds oi public interest.'"
Kconomic Status
riejectinn of at)plican(,s because of
poor credit ratings iuis a disparate im-
pact on minority groii|)s and iience has
been found unlawful by the ('ommis-
si'in. unless busini'ss iiecessil\ can be
shown.
Incjuiries as to an applicant s financial
status, such as bankruptcy, car owner-
ship, rental or owneiship of a house,
length of residence at an address, or
past garnishment of wages, if utilized to
make employment decisions, may like-
wise violate Title Vll."
Availability for Work on
Weekends or Holidays
Employers and unions have an obliga-
tion to accommodate the religious be-
liefs of employees and/or applicants,
unless to do so would cause undue
economic hardship. EEOC has deter-
mined that the use of pre-employment
inquiries that determine an applicant's
availability has an exclusionary effect
on the employment opportunities of per-
sons following certain religious prac-
tices. Questions relating to availability
for work on Friday evenings. .Saturdays,
or holida> . should not be .isked unless
the employer can show that the ijues
tions have not had an e.Kclusionary
effect of its enipU)vees or af)plicants who
would need an accommodation for their
religious practices, that the i)ueslions
are otherwise justified, and that there
are tio allt-rnalive procedures which
would have a lesser exclusionary ef-
fect.'"
Data Required for Legitimate
Business Purposes
Data on such inalti-rs .is marital sta-
tus, number and age o( cliildren, and
similar issui's, which could be used in a
discriminatory manner in making em-
ployment decisions but which are neces-
sary for insurance, reporting require-
ments or other business purposes, can
and should be obtained after a person
has been employed, not by means of an
application form or pre-employment in-
terview.
Another nuans of collecting such data
that has been approved by the courts is
use of a "tear-off sheet," preferably
anonymous. After completing the appli-
cation and the tear off sheet, the latter
is separated from the application and
used only for purposes unrelated to the
selection decision.
• •••
It is reasonable to assume that all
questions on an application for or in a
pre-employment interview are for some
purpose and that selection or hiring
decisions are made on the basis of the
answers given. In an investigation of
charges of discrimination, the burden of
proof is on the employer to show that
answers to all questions on application
forms or in oral interviews an- not used
in making hiring and placement deci-
sions in a discriminatory manner prohi-
bited by the law
To seek information other than that
which is essential to effectively evaluate
a person's qualifications for employ-
ment is to make oneself vulnerable to
charges of discrimination and conse-
quent legal pi'oceedings.
It is therefore in a employer's own
self interest to carefully review all pro-
cedures used in screening applicants for
employment, eliminating or altering
any not justified by business necessity.
'" Stiniirmnn r /A.iJi-.i//. •( I.I I
" ,hhns.,n r. Pikr Cn . XfJ V.
1971 J EK(H.' tXiiMiin N.. 74 11-Jll
;uiii) ■iwMCi) c.iiir.
- EECX' (luidclinf
Reli^jion, (*Kle ot Fi'dc
XIV. I'lirt 1611,'i
. Title 29. Cliaptcr
l>iil>llshi'<l l.v I h.' Ilu
V-E-5
Exhibit V- f
Interview and Hiring Form
Name of Applicant:
Address & Phone:
Position Applied for:
How did the applicant find out about the position?
Minority?
Low/Mod Income?
Ethnic Characteristic:
Was the Applicant Selected for an Interview?
Yes ( ) No ( )
If not, reason:
Date of Interview:
Others participating in the interview besides the
preparer of this report:
Was the Applicant hired?
Yes ( ) No ( )
If not, reason:
Name and Title of Person Preparing this Report:
Date Report Prepared:
V-F-l
(•
^
% Female
in Labor
Force *
% Female
in
Category
% Minority
in Labor
Force*
% Minority
in
Category
tjj
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(•
EXHIBIT V-H
CONTRACTOR'S SECTION 3 PLAN AND FORMS
(Name of Contractor) agrees to implement the following specific
affirmative action steps directed at increasing the utilization of
lower Income residents and businesses within the (Section 3 project
area) .
A. To ascertain from the grantee's CDBG project official the exact
boundaries of the Section 3 covered project area and where
advantageous, seek the assistance of local officials in preparing
and implementing the affirmative action plan.
B. To attempt to recruit from the Section 3 project area the neces-
sary number of lower income residents through: local advertising
media, signs placed at the proposed site for the project, and
community organizations and public or private institutions
operating within and servicing the project area such as local
Human Resource Development Councils, the Montana Job Service,
labor organizations, or other employment-oriented organizations.
C. To maintain a list of all lower income residents who have applied
either on their own or on referral from any source, and to employ
such persons, if otherwise eligible and if a vacancy exists.
D. To Insert this Section 3 plan in all bid documents (for subcon-
tracts greater than $10,000) and to require all bidders on
subcontracts to submit a Section 3 affirmative action plan
detailing the specific steps planned to increase the utilization
of lower income residents and businesses within the Section 3
project area.
E. To insure that subcontracts (greater than $10,000) which are
typically let on a negotiated rather than a bid basis in areas
other than the Section 3 covered project areas, are also let on a
negotiated basis, whenever feasible, when let in a Section 3
covered project area.
F. To formally contact unions, subcontractors, and trade associa-
tions to secure their cooperation in this effort.
G. To insure that all appropriate project area business concerns are
notified of pending subcontractual opportunities.
H. To maintain records, including copies of correspondence, memo-
randa, etc., which document that all of the above affirmative
action steps have been taken.
I. To appoint or recruit an executive official of the company or
agency as Equal Opportunity Officer to coordinate the implementa-
tion of this Section 3 plan.
V-H-1
J. To maintain records concerning the amount and number of con-
tracts, subcontracts, and purchases which contribute to Section 3 |'^
objectives.
K. To maintain records of all projected workforce needs for all
phases of the project by occupation, trade, skill level, and
number of positions and to update these projections based on the
extent to which hiring meets Section 3 objectives.
As officers and representatives of (name of company) , We the under-
signed have read and fully agree to the Section 3 Affirmative Action
Plan, and become a party to the full implementation of the program and
its provisions.
Signature
Title ~~ Date
Signature
Title Date
V-H-2
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^ I V-1-1
INSTRUCTIONS
Thii report is to be used by gianteei to report coiiiidct «ji(l lubcontrict ictiviljes of $10,000 or more under
the Community Development Block Grant (Entiitement and Small Cllies) and Urban Development Action
Grant programs. Grantees should also include contracts entered into by recipients of CDBG tehabUitaiion
assistance. Contracts and Subcontracts of less than JIO.OOO may be reported at the option of the grantee.
if the grantee believe that m the aggregate such contracts represent a lignificant portion of its contracting
activity.
Only contracts executed during the quarter reported should be included
on the report. Business racial/ethnic code is to be used to designate the racial/ethnic character of the
busuiess entity receiving a contrjii or subcontract. To be classified in a particular racial/ethnic category, a
business entity must be 5 1% or more owned and controlled by the racial/ethnic group members of the cate-
gory. When a business is not 51^ or more owned and controlled by ■ single racial/ethnic gioup. enter the
code for the group which seems most appropriate.
The contractors (Firms or oreaniialions which contract directly with the local govtrnmeiit receiving CDBC
or UDAC funds) and subcontractors ffinnf or organizations which contract with contractors) names and
addresses need only be included once on any quarterly report. The contractor's ID Number is to be shown
on all prime contracts and on ail subcontracts. On subcontracts, the subcontractor's ID Number is also
to be sliown. When entermg a subcontract show only the amount of the subcontract and the "type of
trade" and "business ratul/cilinic code" of the subcontractor. The form is to be completed as follows:
1. Grantee Name. Enter the name of the unit of government submitting report of contract/subcontract
activity.
2. Coniaci Person Enter name and phone number of person responsible for maintaining and submitting
contract data at respective unit of government.
3. pjie Submitted. Enter date the report is submitted to DOC
4. Grant Number. Enter the yiOC Community Development Block Grant Contract Number
Amount of Contract Enter the doUar amount of the contract or subcontract. Round the figures to
the nearest thousand dollars. If subcontractor ID Number is provided, the dollar figure would be for
the subcontract only-not the prime contract.
6. Type of Trade. Enter the numeric code fl thru 3) which best indicates the contractor's/subcontrac-
tor's service. If Subcontractor ID Number is provided, the type of trade code would be for the sub-
contractor only - not the prime contractor. The other category Includes supply, professional services
and all other activities except construction and education/training activities.
7. Business Racial/Ethnic Code. Enter the code (1 thru 5) which indicates the ethnic background of the
contractor/subcontractor If the Subcontractor ID Number is provided, ttie code would apply to the
Subcontractor - not the Prime Contractor.
8. Prime Contractor ID Number. Enter Employer (IRS) Number of the Prime Contractor as the unique
identifier for prime recipient of CDBG funds. Note th«t the Employer Number must be provided for
each contract/subcontract awarded.
9. Subcontractor ID Number. Enter Employer ORS) Number of the Subcontractor as the unique identi-
fier for each subcontract awarded from CDBC funds. When Subconuactor ID Number is provided,
the respective Prime Contractor ID Number nust also be provided.
10. Contracior/Subcontraclor Name and Address. Enter the name and address information for each firm
receiving contract/subcontract activity. Tlus information need be provided only one time on each
report for each firm.
V-I-2
EXHIBIT V-J
Listing of accxDptatjle actions to prcrpte fair hiousing
PiX)vision of housing counseling services which assist minorities and vonen
seeking lousing outside areas of concentration.
For very srrell cormunities only- - publicize that the city government will
assist persons experiencing discrimination in housing. Such assistcince can
be in the form of facilitating the filing of a oonplaint with HUD.
Wbrk with local real estate brokers to formulate a Voluntary Areawide Marketing
Agreem, nL.
Wbrk wit}) local brnnlr; to ond redlining practices and to post "equal lending
opportunity" advertisements.
ii
Use "equal housing opportunity" slogan and logo|Sr| on city letterhead.
Sponsoi lair housing seniniirs and can^xiigns.
Wbrk with minority and vonen leaders in the area to prcmote housing develc^xnent
and increase minority and female participation.
Assist Ifjal housing developer in developing outreach programs to attract
minorities amd females.
Review zoning ordinances and conprehensive plans to insure they promote special
deconcentration of assisted housing units.
Make city-owned property locatexJ outside areas of concentration available to
develo['prs at no or nominal cost for the construction of assisted units
particuloily for large family units.
Develop an Aieawide Housing Opportunity Plan.
Create a local housing authority.
CSonduct si^ecial studies to insure minority and fenale housing needs are
adequately identified.
Adopt n (T~)de enforcement ojdi nance which will conpel landlords to keep
their luiits in safe and sanitary condition.
Chapter vi
Labor
Standards
CHAPTER VT
LABOR STANDARDS
OVERVIEW
This chapter provides an overview of federal and State laws which
govern the wages and working conditions for laborers and mechanics
employed under construction contracts funded in whole or in part by
State CDBG funds.
Solicitation of bids and the awarding of contracts for con-
struction, alteration or rehabilitation of public works, projects,
public facilities and some housing projects are governed by a set of
laws designed to ensure that:
all contractors pay mechanics and laborers at a rate equal
to that paid to those workers on similar activities in the
locality. This is known as the "prevailing wage rate;"
workers be paid at regularly scheduled intervals (at least
once a week) and only those deductions allowable by law or
as authorized by the employee shall be taken out of the
worker's gross pay;
all workers receive "overtime" compensation at a rate of one
and a half (1.5) times their regularly hourly wage for
worked performed in excess of eight (8) hours per day or
forty (40) hours per week; and
all workers are assured of safe and healthy working con-
ditions .
APPLICABLE LAWS
The following four acts provide the legislative authority for the
requirements related to workers' wages and hours on projects receiving
federal assistance. Tn addition to compliance with labor standards.
VI-l
grantees must comply with applicable civil rights requirements ns
explained in Chapter V. It is suggested that grantees review Chapter
V prior to soliciting any bids for contracts as described later in
Chapter VI.
The Requirements Notebook contains a copy of:
the Copeland Anti-Kickback Act;
Contract Work Hours and Safety Standards Act; and
HUD Handbook 1344.1 - Federal Labor Standards Compliance in
Housing and Community Development Programs. Exhibit 1 to
the Handbook contains Title 29 CFR Part 5, Labor Standards
Provisions Applicable to Contracts covering Federally
Financed and Assisted Construction (Also Labor Standards
Provisions Applicable to Nonconstrurt ion Contracts Subject
to the Contract Work Hours and Safety Standards Act).
A copy of the Davis-Bacon Act is available upon request to the CDBG
liaison.
~ DAVIS-BACON AND RELATED ACTS
Objective — to ensure that mechanics and laborers employed in con-
struction work under federal contracts and contracts of recipients of
federal financial assistance are paid wage rates and fringe benefits
equal to those of corresponding classes of workers on similar con-
struction in the locality in which the work is performed.
Key Provisions — applicable to all contracts or subcontracts, which
exceed $2,000 for construction, alteration, or rehabilitation. Rate
determinations are provided by the Office of the Wage and Hour Divi-
sion, Employment Standards Administration, Department of Labor.
Classifications of workers excluded from prevailing wage rates include
apprentices registered in a bona fide apprenticeship program, trainees
employed under a program approved by the U.S. Department of Labor, or
VI-2
helpers if the helper classification Is specified on the request to
the Department of Labor for a wage rate determination. Housing
rehabilitation of less than eight units or where less than eight units
were bid as a single contract is excluded from Davis-Bacon provisions.
— SPECIAL CONDITIONS - LABOR (TITLE 18, CHAPTER 2, PART 4 - MCA)
Objective — same as Davis-Bacon federal legislation for all contracts
let by the State, counties and municipalities.
Key Provisions — superceded in those instances where federal law is
applicable (Section 18-2-402(2) MCA). No minimum contract provision;
therefore. State law applies to contracts less than $2,000. Prevail-
ing wage rate shall not exceed the applicable wage rate in the local-
ity as negotiated under existing or current collective bargaining
agreements .
~ COPELAND "ANTI-KICKBACK" ACT
Objective — to prohibit wage "kickbacks" and salary deductions other
than those prescribed by law (e.g. tax withholding and FICA) or those
voluntarily authorized by the wage earner.
Key Provisions — applicable to any federally assisted contract
subject to Davis-Bacon wage standards.
~ CONTRACT WORK HOURS AND SAFETY STANDARDS ACT, AS AMENDED
Objective — to ensure that workers on federally assisted construction
projects are compensated for overtime and to ensure that safe and
healthy working conditions are provided.
Key Provisions — applies to all construction contracts over $2,000.
Financial assistance which is in the form of a loan guarantee or loan
insurance is exempt from this requirement.
VI-3
LOCAL GRANTEE RESPONSIBILITIES
CDBC funded construction projects require that the grantee take
the following actions to ensure that all requirements related to labor
standards are satisfied. As noted earlier, applicable civil rights
requirements must also be complied with.
Step I — Request Wage Rate Determination
A request for wage determination should be submitted to the CDBG
liaison in the Department of Commerce as soon as the grantee knows the
project will go to bid. The request consists of a letter to the DOC
for a wage determination (see Exhibit VI-A) .
Wage determinations are published periodically in the Federal
Register. Different types of determinations apply, depending upon the
type of project. There are different determinations for
"heavy-highway" construction projects, projects where buildings are
involved, and for various types of housing rehabilitation projects.
DOC maintains a file of current determinations and verifies them by
County with the U.S. Department of Labor before sending a copy to the
grantee in response to its request.
Ten days prior to the bid opening the grantee must contact the
CDBG liaison by telephone or in writing, to determine whether the wage
rate decisions included in the bid solicitation are still current.
DOC will respond in writing. In those instances where changes have
occurred, the grantee should provide the new rate decision to all
potential bidders.
Step 2 — Include Wage Rate
In Solicitation of Bids
The wage rate determinations as provided by the State CDBG staff
must be included in any solicitation for bids. (A sample bid package
is provided in Chapter VIII, Public Facilities Projects).
VI-4
Step 3 — Include Labor Standards Provisions
and Certifications in Solicitation of Bids and Contract Document
The governing regulations for the applicable laws related to
labor standards provide for specific language to be included in all
solicitations for bids and contracts for projects receiving federal
financial assistance. Additionally, each bidder and eventual con-
tractor are required to provide specific certifications assuring the
grantee that the bidder and/or contractor will comply with prescribed
labor standards requirements. (Specific bid and contract language and
certifications are provided in the sample bid package and construction
contracts which appear as exhibits in Chapter VIII.)
Bidders must also comply with civil rights requirements as
described in Chapter V. As with labor standards, prescribed language
for bid documents and contracts is included in exhibits in Chapter
Vlll. Several key requirements bidders must comply with include:
specific plans to utilize local businesses (Exhibit V-H
provides a sample Section 3 plan and related forms);
— non-discrimination;
— hiring local low and moderate income persons; and
utilizing minority businesses.
The grantee is then required to maintain data on awards to local or
minority business contractors (Exhibit V-I provides sample reporting
forms) .
Step A — Verify Bidder Eligibility
The U.S. Department of Labor and HUD both maintain lists of
contractors who have been found in violation of the labor standards
requirements and therefore have been debarred, suspended, or otherwise
declared ineligible for participation in federally assisted con-
struction projects. As soon as possible following the bid opening,
but before awarding any construction contract, the grantee must
VI-5
provide notice to the State CDBG liaison of a pending; contract. (See
sample letter. Exhibit VI-B.) The CDBG staff wi] 1 then check both
hud's "Consolidated List of Debarred, Suspended, and Ineligible
Contractors" and the Comptroller General's "Consolidated List of
Debarred and Suspended Contractors."
If the selected bidder is determined to be eligible the DOC will
provide the grantee with a notice of eligibility. If the selected
bidder appears on either list of ineligible contractors, the DOC will
provide a notice of ineligibility. At that point the grantee may
offer the contract to the first alternate bidder or may reopen the
bidding procedures.
Step 5 — Include Instructions Related to Labor
Standards In Pre-Construction Conference
Following the contract award the grantee should hold a preconst-
ruction conference, (A detailed description of the conference and
labor standards, civil rights requirements, and other topics to be
covered is provided in Chapter VIII, Public Facilities Projects.) At
the conference, the grantee should give explicit instructions to the
contractor pertaining to notices that must be provided at the
construction site and wage reporting requirements.
Notices to be posted at the construction site include:
Notice to Employees (WH1321 - Available in packages of 20
from the DOL Regional Employment Standards Administration.
A sample notice is included as an exhibit in the HUD Hand-
book. ) ;
safety and health protection on the job; and
wage rate decision.
i
VI-6
Contractor reporting requirements include:
General and Subcontractor Weekly Payrolls (a
payment form is included as an exhibit in the HUD Handbook) ;
— Statement of Compliance (included as an exhibit in the HUD
Handbook) ; and
— Notice of Approved Apprenticeship or Trainee Programs, if
applicable .
Step 6 — Monitor Contractor Performance
It is the grantee's responsibility to monitor construction
contracts to ensure that all required notices are posted prominently
at the construction site, that the contractor's weekly wage reports
are accurate, and that the contractor is complying with applicable
labor standards. This monitoring function can be accomplished through
the following activities:
on-site inspections to ensure that required notices are
posted ;
comparison of weekly payroll reports to the prevailing wage
rate decision; and
interviews with construction employees. Interviews should
be conducted at least once a month with a representative of
each classification of laborers and at least 10 percent of
the workforce. The format for construction employee inter-
views is provided as an exhibit in the HUD Handbook.
Step 7 — Investigate Labor Standards Violations
Violations of labor standards requirements may surface as the
result of either monitoring by the grantee or through a specific
complaint by a construction worker. in either instance, the grantee
is responsible for investigating and documenting the alleged viol-
ation.
VI-7
If a violation is evident, the grantee should work with the
contractor on an informal basis to resolve the finding and allow a
reasonable time for correction. Where the contractor refuses to
address the violation or continues to violate the labor standards
provision, the grantee should promptly report the violation to the
CDBG liaison. The DOC then will work with the U.S. Department of
Labor to determine what actions are required. The contractor should be
informed that an unresolved finding could result jn disbarment and
make the contract<->r ineligible lor further state or federally assisted
construction projects.
Step 8 — Maintain Labor Standards Files
For each construction contact, the grantee should maintain a
labor standards file which includes the following items:
copy of Wage Rate Determination Request;
copy of Wage Rate Decision;
— evidence that labor standards provisions are included in bid
packages and contracts;
letter of request for contractor eligibility;
— DOC notice of contractor eligibility;
copy of pre-construction conference Instructions;
— evidence that required notices have been posted at the
construction site;
contractor's Weekly Payroll (identified as initial, second,
etc. , final) ;
— Statement of Compliance;
construction worker interviews;
evidence of any violations with supporting documentation;
and
— evidence of violation resolution.
VI-8
•
CHAPTER VT
EXHIBITS
VT-A - Request for Wage Determination
Vl-B - Request for Verification of Bidder Eligibility
«
VT-9
(1
EXHIBIT VI-A
REQUEST FOR WAGE nETERMlNATl ON
(Type on letterhead of grantee)
(Date)
Department of Commerce
Community Development Division
Cogswell Building, Room C-211
Capitol Station
Helena, Montana 59620
The (name of grantee: City, Town or County of ) is
preparing to go to bid for a contract Involving 1983 Montana Community
Development Block Grant (CDBG) funds. The project involves:
(brief description of activities) ;
— (estimate amount) ; and
(projected date of bid opening).
Please send a copy of the current wage rate determination which will
apply to this project.
Ten days prior to the bid opening I will contact you to confirm that
the wage rate determination you have sent in response to this request
is still current.
Sincerely,
(signature)
Typed Name
CDBG Project Administrator
Mailing Address
Telephone Number
VI-A- I
(i
(Date)
EXHIBIT VI-B
REQUEST FOR VERIFICATION OF BIDDER ELIGIBILITY
(Type on letterhead of grantee)
Departmc^nt of Conimerco
Cominunity Development Division
Cogswell Building, Room C-211
Capitol Station
Helena, Montana 59620
The (name of grantee: City, Town or County of ) opened
bids for the construction on the (name of project) on (date of bid
opening) and would like clearance on the (lowest bidder OR two lowest
bidders) . Please check the current "Consolidated List of Debarred,
Suspended, and Ineligible Contractors" to verify eligibility of the
following contractor (s) :
(provide name(s) and address(es) of contractor (s) )
Sincerely,
(signature)
Typed Name
CDBG Project Administrator
Mailing Address
Telephone Number
VI-B-
(%
Chapter vii
Acquisition
^ Relocation
<•
CHAPTER VII
ACQUIS IT ION /RELOC AT ION
OVERVIEW
The arquisltion of real property and/or the relocation of resi-
dents and tenants has the potential for being a demanding experience
and one where the local CDBG grantee is most vulnerable to litigation
by impacted individuals. In addition, acquisition and relocation are
time-consuming activities and therefore are likely to require the
hiring of a specialist to provide assistance to displaced persons.
For these reasons it is imperative that the grantee, prior to
proceeding with any acquisition or relocation activities, have in
place a standard set of procedures which assures that the acquisition-
relocation process will be fair and equitable to all involved parties.
In particular, the locally developed procedures should ensure that all
impacted Individuals are provided with as much information as possible
concerning the acquisition/relocation, that they are offered advice
and counseling to the greatest extent possible, and that the local
procedures include means by which the locality will address grievances
by impacted individuals.
When designing the system the grantee should consider the follow-
ing principles:
— every effort should be made to reach solutions in acqui-
sition/relocation situations that are mutually agreeable to
all involved parties;
whenever possible, litigation should be avoided and used
only as a last resort; and
the procedures should expedite the acquisition or relocation
process to minimize the disruptive effects on the displaced
individuals and/or businesses.
VII-1
APPLICABLE LAWS
UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION
POLICIES ACT OF 1970
Objective — to ensure the uniform and equitable treatment of persons
and businesses displaced as a result of federal or federally assisted
projects and to provide uniform procedures for the acquisition of real
property for federal or federally assisted projects.
Key Provisions — property owners are to be paid at least the
appraised fair market value for acquired real property and improve-
ments. Homeowners are eligible for additional assistance to compen-
sate for moving expenses and the differential for purchasing "compara-
ble, decent, safe, and sanitary" housing. Displaced tenants are
eligible for reasonable moving expenses and supplemental assistance to
cover either the differential in rent for the new housing unit or for
downpayment if the displaced persons chooses to purchase a residence.
Owners of businesses and farm operations are eligible for reasonable
moving costs and reimbursement for any direct losses (tangible or
intangible) that result from the acquisition or relocation.
A copy of this Act is included in the Requirements Notebook along with
the regulations at 24 CFR Part 42.
— RELOCATION ASSISTANCE/FAIR TREATMENT OF CONDEMNEES (Title 70,
Chapter 31 , MCA)
Complements requirements provided for in the federal legislation.
ACQUISITION: LOCAL GRANTEE RESPONSIBILITIES
For CDBG projects which require acquisition of property, the
local CDBG office must perform the following tasks.
VII-2
Step 1 — Obtain n Copy of HUD Handbook 1376.17 -
Relocation and Real Property Acquisition
Grantees which have activities involving acquisition must obtain
a copy of the Relocation and Real Property Acquisition Handbook from
the CDBC liaison before proceeding with Che acquisition activities.
The Handbook contains forms which must be used and provides guidance
in addition to this chapter.
Step 2 — Determine Whether Each Acquisition is Governed
By Title III of the Uniform Act
The Uniform Act does not apply to all real property acquisition.
Exceptions to the Uniform Act include instances where the property is
acquired through a voluntary proposal, submitted bv the owner in
response to ,n public invitation, or the real property is already in
the possession of a state or federal agency. In either case, however,
persons displaced by the acquisition are still entitled to relocation
assistance under Title II of the Act.
If the procedures under the Uniform Act are not applicable, the
grantee must prepare a notice of exemption to be included in the
project file. The notice will include only a description of the
parcel to be acquired and the criteria by which the locality deter-
mined that the Uniform Act does not apply. (See Exhibit VII-A for a
sample notice.)
Step 3 — Notify Property Owner of Intent to Acquire
This notice must be delivered in person or sent by registered
mail to the property owner. The notice should include information
about the activity for which the property will be used, indicate that
the notice is not a notice to vacate the property, and describe the
procedures by which the grantee will proceed with its attempt to
acquire the property. The grantee's CDBG office should also provide
the owner with a copy of HUD's infoi'mation booklet "When a Public
Agency Acquires Your Property" or its equivalent. The booklet is
included in the Requirements Notebook.
VII-3
Finally, the notice should provide a local contcTct who can answer
requestions and provide further information. (See Exhibit VII-B for a
sample initial notice to property owner.)
Step 4: Have Property Appraised to Determine Fair Market Value
The Uniform Act requires that the public agency must compensate
the owner at no less than the fair market value. Although only one
appraisal is required by law, past experience suggests that two
appraisals are preferred, especially in instances where the property
is valued at greater than $25,000. Regardless of the number of
appraisals, the property owner or his or her representative must be
invited to accompany the appraiser (s) .
Contracting for appraisal services must be done in accordance
with guidelines in the HUD Handbook. The prescribed contract for
appraisal services is presented as Exhibit lB-2 in the Handbook.
Step 5 — Determine Just Compensation for the Property
Based on the appraisal(s) , the local CDBG office will establish
it considers to be a fair price for the property.
Step 6 — Make Written Offer to Owner
As soon as possible following the initial notice of intent to
acquire the property, the CDBG office should submit a written offer to
the property owner. (See Exhibit VII-C for a sample written offer.)
The offer should include;
— the amount of compensation established by the CDBG office;
— an invitation to meet with the owner to discuss the offer;
— an explanation of any incidental costs related to the
transfer of the property for which the owner will be reim-
bursed by the public agency; and
— a willingness to review any materials provided by the owner
which might result in a modification of the initial offer.
VII-4
Step 7 — Review Any Additional Materials Related to
Determination of the Purchase Price
Based on discussions with the owner and material that has been
supplied by the owner, the grantee may determine that the original
appraisals require updating or may request new appraisals. If
subsequent updating or new appraisals justify a higher rate of
compensation, the grantee should immediately establish a new offer
price and submit the new offer in writing as described in Step 6.
Step 8a — Make Payment, or
Tn those cases where the CDBG office and the property owner
arrive at a mutually agreed upon purchase price, the grantee must make
direct payment to the owner before requiring the owner to surrender
possession of the property. (Note: The grantee is prohibited by Title
III of the Uniform Act from taking any actions that might coerce the
property owner into agreeing to the agency's final offer. For example,
the public agency could not threaten to move up condemnation proceed-
ings, an action which might put undue hardship on the property owner.)
Following payment the local agency can take possession of the land and
proceed with the CDBG project.
Step 8b — Make Final Offer Before Initiating
Condemnation Procedures
If the CDBG office and the property owner cannot reach agreement
on a purchase price, a notice of final offer should be given to the
owner. As with other notices, the agency should hand deliver the
final offer or send it by registered mail. The notice should contain
the final offer, an invitation to discuss again the basis of the final
offer, and an anticipated date on which the local CDBG office intends
to begin condemnation procedures. The notice should be received by
the owner at least seven days before the date provided for the com-
mencement of condemnation. (See Exhibit VIT-D for a sample final
notice. )
VII-5
Step 9 — Initiate Condemnation Proceedings
On the date provided in the notice of final offer, the locality
can begin condemnation proceedings in accordance with State laws
governing the excise of the power or eminent domain by counties and
municipalities, as provided for in Section 70-30-101, MCA - Eminent
Domain.
Step 10 — Maintain Acquisition File for Each Property
In addition to the above procedural steps, the local CDBG office
is responsible for maintaining files and documentation on each pro-
perty acquired. The file should Include at the least the following,
items:
— description of property and reasons for acquisition;
— Notice of Intent of Acquire;
— appraiser contracts;
— invitation to owner to accompany appraisers;
— copy of the appraisal;
Offer of Just Compensation;
records of any negotiations with owner;
copy of any materials supplied by owner to determine just
compensation;
— final offer;
Notice of Initiation of Condemnation (if applicable);
— evidence of payment;
— copy of the deed and settlement costs;
copy of agreements for compensation of related improvements;
and
justification of excess payment (if applicable).
Other Acquisition Considerations
Uneconomic Remnant
If the local CDBG office acquires only a portion of the owner's
parcel and the remaining portion (s) have little or no utility or
VII-6
economic value, the agency must offer to acquire the "uneconomic
remnant" as part of the total iicquisition offer.
Tenant Owned Improvements
The grantee must offer just compensation for any improvements on
acquired property. Just compensation can be determined as the amount
that the improvement adds to the total value of the real property, the
depreciated replacement cost of the improvement , or the salvage value
of the improvement .
OwTKn- Retention of Improvements
If the property owner chooses to remove any improvements which
have been included in the fair market appraisal of the property, the
grantee may subtract the salvage value of the removed improvements
from the purchase offer. For example, if a property value includes a
utility shed that the owner removes from the property upon public
acquisition, the offer to the owner may be decreased to the appraised
property value less the salvage value of the shed.
Payments in Excess of Just Compensation
II the public agency offers substantially more to the owner than
the appraisal value, a justification should be provided in the acqui-
sition file. If the justification appears unreasonable, the Depart-
ment of Commerce may determine the excess payment to be an ineligible
cost under the CDBG program. The purpose of this provision is to
discourage windfall profits from the sale of properties for use in
publicly assisted projects.
Rental Payments
If the CDBG office agrees to allow the owner to remain on the
property for a period of time following payment for acquisition, it
can charge the owner up to the fair market rent for the period during
which the owner remains on the property.
VII-7
RELOCATION: LOCAL GRANTEE RESPONSIBILITIES
For CDBG projects which require relocation of owner-occupied
households, tenant-occupied households, and/or businesses, the local
CDBG office must perform the following tasks.
Step 1 — Obtain a Copy of:
- HUD Handbook 1376.17 - Relocation and Real Property Acquisition
- HUD Publication CPD 67A - Looking Beyond the Walls: A Guide to
Relocation
Grantees which have activities involving relocation must obtain a
copy of these two publications from the CDBG liaison before proceeding
with the allocation activities. The Handbook contains forms which
must be used and provides guidance in addition to this chapter.
"Beyond the Walls" also provides additional guidance and contains
completed examples of the forms which must be filled out.
Step 2 — Determine Relocation Workload and Costs
The approximate number of relocation cases should have been
included in the grantee's CDBG application accompanied by an estimate
line item in the project budget. If necessary, these figures should
have been refined during negotiation and execution of the grantee's
contract with DOC, before proceeding with any relocation activity.
Step 3 — Design Relocation Procedures
Prior to commencing any relocation activities, the grantee should
prepare written relocation policies and procedures to provide to
relocatees. The following steps must be included in the local proce-
dures as well as any applicable local requirements. Additionally, the
local policies and procedures should include a grievance and appeals
process.
VTI-8
Step 4 — Determine Eligibility of Relocatee for Benefits
Person? relocated as a result of CDBG project activities are
eligible for two types of relocation assistance: moving expenses and
replacement housing payments. Replacement housing payments may be in
the form of rent differential or downpayments for relocatees who were
tenant occupants, or may bo the cost differential or interest
differential if the displaced household was owner-occupied.
Moving expenses must be paid to all relocatees. Tenants or
persons who have owned their home for 90 to 179 days prior to notice
of relocation are eligible for: rental assistance equal to 48 times
the monthly differential between- the rent in the new unit and the unit
from which the household was relocated, or assistance to cover the
downpayment for the nevr unit and other incidental expenses such as
closing costs. The downpayment assistance can provide the first
$2,000 of the relocatee's downpayment or incidental expenses and up to
an additional $2,000 on a dollar-for-dollar matching basis.
Step 5 — Provide Relocatee with Notice of Displacement
or Notice of Right to Continue Occupancy
Within 30 days of the start of negotiations to acquire a property,
the relocation specialist must provide each person to be relocated
with either a Notice of Displacement or a Notice of Right to Continue
Occupancy. In either instance the Notice should be hand delivered
with evidence of receipt or sent by certified mall with receipt
requested.
The HUD Handbook includes separate exhibits for Notices of
Displacement to 180-Day Homeowners, Residential Tenants, and Business.
The Notices are included as Handbook. Exhibits IC-2, IC-3, and IC-4,
respectively.
VIl-9
The Notice of Displacement should:
identify the CDBG project and inform the displaced person of
his or her eligibility for relocation assistance;
— generally describe the level of assistance pawients for
which the dislocated person is eligible;
offer non-financial assistance such as counseling or housing
referrals;
— be nccompanied by a copy of the local CDBG office's relo-
cation policies and procedures and/or a copy of the appro-
priate HUD brochure dealing with relocation rights. These
brochures are included in the Requirements Notebook:
- Relocation Assistance to Displaced Homeowners
- Relocation Assistance to Displaced Tenants
- Relocation Assistance to Displaced Businesses, Farm
Operations and Nonprofit Organizations; and
— provide the name of a contact person in the local CDBG
office who can provide further information or answer
questions.
