2018 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM REQUEST FOR PROPOSALS

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1 2018 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM REQUEST FOR PROPOSALS Introduction The Town of Cary is presently accepting proposals for the allocation of approximately $525,000 in Community Development Block Grants (CDBG) for the 2018 Program Year. Please note the Town of Cary may not receive final notification of the final annual CDBG award amount from the Department of Housing and Urban Development until April The estimate is included to provide guidance to applicants regarding the expected amount of available funds. The Town will reserve the right to award more or less than this estimate dependent on the final entitlement amount authorized by Congress and the Department of Housing and Urban Development. To utilize CDBG funds most effectively to address the highest priority needs, the Town will be prioritizing submitted applications using the evaluation criteria attached to the application. Of special interest are proposals that will provide housing to extremely low, low-moderate income, and special needs and senior households, and social service activities addressing crisis intervention, housing and homeless services, and Homeless and Special Needs goals. Appropriate projects may include land acquisition for the construction of affordable housing, acquisition and repair of existing housing for low-income households. Additionally, support services for homelessness prevention and transition as part of a comprehensive approach that improves the living conditions of clients, or housing support and supportive services for people with special needs are also eligible uses of CDBG funds under the current CDBG Consolidated Plan. However please note that under CDBG regulatory limits only 15% of the 2018 allocation is available for social services and thus such awards are limited. The primary purpose of the CDBG Program is to fund community development projects and programs, which benefit low and moderate-income people. Town of Cary Planning Staff will review the grant requests and make a recommendation for grant awards to the Town Council. Subsequently, the Town Council will hold a public hearing and make a final decision on the grant award(s). Please also note, that should your proposal include a multi-phased project that will may be request additional CDBG funds in the subsequent Program Years (2019 or thereafter) or If it is anticipated that other public or private funds will augment or support the project, please ensure that all relevant details are included at this time to assist in the award evaluation and selection process. John J Donachie Senior Planner, Town of Cary Planning Department Housing & Community Development, john.donachie@townofcary.org

2 TOWN OF CARY 2018 CDBG RFP APPLICATION SCHEDULE AND DEADLINES February 3rd, 2017, 2018 RFP applications available to the public. March 10th, 2017, 2018 Applications due by 4:30 p.m. March 30 th, 2017 Town Council Public hearing to consider priorities for FY2018 Annual Action Plan 13th Apr, th Apr, 2017 Draft FY 2018 Annual Action Plan and Funding Recommendations presented to Council Town Council adopts the FY 2018 Annual Action Plan Questions? Please contact: John J Donachie Senior Planner, Housing & Community Development, Town of Cary Planning Department 316 N. Academy Street, Cary, NC P.O. Box 8005, (919)

3 Overview of CDBG Program Per Title I of the Housing and Community Development Act, the Town of Cary is entitled to receive Community Development Block Grant (CDBG) funds from the U.S. Department of Housing and Urban Development (HUD) on an annual basis. The Town is responsible for administering the CDBG funds that serve the area through nonprofit organizations and provide eligible activities that benefit low- and moderateincome persons. This Request for Proposals is a venue to distribute CDBG funds to nonprofit organizations and it is a competitive application process. Nonprofits considering submitting an application must clearly demonstrate their ability to successfully meet one of the CDBG program s three broad national objectives: 1. Benefit low- and moderate-income persons, 2. Aid in the prevention or elimination of slums or blight, or 3. Meet community development needs having a particular urgency. Service Area Nonprofit organizations and agencies who serve persons residing in the Town of Cary may apply for funding. Target Population Low- and moderate-income (LMI) means an individual s income does not exceed 80 percent of the area median income. The median income for Raleigh-Cary area can be viewed at Eligible Activities Housing Rehabilitation of LMI-occupied homes (100% LMI benefit required) Funding to support new affordable housing The re-use of existing buildings for new affordable housing Community Service Organizations Neighborhood-based community centers Transitional housing to prevent homelessness Facilities to serve abused children, battered spouses, seniors, the disabled, the homeless, the illiterate, persons living with AIDS, or migrant farm workers Sheltered workshops to provide employment to the disabled Community Facilities Replacement of deteriorating water or sewer lines Streets, sidewalks, greenways, and parks Drainage improvements Traffic calming to increase safety in neighborhoods Economic Development Job creation activities, such as public improvements to help a business create mostly LMI jobs (not necessarily low-wage: jobs are held by or available to persons not requiring more than a high school education, or the business will provide training for the needed skills) Downtown revitalization activities (such as façade improvement grants or loans) to enable town center area businesses increase the appeal of downtown

