This rulemaking will address changes that the Florida Legislature made during the 2011 and 2013 legislative sessions to Sections 290.044 through 290.0475, Florida Statutes. The rulemaking will also resolve conflicts between the rule and other ...

Division of Community Development

RULE NOS.:RULE TITLES:

73C-23.0031Definitions

73C-23.0035Eligibility

73C-23.0041Application Process and Administrative Requirements

73C-23.0045Specific Requirements for Competitive Categories

73C-23.0048Specific Requirements for Economic Development

73C-23.0051Grant Administration and Project Implementation

73C-23.0061Emergency Set-aside Assistance

73C-23.0071Section 108 Loan Guarantee Program

73C-23.0081Nonrecurring CDBG Funding

PURPOSE AND EFFECT: This rulemaking will address changes that the Florida Legislature made during the 2011 and 2013 legislative sessions to Sections 290.044 through 290.0475, Florida Statutes. The rulemaking will also resolve conflicts between the rule and other sections of Florida Statutes and incorporate a revised process for environmental reviews required by the U.S. Department of Housing and Urban Development. Finally, the rulemaking will make it easier for local governments to understand the application process, find information related to economic development grants, and know what is required of them if they receive funding.

SUMMARY: The rule covers how local units of government are determined to be eligible for Community Development Block Grant funding; the application process; the national objectives that must be met; what program categories are funded; the administrative requirements of subgrants, including financial management, environmental review, program implementation, procurement, audit and reporting requirements, and modifying and closing out subgrant agreements; the emergency set-aside program, and Section 108 loans.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION: The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The Agency has performed a review of the statutory requirements and has determined that its proposed rules in Chapter 73C-23, F.A.C., have no adverse impact or regulatory costs which exceed any of the criteria established in Section 120.541(2)(a), Florida Statutes. The rules are therefore expected be able to take effect without the need of being ratified by the Legislature.

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.

RULEMAKING AUTHORITY: 290.044, 290.046, 290.048 FS.

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

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

DATE AND TIME: Friday, October 31, 2014, 8:45 a.m.

PLACE: Florida Department of Transportation District Office 2, Madison Room, 1109 South Marion Avenue, Lake City, Florida

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Roger Doherty, Division of Community Development, Department of Economic Opportunity, 107 East Madison Street, MSC 400, Tallahassee, Florida 32399, [phone]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Roger Doherty, Division of Community Development, Department of Economic Opportunity, 107 East Madison Street, MSC 400, Tallahassee, Florida 32399, [phone]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

(Substantial rewording of Rule 73C-23.0031 follows. See Florida Administrative Code for present text.)

 

73C-23.0031 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 Code of Federal Regulations (CFR) Part 570, Subparts A, C, I, J, K, M and Appendix A; 24 CFR Part 8; 24 CFR Part 85; 24 CFR Part 91; 24 CFR Part 135; 29 CFR Part 5; and 49 CFR Part 24; incorporated herein by reference for use throughout this chapter. These and other documents referenced in this rule are available either on the Department’s Small Cities CDBG Program website, on the U.S. Government Printing Office website – www.gpo.gov, or upon request from the CDBG program office. The following additional definitions are provided for clarification.

(1) “Addressed need” means the activities that the Applicant proposes to complete with the funds requested in its Small Cities Community Development Block Grant Application for Funding.

(2) “Administrative closeout” means the written notification to a Recipient by the Department that all applicable administrative actions and all required work of a subgrant have been completed, with the exception of the submission and approval of the final Office of Management and Budget (OMB) Circular A-133 audit.

(3) “Administrative costs” include the payment of all reasonable costs of management, coordination, monitoring, and evaluation, and similar costs and carrying charges, related to the planning and execution of community development activities which are funded in whole or in part under the Small Cities CDBG Program. Administrative costs shall include all costs of administration, including general administration, planning and urban design, and project administration costs. Excluded from administrative costs are:

(a) Architectural, engineering and associated construction observation;

(b) Force account crews performing construction work;

(c) Title searches, appraisals and costs of surveys for acquisition activities.

(4) “Application cycle” means the 45-day period during which applications will be accepted by the Department for competitive scoring for a specified federal fiscal year’s funds. The application cycle is announced in the Notice of Funding Availability for each federal fiscal year.

(5) “Applicant” means a unit of local government that applies for CDBG funding.

(6) “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. The following are considered “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, and 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 and projects which received “readiness to proceed” points or a planning and design grant.

(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 a facility.

(j) Activities required to obtain 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).

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

(8) “Biddable construction plans and specifications” means construction plans and specifications, certified by an engineer or architect as complete, that include all addressed need service areas and all addressed need work activities outlined in the application. Biddable construction plans and specifications that are submitted with the application must contain all of the documents, forms and information that a contractor needs to submit a bid, except for a wage decision and the CDBG Supplemental Conditions. These documents must be consistent with the project description in the application and the proposed budget and scope of work.

(9) “Business incubator” is a multi-tenant building that provides affordable, flexible space along with a variety of office and professional services to small and/or new businesses. The purpose of an incubator is to create an atmosphere conducive to the creation and growth of fledgling businesses.

(10)“CATF” means Citizen’s Advisory Task Force pursuant to Section 290.046(6), F.S. The CATF shall be comprised of at least five residents of the Applicant’s jurisdiction. None of the members shall be an elected official of the Applicant, and no more than one shall be an employee of the local government. The purpose of the CATF is to provide recommendations on all phases of the local CDBG program.

(11) “Complementary activities” are eligible activities, as provided in Section 290.042, F.S., required by the primary activity or project scored in the CDBG application for which grant funds are being requested and which do not, except for Economic Development projects, exceed 35 percent of the cost of the primary activity or project.

(12) “Completeness letter” means the letter that the Department sends an Applicant following a site visit. The letter either states that the application is complete or lists the additional documentation that is needed to make the application eligible for funding.

(13) “Completeness period” means the 21-day period that the Applicant has to respond to any requests for additional information related to its Application for Funding. The 21-day period starts on the day that the Applicant receives its Certified Mail, Return Receipt Requested Completeness Letter from the Department.

(14) “Concern” means an issue that, if not addressed or corrected, may result in a finding in a Department monitoring report.

(15) “Department” means the Department of Economic Opportunity.

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

(17) “Engineer” means a person meeting the qualifications in Section 471.005(5), F.S.

(18) “Final Closeout” means the written notification to a Recipient by the Department that the final required audit or an attestation statement that a Single Audit is not required for an administratively closed subgrant has been approved by the Department. The date that the Department issues the notice of subgrant final closeout starts the six-year records retention period for subgrant files.

(19) “Finding” means a specific issue of noncompliance with federal or state regulatory requirements, including the CDBG subgrant contract provisions, that is identified in a monitoring report produced by the Department.

(20) “Fundable range” means the range of application scores in the Economic Development, Neighborhood Revitalization, Housing Rehabilitation and Commercial Revitalization categories from the top application score in each category to the score of the highest ranked application in each category for which funds are not available plus 0.01 points. For example, if the top application score in the Neighborhood Revitalization category is 724.15 and the score of the highest ranked unfunded Neighborhood Revitalization application is 624.15, then the fundable range for Neighborhood Revitalization applications would be 724.15 - 624.16.

(21) “Funding cycle” means the time period from the starting date of one application cycle through the last day before the starting date of the next application cycle.

(22) “Household” means all individuals residing in a dwelling unit, regardless of their relationship.

(23) “Household Income” means the income of all individuals aged 18 and above residing in a dwelling.

(24) “Income” means annual income as defined by the U.S. Department of Housing and Urban Development as set forth in 24 CFR 570.3, incorporated herein by reference.

(25) “Job creation location” means the geographic location in the project area where job creation activities of the Participating Party and expenditure of non-public funds will occur.

(26) “Jobs created” means non-public sector jobs created in Florida that were not in existence 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 jobs created and the old jobs eliminated.

(27) “Jobs permanent” means full-time jobs (2,000 hours annually) or full-time equivalent jobs (2,000 hours annually) as set forth in the application which are necessary to the overall goals and objectives of a business and which have no known end.

(28) “Jobs retained” means jobs that without CDBG assistance, would be abolished by layoffs, plant closing, or other severe economic or natural conditions or as otherwise clarified in 24 CFR 570.483(b)(4), incorporated herein by reference.

(29) “Jurisdiction” means the corporate limits of a local government.

(30) “Leverage” includes local government funds, non-CDBG grants and loans to the local government, funds expended by other entities for the project (including by a Participating Party in an Economic Development project), fee waivers, or donated land required for the project. Special CDBG allocations awarded separately from the annual allocation, such as disaster recovery funding, may be used as leverage. Leverage funds must be spent on activities that are eligible for CDBG reimbursement in the program category that is being funded to receive leverage points for the respective application.

(31) “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 non-performance or failure to perform in accordance with contractual requirements. 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.

(32) “Local government” means a unit of general purpose local government, such as county governments and municipal governments (incorporated cities, towns and villages) within the State of Florida.

(33) “Low- and moderate-income (LMI) household” means a household whose annual income does not exceed 80 percent of the median income for the area as most recently determined by HUD.

(34) “Low- and moderate-income persons” means members of low- and moderate-income households.

(35) “Low-income (LI) household” means a household whose annual income does not exceed 50 percent of the median income for the area as most recently determined by HUD.

(36) “Microenterprise” is a commercial enterprise that has five or fewer employees, one or more of whom owns the enterprise.

(37) “Minority” means an individual who is Black/African American, American Indian/Alaskan Native, Asian, Native Hawaiian/Pacific Islander or Multi-Racial.

(38) “One hundred year floodplain” or “100-year floodplain” means the area subject to a one percent or greater chance of flooding in any given year as specified in 24 CFR 55.2(b)(1), incorporated herein by reference, and used throughout this chapter.

(39) “On schedule” means the local government’s performance on an open CDBG subgrant agreement is in accordance with the expenditure rates and accomplishments described in the contract’s Activity Work Plan. Expenditures shall be considered “on schedule” if the local government has received at least 90 percent of the amount projected in the work plan’s schedule of expenditures. Accomplishments shall be considered “on schedule” if an activity identified in the work plan is not more than two months past the scheduled completion date.

(40) “On-time performance” means the local government has not received one or more extensions to the subgrant agreement period totalling 12 months or more, except for time extensions required for an Economic Development project to track additional job creation when contractual job creation commitments have been met, but the cost per job exceeds $10,000. An Economic Development project that is generating program income and has met all contractual obligations shall be considered on time if it is extended more than 12 months solely to expend the program income. For a subgrant initially funded only for planning and design, the subgrant shall be considered on time unless it is extended more than 24 months from the effective date of the modification which provides the construction phase funding.

(41) “Open subgrant” for the purposes of Applicant eligibility is a CDBG agreement that has not been administratively closed.

(42) “Participating Party” means a private, for-profit business or non-governmental private not-for-profit entity responsible for creating or retaining permanent jobs as part of a proposed Economic Development project. A governmental entity cannot be a Participating Party.

(43) “Program income” means gross income received by a unit of local government that was generated from the use of CDBG funds.

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

(45) “Public notice” is an advertisement published in a local newspaper of general circulation at least five days and no more than 20 days prior to the day of the event for which the notice was placed. The calculation of the time period shall include the date of publication of the notice but not the day of the event.

(46) “Recipient” or “Subgrantee” means a unit of local government that has been awarded CDBG funding.

(47) “Readiness to Proceed Points” are awarded in the Commercial Revitalization and Neighborhood Revitalization categories for projects that have biddable construction plans and specifications completed by the application deadline for all “addressed need” activities that require plans and specifications. All required permit applications for infrastructure activities must also have been submitted to the proper agencies by the application deadline.

(48) “Section 3” means Section 3 of the Housing and Community Development Act of 1974, as amended, incorporated herein by reference, and the implementing regulation, 24 CFR 135, incorporated herein by reference, relating to employment and other economic opportunities for low- to moderate-income persons.

(49) “Service area” means the total geographic area to be directly or indirectly served by a subgrant project that addresses the Low- and Moderate-Income National Objective, where at least 51 percent of the residents are low- and moderate-income persons. A service area must include all, and only those, beneficiaries who are reasonably served or would be reasonably served by an activity.

(50) “Subgrant Agreement” means the contract that is executed between an Applicant and the Department to award CDBG funding for completing the Addressed Need activities that were included in the Applicant’s Small Cities CDBG Application for Funding.

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

(52) “Unaddressed need” means the activities that the Applicant listed in its Small Cities CDBG Application for Funding for which funds were not budgeted in the application. Unaddressed need activities can be added to a subgrant agreement through the modification process if CDBG funds are available after all addressed need activities have been procured. All addressed need activities must be completed before a local government can be reimbursed for unaddressed need activities.

(53) “Very low-income (VLI) household” is a household whose annual income does not exceed 30 percent of the median income for the area as most recently determined by HUD.

