[Federal Register Volume 59, Number 102 (Friday, May 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13104]
[[Page Unknown]]
[Federal Register: May 27, 1994]
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Part V
Department of Housing and Urban Development
_______________________________________________________________________
Funding Availability for the HUD-Administered Small Cities Community
Development Block Grant (CDBG) Program, Fiscal Year 1994; Notice
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Community Planning and
Development
[Docket No. N-94-3766; FR 3723-N-01]
Funding Availability for the HUD-Administered Small Cities
Community Development Block Grant (CDBG) Program--Fiscal Year 1994
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Notice of Funding Availability (NOFA) for Fiscal Year (FY)
1994.
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SUMMARY: This Notice of Funding Availability (NOFA) announces the
availability of $50,616,000 in FY 1994 funding for the HUD-administered
Small Cities Program in New York State under the Community Development
Block Grant (CDBG) Program. The NOFA contains information concerning
the deadline for filing grant applications; eligibility of applicants;
available amounts; selection criteria; and the application process,
including how to apply for funding and how selections will be made.
DATES: Applications are due by July 26, 1994. Application kits may be
obtained from and must be submitted to either HUD's New York or Buffalo
Office. Applications, if mailed, must be postmarked no later than
midnight on July 26, 1994. If an application is hand-delivered to the
New York or the Buffalo Office, the application must be delivered to
the appropriate office by no later than 4 p.m. on the deadline date.
Application kits will be made available by a date that affords
applicants no fewer than 30 days to respond to this NOFA. For further
information on obtaining and submitting applications, please see
Section II of this NOFA.
The above-stated application deadline is firm as to date and hour.
In the interest of fairness to all competing applicants, the Department
will treat as ineligible for consideration any application that is not
received by 4 p.m. on, or postmarked by, July 26, 1994. Applicants
should take this procedure into account and make early submission of
their materials to avoid any risk of loss of eligibility brought about
by unanticipated delays or other delivery-related problems.
FOR FURTHER INFORMATION CONTACT: Stephen Rhodeside, State and Small
Cities Division, Office of Community Planning and Development,
Department of Housing and Urban Development, room 7184, 451 Seventh
Street SW., Washington, DC 20410. Telephone (202) 708-1322 (voice) or
(202) 708-2565 (TDD). (These are not toll-free numbers.)
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act Statement
The information collection requirements related to this CDBG
program have been approved by the Office of Management and Budget (OMB)
and have been assigned OMB approval number 2506-0020.
Contents
I. Purpose and Substantive Description
A. Authority and Background
1. Authority
2. Background
3. Statutory Changes
a. Principal Benefit Certification
b. Program Income
c. Microenterprises and Small Business Development
d. Lump Sum Drawdowns
e. Eligible Activities
(1) Changes Affecting Existing Categories
(a) Assistance to For-Profit Businesses
(b) Direct Homeownership Assistance
(c) Code Enforcement
(d) Loans to Subrecipients
(e) Public Service Cap
(f) Neighborhood-Based Nonprofit Organizations
(2) New Categories of Eligibility
(a) Nonprofit Capacity Building
(b) Institutions of Higher Education
(c) Acquisition by Tax Foreclosure
(d) Microenterprises
(e) Housing Services
(f) Lead-Based Paint
(3) Changes Concerning National Objectives
(a) Low/Mod Jobs Presumption
f. Housing Strategies
g. Section 3
4. Accountability in the Provision of HUD Assistance
a. HUD Responsibilities
(1) Documentation and Public Access
(2) Disclosures
b. Units of Local Government Responsibilities
(1) Disclosures
(2) Documentation and Public Access
(3) Disclosures
B. Allocation Amounts
1. Total Available Funding and Allocations
a. Buffalo Office
b. New York Office
2. Distribution of Funds Between Single Purpose and Comprehensive
Grants
3. Imminent Threats
C. Eligibility
1. Eligible Applicants
2. Previous Grantees
3. Eligible Activities and National Objectives
4. Environmental Review Requirements
D. Types of Grants
1. Comprehensive Grants
a. General
b. Funding Requirements
2. Single Purpose Grants
a. General
b. Funding Requirements
c. Projects with Multiple Activities
d. Applications with Multiple Projects
3. Final Selection
E. Selection Criteria/Ranking Factors
1. General
2. Performance Evaluation
a. Community Development Activities
b. Compliance with Applicable Laws and Regulations
c. Performance Assessment Reports
3. Four Factor Rating
a. Need--Absolute Number of Persons in Poverty
b. Need--Percent of Persons in Poverty
c. Program Impact--General
(1) Program Impact--Single Purpose Grants
(a) Program Impact--Single Purpose--Housing
(i) Housing Rehabilitation
(ii) Creation of New Housing
(iii) Direct Homeownership Assistance
(b) Program Impact--Single Purpose--Public Facilities Affecting
the Public Health and Safety
(c) Program Impact--Single Purpose--Economic Development
(i) The Appropriate Determination
(ii) CDBG Assistance Must Minimize Business and Job Displacement
(iii) Section 105(a)(17) requirements
(iv) National Objectives
(v) Application Requirements
(vi) Review Criteria
(vii) Scoring
(2) Program Impact--Comprehensive Program Grants
(a) Criterion 1
(b) Criterion 2
(c) Criterion 3
(d) Criterion 4
(e) Criterion 5
(f) Criterion 6
(g) Criterion 7
(h) Criterion 8
(i) Criterion 9
(j) Criterion 10
d. Fair Housing and Equal Opportunity Evaluation
(1) Housing Achievements
(a) Provision of Assisted Housing
(b) Implementation of HUD-Approved New Horizons Fair Housing
Assistance Project or a Fair Housing Strategy Equivalent in Scope to
a New Horizons Project
(2) Entrepreneurial Efforts and Local Equal Opportunity
Performance
(a) Minority Contracting
(b) Equal Opportunity Employment
II. Application and Funding Award Process
A. Obtaining Applications
B. Submitting Applications
C. The Application
D. Funding Award Process
III. Technical Assistance
IV. Checklist of Application Submission Requirements
V. Corrections to Deficient Applications
VI. Other Matters
I. Purpose and Substantive Description
A. Authority and Background
1. Authority
Title I, Housing and Community Development Act of 1974 (42 U.S.C.
5301-5320); 24 CFR part 570, subpart F.
2. Background
Title I of the Housing and Community Development Act of 1974
authorizes the Community Development Block Grant (CDBG) Program.
Section 106 of Title I permits the States to elect to assume the
administrative responsibility for the CDBG Program for nonentitled
areas within their jurisdiction. Section 106 provides that HUD will
administer the CDBG Program for nonentitled areas within any State that
does not elect to assume the administrative responsibility for the
program. Subpart F of 24 CFR part 570 sets out the requirements for
HUD's administration of the CDBG Program in nonentitled areas (Small
Cities Program). This NOFA supplements subpart F of 24 CFR part 570,
which sets out the requirements applicable to the CDBG Program in
nonentitled areas.
In accordance with 24 CFR 570.420(e) and 570.420(h)(3), and with
the requirements of section 102 of the Housing and Urban Development
Reform Act of 1989 (HUD Reform Act), HUD is issuing this NOFA for New
York State's Small Cities Program for Fiscal Year (FY) 1994 to announce
the allocation of funds for Single Purpose and Comprehensive grants,
and to establish the deadline for filing grant applications. The NOFA
explains how HUD will apply the regulatory threshold requirements for
funding eligibility, and the selection criteria for rating and scoring
applications for Comprehensive grants and for scoring projects in
applications for Single Purpose grants.
Section I.A.3 of this NOFA provides a description of certain
statutory amendments that apply to the HUD-Administered Small Cities
Program, even though conforming regulations have not yet been adopted.
The statutory amendments listed in Section I.A.3 require little or no
regulatory elaboration. Conforming amendments will be made to 24 CFR
part 570, subpart F in future rulemaking. Other information about the
Small Cities Program will be provided in the application kit, which
will be made available to applicants by HUD's New York and Buffalo
Offices.
3. Statutory Changes
Both the National Affordable Housing Act (Pub. L. 101-625, approved
November 28, 1990) (NAHA) and the Housing and Community Development Act
of 1992 (Pub. L. 102-550, approved October 28, 1992) (the 1992 Act)
amended Title I of the Housing and Community Development Act of 1974
(the HCD Act). Various amendments made by the two recent statutes are
applicable, as described below, to the funds made available under this
NOFA.
a. Principal Benefit Certification. NAHA amended section 101(c) of
the HCD Act to require that at least 70 percent of the CDBG assistance
provided over a specified period must be used for activities that
principally benefit low- and moderate-income persons. Applicants must
certify that CDBG assistance will be used as required by the amended
section 101(c). The principal benefit certification has been revised to
incorporate this change from 60 percent to 70 percent.
b. Program Income. In determining the applicability of CDBG
requirements to the use of program income, section 804 of the 1992 Act
removes any consideration of whether the grantee is still participating
in the CDBG program. This means that program income generated from
projects funded in FY 1993 and thereafter will always be subject to all
of the CDBG requirements.
c. Microenterprise and Small Business Development. Section 807(c)
of the 1992 Act defines a ``small business'' as one that meets the
criteria set forth in section 3(a) of the Small Business Act (15 U.S.C.
632(a)), and defines a ``microenterprise'' as a commercial enterprise
having five or fewer employees, one or more of whom own the enterprise.
Additionally, section 807(c) of the 1992 Act provides that in the
provision of assistance under Sec. 570.203(b) to for-profit
microenterprises and small businesses, HUD will not consider the use of
CDBG funds for training, technical assistance, and other support costs
provided to such entities to be planning or administrative costs.
(Section 807(c) also directs HUD not to consider CDBG funds as
being used for a planning or administrative activity when the funds are
used to pay costs to develop the capacity of the grantee (or a
subrecipient) to provide training, technical assistance or other
support services to small businesses or microenterprises.
Consequently--since these activities are not to be considered as
planning or administrative activities--they are subject to compliance
with the national objective requirements.)
d. Lump Sum Drawdowns. The use of lump sum drawdowns for
residential rehabilitation has been re-authorized for CDBG funds
appropriated after Fiscal Year 1992.
e. Eligible Activities--(1) Changes Affecting Existing Categories--
(a) Assistance to For-Profit Businesses. Section 806(b) of the 1992 Act
amends section 105(a) of the HCD Act so that CDBG assistance provided
to for-profit businesses is not limited to activities for which no
other forms of assistance are available, or to activities that could
not be accomplished, but for that assistance.
(b) Direct Homeownership Assistance. NAHA amended section 105(a) of
the HCD Act to provide that CDBG funds can be used to provide direct
assistance to facilitate and expand homeownership among persons of low-
and moderate-income. Under this provision, CDBG funds may be used to:
subsidize interest rates and mortgage principal amounts for low- and
moderate-income homebuyers; finance the acquisition by low- and
moderate-income homebuyers of housing that is occupied by the
homebuyers; acquire guarantees for mortgage financing obtained by low-
and moderate-income homebuyers from private lenders (except that
assistance under Title I of the HCD Act may not be used by recipients
or subrecipients to guarantee mortgage financing directly); provide up
to 50 percent of the downpayment required from low- and moderate-income
buyers; and pay reasonable closing costs normally associated with the
purchase of a home incurred by a low- and moderate-income homebuyer.
While this provision was set to expire on October 1, 1993, it has been
extended to October 1, 1994 by section 807(b) of the 1992 Act. Under
the terms of this provision, the locality must commit funds to a
specific homeowner prior to October 1, 1994. It is extremely likely
that this provision will be extended until October 1, 1995.
Applications will be rated assuming that the extension will be granted.
(c) Code Enforcement. Section 807(e) of the 1992 Act adds ``private
improvements or services'' undertaken in an area to the list of
activities that may be considered, together with code enforcement, in
determining whether CDBG funds may be used to pay for the code
enforcement in an area.
(d) Loans to Subrecipients. Section 807(d) of the 1992 Act amends
section 105(a)(14) of the HCD Act to authorize the use of CDBG
assistance for activities in the form of loans--both interim and long-
term--as well as grants.
(e) Public Service Cap. NAHA amended section 105(a)(8) of the HCD
Act by placing the 15 percent cap for public services on each State's
total nonentitlement CDBG allocation, plus 15 percent of program income
anticipated to be received in the fiscal year. (Previously, the 15
percent cap for public services was applied to each recipient's grant.)
As a result of this provision, HUD may award a grant to a recipient for
public service activities with 100 percent of the funds spent for
public service activities. However, any application requesting funds
for public service activities must be ratable under one of the existing
Single Purpose or the Comprehensive grant categories. HUD will apply
the 15 percent statewide cap to public service activities by funding
public service activities in the highest-rated applications until the
cap is reached.
(f) Neighborhood-Based Nonprofit Organizations. Section 807(f) of
the 1992 Act amends section 105(a)(15) of the HCD Act to add nonprofit
organizations serving the development needs of communities in
nonentitlement areas as entities eligible to carry out CDBG activities.
(2) New Categories of Eligible Activities--(a) Nonprofit Capacity
Building. Section 807(a)(4) makes eligible the provision of technical
assistance to public or nonprofit entities to increase the capacity of
these entities to carry out eligible neighborhood revitalization or
economic development activities. Section 807(a)(4) makes clear,
however, that the use of funds for technical assistance is not to be
considered as a planning or administrative cost of the program. Before
the amendment, the use of CDBG funds for nonprofit capacity building
was an eligible activity only under Sec. 570.205, and therefore was
subject to the cap on planning and administration set out at
Sec. 570.200(g). While nonprofit capacity building is now eligible
under the new provision and is not subject to a percentage limitation,
it should be noted that any such use of funds under the new authority
must be shown to meet one of the national objectives. (This may be
difficult in some cases, since all activities carried out by the
nonprofit using the added capacity will need to be considered for that
purpose.)
(b) Institutions of Higher Education. Section 807(a)(4) of the 1992
Act makes it possible for a grantee to provide CDBG funds to
institutions of higher education to carry out activities otherwise
eligible for CDBG assistance, provided that it can be determined that
the institution has demonstrated a capability to carry out such
activities.
