To incorporate 2005 legislative changes, reorganize the rules and provide clarification of the rule chapter.  

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    DEPARTMENT OF COMMUNITY AFFAIRS

    Division of Housing and Community Development

    RULE NOS.: RULE TITLES:

    9B-43.003 Definitions

    9B-43.004 Eligible Applicants

    9B-43.005 Application Criteria

    9B-43.006 Application Procedures for All Categories

    9B-43.007 Scoring System

    9B-43.009 Program Requirements for Housing

    9B-43.010 Program Requirements for Neighborhood Revitalization

    9B-43.012 Program Requirements for Economic Development

    9B-43.013 Program Requirements for Commercial Revitalization

    9B-43.014 General Grant Administration of All Categories

    9B-43.0031 Definitions

    9B-43.0041 Application and Administrative Requirements

    9B-43.0051 Grant Administration and Project Implementation

    9B-43.0061 Emergency Set-Aside Assistance

    9B-43.0071 Section 108 Loan Guarantee Program

    PURPOSE AND EFFECT: To incorporate 2005 legislative changes, reorganize the rules and provide clarification of the rule chapter.

    SUMMARY: Rule Chapter 9B-43, F.A.C., has been revised to make it more user-friendly, and to eliminate duplicative information found in the application manual, federal regulation and state statute. The rule is now a concise document that is easier to follow. The application manual(s) that is incorporated by reference is also being streamlined and consolidated into one document.

    SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: No Statement of Estimated Regulatory Cost was prepared.

    However, the rule revisions will not have a financial impact on the State of Florida or any local government served by the Florida Small Cities CDBG Program. The only costs associated with the rule revision are those related to the public meetings being conducted.

    Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

    SPECIFIC AUTHORITY: 290.048 FS.

    LAW IMPLEMENTED: 290.042 FS., 290.043 FS., 290.044 FS., 290.0455 FS., 290.046 FS., 290.047 FS., 290.0475 FS., 290.048 FS.

    A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:

    DATE AND TIME: February 21, 2006, 9:00 a.m.4:00 p.m.

    PLACE: Room 166, Betty Easley Conference Center, 4075 Esplanade Way, Tallahassee, Florida 32399-2100

    Any person requiring special accommodation at the workshop because of a disability or physical impairment should contact Judy Peacock, Planning Manager, CDBG Program, 2555 Shumard Oak Boulevard, Tallahassee, Florida 32399-2100 or call (850)487-3644 (SUNCOM 278-3644) at least seven days before the date of the workshop. If you are hearing or speech impaired, please contact the Department of Community Affairs using the Florida Dual Party Relay System which can be reached at 1(800)955-8770 (Voice) or 1(800)955-9771 (TDD).

    THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULES IS: Monya Newmyer, Community Program Manager, Division of Housing and Community Development, 2555 Shumard Oak Boulevard, Tallahassee, Florida 32399-2100, (850)487-3644

     

    THE FULL TEXT OF THE PROPOSED RULES IS:

     

    9B-43.003 Definitions.

    Specific Authority 120.53, 290.048 FS. Law Implemented 290.042, 290.043 FS. History–New 11-30-87, Amended 10-11-88, 9-25-89, 10-14-90, 12-29-91, 4-26-93, 1-30-95, 2-13-96, 12-25-96, 1-29-98, 3-28-02, Repealed ________.

     

    9B-43.0031 Definitions.

    The Florida Small Cities Community Development Block Grant (CDBG) program is governed by definitions provided in the Housing and Community Development Act of 1974, as amended; Title 24 C.F.R. 570, and Sections 290.0401-.048, F.S., incorporated herein by reference, as effective on ________. The following additional definitions are provided for clarification.

    (1) Architectural and engineering services means the basic services required to be performed by an architect or engineer licensed by the State of Florida including preliminary engineering, design services and services during construction except for the following additional engineering services:

    (a) Site surveys for water treatment plants, sewage treatment works, dams, reservoirs, and other similar special surveys as may be required, such as route surveys.

    (b) Laboratory tests, well tests, borings, specialized geological soils, hydraulic or other studies recommended by the engineer.

    (c) Property surveys, detailed description of sites, maps, drawings, or estimates related to them, assistance in negotiating for land and easement rights.

    (d) Necessary data and filing maps for water rights.

    (e) Redesigns ordered by the owner after final plans have been accepted by the owner and the local government, except redesigns to reduce the project cost to within the funds available.

    (f) Appearances before courts or boards on matters of litigation or hearings related to the project.

    (g) Preparation of environment assessments or environmental impact statements.

    (h) Performance of detailed staking necessary for construction of the project in excess of the control staking.

    (i) Provision of the operation and maintenance manual for facilities.

    (j) Activities required for obtaining state and federal regulatory agency construction permits.

    (k) Design of hookups.

    (l) Cost of engineering specialties such as electrical; hydro geological services; biologists; and heating, ventilation, and air conditioning (HVAC).

    (2) Authorized signature means the original signature of the Chief Elected Official or the signature of a person who is designated by charter, resolution, code, ordinance or other official action of the local government to sign CDBG related documents. If a signature other than the Chief Elected Official is submitted, a copy of that designation must accompany that signature.

    (3) “Direct Benefit” is CDBG assistance that promotes or enhances individual well-being including housing rehabilitation, sewer and water hookups, or job creation by a Participating Party. Activities that only meet a national objective through an area-wide determination do not confer direct benefit.

    (4) “Full time employees means all those persons employed by the local government who are payroll employees on any one specific payroll date during the 45 day period prior to the application deadline date and who receive full vacation, retirement, and any other benefits provided by the employing local government to all its regular employees. Elected officials are not defined as full time employees. For county governments, only the employees of the Board of County Commissioners shall be counted.