Rulemaking Authority 290.048 FS. Law Implemented 290.042, 290.043 FS. History–New 5-23-06, Amended 6-6-10, Formerly 9B-43.0031, Amended__________.

 

73C-23.0035 Eligibility.

(1) Eligibility.

The U. S. Department of Housing and Urban Development (HUD) determines which communities in Florida are eligible to receive funding through the Florida Small Cities CDBG Program. HUD publishes a list of eligible “non-entitlement” local governments annually, which the Department posts on its website. Non-entitlement communities eligible to receive funding include:

(a) Counties with populations (in the unincorporated area) under 200,000, and

(b) Cities, towns and villages with populations under 50,000 that have not opted to participate in an entitlement program with a larger community nor have they received special designation from HUD as an entitlement community.

(2) National Objective.

(a) All local governments receiving CDBG funding must meet one of the three National Objectives with the funds that they receive. The National Objectives are:

1. Benefiting low- and moderate-income (LMI) persons,

2. Preventing or eliminating slum or blight, or

3. Meeting other community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community and other financial resources are not available to meet such needs.

(b) When LMI benefit is used as the National Objective, at least 51% of the persons receiving benefit must be LMI.

(c) When using urgent need as the National Objective, the condition posing a threat to health or welfare must have occurred within 18 months of the application’s submission.

(d) At least 70% of all CDBG funds received by the state must be spent on activities that benefit low- and moderate-income persons.

Rulemaking Authority 290.048 FS. Law Implemented 290.042, 290.043 FS. History–New__________.

 

(Substantial rewording of Rule 73C-23.0041 follows. See Florida Administrative Code for present text.)

 

73C-23.0041 Application Process – General Information and Administrative Requirements.

(1) Application Cycle.

(a) Unless otherwise directed by budgetary or administrative constraints, the Florida Department of Economic Opportunity shall annually initiate an application cycle to receive applications for Community Development Block Grant assistance from “non-entitlement” units of local government that are eligible to apply for funding. This 45-day cycle is the time period during which the Department will accept applications for all program areas for competitive scoring for the annual federal fiscal year allocation. If the 45th day of the cycle falls on a weekend or state holiday, the cycle shall be extended to the next regular business day.

(b) An annual application cycle will be announced for each federal award. The Department shall publish a Notice of Funding Availability (NOFA), which announces the starting date and the deadline date and time for submission of applications. The NOFA shall list the allocations for each funding category from the Annual Action Plan submitted to HUD. The NOFA shall be published in the Florida Administrative Register at least 30 days in advance of the starting date of the cycle.

(2) Funding Categories.

(a) The Department provides funding opportunities in the following program areas:

1. Economic Development.

2. Neighborhood Revitalization

3. Commercial Revitalization

4. Housing Rehabilitation

(b) Funding levels for each category are determined annually based on the allocation that the Department receives from HUD. These levels are included in the Annual Action Plan that is submitted to HUD and in the NOFA.

(c) If funding allows, the Department may include funding for planning and design activities in the Annual Action Plan for the Neighborhood Revitalization funding category. Upon successful completion of the planning and design phase, the Department shall modify the award to provide construction funding, not to exceed the ceiling amount for which the Recipient is eligible, as soon as funds are available.

(3) Subgrant Ceilings.

(a.) The Department shall establish limits on the amount of funds that may be requested in an application.

(b) The limits for Neighborhood Revitalization, Commercial Revitalization and Housing Rehabilitation subgrants shall be 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. Population groupings are based on HUD-modified census figures summarizing low- and moderate-income population as the following chart shows:

LMI Population Subgrant Ceiling

1 – 499 – $600,000

500 – 1,249 – $650,000

1,250 – 3,999 – $700,000

4,000 and above – $750,000

(c) The funding limit for Economic Development subgrants shall be based on the number of jobs to be created by the participating parties. The maximum subgrant amount shall be $1,500,000. No more than $34,999 may be requested for each full time equivalent job to be created.

(d) A Neighborhood Revitalization subgrant, initially awarded for Planning and Design costs only, shall not exceed $70,000.

(4) Eligible Applicants.

(a) Non-entitlement local governments that do not have an open Small Cities CDBG subgrant are eligible to apply for Housing Rehabilitation, Neighborhood Revitalization, Commercial Revitalization or Economic Development funding.

(b) Non-entitlement local governments that do not have an open Housing Rehabilitation, Neighborhood Revitalization, or Commercial Revitalization subgrant are eligible to apply for Housing Rehabilitation, Neighborhood Revitalization, or Commercial Revitalization funding.

(c) To be eligible to apply for a Housing Rehabilitation, Neighborhood Revitalization, or Commercial Revitalization subgrant, a non-entitlement local government with an open but completed Housing Rehabilitation, Neighborhood Revitalization, or Commercial Revitalization subgrant shall submit an administrative closeout package which must be received by the Department no later than 5:00 p.m. Eastern Time on the business day prior to the advertised opening of the application cycle. The Department will respond to the closeout request by either:

1. Approving the closeout request and mailing an administrative closeout notification, or

2. If there are unresolved issues with the subgrant, a Notice of Outstanding Closeout Issues (NOCISS) letter will be sent to the local government within 21 days of receiving the closeout package. If the local government receives a NOCISS letter, it must respond to the issues, and the response must be received by the Department at least 10 days before the application cycle deadline. If the response clears the issues in the NOCISS letter, the local government shall be eligible to apply for funding.

(d) Non-entitlement local governments with an open Housing Rehabilitation, Neighborhood Revitalization, or Commercial Revitalization subgrant, whose activities and expenditures are on schedule and on time, are eligible to apply for an Economic Development subgrant, but not for a Housing Rehabilitation, Neighborhood Revitalization, or Commercial Revitalization subgrant.

(e) Non-entitlement local governments with only an open Economic Development subgrant whose activities and expenditures are on schedule and on time as of the opening of the application cycle are eligible to apply for a Housing Rehabilitation, Neighborhood Revitalization, or Commercial Revitalization subgrant.

(f) Non-entitlement local governments with an open Economic Development subgrant from a previous funding cycle whose activities and expenditures are on schedule and on time are eligible to apply for an additional Economic Development subgrant in each subsequent funding cycle.

(g) Non-entitlement local governments with an open Economic Development subgrant whose activities or expenditures are not on schedule or not on time shall be ineligible to apply for another CDBG subgrant until the Department has received the administrative closeout package for the subgrant.

(h) A non-entitlement local government whose initial Economic Development application is rejected or loses its funding reservation may submit up to two additional Economic Development applications during a funding cycle. The local government may resubmit the initial application or submit an application for a different Economic Development project. Local governments may only receive one Economic Development subgrant per funding cycle.

(5) Citizen Participation Requirements.

(a) The Applicant shall adopt a Citizen Participation Plan that complies with the requirements found in 24 CFR 570.486(a). The plan shall include a Citizen Complaint Policy which provides citizens the address, phone number, and times for submitting complaints and grievances, and provides for timely written answers to written complaints and grievances within 15 working days where practicable, as required by 24 CFR 570.486(a)(7).

(b) The local government must inform and involve its citizens in the project planning and selection, and decision-making process regarding all CDBG-funded projects. Each Applicant shall certify that it is following its Citizen Participation Plan and the citizen participation requirements of this rule. The Applicant shall document that the citizen participation requirements outlined in 24 CFR 570.486(a), this rule, and Section 290.046(5), F.S., have been satisfied, with public notice provided in accordance with subsection 73C-23.0031(45), F.A.C.

(c) Citizen participation shall include at a minimum:

1. At least one public hearing shall be held to obtain citizens’ views regarding community development needs prior to an Application for Funding being drafted. This shall be known as the First Public Hearing. A public notice shall be published in a local newspaper at least five days and no more than 20 days before the day of the hearing as defined in subsection 73C-23.0031(45), F.A.C., of this rule. The notice shall include the federal fiscal year (FFY) for which an application is being considered, the range of activities that may be undertaken with CDBG funding and the amount for which the community can apply.

The public hearing must be conducted by a member of the governing body of the applying local government or by a duly authorized employee of that local government at a time and location convenient to potential beneficiaries. Citizens shall be allowed to comment at the hearing as required by 24 CFR 570.486(a)(5), and the citizen input from this hearing should be considered when the application is being prepared. The local government must document all citizen participation at the hearing.

2. After an Application for Funding has been drafted, citizens shall be given the opportunity to express their views regarding the proposed application. This opportunity shall include the following:

a. A notice for a second public hearing shall be published in a local newspaper at least five days prior to and no more than 20 days before the date of the second public hearing. The notice shall include a summary of the draft application and the date, time and address of a public hearing on the draft application. The summary shall include, at a minimum, the following:

(I) A description of the activities that will be undertaken with CDBG funding;

(II) A budget that lists the specific CDBG dollar amounts that will be allocated for each activity;

(III) The National Objective that will be met by each activity, except administration and engineering; and

(IV) For Neighborhood Revitalization, Commercial Revitalization and Economic Development projects, the specific locations of the proposed activities, including street names or road numbers (e.g., County Road 50).

The notice shall also state where and when a copy of the draft application will be available for citizen review and how citizens can submit written comments on the draft application. Failure to include all of the required information in the public hearing notice shall result in the application being rejected as provided in Section 290.0475(6), F.S.

b. The public hearing on the draft application must be conducted by a member of the governing body of the Applicant or by a duly authorized employee of that local government at a time and location convenient to potential beneficiaries. This shall be known as the Second Public Hearing. Citizens shall be allowed to comment on the draft application at the hearing, and the citizen input from this hearing should be considered before the application is finalized and submitted to the Department. The local government must document all citizen participation at the hearing.

c. Copies of the public notices, affidavits of publication, certified minutes and sign-in sheets/speaker cards for both public hearings shall be included in Part 9, Appendix D, of the Application for Funding. The application shall be rejected if the affidavit of publication or certified minutes for either public hearing are not provided by the end of the Completeness Period.

(d) The Applicant may appoint a Citizens Advisory Task Force (CATF) to make recommendations on community needs prior to drafting an Application for Funding and to provide input during the implementation of any subgrants that the Applicant receives. An Applicant can claim up to 10 points on its Application for Funding if it has an active CATF. To claim points for having CATF participation in the application process, the following conditions must be met:

1. The task force shall be comprised of at least five residents of the Applicant’s jurisdiction, and at least 51% of the members must be from low- to moderate-income households.

2. No more than one employee of the Applicant can serve on the CATF, and no elected officials of the Applicant can serve as members of the task force.

3. The CATF shall conduct at least one meeting prior to the notice for the second public hearing being published to discuss community needs and to provide recommendations to the local governing body. The meeting shall be advertised in accordance with subsection 73C-23.0031(45), F.A.C. A minimum of 51% of the members must participate in the meeting. If the Applicant is claiming points for having an active CATF, copies of the public notice, affidavit of publication, meeting minutes and sign-in sheet shall be included in Part 9, Appendix D, of the Application for Funding. If the affidavit is not available by the application deadline, it must be provided by the end of the “completeness period” to retain the points.

(6) Applications.

(a) Application Form. The Florida Small Cities Community Development Block Grant Application for Funding, Form SC-60, is hereby incorporated into this rule by reference. The application form has nine parts, and these parts include scoring guidelines and documentation requirements for the CDBG application. Parts 1-9 of the application are available for download on the Department’s website - www.FloridaJobs.org/CDBGApplicantInfo. Copies of the electronic form will be made available upon request.

(b) During each application cycle, “non-entitlement” local governments that are eligible to apply can submit applications in the following categories:

1. Either Housing Rehabilitation, Neighborhood Revitalization or Commercial Revitalization. If an Applicant submits an Application for Funding in more than one of these categories, only the first application logged in by the Department will be scored. The other application(s) will be rejected; and

2. Economic Development.

(c) An Applicant cannot be awarded more than one subgrant in any funding cycle from the following categories: Housing Rehabilitation, Neighborhood Revitalization, or Commercial Revitalization. An Applicant cannot be awarded more than one Economic Development subgrant in any funding cycle.

(d) Architectural and Engineering Costs.

1. The maximum percentage of CDBG funds that may be spent on architectural and engineering design costs, excluding additional engineering services, shall be based on the total initial construction budget for eligible subgrant activities, which require architectural and engineering design. These costs shall not exceed the Rural Development/Rural Utility Service (RD/RUS) fee schedule in Florida, incorporated herein by reference, RUS Bulletin 1780-9 (rev. 10/2009), hereby incorporated into this rule by reference. Architectural and engineering inspection services during construction shall not exceed the RD/RUS fee schedule in Florida, incorporated by reference, RUS Bulletin 1780-9 (rev. 6/2007), hereby incorporated into this rule by reference.

a. If more than one design professional is needed for an activity or activities (i.e., 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.

b. For projects involving both Table I and II activities, engineering costs shall be pro-rated appropriately.

c. For each additional engineering service as defined in subsection 73C-23.0031(6), F.A.C., and for preliminary engineering, the local government shall negotiate a reasonable fee for the service following procurement procedures in 24 CFR 85.36, incorporated herein by reference.

d. 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 the RD/RUS fee schedule.

e. 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 plus the percentage in the fee schedule for Table IA, Table IIA, or a prorated amount of both tables for projects involving activities included in both tables. Also, CDBG funds shall not be used to fund any additional design or redesign costs, even if the “Readiness to Proceed” points are subsequently removed from the application after a subgrant award.