(c) Acquisition by Tax Foreclosure. Section 807(a)(4) of the 1992
Act makes eligible the use of CDBG funds to make essential repairs and
to pay operating expenses necessary to maintain the habitability of
housing units acquired through tax foreclosure proceedings in order to
prevent abandonment and deterioration of housing in primarily low- and
moderate-income neighborhoods.
(d) Microenterprises. Section 807(a)(4) of the 1992 Act establishes
a new category of eligibility under which CDBG funds may be used to
provide assistance to public and private organizations, agencies, and
other entities (including nonprofit and for-profit entities) to enable
these entities to facilitate economic development by:
Providing credit (including providing direct loans and loan
guarantees, establishing revolving loan funds, and facilitating peer
lending programs) for the establishment, stabilization, and expansion
of microenterprises;
Providing technical assistance, advice, and business support
services (including assistance, advice, and support relating to
developing business plans, securing funding, conducting marketing, and
otherwise engaging in microenterprise activities) to owners of
microenterprises and persons developing microenterprises; and
Providing general support (such as peer support programs and
counseling) to the owners of microenterprises and to persons developing
microenterprises.
(e) Housing Services. Section 807(a)(4) of the 1992 Act establishes
a new category of eligibility for ``housing services''. Housing
services include housing counseling, energy auditing, preparation of
work specifications, loan processing, inspections, tenant selection,
management of tenant-based rental assistance, and other services
related to assisting owners, tenants, contractors, and other entities,
participating or seeking to participate in housing activities
authorized under the CDBG program or the HOME program. Activities that
are carried out under this provision are to be subject to the 20
percent limitation on administrative expenses.
It is important to note that these activities are currently
eligible in the CDBG program when carried out in conjunction with
rehabilitation (see 24 CFR 570.202(b)(9)), and therefore not subject to
the administrative cap on expenditures.
(f) Lead-Based Paint Hazards. Section 1012 of the 1992 Act amends
section 105(a) by stating that CDBG funds may be used for lead-based
paint hazard evaluation and reduction, as defined in section 1004 of
the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42
U.S.C. 4851). It should be noted that Sec. 570.202(a)(iv) currently
authorizes inspection and abatement of lead-based paint in conjunction
with CDBG-assisted rehabilitation. Additionally, Sec. 570.205
authorizes evaluation of lead-based paint hazards within the
jurisdiction generally. Until the regulations are modified to
incorporate this new provision, grantees may use the new authority to
fund lead-based paint inspection of houses whether or not
rehabilitation of the houses will be CDBG-funded. The new authority may
also be used to fund large scale evaluation of lead based-paint hazards
in the community (assuming that it is an approved activity in the Small
Cities application), outside of the 20 percent limitation on planning
and administration cost, if the grantee can demonstrate that the
evaluation addresses a CDBG national objective.
(3) Changes concerning national objectives--(a) Low/mod jobs
presumption. Section 806(e) of the 1992 Act amends section 105(c) of
the HCD Act by adding a new paragraph (4) which states that, for
purposes of determining whether an activity involves the employment of
persons the majority of whom are low- and moderate-income persons, a
person may be presumed to be a low- and moderate-income person in
either of the following circumstances:
If the employee resides in, or the assisted activity through
which he or she is employed, is located in a census tract that meets
the Federal enterprise zone eligibility criteria; or
The employee resides in a census tract where not less than 70
percent of the residents are low- and moderate-income persons.
The provision of new paragraph (4) concerning the percentage of low-
and moderate-income persons residing in a census tract was effective
upon enactment. However, because existing HUD regulations do not
clearly apply enterprise zone criteria to census tracts, the portion of
new paragraph (4) concerning census tracts that meet the Federal
enterprise zone eligibility criteria will not become effective until
regulations are established identifying the specific criteria that must
be met.
f. Housing Strategies. Any applicant which plans to undertake a
housing activity with Fiscal Year 1994 funds under the HUD-administered
Small Cities Program must prepare and submit a comprehensive housing
affordability strategy (CHAS) to be eligible to apply for such
assistance. In order to receive funding if the Small Cities application
is approved, the housing strategy must be approved by HUD. Further, any
Small Cities application for which a housing strategy is required must
include a certification that the application is consistent with the
housing strategy.
Current CHAS regulations were published in the Federal Register on
September 1, 1992, at 57 FR 40038, as amended, in part, on March 12,
1993 at 58 FR 13686. These regulations are codified in 24 CFR part 91.
Applicants under this NOFA are permitted to use an abbreviated housing
strategy, as set forth in Sec. 91.25 of the CHAS regulations.
Applicants are advised to begin preparation of the abbreviated strategy
at the earliest possible time in order to have sufficient time to
fulfill the applicable citizen participation requirements, which
provide that the strategy must be available to the public for at least
thirty days before its submission to HUD.
If possible, applicants should endeavor to submit the abbreviated
strategy in advance of the Small Cities application due date. The
latest time at which the abbreviated strategy will be accepted by HUD
for the HUD-administered Small Cities Program in New York will be the
application due date for the Small Cities application. Failure to
submit the abbreviated strategy by the due date is not a curable
technical deficiency. Questions regarding the housing strategies should
be directed to the appropriate HUD field office.
Complete Small Cities applications for which the abbreviated
strategy has been submitted but not yet approved will still be rated
and ranked with the other applications; if determined to be fundable,
those applications will receive a conditional approval subject to
approval of the abbreviated strategy. However, such an approval will be
rescinded if the abbreviated strategy has not been approved by HUD
within 60 days from the date that the conditional approval has been
announced. In such event the funding will be awarded to the highest
rated fundable applicant that did not receive funding under this
competition.
g. Section 3. Section 3 of the Housing and Urban Development Act of
1968 was amended substantially by section 915 of the Housing and
Community Development Act of 1992, and the issuance of regulations to
implement the new requirements was mandated. The following policy was
set forth in the statute:
``It is * * * the purpose of this section to ensure that the
employment and other economic opportunities generated by Federal
financial assistance for housing and community development programs
shall, to the greatest extent feasible, be directed toward low- and
very low-income persons * * * ''
HUD published a proposed rule October 8, 1993 (24 CFR part 135)
with a public comment period extended to December 8, 1993. Upon
publication of the interim rule, requirements (including reporting
requirements) relative to section 3 (for the purpose of determining the
effectiveness of section 3) will be applicable to the HUD-administered
Small Cities Program. At the time of publication of the interim rule,
HUD will provide further information and instructions to applicants
concerning the requirements of section 3.
4. Accountability in the Provision of HUD Assistance: Documentation
and Public Access Requirements; Applicant/Recipient Disclosures. HUD
has promulgated a final rule to implement section 102 of the Department
of Housing and Urban Development Reform Act of 1989 (HUD Reform Act).
The final rule is codified at 24 CFR part 12. Section 102 contains a
number of provisions that are designed to ensure greater accountability
and integrity in the provision of certain types of assistance
administered by HUD. (See also Section II.D. of this NOFA.) On January
16, 1992, HUD published at 57 FR 1942, additional information that gave
the public (including applicants for, and recipients of, HUD
assistance) further information on the implementation of section 102.
The documentation, public access, and applicant and recipient
disclosure requirements of section 102 are applicable to assistance
awarded under this NOFA as follows:
a. HUD responsibilities--(1) Documentation and public access. HUD
will ensure that documentation and other information regarding each
application submitted pursuant to this NOFA are sufficient to indicate
the basis upon which assistance was provided or denied. This material,
including any letters of support, will be made available for public
inspection for a five-year period beginning not less than 30 days after
the award of the assistance. Material will be made available in
accordance with the Freedom of Information Act (5 U.S.C. 552) and HUD's
implementing regulations at 24 CFR part 15. In addition, HUD will
include the recipients of assistance pursuant to this NOFA in its
quarterly Federal Register notice of all recipients of HUD assistance
awarded on a competitive basis. (See 24 CFR 12.14(a) and 12.16(b), and
the notice published in the Federal Register on January 16, 1992 (57 FR
1942), for further information on these requirements.)
(2) Disclosures. HUD will make available to the public for five
years all applicant disclosure reports (HUD Form 2880) submitted in
connection with this NOFA. Update reports (also Form 2880) will be made
available along with the applicant disclosure reports, but in no case
for a period of less than three years. All reports--both applicant
disclosures and updates--will be made available in accordance with the
Freedom of Information Act (5 U.S.C. 552) and HUD's implementing
regulations at 24 CFR part 15. (See 24 CFR subpart C, and the notice
published in the Federal Register on January 16, 1992 (57 FR 1942), for
further information on these disclosure requirements.)
b. Units of General Local Government Responsibilities. Units of
general local government awarded assistance under this NOFA are subject
to the provisions of either paragraph b(1), or paragraph (b)(2) and
(b)(3). For units of local government awarded assistance under this
NOFA which in turn make the assistance available on a non-competitive
basis for a specific project or activity to a subrecipient, paragraph
b(1) applies. For units of local government awarded assistance under
this NOFA, which in turn make the assistance available on a competitive
basis for a specific project or activity to a subrecipient, paragraphs
b(2) and (3) apply.
(1) Disclosures. The units of general local government receiving
assistance under this NOFA must make all applicant disclosure reports
available to the public for three years. Required update reports must
be made available along with the applicant disclosure reports, but in
no case for a period less than three years. Each unit of general local
government may use HUD Form 2880 to collect the disclosures, or may
develop its own form. (See 24 CFR 12 subpart C, and the notice
published in the Federal Register on January 16, 1992 (57 FR 1942) for
further information on these disclosure requirements.)
(2) Documentation and Public Access. The recipient unit of general
local government must ensure that documentation and other information
regarding each application submitted to the recipient by a subrecipient
applicant are adequate to indicate the basis upon which assistance was
provided or denied. The unit of general local government must make this
material, including any letters of support, available for public
inspection for a five-year period beginning not less than 30 days after
the award of the assistance. Unit of general local government
recipients must also notify the public of the subrecipients of the
assistance. Each recipient will develop documentation, public access,
and notification procedures for its programs. (See 24 CFR 12.14(b) and
12.16(c), and the notice published in the Federal Register on January
16, 1992 (57 FR 1942) for more information on these documentation and
public access requirements.)
(3) Disclosures. Units of general local government receiving
assistance under this NOFA must make all applicant disclosure reports
available to the public for five years. Required update reports must be
made available along with the applicant disclosure reports, but in no
case for a period less than three years. Each unit of general local
government may use HUD Form 2880 to collect the disclosures, or may
develop its own form. (See 24 CFR subpart C, and the notice published
in the Federal Register on January 16, 1992 (57 FR 1942) for further
information on these disclosure requirements.)
B. Allocation Amounts
1. Total Available Funding and Allocation
The nonentitlement CDBG funds for New York State for FY 1994 total
$50,616,000 and will be allocated as follows:
a. Buffalo Office. $44,438,000 is allocated for distribution to
eligible units of general local government within the jurisdiction of
HUD's Buffalo Office. Maximum grant amounts for units of general local
government under the jurisdiction of the Buffalo Office will be
$400,000 for Single Purpose grant applications and $900,000 for
Comprehensive grant applications, except that counties may apply for up
to $600,000 in Single Purpose funds. The maximum amount for Single
Purpose grant applications made jointly by units of general local
government will be $600,000.
b. New York Office. $6,178,000 is allocated for distribution to
eligible units of general local government within the jurisdiction of
HUD's New York Office. Maximum grant amounts for communities under the
jurisdiction of the New York Office will be $400,000 for Single Purpose
grants and $750,000 for Comprehensive grants, except that counties may
apply for up to $600,000 in Single Purpose funds. The maximum amount
for Single Purpose grant applications made jointly by units of general
local government will be $600,000.
2. Distribution of Funds Between Single Purpose and Comprehensive
Grants
Generally, 85 percent of the funds allocated separately to the New
York and Buffalo offices shall be for Single Purpose grants with the
remaining 15 percent to be reserved for Comprehensive grants. However,
in order to assure a competitive distribution of funds, each HUD office
has the option to revise the division of funds between Single Purpose
and Comprehensive grants to as low as 75 percent for Single Purpose and
up to 25 percent for Comprehensive grants. Applicants requesting more
that $600,000 in Comprehensive funding will be expected to provide
clear and convincing evidence that the proposed activities will
effectively address and correct conditions affecting large segments of
the low- and moderate-income community, and that the grantee has the
capability to expend the funds in a timely fashion. If this is not
provided, the field office may reduce the grant amount.
3. Imminent Threats
The criteria for grants to alleviate or remove imminent threats to
health or safety that require an immediate solution are described at
Sec. 570.432. All imminent threat projects must meet the national
objective of benefitting low- and moderate-income persons. For FY 1994,
$6,665,700 is being set aside in the Buffalo Office, and $926,700 is
being set aside in the New York Office for imminent threat projects.
These funds will be available in each office until the office completes
the rating and ranking process for funds distributed under this NOFA.
C. Eligibility
1. Eligible Applicants
Eligible applicants are units of general local government in New
York State, excluding: metropolitan cities, urban counties, units of
government which are participating in urban counties or metropolitan
cities even if only part of the participating unit of government is
located in the urban county or metropolitan city, and Indian tribes
eligible for assistance under section 106 of the HCD Act. Applications
may be submitted individually or jointly.
2. Previous Grantees
Eligible applicants, which previously have been awarded Small
Cities Program CDBG grants, are also subject to an evaluation of
capacity and performance. Numerical thresholds for drawdown of funds
have been established to assist HUD in evaluating a grantee's progress
in implementing its program activities. (These standards apply to all
CDBG Program grants received by the community.) An additional threshold
relates to the submission of annual Performance Assessment Reports
(PARs) which are due annually for each grant which a local government
has received. Failure to submit a PAR is not a curable technical
deficiency. Applicants generally will be determined to have performed
adequately in the area(s) where the thresholds are met. Where a
threshold has not been met, HUD will evaluate the documentation of any
mitigating factors, particularly with respect to actions taken by the
applicant to accelerate the implementation of its program activities.
3. Eligible Activities and National Objectives
Eligible activities under the Small Cities CDBG Program are those
identified in subpart C of 24 CFR part 570. Each activity must meet one
of the national objectives (i.e. benefit to low- and moderate-income
persons, elimination of slums or blighting conditions, or meeting
imminent threats to the health and safety of the community), and each
grant must meet the requirements for compliance with the primary
objective of principally benefitting low- and moderate-income persons,
as required under the provisions of Sec. 570.200(a) (2) and (3) and
Sec. 570.208, which supersede Sec. 570.420(h)(2). As described in
Section I.A.3.a. of this NOFA, the principal benefit requirement was
increased by NAHA from 60 to 70 percent. The method of calculating the
use of these funds for compliance with the 70 percent overall benefit
requirement is set forth in Sec. 570.200(a)(3) (i) through (v).
