Housing Rehab Contracting National Community Development Association January 24, 2018

Choosing Contractors The client can choose any contractor, as long as: Licensed with the City (right license for the type of work) Registered with the State Insured (Bonds for $100k or more) Not debarred Lead certified (as needed)

Contractor Experience To keep a list or not? How much to help clients when choosing contractors? When they pick someone we haven’t worked with before, or…. …When they pick someone we (unfortunately) have worked with before.

Relationships Remember proper roles: Client signs agreement with the contractor Client signs agreement with the City City and contractor DO NOT have an agreement THINK: What would a regular bank do?

Who Agrees to What? Contractor agreement governs the WORK Client and Contractor sign Loan/Grant agreement governs the MONEY Client and City sign Conditions of Agreement governs BEHAVIOR City provides compliance framework, pays contractor on behalf of client from clients loan/grant funds.

CLIENT agrees to: Contractor agreement: Loan/Grant agreement: Agrees to allow access, provide power/water, make timely decisions, authorize payment per specifications for work completed. Loan/Grant agreement: Agrees to the amount being borrowed/granted, terms of repayment or forgiveness, consequences for default, allows City to pay contractor on behalf of client.

CITY agrees to: Loan/Grant agreement: Agrees to ensure compliance of both parties with federal requirements. Agrees to pay contractor on behalf of the client, perform progress inspections, assure quality and timely work. Agrees to payment/forgiveness terms for funds, servicing requirements, consequences for default. May include escrow or other requirements (varies by state).

CONTRACTOR agrees to: Contractor agreement: Agrees to complete work as described in contract specifications, use specified materials, keep to schedule, meet expectations for access, cleanliness, behavior Agrees follow regulatory and reporting requirements, local building codes, etc.

Conditions of Agreement Signed by both Client and Contractor Governs behavior of client and contractor Spells out City’s right to oversee work, inspect, stop work for non-compliance Examples: Contractor: no smoking or pets on job site, must clean up daily, materials must be new, must provide all warranties and rebates to client Client: must provide access 8am-5pm, must provide water/power, must move belongings prior to job start

What about Subcontractors? Contractor is responsible for selecting and supervising subs – but must identify them from the beginning. All subcontractors and alternates should be listed in the Contractor Agreement at the outset – changes require amending the agreement!

Keeping Contractors Happy: Clear, concise, detailed specs “Start by” date – planned delays are OK, not showing up isn’t Regular communication/inspections Quick payment Resolve problems quickly

Talk about the fine print Retention amounts Start/end dates Payment procedures Material brands/quality/quantity Program inspections v. permit inspections

Program v. Permit Inspections Program inspections ensure federal compliance Work done to spec Project on schedule Correct materials used Work completed prior to payment Permit inspections ensure local code compliance Carried out by different, qualified staff

When things go bad… Remember proper roles: Client and contractor have a legal relationship City can assist in resolving THEIR disputes Only client/contractor can terminate the agreement THINK: What would a regular bank do?

When all else fails The City isn’t a regular bank, so - Grievance policy Contract clause for payment in the event of dispute Contract termination provision

Evaluate Contractors Evaluation by Client and City Staff at the end of EVERY project Keep on file Meaningful metrics Number of days off the site Corrections/stoppages required Repeat inspections necessary Can use to prevent future problems

Questions Heather Johnson Davenport, Iowa hjohnson@ci.davenport.ia.us 563-888-2004