(e) Administrative Costs.

1. For Commercial Revitalization, Economic Development and Neighborhood Revitalization applications, administrative costs to be reimbursed by the subgrant cannot exceed eight percent of the total CDBG funds requested.

2. For Housing Rehabilitation projects, administrative costs to be reimbursed by the subgrant cannot exceed 15 percent of the total CDBG funds requested.

(f) Consistency with Local Comprehensive Plan.

1. The application shall include affirmations from all jurisdictions in which activities will take place that the proposed activities are not inconsistent with the applicable elements of the adopted local comprehensive plan.

2. 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.

(g) Readiness to Proceed:

Points for “Readiness to Proceed” can be claimed for Commercial Revitalization and Neighborhood Revitalization projects if the following are submitted with the Application for Funding before 5 p.m. on the final day of the application cycle:

1. Biddable construction plans and specifications as defined in subsection 73C-23.0031(8), F.A.C. The plans must be signed and sealed by the engineer responsible for developing them;

2. Documentation that all required permit applications for infrastructure activities were submitted to the applicable agencies prior to the CDBG application deadline. If the only agency that must issue permits for the activities is the Applicant, then documentation to that effect must be included in the application; and;

3. A written certification from the engineer or architect who prepared the plans and specifications to the Chief Elected Official of the Applicant. The certification must list the date that the biddable construction documents were completed and state that all required permit applications for all infrastructure activities have been submitted to the applicable agencies. If the Applicant is the only permitting agency, this fact must be included in the certification.

Deficiencies with the readiness to proceed documentation cannot be cured after the application deadline for the purpose of getting the points. The Department will review the plans and specifications for completeness during the application review process, but the plans and specifications cannot be accepted by the Department until the Applicant has been issued the environmental release of funds for the project.

(h) Application Submission.

1. Applications shall be received by the Department in Tallahassee by 5:00 p.m. Eastern Time, on the date specified in the NOFA. Except as noted in paragraph 73C-23.0048(2)(b), F.A.C., applications received after the specified deadline shall not be considered.

2. By the application deadline, one copy of Part 2 and Part 3 from the Small Cities CDBG Application for Funding shall be sent to the Regional Planning Council that serves the Applicant.

(7) National Objective and Public Benefit Documentation.

(a) Achievement of national objectives. Applications must demonstrate that the proposed activities meet the criteria specified in 24 CFR 570.483 for complying with a national objective and meeting public benefit standards and that they address community need as outlined in Sections 290.046(3)(a)-(d), F.S.

(b) Public Benefit Achievement. Determination of benefit to persons of low- to moderate-income is established through the following methods:

1. HUD Census Data – LMI benefit can 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 can 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 the PVLOW column. The total of VLI beneficiaries is divided by the total beneficiaries in the LOWMODUNIV column to establish the VLI percentage for scoring the appropriate VLI beneficiary points.

If a service area contains an entire block group or census tract and portions of other groups or tracts, the data from the block group or tract that is contained entirely in the service area can be used, but the remaining portion(s) of the service area must be surveyed to get LMI and VLI data.

2. Random Sample Survey Methodology – A sample-based survey of the beneficiaries must use the Household Income Certification Form, (Form SC-49), which is included in the Application for Funding and also is available on the CDBG website. The survey methodology must correspond with the random sampling requirements established by HUD in Notice CPD-14-013, issued on September 23, 2014, and incorporated herein by reference. The survey methodology must include a confidence level of 95%.

a. 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.

b. When the sample-based survey results appear to substantially overstate the proportion of persons with low or moderate income in a service area when compared to census data, the Department will require the local government to provide supporting evidence substantiating the survey data. If the survey results are found to be inaccurate, the application shall be rejected.

c. Section III of Form SC-49 does not have to be completed if the Applicant is using the survey for scoring purposes only and plans to use census data for reporting the racial makeup of beneficiaries upon completion of the project.

3. Small Service Area Survey Methodology – For surveys of service areas with fewer than 50 households, all households must be surveyed using Form SC-49.

a. Any non-responding household must be assumed to be above income.

b. Section III of Form SC-49 shall be completed for reporting the racial makeup of beneficiaries in a small service area.

4. The number of household members for non-responding households in a survey shall be based on the average household size for all responding households.

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

6. A survey that was submitted as part of a previous CDBG application that was not funded can be submitted as part of a new application package if the survey was completed less than 5 years prior to the application submission date. The survey will be subject to Department review and approval. If the survey is found to be inaccurate or does not document that a national benefit will be met, the application shall be rejected.

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

(8) Beneficiaries of Public Improvements.

(a) For activities where hookups or connections are required for beneficiary access to the CDBG-funded 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. The percentage of low- and moderate-income benefit shall be calculated by dividing the number of LMI persons connected to the CDBG-funded infrastructure by the total number of persons who could be connected to it.

(b) 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.

(c) For activities where hookups or connections are required as a condition for beneficiary access to a CDBG funded public improvement, hookup or connection fees shall not be charged to very low-, low- or moderate-income beneficiaries. Further, none of the project construction costs shall be charged to very low-, low- or moderate-income beneficiaries. All very low-, low- and moderate-income beneficiaries in a Neighborhood Revitalization project service area with hookups as an activity shall be hooked up unless they, or the property owner in the case of rental property, provide written notice that they do not desire a hookup. If such written notice cannot be obtained, the Household Income Certification Form shall note such refusal to provide written notice.

(d) Where non-LMI beneficiaries will have to pay a one-time fee (i.e., assessment, impact fee) to connect to or access the CDBG funded public improvement, and where a periodic service fee (i.e., water bill, sewer bill) 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 must outline the estimated costs to be paid by non-LMI beneficiaries.

(e) 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 ten percent of the beneficiaries must be advised in writing with signature acknowledgement of receipt and understanding prior to application submission. If a household refuses to provide signature acknowledgement, the refusal shall be noted on the form.

(9) Interlocal Agreements for Applicants with Activities Outside Their Jurisdiction.

(a) Prior to application submission, a written interlocal agreement shall be executed by all local governments in whose jurisdictions the CDBG activities will be undertaken. The interlocal agreement must authorize the applying local government to undertake the activities outside its jurisdiction, giving the concurrence of the other local government(s) with the activity and committing resources by one or more local governments, or some other entity which has provided written assurance, to maintain the activity. Such an interlocal agreement must be submitted with the Application for Funding.

(b) Each local government signing an interlocal agreement shall affirm that all activities, project areas, service areas, and job creation locations are not inconsistent with its comprehensive plan.

(c) The application shall contain excerpts of the comprehensive plans of all local governments in whose jurisdiction activities will take place. The excerpts must document that the activities, project areas, service areas, and job creation locations are not inconsistent with the local government’s comprehensive land use plan.

(d) An eligible Applicant’s activities can extend beyond its jurisdiction, provided the areas outside its jurisdiction are eligible. The Applicant must have legal authority to provide such services or undertake such activities and be supported by a signed interlocal agreement executed by both eligible local governments. Except for Economic Development projects, no more than 25 percent of the service area beneficiaries may reside outside the Applicant’s jurisdiction unless all CDBG funded work is taking place within the Applicant’s jurisdiction or on property owned by the Applicant. When all work will take place within the Applicant’s jurisdiction or on property owned by the Applicant, up to 50 percent of the beneficiaries may reside outside the Applicant’s jurisdiction.

(e) Pursuant to 24 CFR 570.486(b), an eligible individual Applicant may apply to undertake a portion of an eligible Neighborhood Revitalization activity in an otherwise eligible location outside its jurisdiction or service area, if it can provide written documentation that the activity is required by an engineer or by a state or federal agency having regulatory authority over the activities. Any benefit to persons outside the jurisdiction or service area must not be a Direct Benefit and may only be incidental to the activity undertaken within the jurisdiction or service area.

(10) Application Reviews.

(a) Prior to reviewing the applications, the Department will publish on its website a listing of all Neighborhood Revitalization, Housing Rehabilitation, and Commercial Revitalization applications received during the open application cycle. The listing will include the Applicants’ self-scores. If the Department receives Economic Development funding requests equal to or in excess of available funding, those self-scores shall also be published.

(b) The Department will complete a threshold review on all applications to determine that the local government, the application, and all proposed activities are eligible to receive funding.

(c) The Department will undertake a completeness review of all applications that it deems likely to be in the fundable range. The review will determine if the application is mathematically correct and contains all required documentation. This review will generate a list of issues to be addressed at site visit. If an application drops out of the fundable range as a result of a completeness review, the highest ranking application outside of the fundable range will be added to those receiving a completeness review.

(d) Except for the Community-Wide Needs Score, any scoring item left blank in Parts 2-7 of the Application for Funding will be scored as zero. This zero score cannot be changed because of information contained elsewhere in the application or as a result of documentation presented at a site visit. The Department shall correct mathematical errors made by the Applicant. The Department shall adjust scores claimed in Parts 2-7 of the Application for Funding if the documentation provided in the application does not support the points claimed. In instances where the Department has corrected mathematical errors or adjusted scores in Parts 2-7, the Department shall adjust the corresponding scores on the Application Scoring Summary page in Part 8. In instances where the Applicant claimed points in Parts 2-7 but failed to transfer the points to the Application Scoring Summary, the Department shall insert the points and adjust the score accordingly.

(11) Application Site Visits and Completeness Letters.

(a) The Department shall conduct site visits to communities whose applications are in the fundable range after the applications have been reviewed.

(b) The Department shall notify the Chief Elected Official in writing of the date and time that the site visit will take place. The letter shall include a list of application support documents and CDBG-required policies that will be reviewed at the site visit.

(c) At the site visit, the Department shall examine all documentation referenced in the Application for Funding and listed in the site visit letter. If an Applicant that is selected for funding has not adopted a required CDBG policy by the site visit, the Department will add a special condition to the Applicant’s subgrant agreement requiring that the policy be adopted within a specified time period after the award.

(d) For Commercial Revitalization, Housing Rehabilitation and Neighborhood Revitalization applications, the Department shall request in writing by return receipt mail corrected copies of all application support documentation found to be unavailable or inadequate at the site visit. This request shall be referred to as the “completeness letter.” Applicants shall have 21 days from the date that the completeness letter is received to provide the requested information to the Department. Responses to completeness letters must be received by the Department no later than 5:00 p.m. Eastern Time of the 21st day. If the response to a completeness letter is received late or does not resolve an issue, the following points shall be deducted from the Applicant’s total score:

1. Revisions that were requested to any of the required maps were not submitted or were incomplete – 250 points;

2. A required interlocal agreement is incomplete or not in compliance – 250 points; and

3. Points claimed in the Application for Funding for which adequate documentation was not provided to prove that the Applicant was entitled to the points.

(12) Application Scoring.

(a) Once an application is submitted to the Department, a local government shall not amend its application to add activities or beneficiaries for the purpose of improving the score or broadening the scope of the project, except as allowed in subparagraph 73C-23.0051(4)(a)2, F.A.C.

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

1. Community-wide needs: 250 points

2. Program impact: 660 points

3. Outstanding performance in equal opportunity employment and fair housing: 90 points

(c) Community-Wide Need Scores (CWNS) for All Categories. The Department shall calculate the CWNS from the most recent and uniformly available Federal and State data for all jurisdictions eligible to apply. Current decennial U.S. Census data shall be used unless otherwise noted. Data shall be further defined as:

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

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

3. For municipalities incorporated since the most recent census, the 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 CWNS.

4. Factors. Three factors shall be used to determine the CWNS with the following maximum points available for each:

a. Poverty Level

(I) Number of persons below poverty level according to the latest HUD census figures: 50 points

(II) Percentage of persons below poverty level according to the latest HUD census figures: 50 points

b. Number of year-round housing units with 1.01 or more persons per room according to the latest HUD census: 50 points; and

c. LMI Population

(I) Number of persons in the low- and moderate-income population according to the latest HUD census figures: 50 points.

(II) Percentage of persons in the low- and moderate-income population according to the latest HUD census figures: 50 points.

5. Method of Calculation.

a. Prior to calculating actual CWNS, the Department prepares a spreadsheet that reflects the above information (number and percentage of persons below poverty, number of housing units with 1.01+ persons per room and LMI population and percentage of population that is LMI) for each non-entitlement local government. Each non-entitlement local government is first compared with all other non-entitlement governments in their LMI population group using the three above factors.