The Notice of Right to Continue Occupancy is provided only to
residential tenant-occupants when the proposed CDBC activity would not
require permanent displacement. The HUD Handbook includes n ropy of
this Notice as Exhibit 2C-5. This Notice must:
— identify the project;
inform the occupant that any voluntary move may remove any
obligation by the local CDBG agency to provide relocation
assistance;
— explicitly state the occupant's rights upon continued occu-
pancy; and
provide the name of a contact person in the local CDBG
office who can provide further information or answer
questions .
VII-10
Step 6 — Interview Displaced Person to Determine Housing Needs
Immediately following issuance of the Notice of Displacement, the
local relocation specialist should schedule an interview with the head
of each displaced household. The interview should be conducted at the
dislocated person's residence to determine present housing needs (e.g.
number of rooms, bathrooms, air conditioning). At the same time the
relocation officer should obtain information about the family size,
ethnic composition, gross income, source of Income, monthly housing
expenses, and other financial liabilities. The information on the
previous residence and the occupants is important because Title 111
requires that the replacement housing bo both "comparable and afford-
able." (A sample family survey is provided as Exhibit VII-E.)
Step 7 — Prepare Site Occupant Record Card for Displaced Person
Based on the information from the family interview, inspection of
the residence, and other materials that may be provided by the dis-
placed person, the relocation specialist must prepare a Site Occupant
Record Card. Exhibits 7 and 8 of "Beyond the Walls" provide Report
Cards for both residential and non-residential occupants respectively.
In addition to information about housing and family needs, the record
card provides a means of tracking housing referrals and eventual
relocations .
If the agency is handling more than one relocation, summary
information from each record card should be recorded on a "Relocation
Management Control Report." Exhibits 2 and 3 of "Beyond the Walls"
provide Control Report forms for both residential and non-residential
cases, respectively.
Step 8 — Assist Displaced Person to Identify Replacement
Housing and Provide Other Services as Needed
These services should include providing the displaced person with
information about housing availability, housing prices, and rental
VII-11
costs for comparable replacement housing. Additionally, the local
relocation officer should be able to identify any other local, state
or federal housing assistance programs for which the displaced person
might be applicable.
Special attention should be provided to low-income and minority
groups to ensure that they receive the protections required under
Title VI and Title VIII of the Civil Rights Act and Executive Order
11063. (See Chapter V, Civil Rights.) The local relocation agency
cannot require a low-income or minority to vacate his or her present
residence unless he or she has been given opportunities to relocate in
comparable housing that is not located in an area of low-income and/or
minority concentration, if such opportunities are available.
Step 9 — Issue Ninety-Day and Thirty-Day
Notices to Vacate
Unless the local CDBG office identifies an urgent need for the
occupant to vacate the property, it should issue a Ninety-Day Notice
to the occupant identifying the specific date on which the property
must be vacated. As with all notices, it must be hand delivered with
evidence of receipt or be sent by registered mail. The 90 day period
must begin no sooner than the date the occupant acknowledged receipt
of the initial Notice of Displacement. The Notice to Vacate cannot be
issued until a reasonable selection of replacement dwellings has been
identified. (A sample Ninety-Day Notice is provided as Exhibit
VII-F.) The Notice must also inform the occupant that he or she will
receive another notice 30 days before the specific date indicated as
the time by which the occupant must vacate. (A sample Thirty-Day
Notice to Vacate is included in Exhibit VTl-G.)
Step 10 — Approve Identified Replacement Dwelling
Once the displaced person Identified a suitable replacement
dwelling, the local relocation officer must inspect the property to
assure that it meets the criteria of "safe, sanitary, and decent."
VII-12
Exhibit VTI-H provides a suggested format for the inspection of the
replacement unit.
If the selected replacement dwelling provides to be substandard,
the relocation specialist must send the relocatee a notice (Exhibit
VTl-1) to that effect explaining that the individual cannot receive
relocation payments while living in substandard housing. The notice
should contain an offer of assistance to identify suitable replacement
housing.
Step 11 — Determine Relocation Payment
Based on the eligibility criteria described above and the maximum
amount of assistance, the local relocation officer should determine
the amount of the relocation assistance provided for both moving
expenses and relocation costs.
Moving Expenses
First, it must be determined whether the moving expenses will
exceed the minimum fixed amount of up to $500 (up to $300 for moving
expenses and a dislocation payment of $200).
Exhibits 10 and 11 in "Beyond the Walls" provide two alternate
completed examples samples of the required form provided as Exhibit
lD-1 of the HUD Handbook that should be used for determining the claim
for moving expenses for families and individuals. Exhibit 10 of
"Beyond the Walls" demonstrates an instance where actual moving costs
exceeded the minimum payment, while Exhibit 11 provides an example
where the fixed payment provided to be greater. The amount of the
fixed payment for moving expenses (up to $300") is based on the Federal
Highway Administration Schedule for Fixed Moving Expenses which is
available from:
VlI-13
U.S. Department of Housing and Urban Development
Office of Regional Community Planning and Development
Program Support Division, Acquisition/Relocation
Denver Regional/Area Office, Region VIII
1405 Curtis Street, Executive Tower Building
Denver, Colorado 80202.
Exhibits 12 and 13 In "Beyond the Walls" provide completed
examples of the required forms provided as Exhibits lD-2 and IE-1 of
the HUD Handbook. These are the forms to use in determining the claim
for actual and fixed, respectively, moving costs for businesses,
nonprofit organizations, and farm operations.
Replacement Housing Payment
Second, the replacement housing payment is determined according
to whether the displaced person qualified as a 180-day homeowner, or
tenant .
A person who has owned and occupied an acquired property at least
280 days before the local CDBG agency began negotiations to purchase
the property is eligible for:
the amount, if any, by which the cost of the replacement
unit exceeds the price paid by the CDBG agency to acquire
the owner's property;
the amount, if any, for increased mortgage costs as the
result of interest rate or debt service differentials; and
— any incidental expenses associated with purchase of the
replacement unit such as closing costs.
Exhibit 14 in "Beyond the Walls" provides a completed example of
the required form for a replacement housing payment for a 180-day
homeowner. A copy of the form is included as Exhibit IF-1 in the HUD
Handbook. As stated previously, this payment may not exceed $15,000.
VII-14
For tenant-occupants or owner-occupants who have occupied the
acquired property for 90 days prior to the initiation of negotiations
by the local CDBG grantee to acquire the property, the housing
assistance payment is provided as rental assistance or as assistance
in making a downpayment to purchase a replacement dwelling. In either
case, the total assistance cannot exceed $4,000.
Tn the case of rental assistance payments, the relocation spe-
cialist and tenants determine the monthly differential for rent and
utilities. If the rental cost of the replacement unit exceeds that of
the acquired dwelling, the replacement assistance payment is equal to
A8 times the monthly differential. Exhibit 15 in "Beyond the Walls"
provides a completed example of the required form provided as Exhibit
IG-1 of the HUD Handbook that should be used for determination of
rental assistance payments.
Where the displaced person chooses to purchase replacement
housing, the payment is based on the required downpayment and other
incidental costs associated with the purchase of the replacement
dwelling. Exhibit 16 in "Beyond the Walls" provides a completed
example of the required form sample for determination of downpayment
assistance payments. A copy of the form is included as Exhibit IG-2
in the HUD Handbook.
Step 12 — Process Moving Expense and Housing
Replacement Payments
Regardless of the basis for determination of assistance for which
the displaced person is eligible, the local CDBG office should immedi-
ately process the relocation assistance payment. The payment must be
made directly to the displaced person.
At the t imo the payment Is made, ttio local CDBC office should
have the assisted person submit a statement acknowledging both the
receipt of the payment and any services and/or counseling provided by
the local relocation office. (A sample Letter of Acknowledgement is
provided as Exhibit VII-J.)
VII-15
Step 13 — Follow-Up
Approximately 60 davs after the payment has heen made and the
relocation has taken place, the local relocation officer should
contact the relocated individuals to inquire whether the replacement
housing is satisfactory.
Step 14 — Maintain Records and Documentation of Each Relocation Case
For each household or business relocated, the local CDBG office
should maintain a file containing the following data and documenta-
tion:
fully completed Record Form;
— copy of Notice of Displacement or Notice to Continue Occu-
pancy;
— evidence of receipt of Notice by relocatee;
— copy of Household Survey;
copy of Ninety-Day and Thirty-Day Notices;
— evidence of receipt of Notices by relocatee;
— evidence of replacement referrals;
— record of inspection of selected unit;
copy of Relocation Claim with documentation;
— evidence of verification of Claim;
— appeals and disposition; and
any correspondence between the CDBG office and the
relocatee.
Other Relocation Considerations
Waiver of Ninety Day Notice
The local CDBG office may require property owners and tenants to
vacate prior to the issuance of a Ninety-Day Notice in the cases of
emergencies such as natural disasters or in situations where continued
occupancy represents a substantial danger to the health or safety of
the occupant or the public. Eligibility for relocation assistance
VII-16
payments is not affected when a person Is required to vacate for the
ahove reasons. A copy of any instructions to the property owner with
justification for the waiver of the 90-day period should be included
in the case file.
Multiple Occupants
When a property is occupied by two or more people, regardless of
whether they are members of the same family, the relocation assistance
must be divided among the parties on a pro-rated basis proportionate
with each person's share of the moving and relocation expenses. For
additional information, see page IC-13 of the HUD Handbook.
Relocation Assistance is Not Taxable Income
Persons required to vacate property should be informed that the
relocation assistance payments are not considered to be income for
purposes of calculating liability under either the Internal Revenue
Code of 1954, the Social Security Act, or the Montana State Tax Code.
Last Resort Replacement Housing
If an instance arises where the relocation specialist has been
unable to identify comparable and affordable replacement housing, the
local CDBG office may take the following extraordinary actions to
provide replacement units for displaced persons:
— rehabilitate an existing structure with project funds to
bring it up to conditions that would make it affordable and
comparable;
construct new housing with project funds to meet relocation
requirements; or
— exceed the maximum payments provided for in the Uniform Act.
VII-17
In any of the above instances, the relocation specialist must thor-
oughly document efforts to identify comparable and affordable housing
that is decent, safe, and sanitary and describe the process by which a
determination was made to take one of the actions described above. A
copy of this documentation should be included in the case file.
Appeals
Displaced persons may appeal any relocation action if he or she
feels that:
— determination of eligibility or amount of payment was
erroneous ;
— the local CDBG office did not provide sufficient relocation
services including replacement housing referrals; or
— the grantee failed to comply with any requirement (e.g.
notices) of the Uniform Act.
All appeals must initially be made to the local CDBG grantee
under the grievance procedures established for the local program. The
appeal must be filed within six months of the initial notice of
displacement and can be presented either orally or in writing. The
grantee's review of the appeal should bo based on all applicable rules
and regulations, materials supplied by the person making the appeal,
and all materials on which the grantee made its original determina-
tion. The grantee must make a determination within 30 days of receiv-
ing all materials submitted by the person making the appeal.
Within 30 days of the determination the displaced occupant may
appeal to the Department of Commerce to review the local determina-
tion. Similarly, an appeal can be carried to HUD for federal review.
No action taken by the displaced person through the appeal process
limits the person's right to seek judicial review of the local
grantee's action.
VII-18
For additional guidance on the appeals process, refer to Appendix
1 of the HUD Handbook.
Waiver of Relocation Assistance Payment
In the unlikely case that an individual declines to accept
relocation assistance payment offered by the local agency, evidence of
the person's decision should be included in the case file. Exhibit
IA-2 of the HITD Handbook provides the required format for a Letter of
Waiver.
VIl-19
1
CHAPTER VII
EXHIBITS
VII-A - Uniform Real Property Policies Act of 1970/Notice of
Exemption
VII-B - Preliminary Acquisition Notice
VII-C - Written Offer to Purchase
VIl-D - Final Notice to Acquire by Negotiations
VII-E - Family Survey Guide
Vll-F - Ninety-Day Notice to Vacate
VII-C - Thirty-Day Notice to Vacate
VIl-H - Inspection Report Format
V] T-I - Letter to Relocatee in a Substandard Unit
VTI-J - Letter of Acknowledgement for Services and Payment Rendered
VlI-20
EXHIBIT VII-A
UNIFORM REAL PROPERTY POLICIES ACT OF 1970
NOTICE OF EXEMPTION
(Type on letterhead of grantee)
Date
As part of the (name of grantee: City, Town, or County of
) 's FY 1983 project funded by the Montana CDBG program, it
will be acquiring a parcel of land (describe general location,
boundaries, and proposed activity, for example: adjacent to the city
limits as the location of a sewage lagoon. The property is bounded
to the west by the city limits, to the northeast by State Highway
193, and to the southeast by County Road 14.) See attached map.
The (name of grantee) CDBG Office selected this site after soliciting
for a voluntary offer by landowners in the general project area. As
the property was acquired through a voluntary proposal submitted by
the owner in response to a public invitation, the CDBG Office has
determined that the acquisition is exempt from procedures required
under the Uniform Act, Title III.
The (name of grantee) acknowledges that any dislocation of residents
on the property must be accomplished according to provisions related
to relocation in Title II of the Uniform Act.
Any questions related to the acquisition of this property should be
addressed to:
(name )_
CDBG Administrator
(Mailing Address)
( , Montana Zip)
(telephone number)
NOTE: Place this notice in the grantee's file for
Acquis it ion /Re location.
VIl-A-1
EXHIBIT VII-B
PRELIMINARY ACQUISITION NOTICE
(Type of letterhead of grantee)
Date
(name of property owner)
(mailing address)
(. , Montana Zip)
Dear (name of property owner) :
This is to inform you that the (name of grantee: City, Town or County
of ) has determined to acquire your property at (de-
scribe by address or general location, and legal description, for
example: 3A5 Chinook Avenue, Lots 8-9, Block 6 of the Palmer Addi-
tion) to be used for (describe proposed CDBG activity, for example:
construction of a fire station adjacent to the existing library.)
A brochure describing your rights and the (City, Town or County) 's
procedures for acquiring property is enclosed for your information.
If you have any questions, please contact our acquisition/relocation
specialist ( name }_ at (telephone number).
The (City, Town or County) will be hiring an independent appraiser to
appraise your property. You have the right to accompany him or her on
the property inspection if you wish to do so. A letter inviting you
to accompany him or her will be sent by the appraiser at least five
days prior to the visit. This notice is not a notice to vacate and
does not establish eligibility for relocation payments or other
relocation assistance.
Sincerely,
(name )
CDBG Administrator
(mailing address)
( , Montana Zip)
Enclosure: When A Public Agency Acquires Your Property
VII-B-1
(t
EXHIBIT VII-C
WRITTEN OFFER TO PURCHASE
(Type on letterhead of grantee)
Date
(name of property owner)
(mailing address)
( , Montana Zip)
Dear (name of property owner) :
This letter serves as a written offer to purchase property at
(describe by address or p,cneral location, and legal description, for
example: 345 Chinook Avenue, Lots 8-9, Block 6 of the Palmer Addi-
tion) , which our records indicate is owned by (name of property owner,
same as above) . This property is required for (describe proposed CDBG
activity, for example: construction of a new fire station) .
We have had the property appraised by a competent and unbiased fee
appraiser and this report has been thoroughly analyzed by a competent
appraisal analyst and found to be well supported. Based on the
appraisal and review, the (name of grantee: City, Town or County
of ) hereby makes you a firm offer in the amount of ($ )
for the purchase of your property.
We feel that the above offer is most equitable and we urge your
favorable consideration and acceptance of it. If this meets with your
approval, the CDBG office's acquisition/relocation specialist has
prepared an Act of Sale and will assist In any way convenient to you
in finalizing the acquisition. Negotiations for the purchase of your
propertv will begin on ( date ) .
In addition to the offered purchase price, the CDBG office will also
reimburse you for any incidental costs associated with the transfer of
the property.
If you feel that the CDBG office has not examined all the relevant
Information needed to determine just compensation for your property,
please contact the acquisition/relocation specialist (name) at (tele-
phone number) , who will be more than willing to review the material.
Thank you very much for your cooperation and favorable consideration
of this offer.
Sincerely,
(name of Chief Elected Official)
(Mayor or Chairperson, County Commission)
(name of grantee. City, Town or County of )
Enclosure: Statement of the Basis for the Determination of Just
Compensation
VII-C-1
STATEMENT OF THE BASIS FOR DETERMINATION OF JUST COMPENSATION
Description and Location of Property
The (name of grantee: City, Town or County of ) proposes
to purchase land and improvements at (describe by address or general
location, and legal description, for example: 3A5 Chinook Avenue, Lots
8-9, Block 6 of the Palmer Addition) from owner ( name )_ at
(owner's street address, , Montana Zip). It is a
(describe use and character of structure and area, for example:
single-family residential unit which conforms to zoning, present use,
surrounding land use, and area trends.)
Purpose of Purchase
The (name of grantee) intends to use the whole parcel for (describe
proposed CDBG activity, for example: construction of a new fire
station adjacent to the existing library) .
Improvements
(Describe the structure in detail, for example: it is a one-story,
single-family residence of wood frame construction with concrete
foundation, stucco siding, a tar and gravel roof and aluminum gutters
and downspouts.
It contains a living room, kitchen, center hall, two bedrooms and one
bath.
Interior finish is hardwood floors, except hall, two bedrooms and one
bath.
The kitchen has counters and painted wood cabinets. There are no
built-in appliances.
Heat is gas-fired, forced air, 120,000 BTU furnace.
The house is 25 years old. Design is good. Maintenance is average.
Declaration of Offer
Based on the appraisal, the (name of grantee) hereby makes you an
offer in the amount of ($ ) for the purchase of your pro-
perty. This offer is for the fair market value of your property and
does not include any consideration of decrease or Increase in value
contributable to the project for which it is being acquired. It
reflects no relocation payments which the owner/tenant may be entitled
to receive under provisions of Title II of the Uniform Relocation and
Real Property Acquisition Policies Act of 1970.
VII-C-2
EXHIBIT VII-D
FINAL NOTICE TO ACQUIRE BY NEGOTIATION
(Type on letterhead of grantee)
Date
(name of property owner)
(mailing address)
( , Montana Zip)
Dear (name of property owner) :
This letter serves as final written notice of the (name of grantee:
City, Town or County of )'s offer to purchase through negotia-
tions your property at (describe by address or general location, and
legal description, for example: 345 Chinook Avenue, Lots 8-9, Block 6
of the Palmer Addition.) We have taken the following steps to attempt
to reach a mutually agreed upon price for the property.
(Describe dates and actions taken, for example:)
May 1, 1984 Submitted a written offer to you of $37,500.
May 20, 1984 Met with you and your representative to review
additional material which you felt should be included
in determining just compensation.
May 27, 1984 Submitted a second written offer based on the
information you presented, raising the level of compen-
sation to $39,300. At that time we established June
13, 1984 as the date by which you must indicate your
acceptance or refusal of the second written offer.
As we have not received any correspondence or communications from you
concerning our second written offer of (date of second offer, same as
above, for example: May 27, 2984) the CDBG office has no choice but to
proceed with condemnation of your property through exercise of the
(City, Town, or County's powers of eminent domain as provided for
under Title 70, Chapter 30, Part 101 et.seq., MCA) .
We strongly recommend that you obtain legal counsel to represent you
in these proceedings.
VII-D-1
We regret that we must take this action. If you desire to reconsider ^
our last offer, please contact (name) , Acquisition/Reloc;,tion Special- ^^
ist for the (name of grantee) Office, immediately, at (telephone -
number) .
Sincerely,
(Name)
CDBG Administrator
(Mailing Address)
( , Montana Zip)
VII-D-2
Exhibit VII- E
CONFIDENTIAL
FAMILY SURVEY GUIDE*
DATE: INTERVIEWED BY:
Number of Dwelling Units:
Applicant's Name: ^ Age:
First Middle Last
If married, spouse's name: Age:
Address :
Property Description: Lot Square Subdivision
NUMBER OF DEPENDENTS
Age Sex
EMPLOYMENT DATA; (If less than two (2) years, give name of previous employer)
Employer's Name: How Long:
Address :
Occupation: Monthly Salary:
Previous Employer: How Long:
Address :
Occupation: Monthly Salary:
Spouse's Employer: How Long:
Address :
Occupation: Monthly Salary:
Previous Employer: ^°^ Long:
Address :
Occupation: Monthly Salary:
*This survey is suitable for both loans and grants. A simplified form may be more appropriate
when used only for grants.
VlI-E-1
Page Two
OTHER INCOME AND SOURCE
Social Security, Welfare, Retirement or Veteran, Rental Property Income:
Amount :
Amount :
Amount :
Savings Bonds & Other Securities:
Social Security #:
Name of Bank:
Spouse's Social Security #:
Savings Account: Yes ( ) No ( ) Amount:
Checking Account: Yes (1 No ( 1 Amount:
Other Real Estate Owned:
MONTHLY HOUSING EXPENSES;
Value:
Monthly Payments
Balance Due
Name of Company
Current Mortgage
Hazard Insurance
Flood Insurance
Property Taxes (Secure
information from Tax
Receipt)
Heat and Utilities
(Name Account is in)
TOTAL:
Name Property is
listed under:
LIABILITIES:
Automobi le
Other Loans/Credit Accounts (specify)
TOTAL;
VII-E-2
Page Three
MONTHLY FIXED CHARGES:
Income Taxes
'Federal and State)
Social Security
Retirement
Life Insurance
Other
TOTAL:
TOTAL MONTHLY COSTS
(Housing, Other Liabilities, Fixed Charges)
OTHER:
Record of Previous Foreclosures:
Yes ( ) No ( )
If yes, property address:
^S' Name and Address of Lender:
Remarks :
CERTIFICATION OF APPLI CANT( S ) :
I (we) hereby certify that the statements made by me (us) are true and correct to the best
of my (our) belief and knowledge.
S i gnature :
S ignature:
Date:
VII-E-3
EXHIBIT VII-F
NINETY-DAY NOTICE TO VACATE
(Type on letterhead of grantee)
Date
(name of person to be relocated)
(mailing address)
( , Montana Zip)
Dear (name of person to be relocated) :
As you know, the (name of grantee: City, Town or County of )
is purchasing your (home/apartment) . The purchase will be completed
on (date, no later than 60 days after date of this Notice) . We have
been in contact with you since (date) to help you locate and move into
suitable replacement housing. We referred to to (number) of units.
The (house /apartment) you are now living in must be vacated in 90
days, by (date, must be at least 90 days after date of this Notice).
We will send you a second notice 30 days before you must vacate.
If you have any questions or need additional assistance in completing
your move, please contact our Acquisition/Relocation Specialist (name)
at (telephone number) .
Sincerely,
(name)
CDBG Administrator
(mailing address)
( , Montana Zip)
VII-F-1
EXHIBIT VII-G
THIRTY-DAY NOTICE TO VACATE
(Type on letterhead of grantee)
Date
(name of person to be relocated)
(mailing address)
( , Montana Zip)
Dear (name of person to be relocated) :
This letter is to inform you that you must vacate this house/apartment
within 30 days on (date, must be 30 days after date of this letter and
30 days after the name of grantee: Cjty, Town or County of
has title to the property).
If you have any questions or need additional assistance in completing
your move, please contact our Acquisition/Relocation Specialist (name)
at (telephone number) .
Sincerely,
(name)
CDBG Administrator
(mailing address)
( , Montana Zip)
VII-G-i
Exhibit VII-H
INSPECTION REPORT FORMAT
Displaced Person's Name:
Case Number:
Special Requirements: Handicapped | _|
Other I I Specify
Address:
A. Does the building meet Section 8 Housing
Quality Standards?
If no, what would be required to bring the
unit to Section 8 standards?
Date Inspected:
YES NO
Does the building meet Local Housing Code/
Occupancy Code?
If no, what would be required to bring the
unit to code in addition to items listed
in A above?
YES
NO
Estimated Date of Construction:
VII-H-l
D. If prior to 1950, results of paid analysis
If lead-based paint, what is necessary to
remove the hazard?
E. If there are deficiencies and the unit is
slated for use as replacement housing,
date of re-inspection.
Were all certified deficiencies YES NO
corrected?
List uncorrected deficiencies:
If uncorrected deficiencies, date of
re-inspection:
W
Description of Unit
Bedrooms Kitchen Family Room Attic
Bathrooms Living Room Basement
Construction:
General Condition:
H. I (name) , (title) hereby certify
that the building at (address)
meets all (1) applicable housing and occupancy codes, or (2) Section
8 Existing Housing Quality Standards.
Signature: Date:
VII-H-2
EXHIBIT VII-I
LETTER TO RELOCATEE IN A SUBSTANDARD UNIT
(Type on letterhead of grantee)
Date
(name of person to be relocated)
(mailing address)
( , Montana Zip)
Dear (name of person to ho rolocatod) :
Relocation regulations established by federal law will not permit the
(name of grantee: City, Town or County of )_ to make a rental
assistance payment to you until you move into an apartment or house
that meets their definition of a "decent, safe and sanitary" replace
unit. Your new apartment does not meet this definition because:
(List reasons, such as wiring, does not meet the
electrical code or house contains lead-base paint.)
In order to be eligible for a replacement housing payment, you must
move into an apartment or house that meets all of these requirements
within one year from the date you moved from your old apartment on
(address) . You have to move into a qualified apartment or house by
(date, one year from date of displacement). Our Acquisition/-
Relocation Specialist (name) , who can be reached at (telephone number)
has a list of eligible houses and apartments and will help you find
one and will arrange inspections of any apartments or houses you find
on your own.
If you move into a "decent, safe and sanitary house or apartment" by
(date, same as above), you would be eligible to receive a rental
assistance payment up to a maximum of $4,000 to cover the difference
in the monthly cost between your old apartment and a new apartment for
four years, or the difference between your new rent and 30 percent of
your gross monthly income, whichever is less. This payment will be
made in a lump sum if you file a claim for benefits within 18 months
after you move into a decent, safe and sanitary apartment or house.
If you choose to purchase a home, you would be eligible for $2,000 for
downpayment assistance. Up to an additional $2,000 would be available
if you match it dollar for dollar (i.e., if you put in $500, you would
get an extra $500; if you put in $2,000, you would get an additional
$2,000) for a total of $4,000 in downpayment assistance. You are
entitled to these benefits if you move into a decedent, safe and
sanitary replacement unit by (date, same as above) and file a claim
within 18 months of completing the move. The (name of grantee) has
already set aside money to pay you.
VII-I-1
In order to receive these benefits, you must relocate into a standard
unit. Please contact (name of relocation specialist) , who will help
you find and move into a standard unit and is available to answer any
questions you might have.
Sincerely,
(name)
CDBG Administrator
(mailing address)
( , Montana Zip)
VlI-I-2
EXHIBIT VII-J
LETTER OF ACKNOl^fLEDGEMENT
SERVICES AND PAYMENTS RENDERED
Date
(name of acquisition/relocation specialist)
CDBG Office
(mailing address)
( , Montana Zip)
To: (name) , Acquisition/Relocation Specialist
This is to certify that the Relocation Assistance, Services and
Payments rendered by the (name of grantee: City, Tovm or County
of ) CDBG office at the time of my displacement from (former
address) to (new address) was done to my satisfaction.
This is to certify that I received reimbursement for my moving
expenses and/or a Relocation Payment from the (name of grantee) CDBG
office as indicated below.
MOVING EXPENSES:
Fixed payment of $ .
Reimbursement of paid receipt from a mover or direct
payment to a mover or $ .
ADDITIONAL RELOCATION PAYMENTS (Tenants and Certain Others)
Downpayment assistance of a lump sum of
$ .
Rental assistance payment of $ in a lump
REPLACEMENT HOUSING PAYMENT (Owner-Occupants)
Replacement housing payment in a lump sum of
$
Sincerely,
(signature of claimant)
Printed or typed name of claimant
VII-J-1
#
Chapter viii
Public Facilities
Projects
CHAPTER VIII
PUBLIC FACILITIES PROJECTS
OVERVIEW
The procedures described in this chapter are designed to:
— provide for fair and competitive awards of all contracts and
subcontracts for construction of public facilities projects;
and
— ensure that contractors and subcontractors comply with the
applicable federal and state requirements such as labor
standards, civil rights, and procurement.
The intent of the process described in this chapter is to provide
information about construction contract opportunities, to ensure equal
treatment of all potential contractors, and to inform potential
contractors of their responsibilities when accepting a contract funded
in whole or in part by CDBG dollars. Fair and competitive procedures
for selection of contractors are also designed to protect the grantee
from litigation or charges of impropriety related to the awarding of
public contracts to private firms.
APPLICABLE LAWS
The following State laws and federal regulations set forth the
principles for selection and awarding of construction contracts. In
addition to compliance with the following, grantees must comply with
applicable requirements discussed in all of the preceeding chapters of
this Manual.
— LICENSING AND FEES — Section 37-71-201, MCA
Requires that any person(s) performing as a contractor on a
public construction project within the State of Montana obtain a Class
C license from the Montana Department of Commerce. Person (s) working
on contracts valued at less than $5,000 are exempt from this
provision .
VIII-]
— BID SECURITY — Sections 18-1-201, et seq., MCA
Requires that all bids be accompanied by bid security to protect
the public authority in the event a successful bidder fails or refuses
to enter into a contract.
-- PERFORMANCE, LABOR AND MATERIAL BONDS — Section 18-2-201, MCA
Requires that any contractor provide a ten percent bond that
ensures that the contractor will "(a) faithfully perforni all of the
provisions of such contract; (b) pay all laborers, mechanics,
subcontractors, and materialmen; and (c) pay all persons who shall
supply .. .provisions , material, or supplies for the carrying on of such
work . "
~ COUNTY CONTRACTS — Title 7, Chapter 5, Part 23, MCA
Requires competitive bidding for contracts in excess of $10,000,
advertising of such contracts once per week for three weeks before
bids are opened, and award of contracts to the lowest and best
responsible bidder.
~ MUNICIPAL CONTRACTS AND FRANCHISES — Title 7, Chapter 5, Part 43,
Provides similar guidance for the awarding of contracts by
Montana cities and towns. Under 7-5-4302, municipalities must adver-
tise once per week for two weeks and the second publication must not
be made less than five days or more than 12 days before bid opening.
~ PROCUREMENT STANDARDS — 0MB Circular A-102, Attachment 0
Outlines required procedures for selection and award of contracts
funded in whole or in part by federal funds. These procedures are
designed to avoid unnecessary or duplication of purchases, obtain
favorable prices for goods and services without sacrificing quality,
ensure maximum open and free competition, and promote national goals
related to equal employment opportunity and affirmative action.
VIII-2
— BONDING AND INSURANCE — 0MB Circular A- 10?., Attachment B
Establishes bonding requirements for grants. These include a bid
guarantee from each bidder equivalent to five percent of the bid price
(note: this is less restrictive and therefore superceded by State law
which requires ten percent) , a performance bond on the part of the
contract for 100 percent of the contract price, and a pa3mient bond on
the part of the contractor for 100 percent of the contract price. A
copy of Attachment B is included in the Requirements Notebook.
LOCAL GRANTEE RESPONSIBILITIES
The following stops are provided as a guide to implementation of
public facilities projects. They should be followed along with
applicable requirements in preceeding chapters.
Step 1 — Prepare Engineering and/or Architectural
Design and Specification
If the grantee is not utilizing an architect and/or engineer for
general project management as described in Chapter I of the manual,
the grantee should follow the instructions in that Chapter along with
Chapter III, Procurement Standards, for selecting an engineer or
architect to prepare the final project plans including drawings and
material specifications.
Upon selection of an engineer/architect the grantee must contact
the State CDBG liaison to determine whether the individual or firm is
ineligible to participate in federally assisted projects as a result
of past failures to comply with federal program requirements. (Refer
to Chapter VI, Labor Standards for instructions on verifying con-
tractor eligibility.)
As described in Chapters I and III, the contract between the
engineer/architect and the grantee should be as specific as possible.
In particular, the contract should contain a listing of products (e.g.
maps, drawings) that will be provided by the architect or engineer.
VIII-3
Step 2 — Prepare Bid Package
Before inviting bids on any contract, the grantee should take the
following steps to ensure that the bid package contains all the
relevant information that bidders will need to respond adequately:
— the architect/engineer should provide the grantee with a set
of drawings and specifications for the construction project
including an accurate and clear description of the technical
requirements of the project and a certification that the
design takes into account requirements of the Architectural
Barriers Act related to accessibility by handicapped per-
sons. The certification (Exhibit VIII-A) must be co-signed
by a grantee official and included in the contract file. A
copy must be sent to the CDBG liaison, along with a
Transmittal of Contract Document Checklist (Exhibit VIII-B.)
The purpose of the checklist is to have the
architect /engineer who prepared the document, the local CDBG
project manager, or chief elected official certify that the
bid document includes all applicable federal requirements.
Finally, the plans and drawings must be stamped by an
architect/engineer registered or licensed by the Montana
Department of Commerce;
— acquire any property, easements, or rights-of-way that might
be required for construction of the public facility. (See
Chapter Vll, Acquisition/Relocation);
obtain information from local public utilities regarding
underground installations. The grantee should request a map
of the project site which will be included in the bid
package. The request should contain a cut-off date for
response (generally 30 days) after which the grantee would
not be held liable for damages to underground facilities;
determine the cost and pricing format. Contracts may be
either lump sum or unit priced. "Cost Plus" contracts may
not be used; and
VIII-4
prepare the bid package including at the least the following
items :
- Advertisement for Bids (Exhibit VIII-C)
- information on the method of bidding, process by which the
bids will be evaluated, and the method of contract award
(Exhibit VIIT-D)
- General Conditions (Exhibit VIII-E)
- Supplemental General Conditions: Technical Drawings and
Specifications Required; Federal and State Requirements
related to Equal Opportunity, Insurance, and Hazards; and
Wage Determinations (Exhibit VIII-F)
- Bid Proposal Form - Lump Sum (Exhibit VIII-G)
-or-
- Bid Proposal Form - Unit Price (Exhibit VIII-H)
- Bid Bond Form (Exhibit VlII-1)
- information on Performance and Pajnnent Bond Requirements
(Exhibit VIII-J)
- Contractor and Subcontractor Certifications (Exhibit
VI] J-K).
Once the complete bid package has been assembled, it should be
reviewed by the grantee's attorney for completeness and consistency
with State and federal laws and regulations.
Step 3 — Advertise Bid Solicitation
An advertisement of the bid should bo drafted based on the
information on the "Advertisement for Bid" included as part of the bid
package. Pursuant to Section 7-5-4302, MCA, municipalities must
advertise once per week for two weeks and the second publication must
be made not less than five days or more than 12 days before bid
opening. Section 7-5-23-1, MCA, requires that counties must advertise
once per week for three weeks before bids are opened.
VIII-5
Any amendments to the bid package must be mailed to each bidder,
and every bidder must be given an appropriate period of time to
respond to the amendments.
Step 4 — Log Each Bid
Upon receipt by the grantee, each bid should be logged by time
and date of receipt and offer. The bids should remain sealed and
safely stored until the bid opening.
Step 5 — Conduct Bid Opening
The bid opening should bo conducted in a businesslike manner with
each bid being read aloud. The low bid bidder will be determined at
this time.
In the event that all bids exceed the amount of funds available
for the construction project, the grantee has three options:
— seek additional financing resources such as general revenues
or bond proceeds;
— identify "deductible alternatives," elements of the bid that
may be reduced or eliminated; or
— modify the bid package and repeat the entire bid process as
outlined above.