4. Environmental Review Requirement
The HUD environmental review procedures contained in 24 CFR part 58
apply to this program. Under part 58, grantees assume all of the
responsibilities for environmental review, decision-making and action
pursuant to the National Environmental Policy Act of 1969 and the other
provisions of law specified by the Secretary in 24 CFR part 58 that
would apply to the Secretary were he to undertake such projects as
Federal projects.
D. Types of Grants
1. Comprehensive Grants
a. General. Comprehensive grants are available to fund projects
which meet the following criteria:
(1) Address a substantial portion of the identified community
development needs within a defined area or areas;
(2) Involve two or more activities related to each other that will
be carried out in a coordinated manner;
(3) Have a beneficial impact within a reasonable period of time.
HUD may make an exception to the requirement that all activities
must be carried out in a defined area or areas if the applicant can
demonstrate that the comprehensive strategy is a reasonable means of
addressing identified needs.
If an application for a Comprehensive grant does not meet the
requirements of the Comprehensive Grant Program, HUD will rate the
proposal as a Single Purpose grant.
b. Funding requirements. The total amount of funds requested for a
Comprehensive grant must be within the established ceilings. Grant
ceilings for each of the administering offices are indicated in Section
I.B.1 of this NOFA. Grant funds requested must be sufficient, either by
themselves or in combination with funds from other sources, to complete
the project within a reasonable amount of time. If other sources of
funds are to be used with respect to a project, the source of those
funds must be identified and the level of commitment indicated.
2. Single Purpose Grants
a. General. Single Purpose grants are designed to address and
resolve a specific community development need. A Single Purpose grant
may consist of more than one project. A project may consist of one
activity or a set of activities. Each project must address community
development needs in one of the following problem areas:
--Housing
--Public Facilities
--Economic Development
Each project will be rated against all other projects addressing
the same problem area, according to the criteria outlined below. It
should be noted that each project within an application will be given a
separate impact rating, if each one is clearly designated by the
applicant as a separate and distinct project (i.e. separate Needs
Description, Community Development Activities, Impact Description and
Program Schedule forms have been filled out, indicating project names).
In some cases, it may be to the applicant's advantage to designate
separate projects for activities that can ``stand on their own'' in
terms of meeting the described need, especially where a particular
project would tend to weaken the impact rating of the other activities,
if they were rated as a whole, as has been the case with some economic
development and housing projects. If, however, the projects tend to
meet impact criteria to the same extent, or the weaker element is only
a small portion of the overall project, there is no discernable benefit
in designating separate projects.
b. Funding requirements. The total amount of funds requested for a
Single Purpose grant must be within the established ceilings. Grant
ceilings are discussed in Section I.B.1. of this NOFA. Grant funds
requested must be sufficient, either by themselves or in conjunction
with funds from other sources, to complete the project within a
reasonable period of time. If other sources of funds are to be used
with respect to a project, the source of those funds must be identified
and the level of commitment indicated.
c. Projects with multiple activities. If a project consists of more
than one activity, the activity that directly addresses the need must
represent at least a majority of the funds requested. Other activities
must be incidental to, and in support of the principal activity.
d. Applications with multiple projects. If an application contains
more than one project, each project will be rated separately for
program impact. Applicants should note that regardless of the number of
projects, the total grant amount cannot exceed the appropriate grant
ceilings identified in Section I.B.1. of this NOFA.
3. Final Selection
The total points received by a project for all of the selection
factors are added, and the project is ranked against all other projects
from all applications, regardless of the problem areas in which the
projects were rated. The highest ranked projects will be funded to the
extent funds are available. Applicants will receive a single grant in
the amount of the project or projects applied for which were ranked
high enough to be funded. In the case of ties at the funding line, HUD
will use the following criteria in order to break ties:
--The project receiving the highest program impact rating will be
funded;
--If tied projects have the same program impact rating, the project
having the highest combined score on the needs factors will be funded;
--If tied projects have the same program impact ratings and equal needs
factor scores, the project having the highest score on the percent of
persons in poverty needs factor will be funded; and
--If tied projects have the same program impact ratings, equal needs
factor scores, and an equal percent of persons in poverty needs factor
score, the application having the most outstanding performance in fair
housing and equal opportunity will be funded.
As soon as possible after the rating and ranking process has been
completed, HUD will notify all applicants regarding their rating scores
and funding status. Thereafter, applicants may contact HUD to discuss
scores or any aspects of the selection process.
E. Selection Criteria/Ranking Factors
1. General
Complete applications received from eligible applicants by the
application due date are rated and scored by HUD. Regardless of the
type of grant sought (Single Purpose or Comprehensive), applications
are rated and scored against four factors. These four factors are
discussed in more detail in subsection 3 of this Section E. Previous
grantees of Small Cities Program CDBG grants also undergo a performance
evaluation. The criteria for determining adequacy of performance are
discussed in subsection 2 of this Section E.
2. Performance Evaluation
As noted in Section C of this NOFA, previous grantees of Small
Cities Program CDBG grants are subject to an evaluation of performance
and capacity to undertake the proposed program. For purposes of making
performance evaluations, HUD will use any information available as of
the application due date. Performance also will be evaluated using
information which may be available already to HUD, including previously
submitted performance reports, site visit reports, audits, monitoring
reports and annual in-house reviews. Grantees may be requested to
submit additional information, if generally available facts raise a
question as to capacity to undertake the proposed program. No grants
will be made to an applicant that does not have the capacity to
undertake the proposed program. A performance determination will be
made by evaluation of the following areas:
a. Community Development Activities. The following thresholds for
performance in expending CDBG funds have been established for FY 1994
and pertain to all Single Purpose and Comprehensive Grants:
FY 1989 and earlier--Grants must be closed out
FY 1990--Grant funds 100% expended
FY 1991--Grant funds 75% expended
FY 1992--Grant funds 30% expended
FY 1993--Recipients must be on target with respect to the latest Small
Cities Program Schedule received by HUD.
Note: These standards will be used as benchmarks in judging
program performance, but will not be the sole basis for determining
whether the applicant is ineligible for a grant due to a lack of
capacity to carry out the proposed project or program. Any applicant
that fails to meet the percentages specified above may wish to
provide updated data to HUD, either in conjunction with the
application submission or under separate cover, but in no case will
data received by HUD after the application due date be accepted.
b. Compliance with applicable laws and regulations. An applicant
will be considered to have performed inadequately if the applicant:
(1) Has not substantially complied with the laws, regulations, and
Executive Orders applicable to the CDBG Program, including applicable
civil rights laws as may be evidenced by: an outstanding finding of
civil rights noncompliance, unless the applicant demonstrates that it
is operating in compliance with a HUD-approved compliance agreement
designed to correct the area(s) of noncompliance; an adjudication of a
civil rights violation in a civil action brought against it by a
private individual, unless the applicant demonstrates that it is
operating in compliance with a court order designed to correct the
area(s) of noncompliance; a deferral of Federal funding based upon
civil rights violations; a pending civil rights suit brought against it
by the Department of Justice; or an unresolved charge of discrimination
issued against it by the Secretary under section 810(g) of the Fair
Housing Act, as implemented by 24 CFR 103.400;
(2) Has not resolved or attempted to resolve findings made as a
result of HUD monitoring; or
(3) Has not resolved or attempted to resolve audit findings.
An applicant will be ineligible for a grant where the inadequate
performance in compliance with applicable laws and regulations
evidences a lack of capacity to carry out the proposed project or
program. An application also will not be accepted from a unit of
general local government which has an outstanding audit finding or
monetary obligation for any HUD program. Additionally, applications
will not be accepted from any entity which proposes an activity in a
unit of general local government that has an outstanding audit finding
or monetary obligation for any HUD program. The Director of the
Community Planning and Development Division of the HUD field office may
provide waivers to this prohibition, but in no instance will a waiver
be provided where funds are due HUD, unless a satisfactory arrangement
for repayment of the debt has been made.
c. Performance assessment reports. Under 24 CFR 570.507, Small
Cities CDBG grantees are required to submit Performance Assessment
Reports (PARs) annually on the date when the grant was originally
executed. For an application for FY 1994 funds to be considered for
funding, the applicant must be current in its submission of Performance
Assessment Reports. Failure to submit a PAR is not a curable technical
deficiency under Section V of this NOFA.
3. Four Factor Rating
As noted in subsections 1 and 3 of this Section E, all applications
are rated and scored against four factors. These four factors are:
--Need based on absolute number of persons in poverty;
--Need based on the percent of persons in poverty;
--Program Impact; and
--Outstanding performance in fair housing and equal opportunity.
A maximum of 615 points is possible under this system with the
maximum points for each factor being:
------------------------------------------------------------------------
Points
------------------------------------------------------------------------
Need--absolute number of persons in poverty.................... 75
Need--percent of persons in poverty............................ 75
Program Impact................................................. 400
Outstanding performance--FHEO:
Provision of fair housing choice............................. 20
Fair Housing Programs........................................ 20
Minority contracting......................................... 15
Equal opportunity employment................................. 10
--------
Total.................................................. 615
------------------------------------------------------------------------
Each of the four factors is outlined below. All points for each
factor are rounded to the nearest whole number. Applicants should note
that there is a distinct difference in the methods used to evaluate
Program Impact for Single Purpose grants versus Program Impact for
Comprehensive grants. These differences are more fully discussed below.
a. Need--Absolute number of persons in poverty. HUD uses 1990
census data to determine the absolute number of persons in poverty
residing within the applicant unit of general local government.
Comprehensive and Single Purpose grant applicants are grouped and rated
separately for this factor. Applicants which are county governments are
rated separately from all other applicants. Applicants in each group
are compared in terms of the number of persons whose incomes are below
the poverty level. Individual scores are obtained by dividing each
applicant's absolute number of persons in poverty by the greatest
number of persons in poverty of any applicant and multiplying by 75.
b. Need--Percent of persons in poverty. HUD uses 1990 census data
to determine the percent of persons in poverty residing within the
applicant unit of general local government. Comprehensive and Single
Purpose grant applicants are grouped and rated separately for this
factor. Applicants in each group are compared in terms of the
percentage of their population below the poverty level. Individual
scores are obtained by dividing each applicant's percentage of persons
in poverty by the highest percentage of persons in poverty of any
applicant and multiplying by 75.
c. Program Impact--General. In evaluating program impact, HUD will
consider:
--Extent and seriousness of the identified needs;
--Results to be achieved;
--Number of beneficiaries, given the type of program;
--Nature of the benefit;
--Additional actions that may be necessary to fully resolve the need;
--Previous coordinated actions taken by the applicant to address the
need;
--Environmental considerations;
--Whether displacement will be involved and what steps will be taken to
minimize displacement and to mitigate its adverse effects or related
hardships; and
--Where appropriate, housing site selection standards.
Assessments are done on a comparative basis and, as a result, it is
important that each applicant present information in a detailed and
uniform manner.
In addressing Program Impact criteria, applicants should adhere to
the following general guidelines for quantification. Where appropriate,
absolute and percentage figures should be used to describe the extent
of community development needs and the impact of the proposed program.
This includes, but is not limited to, appropriate units of measure
(e.g., number of housing units or structures, linear feet of pipe,
pounds per square inch, etc.), and costs per unit of measure. These
quantification guidelines apply to the description of need, the nature
of proposed activities and the extent to which the proposed program
will address the identified need.
Appropriate documentation should be provided to support the degree
of need described in the application. Basically, the sources for all
statements and conclusions relating to community needs should be
included in the application or incorporated by reference. Examples of
appropriate documentation include planning studies, letters from public
agencies, newspaper articles, photographs and survey data.
Generally, the most effective documentation is that which
specifically addresses the subject matter and has a high degree of
credibility. Applicants which intend to conduct surveys to obtain data
are advised to contact the appropriate HUD office prior to conducting
the survey for a determination as to whether the survey methodology is
statistically acceptable.
There are a number of program design factors related to feasibility
which can alter significantly the award of impact points. Accordingly,
it is imperative that applicants provide adequate documentation in
addressing these factors. Common feasibility issues include site
control, availability of other funding sources, validity of cost
estimates, and status of financial commitments as well as evidence of
the status of regulatory agency review and approval.
Past productivity and administrative performance of prior grantees
will be taken into consideration when reviewing the overall feasibility
of the program. Overall program design, administration and guidelines
are other feasibility issues that should be articulated and presented
in the application, since they are critical in assessing the
effectiveness and impact of the proposed program.
(1) Program Impact--Single Purpose Grants. Each project will be
rated against other projects addressing the same problem area, so that,
for example, housing projects only will be compared with other housing
projects, according to the criteria outlined below. It should be noted
that each project within an application will be given a separate impact
rating, if each one is clearly designated by the applicant as a
separate and distinct project (i.e. separate Needs Descriptions,
Community Development Activities, and Impact Description and Program
Schedule forms have been filled out, indicating separate project
names).
In some cases, it may be to the applicant's advantage to designate
separate projects for activities that can ``stand on their own'' in
terms of meeting the described need, especially where a particular
project would tend to weaken the impact rating of the other activities,
if they were all related as a whole, as has been the case with some
economic development projects. If, however, the projects tend to meet
the impact criteria to the same extent, or the weaker element is only a
small portion of the overall program, there is no discernable benefit
in designating separate projects.
Applicants should bear in mind that the impact of the proposed
project will be judged by persons who may not be familiar with the
particular community. Accordingly, individual projects will be rated
according to how well the application demonstrates in specific,
measurable terms, the extent to which the impact criteria are met.
General statements of need and impact alone will not be sufficient to
obtain a favorable rating.
(a) Program Impact--Single Purpose--Housing. There are three
distinct types of Single Purpose Housing projects: Housing
Rehabilitation, Creation of New Housing and Direct Homeownership
Assistance. Separate rating criteria are provided for each type of
project.