LMI Population:

1 – 499

500 – 1,249

1, 250 – 3,999

4,000 – 10,549

10,550 and above

Population groupings are based on HUD modified census figures summarizing low- and moderate-income population.

Calculating each Applicant’s score includes the following steps:

The highest statistic in each population group for each factor is the basis for relative comparison of all other eligible local governments in the population group. For each eligible local government, the percentage calculated is then multiplied by the maximum number of points available for that particular factor. The score for factors are summed for each eligible local government to determine the CWNS.

b. For each eligible local government, the percentage calculated shall then be multiplied by the maximum number of points available for that particular factor.

percent x maximum points available = score for eligible local government on factor.

c. The CWNS factors shall be summed for each eligible local government for the overall CWNS. Each local government awarded subgrant funds shall have its CWNS reduced by one point for every $20,000 or fraction thereof, of contracted funding. If $20,000 or more in funding is deobligated at the time the administrative closeout is approved by the Department, the CWNS will be increased by one point for each $20,000 deobligated.

No funding-related adjustments shall be made to the Community-Wide Need Scores during the first application cycle in which the new census data is used to update the CWNS. 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 contracted as of the end of the month prior to the opening date of the application cycle. The adjusted CWNS cannot be less than zero. No deduction shall be made to the CWNS for Emergency Set-Aside funding.

(d) Further point breakdowns for Program Impact, Equal Opportunity and Fair Housing are found in the rule or in the appropriate section of the application form.

(e) Applications with scores in the fundable range following appeals and that meet all other requirements contained herein shall be awarded funds for eligible activities. The Department shall not award funds for ineligible activities.

(f) In the event that two or more applications receive the same 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 CWNS shall receive first consideration.

(g) The Department may offer partial funding to the highest scoring non-funded Applicant when insufficient funds are available to fully fund the Applicant’s request provided that all of the beneficiaries in the application can be served. If additional funds become available after a partial funding is awarded, the Applicant can request a modification to fully fund the project.

If partial funding has not been offered and additional funds become available to fully fund a project, the highest scoring non-funded Applicant will be awarded a subgrant.

(h) Leverage. For scoring purposes, the Applicant must certify that leveraged funds shall be expended after the date of site visit and prior to submission of the administrative closeout. The Applicant also must provide documentation that leveraged funds were committed to the project prior to the application deadline.

(i) Penalty Points for Past Performance. A penalty shall be assessed against future subgrant applications based on prior contractual performance on subgrant agreements, including those subgrants which have submitted an administrative closeout prior to application deadline. This penalty will apply regardless of whether the subgrant has been amended to permit the reduction in accomplishments. If the subgrant is terminated with no expenditures or is terminated with expenditures for administration and/or engineering only, no penalty shall be assessed. This penalty expires two years from the date of administrative closeout. The penalty points in effect on the date of the application deadline will be subtracted from the Applicant’s score found on the Application Scoring Summary.

1. In the Housing Rehabilitation category, a penalty of five points per housing unit shall be assessed for failure to rehabilitate or address any low- or moderate-income housing units scored in the original application. The penalty shall be 10 points per unit for failure to address any very low-income housing unit scored in the original application. The maximum penalty shall be 50 points.

2. A penalty of five points per low- and moderate-income household not served or 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 the Commercial Revitalization categories up to a maximum of 50 points. All direct benefit proposed in the application (i.e., water hookups) must be completed to avoid this penalty per house or facade. 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 became damaged or destroyed after application submission, the homeowner refused the hookup or became non-LMI after the survey, and there are no other homes in the service area identified in the application which can qualify for a hookup.

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

(13) Application Rejection.

(a) Applications that do not meet the minimum requirements as outlined in Section 290.0475, F.S. shall be rejected.

(b) An application shall be rejected if survey results included in the application are inaccurate or cannot be substantiated.

Rulemaking Authority 290.044, 290.046, 290.048 FS. Law Implemented 290.044, 290.046, 290.047, 290.0475 FS. History–New 5-23-06, Amended 2-26-07, 6-6-10, Formerly 9B-43.0041, Amended_________.

 

(Substantial rewording of Rule 73C-23.0045 follows. See Florida Administrative Code for present text.)

 

73C-23.0045 Specific Requirements for Neighborhood Revitalization, Commercial Revitalization and Housing Rehabilitation Competative Categories.

(1) Program Requirements for Neighborhood Revitalization.

(a) The primary objective of the Neighborhood Revitalization category is to preserve and revitalize declining, primarily residential, low- and moderate-income service area neighborhoods by addressing the major infrastructure problems contributing to such decline.

(b) Measurement of Program Impact. Specific criteria used to calculate the total 660 points for Program Impact are found in the Neighborhood Revitalization section of the application.

(c) Service Area Requirements.

1. An activity conducted in a primarily residential service area will be considered to benefit low-and moderate-income persons when at least 51 percent of the residents of that service area are low- and moderate-income persons. Such a service area must contain all households that will benefit from the activity. All activities shall meet the national objective of LMI benefit as specified in 24 CFR 570.483(b).

2. Any survey of the beneficiaries of a service area must correspond to the requirements established in paragraph 73C-23.0041(7)(b), F.A.C.

3. Sewer and water hookups shall only be provided in a service area where new or replacement sewer or water lines are being installed. Eligibility for a hookup shall be based on LMI certification of household income and sources not more than one year before the hookup is provided. If requested, LMIs shall provide verification of the household income. Hookup beneficiaries are reported by household.

4. For activities where hookups or connections are required for beneficiary access to the public improvement (Direct Benefit), 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 compared to the total number of persons who could be connected to the infrastructure. Evidence at the time of closeout must include:

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

b. The total number of low- and moderate-income persons in households connected to the infrastructure,

c. The number of LMI persons in households connected to the infrastructure divided by the total number of beneficiaries for that activity in the service area equals at least 51 percent, or a larger percent if required to remain within the fundable range; and

d. A list of all homes hooked up with subgrant funds.

5. Area benefit activities as defined in 24 CFR 570.483(b)(1)(i), addressing the needs of elderly, handicapped or homeless beneficiaries are presumed to provide 51 percent low- and moderate-income benefit for scoring purposes unless a survey of the service area of such activity documents a higher percentage of benefit.

6. 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 as certified by a licensed engineer.

(d) Administrative Costs. Applicants shall utilize no more than eight percent of the total eligible subgrant amount for administrative costs.

(e) 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 an option on the land to control the sale to or ensure use by low- and moderate-income persons; and

3. Documentation that the proposed site is properly zoned.

(f) An Applicant for a Neighborhood Revitalization subgrant shall meet a national objective by demonstrating that its activities will be carried out in distinct service areas characterized by the concentration of persons of low- or moderate-income.

(g) An Applicant for a Neighborhood Revitalization subgrant whose score is below the fundable range for full funding and did not receive Readiness to Proceeds points may be offered Planning and Design funding if the Department allocates funds for that purpose.

1. Funding for Planning and Design will be offered based on the rank-ordered scores of Neighborhood Revitalization Applicants that fell outside the fundable range.

2. Only those applications which meet all other program requirements will be considered.

3. A Neighborhood Revitalization subgrant initally awarded for Planning and Design costs shall not exceed $70,000. Administration and engineering costs shall be as follows:

a. Engineering costs funded from the subgrant shall not exceed the RUS fee schedule for engineering [RUS Bulletin 1780-9 (rev. 10/2009)], (Table I, Table II, or proration of these tables, depending on the nature of the project) and applicable additional engineering services as defined in this rule.

b. Grant administrative costs for the Planning and Design phase of the subgrant shall not exceed five percent of the amount awarded.

4. After biddable construction plans and specifications are provided to the Department, the Recipient shall request a modification to increase the budget to include the construction costs for the project up to the maximum amount allowed for the jurisdiction. The modification will be approved upon acceptance of the plans by the Department and funding availability.

5. If biddable construction plans and specifications cannot be completed, the subgrant shall be closed out.

(2) Program Requirements for Commercial Revitalization.

Applications submitted under this category shall be designed to revitalize commercial areas, which serve primarily low- and moderate-income persons, or to meet the National Objective of preventing or eliminating slum or blight. Applications addressing the slum and blight National Objective must conform to the requirements found in 24 CFR 570.483(c) and Section 163.340, Florida Statutes.

(a) Eligible Activities. All activities must be geographically and physically located within the boundaries of the jurisdiction and the project area and be contiguous to or located on property that is primarily commercial as of the application deadline date. Unimproved property on which activities are proposed cannot be zoned for residential purposes only.

(b) Funds requested and approved for Commercial Revitalization activities shall not be used as grants or loans for working capital, inventory or supplies, or for interior repairs and renovations, except for repairs necessary to correct code violations or for the removal of architectural barriers to handicap access.

(c) Service Area Requirements for LMI Projects. Activities in Commercial Revitalization projects are considered to serve the entire jurisdiction in which they are to be undertaken, unless the Applicant can justify a smaller service area (e.g., a Community Redevelopment Area in a portion of a county). The Applicant shall document, using census data or a survey, that at least 51 percent of beneficiaries in the service area are low- and moderate-income persons. A survey shall comply with the requirements specified in paragraph 73C-23.0041(7)(b), F.A.C.

(d) Requirements for Rehabilitation of Commercial Buildings. If CDBG funds will be used for rehabilitation of commercial buildings, the local government shall adopt a Commercial Rehabilitation Policy. The Department must approve the policy before funds can be requested for that activity. At a minimum, the following shall be included in the procedure:

1. Restrict the Rehabilitation of Commercial Buildings activity to commercial buildings within the project area pursuant to 24 CFR 570.202(a)(3). Properties upon which or adjacent to where CDBG activities are undertaken shall not be zoned for residential purposes only.

2. For projects using the national objective of benefiting low- and moderate-income persons, require all businesses receiving rehabilitation assistance to provide services, which are available to all the residents of the service area.

3. Specify the terms and conditions under which the rehabilitation assistance will be provided.

4. Provide that all buildings to be rehabilitated, except as provided in subparagraphs (3)(d)11. and 14. below, will be occupied at the time the assistance is provided or subject to a lease agreement such that the building will be occupied prior to closeout. The occupant shall be a legally constituted business with business, sales tax, and occupational licenses.

5. Provide that all contracts for rehabilitation over $2,000 will comply with the Davis-Bacon Act.

6. Provide that businesses residing in a building rehabilitated with CDBG funds shall comply with the provisions of 24 CFR 8, (HUD’s implementing regulation of Section 504 of the Rehabilitative Act of 1973 (29 U.S.C. Section 794), incorporated herein by reference, as it relates to employment discrimination and facility accessibility.

7. Provide that CDBG funds addressing those code violations specified in the application will be in compliance with all local and state building codes and standards.

8. Establish a process for recognizing potential conflicts of interest, making those conflicts publicly known, dealing with those conflicts on a local level, and requesting waivers of those conflicts when appropriate pursuant to 24 CFR 570.489 and Sections 112.311-112.3143, F.S. Additionally, provide that no building owner, lesser, lessee, tenant, or occupant, or employee or immediate relative of the same, either personally or corporately, shall serve as a contractor to be paid with CDBG funds for the rehabilitation of said building, nor shall they be paid for their own labor with CDBG funds for the rehabilitation of said building.

9. Establish a process for final inspection of a commercial structure after rehabilitation and a process for final acceptance of a contractor’s work on any grant funded activity and before the local government considers the rehabilitation completed.

10. The expenditure of CDBG funds per façade shall not exceed $22,000 in CDBG funds. A building on a corner containing a single business may be considered to have two facades. Buildings which have been previously subdivided or portioned may be addressed as separate facades only if the building is subdivided such that:

a. There are separate primary entrances for each business; and

b. Each of the businesses has separate and distinct occupational and sales tax licenses.

11. The façade of a vacant building may be addressed only if it is part of an overall building façade renovation effort in a contiguous area.

12. CDBG funds may be expended on the roof of a privately owned commercial building only after the issuance of a bonafide code violation report and only after the rehabilitation of the façade, the removal of architectural barriers to handicap access in the entrances and the bathroom areas, and the correction of other documented code violations.

13. CDBG funds for Commercial Revitalization activities shall not be used as grants or loans for working capital, inventory or supplies, or for interior repairs and renovations of existing businesses, except for repairs necessary to correct code violations or removal of architectural barriers to handicap access and correction of architectural barriers to handicap access in public buildings located in the project area pursuant to the requirements of 24 CFR Part 8, adopted herein by reference.

14. A property that poses a threat to public health or safety can be acquired, cleared, or rehabilitated with CDBG funds to eliminate spot blight. An environmentally contaminated property can be remediated. Dilapidated buildings can be demolished, rehabilitated, relocated or, if historically significant, preserved. If a privately owned blighted property is cleared to eliminate a health or safety hazard, the Recipient shall place a lien on the property to recover the CDBG cost of eliminating the blight.