Under no circumstances can the grantee negotiate with the low bidder
to bring the offer in line with the project budget.
Where the grantee chooses the "deductible alternatives" approach,
each bid should be re-evaluated based on the modified scope of goods
and services to be provided. The grantee must, however, be careful
not to significantly alter the program benefitn when using this
approach, as the grant was awarded based on the level of program
benefits identified in the CDBG application.
VIIl-6
•
Step 6 — Review Low Bid
Following the bid opening the low bid should be reviewed to
ensure that the bid submission was technically and legally responsive
to the solicitation for bids, that the contractors and all subcontrac-
tors are qualified and have the capacity to carry out the project as
scheduled, and that the contractor does not appear on either HUD or
DOL lists of ineligible contractors. Contractor eligibility is
discussed in greater detail in Chapter VT , Labor Standards. Exhibit
VI-B contains a sample letter that may be sent to DOC to request a
determination of eligibility. If the total contract exceeds $10,000,
the contractor must prepare a Section 3 plan to ensure maximum
employment and business opportunities to low and moderate income
persons and residents in the project area. (See Exhibit V-H of the
Civil Rights Chapter.)
If the low bid proves to be unsatisfactory for any reason, and
the grantee chooses to use the next lowest bidder, a statement of
justification should be sent to the low bidder and a copy should be
retained in the contract file.
Step 7 — Award Contract
The grantee should make the contract award within 30 days of the
bid opening unless the funds are not yet available or the project
requires some legislative action.
The contract should consist of an executed contract document
(Exhibit VIII-L) with the following attachments:
— all items Included in the bid package;
— contractor's bid proposal;
— contractor certifications; and
— bond and insurance forms.
VIIl-7
Step 8 — Hold Prc-Construction Conference
The conference should be held immediately following the contract
award. Although the conference is designed for the prime contractor,
the grantee and prime contractor may elect to include all subcontrac-
tors in the discussions.
The conference represents the last time prior to actual project
construction that the grantee can give instructions to the contractor.
These instructions should include a review of the project and time-
table, method for payment, and contractor responsibilities related to
civil rights, labor standards, and other federal. State, and local
requirements.
Minutes of the pre-construction conference should be placed in
the contract file and cross-referenced in the civil rights and labor
standards files.
Step 9 — Issue Notice to Proceed
Upon execution of the contract and holding the pre-condition
conference, the grantee may then provide the prime contractor (s) with
a Notice to Proceed. This Notice establishes the construction
starting date, the estimated date of completion, and the basis for
assessing liquidated damages. (In the event a contractor is unable to
complete a construction project, the grantee may assess the contractor
for the costs the grantee must incur in order to complete the project.
This assessment generally takes into account the work actually
performed by the original contractor and the total amount of any
contracts to subsequent contract to satisfactorily complete the
construction.) These provisions must be consistent with the
corresponding elements of the contract document.
A copy of the Notice to Proceed must be sent to the CDBG
liaison. Additionally, the CDBG liaison should receive a notice of
contract award and pre-construction conference, and date on which
construction will start. (Exhibit VIII-M) .
VIII-8
Step 10 — Monitor Contractor Activities
Throughout the construction period, the grantee must monitor the
contractor for performance in line with the project's technical
specifications and for compliance with all federal, State, and local
standards .
Performance monitoring must be done by the architect/engineer.
The performance monitoring should consist of the following elements:
general supervision — includes identifying the need for any
construction adjustments and preparation of contract amend-
ments. Also, involves on-going monitoring of the estimated
schedule for completion;
— quality control -- to ensure compliance with technical
specifications and conformance with codes and standards;
quality control — to ensure that the contractor is provid-
ing materials and products consistent with the quantities
identified in the design and specifications; and
— certification of pay estimates — to be used by the fiscal
officer to verify estimated costs for partial payments. The
architect/engineer should also obtain evidence that the
contractor has made partial payments to any subcontractor or
materialmen.
In instances where the project was awarded based on a fixed price
bid, the grantee may want the contractor to prepare a cost breakdown
showing the amount of funding associated with each element of the
construction contract. This information can be used by the architect-
/engineering for performance monitoring and by the local CDBG fiscal
officer for determining the accuracy of requests for payments.
Partial payments may be made up to 90 percent of the total amount of
compensation in the contract. The remaining ten percent is held
pending the final inspection and acceptance of work.
VIII-9
Local monitoring of federal and State requirements should be
conducted on an on-going basis by the local CDBC office to assure
compliance with civil rights, labor and other rc-quirements .
Step 11 — Conduct Final Inspection
Upon completion of the construction activities, the architect/-
engineer must provide the grantee with a set of as-built plans with a
request for final payment. Before making the final payment less ten
percent for retainage, the grantee must conduct a final inspection of
the construction work. (Water and sewer projects also require an
inspection by the Montana Department of Health and Environmental
Sciences.) Additionally, the grantee should determine whether all
federal and State requirements (e.g. labor standards) have been
satisfied, and that all contract files are complete.
The grantee can then issue an acceptance of work and make final
payment less the five percent retainage. After 45 days and upon
submission of a clean lien certificate by the contractor, the grantee
may release the retainage.
If after A5 days there remain claims or liens against the con-
tract, the grantee must take appropriate action including making
payments from the retainage and/or the performance and payment bonds
as prescribed by State law.
Step 12 — Maintain Records
For each prime contract the grantee should maintain a file with
the following documentation required by this chapter and chapters V
and VI:
— design and cost estimates;
evidence of easements and acquisition;
bid documents, including required civil rights, labor, and
other provisions;
evidence of bid advertising;
VIII-10
minutes of bid opening including, tabulation of bids;
evidence of low bid review;
letter of request for contractor eligibility;
DOC notice of contractor eligibility;
Notice of Contract Award;
executed contract documents with attachments, including
contractor's Section 3 plan;
minutes of pre-construction conference;
copy of Notice to Proceed;
copy of Notice of Contract Award and Pre-corstruction
Conference;
monitoring and inspection reports;
minority business enterprise form (Exhibit V-I) ;
monthly utilization reports provided by contractor (Exhibit
VIIT-N);
evidence that required labor notices were posted at the
construction site;
contractor's weekly payroll and Statement of Compliance;
construction worker interviews;
evidence of any violations and resolution;
evidence of the final inspection;
Notice of Acceptance of Work;
Clean Lien Certificate; and
evidence of disposition of outstanding claims.
VIII-ll
CHAPTER VIII
EXHIBITS
VIII-A - Architect's Certification: Compliance with Minimum
Standards for Accessibility by the Physically Handicapped
VIII-B - Transmittal of Contract Document Checklist
VIII-C - Advertisement for Bids
VTII-D - Instructions to Bidders
VIII-E - General Conditions
VIII-F - Supplemental General Conditions
VIII-G - Bid for Lump Sum Contracts
VIII-H - Bid for Unit Price Contracts
VIII-I - Bid Bond
VIII-J - Performance and Payment Bonding Requirements
VIII-K - Contractor Certifications
VTII-L - Contract
VIII-M - Notice of Contract Award and Preconstruction Conference
VIII-N - Monthly Employment Utilization Report
VIII-12
Contract No.
Project Name
Address
Exhibit VIII-A
ARCHITECT'S CERTIFICATION:
COMPLIANCE WITH MINIMUM STANDARDS FOR
ACCESSIBILITY BY THE PHYSICALLY HANDICAPPED
Pursuant to the requirements of the Architectural Barriers Act of 1968,
42 use 4151, and the regulations issued subsequent thereto, the undersigned
certifies that the design of the above-mentioned project is in conformance
with the minimum standards contained in the American Standard Specifications
for Making Buildings and Facilities Accessible To and Usable By the Physically
Handicapped, Number A-1 17. lR-1971 (as modified by 41 CFR 101-19.603).
Architect for the Project:
(Legal Name and Address)
Registration Number:
Signature:
; Print Name)
Official Signature
For Grantee :
Date:
; Print Name;
To: Montana Department of Commerce
Community Development Division
Cogswell Building, Room C-211
Capitol Station
Helena, Montana 59620
VIII-A-1
Exhibit VIII-B
TRANSMITTAL OF CONTRACT DOCUMENT CHECKLIST
(Type on letterhead of grantee or project engineer)
(Date)
Montana Department of Commerce
Community Development Division
Cogswell Building, Room C-211
Capitol Station
Helena, MT 59620
This is to certify that the bid document prepared by
dated for
(describe project) , in the amount of $
contains provisions for compliance to the applicable federal
requirements as outlined on the attached checklist.
Your review of the attached checklist would be appreciated. If you
have any questions or comments please contact ( name ) at
(telephone number) .
Sincerely,
(Signature)
CDBG Project Manager
Chief Elected Official, or Project Engineer
CDBG Project
, Montana
VIII-B-1
CDBG CONSTRUCTION CONTRACT CHECKLIST
Davis - Bacon (AO USC 276a to a-7) (29 CFR P f, 5)
Copeland Antl-kickback (18 USC 874) (29 CFR P & 3)
Contract Work Hours and Safety Standard Act (40 USC
327 - 330) (27 CFR P ^ 5)
Title VI of the Civil Rights Act of 1964
Title VIII of the Civil Rights Act of 1968
Executive Order 11246 (7 paragraph if over $10,000)
Executive Order 11063 (non-discrimination in housing
and lending)
Section 109 of the Housing and Community Development
Act of 1964
Section 3 of the Housing and Urban Development Act of
1968
Age Discrimination Act of 1975, as amended
Section 504, Rehabilitation Act of 1973, as amended
Architectural Barriers Act of 1968
DOC Access to Contractor's Records Clause
(IF OVER $100,000)
Section 306 of the Clean Air Act (42 USC 1857)
Clear Water Act of 1977 (33 USC 1368, Section 508)
EPA Regulations at 40 CFR, Part 15
VIII-B-2
Exhibit VIII-C
ADVERTISEMENT FOR BIDS
Owner:
Address:
Separate sealed BIDS for the construction of (briefly describe nature,
scope, and major elements of the project)
will be received by
at the office of
until (Standard/Daylight Savings Time),
, 19 , and then atsaidoffice publicly opened
and read aloud.
The CONTRACT DOCUMENTS may be examined at the following locations:
Copies of the CONTRACT DOCUMENTS may be obtained at the office of
located at
upon payment of $ for each set.
Any BIDDER, upon returning the CONTRACT DOCUMENTS promptly and in
good condition, will be refunded its payment, and any non-bidder upon so
returning the CONTRACT DOCUMENTS will be refunded $ .
Date Signature
VIlI-C-1
•
Exhibit VIII-D
INSTRUCTIONS TO BIDDERS
1. USE OF SEPARATE BID FORMS
These Contract Documents include a complete set of bidding and
Contract forms which are for the convenience of bidders and are not to
be detached from the Contract Document, filled out, or executed.
Separate copies of Bid Forms are furnished for that purpose.
2. INTERPRETATIONS OF ADDENDA
No oral interpretation will be made to any Bidder as to the
meaning of the Contract Documents or any part thereof. Every request
for such an interpretation shall be made in writing to the Local
Public Agency. Any inquiry received seven or more days prior to the
date fixed for opening of Bids will be given consideration. Every
interpretation made to a Bidder will be in the form of an Addendum to
the Contract Documents, and when issued, will be on file in the office
of the Local Public Agency and the office of the Engineer at least
five days before Bids are opened. In addition, all Addenda will be
mailed to each person holding Contract Documents, but it shall be the
Bidder's responsibility to make inquiry as to the Addenda issued. All
such Addenda shall become part of the Contract and all Bidders shall
be bound by such Addenda, whether or not received by the Bidders.
3. INSPECTION OF SITE
Each Bidder should visit the site of the proposed work and fully
acquaint itself with the existing conditions there relating to con-
struction and labor, and should fully inform itself as to the facil-
ities involved, the difficulties and restrictions attending the
performance of the Contract. The Bidder should thoroughly examine and
familiarize itself with the Drawings, Technical Specifications, and
all other Contract Documents. The Contract by the execution of the
Contract shall in no way be relieved of any obligation under it due to
its failure to receive or examine any form or legal instrument or to
visit the site and acquaint itself with the conditions there existing
and the Local Public Agency will be justified in rejecting any claim
based on facts regarding which it should have been on notice as a
result thereof.
4. ALTERNATIVE BIDS
No alternative bids will be considered unless alternative bids
are specifically requested by the technical specifications.
5. BIDS
a. All Bids must be submitted on forms supplied by the Local
Public Agency and shall be subject to all requirements of the Contract
Documents, including the Drawings, and these INSTRUCTIONS TO BIDDERS.
VIII-D-1
All Bids must be regular in every respect and no interlineations,
excisions or special conditions shall be made or included in the Bid
Form by the Bidder.
b. Bid nocnmcnts inc hiding the Rid, the Bid Ciuiranty, the
Non-Collusion Affidavit and tlie Statement of tho Bidder's Qualifica-
tions (if requested) shall be enclosed in envelopes (outer and inner),
both of which shall be sealed and clearly labeled with the words "Bid
Documents", project number, name of Bidder, and the date and time of
bid opening in order to guard against premature opening of the Bid.
c. The Local Public Agency may consider as irregular any Bid on
which there is an alteration of or departure from the Bid Form hereto
attached and at its option may reflect the same.
d. If the Contract is awarded, it will be awarded by the Local
Public Agency to a responsible Bidder on the basis of the lowest Bid
and the selected Alternative Bid items, if any. The Contract will
require the completion of the work according to the Contract Docu-
ments .
e. Each Bidder shall include in its Bid the following informa-
Principals
Names
Social Security Numbers
Home Addresses, including City, State & Zip Code
Firm
Name
Treasury Number
Address including City, State & Zip Code
6. BID GUARANTY
a. The Bid must be accompanied by a Bid guaranty which shall
not be less than five (5) percent of the amount of the Bid. At the
option of the Bidder, the guaranty or a surety company listed in the
latest issue of U.S. Treasury Circular 570. The amount of such Bid
bond shall be within the maximum amount specified for such Company in
said Circular 570. No Bid will be considered unless it is accompanied
by the required guaranty. Certified bank drafts or checks must be
made payable to the order of (agency) . Cash deposits will
not be accepted. The Bid guaranty shall insure the execution of the
agreement and the furnishing of the surety bond or bonds by the
successful Bidder, all as required by the Contract Documents.
b. Revised Bids submitted before the opening of Bids, whether
forwarded by mail or telegram, if representing an increase in excess
of two (2) percent of the original Bid, must have the Bid guarantv
adjusted accordingly; otherwise the Bid will not be considered.
VIII-D-2
c. Certified checks or bank drafts, or the amount thereof, Bid
bonds and negotiable U.S. Government bonds of unsuccessful Bidders
will be returned as soon as practical after the opening of the Bids.
7. COLLUSIVE AGREEMENTS
a. Each Bidder submitting a Bid to the Local Public Agency for
any portion of the work contemplated by the documents on which bidding
is based shall execute and attach thereto, an affidavit substantially
in the form herein provided, to the effect that it has not entered
into a collusive agreement with any other person, firm, or corporation
in regard to any Bid submitted.
b. Before executing any subcontract the successful Bidder shall
submit the name of any proposed subcontractor for prior approval and
an affidavit substantially In the form provided herein.
8. STATEMENT OF BIDDER'S QUALIFICATIONS
Each Bidder shall upon request of the Local Public Agency submit
on the form furnished for that purpose (a copy of which is included in
the Contract Documents), a statement of the Bidder's qualifications,
its experience record in constructing the type of improvements
embraced in the contract, its organi7,ation and equipment available for
the work contemplated, and, when specifically requested by the Local
Public Agency, a detailed financial statement. The Local Public
agency shall have the right to take such steps as it deems necessary
to determine the ability of the Bidder to perform its obligations
under the Contract and the Bidder shall furnish the Local Public
Agency all such information and data for this purpose as it may
request. The right is reserved to reject any Bid where an investig-
ation of the available evidence or information does not satisfy the
Local Public Agency that the Bidder ds qualified to carry out properly
the terms of the Contract.
9. UNIT PRICES
The unit price for each of the several items in the proposal of
each Bidder shall include its pro rata share of overhead so that the
sum of the products obtained by multiplying the quantity shown for
each item by the unit price Bid represents the total Bid. Any Bid not
conforming to this requirement may be rejected as informal . The
special attention of all Bidders is called to this provision, for
should conditions make It necessary to revise the quantities, no limit
will be fixed for such increased or decreased quantities nor extra
compensation allowed, provided the net monetary value of all such
additive and subtractive changes in quantities of such items of work
(i.e., difference in cost) shall not increase or decrease the original
contract price by more than twenty-five (25) percent, except for work
not covered in the Drawings and Technical Specifications as provided
for in the Contract Documents. (If lump-sum Bids are deemed advisable
due to local conditions, this section must be revised accordingly.)
VIII-D-3
10. CORRECTIONS
Erasures or other changes in the Bids must be explained or noted
over the signature of the Bidder.
11. TIME FOR RECEIVING BIDS
a. Bids received prior to the advertised hour of opening will
be securely kept sealed. The officer whose duty it is to open them
will decide when the specified time has arrived, and no Bid received
thereafter will be considered; except that when a Bid arrives by mail
after the time fixed for opening, but before the reading of all other
Bids is completed, and it is shown to the satisfaction of the Local
Public Agency that the non-arrival time was due solely to delay in the
mails for which the Bidder is not responsible, such Bid will be
received and considered.
b. Bidders are cautioned that, while telegraphic modifications
of Bids mav be received as provided above, such modifications, if not
explicit and if in any sense subject to misinterpretation, shall make
the bid so modified or amended, subject to rejection.
12. OPENING OF BIDS
At the time and place fixed for the opening of Bids, the Local
Public Agency will cause to be opened and publicly read aloud every
Bid received within the time set for receiving Bids, irrespective of
any irregularities therein. Bidders and other persons properly
interested may be present, in person or by representative.
13. WITHDRAWAL OF BIDS
Bids may be withdrawn on written or telegraphic request dis-
patched by the Bidder In time for delivery in the normal course of
business to the time fixed for opening; provided, that written confir-
mation of any telegraphic withdrawal over the signature of the Bidder
is placed in the mail and postmarked prior to the time set for Bid
opening. The Bid guaranty of any Bidder withdrawing its Bid in
accordance with the foregoing conditions will be returned promptly.
14. AWARD OF CONTRACT: REJECTION OF BIDS
a. The Contract will be awarded to the responsible Bidder
submitting the lowest Bid complying with the conditions of the In-
vitation for Bids. The Bidder to whom the award is made will be
notified at the earliest possible date. The Local Public Agency,
however, reserves the right to reject any and all bids and to waive
any informality in Bids received whenever such rejection or waiver is
in its interest.
b. The Local Public Agency reserves the right to consider as
unqualified to do the work of general construction any Bidder who does
not habitually perform with his forces the major portions of the work
involved in construction of the Improvements embraced in this Con-
tract.
Vlll-D-4
15. EXECUTION OF AGREEMENT: PERFORMANCE AND PAYMENT BOND
a. Subsequent to the award and within ten (10) days after the
prescribed forms are presented for signature , the successful Bidder
shall execute and deliver to the Local Public Agency an Agreement in
the form included in the Contract Documents in such number or copies
as the Local Public Agency may require.
b. Having satisfied all conditions of award as set forth
elsewhere in these documents, the successful Bidder shall, within the
period specified in paragraph "a" above, furnish a surety bond in a
penal sum not less than the amount of the Contract as awarded, as
security for the faithful performance of the Contract, and for the
payment of all persons, firms, or corporations to whom the Contractor
may become legally indebted for labor, materials, tools, equipment, or
services of any nature including utility and transportation services,
employed or used by it in performing the work. Such bond shall be in
the same form as that included in the Contract Documents and shall
bear the same date as, or a date subsequent to that of the Agreement.
The current power of attorney for the person who signs for any surety
company shall be attached to such bond. This bond shall be signed by
a guaranty or surety company listed in the latest issue of the U.S.
Treasury Circular 570 and the penal sum shall be within the maximum
specified for such company in said Circular 570.
(If applicable State laws require separate bonds as security (1)
for the faithful performance of the Contract and (2) for the payment
of all services, labor, and materials, revise the above paragraph in
accordance with the statutory requirements of the particular State
law. )
c. The failure of the successful Bidder to execute such Agree-
ment and to supply the required bond or bonds within ten days after
the prescribed forms are presented for signature, or within such
extended time as the local public agency may grant, based upon reasons
determined to be sufficient, shall constitute a default, and the
Agency may either award the contract to the next lowest responsible
bidder or readvertise for Bids, and may charge against the Bidder the
difference between the amount of the Bid and the amount for which a
Contract for the work is subsequently executed, irrespective of
whether the amoinit thus due exceeds the amount of the Bid Bond. If a
more favorable Bid Is received by readvortising the defaulting Bidder
shall have no claim against the Agency for a refund.
16. WAGES AND SALARIES
a. Attention of Bidders is particularly callea to the require-
ments concerning the payment of not less than the prevailing wage and
salary rates specified in the Contract Documents and the conditions of
employment with respect to certain categories and classifications for
employees.
VIII-D-5
b. The rates of pay set forth under GENERAL CONDITIONS arc the
mlnimums to be paid during the life of the Contract. It is therefore
the responsibility of Bidders to inform themselves as to local labor
conditions such as the length of work day and work week, overtime
compensation, health and welfare contributions, labor sup])ly and
prospective changes or adjustments of rates.
17. EQUAL EMPLOYMENT OPPORTUNITY
Attention of Bidders is particularly called to the requirement
for ensuring that employees and applicants for employment are not
discriminated against because of their race, color, religion, national
origin, sex, marital status, age, or political ideas.
VIII-D-6
EXHmrr vin-E
GENERAL CONDITIONS
1. Contract and Contract Documents
The project to be constructed pursuant to this contract will be financed with
assistance from the Montana CDBG Program and is subject to all applicable Federal
and State laws and regulations.
The Plans, Specifications and Addenda, hereinafter enumerated in Paragraph 1 of
the Supplemental General Conditions shall form part of this Contract and the
provisions thereof shall be as binding upon the parties hereto as if they were herein
fully set forth.
1. Contract and Contract Documents 36.
2. Definitions 37.
3. Additional Instructions and 38.
Drawings 40.
4. Shop or Setting Drawings 41.
5. Materials, Services, Facilities 42.
6. Contractor's Title to Materials 43.
7. Inspection/Testing of Materials 44.
8. "Or Equal" Clause 45.
9. Patents 46.
10. Surveys, Permits and Regulations 47.
11. Contractor's Obligations 48.
12. Weather Conditions 49.
13. Protection of Work and Property- 50.
Emergency 51.
14. Inspection 52.
15. Reports, Records and Data 53.
16. Superintendence by Contractor 54.
17. Changes in Work 55.
18. Extras 56.
19. Time for Completion and Liqudated 57.
Damages 58.
20. Correction of Work 59.
21. Subsurface Conditions-Different 60.
22. Claims for Extra Cost 61.
23. Owner Termination of Contract 62.
24. Construction Schedule/Periodic 63.
Estimates 64.
25. Payments to Contractor 65.
26. Final Payment as Release 66.
27. Payments by Contractor 67.
28. Insurance 68.
29. Contract Security 69.
30. Additional or Substitute Bond 70.
31. Assignments
32. Mutual Responsibility or Contractors
33. Separate Contractors
34. Subcontracting
35. Architect/Engineer's Authority
Stated Allowances
Removal of Debris
Detail Estimates
General Guaranty
Conflicting Conditions
Notice and Service Thereof
Provisions Deemed Inserted
Life/Health Protection
Subcontracts
Interest/Congressm en
Other Prohibited Interests
Use Prior to Acceptance
Photographs
Supension of Work
Minumum Wages
Underpayments of Wages
Fringe Benefits
Overtime Compensation
Apprentices
Employment Prohibited
Anti-Kickback Act
Classifications Not Listed
Benefits Not Expressed
Posting of Wage Rates
Complaints or Testimony
Claims and Disputes
Questions Re: Regulations
Payrolls and Records
Specific Coverage
Ineligible Subcontractors
Provisions to be Included
Breach of Labor Standards
Employment Practices
Contract Termination; Debarment
VIII-E-1
2. Definitions
The following terms as used in this contract are respectively defined as follows:
(a) "Contractor": A person, firm or corporation with whom the contract is made
by the Owner.
(b) "Subcontractor": A person, firm or corporation supplying labor and materials
or only labor for work at the site of the project, for and under separate
contract or agreement with the Contractor.
(c) "Work on (at) the project": Work to be performed at the location of the
project, including the transportation of materials and supplies to or from the
location of the project by employees of the Contractor and any
Subcontractor.
3. Additional Instructions and Detail Drawings
The Contractor will be furnished ndditional instructions and detail drawings as
necessary to carry out tlie work included in the contract. The additional drawinf;s
and instructions thus supplied lo the Contractor v/ill 'Coordinate willi the Contract
Documents and will be so prepared that they can be reasonably interpreted as part
thereof. The Contractor shall carry out the work in accordance with the additional
detail drawings and instructions. The Contractor and the Architect/Engineer v;ill
prepare jointly (a) a schedule, fixing the dates at which special detail drawings will
be required, such drawings, if any, to be furnished by the Architect/Engineer in
accordance with said schedule, and (b) a schedule fixing the respective dates for the
submission of shop drawings, the beginning of manufacture, testing and innstallation
of materials, supplies and equipment, and the completion of the various part^ of the
work; each such schedule to be subject to change from time to time in accordance
with the progress of the work.
4. Shop Setting Drawings
The Contractor shall submit promptly to the Arciutect/tingineer two copies of each
shop or setting drawing prepared in accordance with the schedule predetermined
aforesaid. After examination of such drawings by the Architect/Engineer and the
return thereof, the Contractor shall make such corrections to the drawings as hnwe
been indicated and shall furnish the Architect/Engineer with two corrected copies.
If requested by the Architect/Engineer the Contractor must furnish a<:'iiiional
copies. Regardless of corrections made in or approval given to such drawings by
the Architect/Engineer, the Contractor will nevertheless be responsible for the
accuracy of such drawings and for their conformity to the Plans and Specifications,
unless it notices the Architect/Engineer in writing of any deviations at the time it
furnishes such drawings.
5. Materials, Services, and Facilities
(a) It is understood that except as otherwise specifically stated in the Contract
Documents, the Contractor shall provide and pay for all materials, labor,
tools, equipment, water, light, power, transportation, superintendence,
temporary construction of every nature, and all other services and facilities
of every nature whatsoever necessary to execute, complete, and deliver the
work within the specified time.
VIII-E-2
(b) Any work necessary to be performed after regular hours, on Sundays or
Le gal Holidays, shall be performed without additional expenses to the
Owner.
6. Contractor's Title to Materials
No materials or supplies for the work shall be purchased by the Contractor or by
any Subcontractor subject to any chattel mortgage or under a conditional sale
contract or other agreement by which an interest is retained by the seller. The
Contractor warrants that it has good title to all materials and supplies used by it
in the work, free from all liens, claims, or encumbrances.
7. Inspection and Testing of Materials
(a) All materials and equipment used in the construction of the project shall be
subject to adequate inspection and testing in accordance with accepted
standards. The laboratory or inspection agency shall be selected by the
Owner. The Owner will pay for all laboratory inspection service direct, and
not as part of the contract.
(b) Materials of construction, particularly those upon which the strength and
durability of the structure may depend, shall be subject to inspection and
testing to establish conformance with specifications and suitability for uses
intended.
8. "Or Equal" Clause
Whenever a material, article or piece of equipment is identified on the plans or in
the specifications by reference to manufactures' or vendors' names, trade names,
catalogue numbers, etc., it is intended merely to establish a standard; and, any
material, article, or equipment of other manufactures and vendors which will
perform adequately the duties imposed by the general design will be considered
equally acceptable provided the material, article, or equipment so proposed, is, in
the opinion of the Architect/Engineer, of equal substance and function. It shall not
be purchased or installed by the contractor without the Architect/Engineer's
written approval.
9. Patents
(a) The Contractor shall hold and save the Owner and its officers, agents, servsmts,
and employees harmless from liability of any nature or kind, including cost and
expenses for, or on account of, any patented or unpatented invention, process,
article, or appliance manufactured or used in the performance of the contract,
including its use by the Owner, unless otherwise specifically stipulated in the
Contract Documents.
(b) License or Royalty Fees: License and/or Royalty Fees for the use of a
process which is authorized by the Owner of the project must be reasonable,
and paid to the holder of the patent, or its authorized licensee, direct by the
Owner and not by or through the Contractor.
(c) If the Contractor uses any design, device or materials covered by letters,
patent or copyright, it shall provide for such use by suitable agreement with
VIII-E-3
the Owner of such patented or copyrighted design, device or material. It is
mutually agreed and understood, that, without exception, the contract prices
shall include all royalties or costs arising from the use of such design, device
or materials, in any way involved in the work. The Contractor and/or its
Sureties shall indemnify and save harmless the Owner of the project from
any and all claims for mfringement by reason of the use of such patented or
copyrighted design, device or materials or any trademark or copyright in
connections with work agreed to be performed under this contract, and shall
indemnify the Owner for any cost, expense or damage which it may be
obligated to pay by reason of such infringement at any time during the
prosecution of the work or after completion of the work.
10. Surveys, Permits, and Regulations
Unless otherwise expressly provided for in the Specifications, the Owner will
furnish to the Contractor all surveys necesary for the execution of the work.
The Contractor shall procure and pay all permits, licenses and approvaLs necessary
for the execution of his contract.
The Contractor shall comply witli all laws, ordiriances, rules, and rcgulat'ons
relating to performance of the work, the protection of adjacent property, and the
maintenance of passageways, guard fences or other protective facilities.
11. Contractor's Obligations
The Contractor shall and will, in good workmanlike manner, do and perform all
work and furnish all supplies and materials, machinery, equipment, facilities and
means, except as herein otherwise expressly specified, necessary or i^roper to
perform and complete aU the work required by this contract, within the time herein
specified, in accordance with the provisions of this contract and said specifications
and in accordance with the plans and drawings covered by this contract any and aU
supplemental plans and drawings, and in accordance with the directions of the
Architect/Engineer as given from time to time during the progress of the work. It
shall furnish, erect, m.aintain, and remove such construction plant and such
temporary works as may be required.
The Contractor shall observe, comply with, and be subject to all terms, conditions,
requirements, and limitations of the contract and specifications, and shall do, c-arry
on, and complete the entire work to the satisfaction rn the Arehitect/Eneineer and
the Owner.
12. Weather Conditions
In the event of temporary suspension of work, or during inclement weather, or
whenever the Architect/Engineer shall direct, the Contractor wiU, and wiU cause
Its subcontractors to protect carefully its and their work and materials against
damage or injury from the weather. If, in the opinion of the Architect/Engineer,
any work or material shall have been damaged or injured by reason of failure on thn
part of the Contractor or any of his Subcontractors so to protect its work, such
materials shall be removed and replaced at the expense of the Contractor,
13. Protection of Work Property - Emergency
VIII-E-4
The Contractor shall at all times safely guard the Owner's property from injury or
loss in connection with this contract. It shall at all times safely guard and protect
its own work, emd that of adjacent property from damage. The Contractor shall
replace or make good any such damage, loss or injury unless such be caused directly
by errors contained in the contract or by the Owner, or its duly authorized
representatives.
In case of an emergency which threatens loss or injury of property, and/or safety or
life, the Contractor will be allowed to act, without previous instructions from the
Architect/Engineer, in a diligent manner. It shall notify the Architect/Engineer
immediately thereafter. Any claim for compensation by the Contractor due to such
extra work shall be promptly submitted to the Architect/Engineer for approval.
Where the Contractor has not taken action but has notified Architect/Engineer of
an emergency threatening injury to persons or damage to the work of any adjoining
property, it shall act as instructed or authorized by the Architect/Engineer.
The amount of reimbursement claimed by the Contractor on account of any
emergency action shall be detemined in the manner provided in Paragraph 17 of the
General Conditions.
14. Inspection
The authorized representatives and agents of the Montana Department of
Commerce shall be permitted to inspect all work, materials, payrolls, records of
personnel, invoices of materials, and other relevant data and records.
15. Reports, Records, and Data
The Contractor shall submit to the Owner such schedule of quantities and costs,
progress schedule, payrolls, reports, estimates, records, and other data as the
Owner may request concerning work performed or to be performed under this
contract.
16. Superintendence by Contractor
At the site of the work the Contractor shall employ a construction superintendent
or foreman who shall have full authority to act for the Contractor. It is understood
that such representative shall be acceptable to the Architect/Engineer and shall be
one who can be continued in that capacity for the particular job involved unless it
ceases to be on the Contractor's payroll.
17. Changes in Work
No changes in the work covered by the approved Contractor Documents shaU be
made without having prior written approval of the Owner. Charges or credits for
the work covered by the approved change shall be determined by one or more, a
combination of the following methods:
(a) Unit bid prices previously approved.
(b) An agreed lump sum
(c) The actual cost of:
1. Labor, including foreman;
VIII-E-5
2. Materials entering premanently into the work;
3. The ownership or rental cost of construction plant and equipment
during the time of use on the extra work;
4. Power and consumable supplies for the operation of power equipment;
5. Insurance;
6. Social Security and old age and unemployment contributions.
To the cost under (c) there shall be added a fixed fee to be agreed upon but
not top exceed fifteen percent (15%) of the actual cost of the work. The fee
shall be compensation to cover the cost of supervision, overhead, bond,
profit and any other general expenses.
18. Extras
Without invalidating the contract, the Owner may order extra work or make
changes by altering, adding to or deducting from the work, the contract sum being
adjusted accordingly, and the consent of the Surety being first obtained where
necessary or desirable. All the work of the kind bid upon shall be paid for at the
price stipulated in the proposal, and no claims for any extra work or materials shall
be allowed unless the work is ordered in writing by the Owner or is
Architect/Engineer, acting officially for the Owner, and the price is stated in such
order.
Time for Completion and Liquidated Daniages
It is hereby understood and mutually agreed, by and between the Contractor and the
Owner, that the date of beginning and the time for completion as specified in the
contract of the work to be done hereunder are ESSENTIAL CONDITIONS of this
contract; and it is further mutually understood and agreed that the work embraced
in this contract shall be commenced on a date to be specified in the "Notice to
Proceed."
The Contractor agrees that said work shall be prosecuted regularly, diligently, and
uninteruptedly at such rate of progress as will insure full completion thereof within
the time specified. It is expressly understood and agreed, by and between the
Contractor and the Owner, that the time for the completion of the work described
herein is a reasonable time for the completion of the same, taking into
consideration the average climatic range and usual industrial conditions prevailing
in this locality.
If the said Contractor shall neglect, fail or refuse to complete the work within the
time herein specified, or any proper extension thereof granted by the Owner, then
the Contractor does hereby agree, as a part consideration for the awarding of this
contract, to pay the Owner the amount specified in the contract, not as a penalty
but as liquidated damages for such breach of contract as hereinafter set forth, for
each and every calendar day that the Contractor shall be in default after the time
stipulated in the contract for completing the work.
The said amount is fixed and agreed upon by and between the Contractor and the
Owner because of the impracticability and extreme difficulty of fixing and
ascertaining the actual damages the Owner would in such event sustain, and said
amount is agreed to be the amount of damages which the Owner would sustain and
said amount shall be retained from time to time by the Owner from current
periodical estimates.