4 Public Service Organizations (no more than 15% for this purpose allowed) The Town of Cary is able to pay for salaries, office rent, and other related costs for services provided to LMI or protected groups if such services represent new activities, not existing activities already provided by the Town or nonprofit organizations within the Town. Examples include (if not provided locally by the entity seeking funding): vouchers for public transportation (Go-Cary, TTA, other), literacy training, job training for the disabled, budgeting and life skills training for homeless families, counseling for abused children, etc. Proposal Submission Please submit proposals using the Application form and checklist in the Attachments. Submit one proposal on a CD/flash drive (in word or pdf format) and one copy of the original proposal (paper copy). Evaluation of Proposals A review team will evaluate proposals using criteria listed in the evaluation criteria section to evaluate each application. Right to Reject Proposals The Town of Cary reserves the right to reject any or all applications received. Deadline for Submission All responses to this Request for Proposals must be submitted to the Town of Cary by 5:00 p.m. on March 3rd, Late proposals will not be accepted. Delivery of Proposals Mail to: OR Bring to: Town of Cary Town of Cary Attn: John J Donachie Town Hall Campus Planning Department 1st Floor (Planning Department) P. O. Box 8005 Cary, NC Cary, NC Any questions or comments regarding this Request for Proposals should be directed to: : John Donachie Senior Planner, Housing & Community Development, Town of Cary Planning Department 316 N. Academy Street, Cary, NC P.O. Box 8005, ) (Or) john.donachie@townofcary.org

5 Evaluation Criteria Threshold and Scoring Guideline Applications for projects which meet the minimum eligibility and threshold requirements will be deemed competitive and evaluated with the following scoring criteria. The Town will prioritize multiple funding applications for funding purposes, according to the Town s Consolidated Plan priorities and Annual Action Plan. The Town may fund projects significantly less than their requested amount in order to fund multiple projects that serve similar populations. Point will be awarded and measured for each category that is relevant to the application. The threshold score for a proposal to be considered for funding is 75 percent of the sum total of possible points. Funding is always dependent upon available funds and consistency with the Consolidated Plan priorities and Annual Action Plan. Evaluation Criteria Total Points = Statement of Need Score is based on applicant s demonstration of the contribution the proposed project will have on the target population and the community at large. Applicant should provide current, relevant data (including demographic) that adequately support the need. Please include other agencies in your community that serve this population. Applicant should distinguish whether the funding request will be used for an existing or new activity/project. 2. Proposal Concept Efficiency and Project Outcomes and Objectives Score is based on the ability of the applicant to provide a timetable for implementing the project activities. The timetable should include execution of the contract with the Town (allow 4 weeks), design, environmental assessments, subcontracts, and permitting. Applicant should provide an anticipated project completion date. Objectives should be measurable and include the number served. Description of the measurement tools that will be used for evaluations Completion and expenditure of CDBG funds within 18 months from the date of execution of the contract Collaboration with other programs/businesses/agencies Additional pertinent information that will assist the review panel in evaluating the proposed method of operation

6 3. Organizational Capacity, Management and Staffing Plan Score is based on the justification in the application, the applicant s experience in the proposed area, organizational development, administrative structure and fiscal integrity and proposed staffing/resource proposals. Mission statements should be in-line with the services provided. Responses should include: The applicant s mission statement Evidence of Nonprofit Status, IRS 501 ( c )(3) Current state registration Article of Incorporation Corporation By-laws Most recent financial statement Copy of written financial procedures and responsibilities Listing of Board of Directors Resumes for principal staff who will be involved in the proposed activity An organizational chart Demonstration of ability to successfully operate the proposed program Information about how long the organization has provided services in the Town of Cary A brief overview of all programs operated by your agency A notarized No Conflict of Interest or Disclosure of Conflict of Interest statement 4. Budget, Justification, and Leveraging Applicants should include clear explanations for all costs involved and costs should be reasonable. Applicants should demonstrate that CDBG funds are leveraged with other resources. Please be specific. Please fill out the Leverage Form (Project Funds from Other Sources Page) List the total funding requested If funding is being requested for more than one program, list programs separately 5. Financial Standing Applicants must demonstrate that they are financially secure, can cover any unexpected costs and have good financial management procedures in place. Please describe any experience in accessing/utilizing any CDBG funds or any other public funds. Include a copy of the organization s auditors cover letter that indicates an unqualified or qualified opinion. 6. Activities Funding Tool Grantees develop the Consolidated Plan to allocate limited resources to the community development activities that are most likely to improve the quality of life in their communities. The Activities Funding Tool developed by HUD will be used to assist in the evaluation along with the other factors including their communities priority needs, market conditions, geographic targets, potential partners, and HUD resources when making investment decisions, this will help to ensure that we support projects with greatest ability to achieve the desired outcomes for the greatest number of people. PROPOSAL EVALUATION A proposal evaluation committee will be established to review and evaluate all proposals submitted in response to this RFP. The Evaluation Committee will first review each proposal for compliance with the minimum information requested. Failure to provide the minimum information requested may disqualify a proposal. The Evaluation Committee will evaluate all proposals submitted and each proposal will receive a score based on these categories.