(e) Administrative Costs. Applicants under the Commercial Revitalization categories shall utilize no more than eight percent of the total eligible subgrant amount for administrative costs.

(3) Program Requirements for Housing Rehabilitation.

(a) The primary objectives of the Housing Rehabilitation category are to improve housing conditions for low- and moderate-income persons. All housing units to be rehabilitated shall be located within the jurisdictional boundaries of the Recipient. For a county, all housing units to be rehabilitated shall be located in the unincorporated portion of the county.

(b) Housing Rehabilitation subgrant Recipients must have a Department-approved Housing Assistance Plan addressing the activities specified in the application.

(c) Low- and Moderate-Income Benefit for Housing Rehabilitation.

1. Selection of beneficiaries or housing units need not take place during the application process, but may take place at any time during the subgrant application or implementation process. All beneficiaries must be low- and moderate-income persons pursuant to 24 CFR 570.482.

2. Activities involving rehabilitation shall be considered to directly benefit low- and moderate-income persons only to the extent that such housing shall, upon completion, be occupied by low- and moderate-income persons, and for rental units, the units must be occupied by low- and moderate-income persons at affordable rents pursuant to 24 CFR 92.252, incorporated herein by reference.

3. Water or sewer hookups may be performed under this category as a complementary activity in conjunction with rehabilitation of a home.

4. Water or sewer hookup-only applications must be funded under this category. Related activities, such as abandonment of a septic tank or well or modification to a house’s plumbing to complete the hookup, may be funded in a hookup-only grant. Beneficiaries are reported by households.

(d) A Recipient shall adopt and implement procedures to fulfill regulatory and statutory requirements relating to Lead-Based Paint pursuant to 24 CFR 570.487 and 24 CFR 35, Subparts B, J, and R, incorporated herein by reference. A Recipient can request reimbursement from the housing rehabilitation line item of its budget for the cost of a lead-based paint inspection prior to the home’s site specific environmental review being approved because the inspection is part of the environmental review process. The Recipient is required to:

1. Prohibit the use of lead-based paint;

2. Notify potential beneficiaries of the hazards of lead-based paint;

3. Inspect properties built before 1978 prior to initiating rehabilitation to determine if lead-based paint is present;

4. Undertake appropriate protection of workers and occupants during abatement;

5. Ensure proper clean up and disposal procedures are used;

6. Retain records of enforcement and monitoring for at least six years after final closeout of the subgrant.

(e) Rehabilitation of all housing units addressed in any way with CDBG funds must be in compliance with the current Florida Building Code for Existing Buildings, as well as local Building Codes and local Maintenance Codes. If housing units must be replaced, construction of new units must be in full compliance with current Florida Building Code.

(f) When CDBG funds are expended to acquire property through a voluntary process for the purpose of assisting low- and moderate-income households to relocate out of a 100-year floodplain, the following shall apply:

1. Future development of the property acquired shall be prohibited, unless the use does not increase the property’s impervious surface;

2. The local government may retain title to the property or transfer the title to a land conservancy agency or program, subject to Department approval;

3. The beneficiaries shall agree in writing to relocate outside a 100-year floodplain; and

4. Any beneficiaries who subsequently relocate into a 100-year floodplain shall not be provided any direct benefit with CDBG funds at any future point in time, and this restriction shall be noted in the relocation document signed by the beneficiaries in subparagraph (2)(f)3. above.

5. All structures on the property shall be demolished or relocated out of the floodplain.

(g) Administrative Costs. Applicants under the Housing Rehabilitation category shall utilize no more than 15 percent of the total eligible subgrant amount for administrative costs.

Rulemaking Authority 290.048 FS. Law Implemented 290.043, 290.044, 290.046 FS. History–New 6-6-10, Formerly 9B-43.0045, Amended_________.

 

73C-23.0048 Specific Requirements for Economic Development.

(1) Applications submitted under this category shall be for the following:

(a) The creation or retention of jobs, of which at least 51 percent are for low- and moderate-income persons,

(b) The creation of jobs that are presumed to be low- and moderate-income under 24 CFR 570.483(b)(4)(iv) and (v), or

(c) To assist a business that provides goods or services to low- and moderate-income persons in accordance with 24 CFR 570.482(f)(2)(ii).

(2) Application Submission and Funding Reservation for Economic Development Projects.

(a) An Economic Development Application for Funding may be submitted when the annual application cycle opens. Economic Development applications received by the application deadline will be scored and ranked if the total dollars requested exceeds the amount available in the category. If successful, they will be awarded until all available funds are committed.

(b) If initial application requests not exceed the available funds, any Application for Funding received after the application deadline will be reviewed and awarded on a first-come, first-served basis until all funds are committed.

(c) These funds shall include the annual Economic Development allocation and may include program income and deobligated funds from previous Economic Development subgrants, in accordance with the Annual Action Plan.

(d) A local government may apply up to three times in an annual funding cycle.

(e) A local government cannot submit an additional Economic Development Application for Funding in an annual funding cycle until any previously submitted Economic Development application for that annual funding cycle has been rejected by the Department, has lost its funding reservation, or has been withdrawn in writing by the Chief Elected Official or his or her designee.

(f) Economic Development applications will be date stamped upon receipt by the Department’s Community Development Block Grant Section. The date stamp and time received by the Section shall establish the date and time for funding reservation purposes. Date stamps from any other section of the Department shall not establish a funding reservation. Funds will be reserved in the order that the applications are received by date and time.

(g) Once the Application for Funding is received, the local government will not be allowed to provide new documentation from a Participating Party to meet the initial Participating Party requirements in the application.

(h) If sufficient funds are available to fully fund an application, that amount is reserved for the Applicant upon receipt of the Application for Funding. The application continues to have those funds reserved until a subgrant is executed or until there is a loss of funding reservation.

(i) If insufficient funds are available to fully or partially fund applications with a funding reservation, those applications shall retain a position in the funding reservation line. The applications may be funded if additional funds are made available by additional allocations or by a loss of funding reservation by another Economic Development Applicant.

(j) If partial funding is available, the Department may offer to partially fund an eligible application and will continue with the application review and scoring for partial funding. If the application remains eligible after review and scoring based on available funding, the Department will offer to partially fund it. There is no guarantee of full funding in such an offer, but a partially funded subgrant will be considered first if additional funds become available. The local government has the option of declining a partially funded offer.

(k) The review and offer of funding will then be made to the next eligible pending application. If there are no other applications pending or if the amount of the funds available is too small for reasonable consideration, the partial funds can be held until additional funds are available.

(3) Prohibited Uses of Funds.

(a) Funds shall not be used for working capital, inventory or supplies.

(b) Direct assistance to a non-public entity shall not be in the form of a grant.

(c) Funds cannot be used to purchase assets from any entity if any corporate officer(s) or principal(s) of the Participating Party owns an interest in that entity.

(d) Funds cannot be used to build or develop infrastructure beyond that which is required as a prerequisite for the job creation by the Participating Party.

(e) Funds shall not be used to refinance existing debt.

(f) Funds cannot be used for a loan to a non-public entity which is determined not to be appropriate as defined in 24 CFR. 570.482(e).

(4) Economic Development Activity Outside the Applicant’s Jurisdiction.

(a) The Applicant can undertake activities outside its jurisdiction provided an interlocal agreement exists with the affected jurisdiction(s); and

1. The activity involves installing new infrastructure or connecting to existing infrastructure that is located outside the Applicant’s jurisdiction and may be owned and operated by the Applicant, or another public or private entity, but the job creation site is located within the Applicant’s jurisdiction;

2. The job creation site is located outside the Applicant’s jurisdiction, but the activity involves connecting to infrastructure owned by the Applicant; or

3. The job creation site is located outside the Applicant’s jurisdiction, but it is located in an Applicant-owned industrial/commercial site.

(b) Liability for CDBG performance and compliance with all applicable rules and regulations rests with the Applicant.

(5) Eligibility Requirements for Loans.

(a) Determining eligibility for loans to non-public entities. All Economic Development applications submitted to the Department shall be screened to determine if the amount of any loan assistance to a private, for-profit entity; a private, non-profit entity; a neighborhood based organization; a local development organization; or other non-profit entities is appropriate to carry out the Economic Development project. A financial underwriting analysis of the project shall be conducted to determine that the minimum amount of assistance is being requested, that the terms and interest rates are appropriate given the entity’s debt service capacity, and that the entity has the ability to meet the proposed debt service, given historical financial statements, as well as data and reasonable projections of revenues and operating expenses, if applicable.

(b) Applications which do not contain justification of the appropriateness of the assistance being requested shall be ineligible in accordance with federal law and federal guidelines and shall be ineligible for scoring as provided in Section 290.0475, F.S.

(c) If the Department’s review of the financial underwriting analysis for the assistance determines that the funds requested exceed the funds necessary, the funding request shall be reduced by the Department.

(d) The local government shall provide a financial underwriting analysis and other Participating Party documentation to the Department that was not required at the time of application. The underwriting analysis must meet the requirements of 24 CFR 570.482(e), and Appendix A of 24 CFR 570. The underwriting analysis must be prepared by a certified public accountant, a commercial lending underwriter, a financial professional employed by the local government or the Participating Party, or some other financial or economic development professional approved by the Department, and shall verify:

1. That all project costs are reasonable;

2. That all sources of funding included in the application document their commitment to the project through written offers to fund with all contingencies stated;

3. That to the extent practicable, CDBG funds are not substituted for readily available non-federal financial support;

4. That the project is financially feasible;

5. That to the extent practicable, the return on owner’s equity investment shall not be unreasonably high; and

6. That to the extent practicable, CDBG funds will be disbursed on a pro-rata basis with other finances provided to the project.

(e) Once this 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 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.

(f) For CDBG loans only, CDBG funds may be used to fund up to 50 percent of the cost of eligible activities at the job creation location. The administrative cost shall not be included in this calculation. Applications which do not meet this requirement shall lose their funding reservation.

(6) Eligibility Requirements for Infrastructure Projects.

(a) The eligibility for infrastructure projects shall be determined by:

1. The type of activities proposed, and

2. Evidence that the activities will benefit primarily low- and moderate-income persons.

(b) Applications shall also document that the entity proposing to create jobs is financially viable based on accepted industry standards.

(c) The application shall include a letter from an engineer certifying that the route, scope, cost, and size of the components of the proposed infrastructure are the minimum necessary to provide for the needs of a Participating Party at a job creation location. The Applicant cannot request a modification to decrease the size of the proposed minimum infrastructure because of price or change in needs after an agreement is awarded. Any increase in cost shall be paid either by the Applicant or the Participating Party.

(d) Job Commitment. Applicants shall document that the Participating Party has the financial capacity to meet its commitment to provide or retain the jobs specified in the application. Applications which do not contain evidence of the capacity to provide jobs shall lose their funding reservation.

(e) Job Creation or Retention. At least one full time equivalent job must be created or retained for each $34,999 in CDBG funds requested. Applications which do not meet the cost-per-job requirements shall lose their funding reservation.

(f) Leveraging of CDBG Dollars. Non-CDBG public funds directly linked to the proposed project may be included for scoring purposes. Applicants shall include documentation that all funds to be used for leverage are available and committed to the project and will be in the form of cash, loans, or grants. For CDBG loans, funds expended on assets purchased prior to the date of the site visit shall not be counted to meet the 50 percent non-CDBG investment portion of the project costs. Leverage is not required for infrastructure only projects. In order to be eligible for scoring, leveraged funds must be expended after the date of the site visit and prior to the date of the submission of administrative closeout. The cost of CDBG application preparation paid by the local government is an exception to this provision.

(7) National Objective and Public Benefit Documentation.

(a) An Applicant for an Economic Development project must meet a national objective by:

1. Creating or retaining jobs of which at least 51 percent are for persons from low- to moderate-income households or which meet the criteria contained in 24 CFR 570.483(b)(4)(iv) and (v), or

2. Providing goods and services to an area with a primarily low- to moderate-income clientele.

(b) An Applicant for an Economic Development project must provide a public benefit by:

1. Creating or retaining full time equivalent jobs at a CDBG-funded cost per job of $34,999 or less, or

2. Providing goods and services to low- to moderate-income persons at a cost of no more than $350 per LMI beneficiary served.

(c) In determining whether an activity will benefit low- and moderate-income persons, the net effect of the completed activity shall be considered. In the Economic Development category, each activity shall meet a national objective pursuant to 24 CFR 570.483(b)(4).

1. New jobs. The determination of actual benefit to low- and moderate-income persons shall be made based on the number and percent of persons who, at the time they were hired, were low- and moderate-income persons as defined herein.