    (5) Fundable range shall be determined from the scores of the eligible applications, ranked in descending order by the Department. Following appeals, awards will be made based upon rank beginning with the highest scoring application and proceeding in descending order until all available funds in that category for that funding cycle are depleted. The score of the last application funded shall establish the lowest score in the fundable range if there are no eligible unfunded applications remaining in the category. If there are unfunded applications in a category, the highest scored unfunded application shall establish the lowest score of the fundable range.

    (6) Job creation location means the geographic location within the project area where job creation activities of the Participating Party and expenditure of non-public funds will occur. This excludes any locations where public funds from any source are being expended for local government-owned infrastructure, local government owned public facilities or within public easements or rights-of-way.

    (7) Jobscreated means jobspermanent which were not in existence in the State of Florida prior to the provision of the CDBG assistance and which would not be created without CDBG assistance. In cases where an employer both creates and eliminates jobs, jobs created means the difference between the new jobscreated and the old jobs eliminated.

    (8) Jobspermanent means a full-time job or a full-time equivalent job (2,000 hours annually) as set forth in the application which is necessary to the overall goals and objectives of a business and which has no known end, and which will be maintained by the Participating Party for a minimum of one year from administrative closeout of the subgrant.

    (9) Jobsretained means jobspermanent which, without CDBG assistance, would be abolished by layoffs, plant closing, or other severe economic or natural conditions or as otherwise clarified in 24 C.F.R. 570.483(b)(4), as effective on ________.

    (10) “Jurisdiction” means the corporate limits of a local government or the area over which it has zoning authority.

    (11) Liquidated damages are funds paid to a local government by a contractor, vendor, or any other party pursuant to a CDBG-funded contract when such payment is triggered by nonperformance or failure to perform on their part. This definition is applicable whether such funds are withheld by the local government or repaid or rebated to the local government by the contractor, vendor or third party.

    (12) “Local government” means a unit of general purpose local government, i.e., county governments and municipal governments (incorporated cities, towns and villages) within the State of Florida. Unless otherwise stated, applicant shall refer to the applying local government.

    (13) Main Street Program participant means an entity in a local government's jurisdiction which has been selected for participation in the Florida Main Street Program by the Secretary of State and are currently considered an active participant in the Main Street Program by the Department of State as of the application date.

    (14) “Minority” means a Black, American Indian, Alaskan native, Hispanic, Asian, Hasidic Jew or Pacific Islander individual.

    (15) Open contract means any subgrant which has not been administratively closed.

    (16) “Participating party means a business or other entity responsible for creating or retaining jobspermanent as part of the proposed Economic Development project. The applying local government shall not be a participating party in its own application.

    (17) Principal means the owner of a 50 percent or more interest in a business activity.

    (18) “Project area or areas means the site or sites upon which all subgrant-related construction activities take place, without respect to funding source.

    (19) Public notice is defined as an advertisement published in a local newspaper of general circulation at least five days, and no more than 20 days, prior to event for which the notice was placed.

    (20) "Section 3" means Section 3 of the Housing and Community Development Act of 1968, as amended, and 24 C.F.R. Part 135, as effective on ________, relating to employment and other economic opportunities for lower income persons.

    (21) Service area means the total geographic area to be served by a subgrant-funded activity, where at least 51 percent of the residents are low and moderate income persons. A service area will encompass all beneficiaries who are reasonably served or would be reasonably served by an activity.

    (22) Time period or days means calendar days. All time periods specified in this rule, the application, the contract and all correspondence to and from the Department refer to calendar days unless otherwise specified.

    (23) Very low-income family (VLI) is a household whose annual income does not exceed 30 percent of the median income for the area or does not exceed 30 percent of the median income for the State, whichever is higher, as most recently determined by HUD. This information can be found in the HUD adjusted census data in the elements titled FAMVLOW and NFAMVLOW.

    Specific Authority 290.048 FS. Law Implemented 290.042, 290.043 FS. History–New ________.

     

    9B-43.004 Eligible Applicants.

    Specific Authority 120.53, 290.048 FS. Law Implemented 290.044, 290.046 FS. History–New 11-30-87, Amended 10-11-88, 10-14-90, 12-29-91, 1-30-95, 2-13-96,1-29-98, 3-28-02, Repealed ________.

     

    9B-43.0041 Application and Administrative Requirements.

    The Florida Small Cities CDBG program is governed by the Housing and Community Development Act of 1974, as amended; Title 24 C.F.R.; Sections 290.0401-.048, F.S.; the Guide to National Objectives and Eligible Activities for State CDBG Program published by the US Department of Housing and Urban Development; and the Florida Small Cities CDBG Program Application Manual, all of which are incorporated herein by reference, as effective on ________.

    (1) Application Process.

    (a) An annual application cycle will be announced in anticipation of federal funding. The announcement will include the beginning and ending dates of the application cycle and the application deadline.

    (b) Once an application is submitted to the Department, no aspect of the application may be revised to improve the score or broaden the scope of the project.

    (c) If an activity is determined to be ineligible for funding pursuant to 24 C.F.R. 570.482, as effective on ________, the Department will reduce the amount requested for the ineligible activity and associated complementary activities. The application will be re-scored after this reduction.

    (d) Applicants may submit either a Housing or Neighborhood Revitalization application. If both are received from a single local government, only the first application logged in by the Department will be scored. The second application will be returned.

    (e) Economic Development applications received by the application deadline will be scored, ranked and, if successful, awarded until all available funds are committed; however, should initial application requests not exceed available funds, applications received after the application deadline will be reviewed and awarded on a first-come, first-served basis during the application cycle until all funds are committed.

    (f) Documents to meet application requirements or additional submissions resulting from the site visit must be submitted in original or photocopy form. Facsimile or electronic submissions are not acceptable.

    (2) Grant Ceilings.

    (a) Grant ceilings establish limits on the amount of funds that may be requested in a single subgrant application for Commercial Revitalization, Economic Development, Housing or Neighborhood Revitalization funding based on the most recently available U.S. Census of Population data. In the case of county government applicants, the population shall include only the unincorporated areas of the county.