7 C D B G A P P L I C A T I O N I N S T R U C T I O NS CDBG: APPLICATION INSTRUCTIONS Please refer to these when completing the RFP application attached below) This application packet can also be downloaded at Part One: Most is self-explanatory. When listing a contact person, please list the best contract to get information to and from the organization as quickly as possible. Total Proposal Request: $ List the total amount of grant funds being requested for the project. In addition, list the minimum amount of funds the organization could receive for the project to be possible Minimum Request: $. Organization Name: Please list the name of your organization, and specify if your organization operates under a DBA. Name: Include the name of the applicant who is the point of contact for the application, as well as their title and phone number. Mailing address/ Address: Include the mailing address for your organization - where you want documents and correspondence related to the grant application mailed. Proposed Project Location: Indicate the location where the project activities will take place. You may add a location map where appropriate) NOTE: if the location needs to remain confidential for the safety of program participants, please notify Town staff of project location separately. Part Two: The next section will be the specific request for the grant funds and where the project falls into eligible activity categories. CDBG Eligible Category: From the following list, please choose the CDBG Eligible Activities Category for the proposed project and enter the eligible category on Page 1 of the Application. See Attachment E- Eligible Activities for a more detailed description. CDBG Eligible Activities Categories: (refer to attachment E for guidance) Public Service Public Facilities/Improvements Housing/Special Activities by Sub-recipients Special Economic Development Acquisition of Real Property Other, specify

8 National Objective Compliance/Low and Mod Benefit: From the following three choices, please choose the National Objective Compliance/Low-Mod Benefit for the proposed project and enter the category name on Page 1 of the Application. See attachment E - National Objectives for a more detailed description. National Objective Compliance/Low-Mod Benefit (refer to attachment E for guidance) Area Benefit Limited Clientele Housing Beneficiary Information: Total number of beneficiaries in program Number of beneficiaries in program to be served with CDBG funds Percentage of the CDBG beneficiaries with low/moderate income Cost ($) per CDBG beneficiary (CDBG Request/CDBG Beneficiaries) Part Three: This section includes specific descriptions of the project, target groups, outreach, coordination with other agencies and the timeline. Scope of Proposal: (You may adjust the spacing as necessary) a. Need/Target Group Document the need for the project/program? If the project has been funded before, what have been the primary accomplishments? In addition, quantify the number of low- and moderate-income persons/households to be assisted per service/activity/project. b. Project Description/Benefit Describe the proposed service/activity/project to be carried out with the funds requested. If the proposed project is ongoing, specify why the funds are needed to serve low and moderate-income persons. Discuss the cost-per-beneficiary in relation to private and other organizations delivering similar services. Discuss how the project/program provides benefit to low-income persons. How does the proposed project respond to identified needs? CDBG funds can only be used for expenditures which directly benefit CDBG-eligible clients.

9 c. Outreach Discuss outreach efforts for the proposed service/activity/project; provide a list of the methods you propose to use. If you partner with other organizations through program referrals please list them. d. Organizational Capacity. Summarize the organization's background/programmatic capacity. Does your organization or proposed service fill a unique niche among clients who are not currently served, or are under-served? Attach a list of the Board of Directors. e. Partnerships and Other Resources Has your organization developed this project in collaboration with other groups offering services? What services offered by other community groups complement the proposed project? Are the proposed activities duplicative of projects operated by other local public or non-profit organizations? Identify other potential or actual sources of funds. What fund raising has the organization done to support the proposed project? What role do volunteers play in this project? PERFORMANCE MEASUREMENTS AND SCHEDULE Prepare a Performance Measurements and Schedule table listing the major activities, the direct product/service numbers for each activity, the outcome description and the date the activity is projected to be completed using the template provided. ACTIVITY (What the program does to fulfill its mission) Example: Pediatric health care for sick, low/moderate income children in Cary without any form of health coverage INDICATOR (The direct products of program activities) SERVICE #s Example: Provide pediatric health care to at least 97 sick, low/moderate income children in Cary without any form of health coverage OUTCOME (Benefits that result from the program) Example: Improved access to healthcare for program participants Improved quality of life for program participants PROJECT BUDGET On a separate page, prepare a budget summarizing the use of proposed CDBG funding and all other resources available for the project. A budget summary worksheet is included in the application.