(i) Housing Rehabilitation--Needs. Each application should provide
information on the total number of units in the project area, the
number that are substandard, and the number of substandard units
occupied by low- and moderate-income households. The purpose of this
information is to establish the relative severity of housing conditions
within the designated project area compared to other housing
rehabilitation applications. The application also should describe the
date and methodology of any surveys used to obtain the information,
including an explicit and detailed definition of ``substandard''.
Surveys of housing conditions. Surveys of housing conditions serve
several purposes in evaluating applications for housing rehabilitation
activities. These include establishing the seriousness of need for such
assistance in the project area, providing a basis for estimating
overall budgetary needs, and providing an indication of the
marketability of the project.
Project design and feasibility. The application should describe the
project in sufficient detail to allow the reviewer to assess its
feasibility and its probable impact on the conditions described. It
also should describe project requirements in such a way that regulatory
and policy concerns will be addressed.
In reviewing applications from grantees with prior housing
rehabilitation projects, reasonableness of cost-per-unit, stated in the
application, will be compared against the grantee's actual past
performance. All applications should provide documentation to justify
the cost-per-unit estimates, particularly grantees where past
performance does not support the estimates in the applications.
It should be noted that HUD encourages communities to design
projects supplementing CDBG rehabilitation funds with private funds
wherever feasible and appropriate, especially in the case of rental
units and housing not occupied by lower income persons. In such cases,
the CDBG subsidy should be as low as possible, while retaining
sufficient incentive to attract local participants. On the other hand,
projects designed for low income homeowners should not require private
contributions at a level that puts the project out of reach of
potential participants.
Where the creation of new units is proposed through conversion, the
application should document the need for additional units based on
vacancy rates, waiting lists, and other pertinent information. The
proposed project clearly must support, or result in, additional units
for low- and moderate-income persons. The units may result from the
rehabilitation of currently vacant structures, conversion of non-
residential structure for residential use, or new construction projects
for which the proposed project will provide non-construction
assistance.
Where the proposed project involves the use of Federally assisted
housing, the applicant must identify and document the current
commitment status of the Federal assistance. Lack of a firm financial
commitment for assistance may adversely affect project impact.
Applicants should address issues of site control and marketability, in
addition to addressing feasibility from the standpoint of market
financing.
The impact of the proposed project will be based on the degree of
need, the number of units to be created, overall feasibility and the
nature and cost of the proposed activities.
For projects consisting of more than one activity, the activity
that directly addresses the need must represent at least the majority
of funds requested. Other activities must be incidental to and in
support of the principal activity. For example, public improvements
included in a rehabilitation project that addresses housing need must:
be a relatively small amount in terms of funds requested; clearly be in
support of the housing objective; and demonstrate a positive and direct
link to the national objective.
For incidental activities claiming benefit to low- and moderate-
income persons on an area basis, the application must document that at
least 51 percent of the residents of the service area meet the low- and
moderate-income requirement. Funds should not be requested for
activities that are not incidental to, and in support of the principal
activity.
Scoring. Individual projects often vary in the extent to which they
meet the criteria outlined above. Accordingly, it is difficult to
define precisely those combinations of characteristics which
constitute, for example, ``maximum'' versus ``substantial'' impact. Not
all projects receiving a particular rating will match all the criteria
point-by-point, in the same manner. The objective for non-target area
projects, in as much as they are sparsely populated, only should be to
assist low- and moderate-income persons. Accordingly, the following
standard will be used for rating housing rehabilitation projects:
Maximum (400 Points)
1. Severe need is shown in the project area, in terms of the
proportion of units that are substandard and the extent of disrepair in
the units.
2. The project would bring all, or almost all, of the units in the
project area up to standard.
3. There are no feasibility questions, such as availability of
other resources, marketability, or appropriateness of project design,
which would hinder the timely completion of the project as proposed.
4. Benefits a large number of persons when compared to other
housing projects.
5. Significantly supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Substantial (300 Points)
1. Serious need is shown.
2. Project would bring most of the units in the area up to
standard.
3. There are no major feasibility questions.
4. Benefits a substantial number of persons.
5. Substantially supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Moderate (200 Points)
1. Serious need is shown, but is not as well documented as in other
applications.
2. Project would bring units up to standard, but not to the same
extent as other applications.
3. There may be some minor feasibility questions.
4. Benefits a significant number of persons.
5. Moderately supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Minimal (100 Points)
1. Some need is evident, but it is not serious compared to other
applications, or is not well documented.
2. Project may bring most units up to standard, but not to same
extent as in other applications.
3. There are serious feasibility questions.
4. Benefits a small number of persons.
5. Minimally supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Insignificant (0 Points)
1. Very little need has been demonstrated.
2. Project would not rehabilitate most units.
3. There are serious feasibility questions.
4. Benefits a very small number of persons.
5. Does not support the strategic plan of a designated Empowerment
Zone or Enterprise Community.
(ii) Creation of new housing. CDBG funds may be used to support the
construction of new housing units, and, in certain circumstances, to
finance the actual cost of constructing new units. New construction may
be carried out by an eligible non-profit entity pursuant to 24 CFR
570.204, or as last resort housing. Support of new construction could
include activities such as the acquisition and/or clearance of land,
the provision of infrastructure, or the payment of certain planning
costs.
Where the creation of new units is proposed, the application should
document the need for additional units based on vacancy rates, waiting
lists, and other pertinent information. The proposed project clearly
must support, or result in, additional units for low- and moderate-
income persons. The units may result from new construction projects for
which the proposed project will provide non-construction assistance.
Where the proposed project involves the use of Federally assisted
housing, the applicant must identify and document the current
commitment status of the Federal assistance. Lack of a firm financial
commitment for assistance may adversely affect project impact.
Applicants should address issues of site control and marketability, in
addition to addressing feasibility from the standpoint of market
financing.
The impact of the proposed project will be based on the degree of
need, the number of units to be created, overall feasibility and the
nature and cost of the proposed activities.
Scoring. Individual projects often vary in the extent to which they
meet the criteria outlined above. Accordingly, it is difficult to
define precisely those combinations of characteristics which
constitute, for example, ``maximum'' versus ``substantial'' impact. Not
all projects receiving a particular rating will match all the criteria
point-by-point, in the same manner. Accordingly, the following standard
will be used for rating projects supporting new housing construction:
Maximum (400 Points)
1. Severe need for new housing affordable to low- and moderate-
income persons is shown in the project area.
2. Project would create a large number of new housing units
affordable to low- and moderate-income persons.
3. There are no feasibility questions, such as availability of
other resources, marketability, or appropriateness of project design,
which would hinder the timely completion of the project as proposed.
4. Benefits a large number of persons when compared to other new
housing projects.
5. Project would affirmatively further fair housing choice by
resulting in the spatial deconcentration of minorities throughout the
community, or would provide spatial deconcentration of low- and
moderate-income households if there are no areas of minority
concentration.
6. Significantly supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Substantial (300 Points)
1. Serious need for new units affordable to low- and moderate-
income persons is shown.
2. Project would create a substantial number of new housing units.
3. There are no major feasibility questions.
4. Benefits a substantial number of persons.
5. Project would affirmatively further fair housing choice through
significant efforts toward the spatial deconcentration of minorities
throughout the community, or would provide significant efforts toward
spatial deconcentration of low- and moderate-income households if there
are no areas of minority concentration.
6. Substantially supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Moderate (200 Points)
1. Serious need is shown, but is not as well documented as in other
applications.
2. Project would create new units but not a substantial number.
3. There may be some minor feasibility questions.
4. Benefits a significant number of persons.
5. Project would have some effect of affirmatively furthering fair
housing choice by encouraging spatial deconcentration of minorities
throughout the community, or would encourage spatial deconcentration of
low- and moderate-income households if there are no areas of minority
concentration.
6. Moderately supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Minimal (100 Points)
1. Some need is evident, but it is not serious compared to other
applications, or is not well documented.
2. Project will create a few new units but not as many as in other
applications.
3. There are serious feasibility questions.
4. Benefits a small number of persons.
5. Project would minimally affirmatively further fair housing
choice by encouraging spatial deconcentration of minorities throughout
the community, or would encourage spatial deconcentration of low- and
moderate-income households if there are no areas of minority
concentration.
6. Minimally supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Insignificant (0 Points)
1. Very little need has been demonstrated.
2. Project would not provide for new units.
3. There are serious feasibility questions.
4. Benefits a very small number of persons.
5. Project would have no effect of affirmatively furthering fair
housing choice through the spatial deconcentration of minorities
throughout the community, or would not encourage spatial
deconcentration of low- and moderate-income households if there are no
areas of minority concentration.
6. Does not support the strategic plan of a designated Empowerment
Zone or Enterprise Community.
(iii) Direct homeownership assistance. Homeownership activities are
defined as activities which would promote homeownership within the
applicant jurisdiction, focusing particularly on aiding low- and
moderate-income persons in becoming homeowners. While declining to
identify any particular type of proposed project as superior, HUD is
identifying several criteria which must be addressed within the project
design, in order for the application to receive the maximum project
impact.
Applications must include a well developed description of
homeownership needs in the applicant jurisdiction, focusing
particularly on the needs of low- and moderate-income persons. The
description also should include, if applicable, any alternative
approaches which have been considered in meeting homeownership needs.
Project feasibility must be addressed as part of the application.
The application must demonstrate that the proposed project would
make effective use of all available funds. This would include any
local, State or other Federal funds which would be utilized by the
proposed project. If other such funds are included as part of the
proposed project, the applicant must demonstrate that such funds are
committed and truly available for the project.
Any efforts which would affirmatively further fair housing, by
promoting homeownership among minorities as well as homeownership
throughout the community, must be outlined in the application.
The application must explain how the project would benefit low- and
moderate-income homebuyers, particularly focusing on first-time and
minority homebuyers. The application also should address any
homeownership counseling services, including counseling pertaining to
Federal, State, and local fair housing laws and requirements, which
would be provided to persons selected to participate in the proposed
project. Finally, the application should describe how the project would
utilize public/private partnerships to promote homeownership,
particularly in the sense that private sector financing would be
accessible, as necessary, to project participants to complement
available public sector funds, including CDBG money.
HUD will review each application which meets the threshold against
the following criteria:
Maximum (400 Points)
1. Project design is appropriate to meet demonstrated homeownership
need and alternative approaches to meeting the need are shown to have
been considered. Additionally, there are no feasibility questions
regarding the implementation and execution of the proposed project
according to the schedule.
2. The application documents serious homeownership needs in the
community and the proposed project would make effective use of
available funds.
3. The proposed project would affirmatively further fair housing by
including initiatives to reach out to potential minority homeowners and
by promoting homeownership opportunities throughout the community.
4. The proposed project would target first-time homebuyers.
5. The proposed project would provide homeownership counseling to
project participants.
6. The proposed project would complement other Federal, State or
local programs which promote homeownership.
7. The proposed project would utilize public/private partnerships
in attempting to promote homeownership, particularly in regard to
participation by local financial institutions.
8. Significantly supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Substantial (300 Points)
1. Project design demonstrates a workable approach to homeownership
assistance needs, and there are no major feasibility questions
regarding implementation of the proposed project.
2. Substantial homeownership needs are documented by the
application, and the proposed project would make effective use of
available funds.
3. The proposed project would affirmatively further fair housing by
promoting homeownership opportunities throughout the community.
4. The proposed project would encourage homeownership among first-
time homebuyers.
5. The proposed project would encourage local financial
institutions to lend to assisted homebuyers.
6. Substantially supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Moderate (200 Points)
1. The proposed project has potential to meet homeownership needs
in the community, and there are minor feasibility questions regarding
implementation.
2. Homeownership needs in the community are documented, but not as
well as in other applications.
3. The proposed project would include efforts to affirmatively
further fair housing through homeownership.
4. The proposed project would educate and inform citizens of
homeownership assistance available through the project.
5. The proposed project would not include private sector
involvement.
6. Moderately supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Minimal (100 Points)
1. There are serious feasibility questions regarding the
implementation and execution of the proposed project.
2. The proposed project would have little impact upon homeownership
needs in the community.
3. The proposed project would contribute minimally to fair housing
in the community.
4. The proposed project would marginally aid first-time homebuyers
versus all homebuyers.
5. Minimally supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Insignificant (0 Points)
1. The proposed project has major feasibility questions which would
inhibit its implementation and execution.
2. The proposed project does not address identified homeownership
needs in the community.
3. The proposed project would not actively affirmatively further
fair housing.
4. The proposed project would be of little benefit to first time
homebuyers.
5. Does not support the strategic plan of a designated Empowerment
Zone or Enterprise Community.
(b) Program impact--single purpose--public facilities affecting
public health and safety. In the case of public facility projects,
documentation of the problem by outside, third-party sources is of
primary importance. In the case of water and sewer projects,
documentation from public agencies is particularly helpful, especially
where such agencies have pinpointed the exact cause of the problem and
have recommended courses of action which would eliminate the problem.
Such supporting documentation should be as up-to-date as possible: the
older the supporting material, the more doubt arises that the need is
current and immediate. Applicants also should be sure to indicate how
the project would address public health and safety needs and
conditions. Quantification also is essential in describing needs.
Documentation from those affected should be included.
In order to show that the project is likely to impact upon the
problem, the following items should be covered:
(1) Total project costs. Total project costs should be documented
by qualified third party estimates, and be as recent as possible.
(2) Source of other funds. To the extent that CDBG funds will not
cover all costs, the source of other funds should be identified and
committed. If local funds are to be used, the applicant should show
both the willingness and the ability to provide the funds.
(3) How the project will solve the problem. The applicant should
demonstrate that the project will completely solve the problem and, if
applicable, the applicant should address whether the proposal would be
satisfactory to other State/local agencies which have jurisdiction over
the problem.
(4) Cost effectiveness of the proposal. The applicant should
address whether the proposal is the most cost effective and efficient
among the possible alternatives considered.
(5) Reasonableness of service area. The applicant should address
whether the service area claimed for the project is reasonable, in view
of the nature of the proposed project, and if not, the applicant should
address what effect a more realistic appraisal would have on overall
benefit to low- and moderate-income persons.
(6) Project impact on public health and safety; and
(7) Other applicable feasibility issues have been addressed.