2. Retained jobs. The determination of actual benefit to low- and moderate-income persons shall be made based on the number of low- and moderate-income employed in the jobs that would actually be lost to the labor market or the jobs that would reasonably be expected to turn over within the following two years and filled with LMI persons upon turn over. The calculation of jobs shall be determined as of the date the application is submitted.

3. Where job creation is the method of meeting a national objective for construction of a public improvement or facility, all jobs created or retained as a direct result of the construction of the public improvement or facility shall be considered. However, if the costs per job and the time period specified in 24 CFR 570.483(b)(4)(vi)(F)(2), are attained, only those jobs created by businesses included in the application must be counted for the purpose of meeting a national objective.

(d) Determination of Availability of Jobs to Low- and Moderate-Income Persons. To determine that the created or retained jobs will be made available to low- and moderate-income persons, the local government or Participating Party shall ensure that:

1. Jobs will be created which do not require special skills that can only be acquired with substantial work experience, education beyond high school, or specialized work experience;

2. Training is provided to members of families of low and moderate income as necessary to equip them with the skills required to obtain and retain the job to be created and/or retained. Such training shall be provided at no cost to LMI persons; and

3. The advertising and recruiting efforts are directed toward low- and moderate-income persons.

(e) If a national objective is attained under the provisions of 24 CFR 570.483(b)(4)(iv) or (v), incorporated by reference, demographic and/or census documentation must be provided with the application.

(f) Public improvement activities are also subject to the requirements of 24 CFR 570.483(e)(1). Activities to address the needs of those beneficiaries listed in 24 CFR 570.483(b)(2)(ii)(A), will be presumed to meet the national objective of benefit to low- and moderate-income persons if they are directly related to the job creation or retention activities.

(8) Program Impact Criteria for the Economic Development Category.

Program Impact Criteria for Economic Development shall be based on a maximum of 660 points.

(9) Site Visits and Completeness Letters for Economic Development Applications.

(a) The Department shall conduct site visits to communities that submit economic development applications throughout the funding cycle as long as funds remain available for award.

(b) The Department shall notify the Chief Elected Officer in writing of the date and time that the site visit will take place. The letter shall include a list of application support documents and CDBG-related policies that will be reviewed at the site visit. It shall also discuss any issues that were noted during the application review process that need to be addressed.

(c) At the site visit, the Department shall examine all documentation referenced in the Application for Funding and listed in the site visit letter and, if applicable, review the Applicant’s response to the issues that were noted during the application review process.

(d) The Participating Party(ies) must participate in the site visit, or the Participating Party(ies) must come to Tallahassee to meet with Department staff within 30 days after the site visit. Should a Participating Party fail to meet with Department staff, the application must be withdrawn by the Applicant or the application will lose its funding reservation.

(e) If the application remains eligible for funding following the site visit, the Department will send an “Award and Offer to Contract Letter” and a subgrant agreement electronically to the Applicant for execution.

(f) If issues were generated during the site visit that were not resolved before the “Award and Offer to Contract Letter” was prepared, a list of additional questions or requests for information will be included with the letter. The Department will add special conditions to the Applicant’s subgrant agreement, if necessary, to resolve the issues.

(g) Within 60 calendar days of the Applicant’s receipt of the “Award and Offer to Contract Letter” (the 60-day period), the Department must receive all documentation referenced in the letter, two copies of the signed subgrant agreement, and copies of the documents listed in the instructions for Part 5 of the application under the heading Award and Offer to Contract Documentation.

(h) Two copies of the signed subgrant agreement and all required documentation must be received by the Department on or before 5:00 p.m. Eastern Time, of the 60th day. The day that the “Award and Offer to Contract Letter” is received by the local government shall not be included in the 60-day completeness period. All documents, except for the two copies of the subgrant agreement, may be submitted electronically to meet the 60-day requirement.

(i) If all program requirements have been met, the Department will execute and return a signed copy of the subgrant agreement to the local government.

(j) If CDBG Economic Development funds are unavailable, the eligible applications will be held in the order of their funding reservation as established in this section should additional funds become available.

(10) Administrative Costs.

Applicants under the Economic Development category shall utilize no more than eight percent of the total eligible subgrant amount for administrative costs to a maximum of $120,000.

(11) Loss of Funding Reservation for Economic Development Applications:

An Economic Development application shall lose its funding reservation if:

(a) The Applicant is not eligible pursuant to subsection 73C-23.0041(4), F.A.C.

(b) All activites are found to be ineligible. However, if not all activities are found to be ineligible, the funding reservation will be reduced. Only the funding for the eligible activities will be retained.

(c) The application is missing a required item that is specified in the “Documentation Requirements” section of the application.

(d) The local government withdraws the application in a letter signed by the Chief Elected Officer.

(e) The Department does not receive all required documentation and the subgrant signed by the Chief Elected Officer or his or her designee within 60 days of the applying local government’s receipt of the award and offer to contract letter. If the local government submits the required documentation and signed subgrant after the 60-day period has expired, the date that the subgrant and all required documents are received by the Department becomes the new funding reservation date. If the documentation is adequate and unreserved funds are available to fund the application, a subgrant will be executed by the Department.

(f) A Participating Party withdraws prior to the execution of the subgrant by the Department, unless the subgrant remains within the fundable range with the remaining Participating Parties. Increasing the job creation numbers or leverage of the remaining Participating Parties beyond that referenced in the application shall not be allowed. Replacement of Participating Parties shall not be allowed without withdrawal and resubmission of the application.

(12) Change in Participating Party after Award.

If an Economic Development contract must be modified because of withdrawal of a Participating Party or a reduction in leverage or job numbers, the local government must amend the contract and remain within the fundable range. Substitution of Participating Parties will be allowed only if the substitute is a business desiring to locate at the proposed job creation location or a location that will use the same infrastructure proposed in the application. The substitute Participating Party shall sign a Participating Party agreement which includes an obligation to create the same number of jobs. If the application was scored and ranked, it must remain in the fundable range.

Rulemaking Authority 290.048 FS. Law Implemented 290.043, 290.044, 290.046 FS. History–New_________.

 

73C-23.0049 Funding for Special Economic Development Projects.

(1) Special economic development projects can include the following:

(a) Business Incubators,

(b) Microenterprises, and

(c) Revolving loan funds.

(2) Maximum Funding for Special Economic Development Projects

The maximum amount that the Department may allocate annually for special economic development projects is $750,000. Special economic development projects must be designed to provide job creation opportunities for “non-entitlement” local governments. The allocation shall be included in the Annual Action Plan submitted to HUD.

(3) Request for Proposals.

If funding for special economic development projects is allocated, the Department shall issue a NOFA announcing the funding availability through a Request for Proposals (RFP). The Department shall accept proposals from “non-entitlement” local governments during the time period listed in the NOFA.

(4) Review and Award.

The Department will review all proposals that are received during the advertised time period based on the criteria contained in the RFP, and funding will be awarded to the highest scoring proposal(s) until funds run out.

Rulemaking Authority 290.048 FS. Law Implemented 290.043, 290.044, 290.046 FS. History–New__________.

 

(Substantial rewording of Rule 73C-23.0051 follows. See Florida Administrative Code for present text.)

 

73C-23.0051 Grant Administration and Project Implementation.

(1) Financial Management.

(a) CDBG subgrant Recipients shall establish a financial management system for administering subgrant funds that complies with Section 218.33, Florida Statutes, and 24 CFR 85.20. At a minimum, the system must address the following:

1. Financial reporting,

2. Accounting records,

3. Internal control,

4. Budget control,

5. Allowable cost,

6. Source documentation, and

7. Cash management.

(b) The Department shall not pay a Request for Funds for an amount less than $5,000, unless it is a Recipient’s final Request for Funds prior to administrative closeout.

(c) If the Office of the Governor has determined that a Recipient is in a State of Financial Emergency as defined in Section 218.503, Florida Statutes, the Recipient shall provide the documentation listed in the Special Conditions section of the subgrant agreement with each Request for Funds to justify payment.

(2) Environmental Review.

(a) CDBG subgrant Recipients must comply with the procedures set forth in 24 CFR Part 58, Environmental Review Procedures for Title I Community Development Block Grant Programs, incorporated herein by reference, and 40 CFR 1500-1508, National Environmental Policy Act Regulations, incorporated herein by reference.

(b) For Commercial Revitalization, Economic Development, and Neighborhood Revitalization subgrants, Recipients shall submit four copies of the required environmental documents to the Florida State Clearinghouse before initiating any construction work. Along with the documents required by the federal regulations listed in paragraph (a) above, four copies of the following application documents shall be sent to the State Clearinghouse:

1. Part 2: Application Profile and General Scoring Criteria;

2. Part 3: Sources and Uses of Non-CDBG Funds (Leverage), if applicable;

3. Form C-1 from Part 4 (Commercial), Form E-2 from Part 5 (Economic Development) or Form N-1 from Part 7 (Neighborhood);

4. Part 9: Appendix A: Maps; and

5. Part 9: Appendix D: Historic Preservation Documents, if applicable.

The address for the State Clearinghouse is:

Florida State Clearinghouse

Florida Department of Environmental Protection

3900 Commonwealth Blvd, M.S. 47

Tallahassee, Florida 32399-3000

(c) One copy of the environmental documents shall be sent to the regional planning council that serves the Recipient’s jurisdiction, and one copy of the documents shall be sent to Department along with HUD Form 7015.15 (Request for Release of Funds and Certification).

(d) After receiving comments from the State Clearinghouse and the regional planning council, the Department will compile the comments and send them to the Recipient to address any unresolved issues. If there are no unresolved issues, the Department will issue HUD Form 7015.16 (Authority to Use Grant Funds) to the Recipient.

(e) For Housing Rehabilitation subgrants, the Recipient shall submit environmental documentation for each house that will be rehabilitated to the State Historic Preservation Officer before initiating any construction work on the respective house. The environmental documents shall be submitted to the address below, either individually for each unit or combined into one submittal package:

State Historic Preservation Officer

Attn: Compliance Review

500 South Bronough Street

Tallahassee, Florida 32399-0250

Rehabilitation work cannot be initiated on a housing unit until the Department issues an environmental release for the housing unit.

(3) Procurement.

(a) Each subgrant Recipient shall adopt a local CDBG Procurement Policy that complies with the provisions of 24 CFR 85.36, incorporated herein by reference. For covered professional services contracts, the policy shall also comply with Section 287.055, F.S. (Consultants Competitive Negotiation Act).

1. The Department must approve the policy before the Recipient can request reimbursement of administrative costs exceeding $5,000 or any construction costs. CDBG funds shall be used to obtain commodities and services only in accordance with the approved policy.

2. The Recipient shall submit procurements being paid with CDBG funds to the Department for desk monitoring. Submission shall be made in accordance with the requirements outlined in the Recipient’s subgrant agreement.

(b) Professional services. Any procurement which requires public notice in a newspaper based on the local CDBG procurement policy, shall be published in a newspaper of general circulation in the county where the Recipient is located. The following public notice criteria apply for the procurement process to be approved:

1. If the newspaper is located in an Office of Management and Budget (OMB) designated metropolitan statistical area (MSA), only one responsible and responsive bid or proposal is needed to complete the process.

2. If the newspaper is not located in a MSA, at least three responsible and responsive bids or proposals must be received by the local government.

3. Recipients, whose newspaper of general circulation is not located in a MSA, may advertise in both the local newspaper and a newspaper in a nearby MSA. Only one responsible and responsive bid or proposal would be needed to complete the process.

4. The procurement policy shall require at least 12 days for receipt of the proposals or bids after the date of publishing.

(c) Construction. Public notice for construction procurement shall conform to Section 255.0525, F.S. If fewer than three responsible and responsive bids are received and the notice was not published in a MSA newspaper, the procurement must be readvertised.

(d) Nothing in paragraph (3)(b) or (c) shall preclude a local government from using other media to solicit bids related to procurement of professional services and construction activities.

(e) The Department must provide written approval prior to the Recipient awarding any contract exceeding $25,000 resulting from a single source, a sole source, or a non-competitive procurement. For contracts below $25,000, the Recipient’s files must document the justification for the procurement which complies with 24 CFR 85.36(b)(4).

If prior written approval is not obtained, the Department has no obligation to fund the contract unless the Department subsequently approves the procurement. Cost analysis is required for single and sole source contracts to comply with 24 CFR 85.36(f) and establish the reasonableness of the price even if competitive procurement was used.

(f) In procuring services for subgrant administration, Recipients shall evaluate in writing any economies of scale or other means of securing efficiency that may be available as a result of the type, number and geographic distribution of subgrants to be administered by the Recipient or by a prospective subgrant administrator.