10 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM FACT SHEET The attached application packet is designed to aid your organization in applying for Community Development Block Grant (CDBG) funds. Organizations are encouraged to submit applications if they feel their project would qualify for funding under general CDBG guidelines (services to very-low, low- and moderate income persons/households in specific housing, economic development and public service programs.) The application form and instructions are attached below. Summary: The Community Development Block Grant (CDBG) program grants federal funds through the Department of Housing and Urban Development (HUD) to cities to implement a number of community development, housing and social service projects. The Town of Cary has been granted over $5 million since 2005 and has awarded grants to many different kinds of non-profit agencies. Who is eligible for CDBG funds? The Town has many options for implementing the CDBG program. The Town can grant all or a portion of the funds to a specific project or projects so long as they meet the requirements of the federal Department of Housing and Urban Development (HUD) The Town can grant all or a portion of the funds to projects administered primarily through "non-profit" community groups; or the Town can grant funds to "for-profit" businesses to implement special economic development projects. In Cary both types of projects have been funded although most projects have been for housing and community development activities and these have been primarily administered through "nonprofit" community groups. What types of activities are CDBG funded? Eligible activities/projects/programs may fall a number of categories including: Property Acquisition, Public Facilities and Improvements, private Utilities improvements, Clearance of Property, Public Services, Relocation of Tenants and Property, Removal of Architectural Barriers, Housing Rehabilitation, New Housing Construction, Code Enforcement, Historic Preservation, Commercial or Industrial Rehabilitation, Special Economic Development, Program Administration, and Other Activities. Who benefits from CDBG Projects? The primary beneficiaries of CDBG funded projects are the verylow, low and moderate-income person(s) and household(s.) In Cary, at least 70% of the activities of a project must serve this population. CDBG grantees have reported that they also benefit from the grant funds and from some of the technical assistance they receive from CDBG staff. Who decides how CDBG funds are distributed? In Cary, Planning staff review the proposals and make funding recommendations to the Town Council. The Town Council reviews the requests, reviews the funding recommendations and makes the funding decisions to HUD for the use of our CDBG award. HUD reviews the council's funding decisions and must approve the projects and funding levels made by the Council. During the review process, there are multiple opportunities for public comments either in writing to the Town and/or during the public comment periods at the publicly advertised open meetings of the Town Council.

11 ATTACHMENT A APPLICATION SUBMISSION CHECKLIST/REQUIRED ATTACHMENTS: Signed cover letter from nonprofit organization Application Cover Sheet (Attachment B) A narrative that includes the following: o Statement of Need o Proposal Concept Efficiency and Project Outcomes and Objectives o Organizational Capacity, Management and Staffing Plan o Budget, Justification, and Leveraging o Financial Standing Nonprofit Applicants: o By-laws o The applicant s mission statement o Evidence of Nonprofit Status, IRS 501 ( c )(3) o Current state registration o Article of Incorporation o Corporation By-laws o Most recent financial statement o Copy of written financial procedures and responsibilities o Listing of Board of Directors o Resumes for principal staff who will be involved in the proposed activity o An organizational chart o Demonstration of ability to successfully operate the proposed program o Information about how long the organization has provided services in the Town of Cary o A brief overview of all programs operated by your agency o A notarized No Conflict of Interest or Disclosure of Conflict of Interest statement A copy of the organization s auditors cover letter that indicates an unqualified or qualified opinion. Project Budget and Budget Narrative (Attachment C) Leveraging Sheet (Attachment D) Prior Year Outcomes and Goals (Attachment E) Submit proposals using the checklist above. All proposals must be submitted on a CD or flash drive and electronically mail one copy in a word or PDF file to: john.donachie@townofcary.org If an organization s proposal is selected, a current audit report will be required prior to the release of Community Development Block Grant (CDBG) funds.

12 Application Cover Sheet Town of Cary Application For Community Development Block Grant Program FY 2018 Amount of Request: $ Minimum Amount requested; $ Name of Organization: Mailing Address: Zip Code: Contact Person: Title: Address: Phone Number: Executive Director (if different from above): Project Title: Location of Proposed Project: Specific Target Population: Time Line: Start Date: End Date: Application Certification of Accuracy: (Application is complete to the best of my knowledge) Name/Title of Agency Representative Signature Date Attachment B

13 Attachment B (contd ) National Objective Compliance/Low-Mod Benefit Please select the category the relevant national objective category from the options below. Area Benefit Limited Clientele Housing Beneficiary Information: Total number of beneficiaries in program : - Number of beneficiaries in program to be served with CDBG funds. : - Percentage of the CDBG beneficiaries with low/moderate income : - Cost ($) per CDBG beneficiary (CDBG Request/CDBG Beneficiaries). : -

14 Attachment C Project Budget Include all items associated with implementing the activities described in the detailed project description. If project has more than one distinct component, complete a separate budget for each separate component. a. Town $ Timetable for b. Project $ from c. Total Project Requested Line Item Each Phase Other Resources by This Proposal 3 Cost $ (= a +b) Acquisition/Land Acquisition/Structures Appraisals Demolition Site Preparation Relocation of persons Architect/Engineering Lead-Based Paint Assessment/Abatement Insurance/Bonding 1 Construction Management Fees Builder/Developer Fees Audit 2 Other (specify): Construction (List below by components): GRAND TOTALS $ 1 Note that General Liability Insurance ($1 million); Automobile Liability Insurance, Worker's Compensation and Fidelity Bond (100% of contract amount) are usually required for all contractors. Costs for coverage should be included in this Budget Summary. If you do not already have this coverage, it is an eligible CDBG/ESG/HOME expense. 2 All projects funded under the Consolidated Plan programs must have an annual independent audit. Agencies with total annual federal or federally-derived funding of $500,000 or more must have an annual A-133 audit. The cost of conducting this audit is an eligible CDBG/ESG/HOME expense. 3 Complete the sections on the next page under T.4.a and b for entries in this column

