UPDATE: Contingency Requirements for Close Out of the RREM Program If you are participating in the RREM Program and meet the following conditions; Reconstruction, Rehabilitation, Elevation, and Mitigation (RREM) Program 1. You have selected your own contractor to perform construction work on your home, referred to as Pathway B in the RREM Program. 2. You signed your original grant award agreement prior to October 13, 2014. Built into your grant award determination is a contingency budget intended to address unforeseen costs the program did not account for when estimating your total construction scope of work. Because this contingency was added and potentially increased your grant, the RREM Program may need to document what unforeseen conditions were addressed that justifies the contingency budget added to your grant. The RREM Program would like to notify you of the following information regarding the impact of contingency as it may apply to you. How the Grant Award was determined? The RREM Program calculates the grant award much like a flood insurance adjuster, with an award amount for the property based off a cost estimate to repair any storm-related damage. Recognizing that construction projects may incur unforeseen costs, the Program included an additional contingency mark-up to the Program cost estimate to repair the storm-related damage when determining the homeowners grant award amount. Total without contingency Contingency Total with contingency
How does a homeowner know the impact that contingency had to their grant? Homeowners can contact their Housing Advisor for help understanding the impact of contingency on the homeowner s grant award. Homeowners can reference their Homeowner Award Calculation (Exhibit 1) to verify the amount of funds the homeowner received as a contingency mark-up. o Using the Award Calculation (Exhibit 1), the homeowner can subtract their unmet need from their contingency to learn the level of impact contingency has on the grant award. Equation: Contingency Unmet Need Why does the RREM Program need to verify the need for contingency funds? The federal government requires that RREM grant funds serve to fill a gap in funding to complete the repair work and to supplement funds already received from insurance and other third party resources for construction. To demonstrate that contingency mark-up went towards a gap in funding not covered by other resources, the Program needs to document what eligible costs homeowners had above and beyond their Program cost estimate for the scope of work. How will the Program verify what work can be credited towards contingency? During the final inspection, using the Contingency Validation Form, the RREM Project Manager will identify eligible costs that can be credited. (To view the Contingency Validation Form, please scroll to the bottom of the document) After the final inspection, homeowners will be notified by DCA of the calculation results and final costs to be attributed to the contingency allowance. What are common costs that may be credited towards contingency? Common eligible costs that homeowners might incur which may not have been included in their original ECR/reconstruction pricing, that can be credited towards their contingency may include: o Architectural and/or engineering design services, o Elevation costs (e.g. requirements to elevate higher than the program anticipated) o Increased foundation costs (e.g. Program assumed spread footing, however project required helical piles), o Specific items added to the cost and scope of work required by the Municipal zoning and/or permitting process,
o Items added to the scope of work to satisfy State or Municipal environmental conditions, and o Structural damage not observable at initial site inspection. Homeowner enhancements and upgrades are not eligible to be credited towards the contingency. How does a homeowner know what work can be credited towards contingency if they are reconstructing, since there is no Estimated Cost of Repair for comparison? Homeowners who are reconstructing were awarded grant funds based off a standard, cost-reasonable estimate to replace their home consistent with the number of bedrooms that existed at the storm-damaged property. Such homeowners are advised that the pricing included in the grant award calculation may not account for eligible site specific costs that the homeowner may be required to address, such as municipal requirements to repair bulkheads, off-street parking requirements, and other common costs as noted above. What information should homeowners retain in order to demonstrate need for contingency funds? Homeowners are required to retain bills, invoices, receipts, architectural/engineering documents, photos and related records for construction work completed. This would also include any documentation received from the municipality requiring additional items to be completed as a condition of receiving their certificate of occupancy.