VIII-E-6
It is further agreed that time is of the essence of each and every portion of this
contract and of the speficiations wherein and definite and certain length of time is
fixed for the performance of any act whatsoever, and where under the contract an
additional time is allowed for the completion of any work, the new time limit fixed
by such extension shall be of the essence of this contract, Provided, that the
Contractor shall not be charged with liquidated damages or any excess cost when
the Owner determines that the Contractor is without fault and the Contractor's
reasons for the time extension are acceptable to the Owner; Provided, further, that
the Contractor shall not be charged with liquidated damages or any excess cost
when the delay in completion of the work is due:
(a) To any preference, priority or allocation order duly issued by the
Government;
(b) To unforeseen cause beyond the control and without the fault or neglience of
the Contractor, including, but not restricted to, acts of God, or the public
enemy, acts of the Owner, acts of another Contractor in the performance of
a contract with the Owner, fires, floods, epidemics, quarantine restrictions,
strikes, freight embargoes, and severe weather; emd
(c) To any delays of Subcontractors or suppliers occasioned by any of the causes
specified in subsections (a) and (b) of this article:
Provided, further, that the Contractor shall, within ten (10) days from the beginning
of such delay, unless the Owner shall grant a further period of time prior to the
date of final settlement of the contract, notify the Owner, in writing, of the cause
of the delay, shall ascertain the facts and extent of the delay and notify the
Contractor within a reasonable time of its decision in the matter.
20. Correction of Work
AU work, all materials, whether incorporated in the work or not, all processes of
manufacture, and all methods of construction shall be at aU times and places
subject to the inspection of the Architect/Engineer who shall be the final judge of
the quality and suitability of the work, materials, processes of manufacture, and
methods of construction for the purposes for which they are used. Should they fail
to meet its approval they shall be forthwith reconstructed, made good, replaced
and/or corrected as the case may be, by the Contractor at its own expense.
Rejected material shall immediately be removed from the site. If, in the opinion of
the Architect/Engineer, it is undesirable to replace any defective or damaged
materials or to reconstruct or correct any portion of the work injured or not
performed in accordance with the Contract Documents, the compensation to be
paid to the Contractor hereunder shall be reduced by such amount as in the
judgement of the Architect/Engineer shall be equitable.
21. Subsurface Conditions Found Different
Should the Contractor encounter sub-surface and/or latent conditions at the site
materially differing from those shown on the Plans or indicated in the
Specif ications, it shall immediately give notice to the Architect/Engineer of such
conditions before they are disturbed. The Architect/Engineer will thereupon
promptly investigate the conditions, and if it finds that they materially differ from
those shown on the Plans or indicated in the Specifications, it will at once make
VIII-E-7
such changes in the Plans and/or Specifications as it rnay find necessary, any
increase or decrease of cost resulting from such changes to be adjusted in the
manner provided in Paragraph 17 of the General Conditions.
22. Claims for Extra Cost
No claim for extra work or costs shall be aillowed unless the same was done in
pursuance of a written order of the Architect/Engineer approved by the Owner, as
aforesaid, and the claim presented with the first estimate after the changed or
extra work is done. When work is performed under the terms of subparagraph 17(c)
of the General Conditions, the Contractor shall furnish satisfactory biUs, payrolls
and vouchers covering all items of cost and when requested by the Owner, give
access to accounts relating tliereto.
23. Right of the Owner to Teriniiiute Contract
In the event that any of the provisions of this contract are violated by the
Contractor, or by any of its subcontractors, the Owner may serve written notice
upon the Contractor and the Surety of its intention to terminate the contract, such
notices to contain the reason for such intention to terminate tlie contract, and
unless within (10' days after the serving of such notice upon the Coritractcr, such
violation or delay shall cease and satisfactory arrangement of correction be made,
the contract shall, upon the expiration of said ten (10) days, cease and terminate.
In the event of any such termination, the Owner shall immediately serve notice
thereof upon the Surety and the Contractor and the Surety shall have the right to
take over and perform the contract; Provided, however, that if the Surety does not
commence performance thereof within ten (10) days from the date of the mailing to
such Surety of notice of termination, the Owner may take over the work and
prosecute the same to completion by the contract or by force accouiii for the m
account and at the expense of the Contractor and the Contractor and his Surety
shaU be liable to the Owner for any excess cost occasioned the Owner thereby, and
in such event the Owner may take possession of and utilize in completing the work,
such material, appliances, and plant a:> may be on the site of the work and
necessary therefor.
24. Construction Schedule and Periodic Estimates
Immediately after execution and delivery of the contract, and before the first
partial payment is made, the Contractor shall deliver to the Owner an estini'ited
construction progress schedule in form satisfactory to the Owner, showing the
proposed dates of commencement and completion of each of th*' various
subdivisions of work required under the Contract Docunments and the anticipated
amount o^' each monthly payment that will become due the Contractor in
accordance with the progress schedule. The Contractor shall also furnish on forms
to be supplied by the Owner (a) a detailed estimate giving a complete breakdown of
the contract price and (b) periodic itemized estimates of work done for the purpose
of making partial paymeiits thereon. The costs employed in making up any of these
schedules will be used only for determining the basis of partial payments and will
not be considered as fixing a basis for additions to or deductions from the contract
price.
25. Payments to Contractor
(a) Not later than the 15th day of each calendar month the Owner shall make a ^
VIII-E-8
progress payment to the Contractor on the basis of a duly certified and
approved estimate of the work performed during the preceding calendar
month under this contract, but to insure the proper performance of this
contract the Owner shaU retain ten percent (10%) of the amount of each
estimate until final completion and acceptance of all worl< covered by this
contract; Provided, that the Contractor shaU submit its estimate not later
than the first day of the month; Provided, further, that the Owner at any
time after fifty percent (50%) of work has been completed, if it finds that
satisfactory progress is being made, may make any of the remaining progress
payments in full; Provided, further, that on completion and acceptance of
each separate building, public work, or other divison of the contract, on
which the price is stated separtely in the contract, payment may be made in
full, including retained percentages thereon, less authorized deductions.
(b) In preparing estimates the material delivered on the site preparatory to work
done may be take into consideration.
(c) All material and work covered by partial payments made shall thereupon
become the sole property of the Owner, but this provision shall not be
construed as relieving the Contractor from the sole responsibility for the
case and protection of materisds and work upon which payments have been
made or the restoration of any damaged work, or as a waiver of the right of
the Owner to require the fulfillment of all of the terms of the contract.
(d) Owner's Right to Withhold Certain Amounts and Make Application Thereof;
The Contractor agrees that it will indemnify and save the Owner harmless
from aU claims growing out of the lawful demands of subcontractors,
laborers, workmen, mechanics, materialmen, and furnishers of machinery
and parts thereof, equipment, power tools, and all supplies, including
commissary, incurred in the furtherance of the performance of this
contract. The Contractor shall, at the Owner's request, furnish satisfactory
evidence that all obligations of the nature hereinabove designated have been
paid, discharged, or waived. If the Contractor fails so to do, then the Owner
may, after having served within notice on the said Contractor, either pay
unpaid bills, of which the Owner has written, direct, or withhold from the
Contractor's unpaid compensation a sum of money deemed reasonably
sufficient to pay any and all lawful claims until satisfactory evidence is
furnished that ail liabilities have been fully discouraged where-upon payment
to the Contractor shall be resumed, in accordance with the terms of this
contract, but in no event shall the provisions of this sentence be constructed
to impose any obligations upon the Owner to either the Contractor or his
Surety. In paying any unpaid bills of the Contractor, the Owner shall be
deemed the agent of the Contractor, and any payment so made by the Owner
shall be considered as a payment made under the contract by the Owner to
the Contractor and the Owner shall not be liable to the Contractor for any
such payments made in good faith.
26. Acceptance of Final Payment Constitutes Release
The acceptance by the Contractor of final payment shall be and shall operate as a
release to the Owner of all claims and aU liability to the Contractor for all things
done or furnished in connection with this work and for every act and neglect of the
Owner and others relating to or arising out of this work. No payment, however,
VIII-E-9
final or otherwise, shall operate to release the Contractor or its sureties from any
obligations under this contract or the Performance and Paymeni Bond.
27. Payments by Contractors
The Contractor shall pay (a) for all transportation and utility services not later than
the 20th day of the calendar month following that in which services are rendered,
(b) for all materials, tools, and other expendable equipment to the extent of ninety
percent (90%) of the cost thereof, not later than the 20th day of the calendar
month following that in which such materials, tools, and equipment are delivered at
the site of the project, and the balance of the cost thereof, not later than the 30th
day following the completion of that part of the work in or on which such materials,
tools, and equipment are incorporated or used, and (c) to each of itssubcontractors,
not later than the 5th day following each payment to the Contractor, the respective
amounts allowed the Contractor on account of the work performed byits
subcontractors to the extent to each subcontractor's interest therein.
28. Insurance
The Contractor shall not commence work under this contract until it has obtained
all the insurance required under this paragraph and such insurance has been
approved by the Owner, nor shall the Contractor allow any subcontractor lo
comm.ence work on its subcontract until the insurance required of the
subcontractor has l')een so obtained and approved,
(a) Compensation Insurance: The Contractor shall procure and shall maintain
during the life of its contract Worker's Compensation Insurance as
required by applicable State or territorial law for all of its employees to be
engaged in work at the site of the project under this contract and, in case of
any such work sublet, the Contractor shall require the subcontractor
similarly to provide Worker's Compensation Insurance for all of the latter's
employees to be engaged in such work unless such employees are covered by
the protection afforded by the Contractor's Worker's Compensation
Insurance, In ease any class of employees engaged in hazardous work on the
project under this contract is not protected under the Worker's
Compensation Statute, the Contractor shall provide and shall cause each
subcontractor to provide adequate employer's liability insurance for the
protection of such of its employees as are not otherwise protected.
(b) Contractor's Public Liability and Property Damage Insurance and Vehicle
Liability Insurance: The Contractor shall procure and shall maintain during
the life of this contract Contractor's Public Liability Insurance, Contractor's
Property Damage Insurance and Vehicle Liability Insurance in the amounts
specified in the Supplemental General Conditions.
(c) Subcontractor's Public Liability and Property Damage Insurance and Vehicle
Liability Insurance: The Contractor shall either (1) require each of its
subcontractors to procure and to maintain during the life of his subcontract.
Subcontractor's Public Liability and Property Damage Insurance and Vehicle
Liability Insurance of the type and in the amounts specified in the
Supplemental General Conditions specified in subparagraph (b) hereof, (2)
insure the activities of his policy, specified in subparagraph (b) hereof.
(d) Scope of Insurance and Special Hazards: The insurance required under
VI 11-1^10
subparagraphs (b) and (c) hereof shall provide adequate protection for the
Contractor and his subcontractors, respectively, against damage claims
which may arise from operations under this contract, whether such
operations be by the insured or by anyone directly or indirectly employed by
it and, also against any of the special hazards which may be encountered in
theperformance of this contract as enumerated in the Supplemental General
Conditions.
(e) Builder's Risk Insurance (Fire and Extended Coverage): Until the project is
completed and accepted by the Owner, the Owner, or Contractor (at the
Owner's option as indicated in the Supplemental General Conditions, Form
HUD-4238-N) is required to maintain Builder's Risk Insurance (fire and
extended coverage) on a 100 percent completed value basis on the insurable
portion of the project for the benefit of the Owner, the Contractor,
subcontractors as their interests may appear. The Contractor shall not
include any costs for Builder's Risk Insurance (fire Euid extended coverage)
premiums during construction unless the Contractor is required to provide
such insurance; however, this provision shall not release the Contractor from
its obligation to complete, according to plans and specifications, the project
covered by the contract, and the Contractor and its Surety shaU be obligated
to full performance of the Contractor's undertaking.
(f) Proof of Carriage of Insurance: The Contractor shall furnish the Owner with
certificates showing the type, amount, class of operations covered, effective
dates and date of expiration of policies. Such certificated shall also contain
substantially the following statement: "The insurance covered by this
certificate wiU not be cancelled or materially altered, except after (10) days
written notice has been received by the Owner."
29. Contract Security
The Contractor shall furnish a performance bond in an amount at lesist equal to one
hundred percent (100%) of the contract prices as security for the faithful
performance of this contract and also a payment bond in an amount not less than
one hundred percent (100%) of the contract price or in a penal sum not less than
that prescribed by State, territorial or local law, as security for the payment of all
persons performing labor on the project under this contract emd furnishing materials
in connection with this contract. The performance bond and the payment bond may
be in one or in a separate instruments in accordance with local law.
30. Additional or Substitute Bond
If at any time the Owner for justifiable cause shall be or become dissatisfied with
any surety of sureties, then upon the Performance or Payment Bonds, the
Contractor shall within five (5) days after notice from the Owner so to do,
substitute an acceptable bond (or bonds) in such form and sum and signed by other
surety or sureties as may be satisfactory to the Owner. The premiums on such
bonds shaU be paid by the Contractor. No further payments shaD be deemed due
nor shall be made until the new surety or sureties shall have furnished such an
acceptable bond to the Owner.
31. Assignments
The Contractor shall not assign the whole or any part of this contract or any
VIII-E-11
moneys due or to become due hereunder without consent of the Owner. In case the
Contractor assigns all or any part of any moneys due or to become due under this
contract, the instrument of assignment shall contain a clause substantially to the
effect that it is agreed that the right of the assignee in and to any monies due or
become due to the Contractor shall be subject to prior claims of all persons, firms,
and corporations of services rendered or materials supplied for the performance of
the work called for in this contract.
32. Mutual Responsibility of Contractors
If, through acts of neglect on the part of the Contractor, any other Contractor or
any subcontractor shall suffer loss or damage on the work, the Contractor agrees to
settle with such other Contractors or subcontractors by agreement or arbitration if
such other Contractor or subcontractor wiU so settle. If such other Contractor or
subcontractor shall assert any claim against the Owner on account of any damage
alleged to have been sustained, the Owner shall notify the Contractor, who shall
indemnify and save harmless the Owner against any such claim.
33. Separate Contract
The Contractor siiall coordinate its operations with those of other Contrai.'tors.
Cooperation will be required in the arrap.gement for the storage of materials and in
the detailed execution of the work. The Contractor, including its subcontractors,
shall keep informed of the progress and the detail work of other Contractors ind
shall notify the Architect/Engineer immediately of lack of progress or defective
workmanship on the part of other Contractors. Failure of a contractor to keep
informed of the work progressing on the site and failure to give notice of lack of
progress or defective workmanship by others shall be construed as acceptance by
it of the status of the work as being satisfactory for proper coordinatiori with its
own work.
34. Subcontracting
(a) The Contractor may utilize the services of specialty subcontractors on those
parts of the work which, under normal contracting practices, are performed
by specialty subcontractors.
(b) The Contractor shall not award any work to any subcontractor without prior
written approval of the Owner, which approval will not be given until the
Contractor submits to the Owner a written statement concerning the
proposed award to the subcontractor, which statement shall contam such
inforiiiation as the Owner may require.
(c) The Contractor shall be as fuUy responsible to the Owner for the acts and
omissions of its subcontractors, and of persons either directly or indirectly
employed by them, as it is for the acts and omissions of persons employed
by 'it.
(d) The Contractor shaU. cause appropriate provisions to be inserted in all
subcontracts relative to the work to bind subcontractors to the Contract by
the terms of the General Conditions and other contract documents insofar as
applicable to the work of subcontractors and to give the Contractor the
same power as regards terminating any subcontract that the Owner may
exercise over the Contractor undei any provision of the contract documents.
VII-E-12
(e) Nothing contained in this contract shall create any contractual relation
between any subcontractor and the Owner.
35. Architect/Engineer's Authority
The Architect/Engineer shaU give all orders and directions con templated under this
contract and specifications, relative to the execution of the work. The
Architect/Engineer shaU determine the amount, quality, acceptability, and fitness
of the several kinds of work and materials which are to be paid for under this
contract and shaU decide all questions which may arise in relation to said work and
the construction thereof. The Architect/Engineer's estimates and decisions shall be
final and conclusive, except as herein otherwise expressly provided. In case any
question shaU arise between the parties hereto relative to said contract or
specifications, the determination or decisions of the Architect/Engineer shall be a
condition precedent to the right of the Contractor to receive any money or
payment for work under this contract affected in any manner to any extent by such
question.
The Architect/Engineer shall decide the meaning and intent of any portion of the
specifications and of any plans or drawings where the same may be found obscure or
be in dispute. Any differences or conflicts in regard to their work which may arise
between the Contractor under this contract and other Contractors performing work
for the Owner shall be adjusted and determined by the Architect/Engineer.
36. Stated Allowances
The Contractor shall include in its proposal the cash allowances stated in the
Supplemental General Conditions. The Contractor shall purchase the "Allowed
Materials" as directed by the Owner on the basis of the lowest and best bid of at
least three competitive bids. If the actual price for purchasing the "Allowed
Materials" is more or less than the "Cash Allowance," the contract price shall be
adjusted accordingly. The adjustment in contract price shall be made on the basis
of the purchase price without additional charges for overhead, profit, insurance or
emy other incidental expenses. The cost of installation of the "AUowed Materials"
shall be included in the applicable sections of the Contract Specifications covering
this work.
37. Use of Premises and Removal of Debris
The Con tractor expressly undertakes at its own expense:
(a) to take every precaution against injuries to persons or damage to property;
(b) to store its apparatus, materials, supplies and equipment in such orderly
fashion at the site of the work as wiU not unduly interfer with the progress
of its work or the work of any other contractors;
(c) to place upon the work or any part thereof only such loads as are consistent
with the safety of that portion of the work;
(d) to clean up frequently aU refuse, rubbish, scrap materials, and debris caused
by itsoperations, to the end that at all times the site of the work shall
present a neat, orderly and workmanlike appearance;
VIII-E-13
(e) before final payment to remove all surplus material, fedse-work, temporary
structures, including foundations thereof, plant of any description and debris
of every nature resulting from itsoperations, and to put the site in a neat,
orderly condition;
(f) to effect all cutting, fitting or patching of his work required to make the
same to conform to the plans and specifications and, except with the consent
of the Architect/Engineer, not cut or otherwise alter the work of any other
Contractor.
38. Quantities of Estimate
Wherever the estimated quantities or work to be done and materials to be furnished
under this contract are shown in any of the documents including the proposal, they
are given for use in comparing bids and the right is especially reserved except as
herein otherwise specifically limited, to increase or diminish them as may be
deemed reasonably necessary or desirable by the Owner to complete the work
contemplated by this contract, and such increase or diminution shall in nc way
vitiate this contract, not shall any such increase or diminution give cause for claims
or liability for damages.
39. Lands and Right-of-Way
Prior to the start of construction, the Owner shall obtain lands and rights-of-way
necessary for the carrying out and completion of work to be performed under this
contract.
40. General Guaranty
Neither the fined certificate of payment nor any provision in the Contract
Documents, nor partial or entire occupancy of the premises by the Owner, shall
constitute an acceptance of work not done in accordance with the Contract
Documents or relieve the Contractor of liability in respect to any express
warranties or responsibility for faulty materials or workmanship. The Contractor
shall remedy any defects in the work and pay for any damage to other work
resulting therefrom, which shall appear within a period of one year from the date of
final acceptance of work unless a longer period is specified. The Owner will give
notice of unserved defects with reasonable promptness.
41. Conflicting Conditions
Any provisions of the Contract Documents which may be in conflict or inconsistent
with any of the paragraphs in these General Conditions shall be void to the extent
of such conflict or inconsistency.
42. Notice and Service Thereof
Any notice to any Contractor from the Owner relative to any part of this contract
shedl be in writing and considered delivered and the service thereof completed,
when said notice is posted, be certified or registered mail, to said Contractor atits
last given address, or delivered in person to the said Contractor or its authorized
representative on the work-
VIII-E-14
•
43. Provisions Required by Law Deemed Inserted
Each and every provision of law and clause required by law to be inserted in this
contract shall be deemed to be inserted herein and the contract shall be read and
enforced as though it were included herein, emd if through mistake or otherwise any
provision is not inserted, or is not correctly inserted, then upon the application of
either party the contract shall forthwith be physically amended to make such
insertion or correction.
44. Protection of Lives and Health
"The Contractor shall exercise proper precaution at all times for the protection of
persons and property and shall be responsible for all damages to persons or
property, either on or off the site, which occur as a result of his prosecution of the
work. The safety provisions of applicable laws and building and construction codes,
in addition to specific safety and health regulations described by Chapter XIII,
Bureau of Labor Standards, Department of Labor, Part 1518, Safety and Health
Regulations for Construction, as outlined in the Federal Register, Volume No. 75,
Saturday, April 17, 1971. Title 29 - LABOR, shall be observed and the Contractor
shall take or cause to be taken, such additional safety and health measures as the
Contracting Authority may determine to be reasonably necessary."
45. Subcontracts
"The Contractor will insert in any subcontract the Federal Labor Standards
Provisions contained herein and such other clauses as the Department of Housing
and Urban Development or Montana Department of Commerce may, by instructions
require, and also a clause requiring the subcontractors to include these clauses in
any lower tier subcontracts which they may enter into, together with a clause
requiring this insertion in any further subcontracts that may in turn be made."
46. Interest of Members of or Delegate to Congress
No members of or Delegate to Congress, or Resident Commissioner, shall be
admitted to any share or part of this contract or to any benefit that may arise
therefrom, but this provision shall not be construed to extend to this contract if
made with a corporation for its general benefit.
47. Other Prohibited Interests
No official of the Owner who is authorized in such capacity and on behalf of the
Owner to negotiate, make, accept or approve, or to take part in negotiating,
making, accepting, or approving any architectural, engineering, inspection,
construction or material supply contract or any subcontract in connection with the
construction of the project, shall become directly or indirectly interested
personally in this contract or in any part hereof. No officer, employee, architect,
attorney, engineer or inspector of or for the Owner who is authorized in such
capacity and on behalf of the Owner to exercise any legislative, executive,
supervisory or other similar functions in connection with the construction of the
project, shall become directly or indirectly interested personally in this contract or
in any part thereof, any material supply contract, subcontract, insurance contract,
or any other contract pertaining to the project.
48. Use and Occupancy Prior to Acceptance by Owner
VIII-E-15
The Contractor agrees to the use and occupancy of a portion or unit of the project
before formal acceptance by the Owner, provided the Owner:
(a) Secures written consent of the Contractor except in the event, in the opinion
of the Architect/Engineer, the Contractor is chargeable with unwarranted
delay in final cleanup of such list items or other contract requirements.
(b) Secures endorsement from the insurance-carrier and consent of the surety
permitting occupancy of the building or use of the project during the
remaining period of construction, or,
(c) When the notice consists of more than one building, and one of the buildings
J is occupied, secures permanent firm and extended coverage insurance,
including a permit to complete construction. Consent of the surety must
I also be obtained.
i
(1) The Contractor will not discriminate against any employee or applicant for
employment because of race, creed, color, or national origin. The
Contractor wiU take affirmative action to ensure that applicants are
employed, and that employees are treated during employment, without
regard to their race, creed, color, or national origin. Such action shall
include, but not be limited to, the following: employment, upgrading,
demotion, or transfer; recruitment or recruitment advertising; layoff or
termination; rates of pay or other forms of compensation; and selection for
training, including apprenticeship. The Contractor agrees to post in
conspicuous places, available to employees and applicants for employment,
notices to be provided setting forth the provisions of this nondiscrimination
clause.
(2) The Contractor will, in all solicitations or advertisements for employees
placed by or on behalf of the Contractor, state that all qualified applicants
wiU receive consideration for employment without regard to race, creed, or
national origin.
49. Photographs of the Project
If required the Owner, the Contractor shall furnish photographs of the project, in
the quantities and as described in the Supplemental General Conditions.
50. Suspension of Work
Should the Owner be prevented or enjoined from proceeding with work either before
or after the start of construction by reason of any litigation or other reason beyond
the control of the Owner, the Contractor shall not be entitled to make or assert
claim for damage by reason of said delay; but time for completion of the work wiU
be extended to such delay with such time as the Owner may determine wiD
compensate for time lost by such delay with such determination to be set forth in
writing.
51. Minimum Wage Rate for Laborers and Mechanics
AU laborers and mechanics employed upon the work covered by this Contract shall
VIII-E-16
#
be paid unconditionally and not less often than once each week, and without
subsequent deduction or rebate on any account (except such payroll deductions as
are made mandatory by law and such other payroU deductions as are permitted by
the applicable regulations issued by the Secretary of Labor, United States
Department of Labor, pursuant to the Anti-Kickback Act hereinafter identified),
the full amount due at time of payment computed at wage rates not less than those
contained in the wage determination decision of said Secretary of Labor (a copy of
which is attached and herein incorporated be reference), regardless of any
contractual relationship which may be alleged to exist between the Contractor or
any subcontractor and such laborers and mechanics. All laborers and mechanics
employed upon such work shall be paid in cash, except that payment may be by
check if the employer provides or secures satisfactory facilities approved by the
Local Public Agency or Public Body for the cashing of the same without cost of
expense to the employee. For the purpose of this clause, contributions made or
costs reasonably anticipated under Section 1(b) (2) of the Davis-Bacon Act on behalf
of laborers or mechanics sire considered wages paid to such laborers or mechanics,
subject to the provisions of Section 5.5(a)(l)(iv) of Title 29, Code of Federal
Regulations. Also for the purpose of this clause, regular contributions made or
costs incurred for more thaji a weekly period under plans, funds, or programs, but
covering the particular weekly period, are deemed to be constructively made or
incurred during such weekly period.
52. Underpayments of Wages or Salaries
In case of underpayment of wages by the Contractor or by any subcontractor to
laborers or mechanics employed by the Contractor or subcontractor upon the work
covered by this Contract, the Local Public Agency or Public Bond in addition to
such other rights as may be afforded it under this Contract shall withhold from the
Contractor, out of any payments due the Contractor, so much thereof as the Local
Public Agency or Public Body may consider necessary to pay such laborers or
mechanics the full amount of wages required by this Contract. The amount so
withheld may be disbursed by the Local Public Agency or Public Body, for and on
account of the Contractor or the subcontractor (as may be appropriate), to the
respective laborers or mechanics to whom the same is due or on their behalf to
plans, funds, or programs for any type of fringe benefit prescribed in the applicable
wage determination.
53. Anticipated Costs of Fringe Benefits
If the Contractor does not make payments to a trustee or other third person, it
may consider as part of the wages of any laborer or mechanic the amount of any
costs reasonably anticipated in providing fringe benefits under a plan or program of
a type expressly listed in the wage determination decision of the Secretary of Labor
which is a part of this Contract; Provided, however, the Secretary of Labor has
found, upon the written request of the Contractor, that the applicable standards of
the Davis-Bacon Act have been met. The Secretary of Labor may require the
Contractor to set aside in a separate account assets for the meeting of obligations
under the plan or program. A copy of a ny findings made by the Secretary of Labor
in respect to fringe benefits being provided by the Contractor must be submitted to
the Local Public Agency of Public Body with the first payroll filed by the
Contractor subsequent to receipt of the findings.
54. Overtime Compensation Required by Contract Work Hours and Safety Standards
Act (76 Stat. 357-360: Title 40 U.S.C., Sections 327-332)
VIII-E-17
(a) Overtime Requirements. No Contractor or subcontractor contracting for
any part of the Contract work which may require or involve the employment
of laborers or mechanics, including watchmen and guards, shall require or
permit any laborer or mechanic in any workweek in which it is employed on
such work to work in excess of 8 hours on any calendar day or in excess of 40
hours in such work week unless such laborer or mechanic received
compensation at a rate not less than one and one-half tirnesthe basic rate of
pay for all hours worked in excess of 8 hours in any calendar day or in excess
of 40 hours in such work week, as the case may be.
(b) Violation; Liability for unpaid wages liquidated damages. In the event of
any violation of the clause set forth in paragraph (a), the Contractor and any
subcontractor responsible therefor shall be liable to any affected employee
for anyunpaid wages. In addition, such Contractor and subcontractor shall oe
liable to the United States for liquidated damages. Such liquidated damages
shall be computed with respect to each individual laborer or mechanic
employed in violations of the clause set forth in paragraph (a), in the sum of
$10 for each calendar day on which such employee was required or permitted
to work in excess of 8 hours or in excess of the standard workweek of 40
hours without payment of the overtime v^ages required by the clause set
forth in paragraph (a).
(e) Withholding for liquidated damages. The Local PublicAgency or Public Body
shall withhold or cause to be withheld, from any monies payable on account
of work performed by the Contractor or subcontractor, such sums as may
administratively determined to be necessary to satisfy any liabilities of such
Contractor or subcontractor for liqidated damages as provided in the clause
set forth in paragraph (b).
(d) Subcontract. The Contractor shall insert in any subcontract the clauses set
forth in paragraphs (a), (b), and (c) of this Section and also a clause requiring
the subcontractors to include these clauses in any lower tier subcontracts
which they may enter into, together with a clause requiring this insertion in
any further subcontracts that may in turn be made.
55. Employment or Apprentices/Trainees
a. Apprentices will be permitted to work at less than the predetermined rate
for the work they peformed when they are employed and individually
registered in a bona fide apprenticeship program registered with the U.S.
Department of Labor, Manpower Administration , Bureau of Apprenticeship
and Training, or with a State Apprenticeship Agency recognized by the
Bureau, or if a person is employed in the first 90 days of probationary
employment as an apprentice in such an apprenticeship program, who is not
individually registered in the program, but who has been certified by the
Bureau of Apprenticeship and Training or a State Apprenticeship Agency
(where appropriate) to be eligible for probationary employment as an
apprentice. The allowable ratio of apprentices to journeymen in any craft
classification shall not be greater than the ratio permitted to the contractor
as to its entire work force under the registered program. Any employee
listed on a payroll at an apprentice wage rate, who is not a trainee as
defined in subdivision (b) of this subparagraph or is not registered or
otherwise employed as stated above, shall be paid the wage rate determined
VIII-E-18
by the Secretary of Labor for the classification of work as actually
performed. The contractor or subcontractor will be required to furnish to
the contracting officer or a representative of the Wage-Hour Division of the
U.S. Department of Labor written evidence of the registration of its
program and apprentices as well as the appropriate ratios and wage rates
(expressed in percentages of the journeyman hourly rates), for the area of
construction prior to using any apprentices on the contract work. The wage
rate paid apprentices shall be not less than the appropriate percentage of the
journeyman's rate contained in the applicable wage determination.
b. Trainees. Except as provided in 29 CFR 5.15 trainees will not be permitted
to work at less than the predetermined rate for the work performed unless
they are employed pursuant to and individually registered in a program which
has received prior approval, evidenced by formal certification, by the U.S.
Department of Labor, Manpower Administration, Bureau of Apprentice and
Training. The ratio of trainees to journeymen shall not be greater than
permitted under the plan approved by the Bureau of Apprenticeship and
Training. Every trainee must be paid at not less than the rate specified in
the approved progran for his level of progress. Any employee listed on the
payroll at a trainee rate who is not registered and participating in a training
plan approved by the Bureau of Apprenticeship and Training shall be paid not
less than the wage rate determined by the Secretary of Labor for the
classification of work as actually performed. The contractor or
subcontractor will be required to furnish the contracting officer or a
representative of the Wage-Hour Division of the U.S. Department of Labor
written evidence of the certification of his program, the registration of the
trainees, and the ratios and wage rates prescribed in that program. In the
event the Bureau of Apprenticeship and Training withdraws approval of a
training program, the contractor wiU no longer be permitted to utilize
trainees at less than the applicable predetermined rate for the work
performed until an acceptable program is approved.
c. Equal Employment Opportunity. The utilization of apprentices, trainees and
journeymen under this part shall be in conformity with the equal employment
opportunity requirements of Executive Order 11246, as amended, and 29
CFR Part 30.
56. Employment of Certain Persons Prohibited
No person under the age of sixteen years and no person who, at the time, is serving
sentence in a penal or correctional instutition shall be employed on the work
covered in this Contract.
57. Regulations Pursuant to So-Called "Anti-Kickback Act"
The Contractor shall comply with the applicable regulations (a copy of which is
attached and herein incorporated by reference) of the Secretary of Labor, United
States Department of Labor, made pursuant to the so-called "Anti-Kickback Act"
of June 13, 1934 (48 Stat. 948: 62 Stat. 862; Title U.S.C., Section 874: and Title 40
U.S.C., Section 276c), and any amendments or modifications thereof, shall cause
appropriate provisions to be inserted in subcontracts to insure compliance therewith
by all subcontractors subject thereto, and shall be responsible for the submission of
affidavits required by subcontractors thereunder, except as said Secretary of Labor
may specifically provide for reasonable limitations, variations, tolerances, and
VIII-E-19
exemptions from the requirements thereof.
58. Employment of Laborers or Mechanics Not Listed in Aforesaid Wage Determination
Decision
Any cl£iss of laborers or mechanics which is not listed in the wage determination
and which is to be employed under the Contract will be classified or reclassified
conformably to the wage determination by the Local Public Agency of Public Body,
and a report of the action taken shall be submitted by the Local Public Agency or
Public Body, through the Secretary of Housing and Urban Development, to the
Secretary of Labor, United States Department of Labor. In the event the
interested parties cannot agree on the proper cleissification or reclassification of a
particular class of laborers and mechanics to be used, the question accompanied by
the recommendation of the Local Public Agency or Public Body Shall be referred,
through the Secretary of Housing and Urban Development, to the Secretary of
Labor for final determination.
59. Ffinge Benefits Not Expressed as Hourly Wage Rates
The Local Public Agency or Public Body shaU. require, whenever the minimum wage
rate prescribed in the Contract for a class of laborers or mechanics includes a
fringe benefit which is not expressed as an hourly wage rate and the Contractor is
obligated to pay cash equivalent of such a fringe benefit, an hourly cash equivalent
thereof to be established. In the event the interested parties cannot agree upon a
cash equivalent of the fringe benefit, the question, accompanied by the
recommendation of the Local Public Agency or Public Body, shfell be referred,
through the Secretary of Housing and Urban Development, to the Secretary of
Labor for determination.
60. Posting Wage Determination Decisions and Authorized Wage Deductions
The applicable wage poster of the Secretary of Labor, United States Department of
Labor, and the applicable wage determination decisions of said Secretary of Labor
with respect to the various classifications of laborers and mechanics employed and
to be employed upon the work covered by this Contract, and a statement showing
all deductions, if any, in accordance with the provisions of this Contract, to be
made from wages actually earned by persons so employed or to be employed under
such classifications, shall be posted at appropriate conspicuous points at the site of
the work.
61. Complaints, Proceedings, or Testimony by Employees
N6 laborer or mechanic to whom the wage, salary, or other labor standards
provisions of this Contract are applicable shall be discharged or in any other
manner discriminated against by the Contractor or any subcontractor because such
employee has filed any complaint or instututed or caused to be instituted any
proceeding or has testified or is about to testify in any proceeding under or relating
to the labor standards applicable under this Contract to his employer.
82. Claims and Disputes Pertaining to Wage Rates
Claims and disputes pertaining to wage rates or to classifications of laborers and
mechanics employed upon the worked covered by this Contract shall be promptly
reported by the Contractor in writing to the Local Public Agency or Public Body for
VIII-E-20
•
referral by the latter through the Secretary of Housing and Urban Development to
the Secretary of Labor, United States Department of Labor, whose decision shall be
final with respect thereto.