15 Attachment D Project Budget (continued) Project Funds from Other Resources: All funds shown as "Other Resources" in the Budget Summary in Column 4 should be shown here. "Other Resources" can include cash match, donated or in-kind physical match (such as free space, equipment, etc.) or in-kind professional match. Also include other federal, State, County and Town funding, as well as Low Income Housing Tax Credits (LIHTC). For Other Resources needed for project implementation, please complete the following chart. Use the codes below in the Status Code column, and provide narrative explanations as needed. (If necessary, attach additional pages.) Proposed Source C/IK 1 $ Value Status Code 2 Anticipated Date In Hand Total $ Value: $ 1 Indicate whether Resource is being provided as Cash (C) or as In Kind (IK) contribution. 2 Status Codes for Other Resources (See below) C A TBR Committed: Attach documentation/provide timetable for submission of documentation. Professional in-kind match is considered as Committed only with written documentation. For continuing funding resources not yet committed for next year, provide most recent award letters. Additional documentation may be submitted as available through August If committed but undocumented, explain in box below. Applied For: Provide status and estimated notification date To Be Raised: Describe funding plan and timetable in box below Explanations for Status Codes 2 above:

16 Attachment D (cont.) Attachment E PRIOR YEAR OUTCOMES AND GOALS If applicable, provide program goals and outcomes related to FY 16/17 CDBG funding received. Include the unduplicated number of people served. Last Year s Program Outcome/Goal What Outcome/Goal was achieved? Explanation of achieving or not achieving Outcome/Goal Outcomes: Outcomes are not the activities of the agency, but how the activities impact the people being served. Outcomes may be long term or short term but must be quantified and measurable. An example might include Six (6) families will become homeowners. Outcomes must relate to activities funded under this contract and should be limited in number to reflect only major impacts. Tasks: These are the major activities carried out by the contractor/agency that lead to the specific Outcome. All Tasks must be quantified as to either the number of services provided and/or the number of people receiving the service. Only major Tasks should be included. For the above example outcome a task might be Families must complete a first-time homebuyer class Outputs: Direct products of Tasks; interim achievements. Not all projects require Outputs. Outcome Measurements: How will the contractor/agency determine whether an Outcome has been achieved; how specifically will success be determined? Outcome Measures must be specific as to methodology and reporting requirements, including follow-up and reporting timetables. Measures must be an accurate reflection of the specific Outcome being addressed.

17 Attachment E H U D E L I G I B L E A C T I V I T I E S & H U D N A T I O N A L O B J E C T I V E S

18 1-1 CHAPTER 1 ELIGIBLE ACTIVITIES PURPOSE This chapter describes in detail the many types of activities which may be assisted using CDBG funds. The purpose of this chapter is to help ensure that grantees will use CDBG funds only for eligible activities and will properly classify activities by type. The importance of using CDBG funds only for eligible activities is self-evident. The proper classification of activities is also important because the applicable statutes and regulations place specific requirements on certain activities and not on others. For example, there is a statutory and regulatory limitation on the amount of CDBG funds which may be used for public services. There is a similar limitation on the amount of CDBG funds which may be used for planning and administrative costs. The statute and regulations also place special requirements on such activities as code enforcement and assistance to for-profit businesses for economic development projects. An improperly classified activity may be unnecessarily subject to an inapplicable requirement or, conversely, it may be carried out in a manner contrary to the intent of the law. SCOPE OF AN ELIGIBILITY DETERMINATION Six steps are involved in the process of determining if CDBG funds may be used to assist a proposed activity. The first step is to determine if the activity is included within the listing of eligible activities in the CDBG regulations, as modified by statutory amendments. This chapter describes all activities which are currently eligible. The second step is to determine if the proposed activity falls within a category of explicitly ineligible activities, despite its apparent inclusion within the listings of eligible activities. For example, while many public facilities are eligible for assistance, there is an explicit statutory and regulatory bar to providing assistance to buildings for the general conduct of government. The explicitly ineligible activities are identified in this chapter. The third and probably most important step is to determine if the proposed activity meets one of the national objectives of the program: NATIONAL OBJECTIVES Benefiting low and moderate (L/M) income persons, Addressing slums or blight, and Meeting a particularly urgent community development need.