Individual projects often vary in the extent to which they meet the
criteria outlined above. Therefore, it is difficult to define precisely
those combinations of characteristics which constitute, for example,
``maximum'' versus ``substantial'' impact. Not all applications
receiving a particular rating will match point-for-point all the
criteria in the same way. The following standards will be applied:
Maximum (400 Points)
1. Need is serious, current and requires prompt attention.
2. Program would resolve the problem completely, either through
funds requested or with the support of other resources already
committed.
3. No other obstacles to timely and effective implementation of the
program exist.
4. Benefits a large number of persons when compared to other public
facility projects.
5. Demonstrates that the applicant has considered and, as
appropriate, will use alternative cost effective methods or material in
the execution of the project.
6. Public health and safety concerns are fully resolved by the
project.
7. Project would significantly address serious deficiencies in
accessibility for disabled persons and/or provide a substantial
increase in the number of public facilities accessible to disabled
persons.
8. Significantly supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Substantial (300 Points)
1. Serious need is shown.
2. Program would resolve the problem completely.
3. There are no major feasibility questions.
4. Benefits a substantial number of persons.
5. There is evidence that efforts have been made to minimize
project costs through use of alternative methods and materials, as
appropriate.
6. Public health and safety concerns are substantially resolved by
the project.
7. Project would substantially address serious deficiencies in
accessibility for disabled persons and/or provide a significant
increase in the number of public facilities accessible to disabled
persons.
8. Substantially supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Moderate (200 Points)
1. Serious need is shown, but is not as serious or well documented
as other applications.
2. Program may not meet the need as completely as in some other
applications.
3. There may be some questions relative to feasibility.
4. Benefits a significant number of persons.
5. There is evidence that efforts have been made to minimize
project costs.
6. Public health and safety concerns are partially met by the
project.
7. Project would somewhat address serious deficiencies in
accessibility for disabled persons and/or provide some increase in the
number of public facilities accessible to disabled persons.
8. Moderately supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Minimal (100 Points)
1. Some need is evident, but is not serious.
2. Only a portion of the need would be met or the problem would not
be resolved completely.
3. There are serious feasibility questions.
4. Benefits only a small number of persons.
5. There is little evidence that efforts have been made to minimize
costs.
6. Public health and safety concerns are minimally addressed by the
project.
7. Project would minimally address serious deficiencies in
accessibility for disabled persons and/or provide a minimal increase in
the number of public facilities accessible to disabled persons.
8. Minimally supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Insignificant (0 Points)
1. No clear need has been demonstrated.
2. Program is not appropriate to meeting described needs, or there
is serious doubt that there would be much impact on needs.
3. There are major feasibility questions.
4. Benefits a very small number of people.
5. There is no evidence that efforts have been made to minimize
project costs.
6. Public health and safety needs are not addressed by the project.
7. Project would not address serious deficiencies in accessibility
for disabled persons and/or would not provide an increase in the number
of public facilities accessible to disabled persons.
8. Project does not support the strategic plan of a designated
Empowerment Zone or Enterprise Community.
(c) Program impact--single purpose--economic development projects.
As discussed earlier in this section of the NOFA, each individual
Single Purpose project will receive a separate impact rating.
Applicants whose proposed economic development program will include
multiple proposals should determine the most appropriate form of
submission. This determination will require a choice as to either the
incorporation of all proposals into a single project or the submission
of separate projects for each proposal (each transaction will be
considered a separate project). The single project format presents an
``all or nothing'' situation. In determining the appropriate submission
format, applicants should consider the ability of a transaction to rate
well on its own, based on the magnitude of employment impact, size of
the financial transaction and the other factors discussed in this
section.
The submission of proposals as separate projects must be clearly
designated by the applicant with individual Needs Descriptions,
Community Development Activities, Impact Descriptions and Program
Schedule forms, including an appropriate name for each project on HUD
Form 4124.1.
Section 807(c)(3) of the 1992 Act provides that it is the sense of
Congress that each grantee should devote one percent of its grant for
the purpose of providing assistance under section 105(a)(23) of the HCD
Act to facilitate economic development through commercial
microenterprises. A microenterprise is defined as a commercial
enterprise with five or fewer employees, one or more of whom owns the
enterprise. This should be considered in developing an economic
development application.
It is noted that in accordance with section 806 of the 1992 Act,
the Department will soon publish a proposed rule relating to evaluation
and selection of Economic Development activities by grantees. It is
strongly suggested that you read the proposed rule as it reflects the
Department's latest proposed policy on the evaluation of Economic
Development Projects.
In addition to the standard submission requirements, to receive
maximum points, Small Cities applicants must submit information that
demonstrates that CDBG funds are needed for the proposed project or
activity. HUD will evaluate this material as part of its Eligibility
Review prior to considering an application for funding in the FY 1994
competition. The following is a discussion of some of the factors HUD
will consider in assessing projects in these key areas:
(i) The appropriate determination. HUD requires that economic
development activities undertaken with CDBG funds be appropriate to
carry out an economic development project. Applicants should attempt to
demonstrate that each economic development project has a reasonable
likelihood of success.
Applicants must document the financial analysis of the project's
need for assistance, as well as public benefit factors that were
considered in making its determination that assistance is appropriate.
The applicant is expected to provide clear documentation on how the
decision was reached.
The written documentation of the financial analysis of the
project's need should use the following steps:
1. Reasonableness of Proposed Costs.--The applicant must review
each project cost element and determine that the cost is reasonable and
consistent with third-party, fair-market prices for that cost element.
The general principle is that the level of CDBG assistance cannot be
adequately determined if the project costs are understated or inflated.
2. Commitment of Other Sources of Funds. The applicant shall review
all projected sources of funds necessary to complete the project and
shall verify that all sources (in particular private debt and equity
financing) have been firmly committed to the extent practicable, and
are available to be invested in the project. Verification means
ascertaining that: the source of funds is committed; that the terms and
conditions of the committed funds are known; and the source has the
capacity to deliver.
3. No Substitution of CDBG Funds for Private Sources of Funds. The
applicant shall financially underwrite the project and ensure to the
extent possible that CDBG funds are not being substituted for available
private debt financing or equity capital. The analysis must be tailored
to the type of project being assisted (i.e. real estate, user project,
capital equipment, working capital, etc.). Real estate projects require
different financial analysis than working capital or machinery and
equipment projects. Applicants should ensure that both a significant
equity commitment by the for-profit business exists, and that the level
of certainty of the end use of the property or project is sufficient to
ensure the achievement of national objectives within a reasonable
period of time.
4. Establishment of CDBG Financing Terms. The amount of CDBG
assistance provided to a for-profit business ideally should be limited
to the amount, with appropriate repayment terms, sufficient to go
forward without substituting CDBG funds for available private debt or
cash equity. The applicant should structure its repayment terms so that
the business is allowed a reasonable rate of return on invested equity,
considering the level of risk of the project. It should be remembered
that equity funds generally should bear the greatest risk of all funds
invested in a project.
5. Assessing Public Benefit. The extent of public benefit expected
to be derived from the economic development project must be assessed.
While no standards have been promulgated in a final rule, the
assessment of public benefit should consider such factors as the number
and type of jobs to be created or retained, in relation to the needs of
low- and moderate-income persons who are likely to be employed, the
extent to which a business provides essential services to low- and
moderate-income neighborhoods, and increases to the tax base including
property, sales and income taxes in the area. These factors are not all
inclusive.
(ii) CDBG assistance must minimize business and job displacement.
Each applicant will evaluate the potential of each economic development
project for causing displacement of existing businesses and lost jobs
in the neighborhood where the project is proposed to be located. When
the grantee concludes that the potential exists to cause displacement,
given the size, scope or nature of the business, then the grantee must,
to the extent practicable, take steps to minimize such displacement.
The project file must document the grantee's review conclusions and, if
applicable, the steps the grantee will take to minimize displacement.
(iii) Section 105(a)(17) requirements. Section 105 (a)(17) of the
HCD Act requires that an activity assisted under that section achieve
one of the following criteria:
(1) Creates or retains jobs for low- and moderate-income persons
(note that a project which meets the national objective of principally
benefitting low- and moderate-income persons by creating or retaining
jobs, 51 percent of which are for low- and moderate-income persons,
will be deemed to have met this criterion without any additional
documentation);
(2) Prevents or eliminates slums or blight (note that a project
which meets the national objective of aiding in the prevention or
elimination of slums or blight on an area basis will be deemed to have
met this criterion without any additional documentation);
(3) Meets an urgent need (note that a project which meets the
national objective of meeting community development needs having a
particular urgency will be deemed to have met this criterion without
any additional documentation);
(4) Creates or retains businesses owned by community residents;
(5) Assists businesses that provide goods or services needed by and
affordable to low- and moderate-income residents;
(6) Provides technical assistance to promote any of the activities
under (1) through (5) of this subsection.
(iv) National objectives. As previously stated in this NOFA, all
CDBG-assisted activities must address one of the three broad national
objectives. Since economic development projects usually result in new
employment or the retention of existing jobs, these activities most
likely would be categorized as principally benefitting low- and
moderate-income persons in this manner. Such projects will be
considered to benefit low- and moderate-income persons where the
criteria of 24 CFR 570.208(a)(4) are met. HUD will consider an activity
to qualify under this provision where the activity involves jobs at
least 51 percent of which are taken by or made available to such
persons, or retained by such persons. The extent to which the proposed
project will directly address employment opportunities for low- and
moderate-income persons in the applicant jurisdiction will be a primary
factor in HUD's assessment of the proposed program.
In determining whether the person is a low- and moderate-income
person for these activities, it is the person's family income at the
time the CDBG assistance is provided that is determinative. When making
judgments concerning whether an individual qualifies as a low- and
moderate-income person, both family size and the income of the entire
family must be considered. This consideration is necessary because a
low- and moderate-income person is defined as a member of a low- and
moderate-income family. The 1992 Act amends the HCD Act by stating that
a person may be presumed to be a low- and moderate-income person if the
employee resides in a census tract where not less than 70 percent of
the residents are low- and moderate-income persons. HUD will also
accept a written certification by a person of his or her family income
and size to establish low- and moderate-income status. The
certification may simply state that the person's family income is below
that required to be low- and moderate-income in that area. The form for
such certification must include a statement that the information is
subject to verification. The application must contain adequate
documentation to explain fully, and to support, the process that will
be used to ensure that project(s) comply with the low- and moderate-
income employment requirements. The documentation must be sufficient to
show that the process has been developed and that program participants
have agreed to adhere to that process.
(v) Application requirements. To the extent feasible, the material
listed below should be submitted for economic development projects. The
material should be submitted for each proposed activity (e.g., each
loan will be considered a separate activity), whether the proposed
activity is presented as a separate project or as part of a project
involving multiple activities. Since economic development projects are
rated against each other, the more completely these submission
requirements are met, the greater the potential exists for enhancing
the impact score of the project.
1. A letter from each appropriate developmental entity which
includes at least the following information:
a. A detailed physical description of the project with a schedule
of events and maps or drawings as appropriate.
b. The estimated costs for the project, including any working
capital requirements.
c. A discussion of all financing sources, including the need for
CDBG, the terms of the CDBG assistance, and the proposed lien
structure. The amount, source and nature of any equity investment(s)
must also be provided as well as a commitment to invest the equity.
d. A discussion of employment impact which includes a schedule of
newly created positions. The schedule should identify the number,
salary and skill level of each permanent position to be created. If
jobs are made available to low- and moderate-income persons, the
applicant must also demonstrate and document how persons from low- and
moderate-income households will be accorded first consideration for
employment opportunities.
e. A discussion of all appropriate feasibility issues including,
but not limited to: site control, zoning, public approvals and permits,
impact fees, corporate authorizations, infrastructure, environment and
relocation.
f. An analysis and summary of market and other data which supports
the anticipated success of the project.
2. A development budget showing all costs for the project,
including professional fees and working capital.
3. Documentation to support project costs. Documentation generally
should be from a third party source and be consistent with the
following guidelines:
a. Acquisition costs should be supported by an appraisal.
b. Construction/renovation costs should be certified by an
architect, engineer or contractor. Use of Federal Prevailing Wage Rates
should be cited where applicable.
c. Machinery and equipment costs should be supported by vendor
quotes.
d. Soft costs (e.g., legal, accounting, title insurance) need be
substantiated only where such costs are anticipated to be abnormally
high.
4. Letters from all financing sources discussing (at a minimum) the
amount and terms of the proposed financing, and the current status of
the application for funding.
5. Historical financial data of the development entity, preferably
for the last three years. This information may be submitted under
separate cover with confidentiality requested. It is recognized that
historical financial data may be unavailable or inappropriate for some
projects (e.g., start-up companies and real estate transactions).
6. A two-to-five year cash flow pro forma with accompanying notes
citing basic assumptions.
7. The applicant's assessment of the project's consistency with the
CDBG program eligibility appropriate standards and with the national
objectives requirements.
(vi) Review criteria. In evaluating and rating economic development
projects, HUD will analyze the following factors:
1. Employment: The extent to which the proposed project will
directly address employment opportunities for low- and moderate-income
persons in the applicant's jurisdiction will be a primary factor in
HUD's assessment of program impact. Applicants are reminded that for an
activity to be consistent with the statutory objective of low- and
moderate-income benefit, as a result of the creation or retention of
jobs, at least 51 percent of created or retained employment
opportunities must be held by, or made available to, persons from low-
and moderate-income families. Applicants must fully document and
describe employment benefits. In addition, applicants should address
the following issues:
a. All employment data must be expressed in terms of full-time
equivalents (FTEs). Only permanent jobs may be counted, and applicants
must take into account such factors as seasonal and part-time
employment. A seasonal job may be considered permanent if the season is
long enough to be considered the person's principal occupation;
permanent part-time jobs must be converted to the full-time equivalent.
b. The amount of CDBG assistance required to produce each full-time
equivalent job will affect the impact assessment by HUD. Lower CDBG
costs per job are preferable to higher CDBG costs per job. Such
assessments of impact will be done on a comparative basis among all
projects submitted, rather than by comparison to a given standard.
c. The use of CDBG funds to assist a business with transferring to
a different community will generally be considered as having no
employment impact. Exceptions to this rule may include an expansion to
the business as a result of, or concurrent with, the transfer; or if
the business can demonstrate that it is infeasible to continue
operations at the current site. If the applicant proposes to assist in
a transfer of operations based on an exception to the general rule, HUD
should be contacted early in the planning process to discuss the
viability of such a proposal. Failure to do so could result in the
application receiving 0 impact points.
d. Applicants are encouraged to use CDBG funds for projects that
provide as many jobs as possible for individuals that are currently
receiving public assistance. Providing employment to recipients of
public assistance will help break the cycle of dependency and empower
low income citizens to take control of their lives.