(g) Under Section 290.047(5), F.S., a local government is permitted to contract with the same entity for more than one service, provided that the local government can document that the entity is either (i) the sole source or (ii) was determined, through the Request for Proposals process, to be the proposer most advantageous to the local government. Different services, such as, program administration, and engineering services, shall not be combined in a single contract except for design-build contracts procured in accordance with Section 287.055, F.S. If separate procurements result in one firm selected for application and administration services, those services may be combined into one contract provided there are separate scopes of work and a separate fee for each service.

(h) 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; and

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 those 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 CDBG subgrant, except as provided in paragraph (3)(i) below. Each advertisement for procurement of CDBG professional services, except for application preparation, must identify either the CDBG funding cycle by federal fiscal year or the CDBG subgrant number. In the absence of any identifier, the procurement will be presumed to be for the CDBG funding cycle closest to the publication date of the advertisement or, if there is no advertisement, the date of receipt for proposals.

4. Each professional services contract must identify the CDBG contract number to which it is applicable.

5. No firm shall be precluded from submitting a bid or proposal for any work funded partially or wholly with CDBG funds based on a minimum experience requirement. A firm’s experience can be addressed as an evaluation factor in the ranking for professional services and is a consideration in determining the “responsibility” of a firm when the determining the “low, responsive, responsible bidder” for services procurement through bids, as required by 24 CFR 85.36(d)(2)(ii)(D).

(i) Engineering and Administration Services.

1. If the procurement for administration or engineering services for a subgrant initially funded only for planning and design was accepted by the Department and the public notice or Request for Proposals stated that the firm awarded a contract for planning and design services would also, at the discretion of the local government, provide additional services during project construction, then a procurement for those services during construction is not required. If the Request for Proposals specifically included services during construction in the scope of work, then no additional procurement is required for those services.

2. A Recipient whose application received “Readiness to Proceed” points may use the design engineer for services during construction if the Department determines that the procurement for design services was competitive and the Request for Proposals specifically included services during construction in the scope of work.

(j) Construction Contracts.

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

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

3. All contracts in excess of $100,000 covered by Section 3 regulations shall contain the language required in 24 CFR 135.38, incorporated by reference.

4. All contracts in excess of $100,000 shall include the following:

a. A performance bond on the part of the contractor for 100 percent of the contract price; and

b. A payment bond on the part of the contractor for 100 percent of the contract price.

5. All contracts shall include liquidated damages clause establishing a predetermined amount that must be paid if the contractor fails to perform as promised.

(k) 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.

(4) Modifications.

(a) All proposed modifications to the subgrant agreement must be approved by the Department.

A Recipient shall not request a modification to add activities that would broaden the scope of the project beyond what was included in the original Application for Funding, except as allowed below. Unaddressed need activities that were included in the Application for Funding can be added to the subgrant agreement through a modification request if all addressed need activities have been procured and funds are available to complete the unaddressed need activities. Replacing a participating party that has withdrawn from an economic development project is not considered an activity.

If a modification request involves a reduction in the number of beneficiaries or accomplishments listed in the original Application for Funding, the Recipient shall conduct a public hearing to discuss the changes prior to submitting the modification request. The hearing must be noticed as defined in subsection 73C-23.0031(44), F.A.C., of this rule.

A modification request shall be denied if:

1. The modification would result in the application score dropping below the fundable range for applications submitted in the same program category during the same application cycle; or

2. The modification request contains an activity that was not included in the Recipient’s original Application for Funding. The only exception shall be that an activity designed to address Americans with Disabilities Act (ADA) violations that were discovered during Department monitoring can be approved provided funds are available after all bids related to addressed need have been procured.

(b) Documentation Required. Requests for modification shall include the following written documentation for review by the Department:

1. A cover letter signed by the Chief Elected Officer or his or her designee which describes the need for the proposed changes and the effect of the changes upon the approved project. If the modification involves an extension of time, the Recipient must provide a justification for the extension.

2. Two copies of Form SC-44 Modification to the Subgrant Agreement signed by the Chief Elected Officer or person designated by resolution to sign modifications.

3. If applicable, copies of all revised application pages that would be changed if the proposed modification is approved showing the changes.

4. If applicable, a revised Activity Work Plan.

5. If there are changes to the subgrant budget, including CDBG or leverage funds, beneficiaries or accomplishments, a signed copy of Form SC-35 Request for Amendment that shows current and proposed numbers. The grant manager will prepare a revised Project Budget based on the information on Form SC-35 and include it with the modification package.

6. If there is a change in activity location, a map indicating the proposed changes.

7. If applicable, a copy of the public notice for the public hearing at which the modification was approved, documenting compliance with subsection 73C-23.0031(44), F.A.C. and a copy of the minutes from the hearing.

(c) To allow the Department adequate time to process a modification before the contract end date, modification requests shall be received by the Department at least 45 calendar days prior to the contract end date. If a modification is received less than 45 calendar days before the contract end date, the following penalty points shall be assessed on future Small Cities CDBG applications:

1. For modification requests received 35-44 days before the contract end date, a 5-point penalty shall be assessed for two years from the date that the administrative closeout request is received by the Department;

2. For modification requests received 25-34 days before the contract end date, a 10-point penalty shall be assessed for two years from the date that the administrative closeout request is received by the Department;

3. For modification requests received 10-24 days before the contract end date, a 15-point penalty shall be assessed for two years from the date that the administrative closeout request is received by the Department;

3. For modification requests received 10-24 days before the contract end date that include a request to extend the contract period, a 20-point penalty shall be assessed for two years from the date that the administrative closeout request is received by the Department;

4. For modification requests received less than 10 days before the contract end date, a 25-point penalty shall be assessed for three years from the date that the administrative closeout request is received by the Department;

5. For modification requests received less than 10 days before the contract end date that include a request to extend the contract period, a 30-point penalty shall be assessed for three years from the date that the administrative closeout request is received by the Department;

6. If a modification request is received after the contract end date, a 40-point penalty shall be assessed for four years from the date that the administrative closeout request is received by the Department if the reinstatement is approved. A reinstatement shall only be approved if the Recipient can show that it will be able to complete any unfinished work before the new end date being requested and that all National Objective and Public Benefit requirements will be met.

7. If a Recipient requests more than one modification with less than 45 days remaining before the contract end date, the penalty points shall be cumulative.

(d) The Department shall approve or reject a modification request in writing within 45 days of the Department’s receipt of the Recipient’s request. If the Department requests additional information needed to process the modification, the Department shall approve or reject the modification request within 45 days of receipt of the additional information.

(e) Any necessary modifications must be received and approved by the Department prior to the local government submitting its administrative closeout package.

(5) Subgrant Agreement Closeout.

(a) The Recipient shall submit a subgrant agreement closeout package to the Department within 45 days of the termination of the contract or within 45 days of the completion of all activities, including job creation for economic development projects. Recipients with an economic development project shall not submit an administrative closeout package until the cost per job is less than $10,000 or until one year after the date that all CDBG-funded activities were completed, whichever comes first.

(b) All funds drawn from the Department and not expended must be returned to the Department prior to submission of the closeout.

(c) Upon completion of the activities contained in the local government’s CDBG subgrant, including any amendments, the local government shall submit to the Department a closeout report and documentation which includes:

1. The final statement of costs and copies of the final construction invoices;

2. Certification that all construction has been completed, inspected and approved by all parties prior to the subgrant end date and submission of the administrative closeout;

3. Photos of project activities, maps, and documentation of fair housing activities and resolution of citizen complaints and outstanding monitoring issues;

4. Certification that all costs except those reflected on the closeout report have been paid;

5. Documentation of the expenditure of any leverage;

6. A report of final beneficiary data and final accomplishments;

7. A list of the homes receiving direct benefit; and

8. Certification that each housing unit assisted was within the local government’s jurisdiction for Housing Rehabilitation.

(d) The closeout report must contain original signatures. Facsimile (FAX) and electronic submissions are not acceptable to meet submission requirements.

(e) The Department will respond to a closeout request by mailing a Notice of Outstanding Closeout Issues (NOCISS) letter that identifies issues that must be resolved before the Department can approve the closeout or by mailing a Notice of Administrative Closeout.

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

(g) If an audit report is past due, the subgrant cannot be administratively closed until the past due audit is received. If an audit report is owed but not past due, the administrative closeout can proceed. Final closeout shall not occur until all required audits are received.

(6) Performance.

(a) Reporting. At a minimum, the local government shall provide the Department with:

1. Quarterly progress reports,

2. An annual Section 3 report,

3. A Semi-Annual Minority/Woman Business Enterprise report, and

4. An administrative closeout report.

(b) Monitoring by the Recipient. Each subgrant Recipient shall constantly monitor its own performance of project activities to ensure that time schedules are met, projected milestones are accomplished, and other performance goals are achieved in accordance with the Activity Work Plan of the subgrant agreement.

(c) Monitoring by the Department. The Department shall periodically review the Recipient’s implementation of the project to ensure compliance with the approved application, the subgrant agreement, the requirements of Sections 290.0401-.048, F.S., this rule, and other applicable State laws and federal regulations.

1. Recipients shall supply data and make records available as necessary for the Department to complete an accurate evaluation of contracted activities. Recipients shall respond to any monitoring finding or concern that requires a response, within 45 days of the Recipient’s receipt of the Department’s monitoring report. The Department will reject any Request for Funds when a response to a monitoring report is late.

2. If the Department must take formal action under the terms of the subgrant to terminate it for cause following a monitoring, the Recipient will be assessed 150 penalty points against the score of future applications. This penalty expires two years from final closeout (not administrative closeout) of the terminated grant.

(d) Remedies. When the Department determines on the basis of a review of the Recipient’s performance that the terms of the subgrant are not being met, the Department shall:

1. Initiate actions as prescribed in 24 CFR 570.910(b), “Corrective and Remedial Actions” and 24 CFR 570.911, “Reduction, withdrawal, or adjustment of grant or other appropriate action.”

2. The Department may unilaterally modify the agreement to delete an ineligible activity and deobligate any unencumbered funds if at any time after the effective date of a subgrant the Department determines that a funded activity is not eligible pursuant to 24 CFR 570.

(e) Submission of inaccurate information in monitoring report responses; audit or audit finding responses; quarterly, closeout, program income, or other reports; or Requests for Funds may result in penalties if this inaccuracy results in subsequent official Department action (such as the granting of administrative or final closeout status, releasing funds, or clearance of findings).

1. In the case of inaccurate monitoring or audit responses, the closeout status, audit clearance, and/or monitoring report clearance shall be revoked.

2. If a penalty was avoided as a result of inaccurate information being reported, the penalty will be assessed.

3. If the subgrant was administratively closed as a result of inaccurate information, the subgrant shall be reopened and the Recipient shall be ineligible to apply for and receive additional CDBG funding in accordance with Section 290.046(2)(c)1., F.S. If a subgrant is reopened, the Department shall cancel any subsequently awarded subgrant and the Recipient shall repay any CDBG funds drawn under the nullified subgrant.

(7) Audit Requirements.

A Single Audit under OMB Circular A-133, or an attestation statement that a Single Audit is not required, must be received from each Recipient with either an open or administratively closed contract the June 30 following the end of each Recipient fiscal year in which subgrant funds were expended or a penalty will be assessed. A 25-point penalty will be assessed for audits not received by the June 30 deadline. A 10-point penalty will be assessed for attestation statements not received by the June 30 deadline. The penalty will expire two years from the date that the audit report or attestation statement was received by the Department.

(a) The annual audit report shall be accompanied by management letters and the Recipient’s response to all findings, including corrective actions to be taken.

(b) The annual financial audit report shall include a schedule of financial assistance specifically identifying all agreement and grant revenue by sponsoring department and agreement number.

(c) The complete financial audit report, including all items specified in paragraph (7)(a) or (b) above, shall be sent directly to the addresses specified in the subgrant agreement.

(d) If the audit shows that the entire funds, or any portion thereof, were not spent in accordance with the conditions of a CDBG subgrant or this rule, the Recipient shall be held liable for reimbursement to the Department of all funds not spent in accordance with applicable regulations and subgrant provisions within thirty (30) days after the Department has notified the Recipient of such noncompliance.

(e) The Recipient shall retain all financial records, supporting documents, statistical records, and any other documents pertinent to a CDBG subgrant for a period of six years after receipt of final closeout notification from the Department. However, if litigation or an audit has been initiated prior to the expiration of the six year period, the records shall be retained until the litigation or audit findings have been resolved.

(f) The Recipient shall have all audits completed by an independent certified public accountant (ICPA) who shall either be a certified public accountant or a public accountant licensed under Chapter 473, F.S. The ICPA shall state that the audit complied with the applicable provisions noted above.

(8) Displacement and Relocation.

(a) Recipients are required to develop a written plan for assisting persons or businesses that may be displaced as a result of activities assisted with CDBG funds. The plan shall include actions that the Recipient shall take to mitigate any adverse effects resulting from CDBG-funded activities that may cause such displacement. This plan shall be in accordance with Section 104(d) of Title I of the Housing and Community Development Act of 1974, as amended, and is required even if displacement is not anticipated.