Contingency Validation Form Rehabilitation/Elevation Reconstruction, Rehabilitation, Elevation, and Mitigation (RREM) Program GENERAL INFORMATION Purpose: The Contingency Validation Form is to document and account for the use of contingency funds that were added to your original grant award to pay for any unforeseen costs for required construction activities necessary to complete the rehabilitation and/or elevation of your damaged property. This includes any required and eligible work that was not included in or exceeded the Estimated Cost of Repair/Scope of Work. Please refer to Section 1 of the Exhibit 1 to your grant agreement for the amount of contingency funds added to your grant award. A reconciliation that will show the net effect to your grant award of the use of contingency funds for eligible additional work completed will be conducted as part of final inspection. Note: The RREM Program can only credit homeowners for reasonable and necessary costs incurred to repair the damaged property to a safe and livable standard. Homeowners who voluntarily choose to install enhancements above the base standard listed in the Estimated Cost of Repair/Scope of Work are not eligible for a credit of that work. Only work performed to meet local code or RREM Program standards will be allowed and captured on this form. Instructions: Your RREM Project Manager will help you to complete this form during the final inspection of your home. Please review your copy of the Estimated Cost of Repair/Scope of Work and determine what additional work was performed. Assemble any documentation that will evidence or support the completion of this additional work. Some examples of eligible additional work and supporting documentation are shown in the table below. EXAMPLES Overview: The following are examples of eligible scope items that can be credited using the Contingency Validation Form, and the appropriate supporting documentation to justify it. Also listed are examples of ineligible items that CANNOT be credited. Eligible credits for scope not captured on the Estimated Cost of Repair/Scope of Work Category of Repair Excess Scope of Work Performed Supporting Documentation Elevation Foundation Municipal Requirements Estimated Cost of Repair calls for 5 feet of elevation actual elevation completed 7 feet due to municipal requirement Estimated Cost of Repair calls for a spread footing foundation actual foundation required helical piles Municipal requirement to repair bulkhead in order to have Certificate of Occupancy issued not included in Estimated Cost of Repair Design Services Homeowner pays for cost of Lead Clearance Examination Report cost not included in Estimated Cost of Repair Elevation Certificate Geotechnical Report Letter from Municipality Invoice for Lead Clearance Report Ineligible credits for scope not captured on the Estimated Cost of Repair/Scope of Work Category of Repair Excess Scope of Work Performed Supporting Documentation Elevation Exterior Doors & Windows Interior Construction Exterior Stairs & Porches Program allowance for 5 feet of elevation homeowner voluntarily elected to elevate additional 3 feet Program allowance for replacement of 6 windows homeowner chooses to replace 2 additional windows that were not stormdamaged Program allowance for replacement of countertops with laminate material homeowner chooses to replace with marble countertops Program allowance for creation of access stairs/porch (5 ft X 7 ft) due to elevation homeowner chooses to build larger porch
Contingency Validation Form Rehabilitation/Elevation Reconstruction, Rehabilitation, Elevation, and Mitigation (RREM) Program CONTACT INFORMATION Homeowner Name: RREM Application #: Homeowner Address (Damaged Property): RREM Project Manager: I. DESIGN SERVICES LIST ALL COMPLETED DESIGN WORK DESIGN SERVICES REQUIRED (Input the actual cost incurred for any design costs. The program will pay the lesser of the actual cost or program allowance, whichever is less) PROGRAM ALLOWANCE (not to exceed) ACTUAL COST INCURRED AMOUNT BEING INVOICED (Lesser of allowance or actual cost incurred) As-Built $1,285.00 $ Elevation Certificate & Lot Survey $1,669.00 $ Foundation Design $2,953.00 $ Geotechnical Analysis $2,182.00 $ Plot Plan $1,027.00 $ Architectural Design Services $2,750.00 $ Foundation Location Survey $1,028.00 $ Soil Erosion Plan $1,927.00 $ Zoning Variance $2,000.00 $ Cribbing Elevation Drawing $642.00 $ Wind Storm Engineering Assessment $1,669.00 $ Wind Storm Engineering Retrofit $2,313.00 $ Other Design Services (list below): $ II. SCOPE CHECKLIST LIST ALL COMPLETED CONSTRUCTION IN EXCESS OF ESTIMATE COST OF REPAIR/SCOPE OF WORK WORK ITEM EXCESS SCOPE OF WORK PERFORMED SUPPORTING DOCUMENTATION ELEVATION REQUIREMENTS FOUNDATION MUNICIPAL REQUIREMENTS ENVIRONMENTAL OR HISTORIC CONDITIONS ACCESSIBILITY AND MOBILITY NEEDS MECHANICAL, ELECTRICAL, PLUMBING STRUCTURAL
EXTERIOR DOORS & WINDOWS EXTERIOR STAIRS & PORCHES BUILDING EXTERIOR INTERIOR CONSTRUCTION LEAD-BASED PAINT HAZARD REMOVAL ASBESTOS HAZARD REMOVAL OTHER I. Homeowner Acknowledgment I certify that all information provided for the completion of this Contingency Validation Form is true and correct to the best of my knowledge. I understand the RREM Program will make a final determination of the amount of funds that may be credited for use of contingency funds, based on its best estimate of the value of additional scope not incorporated into my Estimated Cost of Repair/Scope of Work. Applicant Name Date Applicant Signature