63. Questions Concerning Certain Federal Statutes and Regulations
All questions arising under this Contract which relate to the application or
interpretation of (a) the aforesaid Anti-Kickback Act, (b) the Contract Work Hours
and Safety Standards Act, (c) the aforesaid Davis-Bacon Act, (d) the regulations
issued by the Secretary of Labor, United States Department of Labor, pursuant to
said Acts, or (e) the labor standards provisions of any other pertinent Federal
statute, shall be referred through the Local Public Agency or Public Body and the
Secretary of Housing and Urban Development, to the Secretary of Labor, United
States Department of Labor, for said Secretary's appropriate ruling or
interpretation which shall be authoritative and may be relied upon for the purposes
of this Contract.
64. Payrolls and Basic Payroll Records of Contractor and Subcontractors
The Contractor and each subcontractor shall prepare the payrolls on forms
satisfactory to and in accordance with instructions to be furnished by the Local
Public Agency or Public Body. The Contractor shall submit weekly to the Local
Public Agency or Public Body two certified copies of all payrolls of the Contractor
and of the subcontractors, it being understood that the Contractor shall be
responsible for the submission of copies of payrolls of all subcontractors. Each such
payroll shall contain the "Weekly Statement of Compliance" set forth in Section 3.3
of Title 29, Code of Federal Regulations. The payrolls and basic payroU records of
the Contractor and each subcontractor covering all laborers and mechanics
employed upon the work covered by this Contract shall be maintained during the
course of the work and preserved for a period of 3 years thereafter. Such payrolls
and basic payroll records shall contain the name and address of each such employee,
the correct classification, rate of pay (including rates of contributions or costs
anticipated, of the types described in Section 1(b)(2) of the Davis-Bacon Act , daily
and weekly number of hours worked, deductions made, and actual wages paid. In
addition, whenever the Secretary of Labor has found under Section 5.5(a)(l)(iv) of
Title 29, Code of Federal Regulations, that the wages of any laborer or mechanic
include the amount of any costs reasonably anticipated in providing benefits under a
plan or program described in Section 1(b)(2)(B) of the Davis-Bacon Act, the
Contractor or subcontractor shall maintain records which shows that the
commitment to provide such benefits is enforceable, that the plan or program is
financially responsible, and that the plan or program has been communicated in
writing to the laborers or mechanics affected, and records which show the costs
anticipated or the actual cost incurred in providing such benefits. The Contractor
and each subcontractor shall makeits employment records with respect to persons
employed by it upon the work covered by this Contract available for inspection by
authorized representatives of the Secretary of Housing and Urban Development, the
Montana Department of Commerce, the Local Public Agency or Public Body, and
the United States Department of Labor. Such representatives shall be permitted to
interview employees of the Contractor or of any subcontractor during working
hours on the job.
65. Specific Coverage of Certain Types of Work by Employees
The transporting of materials and supplies to or from the site of the Project or
VIII-E-21
Program to which this Contract pertains by the employees of the Contractor or of
any subcontractor, and the manufacturing or furnishing of materials, articles,
supplies, or equipment on the site of the Project or Program to which this Contract
pertains by persons employed by the Contractor or by any subcontractor, shall, for
the purposes of this Contract, and without limiting the generality of the foregoing
provisions of this Contract, be deemed to be work to which these Federal Labor
Standards Provisions are applicable.
66. Ineligible Subcontractors
The Contractor shall not subcontract any part of the work covered by this Contract
or permit subcontracted work to be further subcontracted without the Local Public
Agency's Public Body's prior written approval of the subcontractor. The Local
Public Agency or Public Body wiU not approve any subcontractor for work by this
Contract who is at the time ineligible under the provisions of any applicable
regulations issued by the Secretary of Labor, United States Department of Labor or
the Secretay of Housing and Urban Development, to receive an award of such
subcontract.
67. Provisions to be Included in Certain Subcontracts
The Contractor shall include or cause tc be included in each subcontract covering
any of the work covered by this Contract, provisions which are consistent with
these Federal Labor Standards Provisions and also a clause requiring the
subcontractors to include such provisions in any lower tier subcontracts which they
may enter into, together with a clause requiring such insertion in any further
subcontracts that may in turn be made.
68. Breach of Foregoing Federal Labor Standards Provisions
In addition to the causes for termination of this Contract as herein elsewhere set
forth, the Local Public Agency or Public Body reserves the right to terminate this
Contract if the Contractor or any subcontractor whose subcontract covers any of
the work covered by this Contract shall breach any of these Federal Labor
Standards Provisions. A breach of these Federal Labor Standards Provisions may
also be grounds for debarment as provided by the applicable regulations issued by
the Secretary of Labor, United States Department of Labor.
69. Employment Practices
The Contractor (1) shall, to the greatest extent practicable, follow hiring and
employment practices for work en the project which will provide new job
opportunities for the unemployed and underemployed, and (2) shall insert or cause
to be inserted the same provision in each construction subcontract.
70. Contract Termination; Debarment
A' breach of Section 45 and the Federal Labor Standards Provisions, may be grounds
for termination of the contract, and for debarment as provided in 29 CFR 5.6.
VIII-E-22
Exhibit VIII-F
SUPPLEMENTAL GENERAL CONDITIONS
1. Enumeration of Plans, Specifications and Addenda
2. Stated Allowances
3. Special Hazards
4. Public Liability and Property Damage Insurance
5. Photographs of Project
6. Schedule of Minimum Hourly Wage Rates
7. Builder's Risk Insurance
8. Certification of Compliance with Air and Water Acts
9. Flood Disaster Protection
10. Special Equal Opportunity Provisions
A. Equal Employment Opportunity
B. Civil Rights Act of 1964
C. Section 109 of the Housing and Community Development Act of
1974
D. Section 3 of the Housing and Community Development Act of
1968
E. Section 504 of the National Rehabilitation Act of 1973
F. Section 503 of the National Rehabilitation Act of 1973
11. Special Conditions Pertaining to Hazards, Safety Standards and
Accident Prevention
12. The Architectural Barriers Act
13. Wage Rate Determination
VIIT-F-1
1. ENUMERATION OF PLANS, SPECIFICATIONS AND ADDENDA
Following are the Plans, Specifications and Addenda which form
a part of this contract, as set forth in Paragraph 1 of the General
Conditions, "Contract and Contract Documents":
DRAWINGS
General Construction: Nos.
Heating and Ventilation: Nos.
Plumbing: Nos.
Electrical Nos.
Other
Nos.
SPECIFICATI
ONS:
General Construct
ion:
Page
to
, inclusWe
Heating and
Ventilation
Page
Page
to
, inclusive
Plumbing:
to
, inclusive
Electrical
Page
to
, inclusive
Other:
Page
to
, inclusive
ADDENDA
No.
Date
No.
Date
No.
Date
No.
Date
2. STATE ALLOWANCES
Pursuant to paragraph 36 of the General Conditions, the contract
shall include the following cash allowances in the proposal:
(a) For (Page of Specifications) $
(b) For (Page of Specifications) $
(c) For (Page of Specifications) $
(d) For (Page of Specifications) $
VIII-F-2
3. SPECIAL HAZARDS
The Contractor's and its Subcontractor's Public Liability and
Property Damage Insurance shall provide adequate protection against
the following special hazards:
4. CONTRACTOR'S AND SUBCONTRACTOR'S PUBLIC LIABILITY, VEHICLE
LIABILITY AND PROPERTY DAMAGE INSURANCE
As required under paragraph 28 of the General Conditions, the
Contractor's Public Liability Insurance and Vehicle Liability Insur-
ance shall be in an amount not less than $ for injuries,
including accidental death, to any person, and subject to the same
limit for each person, in an amount not less than $ on
account of one accident, and Contractor's Property Damage Insurance in
an amount not less than $ .
The Contractor shall either (1) require each of its subcontrac-
tors to procure and to maintain during the life of its subcontract.
Subcontractor's Public Liability and Property Damage Insurance of the
type and in the same amounts as specified in the preceding paragraph,
or (2) insure the activities of its subcontractors in its own policy.
5. PHOTOGRAPHS OF PROJECT
As provided in paragraph 50 of the General Conditions, the
Contractor will furnish photographs in the number, type, and stage as
enumerated below:
6. SCHEDULE OF OCCUPATIONAL CLASSIFICATIONS AND MINIMUM HOURLY WAGE
RATES AS REQUIRED UNDER PARAGRAPH 52 OF THE GENERAL CONDITIONS
Given on Pages , , and .
7. BUILDER'S RISK INSURANCE
As provided in the General Conditions, paragraph 28(e), the
Contractor will/will not maintain Builder's Risk Insurance (fire and
extended coverage) on a 100 percent completed value basis on the
insurable portions of the project for the benefit of the Owner, the
Contractor, and all subcontractors, as their interest may appear.
8. CERTIFICATION OF COMPLIANCE WITH AIR AND WATER ACTS
(Applicable to Federally assisted construction contracts and
related subcontracts exceeding $100,000.)
Compliance with Air and Water Acts
During the performance of this contract, the contractor and all
subcontractors shall comply with the requirements of the Clean
Air Act, as amended, hi USC 1857 et seq., the Federal Water
Pollution Control Act, as amended, 33 USC 1251 et seq., and the
regulations of the Environmental Protection Agency with respect
thereto, at AO CFR 15, as amended.
VIII-F-3
In addition to the foregoing requirements, all nonexempt contrac-
tors and subcontractors shall furnish to the owner, the follow-
ing:
(1) A stipulation by the Contractor or subcontractor, that any
facility to be utilized in the performance of any nonexempt
contract or subcontract, is not listed on the List cf
Violating Facilities issued by the Environmental Protection
Agency (EPA) pursuant to 40 CFR 15.20.
(2) Agreement by the Contractor to comply with all the require-
ments of Section 114 of the Clean Air Act, as amended, (42
use 1857C-8) and Section 308 of the Federal Water Pollution
Control Act, as amended, (33 USC 1318) relating to inspec-
tion, monitoring, entry, reports and information, as well as
all other requirements specified in said Section 114 and
Section 308, and all regulations and guidelines issued
thereunder.
(3) A stipulation that as a condition for the award of the
contract, prompt notice will be given of any notification
received from the Director, Office of Federal Activities,
EPA, indicating that a facility utilized, or to be utilized
for the contract, is under consideration to be listed on the
EPA List of Violating Facilities.
(4) Agreement by the Contractor that it will include, or cause
to be included, the criteria and requirements in paragraph
(1) through (4) of this section in every nonexempt subcon-
tract and requiring that the Contractor will take such
action as the Government may direct as a means of enforcing
such provisions.
9. FLOOD DISASTER PROTECTION
This contract is subject to the requirements of the Flood
Disaster Protection Act of 1973 (P.L. 93-234). The use of any assis-
tance provided under this contract for acquisition or construction
purposes as defined under section 3(a) of said Act, for use in an area
Identified by the Secretary as having special flood hazards which is
located in a community participating in the National Flood Insurance
Program shall be subject to the mandatory purchase of flood insurance
requirements of Section 102(a) of said Act.
10. SPECIAL EQUAL OPPORTUNITY PROVISIONS
A. Equal Employment Opportunity. During the performance of
this contract, the Contractor agrees as follows:
(1) The contractor will not discriminate against any employee or
applicant for employment because of race, color, religion,
sex or national origin. The contractor will take affirma-
VIII-F-4
tive action to ensure that applicants are employed, and that
employees are treated during employment, without regard to
their race, color, religion, sex or national origin. Such
action shall include, but not be limited to the following:
employment, upgrading, demotion, transfer, recruitment or
recruitment advertising, lay-off or termination, rates of
pay or other forms of compensation, and selection of train-
ing, including apprenticeship. The contractor agrees to
post in conspicuous places, available to employees and
applicants for employment, notices to be provided by the
contracting officer setting forth the provisions of this
nondiscrimination clause.
(2) The contractor will, in all solicitations or advertisements
for employees placed by or on behalf of the contractor,
state that all qualified applicants will receive consid-
eration for employment without regard to race, color,
religion, sex or national origin.
(3) The contractor will send to each labor union or representa-
tive of workers with which it has a collective bargaining
agreement or other contract or understanding, a notice to be
provided by the Department's contracting officer advising
the labor union or workers' representative of the contrac-
tor's commitments under Section 202 of Executive Order 11246
of September 2A, 1965, and shall post copies of the notice
in conspicuous places available to employees and applicants
for employment.
(4) The contractor will comply with all provisions of Executive
Order 11246 of September 24, 1965, and of the rules, regul-
ations and relevant orders of the Secretary of Labor.
(5) The contractor will furnish all information and reports
required by Executive Order 11246 of September 24, 1965, and
by the rules, regulations, and orders of the Secretary of
Labor, or pursuant thereto, and will permit access to its
books, records and accounts by the Department and the
Secretary of Labor for purposes of investigation to ascer-
tain compliance with such rules, regulations and orders.
(6) In the event of the contractor's noncompliance with the
nondiscrimination clauses of this contract or with any of
such rules, regulations or orders, this contract may be
cancelled, terminated or suspended in whole or in part and
the contractor may be declared ineligible for further
government contracts in accordance with procedures author-
ized in Executive Order 11246 of September 24, 1965, and
such other sanctions may be imposed and remedies invoked as
provided in Executive Order 11246 of September 24, 1965, or
by rule, regulation, or order of the Secretary of Labor, or
as otherwise provided by law.
(7) The contractor will include the provisions of paragraphs 1
through 7 in every subcontract or purchase order unless
VIlI-F-5
exempted by rules, regulations or orders cf the Secretary of
Labor issued pursuant to Section 20A of Executive Order
11246 of September 2A, 1965, so that each provision will be
binding upon each subcontractor or vendor. The contractor
will take such action with respect to any subcontract or
purchase order as the Department may direct as a means of
enforcing such provisions including sanctions for noncompli-
ance. Provided, however, that in the event the contractor
becomes involved in or is threatened with, litigation with a
subcontractor or vendor as a result of such direction by the
Department, the contractor may request the United States to
enter into such litigation to protect the interest of the
United States.
B. Civil Rights Act of 1964. Under Title VI of the Civil
Rights Act of 1964, no person shall, on the grounds of race,
color, or national origin, be excluded from participation
in, be denied the benefits of, or be subjected to discrimin-
ation under any program or activity receiving federal
financial assistance.
C. Section 109 of the Housing and Community Development Act of
1974.
(1) No person in the United States shall on the grounds of race,
color, national origin, or sex be excluded from participa-
tion in, be denied the benefits of, or be subjected to
discrimination under any program or activity funded in whole
or in part with funds made available under this title.
D. "Section 3" Compliance in the Provision of Training, Employ-
ment and Business Opportiinities
(1) The work to be performed under this contract is on a project
assisted under a program providing direct federal financial
assistance from the Department of Housing and Urban Develop-
ment and is subject to the requirements of Section 3 of the
Housing and Urban Development Act of 1968, as amended, 12
U.S.C. 1701u. Section 3 requires that to the greatest
extent feasible opportunities for training and employment be
given lower income residents of the project area and con-
tracts for work in connection with the project be awarded to
business concerns which are located in, or owned in substan-
tial part by persons residing in the area of the project.
(2) The parties to this contract will comply with the provisions
of said Section 3 and the regulations issued pursuant
thereto by the Secretary of Housing and Urban Development
set forth in 24 CFR 135, and all applicable rules and orders
of the Department issued thereunder prior to that e execu-
tion of this contract. The parties to this contract certify
and agree that they are under no contractual or other
disability which would prevent them from complying with
these requirements.
VIII-F-6
(3) The contractor will send to each labor organization or
representative of workers with which it has a collective
bargaining agreement or other contract or undorstftndlng, if
any, a notice advising the said labor organization or
workers' representative of its commitments under this
Section 3 Clause and shall post copies of the notice in
conspicuous places available to employees and applicants for
employment or training.
(4) The contractor will include this Section 3 Clause in every
subcontract for work in connection with the project and
will, at the direction of the applicant for or recipient of
federal financial assistance, take appropriate action
pursuant to the subcontract upon a finding that the subcon-
tractor is in violation of regulations issued by the Secre-
tary of Housing and Urban Development, 24 CFR. The contrac-
tor will not subcontract with any subcontractor where it has
notice or knowledge that the latter has been found in
violation of regulations under 24 CFR and will not let any
subcontract unless the subcontractor has first provided it
will a preliminary statement of ability to comply with the
requirements of these regulations.
(5) Compliance with the provisions of Section 3, the regulations
set forth in 24 CFR and all applicable rules and orders of
the Department issued thereunder prior to the execution of
the contract, shall be a condition of the federal financial
assistance provided to the project, binding upon the appli-
cant or recipient for such assistance, its successors and
assigns. Failure to fulfill these requirements shall
subject the applicant or recipient, its contractors and
subcontractors, its successors and assigns to those
sanctions specified by the grant or loan agreement or
contract through which federal assistance is provided, and
to such sanctions as are specified by 24 CFR 135.
E. Sections 503 and 504 of the Vocational Rehabilitation Act of
1973. The Contractor will comply with the following:
No otherwise qualified handicapped individual in the United
States, defined in Section 7(7), shall solely by reason of
handicap, be excluded from the participation in, be denied
the benefits of, or be subjected to discrimination under any
program or activity receiving federal financial assistance.
Any contract in excess of $2,500 entered Into for the
procurement of personal property and nonpersonal services
(Including construction) shall contain a provision requiring
that, In employing persons to carry out such contract the
party contracting shall take affirmative action to employ
and advance in employment qualified handicapped individuals
as defined in section 7(7). The provisions of this section
VIII-F-
shall apply to any subcontract in excess of $2,500 entered
Into by a prime contractor in carrying out any contract for
the procurement of personal property and nonpersonal ser-
vices (including construction).
11. SPECIAL CONDITIONS PERTAINING TO HAZARDS, SAFETY STANDARDS AND
ACCIDENT PREVENTION
A. Lead-Based Paint Hazards
(Applicable to contracts for construction or rehabilitation of
residential structures)
The construction or rehabilitation of residential structures is
subject to the HUD Lead-Based Paint regulations, 24 CFR 35. The
Contractor and Subcontractors shall comply with the provisions
for elimination of lead-based paint hazards under Subpart B of
said regulations. The Owner will be responsible for the inspec-
tions and certifications required under Section 35.2''t(f) thereof.
B. Use of Explosives (Modify as Required)
When the use of explosives is necessary for the prosecution of
the work, the Contractor shall observe all local, State and
federal laws in purchasing and handling explosives. The Contrac-
tor shall take all necessary precaution to protect completed
work, neighboring property, water lines, or other underground
structures. Where there is danger to structures or property from
blasting, the charges shall be reduced and the material shall be
covered with suitable timber, steel, or rope mats.
The Contractor shall notify all owners of public utility property
of intention to use explosives at least eight (8) hours before
blasting is done, close to such property. Any supervision or
direction of use of explosives by the Engineer, does not in any
way reduce the responsibility of the Contractor or its Surety for
damages that may be caused by such use.
C. Danger Signals and Safety Devices (Modify as Required)
The Contractor shall make all necessary precautions to guard
against damages to property and injury to persons. It shall put
up and maintain in good condition, sufficient red or warning
lights at night, suitable barricades and other devices necessary
to protect the public. In case the Contractor fails or neglects
to take such precautions, the Owner may have such lights and
barricades installed and charge the cost of this work to the
Contractor. Such action by the Owner does not relieve the
Contractor of any liability incurred under these specifications
or contract.
VIII-F-8
12. THE ARCHITECTURAL BARRIERS ACT
All design specifications for the construction of any building
shall provide access to the physically handicapped in accordance
with the Architectural Barriers Act of 1968.
13. WAGE RATE DETERMINATION
Appropriate wage rates shall be inserted here.
•
VIlI-F-9
Exhibit VIII-G
BID FOR LUMP SUM CONTRACTS
Place
Date
Project No.
Proposal of (hereinafter called Bidder), a
corporation organized under the laws of the State of /a partnership/
an individual doing business as (strike out inapplicable references).
To the
(hereinafter called Owner).
Gentlemen:
Thu Bidder, in compliance with you invitation for bids for the construction of a
having examined the plans and specifications with related documents and the site of the proposed
work, and being familiar with all of the conditions surrounding the construction of the proposed
project including the availability of materials and labor, hereby proposes to furnish all
labor, materials, and supplies; and to construct the project in accordance with the Contract
Documents, within the time set forth therein, and at tl.e prices stated below. These prices
are to cover all expenses incurred in performing the work required under the Contract Documents,
of which this proposal is a part.
Bidder hereby agrees to commence work under this contract on or before a date to be
specified in a written "Notice to Proceed" of the Owner and to fully complete the project
within consecutive calendar days thereafter as stipulated In the specifications.
Bidder furtlier agrees to pay as liquidated damages, the sum of $ for each conse-
cutive calendar day thereafter as hereinafter provided in the GENERAL CONDITIONS.
Bidder acknowledges receipt of the following addenda:
BASE PROPOSAL: Bidder agrees to perform all of the
work described in the specifications and shown
on the plans for the sum of ^ ^ (S )•
(Amount shall be shown in both words and figures. In case of discrepancy, the amount shown
in words wi 1 1 govern. )
ALTERNATE PROPOSALS:
Alternative No. 1:
Deduct the sum of
Alternative No. 2:
Deduct the sum of
(over)
VIII-G-1
UNIT PRICES:
For changing quantities of work items from those indicated by the contract drawings upon
written instructions from the architect/engineer, the following unit prices shall prevail:
1. $
2. $
3. $
The above unit prices shall include all labor, materials, bailing, shoring, removal ,
overhead, profit, insurance, etc., to cover the finished work of the several kinds called
for. Changes shall be processed in accordance with the GENERAL CONDITIONS.
Bidder understands that the Owner reserves the right to reject any or all bids and to
waive any informalities in the bidding.
The bidder agrees that this bid shall be good and may not be withdrawn for a period of
30 calendar days after the scheduled closing time for receiving bids.
Upon receipt of Owner ' s written acceptfnce of this bid. Bidder will execute the formal
contract attached within IC days and deliver a Surety Bond or Bonds as required by the CENEPAL
CONDITIONS.
The bid security attached in the sum of
is to become the property of the Owner in the event
the contract and bond are not executed within the time above set forth, as liquidated damages
for the delay and additional expense to the Owner caused thereby.
Respectfully submitted:
By:
(SEAL - If bid is by a corporation)
Title
Address
VIII-G-2
Exhibit VIII-H
BID FOR UNIT PRICE CONTRACTS
Place
Date
Project No.
Proposal of (hereinafter called Bidder)
a corporation, organized and existing under the laws of the State of /a partner-
ship/an individual doing business as (cross out non-applicable
references) .
(hereinafter called Owner),
Gentlemen:
The Bidder, in compliance with the invitation for bids for the construction of a
having examined the plans and specifications with related documents and the site of the
proposed work, and being familiar with all of the conditions surrounding the construction
of the project including the availability of materials and labor, hereby proposes to furnish
all labor, materials, and supplies, and to construct the project in accordance with the
contract documents, within the time set forth therein, and at the prices stated below.
These prices are to cover all expenses incurred in performing the work required under the
contract documents, of which this proposal is a part.
Bidder hereby agrees to commence work under this contract on or before a date to be
specified in a written "Notice to Proceed" of the Owner and to fully complete the project
within consecutive calendar days thereafter as stipulated in the specifi-
cations. Bidder further agrees to pay as liquidated damages, the sum of $
for each consecutive calendar day thereafter as hereinafter provided in the General Conditions.
Bidder acknowledges receipt of the following addenda:
(over)
VIII-H-1
Bidder agrees to perform all the work described
in the specifications and shown on the plans, for the following unit prices:
Item Est. Unit Price Total
No. Qty. Description (each) Price
Dollars
($
& Cents
)
Dollars
($
& Cents
)
Dollars
($
i Cents
)
Dollars & Cents
($ )
Dollars & Cents
($ )
Dollars 4 Cents
($ )
TOTAL OF BID $
(Amounts are to be shown in both words and figures. In case of discrepancy, the amount
shown in words will govern.)
The above unit prices shall include all labor, materials, bailing, shoring, removal,
overhead, profit, insurance, etc., to cover the finished work of the several kinds called
for.
Bidder understonds that the Owner reserves the right to reject any or all bids and to
waive any informalities in the bidding.
The bidder agrees that this bid shall be good and may not be withdrawn for a period of
30 days after the scheduled closing time for receiving bids.
Upon receipt of written notice of the acceptance of this bid, bidder will execute the
formal contract attached within 10 days and deliver a Surety Bond or Bonds as required under
the GENERAL CONDITIONS. The bid security atached in the sum of
($ ) is to become the property of the Owner in the event the con-
tract and bond are not executed within the time above set forth, as liquidated damages for
the delay and additional exr.ense to the Owner caused thereby.
Respectfully submitted.
By
(SEAL - If bid is by a corporation) Title
Address
VIII-H-2
Exhibit VI 1 1 -I
BID BOND
BY THESE PRESENTS, that we, the undersigned
as Principal, and
as Surety, are hereby held and firm?y bound unto as Owner
in the penal sum of {$ ) for
the payment of which, well and truly to be made, we hereby jointly and severally bind ourselves,
our heirs, executors, administrators, successors and assigns. Signed this
day of , 19 .
The condition of the above obligation is such that whereas the Principal has submitted
^0 a certain bid, attached hereto and hereby made
a part hereof to enter into a contract in writing, for the
NOW THEREFORE,
(a) If said Bid shall be rejected, or in the alternate,
(b) If said Bid shall be accepted and the Principal shall execute and deliver a contract
in the Form of Contract attached hereto (properly completed in accordance with said Bid)
and shall furnish a bond for his faithful performance of said contract, and for the payment
of all persons performing labor or furnishing materials in connection therewith, and
shall in all other respects perform the agreement created by the acceptance of said Bid,
then this obligation shall be void, otherwise the same shall remain in force and effect; it
being expressly understood and agreed that the liability of the Surety for any and all claims
hereunder shall, in no event, exceed the penal amount of this obligation as herein stated.
The Surety, for value received, hereby stipulates and agrees that the obligations of
said Surety and its bond shall be in no way impaired or affected by any extension of the time
within which the Owner may accept such Bid; and said Surety does hereby waive notice of any
such extension.
IN WITNESS THEREOF, the Principal and the Surety have hereunto set their hands and seals,
and such of them a are corporations have caused their corporate seals to be hereto affixed
and these presents to be signed by their proper officers, the day and y'.ar first set forth
above .
(L.S.:
Principal
Surety
(Seal)
By:
VIII-I-1
4
Exhibit VIII-j
PERFORMANCE AND PAYMENT BONDING REQUIREMENTS
(per 0MB Circular A- 102, Attachment B)
Except as otherwise may be required by State law, the following minimum
requirements apply to any contracts exceeding $100,000 in total value.
(a) A performance bond on the part of the contractor for 100 percent
of the contract price. A "performance bond" is one executed in
connection with a contract to secure fulfillment of all the contractor's
obligations under the contract.
(b) A payment bond on the part of the contractor for 100 percent of
the contract price. A "payment bond" is one executed in coneection
with a contract to assure payment as required by law of all persons
supplying labor and material in the execution of the work provided
for in the contract.
VIII-J-l
Page Two
PERFORMANCE BOND
(Name of Contractor or Company)
(Address)
(Corporation/Partnership)
hereinafter called Principal , and
(Name of Surety Company)
(Address)
hereinafter called Surety, are held and firmly bound unto
(Name of Recipient)
(Recipient's Address)
hereinafter called OWNER, in the penal sum of $
Dollars $
Dollars
in lawful money of the United States, for the payment of which sum well and
truly to be made we bind ourselves, successors, and assigns, jointly and
severally, firmly in these presents.
THE CONDITION OF THIS OBLIGATION is such that whereas, the Principal
entered into a certain contract with the OWNER dated the
day of , 19 , a copy of which is hereto attached and made a
part hereof for the construction of:
(Project Name)
NOW THEREFORE, if the Principal shall well, truly and faithfully perform its
duties in all the undertakings, covenants, terms, conditions, and agreements
of said contract during the original term thereof, and any extensions thereof
which may be granted by the OWNER, with or without notice to the Surety
and during the one year guaranty period, and if it shall satisfy all claims
and demands incurred under such contract, and shall fully indemnify and
save harmless the OWNER from all costs and damages which it may suffer
by reason of failure to do so, and shall reimburse and repay the OWNER
all outlay and expense which the OWNER may incur in making good any
default, then this obligation shall be vojd, otherwise to remain in full force
and effect .
VIII-J-2
Page Three
PROVIDED FURTHER, that the said Surety, for value received hereby stipu-
lates and agrees that no change, extension of time, alteration or addition to
the terms of the contract or to WORK to be performed thereunder or the
SPECIFICATIONS accompanying the same shall in any way affect its obligation
on this BOND, and it does hereby waive notice of any such change, exten-
sion of time , cdteration or addition to the terms of the contract or to the
WORK or to the SPECIFICATIONS.
PROVIDED, FURTHER, that no final settlement between the OWNER and the
CONTRACTOR shall abridge the right of amy beneficiary hereunder, whose
claim may be unsatisfied .
IN WITNESS WHEREOF, this instrument is executed in counter-
(N umber)
parts, each one of which shall be deemed an original, this the
day of , 19 .
ATTEST:
(Principal Secretary)
(SEAL)
(Principal)
By (s)
(Witness as to Principal) (Address)
(Address)
ATTEST:
(Surety)
By
(Witness as to Surety) (Attorney in Fact)
(Address) (Address)
NOTE: Date of BOND must not be prior to date of Contract.
If CONTRACTOR is Partnership, all partners should execute BOND.
IMPORTANT: Surety companies executing BONDS must appear on the Treasury
Department's most current list (Circular 570 as amended) and be authorized
to transact business in the state where the PROJECT is located .
VIII-J-3
Page Four
PAYMENT BOND
(*
(Name of Contractor or Company)
(Address)
, hereinafter called Principal,
(Corporation/Partnership)
and
(Name or Surety Company)
(Address)
hereinaiter called Surety, are held and firmly bound unto
(Name of Recipient)
(Recipient's Address)
hereinafter called OWNER, in the penal sum of $ Dollars,
$ in lawful money of the United States, for the payment of which
sum well and truly to be made, we bind ourselves, successors, and assigns,
jointly and severally, firmly by these presents.
THE CONDITION OF THIS OBLIGATION is such that whereas, the Principal
entered into a certain contract with the OWNER, dated the
day of , 19 , a copy of which is hereto attached and made
a part hereof for the construction of:
(Project Name)
NOW, THEREFORE, if the Principal shall promptly make payment to aJl persons,
firms, SUB-CONTRACTORS, and corporations furnishing materials for or per-
forming labor in the prosecution of the WORK provided for in such contract,
and any authorized extension or modification thereof, including all amounts
due for materials, lubricants, oil, gasoline, coal and coke, repairs on
machinery, equipment and tools, consumed or used in connection with the
construction of such WORK, and all insurance premiums on said WORK, and
for all labor, performed in such WORK whether by SUB-CONTR.'XCTOR or
otherwise, then this obligation shall be void; otherwise to remain in full
force and effect.
«
VIII-J-4
PROVIDED FURTHER, that the said Surety, for value received hereby stipu-
lates and agrees that no change, extension of time, alteration or addition to
the terms of the contract or to WORK to be performed thereunder or the
SPECIFICATIONS accompanying the same shall in any way affect its obligation
on this BOND, and it does hereby waive notice of any such change, exten-
sion of time , alteration or addition to the terms of the contract or to the
WORK or '.o the SPECIFICATIONS.
PROVIDED, FURTHER, that no final settlement between the OWNER and the
CONTRACTOR shall abridge the right of any beneficiary hereunder, whose
claim may be unsatisfied.
IN WITNESS WHEREOF, this instrument is executed in counter-
(Number)
pans, each one of which shall be deemed an original, this the
day of , 19 .
ATTEST:
(Principal Secretary)
(SEAL)
(Principal)
By (s)
(Witness as to Principal) (Address)
(Address)
ATTEST:
(Surety)
By ^
(Witness as to Surety) (Attorney in Fact)
(Address) (Address)
NOTE: Date of BOND must not be prior to date of Contract.
If CONTRACTOR is Partnership, all partners should execute BOND.
IMPORTANT: Surety companies executing BONDS must appear on the Treasury
Department's most current list (Circular 570 as amended) and be authorized
to transact business in the state where the PROJECT is located.
VIII-J-5
d
t
Exhibit VIII- K
CONTRACTOR CERTIFICATIONS
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
CERTIFICATION OF BIDDER REGARDING EQUAL EMPLOYMENT OPPORTUNITY
INSTRUCTIONS
This certification is required pursuant to E.xecutive Order I 1246 (30 F. R. 12319-25). The implementing
ailes and regulations provide that any bidder or prospective contractor, or any of their proposed subcon-
tractors, shall state as an initial part ot" the bid or negotiations of the contract whether it has participated in
any previous contract or subcontract subject to the equal opportunity clause: and. if so, whether it has filed
all compliance reports due under applicable instructions.
Where the cenification indicates that the bidder has not filed a compliance report due under applicable in-
structions, such bidder shall be required to submit a compliance report within seven calendar days after bid
opening. No contract shall be awarded unless such report is submitted.
CERTIFICATION BY BIDDER
NAME AND ADDRESS 0? BIDDER (Include ZIP CoOeJ
1. Bidder has participated in a previous contract or subcontract subiect to the Equal Opportuniry Clause.
□ Yes □ No
2. Compliance reports were required to be filed in connection with such contract or subcontract.
n Yes □ No
3. Bidder has filed all compliance reports due under applicable instructions, including SF-100.
□ Yes iZ! No i^ None Required
4. Have you ever been or are you being considered for sanction due to violation of Executive Order 1 1246, as amended?
~ Yes d No
NAME AND TITLE Of SIGNER IPlaase rvP't
Heaiacej Form HUD-4238.CD-1 . «hicn it Obsoiet
HUD-950 1 111-78)
VIII-K-1
Page Two
U.i. OiPAfll-tHT Of fH,UilMC »~0 UXR*N Litvt lOPmInT
COUUUHITY DEVELOPMENT 6L0CK GRANT PROCPAM
CONTRACTOR'S CERTIFICATION
CONCERNING LABOR STANDARDS AND PREVAILING WAGE REQUIREMENTS
m
TO f^f'proprialr Htrtpttntl:
OATC
•■OJECT MUMBCIT HI QKyJ
c/o
VROjeCT M t-mt.
1. Th* undenitneri, havinf executed • conlract wiih.
_foi the conitruction o( the above-identided project, acknowledges that:
(a) Th« Laboc Standards provisions ar« included in the aforesaid contract;
0>) Correction o( any inlracliona of Ihe aloiesmd conditions, including infractions by any of his subcontractors and
any lower ti*r subconltactors, is his responsibility;
2. He c»»tifi»» that:
(•) Neither he nor any firm, partnership or association in which he has tubslantial interest is designated as an
ineligible co.itrjctor by the Comptroller General of the United Slates pursuant to Section S.6(b) of theRegulatioas
of the Secretary of Labot, Part 5 (29 LtH, I'a't j I a> pursuant lo Section 3(j) of the Oavis-Bacon Act, as
amended (-U) U.xC. 27&u-2fa )).