2. Feasibility. A high-impact rating will not be given to projects
that are likely to encounter feasibility issues which would hinder the
timely completion of the project. Such issues include, but are not
limited to: site control, zoning, public approvals and permits,
infrastructure, environment, and relocation. Applicants should address
these and any other applicable issues and provide documentation where
appropriate.
Applicants also must demonstrate the reasonable likelihood of the
project's success, from both a financial and employment standpoint. An
analysis or market data, which indicates an inordinate risk in the
undertaking of the project, will affect the overall rating of program
impact.
3. Leverage. Leverage is defined as the amount of private debt and
equity to be invested as a direct result of the CDBG-funded activity.
Projects which fully conform with those requirements by providing the
maximum feasible level of private investment will be considered as
having appropriate leverage. The extent of firm commitments for private
financing will be reviewed as well as the amount of equity investment.
The project will be reviewed to determine whether CDBG funds are
replacing private sources of funds. In order to receive maximum impact
CDBG funds may not replace private financing, CDBG assistance must be
limited to the amount necessary to fund the project without replacing
CDBG funds for private funds, and equity funds should bear the greatest
risk in the project.
4. Taxes. While not a primary factor in the evaluation of impact,
projects which will augment the applicant's tax base may have a
positive effect on the rating of program impact. It is recognized,
however, that good projects do not always result in increased tax
revenues due to their nature.
5. Repayment. Where CDBG repayments are to be made in some manner
to the applicant, the proposed use of those repayments for economic
development purposes will be considered.
6. Cost Reasonableness. In order to receive a rating greater than
the minimal, the costs must be reasonable, i.e. not inflated.
7. Base Closures. The Department recognizes that communities facing
the loss of a military base may need a well-planned economic
development project to help alleviate the effect of the base closure.
Well planned projects that will help successfully alleviate the
economic impact of base closures will tend to have a high impact and
rate well in the competition.
8. Empowerment Zones/Enterprise Communities. The Department is
supportive of using funds from this NOFA to support projects in
designated Empowerment Zones and Enterprise Communities. A project that
significantly supports the strategic plan of a designated Empowerment
Zone or Enterprise Community will receive a maximum impact score
provided that the other factors for maximum impact are met.
(vii) Scoring. Individual projects often vary in the extent to
which they meet the criteria outlined above. It is, therefore,
difficult to precisely define those combinations of characteristics
which constitute, for example, ``maximum'' versus ``substantial''
impact. Not all applications receiving a ``maximum'' rating will match
all the criteria, point by point, in the same manner. The following
standards will be applied:
Maximum (400 Points)
1. The analysis of market and other risk data provides reasonable
assurance that the project will be successful.
2. The project will have a direct and positive impact on employment
opportunities for persons from low- and moderate-income households, and
the extent of that impact compares favorably with that of other
applicants.
3. All appropriate feasibility issues have been addressed
(including the submission of firm private financing commitments) and
there is reasonable assurance that the project will be completed in a
timely manner.
4. The Public Benefits (e.g., loan repayments, increases to the tax
base including property, sales and income taxes to the area, other
development likely to be stimulated by the activity) to be derived from
the project are considerable relative to other proposals.
5. The infusion of CDBG funds will leverage a substantial
investment of private and other dollars.
6. The project costs are reasonable (i.e. not inflated).
7. CDBG funds will not replace private financing, CDBG assistance
will be limited to the amount necessary to fund the project without
replacing CDBG funds for private funds, and equity funds will bear the
greatest risk in the project.
8. Project significantly supports the strategic plan of a
designated Empowerment Zone or Enterprise Community.
Substantial (300 Points)
The criteria for Maximum (400 Points) is met, with either of the
following exceptions:
1. While the project will have a direct and positive impact on
employment opportunities for persons from low- and moderate-income
households, the extent of that impact is less than that demonstrated by
applicants receiving the maximum rating.
2. While there are no major feasibility problems, there are
feasibility issues which have not been fully addressed and/or may have
a negative effect on timely implementation of the project. However,
overall success of the project appears achievable.
In addition:
3. The Public Benefits derived from this project will be greater
than that received by the majority of applicants.
4. CDBG funds will leverage more private and/or other public
dollars than the majority of projects in the competition.
5. The project costs are reasonable (i.e. not inflated).
6. CDBG funds will not replace private financing, CDBG assistance
will be limited to the amount necessary to fund the project without
replacing CDBG funds for private funds, and equity funds will bear as
great a risk as other project funds.
7. Project significantly supports the strategic plan of a
designated Empowerment Zone or Enterprise Community.
Moderate (200 Points)
The project presents at least one of the following deficiencies
which would affect the appropriateness of CDBG funding:
1. An analysis of the project indicates that the likelihood of the
availability of other required financing is questionable.
2. There is a major feasibility issue which is likely to affect
completion of the project.
3. The analysis of market and other risk data indicates a
likelihood that the project will not create a significant employment
impact.
4. The number of employment positions to be created is
significantly low and/or the CDBG cost per employment position is
significantly high in relation to other applications.
In addition:
5. There will be some Public Benefits resulting from this project.
6. CDBG dollars will leverage a moderate amount of private and/or
other public funds relative to other projects.
7. The project costs are reasonable (i.e. not inflated).
8. Project moderately supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Minimal (100 Points)
The project presents at least one of the following serious
deficiencies which would affect the appropriateness of CDBG funding:
1. An analysis of the project indicates that other required
financing is unlikely to be available.
2. There will be few, if any, Public Benefits resulting from this
project.
3. CDBG dollars will leverage little private and/or other public
investment in the project.
4. Project minimally supports the strategic plan of a designated
Empowerment Zone or Enterprise Community.
Insignificant (0 Points)
The activity presents at least one of the following serious
deficiencies which indicates the inappropriateness of CDBG funding:
1. It is clear that the activity cannot be accomplished based on
any combination of the following factors:
(1) Major feasibility issues.
(2) Inordinate risk.
(3) Unavailability of required financing.
2. The activity will not have a direct impact on employment
opportunities for persons from low- and moderate-income households.
3. The completion of the project will result in no Public Benefits
or will be detrimental to the community.
4. No other investment will be triggered by the use of CDBG funds
for this activity.
5. Project does not support the strategic plan of a designated
Empowerment Zone or Enterprise Community.
(2) Program impact--comprehensive program grants. Comprehensive
programs must address a substantial portion of the identifiable
community development needs of a defined area(s). The extent to which
activities are coordinated will be a major consideration in the
evaluation of program impact. In defining an appropriate area for
comprehensive treatment, applicants should consider the severity of
condition within the area and the resources to be provided. The impact
is greatest where community development needs will be substantially
addressed over a reasonable period of time. Exceptions to the
requirement that activities be concentrated within a defined area or
areas may be made if the applicant can demonstrate that the proposed
program represents a reasonable means of addressing the identified
needs.
HUD will assess the impact of the program for each of the four
program design criteria selected, based on the factors described below.
Applicants must describe fully the extent to which the program will
address each criterion selected. HUD will compare all programs which
address a particular criterion. The best proposal for that criterion
will be the standard by which all others will be judged, although that
proposal will not necessarily be awarded a significant impact.
Assignment of Program Impact points for a Comprehensive Grant
application is a two-step process. First, the potential of the proposed
program of activities to achieve the results intended by each selected
criterion when considered in relation to other communities selecting
the same criterion is assessed. A numerical value is assigned, based on
the following:
The results would have insignificant impact--0 Points
The results would have minimal impact--2 Points
The results would have a moderate impact--4 Points
The results would have a maximum impact--8 points
After each of the four criteria selected by an applicant is rated
and a value assigned, the values are summed. A minimum of 12 points
will be required at this stage in order for the application to be
eligible for further consideration. A score of less than 12 points
indicates that the proposed activities would have insufficient impact
to warrant funding.
Following this process, the actual points for impact are determined
by dividing each applicant's Program Impact Score by the highest
Program Impact Score achieved by any applicant and multiplying the
result by 400.
Listed below are the ten design criteria and the standards which
HUD has developed to evaluate each criterion. The applicant must select
and address four of the criteria. In addition to these standards, the
Submission Requirements and Review Criteria for Economic Development
Projects under the Single Purpose Program apply in determining the
eligibility and rating for economic development proposals that are a
part of a Comprehensive Program. It is particularly important that
applicants fully address the economic development criteria should
Criteria 5 and 6 be selected.
(a) Criterion 1--Supports Comprehensive Neighborhood Conservation,
Stabilization, Revitalization, New Housing Construction or Promotes
Homeownership. The applicant must describe the degree to which the
identified needs of a defined area or areas will be addressed in a
coordinated manner. In defining an area or areas, applicants should
examine carefully the extent of needs and the resources available to
address those needs. Where an area has not been defined, the applicant
should describe fully the appropriateness of implementing activities on
a community-wide basis.
In evaluating the impact of the proposed program, HUD will examine
the following factors:
--Nature and severity of neighborhood needs.
--Extent to which needs will be addressed.
--Amount of funds required to implement neighborhood activities.
--Extent to which activities are coordinated to address housing, public
facility and economic development needs. Program impact will be the
greatest where a substantial portion of the needs within a defined area
will be met.
--Extent to which the project promotes fair housing choice in
homeownership among protected classes.
--Extent to which the project supports the strategic plan of a
designated Empowerment Zone or Enterprise Community.
The strongest consideration for housing rehabilitation programs is
given to those applicants which have designed their housing programs by
taking into account both structural conditions and appropriate
financing mechanisms. The proposed program should be structured in a
way to be marketable, given income and structural characteristics of
the neighborhood area. The physical needs of residential or mixed use
properties must be well stated and documented in terms of
substandardness. Applicants will be expected to maximize the leveraging
of private funds, encourage the participation of local financial
institutions, and develop realistic program guidelines. Private funds
available from financial lending sources should be established. If
leveraging is infeasible, the applicant must fully document that fact.
The most effective housing programs will be those which will address a
substantial portion of the identified needs, while maximizing the
impact of Federal funds.
For those programs that will support the construction of new
residential units, project feasibility will be critical. While the
extent of need and number of units to be created will be a primary
consideration in evaluating the impact, issues of site control,
marketability and assurance of private financing must be addressed, and
must be documented.
Homeownership activities will be reviewed in terms of: how
effectively the program would meet homeownership needs identified in
the community; and the extent to which they would make effective use of
available funds.
Public service activities also may be considered in conjunction
with other activities under this criterion. Again, any such activities
would need to meet demonstrated needs within the community.
The impact of public improvement activities will be assessed
primarily on the documented severity of the need and the extent to
which the proposed program will address that need. Those needs which
directly affect the public safety and welfare will be considered the
most severe.
Economic development activities also will be evaluated by the
extent to which they will alleviate the identified problems. However,
the assessed impact for these activities is often diminished due to
feasibility concerns.
In addition to quantifying the extent of the anticipated
improvements, applicants must demonstrate that the proposed activities
can be carried out--that is, documentation with respect to private
participation in such activities must be thorough. Letters of only
general interest, by either property owners or other private sector
participants, do not necessarily ensure their participation in the
program. Some degree of assurance of participation should be presented.
Review Criteria and Submission requirements for Housing described
under the Single Purpose Program apply in evaluating and rating housing
proposals that are a part of a Comprehensive Program.
(b) Criterion 2--Provides Housing Choice within the Community
either Outside Areas with Concentrations of Minorities and Low- and
Moderate-Income Persons or in a Neighborhood which is Experiencing
Revitalization and Substantial Displacement as a Result of Private
Reinvestment, by Enabling Low- and Moderate-Income Persons to Remain in
their Neighborhood. If a proposed program provides housing choice
within the community outside areas with concentrations of minorities
and low- and moderate-income persons, the application must document
that there are existing areas which do, in fact, contain concentrations
of low- and moderate-income families and minorities. The proposed
program, if implemented, must result in additional housing assistance
being provided in areas of non-concentration. Communities with no
minorities or minority concentrations may receive impact points where
opportunities are provided outside areas of low- and moderate-income
concentration. The degree of impact will be based upon the severity of
needs, the number of units to be provided, and the nature and cost of
the activities.
In a neighborhood which is experiencing revitalization and
substantial displacement as a result of private reinvestment, the
applicant must provide a detailed description of the revitalization
efforts within the neighborhood, the amount of displacement of low- and
moderate-income persons, and the manner in which the implementation of
the proposed program will enable displacees to remain in the
neighborhood. The degree of needs, nature and cost of activities, and
percentage of needs to be addressed will be evaluated to determine
program impact.
(c) Criterion 3--Supports the Expansion of Housing for Low- and
Moderate-Income Persons by Providing Additional Housing Units Not
Previously Available. The proposed program clearly must support, or
result in, additional units for low- and moderate-income persons. The
units may result from the rehabilitation of currently vacant
structures, conversion of non-residential structures to residential
use, or new construction projects for which the proposed program will
provide non-construction or construction assistance. Where the proposed
project involves the use of Federally assisted housing, the applicant
must identify and document the current commitment status of the Federal
assistance. Lack of a firm financial commitment for assistance may
adversely affect program impact. Applicants should address the areas of
site control and marketability, in addition to addressing feasibility
from the standpoint of project financing. Consideration will not be
given to proposed programs which will rehabilitate occupied units or
displace current occupants. The impact of the proposed programs will be
based upon the degree of needs, the number of units to be created, and
the nature and cost of the proposed activities.
(d) Criterion 4--Addresses a Serious Deficiency in a Community's
Public Facilities. Consideration will be given to the extent of
deficiencies, and their relative seriousness, of the identified need.
The following factors will be considered:
--Documentation of the seriousness of deficiencies. Appropriate
documentation should be provided to substantiate the degree of
seriousness. Those deficiencies which directly affect the public safety
and welfare will be considered most severe.
--The nature and cost of the proposed activities in relation to the
percentage of need to be addressed.
--The extent to which the proposed program will address a variety of
deficiencies in public facilities within a defined area.
--Coordination with other activities within the defined area.