    (b) Local governments shall comply with the LMI population and subgrant ceilings listed below to determine the maximum amount of funds for which they may apply. Population groupings are based on HUD modified census figures summarizing low and moderate income population.

    LMI Population Grant Ceiling

    1-499

    $600,000

    500-1,249

    $650,000

    1-250-3,999

    $700,000

    4,000-10,549

    $750,000

    10,550 and above

    $750,000

    (c) The Department shall offer a local government which scores within the fundable range an amount less than that requested in the application if insufficient funds are available to fund the total subgrant request.

    (3) Application Scoring.

    (a) The maximum score possible in each program category is 1,000 points. These points shall be divided among three program factors as specified below:

    Community-wide needs250 points

    Program Impact, Scope of Work, LMI Benefit650 points

    Outstanding Performance in Equal Opportunity Employment and Fair Housing100 points

    (b) The Department shall calculate Community-wide Need Scores for all eligible local governments based on the most recent and uniformly available federal and state data. Current decennial U.S. Census data shall be used unless otherwise noted. The maximum Community-wide Needs Score is 250 points. Data shall be further defined as:

    1. For municipal government applicants, data relevant for the entire incorporated area shall be used;

    2. For county government applicants, data relevant for only the unincorporated areas within the county shall be used;

    3. For municipalities incorporated since the most recent census, block group or census tract data for the area that was incorporated shall be used where available; otherwise a proportion of the county's census data shall be used to calculate the community-wide needs score.

    a. Three factors shall be used to determine the community-wide needs score with the following maximum points available for each:

    b. Number of persons below poverty125 points

    c. Number of year-round housing units with 1.01 or more persons per room62.5 points

    d. Number of low and moderate income persons according to the latest HUD adjusted census data62.5 points

    4. Method of Calculation. Eligible local governments shall be compared on each factor with all other local governments in their LMI population group as designated herein. Calculating each local government's score shall include the following steps:

    a. The highest statistic in each population group for each factor identified herein shall be the basis for relative comparison of all other eligible local governments in the population group, as illustrated below:

    Local government's statistic on factor divided by the highest statistic on factor for all eligible local governments equals percentage to be used for local government's multiplier

    b. For each eligible local government, the percentage calculated shall then be multiplied by the maximum number of points available for that particular factor, as follows: eligible local government's percentage x maximum points available = score for eligible local government on factor

    c. The Community-Wide Needs Score factors shall be summed for each eligible local government for the overall Community-Wide Needs Score. Pursuant to Section 290.046(3)(b), F.S., each local government awarded subgrant funds shall have its community-wide needs score reduced by 5 points for every $100,000, or fraction thereof, of funding awarded. This adjustment shall not be made during the first application cycle in which the most recent census data is used. All adjustments for subgrant funds received shall be based on subgrants received in all application cycles after the most recent census data was first used. This calculation shall be based on all funds awarded as of the end of the month prior to the opening date of the application cycle. The adjusted community-wide needs score cannot be less than zero.

    (c) In the event that two or more applications receive an equal final score, the application addressing the highest State priority goal as reflected by the goal points for application activities shall receive first consideration. If a tie still exists, then the applicant with the highest community-wide needs score shall receive first consideration. If a tie still exists, the application that will provide direct benefit to the largest number of low and moderate income persons will receive first consideration.

    (4) Consistency with Local Comprehensive Plan.

    (a) The application shall include affirmation that the proposed activities are not inconsistent with applicable elements of the adopted local comprehensive plan and shall document this consistency by including the applicable excerpts from the applicant's comprehensive plan in the supporting documentation section of the application.

    (b) If the Department determines that an application is inconsistent with the adopted local comprehensive plan, the applicant shall be advised of that determination in the completeness review letter. If after review of the applicant's response, the Department reaffirms its determination of inconsistency, the application shall be rejected.

    (5) Interlocal Agreements. An applicant may propose activities in other eligible jurisdictions within the following parameters:

    (a) Application scoring criteria are based on the applicant's jurisdiction.

    (b) Activities undertaken outside the applicant's jurisdiction are also undertaken within the applicant's jurisdiction, except in an Economic Development application where the infrastructure activities may be undertaken exclusively outside the jurisdiction.

    (c) No more than 25% of the service area and/or beneficiaries may reside outside the applicant's jurisdiction (except for Economic Development projects).

    (d) The applicant shall include with the application an executed Interlocal Agreement which:

    1. Includes as parties all local governments whose jurisdictions are included in the project and/or service area(s);

    2. Authorizes the applicant to undertake the activities in all jurisdictions included in the interlocal agreement; and

    3. Affirms that all activities are not inconsistent with each local government's comprehensive plan and documents this requirement by including the applicable excerpts of each local government's comprehensive plan in the supporting documentation section of the application.

    (6) Documenting LMI Benefit.

    (a) HUD Census DataLMI benefit may be documented by using HUD-provided Census Data where the service area geographically corresponds with block groups, census tracts, or local government geographical limits. A jurisdiction-wide activity using census data rather than a survey to establish the national objective of benefit primarily to low and moderate income persons may score VLI points by calculating a percentage of VLI benefit using census data. VLI beneficiaries are calculated by totaling, for each block group in each census tract, the numbers shown in two data areas: FAMVLOW and NFAMVLOW. This total of VLI beneficiaries is divided by the total beneficiaries to establish the VLI percentage for scoring the appropriate VLI beneficiary points.

    (b) Sampling Survey MethodologyA sample-based survey of the beneficiaries must utilize the Income Verification Form, which is hereby incorporated by reference as effective on __________, and must correspond with the random sampling requirements established by HUD in Notice CPD-05-06, as effective on __________.