(b) No part of the afoiementioned contract has been or will be subcontracted to any subconiractor if sucS sub-
contractor or any firm, corporation, partnership or ;issocialion in which such subcontiaclor has a subi^lanlizl
interest is designated as an ineligible contractor pursuant to any of the afoiementioned regulatory or statutory
provisions.
3. He agrees lo obtain and fo<M.8rd lo the aforementioned recipient within ten days after Ihe eieculion of any subcontract,
including those executed by his sulxiontraciors and any lower tier iubconlraclors, a Subcontractor's Certifica'ion
Concerning Labor Staadards and Prevailing Wage Requirements e»eculed by the subcontractors.
4. He certifiea that;
(a) Tht legal noma and lh» butinait addrait ol ihe undirt>gn*J are;
(b) Tha wndfugnad i
II A »<NCI.I ^"O^RIBTOOSMll
111 A cowohation onoANizeoiH thc irATCor
121 APAMTKCnSHtP
141 OInCnOnSAKiZATIOM I Del trtiti
(c) The noma, till* and oddreti ol ih* owner,
porfners or officcm of ike undorti^noc
ore:
MAWe
TITU e
Aooncst
MUI>-I47I l«-7JI
VIII-K-2
Page Three
(d) ll.r M-nei tnd osuicxc- ol til nihtr |.tr«unt, l,}ll> i-olu-ol tnd to'fofolt, hc»iii9 a tubttonliul inrrt*tl in ihc uiiflcri..j,itH,
nnd the nalu'C w( ll.t -nlfreil «'C W^ (...,.-. ,,, ,,.,. /
MA»f
AODKIJI
N.,^-tO. ,-Tt..<.T
(c) Tlic nofnrl, oda>»>c> and Ifadc cla»>i(i<o
iiont ol oil alh<T buildinf conttrucnsn
■J:
conitotrori in »hicn ihe ui.doisTO Kjv
H»-e
AOUMKSS
TX»0£ Cl.»iSi»iC»TIO~
f(.l,™i.orl.,/-J
U.S. Ciiin.n.l Ca<]«. Ixci.iin lUlO. Tlll> IH. U.S.C. p»«iilri in p.rl: -Whux^r, . . .
• ■•irn.cn'. Uno-in^ inc >•>••« lo tx l.lii. insll br linvU noi XOK UMK SS.UOO
VIIl-K-3
Page Four
m
CERTIFICATION OF PROPOSED CONTRACTOR REGARDING
SECTION 3 AND SEGREGATED FACILITIES
Name of Contractor Project Name and Number
The undersigned hereby certifies that:
(a) Section 3 provisions are included in the Contract.
(b) A written Section 3 plan was prepared and submitted as part of
the bid proceedings (if bid equals or exceeds $10,000).
(c) No segregated facilities will be maintained as required by Title
VI of the Civil Rights Act of 1964.
Name and Title of Signer (Type or Print]
Signature Date
VIII-K-4
•
Page Five
NONCOLLUSION AFFIDAVIT OF PRIME BIDDER
State of )
County of ) ss.
, being first duly sworn, deposes and says
that:
(1) it is of ,
the Bidder that has submitted the attached Bid;
(2) It is fully informed respecting the preparation and contents of
the attached Bid and of all pertinent circumstances respecting such
Bid;
(3) Such Bid is genuine and is not a collusive or sham Bid;
(4) Neither the said Bidder nor any of its officers, partners, owners,
agents, representatives, employees or parties in interest, including
this affiant, has in any way colluded, conspired, connived or agreed,
directly or indirectly with another Bidder, firm or person to submit
a collusive or sham Bid in connection with the Contract for which the
attached Bid has been submitted or to refrain from bidding in connection
with such Contract, or has in any manner, directly or indirectly, sought
by agreement or collusion or communication or conference with any other
Bidder, firm or person to fix the price or prices in the attached Bid
or of any other Bidder, or to fix an overhead, profit or cost element
of the Bid price or the Bid price of any other Bidder, or to secure
through any collusion, conspiracy, connivance or unlawful agreement
any advantage against the (Local Public Agency)
or any person interested in the proposed Contract; and
(5) The price or prices quoted in the attached Bid are fair and proper
and are not tainted by any collusion, conspiracy, connivance or unlawful
agreement on the part of the Bidder or any of its agents, representatives,
owners, employees, or parties in interest, including this affiant.
(Signed)
Title
Subscribed and sworn to me this
day of , 19^
By:
Notary Public
My commission expires
VIII-K-5
Exhibit Vffl-L
CONTRACT
THIS AGREEMENT, made this day of , 19 , by and
between (Corporate Name of OwnerT" , herein called "Owner,"
acting herein through its ^(Title of Authorized Official) , and a corporation/a
partnership/an individual doing business as (Strike Out Inapplicable
Terms), of , County of , and State
of , hereinafter called "Contractor."
WITNESSETH: That for and in consideration of the payments and agreements
hereinafter mentioned, to be made and performed by the OWNER, the CONTRACTOR
hereby agrees with the OWNER to commence and complete the construction described as
follows:
hereinafter called the project, for the sum of Dollars
($ ) and all extra work in connection therewith, under the terms as stated in the
General and Supplemental Conditions of the Contract; and at — (its or their) own proper
cost and expense to furnish all materials, supplies, machinery, equipment, tools,
superintendence, labor, insurance and other accessories and services necessary to
complete the said project in accordance with the conditions and prices stated in the
Proposal, the General Conditions, and Supplemental General Conditions of the Contract,
the plans which include aU maps, plats, blue prints, and other drawings and printed or
written explanatory matter thereof, the specifications and contract documents therefor
as prepared by , herein entitled the Architect/Engineer,
and as enumerated in Paragraph 1 of the Supplemental General Conditions, aU of which
are made a part hereof and collectively evidence and constitute the Contract.
The Contractor hereby agrees to commence work under this contract on or before a
date to be specified in a written "Notice to Proceed" of the Owner and to fully complete
the project within consecutive calendar days thereafter. The Contractor further
agrees to pay, as liquidated damages, the sum of $ for each consecutive
calendar day thereafter as hereinafter provided in Paragraph 19 of the General
Conditions.
The OWNER agrees to pay the CONTRACTOR in current funds for the performance
of the contract, subject to additions and deductions, as provided in the General
Conditions of the Contract, and to make payments on account thereof as provided in
Paragraph 25, "Payments to Contractor," of the General Conditions.
VIII-L-1
IN WITNESS WHEREOF, the parties to these presents have executed this contract
in six (6) counterparts, each of which shall be deemed an original in the year and day first
above mentioned.
(SEAL)
(Secretary)
(t
ATTEST: (Owner)
By
(Witness) (Title)
(SEAL)
ATTEST: (Contractor)
By
(Secretary)
(Witness) (Title)
(Address)
VIII-L-2
Exhibit VIII-M
NOTICE OF CONTRACT AWARD AND PRECONSTRUCTION CONFERENCE
(Type on letterhead of grantee)
Date
Montana Department of Commerce
Community Development Division
Cogswell Building, Room C-211
Capitol Station
Helena, Montana 59620
This is to inform you that (name of company/I. D. number)
at (address) , (phone) , has been awarded a
contract — (contract //) — to (brief description of work) in the
(name of grantee: City, Town or County of )_. The number of
applicable wage decision is . The contract is for
(amount) . The estimated start of construction is (date) . Contract
completion is estimated to be approximately (date) .
A Preconstruction Conference will be held concerning this project at
(time) on (date) at (address) .
Sincerely,
(Signature)
(typed name)
Labor Standards Coordinator or
Project Manager
( CDBG Project)
( , Montana Zip
VIlI-M-1
9
Exhibit VIII- n
MONTHLY EMPLOYMENT UTILIZATION REPORT
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VIII-N-1
9
Chapter ix
Housing
Rehabilitation
Projects
CHAPTER IX
HOUSING REHABILITATION PROJECTS
OVERVIEW
Of all CDBG supported activities, housing rehabilitation projects
place the greatest administrative burden on the local grantee. This
is a result of the number of ultimate beneficiaries (i.e. the housing
occupants who actually receive rehabilitation assistance) and the
specific characteristics of each case. Additionally, the local CDBG
office remains constantly involved in the process from the determin-
ation of eligibility requirements to selection of recipients to the
final inspection of rehabilitation work performed by contractors.
The extent of administerial involvement in a housing rehabilita-
tion project also leaves the administrating unit open to criticism or
questioning from assistance recipients, non-recipients, and contrac-
tors performing the rehabilitation work. It is important, therefore,
to establish and publicize the procedures by which the local project
will be conducted. This Chapter examines the major elements of a
successful rehabilitation project:
— establish management system;
establish local project guidelines;
— select assistance recipients;
— determine the scope of rehabilitation;
— contract for rehabilitation construction;
inspect the rehabilitation work; and
— maintain records.
APPLICABLE LAWS
Housing rehabilitation projects are subject to all applicable
State and federal laws and regulations. All of the preceeding
chapters of this Manual contain requirements which grantees must
IX- 1
comply with. The following sections of this chnpter provide
additional guidance and discuss additional federal and State
requirements which must be complied with.
LOCAL GRANTEE RESPONSIBILITIES
Step 1 — Establish Management System
Before proceeding with any rehabilitation activity, the grantee
should decide how proiect management will be carried out. Typically,
responsibility is divided between several groups. Although not all
rehabilitation projects are managed in this manner, the governing body
will usually establish a loan review committee to work with the loca]
CDBG staff or third party contractor who will be repponsiblc for
administering the project.
Staff (or contractor) roles often include accepting applications
from potential recipients, verifying income, determining that the
structure can be rehabilitated to all required codes, performing
day-to-day work with recipients and contractors, and coordinating with
the loan review committee, with the clerk on financial management, and
with the governing body and DOC.
The loan review committee works with the staff in developing
proiect guidelines, and makes the determinations regarding which
applicants are awarded assistance. Appointment of a loan review
committee must be done by authorizing ordinance or resolution by the
grantee. The governing body should include representation on the
committee by low and moderate income persons, minorities, women,
elderl}' and the handicapped.
The guidelines should be substantially in accordance with the
project design and mechanisms as proposed in the grantee's application
to DOC for CDBG assistance. The local rehabilitation guidelines must
be formally adopted by the local governing body, and the grantee must
IX-2
send a copy to the CDBG liaison for review and retention in the DOC
file on the project. Similarly, any subsequent modifications to the
project guidelines must be submitted to DOC.
Exhibit IX-A, CDBG Housing Pehabi litation Issues, contains a
listing of major considerations for project design. While this
exhibit contains issues for consideration, be sure to avoid designing
guidelines which conflict with project design as represented in the
application to DOC. The final form of the local guidelines will vary
according to design considerations. For example, guidelines for a
project allowing rehabilitation of owner-occupied units by deferred
loans only will vary considerably from those for a more complex
project allowing several types of loans and grants for both owner-and
renter-occupied units. Another critical decision is whether
rehabilitation contracts will be between the homeowner and the
contractor, as is most commonly done, or whether the grantee will
serve as the general contractor. As discussed in detail in Step 5, it
becomes more complex if the grantee serves as the general contractor
because contracts are then "public" and additional requirements apply.
When developing guidelines, it is recommended that the grantee
take into consideration the following:
— design as proposed In the application to DOC;
— considerations included in Exhibit IX-A;
sample guidelines provided as Exhibit IX-B; and
— guidelines being used by other current or former CDBG
projects throughout the State.
An additional consideration when establishing the management
system is compliance with federal and State requirements and
maintaining records to demonstrate compliance. For example, civil
rights requirements prohibit discrimination in housing opportunities.
Therefore, Step 7 — Maintain Records, of this chapter on housing
rehabilitation, requires grantees to maintain records on benefits to
low and moderate income and minority persons. Other examples of
IX- 3
requirements discussed later 1p this chapter, and corresponding
documentation required, pertain to efforts to use minority and local
contractors, and verifying eligibility. Finally, complying with very
detailed requirements of acquisition or relocation, if that is an
element of the local housing rehabiltation project, would involve the
procedures and forms explained in Chapter VIT.
Step 2 — Establishing Local Project Guidelines
Typically, the loan review committee and staff formulate a set of
local rehabilitation project guidelines which address many of the key
questions that would eventually arise during the conduct of the
project. Having this information at the start lessens any possible
criticism of the program as being arbitrary and apprises potential
assistance recipients of their chances for receiving assistance as
well as the amount of the assistance.
The local project guidelines should contain at the least, the
following elements:
— project purpose - a general statement outlining the reasons
why the locality has elected to establish a rehabilitation
project;
designated authority - establishes the public agency or
third party contractor who will be responsible for adminis-
tering the local project and outlines the administrator's
responsibilities and the loan review committee's responsibil-
ities;
recipient eligibility requirements - establishes thresholds
for participation in the program including income limits and
geographic boundaries if the project is targeted to specific
neighborhoods;
allowable rehabilitation expenses - outlines the range of
housing repairs and /or improvements for which CDBG funds may
be used. The range of allowable expenses may be written
directly into the guidelines or may be referenced;
IX-4
•J
property standards - states the standards that must be
achieved as a result of any CDBG assisted rehabilitation
effort. As required by the 1983 Montana CDBG Program
Description, dated May, 1983, as well as the contract
between the grantee and DOC:
"Rehabilitation" shall include using CDBG funds to make
repairs to substandard residential structures to make them
meet or exceed requirements contained in current editions of
the following:
HUD Section 8 Housing Standards
- HUD Cost-Ef f ective Energy Conservation Standards
(CEECUS)
- National Electrical Code, as amended
- Uniform Plumbing Code, as amended
- Uniform Mechanical Code
- Uniform Building Code (where rehabilitation involves
structures with five or more units, or any commercial
buildings) and
- any locally adopted codes
A copy of the Section 8 Standards and CEECUS are
included in the Requirements Notebook.
maximum assistance amounts — establishes the maximum amount
any single household may receive (generally $10,000 or
$15,000) and describes other rehabilitation dollars that may
be leveraged with CDBG funds;
assistance options — describes the range of assistance that
can be provided with CDBG dollars including grants, loans,
loan guarantees, or interest subsidies;
recipient application procedures — outlines the process by
which the local CDBG office will receive applications for
assistance and criteria by which recipients will be
selected ;
lX-5
security requirements — presents options by which the local
CDBG office secures the CDBG assistance if it is provided as
a direct loan or loan guarantee;
use of contractors — provides options (e.g. selecting a
general contractor, homeowner as general contractor, or
self-help) and guidelines for bidding, contract qualifica-
tions, the contract document, and method of payment;
licensing requirements — The Program Description requires
that:
All electrical and/or plumbing work not done by the
owner of the structure must be done only by electri-
cians and/or plumbers licensed by the Montana Depart-
ment of Commerce. A current listing of licensed
individuals is available from the Professional and
Occupational Licensing Division of the Montana Depart-
ment of Commerce.
In addition, all other applicable State laws governing
licensing must be followed.
permit requirements — in addition to all other permits as
may be required by State statute or local requirements, the
1983 Program Description, page 42, further requires that:
Permits must be obtained from the Building Codes
Division of the Montana Department of Administration,
for all electrical and/or plumbing work undertaken with
CDBG funds unless the grantee has been certified by
Division to enforce the codes cited above. In such
cases permits will be obtained locally.
Permits must be secured whether the work Is done hy contrac-
tor or by homeowner, if the local project permits homeowner
work.
IX-6
inspection procedures — establishes the local CDBG office's
responsibility for periodic progress Inspections nnd final
inspection. In addition, for plumbing and/or electrical
work, the Program Description requires that:
Grantees will be responsible for assuring that such
work is inspected by proper authorities. Options to
provide code inspection may include interlocal agree-
ments with governments with existing building depart-
ments, arrangements with the Building Codes Division of
the Montana Department of Administration, or by con-
tracting with qualified, private sector persons.
other project considerations — includes procedures for
amending or waiving the guidelines, any extraordinary
authorities given to the local CDBG office (e.g. authority
to make emergency grants where there is an immediate danger
to the health and safety of an occupant), and instances that
represent a conflict of interest related either to assis-
tance recipients or the awarding of rehabilitation con-
tracts.
Step 3 — Select Assistance Recipients
The grantee is responsible for assuring that all potential
assistance recipients are informed of the availability of the project.
This can be done through advertisements, news articles in the local
papers, public service announcements on local radio, door-to-door
visits, and/or posting of announcements in public buildings or places
frequented by potential recipients (e.g. a senior citizens' center").
In some instances, extraordinary measures may be required. For
example, in one Colorado community the local rehabilitation agency
staff met with the ministers of the local churches who agreed to
publicize the project during Sunday services.
IX-7
When selecting assistance recipients it is important for the
grantee to comply with federal and State civil rights requirements
which prohibit discrimination and encourage fair housing practices.
This is discussed in greater detail in the "general project benefits"
and "fair housing" sections of Chapter V.
Regardless of the method of selecting recipients, first-come-
first-serve or through periodic competitions, each potential recipient
must be screened for eligibility. This can be done through a house-
hold survey which examines family composition, income, employment, and
length of occupancy. (A sample family survey instrument is provided
as Exhibit IX-C.)
Following the household survey, all information related to
employment, income, expenses, and other assets must be verified. This
information can be obtained from a number of sources, including:
— income: employer verification
tax returns
paycheck returns
stubs from pension, social security, etc.
— assets: bank statements or passbooks
county assessor's records
household inspection
— expenses: cancelled checks for
- mortgage
- utilities
- credit payments
- taxes
- insurance
mortgage bank statements
(Sample forms for verification of emplojTnent and verification of bank
accounts are presented as Exhibits TX-D and IX-E.) The local rehabil-
itation staff can perform this function; the Loan Review Committee
members do not need to know the incomes. All financial information
required for screening potential recipients is confidential and should
be treated as such by the local CDBG rehabilitation office. The only
TX-8
exceptions to this rule are State and federal project monitors who may
require n review of the files to determine whether the grantee is
providing project benefits as outlined in the grant application.
For f irst-come-f irst-serve projects, once information on the
potential recipient is collected and verified and the applicant is
determined to be eligible, the local project official can proceed with
the work write-up and estimates.
If the project is geared toward a periodic competition among
potential recipients, the local established selection criteria is
applied to the information available on each applicant. Criteria can
be based on the extent to which the applicant is below the established
income limits or preference may be given based on some characteristics
of the need of household, such as elderly, handicapped, or single head
of household with dependent children.
In either case, the local CDBG office should provide all appli-
cants with a Notice of Disposition (Exhibit IX-F) indicating that
assistance will be provided or stating the reasons why the applicant
was not accepted.
Step 4 — Prepare Work Write-Ups and Cost Estimates
An inspection of the property must be conducted to determine the
specific items to be repaired or replaced and to estimate the cost of
each item. The write-up must include those items necessary to bring
the structure up to local building codes. Section 8 Minimum Property
Standards and other standards listed on page lX-5, or standards
defined in the local project guidelines, whichever are more stringent.
Procedures required to conduct the initial inspection depend on
the level of experience of the inspector. In instances where a
trained inspector is available, the write-up may be recorded on a
blank form and signed by the inspector. Where the person conducting
the inspection is less experienced, the inspection should be based on
lX-9
a specific checklist of potential deficiencies. The local rehabilita-
tion official who prepares the write-up then checks for each and every
potential deficiency. It is highly recommended tlint if an experienced
inspector is not available, training for local agency staff should be
included in the administrative budget. (Exhibit IX-C, Residential
Inspection Report, consists of a detailed work write-up checklist.)
With the Information contained in the work write-up, the local
CDBG office must estimate the cost of the rehabilitation activity to
determine whether it can be completed within the limits of the maximum
assistance available to the household. Again, it Is important that
the cost estimates be made by persons familiar with material and labor
costs in the project area. Inaccurate estimates may discourage
potential contractors from competing for the rehabilitation contracts
or result in contractors cutting corners to bring the project in under
the maximum assistance level. (A sample work write-up and cost
estimate is provided as Exhibit IX-H.)
Step 5 — Contract for Rehabilitation Construction
Requirements for contracting for rehabilitation assistance are
dictated by whether the contracts are between homeowners and the
contractors (see Exhibit IX-A) , or whether the grantee opts to serve
as general contractor. When the grantee serves as general contractor,
contracts are considered "public" and are subject to additional
federal and State requirements applying to public contracts.
Rehabilitation projects most commonly involve contracts between
homeowners and contractors; therefore, the following Instructions are
based upon that option for contracting.
All rehabilitation contracts under $10,000 between the homeowner
and the contractor must be awarded by competitive negotiation consis-
tent with Montana State Law and procedures outlined in 0MB Circular
A-102, Attachment 0. (See Chapter III for more detailed instructions
on competitive negotiation.) Contracts over $10,000 must be
consistent with the competitive processes of State law and A-102,
Attachment 0. Additionally, the local rehabilitation specialist or
IX-10
other representative of the grantee should sign as a trustee to the
contract. The contract must be awarded to the lowest responsive and
responsible submittal. Criteria by which submittals can be judged to
be responsive include:
poor performance on other rehabilitation contracts;
whether the submittal is substantially below the cost
estimates prepared with the work write-up;
whether the contractor is under penalty from another con-
tract; and/or
whether the contractor has uncompleted rehabilitation
contracts at the time of the submittal.
The local CDBG office should request a determination of
contractor eligibility from the CDBG liaison before the contract is
executed. Contractor eligibility is discussed in greater detail in
Chapter VT , Labor Standards. (Exhibit IX-1 contains a sample letter
that may be sent to DOC to request a determination of eligibility.)
As an alternative to submitting a request each time a contractor is
selected, the local CDBG office may wish to send the entire list of
approved rehabilitation contractors to DOC for clearance, after which
it would only be necessary to obtain clearance for new contractors
added to the local list. The DOC notice of eligibility should be
maintained In the files.
As was explained under Step 2, Establishing Local Project Guide-
lines, the grantee is responsible for assuring that all applicable
contractor requirements are follows.
Every effort should bo made to use minority and local contractors
and material suppliers as required bv HUD policy and by Section 3 of
the HUD Act of 1968, and discussed in greater detail in the "business
opportunity" section of Chapter V, and Chapter Vlll. (Exhibits V-H
and I contain reporting forms which grantees should maintain to
demonstrate compliance.) Often small contractors who are unfamiliar
with the legal requirements associated with publicly assisted
construction shy away from participation. The
IX-U
local CDBG office should consider providing technical assistance to
local contractors to facilitate their participation. This assistance
may be in the form of training sessions or briefings about publicly
funded contracts and/or elimination of procedural barriers that
inhibit small contractor participation.
A potential barrier is cash flow problems sometimes experienced
by small contractors. This barrier can be overcome by drawing down
the full amount of rehabilitation assistance for each contract after
it is approved, and placing it in an escrow account. This system
enables the contractor to be paid immediately upon verification of
completed work elements. This system is subject to requirements
explained in HUD Notice CPD-79-27, Use of Escrow Accounts for Property
Rehabilitation loans or Grants in Block Grant Programs. A copy of the
Notice is included in the Requirements Notebook.
The local CDBG rehabilitation office must prepare a standard
contract agreement for all rehabilitation activities. Each contract
must include the following:
— executed contract agreement;
— copy of the work write-up and contractors response;
— general conditions;
— contractor certifications; and
— any special conditions.
(Exhibit IX-J presents a sample contract package.) All federal
requirements related to equal employment and businesses opportunities
apply to the rehabilitation contracts. However, Davis-Bacon and other
related labor standards requirements are triggered only in those
instances where the rehabilitation involves a structure containing
eight or more units or where eight or more units are put to hid as a
single package.
One additional federal requirement tied to rehabilitation activ-
ities is the Lead-Based Paint Poisoning Prevention Act, as amended. A
IX- 12
copy of the Act Is included in the Requirements Notebook. The provi-
sion is designed to prevent lead-based paint poisoning in residential
structures constructed, improved, or rehabilitated with federal funds.
The Act and accompanying regulations at Title 24 CFR Part 35 specify
that lead-based paint may not be used in federally assisted housing
structures and that where lead-based paint currently exists, the paint
must be removed and all necessary steps be taken to eliminate the
hazard .
The contract conditions should also refer to any State and local
permitting and licensing requirements, specify who will pay for the
building permits (generally the contractor) , and require the contrac-
tor to warrant the work for a specific period (e.g. one year) follow-
ing the final acceptance. Both permitting and licensing requirements
were explained previously in greater detail under Step 2.
Although a pre-construction conference is not required, it is
recommended that the local agency bring together the homeowner and the
contractor to review the work write-up and the method of pajnnent .
Step 6 — Inspect the Rehabilitation Work
The local CDBG rehabilitation office is responsible for periodic
and systematic inspections of all rehabilitation work performed by
contractors. The Inspections should be geared to completion of
certain elements of the work write-up such as wiring improvements.
For work that will be covered by walls, ceilings, or floors, the
inspections should be scheduled before the work is covered over.
Deficiencies identified during the inspections should be presented to
the contractor for correction before any partial payment is made for
that work.
Inspection requirements will vary according to permitting systems
established. For example, where plumbing and electrical permits are
obtained from the State Building Codes Division, the State inspectors
will be involved. Where the grantee is certified to enforce the
codes, local permitting and inspection will be done.
IX- 13
If the contractor refuses to make the corrections, the local CDBG
office may terminate the contract. In this event, the Inspector
should assess the work completed to date and escrow an amount of the
CDBG funds to compensate the contractor for work that has been satis-
factorily completed. The escrow account to the released contractor is
paid only after it is determined that the remaining funds are suffi-
cient to cover the costs of a second contractor hired to complete the
tasks outlined in the original work write-up.
Documentation of any change orders must be maintained by the
local CDBG office in the individual rehabilitation files. Any change
order must be reasonable in terms of cost and in proportion to the
total contract amount. A notation should be included to explain why
it is necessary.
An additional role for the local CDBG staff is to serve as
mediator between the owner and the contractor. In the event that the
owner indicates dissatisfaction with the contractor's work, the local
agency should promptly investigate the complaint and seek a mutually
agreeable solution to the complaint.
The local agency may make partial progress payments based on
satisfactorily completed work. Partial payments should not exceed 80
percent (or whatever percentage is specified in the contract for
rehabilitation) of the total contract amount before final inspection
and approval. As with public facilities contracts the remaining funds
should be withheld until the final inspection, acceptance of work by
the owner and the local CDBG office, and presentation of a clean lien
certificate. (Sample Notice of Acceptance and Release of Lien forms
are provided as Exhibits IX-K and IX-L.)
Approximately 60 days after the work is completed, the local CDBG
staff should make a follow-up visit to the home to determine the
owner's satisfaction with the contractor's work and identify any
deficiencies that need correction under the contractor's warranty.
IX- U
Step 7 — Maintain Records
Throughout the local project activities the local CDBG office
should maintain documentation of a variety of activities, including
records of benefits to low and moderate households and protected
groups such as women and minorities. (Exhibit IX-M provides a
suggested format for tallying benefits by households characteristics.)
The grantee will be responsible for the following documentation
and data related format to the local rehabilitation program.
General documentation should include at least the following:
— rehabilitation guidelines and council resolution of
adoption;
— copies of all applications;
notices of rejection and reasons;
— data on benefits to low and moderate income and minority
persons (See Exhibit IX-) ;
— letter of request for contractor eligibility;
— DOC notice of contractor eligibility;
documentation of any acquisition and/or relocation cases;
and
for contracts of $10,000 or more, data on utilization of
local and minority contractors^ (see Exhibits V-H and I);
For each rehabilitation job, maintain an individual file contain-
ing documentation for at least the following items:
— family survey;
— work write-up and cost estimate;
— executed contract with requirements and attachments;
— electrical and plumbing permit numbers and dates;
Notice to Proceed;
— site inspection reports;
IX- 15
requests for partial payment .md documentation;
change order requests and approvals; v|^P
Notice of Acceptance of Work;
Release of Liens; and
any correspondence, complaints, and resolution of com-
plaints.
IX-16
CHAPTER IX
EXHIBITS
IX-A - CDBG Housing Rehabilitation Issues
IX-B - Rehabilitation Assistance Project Guidelines
IX-C - Family Survey Guide
IX-D - Reqiicst for Verification of Employment
TX-E - Request for Verification of Deposit
IX-F - Notice of Disposition
IX-G - Residential Inspection Report
IX-H - Work Write-Up and Cost Estimate
IX-I - Request for Verification of Contractor Eligibility
IX-J - Contract Package for Rehabilitation
IX-K - Notice of Acceptance of Work
IX-L - Release of Lien Forms
IX-M - Benefits Reporting Form
IX-17
%
EXHIBIT IX-A
CDBG HOUSING REHABILITATION ISSUES
To implement a CDBC Housing Rehabilitation Project, each grantee
has a number of decisions to make regarding the operational format of
the project. The following discussion isolates several of the more
critical areas with which each project must deal.
ROLE OF THE GRANTEE IN CONTRACTING
Before a community begins to design criteria for applicant
selection or decides what specifications will be used for construction
materials, it is vital that a decision be made regarding the role of
the grantee. There are basically four choices:
— the grantee serves as the prime contractor for roliabilit-
ation contracts;
— the grantee issues construction contracts to contractors
through its normal bidding process;
— the grantee makes awards to homeowners and therefore becomes
a third party to all construction contracts; or
— the grantee uses the force account system, whereby its
employees perform the construction tasks.
Because each option has may legal implications regarding the
disbursement of funds, grantees should examine the alternatives in
detail before moving into other project issues.
For example, if the grantee choses to become the prime contractor
(e.g. act as the general contractor) of it the governing body choses
to issue a bid for each unit, then State law governing bidding proce-
dures will apply, including but not limited to advertising time
requirements, public bid openings, and constraints regarding the point
at which each construction project must be formally bid ($2,000).
However, if the grantee choses to make an award to an individual
homeowner and then acts as a third party to an agreement between the
homeowner/renter/landlord and contractor, the Montana statutes govern-
ing the expenditure of funds by the local government do not apply in
the same manner. Using this alternative, the homeowner and grantee
can accept "cost proposals" or bids without encountering the same
dollar limitations placed upon the project as in the above two alter-
natives .
It is important to remember that regardless of the option
selected, 0MB Circular A-102 attachment 0 still applies. Attachment 0
mandates that a competitive selection process be used, that awards be
made to the lowest cost submitted by a qualified respondent, and
formal advertising and bids are required if the project exceeds
$10,000. Under the force account alternative, all of the employment
procedures related to construction type labor apply as do State,
federal, and local purchasing requirements for material and supplies.
lX-A-1
METHODS OF REVIEW/ AWARD
Just as decisions regarding systems that establish the contract-
ing role of the grantee must be made, choices also exist regarding the
process of reviewing applications for assistance and making appropri-
ate awards. The grantee has the following options:
creating advisory and/or loan review boards to assist with
management;
utilizing an executive staff (force account or contract);
making decisions regarding each applicant at the governing
body level; or
combinations thereof.
The management, review and award process depends to some extent
upon the role the grantee has chosen. If the grantee is to be the
prime contractor and therefore subcontract all work or desires to bid
each project under the governing body's normal bidding process, then
the governing body must accept responsibility for awarding contracts.
If the grantee has chosen to become a third party to a contract, it
may then be possible for an advisory group to accept primary respon-
sibility for the disbursement of funds in the form of awards to
recipients.
While the systems employed are as diverse as the users, it is
important that administrative and management procedures be consistent
with legal constraints and community needs.
PROGRAM GUIDELINES
The statutory requirements of a rehabilitation program, as well
as the fact that each community has great latitude in establishing
program guidelines, is often difficult for a grantee to deal with.
Some areas where options exist include:
— loan and/or grant limits;
— application procedures;
— repayment schedules;
— bid sheets;
materials required;
contracts between the project and homeowners, renters,
landlords and contractors;
— the type of people targeted for service, such as elderly,
handicapped, and female head of household; and
the time established for certain activities to occur.
However, there are certain areas where choices do not exist. For
example, if the CDBG application indicated that it would serve only
low to moderate income families, then the project can not serve those
above Section 8 income guidelines. While there may be limited choices
in the types of income information collected for each applicant, the
project must maintain files verifying the income level. The project
must have written documentation regarding all expenditures, applicant
actions, awards, contract actions, and other related activities
requiring formal commitment by the project.
IX-A-2
EXHIBIT IX-B
REHABILITATION ASSISTANCE PROJECT GUIDELINES
NOTE: This is an example only. Guidelines for each grantee's
project will vary according to project design as represented
in its application to DOC for CDBG assistance. The follow-
ing guidelines are for a owner-occupied project, and need to
be verified for consistency with State law and any local
requirements.
I. PURPOSE OF THE PROGRAM
A. The (name of grantee. City, Town or County of )_,
Montana, acting by and through the Community Development
Agency shall provide financial assistance to those appli-
cants of (name of community) who reside in those areas
specified in the Grant Application for Montana Community
Development Block Grant (CDBG) Program funds as approved by
the Montana Department of Commerce (DOC) and who meet the
eligibility criteria specified herein.
B. The sole purpose of the financial assistance provided shall
be to provide decent, safe, and sanitary housing for low and
moderate income residents by rehabilitation of existing
structures to a condition which brings the structure into
compliance with: (See requirements as outlined in Step 2 of
this Chapter, Establishing Project Guidelines.)
C. This program shall be operated in accordance with all
applicable rules and regulations of the (name of grantee) ,
the State of Montana, DOC, and the U.S. Government.
II. DESIGNATED AUTHORITY
A. The Community Development Agency of the (name of grantee)
shall be the designated authority to administer the Rehabil-
itation Program of the (name of community) .
B. The Loan Review Committee shall be designated as the approv-
ing officer.
C. The Rehnbilitatlon Specialist shall be the officer
designated to submit all applications for approval, on
behalf of the applicant. Furthermore, in the event of
present or future participation by the (name of grantee) in
the Department of Housing and Urban Development's (HUD)
Section 8 Rehabilitation Loans, and/or private investor
loans (banks, savings and loans, or other such
institutions) , the Rehabilitation Specialist shall be the
designated authority to prepare and submit applications to
the appropriate funding source.
III. ELIGIBILITY REQUIREMENTS FOR CDBG FINANCIAL ASSISTANCE
TX-B-1
A. The applicant must bo an individual or family who owns and
occupies a residential unit. The applicant will be consid-
ered the owner If he or she:
1. Is the "owner of record" on the books at the Clerk, and
Recorder's Office;
2. Possesses a valid contract for deed which has been or
will be filed for record at the Clerk and Recorder's
Office and which includes reasonable rights of redemp-
tion and quiet and peaceable possession of the pro-
perty; or
3. Possesses a life estate which has been, or may be,
filed for record at the Clerk and Recorder's Office.
B. The Owner Occupied Structure must be located in (describe
eligible area, whether community-wide, restricted to certain
census enumeration districts, or targeted to a certain
geographical area as shown on a map included as an attach-
ment. )
C. Since CDBG funds are intended to serve low and moderate
income residents or hardship cases who have no other means
of financing repair or improvements, such funds shall not be
available to any owner-occupants who have substantial
financial resources available.