--The degree to which the application addresses such feasibility
issues, including but not limited to, the validity of cost estimates by
qualified sources, the availability of other funds, site control, and
environmental constraints.
--The number of persons to benefit.
--The extent to which the project addresses serious deficiencies in
accessibility requirements and/or expands the number of accessible
public facilities.
--Extent to which the project supports the strategic plan of a
designated Empowerment Zone or Enterprise Community.
(e) Criterion 5--Expands or Retains Employment Opportunities.
Consideration will be given to proposed programs that will result in
the creation of new jobs or retention of existing employment
opportunities. The following factors will be considered:
--The number of jobs to be created or retained in relation to the
identified needs. Documentation should be provided to substantiate the
number and type (permanent or seasonal, full or part-time) of job
claimed. Letters from local development agencies or expected
participants which express more than general interest would be
appropriate. With respect to job retention, evidence should be provided
to demonstrate that without the proposed program, existing jobs would
be lost. The applicant also must address the potential impact of job
loss on the community.
--The extent to which CDBG funds are used to leverage private
commitments. If leveraging is proposed, applicants should analyze the
actual amount of additional funds required to make the project
financially feasible. In designing a program to assist existing
business expansion or retention, or to encourage new business
development, applicants must address whether CDBG funds will be used
for infrastructure, land assemblage or other financial incentives.
These factors may be important considerations for a firm deciding where
to locate and whether to expand or reduce the scope of its operation.
CDBG funds may be more effectively used as a loan rather than a grant.
In this regard, the CDBG funds would generate additional program
resources through loan repayments to the community. It is considered
especially advantageous if a revolving loan fund is established and
repayments continue to be used to expand or retain employment
opportunities.
--The relationship of the activity to other projects being implemented
within the defined area.
--The number of persons to benefit.
--Particular attention will be given to the extent to which the Review
Criteria and Submission Requirements for Economic Development Projects
are addressed (see Single Purpose Program Criteria).
--Extent to which the project supports the strategic plan of a
designated Empowerment Zone or Enterprise Community.
--Extent to which the project results in the employment of persons on
public assistance.
(f) Criterion 6--Attracts or Retains Businesses which Provide
Essential Services. Consideration will be given to proposed programs
which will address the attraction or retention of businesses commonly
associated with neighborhood needs (corner grocery stores, dry
cleaners, pharmacies, etc.). The applicant must describe clearly the
nature and anticipated impact of activities. Documentation in the form
of letters from existing or new potential businesses offering a
commitment to the program should be included. (Letters of only general
interest by property owners do not necessarily ensure their
participation in the program, or their willingness to secure debt if
private lending is proposed). The following factors will be considered:
--The impact of the proposed program in relation to the identifiable
neighborhood needs. The extent of area stability must be documented. In
describing the needs of a business district or neighborhood commercial
area, such factors as overall structural conditions, business
turnovers, and vacancy rates over a period of time should be clearly
presented. The formulation of a commercial revitalization program must
be based on a thorough assessment of local needs and a realistic
program design. An important consideration is whether the proposed
program is designed to be marketable given income characteristics,
local business condition, etc. The condition of supporting public
facilities and improvements and their influence on the business
environment must be established. If public improvements are proposed in
connection with economic expansion or retention, applicants must
address the extent to which the lack of these improvements impact on
business.
--Attraction/retention must be fully documented by the applicant. With
respect to business retention, evidence should be provided to
demonstrate clearly and objectively that without the proposed CDBG
Program, existing retail/commercial businesses would curtail their
operations. The applicant also must document and address the potential
impact of the business loss on the community and/or target area. HUD
would accept as examples of clear and objective evidence a notice
issued by the business to affected employees, a public announcement by
the business, or financial records provided by the business that
clearly indicate the need for closing or moving all or portions of the
business out of the area.
--The amount of private funds to be leveraged. If leveraging is
proposed, applicants should analyze the actual amount of private or
public funds needed to make the project financially feasible. In this
regard, the establishment of a revolving loan fund, in which repayments
would continue to be used to attract or retain businesses providing
essential services, would be considered a positive factor.
--The relationship of the activity to a comprehensive approach to
meeting the overall needs of the neighborhood area.
--The impact of the proposed program in utilizing minority, women-
owned, and project area businesses.
--Extent to which the project supports the strategic plan of a
designated Empowerment Zone or Enterprise Community.
--Extent to which the project results in the employment of persons on
public assistance.
(g) Criterion 7--Removes Slums or Blighting Conditions.
Consideration will be given to proposed programs which will have a
direct impact on the removal of slums or blighting conditions.
Appropriate areas may include, but are not limited to, deteriorated
residential or commercial structures, inappropriate land uses, or
blighting conditions, such as repeated flooding and drainage problems
or serious deficiencies in public facilities. Applicants should be
aware that slum and blight activities can be carried out under the
national objective of benefit to low- and moderate-income persons. If
an applicant elects to qualify the activity on this basis, the degree
of low- and moderate-income benefit must be demonstrated by the
applicant.
Where residential or commercial rehabilitation activities are
proposed as preventing or eliminating blighting conditions, the
application must clearly document the number, type, and condition of
deteriorating or deteriorated buildings in the designated target area.
Detailed conditions of the physical condition of buildings or
structures would be appropriate to establish the extent of substandard
and blighting conditions. For rehabilitation of residential structures
to be designed as eliminating blight and addressing an area's
deterioration, the buildings must be considered substandard under local
definition.
When an area is determined to be blighted, there must be a
substantial number of deteriorated or dilapidated buildings, or the
public improvements throughout the area must be in a state of
deterioration. The proposed CDBG program or project must be designed to
eliminate or address a substantial portion of the identified blighting
conditions or physical decay. CDBG assistance for facilities or
structures which are in good repair and show no real signs of
deterioration would not score well under this criterion. For instance,
minor facade improvements to a commercial building alone would not
indicate that a building is in poor condition. However, assistance to a
commercial area which consists of deteriorating businesses, storefronts
in serious need of rehabilitation, a high vacancy factor, and public
improvements, such as parking areas and parking access improvements
which are in need of physical upgrading, would have a direct impact on
eliminating blighting conditions. Public improvements that are so
deteriorated that they constitute a genuine threat to the continued
viability of an area by discouraging private investment necessary to
maintain properties may also be considered a blighting influence. The
following factors will be considered:
--Extent and documented seriousness of conditions/needs. References to
engineering studies, surveys or letters from appropriate local agencies
should be included.
--Impact of the proposed program in relation to providing long-term
permanent solutions to alleviate the identified need. Short-term or
superficial improvements will not be considered to have a significant
impact.
--Coordination with other projects and activities which will address
needs within the defined area.
--Nature of any proposed re-use: degree of commitment for re-use.
--Extent to which the project supports the strategic plan of a
designated Empowerment Zone or Enterprise Community.
(h) Criterion 8--Resolves a Serious Threat to Health or Safety. The
applicant must describe the condition which poses a threat to public
health and safety. A serious threat refers to a situation which demands
immediate attention. This may be a condition that has just occurred or
a condition which, though long standing, has intensified to become an
immediate danger.
Applicants should be aware that imminent threat/urgent need
activities can be carried out under the national objective of benefit
to low- and moderate-income persons. If an applicant elects to qualify
the activity on this basis, the degree of low- and moderate-income
benefit must be demonstrated by the applicant. Consideration will be
given to the following:
--The extent to which a serious threat to health or safety is
documented, or of recent origin, or which recently became urgent.
Documentation should include the identification of the existing
conditions by appropriate agencies.
--The extent to which the serious threat will be resolved.
--The submission of documentation which demonstrates that other
financial resources are insufficient or unavailable to resolve such
needs.
--The degree to which the application addresses issues such as the
validity of cost estimates by qualified sources; the availability of
other funds; site control and environmental conditions; or other public
body approvals.
--The number of persons to benefit, as well as the number of
individuals actually threatened.
Note: This criterion is generally more restrictive than
Criterion 4. The existing condition must pose a serious and
immediate threat to the health or welfare of the target population.
(i) Criterion 9--Supports Other Federal or State Programs Being
Undertaken in the Community or Deals with the Adverse Impact of Another
Recent Federal or State Action. The Other Federal or State Program or
Action Must Be of Substantial Size or Impact in the Community in
Relation to the Proposed Program. The application must contain a
complete description of the Federal or State Program(s) (excluding
other CDBG Programs) which currently are underway, or a complete
description of the adverse impact of a recent Federal or State action
(e.g. the closing of a military base). A Federal or State program or
action not yet initiated will be considered only where the application
provides documentation establishing the certainty of, and the
approximate commencement date of, the described program or action.
The proposed CDBG Program must demonstrate clearly the magnitude of
the effect of the Federal or State Program or action on the community.
The degree to which the proposed CDBG Program will support the Federal
or State Program, and/or the extent to which the adverse impact of
Federal or State action will be mitigated, also must be demonstrated.
In addition to the above, the nature and costs of the proposed
activities will be considered in determining the degree of impact.
(j) Criterion 10--Supports Energy Production or Conservation. This
criterion will be judged, and points will be awarded, based upon the
community's ability to demonstrate that the proposed program will
support energy production or conservation. Applicants are urged to
develop innovative approaches toward addressing energy needs with Small
Cities CDBG funds. Energy considerations can be a factor in most
activities proposed by smaller communities. Attention should focus on
new methods of producing energy or conserving energy where possible. In
developing and evaluating proposals, there are a number of energy
aspects to consider. The following factors will be considered:
--Cost efficiency--Relationship of dollar amount to benefits to be
derived. The applicant must document estimates of energy costs which
are to be saved as a result of the proposed program. The proposed
program should make maximum use of non-CDBG resources as well as CDBG
funds. Appropriate documentation must be provided to ensure that the
proposal is economically feasible.
--The extent to which the proposed program will support other programs
currently aimed at addressing energy production or conservation needs
of the community. From a management standpoint, proposed projects
should be consistent with needs or objectives of any plan for energy
management or conservation. Applicants should pursue the availability
of other resources from Federal or State energy related programs. The
degree of commitment of other resources should be established. State
energy offices, private as well as municipally-owned utility companies,
and home heating oil companies may be appropriate entities to be
involved in the development and planning of proposals.
--The application should address whether the project is based on
appropriate technology, materials and methods to maximize energy
conservation. Engineering reports or studies would be appropriate
evidence to support the overall feasibility of the project. The
conversion of existing facilities, where appropriate, rather than
proposing new construction may be more economical.
--While housing rehabilitation programs which include weatherization/
winterization components will be considered, they generally will not be
presumed as addressing a severe need unless unique conditions are
specifically identified and cost savings are properly documented.
d. Fair Housing and Equal Opportunity Evaluation. Documentation for
the 65 points for these items is the responsibility of the applicant.
Claims of outstanding performance must be based upon actual
accomplishments. Clear, precise documentation will be required. Maps
must have a census tract or block numbering area (BNA), and they must
be in accordance with the 1990 Census data. Additionally, maps must
identify the locations of areas with minorities by census tract or BNA.
If there are no minority areas, state so on the map. Only population
data from the 1990 Census will be acceptable for purposes of this
section.
Please note that a ``minority'' is a person belonging to, or
culturally identified as, a member of any one of the following racial/
ethnic categories: Black, Hispanic, Asian or Pacific Islander, and
American Indian or Alaskan Native. For the purposes of this section,
the separate category--``women'' --is not considered a minority.
Counties claiming points under this criterion must use county-wide
statistics (excluding entitlement communities). In the case of joint
applications, points will be awarded based on the performance of the
lead entity only.
The following factors will be used to judge outstanding performance
in these areas. Please note that the criteria are the same for
Comprehensive and Single Purpose applicants, and that points for
outstanding performance may be claimed under each criterion:
(1) Housing Achievements (40 points total). (a) 20 Points--
Provision of Assisted Housing--Providing assisted housing for low- and
moderate-income families, located in a manner which provides housing
choice in areas outside of minority, or low- and moderate-income
concentrations.
Points will be awarded where both of the following criteria are
met:
(i) More than one-third of the housing assistance provided by the
applicant in the last five (5) years (excluding Section 8 existing and
housing assistance provided in place) has been in Census Tracts (CT) or
Block Numbering Areas (BNA) having a percentage of minority population
which is less than the minority population in the community as a whole;
and
(ii) With regard to the Section 8 Existing Program, a community
must show the location (CT or BNA) of its currently occupied family
units by race/ethnicity. Points will be awarded if more than one-half
of the minority assisted families occupy units in areas which have a
lower percentage of minority population than that of the community as a
whole.
A community with no minorities must show the extent to which its
assisted housing is located outside areas of concentrations of low- and
moderate-income persons. In order to receive points under this
criterion, applicants should follow the process outlined in (i) and
(ii) above, substituting low- and moderate-income persons and families
for minority persons or families. Applicants addressing the first
criterion must use a map indicating the location of all assisted
housing and a narrative which indicates the number of units and the
type of assisted housing. The map also must show the general location
of low- and moderate-income households and minority households, giving
the numbers and percentages for both.
To qualify as housing assistance provided, the units being claimed
must be part of a project located outside minority or lower income
concentrated areas which has, at a minimum, received a firm commitment
from the funding agency.
(iii) Points also may be awarded for efforts which enable low- and
moderate-income persons to remain in their neighborhood when such
neighborhoods are experiencing revitalization and substantial
displacement as a result of private reinvestment. Applicants requesting
points under this criterion would not need to meet the requirements of
(i) and (ii) in order to receive points. Points will be awarded where
more than one half of the families displaced were able to remain in
their original neighborhood through the assistance of the applicant.
Applicants must show that:
--the neighborhood experienced revitalization;
--the amount of displacement was substantial;
--displacement was caused by private reinvestment;
--low- and moderate-income persons were permitted to remain in the
neighborhood as a result of action taken by the applicant.
If the community is inhabited predominantly by persons who are
members of minority and/or low-income groups, points will be awarded
where there is a balanced distribution of assisted housing throughout
the community.
(b) 20 Points - Implementation of a HUD-approved New Horizons Fair
Housing Assistance Project or a Fair Housing Strategy that is
equivalent in scope to a New Horizons Project.