    1. The survey process must verify eligibility of any proposed direct benefit activities, certify the number of projected very low, low and moderate income households and beneficiaries, and the total number of beneficiaries.

    2. Where the sample-based survey results substantially overstate the proportion of persons with low or moderate income in a service area, the Department will require the local government to provide supporting evidence which substantiates the survey data. If the survey results are found to be inaccurate, the application shall be rejected.

    (c) Small Service Area Survey Methodology. For surveys of service areas under 50 households, all households must be surveyed. Any non-responding household must be assumed to be above low and moderate income. The number of household members for non-responding households may be verified through third parties.

    (d) A survey approved by the Department for a CDBG application remains valid for the same geographic service area for up to five years from the date the survey was completed.

    (e) Only the methods of LMI benefit determination provided for in this rule shall be used.

    (7) Site Visits. Prior to issuing awards, the Department will conduct site visits.

    (a) The Department shall notify the local government in writing of the date and approximate time the site visit will take place.

    (b) The Department shall examine all documents that have been certified to in the application.

    (c) Economic Development site visits will require the participating party/parties to be present, or the participating party must meet with Department staff within 30 days after the site visit at the Department of Community Affairs. Should a participating party fail to meet with Department staff, it must be withdrawn from the application by the local government or a 251-point penalty shall be assessed against the Program Impact score. During the site visit, the local government must provide documentation requested by the Department based on the application review.

    (8) Completeness Review Letter (for all grant categories except economic development). Following site visit, the Department will advise the applicant of the status of the review.

    (a) The Department shall request in writing required documentation determined unavailable or inadequate during site visit. Except for Economic Development applications, applicants shall have 12 calendar days from the date the request is received to provide appropriate documentation to the Department.

    (b) If the Department has not received the requested documentation by the deadline date at 5:00 p.m. (E.S.T.), the applicant's funding request shall be revised accordingly and the following reduction in scores shall be applied:

    1. Maps (where required)250 points

    2. Interlocal Agreement, if applicable250 points

    (c) Additional completeness Review Items for Neighborhood Revitalization Applications. During the completeness review period, the Department shall review applications that propose land assembly or site preparation for new housing construction for low and moderate income persons to determine whether documentation is provided to show:

    1. Firm commitments for construction from the developer,

    2. Documentation of ownership, or

    3. An option on the land to control the sale to or use by low and moderate income persons is provided in the application. Documentation that the proposed site is properly zoned shall also be submitted.

    (d) Additional Completeness Review Items for Economic Development Applications. The following completeness requirements must be met for Economic Development applicants:

    1. Within 60 days of the applicant's receipt of the Award and Offer to Contract letter, the Department must receive the Subgrant Agreement executed by the local government and documentation required to address all issues identified during the site visit. The date of receipt of the Award and Offer to Contract letter shall not be included in the 60 days.

    2. In the event that a participating party withdraws prior to the execution of the subgrant agreement by the Department, and the application remains within the fundable range based on the remaining participating parties, those remaining participating parties may not increase the job creation numbers or leverage claimed for points beyond the score of the original application. Replacement of participating parties shall not be allowed without withdrawal and resubmission of the application.

    (9) Eligibility. Contract performance shall be considered on time for open subgrants that have received an agreement period extension of less than twelve months. Performance is on schedule when expenditures and work activity plans stated in awarded subgrant agreement(s) have been met or surpassed. The certification of on time performance, as provided in the application, is subject to verification by Department staff. If the Department determines that the certification of on time performance is inaccurate and the performance is not in accordance with the expenditures and work plan accomplishments described in the subgrant agreement, then the application will not be considered further.

    Specific Authority 290.048 FS. Law Implemented 290.044, 290.046, 290.047 FS. History–New ________.

     

    9B-43.005 Application Criteria.

    Specific Authority 120.53, 290.048 FS. Law Implemented 290.044, 290.046, 290.047 FS. History–New 11-30-87, Amended 10-11-88, 9-25-89, 10-14-90, 12-29-91, 1-30-95, 2-13-96, 12-25-96, 3-28-02, Repealed ________.

     

    9B-43.0051 Grant Administration and Project Implementation.

    (1) Administrative Costs.

    If proposed administrative cost percentages in an application are exceeded, as set forth in Section 290.047, F.S., the dollars for administrative costs shall be reduced prior to the offering of a subgrant award in order to bring the percentages into compliance based on the total eligible subgrant costs.

    (2) Lead-Based Paint. The applicant shall adopt and implement procedures to fulfill regulatory and statutory requirements relating to Lead-Based Paint pursuant to 24 C.F.R. 570.487, 24 C.F.R. 35, and Section 302 of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. Section 1251 et seq.), as effective on ________. The applicant is required to:

    (a) Prohibit use of lead-based paint;

    (b) Notify potential beneficiaries of the hazards of lead-based paint;

    (c) Inspect properties prior to initiating rehabilitation to determine if lead-based paint is present;

    (d) Undertake appropriate protection of workers and occupants during abatement;

    (e) Ensure proper cleanup and disposal procedures are used; and

    (f) Retain records of enforcement and monitoring for at least three years.

    (3) Rehabilitation Standards. Upon completion of the rehabilitation program, all housing units addressed with CDBG funds must be in compliance with the subgrantee's local building code and the HUD Section 8, Housing Quality Standards detailed in 24 C.F.R. 882.109, as effective on ________. This requirement does not apply if the construction activity is limited to water hookups, sewer hookups, the abandonment of wells, or the abandonment of septic systems with no internal or external modifications to the housing structure.

    (4) Architectural and Engineering Costs. The maximum percentage of subgrant funds allowed for architectural and engineering costs shall be based on the subgrant activities which require architectural design and engineering and shall not exceed the Rural Development (RD) Rural Utility Service (RUS) fee schedule (Form RD 1942-9) in Florida RUS Bulletin 1780-9, incorporated herein by reference, as effective on ________.