D. To qualify for assistance, the gross income of the applicant
shall not exceed the limits contained in current Section 8
income guidelines. (For assistance through loans, annual
reverif ication of income and adjustment to amount of loan
repayment should be included. Also, if loans of varying
interest rates are offered, differential income structures
may be established such that the lower the Income, the lower
the amount of interest charged.)
IV. INCLUDABLE COSTS FOR CDBG FUNDED REHABILITATION
CDBG rehabilitation funds shall be used only for those repairs
and/or replacements which are necessary to correct actual or
incipient violations of the housing codes as listed in Section
I-B, or which have been designated as eligible items and iden-
tified by notice from DOC, or as named in the HUD Rehabilitation
Financing Handbook 7375.1 Rev., or other such handbooks and/or
notices which may be received from DOC or HUD.
V. CDBG REHABILITATION ASSISTANCE AMOUNTS
A. When all qualifications have been met by the applicant, he
or she shall be entitled to receive CDBG rehabilitation
assistance in the amount necessary to bring the property up
to meet standards listed in Section I-B but not to exceed
$ ( 10,000) . No applicant may receive more than one CDBG
rehabilitation assistance grant.
IX-B-2
B. In the event ($10,000) Is not sufficient to bring the
property up to meet minimum property standards and the
codes, CDBG rehabilitation assistance will not be approved
unless :
1. Used in conjunction with an approved Section 504
Rehabilitation Loan or from Farmers Home Administra-
tion.
2. The applicant places the necessary funds in escrow with
the CDBC rehabilitation assistance funds when the
Contract is signed.
3. Used in conjunction with an approved rehabilitation
loan from a private investor as defined in Section VII
and VITI.
VI. CDBG USED IN CONJUNCTION WITH OTHER REHABILITATION FUNDS
A. Section 504 Rehabilitation Loans
The Community Development Agency must submit applications
for Section 504 Rehabilitation Loans to the Farmers Home
Administration on behalf of applicants who meet the
requirements of the Section 504 Program at the time of
application. All rules and regulations of the Farmers Home
Administration governing such loans shall be adhered to, and
documentation of such compliance shall be maintained in the
Community Development Department applicant's file.
B. CDBG rehabilitation funds may be used in conjunction with
Section 504 Rehabilitation Loans; however, CDBG funds shall
not exceed the maximum amount specified in Section V or the
amount necessary to reduce the applicant's monthly housing
expense after rehabilitation to 25% of the applicant's gross
income, whichever is less.
VII. LOAN SUBSIDY PROGRAM
CDBG rehabilitation funds may be used to subsidize interest rates
for rehabilitation loans secured from private investors such as
banks, savings and loans, mortgage companies, etc. The subsidy
paid from CDBG funds shall be restricted to payments necessary to
reduce the interest rate from the current market rate to a more
favorable rate to be determined by the private lending institu-
tion and the Community Development Agency.
The Community Development Agency shall prepare and submit the
loan application to the private investor for approval. The
private investor shall be given the first position of security by
means of a promissory note and mortgage from the applicant to the
private investor.
IX-B-3
Tf there is an existing mortgage on the property to be rehabil-
itated, the private investor may, at his or her discretion,
disapprove the application, accept a secondary mortgage position
or refinance the existing mortgage. Terms of the mortgage shall
not exceed ten (10) years or a maximum amount of $10,000.
VIII. GUARANTEED LOANS
CDBG funds may be used to guarantee rehabilitation loans from
private investors (banks, savings and loans, mortgage companies,
etc.).
The Community Development Agency shall place in escrow with the
participating private investor, 100% of the first loan to estab-
lish a default reserve account. For each succeeding loan, the
Community Development Agency shall deposit ten percent (10%) of
the contract price for each rehabilitation loan approved by the
participating private investor until the default reserve account
reaches $50,000.
After the default reserve has reached the $50,000 maximum, the
Community Development Agency shall make further deposits only if
the default reserve account is reduced by virtue of a default on
the mortgage resulting in foreclosure by the private investor and
disposition of the mortgaged property. Funds shall be drawn from
the default reserve account only in the amount necessary to clear
the balance of the mortgage after disposition by sale of the
property by the mortgage holder.
Terms of the mortgage shall be negotiated at an interest rate
acceptable to the Community Development Agency and the lending
institution (not more than ten (10) years, and not more than
$10,000.)
IX. SECURITY REQUIREMENTS, OPTION 1
A. A property lien or promissory note and mortgage to the (name
of grantee) , Montana, or such Agency as they may designate
shall be required on every CDBG rehabilitation assistance.
Said lien or note and mortgage will be properly filed and
include the following provisions:
1. Zero percent (0%) interest rate.
2. No payment shall be due from the property owner as long
as the property is the legal residence of the reci-
pient .
3. If the property is transferred by sale or the recipient
ceases to occupy the property as his or her legal
residence, repayments of the CDBG Rehabilitation
Assistance shall be due and payable immediately. At
the end of each year, the repayment amount shall be
reduced by twenty percent (20%) or one-fifth (1/5) of
the total amount of the CDBG Rehabilitation Assistance
until a zero balance is obtained at the end of five
IX-B-4
(5) years. For example, on the maximum CDBG Rehabil-
itation Assistance of ($10.000) , the following repay-
ment schedule would apply:
Date of Mortgage Repayment Amount
End of Year 1 $8,000
End of Year ?. 6,000
End of Year 3 4,000
End of Year 4 2,000
End of Year 5 -0-
4. The (name of grantee) or such Agency as they may
designate will file a Release of Mortgage upon receipt
of payment, or at the conclusion of the fifth (5th)
year of occupancy by the applicant.
5. The requirement of security documents (Note and Mort-
gage) may be waived by the Community Development
Director when it is determined to be in the best
interest of the program.
IX. SECURITY REQUIREMENTS, OPTION 2
A. A property lien or promissory note and mortgage to the (name
of grantee), Montana or such Agency as they may designate
shall be required on every CDBG rehabilitation assistance.
Said lien or note and mortgage will be properly filed and
include following provisions:
1. Zero percent (0%) interest rate.
2. No payments shall be due from the property owner as
long as the property is the legal residence of the
recipient .
3. If the property is transferred by sale of the recipient
ceases to occupy the property as his or her legal
residence, repayments of the CDBG rehabilitation
assistance shall be due and payable immediately.
4. The (name of grantee) or such Agency as they may
designate will file a release or mortgage upon receipt
of payment.
IX. SECURITY REQUIREMENTS, OPTION 3
No Security requirements, Straight Grant.
X. ACQUISITION AND REHABILITATION BY PUBLIC BODIES
A. Upon approval of the (City or Town Council, or County
Commission), CDBG rehabilitation assistance funds may be
used to rehabilitate properties owned or acquired by the
County Development Agency (public body) which are either to
remain in public ownership or to be sold.
IX-B-5
Other Rehabilitation Assistance
CDBG funds may be used for temporary on-site relocation
expenses for those displaced temporarily by rehabilitation
activities being carried out with CDBG assistance.
Historic Preservation
Upon approval of the (City, or Town Council, or County
Commission) , the use of CDBG funds for rehabilitation
assistance may include property listed on the National,
State, and Local Registers of Historic Places.
XI. EMERGENCY REPAIR
A. The Community Development Agency shall have the authority to
grant funds for emergency repairs on any structure which it
determines to be feasible. Such funds shall be granted for
the following reasons:
1. Any act of nature resulting in critical damage to the
structural condition.
2. To eliminate specific hazards to health and sanitation.
B. The Community Development Director or delegated representa-
tive (s) shall review all applications for emergency repairs
prior to approving a grant, and the decision of the review
shall be final.
C. The applicant must meet the eligibility requirements for the
CDBG rehabilitation assistance to receive emergency repairs.
The Community Development Agency shall have the authority to
waive prior verification of eligibility in cases where an
immediate danger to health, safety, or sanitation exists.
The applicant shall be notified that in event the verifica-
tion of eligibility should reveal the applicant does not
fall within the requirements, they shall be required to make
full restitution to the Department.
D. Such emergency repairs shall not prejudice the right of the
applicant to make applications for rehabilitation assistance
loans, grants or any combinations thereof for which he or
she may be eligible.
E. Emergency repairs shall not exceed ($2 ,000) per applicant
and no applicant shall be entitled to more than one emer-
gency repair grant.
XII. CONTINGENCY FUNDS
At the discretion of the Rehabilitation Specialist, additional
funding not to exceed ten percent (10%) of the original contract,
or ($1 ,000) , whichever is less, may be utilized as a contingency
fund to pay the cost of repair and/or replacement of actual or
IX-B-6
incipient code violations which were not observed and included in
the original contract.
Example I: Terminate infestation and damage not discovered until
repairs were begun.
Example 2: Collapsed sewer lines not discovered until roto-root-
ing was attempted.
XIII. FILES AND REPORTS
The Comniunity Development Agency shall maintain accurate files
and records on each applicant and all documentation pertinent to
the applicant shall be included. Such files shall be open for
inspection as to qualifications, bid procedures, inspections of
work, and payments from the escrow account.
XIV. ESCROW ACCOUNT
All funds for CDBc; rehabilitation assistance shall be placed in
the Rehabilitation Escrow Account. Checks for rehabilitation
assistance shall be made payable to the applicant, who shall
endorse said check at the time the contract is signed. The
Contractor shall not be allowed to make preliminary withdrawals
from this account on any CDBG rehabilitation assistance. Such
funds deposited in Escrow shall serve as a statutory bond for the
Contractor and shall not be disbursed until all proper lien
waivers are received.
XV. BIDDING PROCEDURE
A. Contractor selection shall be in accordance with State law
and the requirements of OMR Circular A-102, Attachment 0.
R. The homeowner shall have the right to select any qualified
Contractor. If the Contractor selected has not been previ-
ously approved by the Community Development Agency, he or
she shall submit contractor qualification forms, a credit
report, and a Certificate of Insurance. If the Contractor
is approved by the Agency, then he or she will be awarded
the contract.
C. The homeowner shall have the right to select more than one
Contractor for competitive bidding. All Contractors'
bidding must meet Department's requirements to be eligible
to do rehabilitation. If the Homeowner has no preference,
two or more Contractors will be assigned from the approved
Contractor rotation file to bid on their job.
XVI. CONTRACTOR QUALIFICATIONS
A. The Community Development Agency shall adopt and abide by
the qualifications and regulations established by the HUD
IX-B-7
Rehabilitation Handbook dated February,
subsequent revisions thereto.
1974, and all
B. The Contractor shall carry insurance as required by the
(name of grantee) and State of Montana and liability insur-
ancc at minimum of $100,000/$3000,000/$50 ,000.
C. Where applicable, the Contractor shall be licensed pursuant
to the State statutes. (See requirements as outlined in
Step 2 of this Chapter.)
XVII. RECEIPT OF APPLICATIONS, OPTION I
The Community Development Department will accept applications for
verification from owner occupants of the specified area. All
applications shall be considered on a "first come — first
served" basis.
XVII. RECEIPT OF APPLICATIONS, OPTION 2
The Community Development Agency will accept application for
verification from owner occupants of the specified area. All
applicants shall be verified as to eligibility and shall be
granted on the first working day of each month.
Those applications receiving the highest number of grade points
shall be considered as first priority applications. The Reha-
bilitation Specialist shall be responsible for the grading of the
applications in accordance with the following schedule:
Maximum 5 points
Income
One point for each 10% below eligibility limit
Housing Conditions
Lack of essential plumbing
Lack of essential heating
Lack of adequate electrical
Condition of foundation, roof,
or exterior walls
Condition of windows and doors
Age of Occupant or Handicapped
One point for every 5 years
over 60 or Head of Household
or 5 points for Handicapped.
Female Head of Household
Large Family (above four
dependents)
Length of time as qualified
applicant - One point for
each six months
Total Maximum Points
Maximum 10 points
3 points
2 points
2 points
2 points
2 point
Maximum 5 points
2 points
2 points
6 points maximum
30
IX-B-8
XVIII. CONTRACTING REHABILITATION WORK
A. This section sets forth requirements and procedures with
respect to construction contracts for rehabilitation
financed through a rehabilitation grant and/or a rehabilita-
tion loan and shall be undertaken only through a written
contract between the contractor and the recipient of the
grant or loan. The Community Development Agency shall
assist each applicant in arranging for and obtaining an
acceptable construction contract.
1. Form of Contract
The construction contract will consist of a single document
signed by the Contractor and accepted by the applicant only,
following approval of the rehabilitation grant and/or loan.
It shall contain a bid and proposal by the Contractor and
the general conditions, as well as the specifications for
the work to be performed.
2. Acceptance of Contractors
The Community Development Agency shall always exercise care
and good judgment in approving a Contractor. An approved
Contractor shall be of good reputation, financially sound,
have adequate financial resources to carry out the bid and
proposal, and be qualified to do the required work. The
Department shall frequently monitor its list of Contractors
to assure that they continue to be acceptable.
XIX. PERMITTING REQUIREMENTS
All required permits pursuant to State law and local requirements
must be obtained prior to commending rehabilitation work. (See
Step 2 of this Chapter.)
XX. INSPECTION OF REHABILITATION WORK
A. This section sets forth the requirements for the inspection
of rehabilitation work financed in whole or in part with a
rehabilitation grant and/or loan.
B. Responsibility for Making Inspections
The Community Development Agency shall make inspections of
construction work in cases involving a residential loan and
for such loans under ($10,000) regardless of the number of
dwelling units involved. To accomplish this. Community
Development Agency shall make:
IX-B-9
1. Compliance inspection, as necessary, to assure that the
construction work is being completed in accordance with
the construction contract.
2, A final inspection to determine that the construction
work has been completed in accordance with the con-
struction contract.
In addition, the Community Development Agency is responsible
for assuring that inspection of plumbing and/or electrical
work is accomplished. (See requirements in Step 2 of this
Chapter.)
C. Final Inspection
Upon completion of the rehabilitation work and receipt of
the contractor's invoice containing his or her certification
of satisfactory completion of all work in accordance with
the contract and his or her warranty, the Community Develop-
ment Agency shall arrange for inspection of the completed
work.
D. Making Final Payment
When the final inspection determines that the work is
satisfactorily completed in accordance with the contract,
the Community Development Agency shall obtain from the
Contractor a Release of Liens, and a copy of each warranty
due to the applicant for the work. After receipt of a
Release of Liens, including releases from all subcontractors
and suppliers and a copy of each warranty, the Agency shall
make final payment from the Escrow Account in accordance
with rules and regulations.
E. One Year Guarantee on Work by Contractor
All work performed by the Contractor is covered by a one (I)
year guarantee but property owners are not always aware
that, for a period of one year, they may require the Con-
tractor to current significant defects and inadequacies in
the work performed under this contract.
XXI. CHANGES, WAIVERS, AND/OR CONFLICTS
A. The (City or Town Council, or County Commission) shall have
the right to change, modify, or revoke all of any part of
this plan by a majority vote of the Council provided an
acceptable alternate Rehabilitation Program is approved.
TX-B-10
Exhibit IX- C
I CONFIDENTIAL |
FAMILY SURVEY GUIDE*
DATE: INTERVIEWED BY:
Number of Dwelling Units:
Applicant's Name: ___^_ Age:
First Middle Last
If married, spouse's name: Age:
Address: __^
Property Description: Lot Square Subdivision
NUMBER OF DEPENDENTS
Names Age Sex
EMPLOYMENT DATA: (If less than two (2) years, give name of previous employer)
Employer's Name: ___^ How Long:
Address : __^
Occupation: ____^ Monthly Salary:
Previous Employer: How Long:
Address: ^
Occupation: Monthly Salary:
Spouse's Employer: How Long:
Address: ^ _^
Occupation: Monthly Salary:
Previous Employer; _^ How Long:
Address: ^ ___^^
Occupation: Monthly Salary:
*This survey is suitable for both loans and grants. A simplified form may be more appropriate
when used only for grants.
IX-C-1
Exhibit IX-C
Page Two
OTHER INCOME AND SOURCE
Social Security, Welfare, Retirement or Veteran, Rental Property Income:
Amount:
Amount :
Savings Bonds & Other Securities: Amount:
Social Security #: Spouse's Social Security #:
Name of Bank:
Savings Account: Yes ( ) No ( ) Amount:
Checking Account: Yes ( ) No ( ) Amount:
Other Real Estate Owned: Value:
MONTHLY HOUSING EXPENSES:
Current Mortgage
Hazard Insurance
F'lood Insurance
Property Taxes (Secure
information from Tax
Receipt)
Heat and Utilities
(Name Account is in)
TOTAL:
Name Property is
listed under:
Monthly Payments Balance Due Nams of Compiny
LIABILITIES:
Automobi le
Other Loans/Credit Accounts (specify)
TOTAL:
IX-C-2
Exhibit IX-C
Page Three
MONTHLY FIXED CHARGES:
Income Taxes
(Federal and State)
Social Security
Retirement
Life Insurance
Other
TOTAL:
TOTAL MONTHLY COSTS
(Housing, Other Liabilities, Fixed Charges)
OTHER:
Record of Previous Foreclosures:
Yes ( ) No ( )
If yes, property address:
Name and Address of Lender:
Remarks :
CERTIFICATION OF APPLICANT(S ) :
I (we) hereby certify that the statements made by me (us) are true and correct to the best
of my (our) belief and knowledge.
Signature:
Signature:
Date:
IX-C-3
•
Exhibit IX-D
REQUEST FOR VERIFICATION OF EMPLOYMENT
COMMUNITY DEVELOPMENT REHABILITATION PROGRAM
REQUEST FOR VERIFICATION OF EMPLOYMENT
APPLICATION NUMBER
A. NAME AND ADDRESS OF APPLICANT FOR LOAN
D. DATE OF REQUEST
B. NAME AND ADDRESS OF APPLICANT'S EMPLOYER
NOTE TO EMPLOYER
Thu applicant identified in Block A has
applied for Rehabilitation Assistance.
The applicant has authorized this Agency
in writing to obtain verification from
any source named in the application.
Your verification of employment is for
the confidential use of this Agency.
Please furnish the information requested
below and return this form, using the
stamped, addressed envelope provided.
EMPLOYER'S VI.^IFICATION
E. POSITION HELD
F. DATE OF EMPLOYMENT
RATE OF PAY
Hourly $
Annual $
PROBABILITY OF CONTINUE EMPLOYMENT
H. OTHER REMARKS
ADDITIONAL COMPENSATION -- ACTUAL
AMOUNTS RECEIVED PAST 12 MONTHS
Overtime $
Coii.misions $
Bonus $
♦If the applicant is in military service,
give income on monthly basis as follows:
Base Pay $
Quarters and
Subsistence
Flight or
Hazardous Duty
Al lowance
SIGNATURE OF EMPLOYER
The above information is furnished in
strict confidence, in response to your
request.
S ignature
Title
Date
NAME & ADDRESS OF AGENCY TO WHICH THIS
FORM SHALL BE RETURNED
L. AUTHORIZATION
I hereby authorize the release of the
above requested information.
Signature of Applicant
IX-D-1
Exhibit IX- E
REQUEST FOR VERIFICATION OF DEPOSIT
COMMUNITY DEVELOPMENT REHABILITATION
PROGRAM
C. APPLICATION NUMBER
A. NAME AND ADDRESS OF APPLICANT FOR LOAN
D. DATE OF REQUEST
E. BALANCE
$
B. NAME AND ADDRESS OF BANK OR OTHER
DEPOSITORY
F. TYPE OF ACCOUNT
NOTE TO BANK OR OTHER DEPOSITORY: The applicant(s) identified in Block A has applied for
rehabilitation assistance. The applicant(s) has indicated in a financial statement the
information shown in Blocks E & F above concerning a deposit with you, and has authorized
this Agency in writing to verify this information with any source named in the application.
We also wish to know whether the applicant(s) has any loans outstanding with your insti-
tution. Your verification of this information, together with any other information that
may be of assistance in rendering a decision, is for the confidential use of this Agency.
Please furnish the information reqested below and return this form to the Agency shown
in Block M, using the stamped, addressed envelope provided. Any statements on your part
or on the part of any of your officers as to the responsibility or standing of any person,
firm, or corporation is a matter of opinion and is given as such, and solely as a matter
of courtesy, for which no responsibility is attached to your institution or any of your
officers .
VERIFICATION OF BANK OR OTHER DEPOSITORY
G. IS INFORMATION GIVEN IN BLOCKS
E & F APPROXIMATELY CORRECT?
Yes ( ) No ( )
If NO, explain:
LOANS OUTSTANDING
TO APPLICANT
1. Secured
2. Unsecured
DATE
OF LOAN
BALANCE
OUTSTANDING
K. OTHER
L. SIGNATURE OF OFFICIAL OF BANK OR OTHER DEPOSITORY
The above information is furnished in strict confidence in response to your request,
and is solely for use of the Agency shown in Block M.
Date
Signature
Title
M. NAME AND ADDRESS OF AGENCY TO WHICH THIS
FORM IS TO BE RETURNED
N. AUTHORIZATION: I hereby authorize
release of the above requested infor-
mation.
Signature of Applicant
IX-E-1
EXHIBIT IX-F
NOTICE OF DISPOSITION
(Type on letterhead of grantee)
(Date)
(name of owner receiving rehabilitation assistance)
(address)
( , Montana Zip)
Dear (name of owner) :
This letter serves to inform you that you have been awarded a (grant
or loan) in the amount of $ under the Housing Rehabilita-
tion Program funded by a Montana Community Development Block Grant to
the (name of grantee) .
Within the next five days ( name ), Housing Rehabilitation
Specialist will be contacting you concerning the selection of a
contractor to perform the rehabilitation services described in the
work write-up prepared by the Housing Inspector.
If you have any questions please contact ( name ) , Rehabilit-
ation Specialist, at (telephone number) .
Sincerely,
(signature)
typed name
CDBG Project Administrator
Mailing Address
Telephone number
IX-F-1
•
Exhibit IX-G
RESIDENTIAL INSPECTION REPORT
Telephone #
Occupant Date
Location of Property
Type of Construction
# Stories # Units
#Occupants
# Habitable Rooms # Bedrooms
i
KEY: A-Acceptable E-Exterminate I-Install P-Paint W-Remove
Z-Provide
NOTE: Indicate only code and incipient items.
X-Repair R-Replace
WORK
WORK ITEMS EXISTING CONDITIONS REQUIRED
1. Excavation
a. Trench
b. Grading of crawl spaces
c. Backfill
2. Foundations
a. Footing
b. Foundation walls
c. Girders, beams, sills, grade-
beams, posts, columns, piers...
d. Condition below first floor,
ventilation, drainage, access
doors, termite shields, ground
clearance, trash, other items..
e. There is (evidence) (no evidence)
of termites, dry rot, or
decay damage
3. Chimneys
a. Masonry chimneys
b. Specially fabricated chimneys
or flues
4. Fireplaces (existing)
a. Masonry fireplaces
b. Metal fireplace units
5. Exterior Walls
a. Stud framed
b. Masonry
c. Masonry veneer over stud frame.
d. Incidental masonry items
6. Floor framing
a. Joists, hangers, bridging, nail
b. Slabs, forms, etc
c. Basement floor or other slab...
7. Subf looring
8. Finish Flooring.
IX-G-1
WORK
WORK ITEMS EXISTING CONDITIONS REQUIRED
9. Partition Framing (incl. closets)
a. Stud framing
b. Masonry
c. Lintels for masonry partitions.
10. Ce1 ling Framing
a. Joists, nails
b. Strongb locks
c. Hangers and suspended ceilings.
U. Roof Framing
a. Rafters S joists, ridge pole,
hip & valley rafters, collar
beams, nails
b. Purlins & braces, nails
12. Roofing
a. Roof covering- materials. ..... .
b. Valleys
c. Flashings at intersections of
roof S wall surfaces
d. Skylights & scuttles
e. Fascia boards, eaves & soffits
13. Gutters & Downspouts
a. Gutters
b. Downspouts
c. Scuppers & leader heads
d. Splash backs & downspout con-
nections to drains
14. Entrances & Exterior Detail
a. Exterior doors
b. Exterior detail
15. Wall Condition
a. Lath, plaster, cornerites,
corner beads
b. Wallboard or other finish
materials, taping or other
joint treatment, nailing
strips, fastenings
c. Furring
d. Plaster cornice or cove
16. Decorating
!7. Interior Doors & Trim
a. Interior doors
b. Cased openings
c. Running trim such as base S
shoe mold, chair rail, picture
mold, interior wood cornice...
i
lX-G-2
WORK
WORK ITEMS EXISTING CONDITIONS REQUIRED
13. Windows
a. Windows
b. Window screens
c. Caulking of frames
19. Cabinets & Interior Detail
a. Kitchen cabinets
b. Medicine cabinets
c. Other cabinets, closets, etc...
d. Clothes closet equipment
20. Stairs
a. Main stair
b. Basement stair
c. Attic stair
d. Disappearing stair
e. Built-in ladder
f. Porch or balcony stair
g. Reinforced concrete stafr..... ..
21. Special Floors & Wainscot
a. Finish flooring (non-wood)
b. Special interior door saddles
or thresholds
c. Wainscot
d. Base not part of wainscot
22. Plumbing
a. Within structure for each unit
1. Single bathroom & kitchen...
2. Bathroom accessories
3. Additional installations
duplicating above
4. Water heater and connections
5. Gas distribution system
6. Floor drains
7. Sill cocks
8. Additional fixtures
9. Accessory equipment
10. Installations/other units...
b. House sewer
c. House water service
d. Gas service connection
e. Individual gas supply
f. Individual water supply system.
g. Individual sewer disposal
h. Exterior drains
23. Heating/Ventilation/Cooling
a. Heating system
b. Cooling system
c. Ventilating system
IX-G-3
WORK
WORK ITEMS EXISTING CONDITIONS REQUIRED
24. Electrical Service
a. Service
b. Distribution system
c. Power outlets
d. Exterior wiring to exterior
buildings
e. Measurement: units & outlets...
25. Lighting Fixtures
26. Insulation
27. Miscellaneous
a. Status of secondary buildings
located on property
b. Fences.
c. General landscaping & other
on-site improvements present
or needed
d. 8aseiient
28. Yards
a. Setback
b. Side yards
c. Rear years
IX-G-4
Exhibit IX-H
WORK WRITE-UP AND COST ESTIMATE
Note: rrhis is an exanple only. Inse^ applicable information for each case.
Applicant: Application #:
Address:
Inspector: Date Inspected:
Estimated
Living Room (10' x 15') Cost
Floors Remove existing subfloor (approximately 210
square fee) and replace with plywood at least
5/8". $
Install sheet vinyl over wood surface, "Armstrong
Standard" or equal (approximately 210 square feet).
Walls Patch holes and cracks ir> existing plaster
(approximately 6 square feet). Include lathing
on south and west walls.
Paint walls (approximately 480 square feet) with
two costs of interior latex paid, "Sherman Williams
Good" or equal, with roller.
Bedroom #2 (9' x 11')
Window Install screen and lock (3' x 4').
Doors and Paint using semigloss "Sherman Williams Good"
Woodwork or equal using brush.
Hall (4' X 10')
Ceiling Install frame and cover on access hole (approximately
3' X 3').
Electric Remove existing hanging light cord and replace
with NL approved ceiling fixture with switch
Closet Rebuild existing closet 3'9" x 2'0"; door
size 2068; install 12" #2 pine shelf and
1-3/8" clothes pole.
IX-H-1
Estimated
Kitchen (ITS" x 14'5") Cost
Ceiling Install 12" x 12" celotex tile over existing
wood ceiling (approximately 165 square feet)
with adhisive. $
Windows Remove existing wood windows, reset and install
new trim (approximately 2' x 3'). $
Paint window trim using semigloss with brush. $
Cabinets Remove 3 base kitchen cabinets and countertop. $
Install 36" door base cabinets with 2 drawers
and 2 cabinets and Formica countertop with
4'= blacksplash. ^
Install 36" wall cabinets 26" over base cabinet. $
Install stainless steel sink in top (32" x 21"). $
Electric Install 10" ventilating fan, vent fan through
wall over stove. 5
Remove existing electrical panel box and install
a new panel box (100 amp. minimum with breaker
switch) and place all wiring inside wall.
Replace all hazardous wiring as per code. $
Install 2 new electrical outlets in kitchen,
check wiring, replace as necessary. $
Bathroom (6' x 8')
Floor Remove existing subfloor (approximately 54 square
feet), replace with plywood subfloor at least
5/8". ^
Install vinyl asbestos floor tile, "Armstrong
Standard" or equal (approximately 48 square feet). $
Ceiling Remove water damaged plaster down to the lathes,
replace lathes if damaged, replaster (approximately
48 square feet), and paid with 2 coats of interior
"Sherman Williams Good" or equal. $
Walls Scrape, seal, and repaint all walls with 2 coats
of interior latex, "Sherman Williams Good" or
equal. ^
Toilet Remove and replace existing toilet with new
toilet, "Standard Quality" or equal. $
lX-H-2
Exterior
Estimated
Cost
Joists
Facia and
Trim
Screen
Doors
Remove four rear joists, size 2" x 10" x 14',
and replace with same size joists.
Remove 2 deteriorated barge rafters size
2" X 5" X 12'. Replace with same size rafters.
Replace 2 existing deteriorated screen doors
3' X 6'8" with new aluminum screen doors of
the same size.
Exterior Weatherstrip 8 windows with spring bronze
Windows and caulR as needed.
Roof
Remove existing asphalt roofing down to
existing sheathing. Remove and replace
sheathing if deteriorated.
Install new asphalt/shingles/300 lb.
Flash all valleys. Install new aluminum gutters
and down spouts.
IX-H-3
EXHIBIT IX- I
REQUEST FOR VERTFTCATTON OF CONTRACTOR ELIGIBILITY
(Type on letterhead of grantee)
(Date)
Department of Conunerce
Community Development Division
Cogswell Building, Room C-211
Capitol Station
Helena, MT 59620
The (name of grantee: City, Town, or County of ) is ready for
homeowners to enter into contracts for housing rehabilitation under
the (name of project).
Please check tho current "Consolidated List of Debarred, Suspended,
and Inollglblc Contractors" to verify eligibility of the following
contractor (s) :
(provide name(s) and addresses of contractors)
Sincerely ,
(signature)
typed name
CDBG Project Administrator
Mailing Address
Telephone Number
IX-1-1
I
i
EXHIBIT IX-J
CONTRJ^CT PACKAGE FOR REHABILITATION
NOTE: This is an example only. Each contract will require it own
specific information.
(name of grantee: City, Town, or County of )
THIS AGREEMENT, entered into as of the day of ,
19 > by and between (name of property owner, address) hereinafter
referred to as "Owner" and (name of contractor, address) , hereinafter
referred to as "Contractor."
WITNESSETH
1. The Owner does hereby employ the Contractor to do all the work
and provide all materials, tools, machinery, supervision, etc.,
necessary for the rehabilitation of the property known as
(include general and legal description) of the total sum of
Dollars ($ ) , all in accor-
dance with the estimate, plans and specifications which are
attached hereto as Exhibit "A" and expressly incorporated herein
by reference and made a part hereof.
2. The Contractor does hereby agree that it will perform the work
diligently and in a good workmanship manner, using the materials
specified or materials of at least equal quality.
3. The Contractor shall be responsible for obtaining all necessary
permits for the work to be performed, and the work being done or
any part thereof shall not be deeded completed until the same has
been accepted ns satisfactory by the Owner or by the (grantee) .
A. When adjacent property Is affected or endangered by any work done
under this contract, it shall be the responsibility of the
Contractor to take whatever steps are necessary for the protec-
tion of the adjacent property and to notify the owner thereof of
such hazard.
5. The Contractor hereby agrees not to assign or sublet this con-
tract without the written consent of the Owner. The request for
the assignment shall be addressed to the Owner, c/o the local
Community Development Rehabilitation Office.
6. Tn the event of any breach of this contract, the Owner, may at
its option engage the services of another contractor to complete
the work and deduct the cost of such completion from any amount
due the Contractor hereunder.
7. Upon satisfactory completion of the work, the (Vner will pay the
Contractor 80 percent of the contract price and will issue its
written acceptance of the work, and Contractor shall Immediately
file the same with the Clerk and Recorder for
IX-J-1
County. After the expiration of 45 days from the registry of the
Notice of Acceptance and after the Contractor shall have deliv-
ered to the Owner a certificate from the Clerk and Recorder In
the name of the Owner and Contractor, showing that no liens or
claims arising out of the work are recorded and that more than 45
days have elapsed since the registry of the notice, this contract
shall be completed and the Contractor and his or her surety shall
be discharged and Contractor paid the ten percent retainage.
8. The Owner does hereby agree to pay progress payments, if any, in
accordance with the following conditions:
1. Progress payments shall not exceed 90 percent of the value
of the specified work satisfactorily completed.
2. Contracts over ($5,000) but not exceeding ($8,000); One (1)
partial payment mav be requested by the Contractor after a
minimum of 50 percent oi the total contract work ir; satisfac-
torily completed.
3. Contracts over ($8,000); Two (2) partial payments may be
requested by the Contractor, (1) First partial payment —
after a minimum of 40 percent of the total contract work is
satisfactorily completed; (2) Second partial pa>Tnent —
after an additional 40 percent of the total contract work is
satisfactorily completed.
9. The Contractor covenants and agrees to, and does hereby, indem-
nify, and hold harmless and defend the Owner, local Community
Development Rehabilitation Office, the (name of grantee), and the
State of Montana, their agents, servants, or employees, from and
against any and all claims for injuries or damages to persons or
property of whatsoever kind of character, whether real or
asserted, arising out of this agreement of the work to be per-
formed hereunder. The Contractor hereby assumes all liability
and responsibility for injuries, claims or suits for damages, to
persons or property of whatsoever kind of cliaracter, whether real
or asserted, occurring during the time the work is being per-
formed and arising out of the performance of the same.
10. Neither the Contractor nor any subcontractor shall commence work
under this agreem.ent until all insurance required under this
paragraph has been secured and such insurance has been approved
by the Owner:
Compensation Insurance: The Contractor shall take out and
maintain during the life of this contract. Worker's Compensation
Insurance for all of its employees at the site of the project;
and in case any work is sublet, the Contractor shall require the
subcontractor similarly to provide Worker's Compensation Insur-
ance for all of the latter's employees.
IX-J-2
Public Liability and Property Damage Insurance: The Contractor
shall take out and maintain during the life of this contract,
such public liability and property damages insurance as shall
protect It and any subcontractor performing work covered by this
contract from claims for damages or personal injury, including
accidental death, as well as from claims for property damage
which may arise from option under this contract, whether such
operation be by itself or by one directly or indirectly employed
by either of them; and the amounts of such insurance shall be as
follows :
Public Liability Insurance in the amount not less than
Twenty-five Thousand Dollars ($25,000) for injuries, includ-
ing accidental death, to any one person; and in an amount of
not less than Fifty Thousand Dollars ($50,000) on account of
one accident.
It is further agreed that the Contractor, at its sole cost
and expense, shall acquire and maintain fire and extended
coverage insurance upon the entire structure on which the
work on this contract is to be done, to One Hundred percent
of the insurable value which is declared to be $ ,
on a form of policy approved by the Insurance Commissioner
of the State of Montana, or an agency duly delegated by it
for insuring such a risk in the State of Montana. Loss, if
any, is to be payable to the Owner having legal title to the
property that is to be rehabilitated, except in such ases as
may require payment of the proceeds of such insurance to a
mortgagee as its interests may appear.