The applicant must demonstrate that it is implementing a HUD-
approved New Horizons Fair Housing Assistance Project or demonstrate
participation in a HUD-approved county/State/regional New Horizons
Project; or that the applicant is implementing a fair housing strategy
that is equivalent in scope to a New Horizons Project. If the applicant
is implementing a New Horizons Project, it must include:
--the date it was approved (by HUD); and
--those actions taken to implement the plan.
If the applicant is implementing an equivalent fair housing
strategy, it must include:
--the strategy being implemented;
--those actions taken to implement the strategy.
Please note that a fair housing strategy must include the four
elements of a New Horizons Project in order to be considered equivalent
in scope:
--Local compliance activities;
--Educational programs to enhance the clarity and understanding of the
community's fair housing policy. For communities with few or no
minorities, this should include publication in the surrounding
communities of the applicant's policy of fair housing for minorities
and the disabled;
--Assistance to minority families; and
--Special programs (e.g. utilization of Community Housing Resource
Board (CHRB) Programs, efforts to encourage local realtors to enter
into voluntary agreements to encourage equal access to financial
institutions, etc.).
The fair housing strategy must include goals for each of the above
elements. The date of adoption or development of the strategy should be
indicated, as well as the date proposed activities will be or have been
implemented.
(2) Entrepreneurial Efforts and Local Equal Employment (25 points
total). Applicants may request points for both of these subfactors and
must use the format sheets included in the application.
(a) Minority Contracting. 15 points--Outstanding performance points
will be given to those applicants who have demonstrated that they have
utilized minority businesses to the following degree. The applicant
must demonstrate that at least five percent of all its contracts, based
on dollar value, have been awarded within the past two years to
minority owned and controlled businesses (businesses that are at least
50 percent owned by minorities) provided that the minority population
is five percent or less. If the minority population exceeds five
percent, then the applicant must have a corresponding percentage of its
contracts awarded to minority businesses; however, 20 percent of the
total dollar value of its contracts will be sufficient for award of
points for any applicant. The applicable percentage of minority
population is the percentage of minorities in the applicant's
jurisdiction, or is the county percentage, whichever is higher.
The applicant must provide the information as outlined in the
suggested format, showing the name, address, telephone number, contract
date and contract amount for each contract or subcontract with a
minority business. This information is to be provided in addition to
information required on the HUD Form 4124.4, and should be for the two-
year period ending February 1, 1994.
(b) Equal Opportunity Employment. 10 points--In order to be
considered for points, if claimed, the applicant must document that its
percentage of minority, permanent full-time employees is greater than
the percentage of minorities within the county or the community,
whichever is higher. Applicants with no full-time employees may claim
points based on part-time employment provided that they document that
the only permanent employment is on a part-time basis.
II. Application and Funding Award Process
A. Obtaining Applications.
Application kits may be obtained from either HUD's New York or
Buffalo Offices. Applicants in New York, in the counties of Sullivan,
Ulster, Putnam, and in non-participating jurisdictions in the urban
counties of Dutchess, Orange, Rockland, Westchester, Nassau, and
Suffolk should submit applications to the New York Office. All other
nonentitled communities in New York State should submit their
applications to the Buffalo Office. The appropriate addresses for HUD's
New York and Buffalo offices are: Department of Housing and Urban
Development, Office of Community Planning and Development, Attention:
Small Cities Coordinator, 26 Federal Plaza, New York, NY 10278-0068,
Telephone (212) 264-6500, or Department of Housing and Urban
Development, Community Planning and Development Division, Attention:
Small Cities Coordinator, 465 Main Street, Lafayette Court, Buffalo, NY
14203, Telephone (716) 846-5768.
B. Submitting Applications
A final application must be submitted to HUD no later than July 26,
1994. A final application includes an original and two photocopies. In
accordance with HUD's regulation at 24 CFR 570.443(a)(1), final
applications may be mailed, and if they are received after the
deadline, must be postmarked no later than midnight, July 26, 1994. If
an application is hand-delivered to either the New York or Buffalo
Offices, the application must be delivered by 4:00 p.m. on the
application deadline date. Applications must be submitted to the
appropriate HUD office at the address listed above in Section A.
The above-stated application deadline is firm as to date and hour.
In the interest of fairness to all competing applicants, the Department
will treat as ineligible for consideration any application that is not
received on, or postmarked by July 26, 1994. Applicants should take
this practice into account and make early submission of their materials
to avoid any risk of loss of eligibility brought about by unanticipated
delays or other delivery-related problems.
C. The Application
An application for the Small Cities Program CDBG Grants is made by
the submission of:
(1) a completed HUD Form 4124, including HUD Forms 4124.1 through
4124.6 and all appropriate supporting material;
(2) a completed Standard Form 424;
(3) a signed copy of certifications required under the CDBG
Program, including, but not limited to the Drug-Free Workplace
Certification, and the Certification Regarding Lobbying pursuant to
section 319 of the Department of Interior Appropriations Act for Fiscal
Year 1990 (31 U.S.C. 1352), generally prohibiting use of appropriated
funds, and, if applicable, Disclosure of Lobbying Activities (SF-LLL);
(4) Form HUD-2880, Applicant/Recipient Disclosure/Update Report, as
required under subpart C of 24 CFR part 12, Accountability in the
Provision of HUD Assistance; and if applicable,
(5) CHAS or ``abbreviated strategy''.
D. Funding Award Process
In accordance with section 102 of the Reform Act and HUD's
regulation at 24 CFR 12.16, HUD will notify the public by notice
published in the Federal Register of all award decisions made by HUD
under this competition. In accordance with the requirements of section
102 of the Reform Act and HUD's regulations at 24 CFR part 12, HUD also
will ensure that documentation and other information regarding each
application submitted under this notice of funding availability is
sufficient to indicate the basis upon which assistance was provided or
denied. Additionally, in accordance with Sec. 12.14(b) of these
regulations, HUD will make this material available for public
inspection for a period of five years, beginning not less than 30
calendar days after the date on which assistance is provided.
III. Technical Assistance
Prior to the application deadline, the Buffalo and New York offices
will provide technical assistance on request to individual applicants,
including explaining and responding to questions regarding program
regulations, and defining terms in the application package. In
addition, HUD will conduct informational meetings around the State to
discuss the Small Cities Program, and will conduct application
workshops in conjunction with these meetings. Please contact either the
New York or Buffalo Office for further information regarding these
meetings. Application kits will be available at these meetings, as well
as from the HUD offices previously identified in Section II of this
NOFA, and will also be available at the informational meetings. In
order to ensure that the application deadline is met, it is strongly
suggested that applicants begin preparing their applications
immediately and not wait for the informational meetings.
In order to be considered for funding, complete applications (an
original and two photocopies of the entire application) must be
physically received by the appropriate HUD office on July 26, 1994, by
4 p.m. or, if mailed, postmarked no later than midnight, July 26, 1994.
Applications must be delivered or mailed to the appropriate HUD office
at the address indicated in Section II.
IV. Checklist of Application Submission Requirements
The following checklist is intended to aid applicants in
determining whether their application is complete:
Application Completeness Checklist
Applicant:-------------------------------------------------------------
Comprehensive Grant ________ Single Purpose Grant ______
Amount Requested $____________
1. Is amount of funds requested within established maximum?
2. Part I--Needs Description (HUD Form 4124.1)
(a) Single Purpose Grants
i--Program Area
________ Housing
________ Target Area
________ Non-target Area
________ Public Facilities
________ Economic Development (If an ``appropriate'' analysis is
required but is not included, the application cannot be rated.)
ii--Is description of community development needs included in
application?
(b) Comprehensive Grants
i--Have four design criteria been selected and discussed in
application?
ii--Is description of community development needs included in
application?
3. Part II--Community Development Activities (HUD Form 4124.2)
(a) Has national objective been identified for each activity?
(b) Will 70 percent of grant funds primarily benefit low- and
moderate-income persons? (If not, the application cannot be rated.)
4. Part III--Impact Description (HUD Form 4124.3)
5. Part IV--Outstanding Performance (HUD Form 4124.4)
6. Part V--Program Schedule (HUD Form 4124.5)
7. Part VI--Maps
(a) Location of proposed activities. (Applicants must show the
boundaries of the defined area or areas.)
(b) Location of areas with minorities by census tract. (If there
are no minority areas, state so on the map.)
(c) Housing conditions if project involves housing
rehabilitation. (Number and location of each standard and
substandard unit should be clearly identified.)
8. (a) Is Standard Form 424 complete?
Yes No
(b) Is original signature on at least one copy?
Yes No
9. Is Certification signed with original signature?
Yes No
10. If housing activities have been proposed as part of
application, has the Comprehensive Housing Affordability Strategy
(CHAS) been prepared and submitted to HUD (or included with this
application)?
11. Form HUD-2880, Application/Recipient Disclosure/Update
Report, as required under subpart C of 24 CFR part 12.
V. Corrections to Deficient Applications
Under no circumstances will HUD accept from the applicant
unsolicited information regarding the application after the application
deadline has passed.
HUD may advise applicants of technical deficiencies in applications
and permit them to be corrected. A technical deficiency would be an
error or oversight which, if corrected, would not alter, in either a
positive or negative fashion, the review and rating of the application.
Examples of curable technical deficiencies would be a failure to submit
the proper certifications or failure to submit an application
containing an original signature by an authorized official. Situations
not considered curable would be, for example, a failure to submit
program impact descriptions.
HUD will notify applicants in writing of any curable technical
deficiencies in applications. Applicants will have 14 calendar days
from the date of HUD's correspondence to reply and correct the
deficiency. If the deficiency is not corrected within this time period,
HUD will reject the application as incomplete.
Applicants should note that if a CHAS is required in support of a
housing activity, the failure to submit a CHAS in a timely manner is
not considered a curable deficiency.
VI. Other Matters
Environmental Impact
A Finding of No Significant Impact with respect to the environment
was made in accordance with HUD regulations at 24 CFR part 50,
implementing section 102(2)(C) of the National Environmental Policy Act
of 1969 (42 U.S.C. 4332) at the time of development of the FY 1993 NOFA
for this program. Because no substantive programmatic changes have been
made, that Finding remains applicable to this NOFA and is available for
public inspection and copying between 7:30 am and 5:30 pm weekdays at
the Office of the Rules Docket Clerk, 451 Seventh Street, SW, Room
10276, Washington, DC 20410.
Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that this NOFA
will not have substantial, direct effects on States, on their political
subdivisions, or on their relationship with the Federal Government, or
on the distribution of power and responsibilities between them and
other levels of government. While the NOFA will provide financial
assistance to the Small Cities Program of New York State, none of its
provisions will have an effect on the relationship between the Federal
Government and New York State, or the State's political subdivisions.
Family
The General Counsel, as the Designated Official for Executive Order
12606, The Family, has determined that the policies announced in this
NOFA would not have the potential for significant impact on family
formation, maintenance and general well-being within the meaning of the
Order. No significant change in existing HUD policies and programs will
result from issuance of this NOFA, as those policies and programs
relate to family concerns.
Accountability in the Provision of HUD Assistance
See Section I.A.4 of this NOFA.
Prohibition Against Lobbying Activities
The use of funds awarded under this NOFA is subject to the
disclosure requirements and prohibitions of section 319 of the
Department of Interior and Related Agencies Appropriations Act for
Fiscal Year 1990 (31 U.S.C. 1352) and the implementing regulations at
24 CFR part 87. These authorities prohibit recipients of Federal
contracts, grants, or loans from using appropriated funds for lobbying
the Executive or Legislative Branches of the Federal Government in
connection with a specific contract, grant, or loan. The prohibition
also covers the awarding of contracts, grants, cooperative agreements,
or loans unless the recipient has made an acceptable certification
regarding lobbying. Under 24 CFR part 87, applicants, recipients, and
subrecipients of assistance exceeding $100,000 must certify that no
Federal funds have been or will be spent on lobbying activities in
connection with the assistance.
Indian Housing Authorities (IHAs) established by an Indian tribe as
a result of the exercise of the tribe's sovereign power are excluded
from coverage of the Byrd Amendment, but IHAs established under State
law are not excluded from the statute's coverage.
Prohibition Against Lobbying of HUD Personnel
Section 13 of the Department of Housing and Urban Development Act
(42 U.S.C. 3537b) contains two provisions dealing with efforts to
influence HUD's decisions with respect to financial assistance. The
first imposes disclosure requirements on those who are typically
involved in these efforts--those who pay others to influence the award
of assistance or the taking of a management action by the Department
and those who are paid to provide the influence. The second restricts
the payment of fees to those who are paid to influence the award of HUD
assistance, if the fees are tied to the number of housing units
received or are based on the amount of assistance received, or if they
are contingent upon the receipt of assistance. HUD's regulation
implementing section 13 is codified at 24 CFR part 86. If readers are
involved in any efforts to influence the Department in these ways, they
are urged to read the final rule, particularly the examples contained
in Appendix A of the rule. Appendix A of this rule contains examples of
activities covered by this rule.
Any questions concerning the rule should be directed to the Office
of Ethics, room 2158, Department of Housing and Urban Development, 451
Seventh Street, SW., Washington DC 20410-3000. Telephone: (202) 708-
3815 (voice/TDD). (This is not a toll-free number.) Forms necessary for
compliance with the rule may be obtained from the local HUD office.
Prohibition Against Advance Information on Funding Decisions
Section 103 of the Reform Act proscribes the communication of
certain information by HUD employees to persons not authorized to
receive that information during the selection process for the award of
assistance that entails a competition for its distribution. HUD's
regulations implementing section 103 are codified at 24 CFR part 4, and
recently were amended by an interim rule published in the Federal
Register on August 4, 1992. In accordance with the requirements of
section 103, HUD employees involved in the review of applications and
in the making of funding decisions under a competitive funding process
are restrained by 24 CFR part 4 from providing advance information to
any person (other than an authorized employee of HUD) concerning
funding decisions, or from otherwise giving any applicant an unfair
competitive advantage.
Persons who apply for assistance in this competition should confine
their inquiries to the subject areas permitted by 24 CFR part 4.
Applicants who have questions should contact the HUD Office of Ethics
(202) 708-3815 (voice/TDD). (This is not a toll-free number.)
Dated: May 24, 1994.
Andrew Cuomo,
Assistant Secretary for Community Planning and Development .
[FR Doc. 94-13104 Filed 5-26-94; 8:45 am]
BILLING CODE 4210-29-P