    (a) If more than one design professional is needed for an activity or activities (e.g., a landscape architect in addition to an engineer for sidewalk construction in a Commercial Revitalization project), the local government shall not exceed the appropriate RD/RUS fee curve for each activity covered by each design professional negotiated separately. For projects involving both Table I and II activities, engineering costs shall be pro-rated appropriately.

    (b) For each additional engineering service as defined in Rule 9B-43, F.A.C., and for preliminary engineering, the local government shall negotiate a reasonable fee for the service following procurement procedures in 24 C.F.R. 85.36, as effective on ________. Preliminary engineering costs not to exceed one-half of one percent of the estimated construction cost may be paid with CDBG funds over and above the amounts included in the RD/RUS fee schedule.

    (c) If readiness to proceed points are part of the final application score, then CDBG subgrant funds for engineering costs shall not include preliminary engineering and shall not exceed $10,000 for non-inspection engineering plus the percentage in the fee schedule for Table I-A, Table II-A, or a prorated amount of both tables for projects involving activities included in both tables for engineering inspection.

    (5) Beneficiaries of Public Improvements.

    For activities where hookups or connections are required for beneficiary access to the public improvement, low and moderate income benefit shall be determined by the number of low and moderate income persons in households connected to and able to use the water, sewer or other infrastructure.

    (6) Underwriting Analysis. The provisions of 24 C.F.R. 570.482(e), as effective on ________, regarding underwriting analysis are incorporated herein by reference.

    (7) Completion of Activities. The Department will acknowledge a local government's closeout by mailing an administrative closeout notification or providing a letter regarding Notice of Outstanding Closeout Issues (NOCISS).

    (a) The NOCISS letter shall identify impediments to closeout which the local government must resolve before the Department's review of the closeout will proceed.

    (b) A local government's response to a NOCISS letter must be received by the Department at least ten days before the application deadline in order for the local government to be eligible to apply during the next funding cycle. For a NOCISS response received at least ten days prior to application deadline, eligibility will be established if the response satisfies the deficiencies set forth in the NOCISS letter, regardless of whether or not the Department's closeout notification has been mailed.

    (8) Non-performance Penalties. Subgrant application penalties and subgrant application restrictions shall be assessed based on non-performance of contractual requirements related to project accomplishments. The following penalties and restrictions will apply to subgrant agreements for which an administrative closeout was submitted prior to the upcoming application cycle deadline and will apply regardless of whether the subgrant agreement has been amended to permit the reduction in accomplishments:

    (a) A penalty of five points per housing unit, up to a maximum of 50 points, for failure to address the number of housing units scored in the original Housing category application.

    (b) A penalty of five points per low and moderate income household not served OR a penalty of five points for each business facade not addressed, as geographically displayed on the original application maps (as modified, if necessary, during the completeness process) in the Neighborhood Revitalization or Commercial Revitalization categories, up to a maximum of 50 points. All direct benefit proposed in the application (e.g., water hookups) must be completed to avoid this penalty. No penalty shall be assessed for failure to provide a water or sewer hookup if the hookup is not possible because the home is vacant or was damaged or destroyed after application submission and there are no other homes in the service area that were identified in the application as unmet need which qualify for a hookup.

    (c) A penalty of five points per job, up to a maximum of 50 points, for failure to create or retain the total number of jobs in the original contract in the Economic Development category.

    (d) A penalty of 150 points if the Department takes formal action under the terms of the contract to terminate a subgrant agreement for an event of default. This penalty will expire two years from the subgrant agreement termination date.

    (e) Submission of inaccurate information may be subject to one or more of the following penalties:

    1. In the case of monitoring or audit responses, it shall result in the revocation of closeout status, audit clearance, monitoring report clearance, etc.

    2. In the case of any action which avoids a penalty, the penalty will be assessed.

    3. In the case of an administrative closeout status, it shall result in the nullification of the eligibility of the local government to apply for and receive additional CDBG funding in accordance with Section 290.046(2)(c),(i), F.S. Such revocation of administrative closeout status will also affect subsequent Department actions made on that basis, including the cancellation of any subsequent awards and repayment by the local government of any funds previously expended under the nullified subgrant agreement.

    (f) All penalties in subsection (8) will expire two years from the date of administrative closeout or subgrant termination by the Department.

    (g) If the subgrant agreement is terminated with no expenditures, or is terminated with expenditures for administration and/or engineering only, no penalty will be assessed.

    (h) The Department will waive these penalties if the local government is unable to meet subgrant agreement requirements due solely to a state or federally declared natural disaster or emergency.

    (9) Procurement. Grant funds shall be used to obtain commodities and services only in accordance with written procurement procedures adopted by the local government and shall comply with the provisions of 24 C.F.R. 85.36, as effective on ________, and, for covered professional services contracts, Section 287.055, F.S., (Consultants Competitive Negotiation Act).

    (a) Any procurement which requires public notice in a newspaper shall be published in a daily newspaper of general circulation in a nearby Office of Management and Budget (OMB) designated metropolitan statistical area (MSA). Alternatively, a local government may substitute such notice with a combination of local newspaper publication and mailed announcements to potential bidders, which generates at least three responsible and responsive bids or proposals. Such publication and/or mailing shall allow at least 12 days for receipt of the proposals or bids.

    (b) The Department must provide written permission prior to the local government awarding any contract exceeding $25,000 procured as a result of inadequate competition, a sole source or a noncompetitive procurement. For contracts below $25,000, the local government's files must document the justification for such noncompetitive procurement which complies with 24 C.F.R. 85.36(b)(4), as effective on ________.

    (c) All contracts for professional services shall conform to the following:

    1. Any Request for Proposals which includes more than one service shall provide that:

    a. Proposals may be submitted for one or more of the services;

    b. Qualifications and proposals shall be separately stated for each service;

    c. The evaluation of the proposals shall be separate for each service.