19 1-2 The fourth step is to ensure that carrying out the activity with CDBG funds will not result in the grantee violating its certification that at least 60% of CDBG funds will benefit L/M income persons over one, two, or three consecutive program years, as specified by the grantee. The procedure for calculating overall program benefit to L/M income persons is described in Chapter 3. The fifth step is to review proposed costs of the activity to determine if they appear to be necessary and reasonable and will otherwise conform with the requirements of OMB Circulars A-87, Cost Principles Applicable to Grants and Contracts with State and Local Governments ; A-122, Cost Principles for Nonprofit Organizations ; A-21, Cost Principles for Educational Institutions, as applicable. The sixth step is to complete the environmental review and clearance procedures for the project of which the activity is a part. Those procedures are set forth in 24 CFR, Part 58. HUD is prohibited by law from releasing funds for a CDBG activity until the grantee certifies that it has met its responsibilities with respect to environmental protection. ELIGIBLE ACTIVITY CATEGORIES The remainder of this section describes separately each type of eligible activity in the following order: ELIGIBLE CATEGORIES PAGE ACQUISITION OF REAL PROPERTY 1 3 DISPOSITION 1 6 PUBLIC FACILITIES AND IMPROVEMENTS 1 7 PRIVATELY-OWNED UTILITIES 1 11 CLEARANCE 1 12 PUBLIC SERVICES 1 13 INTERIM ASSISTANCE 1 16 RELOCATION 1 18 LOSS OF RENTAL INCOME 1 20 REMOVAL OF ARCHITECTURAL BARRIERS 1 21 HOUSING REHABILITATION 1 22 NEW HOUSING CONSTRUCTION 1 24 CODE ENFORCEMENT 1 26 HISTORIC PRESERVATION 1 27 COMMERCIAL OR INDUSTRIAL REHABILIATION 1 29 SPECIAL ECONOMIC DEVELOPMENT 1 30 SPECIAL ACTIVITIES BY SUBRECIPIENTS 1 31 PLANNING AND CAPACITY BUILDING 1 32 PROGRAM ADMINISTRATION COSTS 1 33 OTHER ACTIVITIES 1 34

20 1-3 ACQUISITION OF REAL PROPERTY Eligible Activities. CDBG funds may be used to acquire real property in whole or in part by purchase, long-term lease, donation, or otherwise, as follows: CDBG funds: may be used by The grantee, Any other public agency, A private nonprofit entity, To acquire real property for any purpose which meets a national objective of the CDBG program. This is subject only to the limitations on political activities [see s (a)(3)] and assisting buildings for the general conduct of government [see s (a)(1) and pg. 1-8 of this Guide]. References: s (a) and s (a). In addition, CDBG funds may be provided to private individuals and private for-profit entities to acquire real property in the following situations: CDBG funds may be provided to private individuals and private for-profit entities to acquire property to be rehabilitated, if the property is then rehabilitated and used or sold for residential purposes which meet a national objective of the CDBG program. Reference: s (b)(i). Private for-profit entities may use CDBG funds to acquire real property when the acquisition or the activity of which it is a part meets a national objective of the CDBG program and is determined by the grantees to be necessary or appropriate to carry out an economic development project. See pg for more information on the necessary or appropriate determination. References: s (b) Example: The real property acquired may be: Land Air Rights Easements Water Rights Right-of Ways Buildings and other real property improvements Other interests in the real property

21 Real property acquisition does not include: 1-.4 The costs of moveable equipment, furnishings or machinery. A land-write-down in which land is purchased at one price and then sold to the same entity at a lower price. This is not an eligible activity since it does not constitute a bona fide acquisition. Acquiring newly-constructed housing or acquiring an interest in the construction of new housing, unless such housing is constructed under one of the limited circumstances described on page Compliance with National Objectives Acquisition of real property must always be viewed in terms of the use of the property after acquisition for the purpose of evaluating compliance with the CDBG national objectives. A preliminary determination of compliance may be based on the planned use. A final determination must be based on the actual use of the property, excluding any short-term temporary use. Where the acquisition is for the purpose of clearance which will eliminate specific conditions of blight or physical decay, the clearance activity may be considered the actual use of the property. However, any subsequent use or disposition of the cleared property must be treated as a change of use under s Acquisition of real property may qualify as meeting a national objective in any of the ways shown in the charts on the pages following Additional Considerations. Additional Considerations In order to be considered acquisition, a permanent interest in the property must be obtained. Long-term leases only qualify as acquisition if they are for 15 years or more. If property acquired with CDBG funds is subsequently sold, the sale must be at fair market value unless the property will be used for an activity which means a CDBG national objective. Sale proceeds would be program income. Acquisition of real property by the grantee or other State agencies for a CDBG assisted activity is subject to the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of Temporary easements, acquisition from another public agency, and voluntary offers in response to a public solicitation are exempt from Uniform Act requirements. Reference: s