11. It is agreed that the Owner is hereby obligated to issue a
written proceed-order to the Contractor within thirty (30) days
from the date of execution of this contract. It is further
agreed that the Contractor will, after the receipt of such order,
begin the work to be performed under this contract within ten
(10) calendar days of the date of such order. Upon commencement
of work the Contractor hereby agrees to complete the same within
day, time being of the essence.
12. Contractor hereby guarantees the improvements herein provided
for, for a period of one year from the date of final acceptance
of all work required by this contract. It is further agreed that
the Contractor will furnish the Owner, c/o the Local Community
Development Rehabilitation Office, with all manufacturers'
suppliers' written guarantees and warranties covering materials
and equipment furnished under this contract.
13. The Contractor shall at all times keep the premises free from
accumulations of waste materials or rubbish caused by its
employees at work; and at the completion of the work it shall
remove all its rubbish from and about the building and all its
tools, scaffolding and surplus materials and rhall leave the work
"broom clean" or its equivalent. It is further agreed that all
materials, and equipment that have been removed and replaced as a
part of the work hereunder shall belong to the contractor.
IX-J-3
14. The Contractor shall, upon completion of the work, and upon final
payment by the Owner, furnish the Owner with an affidavit
certifying that all charges for materials and other expenses
incurred by the Contractor pertaining to the execution of this
contract, have been paid in full, to the end that no liens of any
kind or character (save and except those between the parties
hereto) may be affixed against the above described property.
Final payment of the contract amount will be made only after
final inspection and acceptance of all work to be performed by
the Contractor, and the Contractor satisfactorily provides
releases of liens or claims for liens by the contractor,
subcontractors, laborers, and material suppliers.
15. The Contractor shall remove any and all cracking, scaling,
peeling, chipping, and loose paint and repaint all surfaces using
two coats of a non-lead base paint. Where the paint film integ-
rity of the applicable surface cannot be maintained, the paint
shall be completely removed or the surface covered with a suit-
able material such as gypsum, wallboard, plywood, or plaster
before any repainting is undertaken.
16. This instrument constitutes the entire agreement between the
parties and no written or oral agreement of any kind exists to
change the provisions hereof. No other work shall be done, nor
additional monies paid, unless provided for in a previously
written contract, signed by the parties hereto, and approved in
writing by the (name of grantee) , Local Community Development
Rehabilitation Office.
17. In the event there is any conflict between the provisions of this
contract and the provisions of Exhibit "A", the provisions of
this contract shall in all cases prevail.
ATTACHMENTS
GENERAL TERMS AND CONDITIONS RELATED TO EQUAL EMPLOYMENT A^fD
LABOR STANDARDS — For specific language, insert applicable
provisions of Exhibit VIIT-E and F.
Exhibit "A" — A copy of the work write-up and cost estimates as
provided by the Local Community Development Rehabilitation
Office. (See Exhibit IX-H.)
m
IX-J-4
IN WITNESS WHEREOF, the Contractor and Owner have executed this
Agreeinent .
(signature)
Contractor - (typed name)
(signature)
Owner - (typed name)
(signature)
Owner - (typed name)
(signature)
Witness (typed name)
(signature)
Witness (typed name)
IX-J-5
EXHIBIT IX-K
NOTICE OF ACCEPTANCE OF WORK
TO ALL WHOM IT MAY CONCERN, and especially to all subcontractors,
workers, laborers, mechanics, and furnishers of materials.
Public notice is hereby given, according to law, that
has accepted the work done by
, the contractor, under this contract
with him/her of date , and recorded
in Book , Folio , of the mortgage records
of the ; such contract
being entitled .
Al 1 subcontractors^ workers, laborers, mechanics, and furnishers of
material must assert whatever claim they may have against the said contractor,
growing out of the execution of said contract, according to law, within
sixty (60) days from registration hereof.
DATE BY
IX-K-l
EXHIBIT IX-L
RELEASE OF LIEN FORMS
GENERAL CONTRACTOR'S AFFIDAVIT, WARRANTY, AND LIEN WAIVER
STATE OF MONTANA )
) ss.
{ ) COUNTY )
LOAN NO.
OWNER:
ADDRESS"
BLOCK & nnr
THAT I, the undersigned, being duly sworn, do depose and say that I was
contracted to construct, alter, or repair an improvement on the above
described property.
THAT the improvements on the subject property have been fully and satisfac-
torily completed in substantial conformity with the contract.
THAT all the materials used in said improvement, all labor performed thereon,
and all fees, industrial insurance, and permits, in connection with the
said improvements which might give rise to liens on the within described
property have been paid in full.
Lifted below are all subcontractors and major materialmen included in this
work. Attached are waivers of liens from all of them as substantiation
of the above statement.
Name of Subcontractor or Materialman and Address
Name Address
******** ■.■.■,********
THAT the affiant hereby waives any lier: or riiht to lien which he may have
against the described property and warrant;, to save harmless the said Property
Owner and the Rehabilitation Agency of the (aame of grantee) from any liens
which are now in existence, or may hereafi:er arise by reason of said improve-
ments, and cause the same to be released of record immediately.
THAT the foregoing waiver and these statements :ire an express warranty
and representation to the Rehabilitation Agency of che (name of grantee)
and the Property Owner of the facts herein sworn to and is made for valuable
consideration, receipt whereof is acknowledged.
SUBSCRIBED AND SWORN to before me this day of
1984
Notary Pub I ic
My C'^mmission Expires
lX-L-1
Page Two
SUBCONTRACTOR'S OR MATERIALMAN'S
AFFIDAVIT, WARRANTY, AND LIEN WAIVER
STATE OF MONTANA )
)
) COUNTY )
LOAN NO.
OWNER:
ss.
ADDRESTi
BLOCK & UTT:
THAT I, the undersigned, do depose and say that I was employed to furnish
labor or engaged to furnish materials for an improvement being situated
on certain -eal estate in(__ ) County, State of Montana, as described
above.
I hereby declare that I have been paid in full for my labor or the material
supplied for said improvement and I waive any lien or right to lien against
the described property. I warrant to save harmless the Property Owner
and the Rehabilitation Agency of the (name of grantee) from any lien(s)
whicn are now in existence or may thereafter arise by reason of said
improvements.
Name of Company
By:
Signature
Date:
IX-L-2
BENEFITS REPORTING FORf-I
1-1 -^ S 5
o u n rd
O n H ^
fi§
IX-M-1
Chapter x
Economic
Development
Projects
CHAPTER X
ECONOMIC DEVELOPMENT PROJECTS
OVERVIEW
In addition to amendments In the Housing and Community Develop-
ment Act of 1981 that provided for State administration of the CDBG
program, Congress added a provision to Section 105 of the Act
(Eligible Activities) that permits assistance to for-profit entities.
Section 105(a) (17) allows the "...provision of assistance to private,
for profit entities, when the assistance is necessary or appropriate
to carry out an economic development proiect."
This amendment to the Act opened the door for broader particip-
ation by the private sector in the CDBG program. In particular, under
the present economic conditions which include high interest rates and
a scarcity of investment capital, CDBG funds are becoming a valuable
financial tool cither in the form of write-downs, direct loans, or
interest subsidies.
Since FY 1982 was the first year in which this provision was in
effect, some questions still remain unanswered about the specifics of
the relationship between the local grantee and the assisted entity.
This section outlines both those issues that have been resolved (e.g.
the applicability of various federal compliance requirements) and
decisions that presently remain up to the discretion of the local
grantee .
Economic development assistance under the CDBG program usually
falls into two categories:
— construction or improvements to a public facility which is
essential to the operations of a business, such as rail
spur, increased sewage capacity, or streets, and/or
X-I
direct assistance to the private entitv in the form of a
direct loan, interest subsidy, or write-down.
Activities in the first category, although they may directly
benefit a single private entity, are viewed as public works projects
undertaken by the local government, and therefore, are subject to the
same procedures and applicable laws as any other public facilities
projects. For additional information, see Chapter VIII, Public Facil-
ities Projects.
In the case of direct financial assistance, the pass-through of
monies to the private entitles does influence the range of compliance
and monitoring requirements. These requirements will be the focus of
the remainder of this chapter.
APPLICABLE LAWS
— ENVIRONMENTAL REVIEW
If the financial assistance to the business will be used for
acquisition of property and/or construction of a facility, the grant
agreement between the State and the locality will be conditional on an
environmental review as described in Chapter II of this manual.
~ LABOR STANDARDS
Construction activities by a private business funded in whole or
in part by CDBG funds are governed by the Davis-Bacon Act, Section
18-2-4, MCA, Copeland "Anti-Kickback" Act, and the Contract Work Hours
and Safety Standards Act. As described in Chapter VI, Labor
Standards, these requirements are waived in instances where the
assistance is in the form of a loan guarantee or insurance.
— CIVIL RIGHTS
All civil rights laws and executive orders as described in
Chapter V, Civil Rights, apply to the use of CDBG funds for economic
development regardless of the form of the assistance.
X-2
~ ACQUISITION AND RELOCATION
The Uniform Act as doscribed in Chapter VII applies only to
property acquired for "public purposes." Since assistance such as
loans to businosses may result in the acquisition of property for a
"private purpose," the Uniform Act does not apply in these cases.
Local governments may, at their own discretion, place certain
conditions on the financial assistance to ensure that real property is
acquired at fair market value and that any dislocation of persons
and/or businesses is handled in an equitable manner.
— PROCURFMENT REQUIREMENTS AND ALLOWABLE COSTS
OMR Circular A-in2 and A-R7 as outlined in Chapters 111,
Procurement Standards, and IV, Financial Management, apply only to
state and local units of government. Therefore, private firms need
not adhere to the procedures Incorporated in these Circulars. As in
the case of acquisition/relocation, the local grantee may, at its
discretion, place certain conditions on procurement by the assisted
entity that ensures competitive bidding or describes eligible costs.
LOCAL GRANTEE RESPONSIBILITIES
For each economic development project, the local grantee must
take the following steps related to management and monitoring of these
activities .
Execute Assistance Agreement
To protect both the local grantee and the assisted entity, an
assistance agreement or contract should be executed prior to the
transfer of any financial assistance or beginning of construction of
the related public facilities. As with the contract between the
grantee and DOC, the assistance agreement should be reviewed by the
attorney for the local governing body. The agreement must be submit-
ted to the CDBG liaison for review and approval prior to its execution
X-3
and effective date. In addition, DOC will require that the agreement
be referenced in and included as an attachment to the contract between
the grantee and DOC. Tn additioTi, DOC will prohibit modification of
the agreement without prior ni)proval by DOC. Finally, DOC may require
a section addressing program income. The assistance agreement should
include the following items:
names and addresses of all involved parties including the
grantee, the firm, and (if applicable) participating private
financial institutions;
— scope of services to be performed by both the grantee and
the firm. Be specific;
project schedule;
community benefits and hiring plan. If the assistance was
based on certain community benefits such as a specific
number and/or percentage of employment bv local residents or
low/moderate-income individuals, this pro\'ision must be
included in the assistance agreement;
— total project funding describing the amounts and sources of
non-CDBG dollars;
— loan terms. If the assistance is in the form of a direct
loan, the grantee must include the term of the loan (time
for repayment), interest rate, and repayment schedule
(payment intervals);
provision for site visits by the grantee and DOC;
— payment of property taxes;
— termination clause both for convenience and cause; and
— requirement of compliance with all applicable laws, ordin-
ances, rules and regulations of the grantee, the State of
Montana, and the U.S. Government.
A sample assistance agreement is provided as Exhibit X-A.
Plan for Use of Program Income
The grantee should finalize plans as proposed in the grant
application for use of recaptured program income primarily from
repayment of principal and interest on direct loans. The use of
X-4
program income must be consistent with the provision included in the
grant contract between the locality and DOC, and requirements of 0MB
Circular A-102, Attachment E.
Incurring Costs
As with any other CDBG project, actual project implementation
cannot begin until grant conditions related to the release of funds,
including conducting the environmental review, have been removed and
the grantee has received a letter of authorization to incur costs from
the Department of Commerce. Therefore, the grantee should make it
clear to the assisted firm that no costs should be incurred until the
date of letter of authorization to incur costs.
Although the firm is not subject to provisions of 0MB and Trea-
sury Circulars that prescribe fund disbursement, the local grantee
must comply with these provisions. Therefore, the disbursement of
funds to the grantee and, in turn, to the assisted firm should be tied
to the actual need for assistance dollars as outlined in Chapter IV
as well as to any special conditions in the contract term between the
grantee and DOC or the assistance agreement.
Especially in the case of direct loans, the rate of drawdown will
vary from case to case. If, for example, the assistance is for the
purchase of equipment at the start-up of operations, it may be appro-
priate to request payment of the entire amount of the loan. However,
if the firm is using the CDBG loan for construction of a new facility,
the drawdown of the CDB(i fund should bo directly tied to the need to
pay contractors for tlie actual work performed. As an option, DOC or
the locality may Include a provision on drawdown rates in the assist-
ance agreement.
Monitor Project Activities
The local grantee remains liable for compliance monitoring of all
CDBG funded activities. Therefore, the locality should devise a plan
X-5
for monitoring the specific scope of services described in the assist-
ance agreement and ensure that the assisted entity adheres to all
applicable laws and procedures.
For specific Information on responsibilities for civil riphts and
labor standards, refer to Chapters V and VT of tlris manual.
Maintain Records
For each economic development project, the local CDBG office
should maintain a file containing the following information:
— copies of the assistance agreement;
copies of funding commitments from participating lenders;
— evidence of loan repayment;
evidence of use of program income;
— evidence of community benefits; and
files related to compliance with applicable laws discussed
under chapters on environmental, civil rights, labor, public
facilities, etc.
X-6
CHAPTI'lR X
EXHIBITS
X-A - Assistance Agreement
X-7
EXHIBIT X-A
ASSISTANCE AGREEMENT
NOTE: This is an example only,
sperific information.
Each contract will require its own
THIS AGREEMENT, is hereby entered into as of the
day of
or Count
,198 , by and between the (name of grantee: City, Town
of ) hereinafter referred to as the
County/City /Town , and (name of company), (address), hereinafter
referred to as the Firm.
WITNl'.SSETH:
A. Wliereas the County /City /Town is interested in expanding its
economic base with the primary emphasis on creating and retaining
jobs;
B. Whereas the County /City /Town is under contractual agreement with
the Montana Department of Commerce to implement an economic
development program with funding from the Montana CDBG Program;
and
C. Whereas the Firm is interested in maintaining and expanding its
emplo3nnent base;
NOW THEREFORE, the parties hereto do mutually agree as follows:
SCOPE OF WORK
A. The County/City/Town shall:
(Specifically describe each action that the grantee will under-
take as part of the economic development project including: any
public facilities construction to support the firm's activities,
any commitment of funds other than CDBG, and the amount of any
CDBG loan with the terms for repayment. If the terms require
additional explanation and/or maps, it can be provided as an
attachment to the agreement.)
B. The Firm shall:
(Specifically describe each action that the firm will undertake
as part of the economic development project including: all
commitments for owner financing through equity or private lending
institutions as well as any commitment related to local employ-
ment . )
TIME OF PERFORMANCE
The services described under scope of work shall be undertaken
upon execution of this document and end on (date) (In
addition, it may be appropriate to insert several interim milestones
and dates by which each party will complete specific actions described
in the Scope of Work.)
X-A-1
TERMS AND CONDITIONS
A. Conformance with Laws: The Firm will comply with all applicable
laws, ordinances, rules and regulations of the grantee, the State
of Montana, and the U.S. Government. (Or, all of the laws may be
listed in paragraph form. See exhibits in Chapter VIII, Public
Fac] lities. )
(Additional conditions or provisions may include:
— enforced delay: extension of times or performance;
default;
— certificate of completion;
conflict of interest;
non-liability of elected officials or employees of the
grantee;
venue;
— liability and worker's compensation;
payment of property taxes;
communications between parties;
progress reports; and
— indemnification.
IN WITNESS WHEREOF, Representatives of the County/City/Town and the
Firm have executed this Agreement.
For the Town/City/County of
For the Firm
i
(signature)
(Mayor, or all three County
Commissioners)
(signature)
(Tvped name)
Date
Title
Date
Legal Review
i
X-A-2
Chapter xi
project
Close-out
CHAPTER XI
PROJECT CLOSE-OUT
OVERVIEW
This chnptor describes tlie steps rrcniired to close-out a Montana
CDBG project. It focuses on the following areas:
— prepare a substantive performance report;
— request State monitoring visit;
arrange for audit; and
— complete close-out forms.
The ease with which the grantee can complete these requirements
usually depends on the extent to which the grantee has maintained
accurate and up-to-date records and files as outlined in the previous
chapters. All of the information needed to complete the above should
exist within the project files and require little, if any, additional
information gathering.
The close-out of a grant is the process by which the grantor
agency (DOC) determines that all applicable administrative actions
and all required work have been completed. OMB Circular A-102,
Attachment L includes the following close-out requirements:
a refund to the grantor agency (DOC) of any balance of
unobligated cash advanced to the grantee that is not author-
ized to be retained;
— the submission with 90 davs of all financial, performance,
and other reports required as a condition of the grant;
when authorized by the grant, the grantor agency shall make
a settlement for any upward or downward adjustments to the
federal share of costs after final reports are received;
XI- 1
an account of all property acquired with grant funds by the
grantee;
a final audit or the right to rocovor appropriate amounts
after a final audit; and
— systematic settlement of terminations for cause or mutual
conveni cnce ,
LOCAL GRANTEE RESPONSIBILITIES
Step 1 — Prepare Substantive Performance Report
Within 90 days following the completion of the CDBG funded
project activities, the grantee must submit to the CDBG liaison a
Project Completion Report (PCR). In addition, multi-vrar comprehen-
sive projects are required to submit a PCR within 60 days of the end
of each program year.
In addition to substantive information about the project, the PCR
requires the grantee to certify:
that the information contained in the PCR is accurate;
that all records related to the CDBG project are available
on request; and
that the CDBG funds were not used to reduce the level of
local financial support for housing and community develop-
ment activities.
The completed PCR should consist of no more than 10 pages using
charts and tables wore possible to summarize information. (The format
for the PCR is provided as Exhibit XI-A.) The PCR must cover the
following topics:
— progress on each funded activity exactly as stated in the
grant contract;
XI-2
— the extent to which the completed activity served to accomp-
lish the national program objectives claimed in the
application (benefit low and moderate income households,
prevent or eliminate blighting conditions, or respond to
immediate health threat where other financial resources are
not available) ;
— the extent to which program benefits were accrued by low and
moderate income person(s) and members of protected groups;
and
— local efforts to promote fair housing, equal employment,
and/or Section 3 business opportunities through expenditure
of block grant dollars.
The grantee should also attach any other evidence of program
performance including letters from assistance recipients or other
citizens comments.
Step 2 — Request State Monitoring Visit
Although the CDBG liaison may schedule monitoring visits through-
out the course of the CDBG project activities, the grantee should
inform the liaison of the project's completion and schedule a final
monitoring visit. The final monitoring visit may consist of:
— a comprehensive review of the project and grantee management
performance; or
— an examination of specific program or administrative issues
that were identified through grantee reports or previous
monitoring visits.
In either case the grantee must provide the CDBG liaison will all
requested information.
At the end of the monitoring visit, the CDBG liaison will make a
preliminary oral report of findings to the local administering agency,
providing local officials with the opportunity to provide additional
XI-3
materials that might quickly resolve the findings. Any unresolved
findings will be contained in a Letter of Findings thrt will be sent
from DOC to the chief elected official of the recipient jurisdiction.
Within 30 days of rcccijjt of the Letter of Findings, the grantee
must respond to the findings indicating corrective measures that have
been or will be taken, or by providing additional information or
materials that resolve the finding. (See Exhibit XI-B.) The grantee
will then receive notification from DOC informing the grantee whether
the corrective measures are sufficient.
Step 3 — Arrange for Audit
Following receipt of the Project Completion Report and grantee
response to any monitoring visit findings, the CDRC liaison will
notify the grantee to proceed with the financial and compliance audit
of program expenditures.
Under the Montana program the grantee is given the option of
securing an independent audit of CDBG funded activities or including
the audit as part of a regularly scheduled county or municipal audit
as required by Montana State law, provided that the regular audit
occurs no later than 120 days following the completion of CDBG project
activities. If the locality opts for the independent audit, the cost
may be included in the program administration budget. Independent
audit solicitation must be conducted under the procedures described
for use of contractors with CDBG funds.
In either case, the audit must be conducted in compliance with
requirements outlined in 0MB Circular A-102, Attachment P and gen-
erally accepted auditing standards established by the American Insti-
tute of Certified Public Accountants and the Comptroller General.
These standards are contained in "Standards for Audits of Governmental
Organizations, Program, Activities, and Functions" ("Yellow Book.")
Both of these documents are included in the Requirements Notebook.
XI-4
In most instances auditors arR unfamiliar with the specific
compliance requirements of the CDBG program; therefore, the grantee
should provide the auditor with a copy of another publication by the
Comptroller General, "Guidelines for Financial and Compliance Audits
on Federally Assisted Program" ("Red Book"'), before the auditor begins
examination of the program records. This booklet provides a uniform
audit approach and uniform documentation procedures for financial and
compliance audits.
Another publication Is available upon request to the CDBG liaison.
Handbook //IG6506.2, HUD Audit Guide and Standards for CDBG Recipients,
covers the same requirements as the Comptroller General's Red Book and
includes additional details pertaining to the CDBG program.
Auditors should make a special effort to detect possible fraud,
waste, and abuse. Audits should include a review of the grantee's:
— internal accounting control system;
— drawdown practices;
— use of project income;
— direct costs charged to the CDBG program;
— indirect cost allocation plans and indirect costs charged to
the CDBG program, if applicable;
— procurement practices;
property management practices; and
— procedures and documentation supporting compliance with
applicable laws and regulations.
Exhibit XI-C provides a list of common audit findings.
A copy of the audit report (an example is included as Exhibit
XI-D) should be sent to the CDBG liaison. If there are audit find-
ings, the grantee should prepare a Response to Audit Report (Exhibit
XI-E) and submit it to DOC with a copy of the audit report. The CDBG
liaison will notify the grantee whether the response is sufficient.
XI-5
Step A — Complete Close-Out Forms
Following receipt by DOC of the audit report and the grantee's
response to findings, if any, the CDBC liaison will request that the
grantee prepare a Certification of Completion which provides:
— final statement of costs;
— computation of grant balance;
— description of any outstanding costs and/or third-party
claims against the CDBC funds; and
— certification releasing the State of any further financial
obligations .
The original and two copies with original signatures must be
submitted to the CDBC liaison for approval. A copv of the Certificate
of Completion is provided as Exhibit XI-F.
If the computation of grant balance indicated that advance
payments have exceeded actual program expenditures, the CDBG liaison
will request the grantee to submit a check to the State equal to the
excess advances.
If there are unsettled third-party claims against CDBG funds, the
grantee must prepare a revised certificate upon resolution of the
claims. The certificate should be executed and submitted to DOC
as described above.
Every effort should be made to complete the close-out procedures
as soon as possible. Delay in submitting the final certification or
lack of response to audit or monitoring findings may indicate insuf-
ficient capacity to manage and implement CDBG funded projects and may
result in loss of subsequent project funding.
XI-6
CHAPTER XI
EXHIBITS
XI-A - Project Completion Report
XI-B - Response to DOC Letter of Findings
XI-C - ConiiTion Audit Findings
XI-D - Audit Report
XI-F - Response to Audit Report
XI-F - Certification of Completion
XI-7
EXHIBIT XI-A
PROJECT COMPLETION REPORT
Grantee Name:
Address of Grantee:
Contract Number:
Final Progress Report:
For cpch line item in the contract scope of work (e.g. administration,
construction, acquisition, rehabilitation, economic development loans)
provide the following Information:
A. Name of Activity
B. National Objective(s) Served
C. Actions Accomplished
D. Actions Remaining & Anticipated Completion Date
E. Total Actual Expenditures for the Activity
F. Summary of Benefits for Low/Mod Income Households and
Minorities
- percent of expenditures benefiting low/mod income;
- total expenditures benefiting low/mod income;
- number of low/mod Income benef iticiaries; and
- number of minority beneficiaries.
Citizen Comment:
A summary of each citizen comment received by the local governing body
or the local CDBG administering unit should be attached to the Project
Completion Report. The summary should include the grantee's
assessment of the citizen comment and n description of any action
taken in response to the comment.
Certifications :
As chief elected official of the grantee iurisdiction, I certify that:
a. the information contained in this report is accurate to the
best of my knowledge;
b. all records related to grant activities are available on
request; and
c. CDBG funds were not used to reduce the level of local
financial support for housing and community development
activi tes .
Typed Name and Title of Chief Elected Official;
Signature of Chief Elected Official:
XI-A-1
Date;
EXHIBIT XI-B
RESPONSE TO DOC LETTER OF FINDINGS
(Type on letterhead of grantee)
(Date)
Montana Department of Coinmerce
Community Development Division
Cogswell Building, Room. C-211
Capitol Station
Helena, MT 59620
NOTE: This is an example only. Each response will require its own
specific Inf f)rmation .
This letter is in response to your letter dated (date) summari7.ing the
results of your monitoring visit of (dates) .
) has taken
The (name of grantee: City, Town, or County of
the following corrective actions:
(describe actions being taken in response to findings from
DOC monitoring, for example:)
The (name of grantee) received the wage rate decision for laborers
working on the road paving, and they were included in a contract
amendment signed by the contractor on December 10. We amended the
contract value by $2,500 to cover the differential in wages previously
paid and those required under the Davis-Bacon provisions. A confer-
ence with the contractor and the affected laborers was held to explain
the problem and all parties appeared to understand and be satisfied
with our resolution. The Second Avenue paving project is now in
order.
T have reviewed the sections of the CDBC 1983 Grant Administration
Manual related to labor standards and have identified our omissions
that led to this situation. I believe that future bidding procedures
and contracts will be vastly improved as a result of the monitoring
visit and vour guidance.
Thank you for your assistance in this matter. If there are any
remaining questions about the wage rates or anv other aspect of our
CDBG program I hope you will not hesitate to contact me.
Sincerely,
(name of local project administrator)
(title)
(mailing address)
XI-B-]
EXHIBIT XI-C
COMMON ADDIT FINDINGS
L«ck of Fiscal Control and/or Accountability
Books not maintained on a current basis or not kept in accordance with
procedures equivalent to 0MB Circular A- 102.
All receipts, (e.g., CDBG advances, loan application fees, rental income,
program fees, bid deposits, etc.) not recorded in the Cash Receipts Ledger.
Bank reconciliations and subsidiary ledgers not maintained; such as
rehabilitation loan ledgers that accurately Identify amounts borrowed,
payments, additions and balances.
Financial data, as shown on performance reports, not in agreement with the
books.
Unsupported or Insufficient support for payments.
Incurring of costs contrary to 0MB Circular A-87 (formerly Federal Management
Circular 74-4).
Accounting systems of recipients not maintained in a manner equivalent to 0MB
Circular A- 102.
Expenditures made prior to State's release of funds date.
Escrow funds/advance/accounts receivable charged as costs.
Program income not used for approved CDBG activities.
Substitution of New Activities
Funding of projects outside approved boundaries or for ineligible activities.
Contracting Irregularities
Contracts awarded to other than the low bidder without justification.
Contracts awarded without required competitive bids.
Change orders issued for claimed "additional" work.
Contractor's failure to post required bonds (i.e., payment and performance
bonds) .
XI-C-1
EXHIBIT Xl-D
AUDIT REPORT
(Date)
(Name of p,rantee: City, Town or County of )
NOTE: Thds is an example only. Each response will require its own
specific information.
We have completed our examination of (name of grantee) pertaining to
its Montana Community Development Block Grant Fund for the year ended
(date) . We are commenting on their internal control and compliance
with federal and State CDBG requirements.
Based on our tests of transactions and examinations of records we
believe the grantee has substantially complied with the financial
terms and conditions of the contract with the Department of Commerce
and the regulations, policies, and procedures prescribed under the
Montana CDBC Program.
Our findings are presented below:
1. An expenditure of $300.00 for advertising is unsupported by
documentation indicated that the cost Incurred related to
the local CDBG program and was eligible for reimbursement as
an administrative expense.
2. The $1,200.00 expended for the salary of , City
Clerk, is unsupported by payroll records documenting the
hours spent on CDBG activities as opposed to general city
administration.
As part of our examination, we reviewed and tested the grantee's
system of internal accounting control to the extent we considered
necessary to evaluate the system as required by generally accepted
auditing standards. Under these standards, the purpose of such
evaluation is to establish a basis for reliance thereon in determining
the nature, timing, and extent of other auditing procedures. Addition-
ally, our examination included procedures necessary in our judgment to
determine compliance with contractual terms and conditions and regul-
ations, policies, and procedures prescribed by the Montana CDBG
program and by management and the governing body of (name of grantee) ,
insofar as such compliance review was necessary under the provisions
of Section of the tluidelines for Financial and Compliance
Audits of Federally Assisted Program, dated February 1980. Since the
grantee does not charge indirect costs, there was no cost allocation
plan to grantee.
The objective of internal accounting control is to provide reasonable,
but not absolute, assurance as to the safeguarding of assets against
loss from unauthorized use or disposition, and the reliability of
financial records for preparing financial statements and maintaining
XT-D-1
accountability for assets. The concept of rennonable assurance
recognizes that the cost of a system for internal accounting control
should not exceed the benefits derived and also recognizes that the
evaluation of these factors necessarily requires estimates and judg-
ment by management.
There are potential limitations that should be recognized in consider-
ing the potential effectiveness of any system of internal accounting
control. In the performance of most control procedures, errors can
result from misunderstanding of instructions, mistakes of judgment,
carelessness, or other personal factors. Control procedures whose
effectiveness depends upon segregation of duties can be circumvented
intentionally by management with respect either to the execution and
recording of transactions or with respect to the estimates and judg-
ments required in the preparation of financial statements. Further,
projection of any evaluation of internal controls to future periods is
subject to the risk that the procedures may become inadequate because
of changes in conditions, and that the degree of compliance v/ith the
procedures deteriorates.
Our study and evaluation of the grantee's system of internal controls
and our review of its compliance with contractual terms, regulations,
policies and procedures which was made for the purpose set forth in
the first paragraph of this section, disclosed no conditions that we
believe to be material weaknesses or evidence of noncompliance with
requirements set forth by HUD or the Montana Department of Commerce.
We would like to acknowledge the courtesy and cooperation extended to
us by the personnel of the (name of grantee) during our examination.
Should you have any questions concerning the matters discussed herein,
we shall be pleased to discuss them with you at your convenience.
Yours very truly.
(name of firm)
Certified Public Accountants
XI-D-2
EXHIBIT XI-R
RESPONSE TO AUDIT REPORT
NOTE: This is an exantple only. Each response will require its own
specific information.
(Date)
Montana Department of Commerce
Community Development Division
Cogswell Building, Room C-211
Capitol Station
Helena, MT 59620
In response to the Audit Report by (name of CPA firm) of (name of
grantee) 's CDBG Project:
(include comments, for example:)
1. The expenditure for $300.00 for advertising was related to
publicity for the CDBG rehabilitation program and the
advertising of bids for the Second Avenue paving project.
We had, in fact, misplaced the copj' of the invoice that
should have been in the financial management file. We
obtained a copy of the invoice from the business office of
the Gazette and have enclosed a xerox of the invoice for
your information.
2. We have reconstructed payroll for the City Clerk based upon
his/her desk diary, appointment calendar, and the like. A
copy is attached. The reconstruction accounts for 115 hours
at $9.60 per hour. That accounts for $1,104 of the unre-
solved $1,200 identified in the audit report. The remaining
$96.00 will be paid out of the General Fund. We have
instituted a time and attendance sheet procedure to avoid a
recurrence of this problem.
We believe the actions described above adequately respond to the audit
findings. We look forward to your response.
Sincerely,
(name of local project administrator)
(name of grantee)
(mailing address)
( , Montana Zip)
XI-E-1
EXHIBIT XI-F
CERTIFICATION OF CO>fPLETION
MONTANA CDBC PROGRAM
GRANTEE:
CONTRACT #:
FINAL STATEMENT OF COST
Line Activity
To be completed by Grantee
Paid
Costs
Unpaid 1 Total
Costs 1 Costs
DOC Use
Only
Administration
1. Personal Services
(includes all salaries;
wages & fringe benefits)
2. Supplies
Office Supplies (Small
items of equipment only)
3. Purchased Services
Postage, Printing &
Publications, etc.
Audit
Legal
Other
A. Consulting Services
(List each Contract)
5. Telephone
6. Travel and Training
j
7. Rent
8. TOTAL CDBG ADMINISTRATIVE COSTS
Construction
9. Acquisition
10. Engineering
1
11. Construction Activities
(List by Contract)
12. TOTAL CDBG CONSTRUCTION COSTS
OR
Project
9. Acquisition/Demolition
1
10. Rehabilitation
13. TOTAL CDBG PROGRAM COSTS
1
14. TOTAL CDBG PROJECT COSTS
(lines 8+13)
r
15. CDBG PROJECT INCOME
16. Grant Amount Applied
to Project Costs
(line 14 less 15)
XI-F-1
B. COMPUTATION OF GRANT BALANCE
To
be
comp
leted
bv
Grantee
IDOC Use only
Description
Amount
1 Approved Amount
a. Grant Amount Applied to '
Project Costs (line 16)
b. Unsettled Third Party
Claims
c. Subtotal
d. Grant Amount per Grant ;
Contract j
c. Unutili2cd Grant Funds j
f. Grant Funds Receivod |
9. BALANCF OF GRANT PAYABl.F.
C. Unpaid Costs & Unsettled Third Pai ty Claims
List any unpaid costs and unsettled third-party claims against the
CDBG grant. Describe circumstancos and amounts involved.
/ / Check if continued on additional sheet and attach,
CFRTTFTCATTON OF RECIPIENT
It is hereby certified that all activities undertaken by the Recipient
with funds provided under the contract identified on Page 1 hereof, have,
to the best of my knowledge, been carried out in accordance with the
Contract; that proper provision has been m.ade by the Grantee for payment
of all unpaid costs and unsettled third-party claims identified above;
that the State of Montana is under no obligation to make any further pay-
ment to the Recipient under the Contract in excess of the amount ident-
ified as C. Subtotal under Computation of Grant Balance, above; and that
every statement and amount set forth in this instrument Is, to the host
of my knowledge, true and correct as of this date.
DATE
TYPED NAME & TITLE OF RECIPIENT'S
AUTHORIZED REPRESENTATIVE
SIGNATURE OF RECIPIENT'S
AUTHORIZED REPRESENTATIVE
DEPARTMENT OF COMMERCE APPROVAL
This Certification of Completion is hereby approved. Therefore, I
authorize cancellation of the unutilized contract commitment and related
funds reservation and obligation of $ , less $
previously authorized for cancellation. (Line 3, above)
DATE
TYPED NAME & TITLE OF STATE
AUTHORIZED OFFICIAL
SIGNATURE OF STATE
AUTHORIZED OFFICIAL
XI-F-2
MONTANA
STATE
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