    2. A written evaluation, such as a ranking sheet or narrative, shall be prepared for each proposal, ranking or comparing each proposal to the criteria in the published Request for Proposals. Based on that criteria, the written evaluation will document why the successful proposal was selected.

    3. A separate professional services contract must be procured and executed between the local government and any professional services consultant for each particular CDBG subgrant and each service. Each advertisement for procurement of CDBG professional services, except for subgrant application preparation, must identify either the CDBG subgrant cycle by federal fiscal year or the CDBG subgrant agreement number.

    4. Each professional services contract must reference the CDBG subgrant agreement to which it is applicable.

    (d) Construction Contracts.

    1. If CDBG and other sources of funding are being jointly used to fund activities under a single contract, the activities to be paid for with CDBG funds must be shown separately in the bid proposal so that the CDBG activities and the amount of the contract to be paid from CDBG funds are identifiable.

    2. If, after applying any specified deductive alternates, construction bids exceed available funds, the local government shall not negotiate with the low bidder unless there is only one bidder or all bidders are allowed to submit revised bids for the revised project.

    3. If the construction cost can be reduced by deleting entire line items or reducing quantities based on unit prices identified in the bid, the effect of such deletions or reductions on all bidders' prices shall be determined. Contract award shall be made to the low, responsive and responsible bidder for the revised project.

    4. All contracts in excess of $100,000 covered by Section 3 regulations shall contain the language required in 24 C.F.R. 135.38, as effective on ________.

    5. The provisions of this subsection shall not be construed to conflict with or supersede the requirements of Section 287.055, F.S., or any other applicable State or federal law.

    (10) Expenditures and Limitations.

    (a) No payment from the Department shall be for an amount less than $5,000, unless it is a local government's final request for funds.

    (b) Local governments operating on a reimbursement of funds basis must submit at least one request for funds each quarter which reflects actual project expenditures for the quarter.

    (c) Local governments may maintain no more than $5,000 of cash-on-hand to meet daily cash needs. Amounts greater than $5,000 shall be expended within 14 days or refunded to the Department.

    (d) Escrow Accounts. Local governments may draw down CDBG funds and deposit them into an interest-bearing escrow account for housing rehabilitation. An escrow account may be established when direct grants or loans are made to owners of private property for the purpose of housing rehabilitation. Escrow accounts shall only be used pursuant to 24 C.F.R. 570.511, as effective on ________.

    1. Funds may be requested only after approval of the contractor and amount of the contract by the local government. If funds are received by the local government prior to the execution of a contract that obligates those funds, those funds will be returned to the Department within seven days of their receipt.

    2. The local government must track the requirements for, receipt of, and disbursement of all funds for each housing unit.

    3. Funds requested and escrowed for use on housing units shall not be used for any other purpose.

    4. Funds requested and escrowed for a housing unit must be expended on that housing unit within 45 days from date of deposit in the escrow account or be returned to the Department.

    5. Interest earned on escrow accounts shall be returned quarterly to the Department.

    (11) Amendments. All proposed amendments must be approved by the Department except for quantity revisions to accomplishments which do not reduce the number of beneficiaries and deobligation of funds at closeout.

    (a) Only those amendments reducing the number of intended beneficiaries, or accomplishments, from the original application shall require review by the Citizens Advisory Task Force and a public hearing with public notice.

    (b) An amendment reducing the score below the fundable range will not be approved by the Department.

    (c) Documentation Required. All requests for subgrant agreement amendments shall include the following written documentation for review by the Department:

    1. A cover letter signed by the Chief Elected Official or his or her designee which describes the need for the proposed changes and their effect upon the approved project. If the amendment involves a score reduction, the letter must state the amended score.

    2. All application forms that would be changed by the proposed amendment.

    3. If applicable, a revised activity work plan.

    4. If applicable, a revised budget showing the current and amended budget.

    5. If there is a change in activity location, a legible map which indicates the proposed change.

    6. If applicable, a copy of the minutes of the meeting of the Citizen's Advisory Task Force (CATF) when the proposed amendment was reviewed.

    7. If applicable, a copy of the public notice for the public hearing at which the amendment was approved, which shall evidence compliance with subsection 9B-43.001(19), F.A.C.

    8. Signature of the Chief Elected Official on Form DCA-69 or documentation from the local governing body authorizing the proposed amendment.

    (d) The amendment must be received by the Department at least 45 days prior to the end of the subgrant agreement. If the amendment is extending the subgrant agreement period, it must be received by the Department at least 90 days prior to the end of the subgrant agreement.

    (e) If the local government requests administrative closeout prior to the termination date of the subgrant agreement, any amendment affecting closeout and requiring Department approval must be included with the closeout.

    (f) Time Extensions to Subgrant Agreements. Any proposed amendment extending the termination date of the subgrant agreement must be approved by the Department. Each time extension amendment requested by the local government must explain the delay and justify the need for the extension. If such justification is not deemed reasonable by the Department, the request will be rejected.

    (12) Subgrant Closeout.

    (a) At the time of submission of the closeout report, the local government must have available documentation which verifies its certification that all construction has been completed, inspected and approved by all parties prior to the subgrant agreement end date and submission of the administrative closeout.

    (b) An administrative closeout may be submitted only when the local government has no more than $5,000 in total funds on hand. All funds drawn from the Department and not expended that exceed $5,000 must be returned to the Department prior to or with the submission of the closeout. If the local government has transferred funds from the regular CDBG administrative account or the escrow account and these funds remain under the control of the local government, the funds are not considered expended for purposes of administrative closeout.

    (c) Upon completion of the activities contained in the local government's CDBG subgrant agreement, including any amendments, the local government shall submit to the Department a closeout which, at a minimum, gives the final statement of costs, certifies that the project and all non-administrative activities are completed and accepted, that all costs except those reflected on the closeout have been paid, that the final score at closeout is within the fundable range as last amended and reports demographics of the program's beneficiaries.