22 1-5 ACQUISITION Objective Qualifies If Example Additional L/M Area Benefit The property will be used for an activity the benefits of which are available to all the residents in a particular area, and at least 51% of those residents (or less if the exception criteria are applicable area L/M income persons. Buying land on which a neighborhood park will serve a L/M income neighborhood. For more information, see page 2-3 L/M Limited Clientele L/M Housing The property will be used for an activity the benefits of which are limited to a specific group of people, at least 51% of whom are L/M income persons. The property will be used for housing occupied or to be occupied by L/M income persons Rental units for L/M income persons must be occupied at affordable rents Buying a building to be converted into a shelter for the homeless. Buying an apartment house to provide or maintain units with affordable rents for L/M income persons, provided at least 51% of the units are or will be occupied by L/M persons. For more information, see page 2-5. For more information, see page 2-7. L/M Jobs The acquisition is part of an activity that will create or retain permanent jobs at least 51% of which are for L/M income persons. Providing CDBG funds to a private for-profit business to acquire land for a plant expansion if at least 51% of the new permanent jobs will be for L/M income persons For more information, see page 2-9. Slum or Blighted Area The real property is in a designated slum/blight area and the property will be used in a manner which addresses one or more of the conditions which contributed to the deterioration of the area. Using CDBG funds to acquire one or more deteriorated buildings for rehabilitation or demolition. For more information, see page 2-17.

23 1-6 DISPOSITION Eligible Activities. CDBG funds may be used to pay costs incidental to disposing of real property acquired with CDBG funds, provided the property with be used to meet a national objective of the CDBG program. The property may be disposed of through: Sale, Lease, Donation, Or otherwise. CDBG funds may also be used to pay reasonable costs of temporarily managing such property (or property acquired under urban renewal) until final disposition of the property is made. Reference: s (b). Example: Disposition costs include fees paid for: Appraisals, Surveys, Marketing, Legal Services, Financial Services, Transfer Taxes, and other costs involved in the transfer of ownership of property.

24 PUBLIC FACILITIES AND IMPROVEMENTS 1-7 Eligible Activities. CDBG funds may be used by the grantee or other public or private nonprivate entity for the: Acquisition, Construction, Reconstruction, Rehabilitation, or Installation of public improvements or facilities (except for buildings for the general conduct of government), provided such improvements or facilities meet a national objective of the CDBG program. References: s (c). Example: Public facilities and improvements include, but are not limited to: Shelters for the homeless Water and sewer facilities Flood and drainage improvements Fire protection facilities/equipment Community, senior and health centers Parking, streets, curbs, gutters and sidewalks, parks and playgrounds Public facilities and improvements do not include: Costs of operating or maintaining public facilities/improvements Assisting buildings for the general conduct of government. See s (a)(1) page 1-8 for additional information Costs of purchasing construction equipment see s (b)(1)(i) Costs of furnishings and other personal property except firefighting see s (b)(1)(ii) equipment New construction of public housing, except as provided in: s (b)(3) s (b)(3) Compliance with the National Objectives see s (b)(2) Public facilities and improvements may qualify as meeting a national objective of the CDBG program in any of the ways shown in the charts on the pages following Additional Considerations.

25 Additional Considerations 1-8 Title to public facilities: Non-profit entities may acquire title to public facilities such as a senior center, centers for the handicapped and neighborhood facilities. When such facilities are owned by non-profit entities they must be open for use by the general public during all normal hours of operation. Reference: s (c). Facilities containing both eligible and ineligible uses: If a public facility contains both eligible and ineligible uses, s (b)(1) of the regulations should be consulted for special qualifying criteria for the eligible portion of the facility. Fees for use of facilities: Reasonable fees may be charged for the use of the facilities assisted with CDBG funds, but charges, such as excessive membership fees, which will have the effect of precluding L/M income persons from using the facilities, are not permitted. Reference: s (b)(2). Shelters are not considered new housing construction: Facilities designed for use in providing shelter for persons having special needs are considered public facilities and are not subject to the prohibition against new housing construction. Included are: Buildings for the general conduct of government : Hospitals Nursing homes Convalescent homes Battered spouse shelters Shelters for the homeless Halfway houses for drug offenders or parolees Halfway houses for runaway children Group homes for mentally challenged persons Temporary housing for disaster victims

26 As defined in the statute, this term means city halls, county administrative buildings, State capitol or office buildings or other facilities in which the legislative, judicial or general administrative affairs of government are conducted. Such buildings are ineligible for CDBG assistance. Other facilities in which the general administrative affairs of government are conducted are generally considered to mean government office buildings, but not to include buildings in which services are provided to the public. Therefore, while CDBG funds may not be used to assist a government office building, such as one containing offices for staff administering the grantee s CDBG program, CDBG funds may be used to assist a fire station, police station, or jail, provided such assistance meets a national objective of the program. CDBG funds may also be used to assist mini-city halls located in L/M areas.