    (d) If any change has been made since the application map or the last map amendment in Commercial Revitalization or Neighborhood Revitalization, the closeout shall also contain a revised map of the activities completed during the term of the CDBG contract.

    (e) The closeout for Housing contracts shall, at a minimum, include a list of the households assisted by the contract and certify that they were within the local government's jurisdiction. Additional information required by HUD may be requested.

    (f) For activities where hookups or connections are required for beneficiary access to the public improvement, low and moderate income benefit shall be determined by the number of low and moderate income persons in households connected to and able to use the water, sewer or other infrastructure at the time of administrative closeout. At a minimum, evidence at the time of closeout must show:

    1. The total number of persons in all households in the service area;

    2. The number of low and moderate income persons in households connected to the infrastructure; and

    3. Documentation that the number of LMI persons in households connected to the infrastructure divided by the total number of beneficiaries in the service area equals at least 51 percent or higher, if required to remain within the fundable range.

    (i) CDBG funded activities may not extend beyond the location of the last LMI beneficiary except where it is required for sound engineering, operation, or design reasons as certified by a licensed engineer.

    (ii) For activities where hookups or connections are required as a condition for beneficiary access to a CDBG funded public improvement, CDBG funds must be used to pay for direct access costs for LMI beneficiaries.

    (iii) Where non-LMI beneficiaries will have to pay a one time fee (i.e., assessment, impact fee, etc.) to connect to or access the CDBG funded public improvement, and where a periodic service fee (i.e., water bill, sewer bill, etc.) will be charged, the proposed non-LMI beneficiaries will be advised of the estimated cost of the one-time fee and all beneficiaries will be advised of the estimated amount of any periodic service fee. The application narrative and budget will outline the estimated costs to be paid by non-LMI beneficiaries. Surveyed beneficiaries shall be advised of both fees in writing with signature acknowledgement of receipt and understanding prior to application submission. If census data is used, a random sample, representing 10 percent (%) of the beneficiaries must be advised writing with signature acknowledgement of receipt and understanding prior to application submission.

    (g) A local government whose closeout is not received by the Department prior to the date of the opening of the application cycle, as defined in the Notice of Funding Availability (NOFA), shall not be eligible pursuant to subsection 9B-43.003(7), F.A.C.

    (h) The closeout must contain original signatures. Facsimile (FAX) submissions are not acceptable.

    (i) If a local government fails to meet contractual requirements on time, the Department reserves the right to require that a local government financially (not administratively) close out a subgrant agreement in order to meet federal requirements for the timely distribution of funds set by HUD.

    (j) The closeout is due within 45 days after expiration or termination of the subgrant agreement.

    (13) Audit Requirements.

    (a) If an audit or an attestation statement has not been received from a local government with either an open or administratively closed contract by the April 30 deadline date, a 25 point penalty will be assessed. The penalty will expire two years from the date that the audit or attestation statement was due.

    (b) If audit requirements are not documented at the time of site visit because a required audit was not performed, the Department shall find that the local government has inadequate administrative capacity. If a required audit was performed but not submitted to the Department, the application will be considered, but any funded CDBG contract will contain special conditions limiting expenditure of funds until all audit issues are resolved.

    (14) Program Income. Any program income generated by a CDBG subgrant, whether open or closed, shall be reported and returned to the Department.

    (15) Non-program Income. Liquidated damages, rebates, refunds, or any other non-program income funds received shall be used to conduct additional eligible CDBG activities or returned to the Department. Additional direct and quantifiable costs (i.e., legal fees, court costs, engineering fees or administrative fees as defined in this rule) generated by the incident creating the liquidated damages may be deducted from the total liquidated damages prior to undertaking additional activities or returning funds to the Department. Use of the funds for additional eligible CDBG activities must be preceded by an amendment to the CDBG contract detailing their use.

    Specific Authority 290.048 FS. Law Implemented 290.044, 290.046, 290.047 FS. History–New ________.

     

    9B-43.006 Application Procedures for All Categories.

    Specific Authority 120.53, 290.048 FS. Law Implemented 290.044, 290.046, 290.047, 290.0475 FS. History–New 11-30-87, Amended 10-11-88, 9-25-89, 10-14-90, 12-29-91, 4-26-93, 1-30-95, 2-13-96, 12-25-96, 1-29-98, 3-28-02, Repealed ________.

     

    9B-43.0061 Emergency Set-aside Assistance.

    Applications will be accepted from eligible applicants for the Emergency Assistance Set-aside in accordance with the following criteria:

    (1) The maximum funds available under this set-aside from each federal fiscal year's allocation shall be five percent (5%) of the funds and shall be available from April 1 of the year for which they are allocated through the third quarter (March 31) of the next State fiscal year.

    (2) Any funds in this set-aside for which a notice of intent to submit an emergency application has not been received prior to March 31 shall be reallocated in accordance with Section 290.044(4), F.S.

    (3) Applications will only be accepted from eligible local governments, as defined in Section 290.042(5), F.S., which have been declared by executive order of the Governor to be in a state of emergency as provided under Section 252.36, F.S., and any subsequent emergency rule criteria prepared by the Department to address the emergency.

    (4) The purpose of funds shall be to meet serious, urgent community needs which pose an immediate and direct threat to the health, safety and welfare of eligible residents of low and moderate income and are eligible activities. The activities to be funded must be documented as being directly related to the disaster event covered in the executive order and documented through disaster assessment reports or similar documentation. The amount of funds requested shall be limited to that amount necessary to address the emergency need.

    (5) Applicants under this category shall demonstrate that no other federal, State or local disaster funds to address the emergency are available.

    (6) All other provisions of this Rule Chapter shall apply to the Emergency Assistance Set-aside unless otherwise stated.

    Specific Authority 290.044 FS. Law Implemented 290.044 FS. History–New ________.