27 1-9 Special Assessments: A special assessment is the recovery of the capital costs of a public improvement, such as streets, water or sewer line, curbs and gutters, though: a) a fee or charge levied or filled as a lien against a parcel of real estate as a direct result of benefit derived from the installation of a public improvement; b) a one-time charge made as a condition of access to the public improvement. Where CDBG funds are used to pay all or part of the cost of a public improvement, the rules described in Appendix C apply if special assessments are used to recover capital costs. Because special assessments are a technique for funding public improvements, the use of CDBG funds to pay special assessments for a public improvement not initially assisted with CDBG funds constitutes CDBG assistance to the public improvement. Therefore, all the rules applicable to a CDBG-assisted public improvement apply if CDBG funds are used to pay special assessments for that improvement. PUBLIC FACILITIES AND IMPROVEMENTS Objective Qualifies If Example Additional L/M Area Benefit L/M Limited Clientele The public facility or improvement will be used for a purpose the benefits of which are available to all the residents in a particular area, and at least 51% of those criteria are applicable) are L/M income persons. The public facility or improvement will be used for a purpose the benefits of which are limited to a specific group of people (i.e. senior citizens or the homeless) at least 51% of whom are L/M Income Persons Water and sewer facilities, streets, curbs, gutters, side-walks, parks, play-grounds, fire protection and equipment, flood and drainage improvements and multipurpose neighborhood centers. Senior centers, day care centers, shelters for the homeless and centers for the handicapped. For more information, see page 2-3. For more information, see page 2-5.

28 Objective Qualifies If Example Additional L/M Housing L/M Jobs The public facility or improvement assists in the provision of housing to be occupied by L/M income persons. There is a clear link between the activity and the creation of retention of permanent jobs at least 51% of which are for L/M income persons. There should be a written agreement with the benefiting business(es), before the work begins, covering: Why the facility/improvement is essential for creating or retaining permanent jobs; The number and types of jobs to be created and/or retained; and, Which of those jobs are for L/M income persons? Site improvements on publicly owned property to be used for new housing to be occupied by L/M income persons. If the new housing is to be built by a private developer, the site improvements must be made before the publicly- owned property is conveyed to the public. Rebuilding a public road adjacent to a factory to allow larger and heavier trucks access to the facility if it is essential to plant expansion and the creation of permanent jobs for L/M persons. For more information, see page 2-7 For more information, see page Slum or Blighted Area The public facility or improvements are located in a designated slum or blighted area and are designed to address one or more conditions which contributed to the deterioration of the area. Reconstruction or For more Rehabilitation of deteriorated information, public improvements in see page 2-17 the area. Whenever there is substantial evidence to show that the expansion and the creation of jobs were not the primary reasons for undertaking the public improvement, use of CDBG funds for the activity would be subject to challenge. If the public facility or improvements also serves a residential area, then the criteria described under L/M Area Benefit on page 2-3 must be met in order for the activity to be considered to benefit L/M income persons.

29 1-11 PRIVATELY-OWNED UTILITIES Eligible Activities. The grantee, or other public agencies, and private non-profit entities may use CDBG funds to: Acquire, Reconstruct, Rehabilitate, or Install The distribution lines and facilities of privately-owned utilities, provided such activity meets a national objective of the CDBG program. Reference: s (1) Example: A grantee could use CDBG funds to: Pay the costs of placing new, underground existing power lines and telephone lines owned by private utilities provided that action meets a national objective. The grantee could install water lines to be owned and operated by a private utility, again provided that action meets a national objective. Compliance with National Objectives Privately-owned utilities may qualify as meeting a national objective of the CDBG program in the same ways as are applicable to Public Facilities and Improvements. See page Additional Considerations There are no additional considerations under this activity.

30 1-12 CLEARANCE Eligible Activities. CDBG funds may be used for: Clearance, Demolition, Removal of building and improvements, or Movement of structures to other sites Provided such activities meet a national objective of the CDBG program. Demolition of HUD-assisted housing units may be undertaken only with the prior approval of HUD. Compliance with National Objectives Clearance activities may qualify as meeting a national objective of the CDBG program in the ways depicted in the charts on the following pages. Additional Considerations There are no additional considerations under this activity.

31 1-13 PUBLIC SERVICES Eligible Activities. CDBG funds may be used to provide public services (including labor, supplies and materials), provided the public services meet a national objective of the CDBG program and provided that each of the following criteria is met: The public service must be either: A new service or A quantifiable increase in the level of a service above that which has been provided by or on behalf of the unit of general local government (through funds raised by such unit, or received by such unit from the State in which it is located) during the 12 months prior to submission of the grantee s final statement. (This requirement is intended to prevent the substitution of CDBG funds for recent support of public services by the grantee using local or State government funds.) Exception: An exception may be made if HUD determines that the decrease in the level of services was the result of events not within the control of the unit of general local government. Reference: s (e)(1). The amount of CDBG funds obligated within a program year to support public service activities must not exceed 15% of the total grant awarded to the grantee for that year, except under the circumstances described in the next paragraph. A description of how to calculate the Public Services CAP is located on page A grantee may exceed the 15% CAP only if the grantee obligated more than 15% of its FY 1982 or 1983 grant for public service activities during the 1982 or 1983 program year, respectively. This exception only applies to those grantees that received authority from HUD to exceed the 10% CAP on public services for their 1982 or 1983 program year and legally obligated in excess of 15% for public services that program year. During each program year thereafter, such grantees may obligate either the amount or percentage obligate for public services during the FY 1982 or 1983 program year, whichever is greater. Reference: s (e). 1-14