     

    9B-43.007 Scoring System.

    Specific Authority 120.53, 290.048 FS. Law Implemented 290.046 FS. History–New 11-30-87, Amended 10-11-88, 10-14-90. Repromulgated 1-30-95. Amended 2-13-96, 3-28-02, Repealed ________.

     

    9B-43.0071 Section 108 Loan Guarantee Program.

    (1) Application Process.

    (a) Projects which propose loans to a third party or parties shall include letters of commitment from all funding sources evidencing sufficient funds to complete the project. For economic development projects, these commitments shall include at a minimum those stated in the Economic Development section of the Florida Small Cities CDBG Application Manual under Initial Participating Party Commitments.

    (b) Following the receipt of a formal invitation to submit an application, the local government (Applicant/Borrower) shall have a third party conduct and complete a detailed underwriting analysis in accordance with 24 C.F.R. 570.482 (e) (2) and Appendix A of 24 C.F.R. Part 570, as effective on __________. The Department may, at its discretion, require additional underwriting standards, criteria or review.

    (c) The Department shall retain the right of approval of the third party underwriter, the method of analysis and adherence to the guidelines in 24 C.F.R. 570.482 (e) (2) and Appendix A.

    (d) The local government shall submit the underwriting analysis with the final application package. The Department reserves the right to require additional information from the local government, the underwriter and/or the third party to whom a loan is proposed. Once a financial underwriting analysis and other required documentation has been provided by the local government, any material change, including changes in corporate or ownership structure, which affects the underlying assumptions upon which the local government relied will require that the underwriting analysis be re-evaluated by the local government and any assistance requested for the participating party must be adjusted if a material change has occurred.

    (2) Site Visit and Contracting Period.

    (a) The Department will conduct a site visit following review and acceptance of the final application package. For projects which propose loans to a third party or parties, a representative of the third party(ies) shall attend the site visit or must meet with Department staff within 30 days after the site visit at the Department of Community Affairs.

    (b) The local government shall submit a fully executed Participating Party Agreement meeting the requirements set out in the Economic Development section of the Florida Small Cities CDBG Application Manual.

    (3) Administration and Reporting.

    (a) The local government shall copy the Department on all written correspondence with HUD, the underwriter, the Participating Party and all other involved parties.

    (b) The local government shall at a minimum provide the Department with quarterly progress reports until such time as the project is administratively closed. This report shall include documentation in a form acceptable to the Department of the project's draws and repayments, accomplishments to date and updates on previous areas of concern as determined by the Department.

    Specific Authority 290.048 FS. Law Implemented 290.0455 FS. History–New ________.

     

    9B-43.009 Program Requirements for Housing.

    Specific Authority 120.53, 290.048 FS. Law Implemented 290.043, 290.044, 290.046 FS. History–New 11-30-87, Amended 10-11-88, 10-14-90, 12-29-91, 4-26-93, 1-30-95, 2-13-96, 12-25-96, 1-29-98, 3-28-02, Repealed ________.

     

    9B-43.010 Program Requirements for Neighborhood Revitalization.

    Specific Authority 120.53, 290.048 FS. Law Implemented 290.043, 290.044, 290.046 FS. History–New 11-30-87, Amended 10-11-88, 10-14-90, 12-29-91, 4-26-93, 1-30-95, 2-13-96, 12-25-96, 3-28-02, 3-28-02, Repealed ________.

     

    9B-43.012 Program Requirements for Economic Development.

    Specific Authority 120.53, 290.048 FS. Law Implemented 290.044, 290.046 FS. History–New 11-30-87, Amended 10-11-88, 10-14-90, 12-29-91, 1-30-95, 2-13-96, 12-25-96, 3-28-02, Repealed ________.

     

    9B-43.013 Program Requirements for Commercial Revitalization.

    Specific Authority 120.53, 290.048 FS. Law Implemented 290.044, 290.046, 290.047 FS. History–New 11-30-87, Amended 10-11-88, 9-25-89, 10-14-90, 12-29-91, 4-26-93, 1-30-95, 2-13-96, 12-25-96, 3-28-02, Repealed ________.

     

    9B-43.014 General Grant Administration of All Categories.

    Specific Authority 120.53, 290.048 FS. Law Implemented 290.046 FS. History–New 11-30-87, Amended 10-11-88, 10-14-90, 12-29-91, 4-26-93, 1-30-95, 2-13-96, 12-25-96, 1-29-98, 3-28-02, Repealed ________.

     

    NAME OF PERSON ORIGINATING PROPOSED RULE: Monya Newmyer, Community Program Manager

    NAME OF SUPERVISOR OR PERSON WHO APPROVED THE PROPOSED RULE: Kimball Love, Director, Division of Housing and Community Development

    DATE PROPOSED RULE APPROVED BY AGENCY HEAD: January 10, 2006

    DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: December 30, 2005

Document Information

Comments Open:
1/27/2006
Summary:
Rule Chapter 9B-43, F.A.C., has been revised to make it more user-friendly, and to eliminate duplicative information found in the application manual, federal regulation and state statute. The rule is now a concise document that is easier to follow. The application manual(s) that is incorporated by reference is also being streamlined and consolidated into one document.
Purpose:
To incorporate 2005 legislative changes, reorganize the rules and provide clarification of the rule chapter.
Rulemaking Authority:
290.048 FS.
Law:
290.042 FS., 290.043 FS., 290.044 FS., 290.0455 FS., 290.046 FS., 290.047 FS., 290.0475 FS., 290.048 FS.
Contact:
Monya Newmyer, Community Program Manager, Division of Housing and Community Development, 2555 Shumard Oak Boulevard, Tallahassee, Florida 32399-2100, (850)487-3644
Related Rules: (15)
9B-43.003.
9B-43.0031. Definitions
9B-43.004.
9B-43.0041. Application and Administrative Requirements
9B-43.005.
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