(b) If the CDBG project involves the acquisition of real property by the local government, regardless of whether such acquisition is funded from the CDBG grant, or causes displacement of persons or businesses, the local government shall comply with 49 CFR 24 (the implementing regulation of the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970) incorporated herein by reference. For activities resulting in displacement of persons or businesses that do not involve the acquisition of real property, and thus not subject to the “Uniform Act,” the local government’s local written policy shall identify the assistance it elects to provide for such persons or businesses.

(c) The Recipient shall make its displacement and relocation policy available to the public.

(9) Records.

The local government shall maintain all subgrant files and records within a readily accessible site within its jurisdiction and under its control at all times until six years after receipt of final closeout notification from the Department. The local government shall provide all interested citizens with reasonable access to the subgrant records during normal business hours.

(10) Program and Non-Program Income.

(a) Liquidated damages, rebates, refunds, or any other “non-program income” received from any party previously paid (or from whom payment was withheld) shall be used to conduct additional eligible 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 subgrant detailing their use.

(b) Program income generated after closeout shall be returned to the Department. Program income generated prior to closeout of a subgrant shall be returned to the Department unless:

1. The program income is used to fund additional units of CDBG activities referenced in the subgrant under which the program income was generated; and

2. The Recipient amends the subgrant to encompass expenditure of the program income prior to administrative closeout; and

3. The funds are to be expended pursuant to the provisions of 24 CFR 570, Sections 290.046-.048, F.S., and this rule.

(11) Conflict of Interest.

If CDBG funds are to be expended to assist or benefit any person listed in 24 CFR 570.489(h)(3), or listed in Section 112.3143, F.S., who is subject to a conflict described in 24 CFR 570.489(h)(2), a waiver of that conflict shall first be requested pursuant to 24 CFR 570.489(h)(4). Should CDBG funds be expended prior to the Department’s approval of the waiver of the conflict of interest, the funds expended will not be considered an eligible expense and shall be subject to repayment.

(12) Direct Benefit.

The eligibility of households receiving direct benefit, including water or sewer hookups, shall be established no earlier than one year before the work is performed. Eligibility documentation shall include third party documentation of household income and source(s) regardless of the value of the direct benefit.

Rulemaking Authority 290.048 FS. Law Implemented 290.044, 290.046, 290.047, 290.0475 FS. History–New 5-23-06, Amended 2-26-07, 6-6-10, Formerly 9B-43.0051, Amended__________.

 

(Substantial rewording of Rule 73C-23.0061 follows. See Florida Administrative Code for present text.)

 

73C-23.0061 Emergency Set-aside Assistance.

Applications will be accepted for the Emergency Assistance Set-aside in accordance with Section 290.044(5), F.S., and the following criteria:

(1) The maximum funds available under this set-aside from each federal fiscal year’s allocation shall be five percent of the funds and shall be available through March 31 of the following calendar year.

(2) The funds shall be to meet serious, urgent community needs of low- and moderate-income residents resulting from a natural disaster. The area must have been declared to be in a state of emergency by executive order of the Governor as provided under Section 252.36, F.S. The National Objective to be met shall be Urgent Need or Low- and Moderate-Income benefit.

(3) If more than one county is declared to be in a state of emergency as the result of a natural disaster, the Department shall rank the counties using damage estimates from the Federal Emergency Management Agency and/or the Florida Division of Emergency Management. A Notice of Funding Availability (NOFA) shall be issued for those eligible communities in the county that incurred the highest estimated damage amount.

(4) Applications will only be accepted from eligible local governments, as defined in Section 290.042(5), F.S., from the county listed in the NOFA. A local government with an open subgrant in any other category is not precluded from applying for or receiving Emergency Set-aside funds because of the open subgrant or its status.

(5) Sufficient documentation must be provided to show that the activities for which funding is being requested are directly related to the specific event covered by the Governor’s executive order. The amount of funds requested shall be limited to that amount necessary to address the emergency need. As stated in Section 290.044(5), F.S., Emergency Set-aside funds may only be provided to a local government to fund eligible emergency-related activities for which no other source of federal, state, or local disaster funds is available.

(6) All other provisions of this rule chapter shall apply to the Emergency Assistance Set-aside unless otherwise stated in the NOFA.

(7) If the total requests for funding from the eligible communities in the county determined to have incurred the highest estimated damage exceed the amount of available funds, the Department shall allocate funds proportionately among all Applicants with eligible activities, not to exceed the amount available.

(8) If an Applicant chooses not to accept the amount offered, that amount shall be redistributed to other eligible Applicants.

(9) If any funds remain after the awards are made to all of the communities in the county with the highest estimated damage amount, a NOFA shall be issued for the communities in the county that incurred the second highest estimated damage amount. The remaining funds shall be allocated proportionately between the communities that apply.

(10) If a state of emergency is not declared before March 31 of a state fiscal year, the emergency set-aside funds for that time period shall be reallocated in accordance with Section 290.044(5), F.S.

Rulemaking Authority 290.044 FS. Law Implemented 290.044 FS. History–New 5-23-06, Amended 6-6-10, Formerly 9B-43.0061, Amended__________.

 

(Substantial rewording of Rule 73C-23.0071 follows. See Florida Administrative Code for present text.)

 

73C-23.0071 Section 108 Loans Guarantee Program.

(1) Eligibility.

(a) Municipalities and counties on U.S. Department of Housing and Urban Development’s (HUD) list of non-entitlement local governments in Florida are eligible to apply for Section 108 loans guaranteed by the State of Florida’s current and future Small Cities Community Development Block Grant allocations.

(b) Any project proposed for funding through the Small Cities Community Development Block Grant Loan Guarantee Program must be located within the jurisdictional boundaries of the non-entitlement local government that is applying for the loan.

(c) Section 108 loan requests must meet one of the three National Objectives to be eligible for consideration.

(2) Application Process.

(a) Eligible non-entitlement local governments wanting to receive assistance through the Small Cities Community Development Block Grant Loan Guarantee Program may apply at any time during the year. The following application process must be followed:

1. The non-entitlement local government completes the Section 108 Pre-Application Questionnaire (See Form SC-58.) and submits it to the Department for review.

2. Following the Department’s review and acceptance of the local government’s responses to the Section 108 Pre-Application Questionaire, the local government requests a screening meeting with the Department. The meeting is held to determine if the proposed project meets all program requirements.

3. If the Department determines that the project is eligible for further consideration, the local government is invited to submit a Section 108 loan application. The local government must provide documentation to the Department that it has met the Citizen Participation requirements detailed in paragraph 73C-23.0041(5)(b), F.A.C., with the exception that it only has to provide a project summary and draft budget at the second public hearing.

4. The local government then prepares its Section 108 loan application and submits it to the Department for review. The application narrative must describe how the proposed project will meet a national objective and the public benefit standards, and it must document that the proposed activities are eligible for funding. The narrative shall also include a detailed budget showing all sources and uses of funds, a repayment (amortization) schedule, required local government certifications, proof of proper citizen’s participation and site control (if applicable), background information on project partners, maps, and other supporting documentation to illustrate the specifics of the proposed project. Projects which propose a loan(s) to a third party(ies) shall include letters of commitment from all funding sources evidencing sufficient non-loan funds are available to complete the project. For economic development projects, these commitments shall include at a minimum those stated in the Economic Development section of the Small Cities CDBG Application for Funding (Form SC-60.5) under “Initial Participating Party Commitments.”

5. Upon receipt of the application, the Department conducts a “due diligence and compliance” review of the application. The Department determines whether the application is eligible for funding and financially feasible, ineligible for funding, or financially infeasible.

6. The local government shall have a third party complete a detailed underwriting analysis of the proposed project in accordance with 24 CFR 570.482(e)(2) and Appendix A of 24 CFR 570.

a. The Department shall retain the right to approve the third party underwriter and the method of analysis and to enforce adherence to the guidelines in 24 CFR 570.482(e)(2) and Appendix A. The Department may, as necessary, require additional underwriting standards, criteria or review.

b. The client for the underwriter is the Department; however, the cost for the underwriting analysis is the responsibility of the applying local government or its partner(s).

c. The Department shall be provided the underwriting analysis prior to the final application package being sent to HUD Office in Jacksonville. 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 the underwriter and any assistance requested for the Participating Party must be adjusted if a material change has occurred.

d. Should the project be approved and funded, the cost for underwriting analysis may be reimbursed from loan proceeds to the entity incurring the cost. This reimbursement requires an up-front letter of request to incur pre-agreement costs from the applying local government, delivered to the Department prior to incurring the costs.

7. Any application that is eligible for funding and financially feasible is forwarded to the HUD Office in Jacksonville, along with the underwriting analysis and a recommendation that the application be approved or denied. HUD staff reviews the application and underwriting analysis to ensure that the project is eligible and feasible and to verify that the proposed project meets a national objective, includes eligible activities and meets the public benefit standards. HUD’s review also verifies that citizen’s participation requirements were met and that all required certifications have been completed.

8. The Jacksonville HUD Office then forwards the application to the Section 108 staff at HUD headquarters, along with its recommendation for approval or disapproval of the project.

9. A HUD staff underwriter completes a detailed review of the application and examines the requested loan terms and additional security requirements. The staff underwriter may communicate with HUD Jacksonville, the Department, the applying local government, and the local underwriter in order to resolve questions, concerns or issues that may arise during the review.

10. Following completion of the HUD staff underwriter’s review, a Project Review Panel (consisting of staff from headquarters and Jacksonville) examines the application, suggest ways to resolve issues, request additional information or recommend approval or disapproval. Applications that are approved are forwarded to the Secretary of HUD for final approval.

(3) 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(ies), a representative(s) of the third party(ies) shall attend the site visit or shall meet with Department staff within 30 days of the site visit at the CDBG Office in Tallahassee.

(b) The local government shall submit a fully executed Participating Party Agreement(s) that meet(s) the requirements set out in the Economic Development section of the Small Cities CDBG Application for Funding (Form SC-60.5).

(c) The local government and the Department shall execute an agreement that outlines the State’s requirements for administering the Section 108 loan and includes a Program Budget and an Activity Work Plan.

(d) The Department, HUD and the local government sign the HUD Section 108 Loan Guarantee Agreement.

(4) 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 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.

(c) The local government shall provide documentation and reporting of Minority and Women Business Enterprise participation and Section 3 compliance until such time as the project is administratively closed.

(d) The local government shall meet the requirements of subsection 73C-23.0051(8), F.A.C., pertaining to audits.

(e) The Department shall monitor the local government and project partners to ensure compliance with a National Objective and the public benefit standards, as well as all applicable federal and state regulations.

(f) The local government shall provide the Department with documentation of each loan payment made to HUD throughout the life of the Section 108 loan.

Rulemaking Authority 290.048 FS. Law Implemented 290.0455 FS. History–New 5-23-06, Amended 6-6-10, Formerly 9B-43.0071, Amended__________.

 

(Substantial rewording of Rule 73C-23.0081 follows. See Florida Administrative Code for present text.)

 

73C-23.0081 Nonrecurring CDBG Funding.

(1) Funding.

When nonrecurring CDBG funds are awarded to the State of Florida by the U.S. Department of Housing and Urban Development (HUD) to address disaster recovery needs in Presidentially declared disaster areas, the Department will adhere to the following process:

(a) Submit an Action Plan to HUD which describes the proposed use of the funds.

(b) Notify eligible Applicants of the availability of the funds, the eligible uses, and the manner in which they can be accessed.

(c) Evaluate local government proposals for the use of the funds and make on-site visits to ensure compliance with federal guidelines.

(d) Execute subgrant agreements with the local governments.

(2) Objective.

The objective of nonrecurring disaster funding is to address disaster relief, long-term recovery, to restore housing and infrastructure, and other activities allowed under the applicable Federal Register notice, particularly that which affects persons who are of low- and moderate-income that suffered damage or loss as a result of the disaster. Funds may be made available to both Urban Entitlements and participants of the Florida Small Cities CDBG Program, federally designated Indian Tribes and nonprofit organizations.

(3) Rule 73C-23.0031, F.A.C.

(Definitions, except the definitions of “application cycle,” “business incubator,” “fundable range” “funding cycle,” “microenterprise” and “service area”) and subsections 73C-23.0051(1), (3) and (9), F.A.C. (Selected portions of Subgrant Administration and Project Implementation) will apply to CDBG disaster recovery funding. All other portions of Rule Chapter 73C-23, F.A.C., are waived.

(4) Service area.

“Service area” is defined as the total geographical area to be served by an activity. A service area will encompass all beneficiaries who are reasonably served or would be reasonably served by an activity.

(5) Interlocal Agreements.

Eligible Applicants proposing eligible activities in other eligible jurisdictions will enter into an Interlocal Agreement with the following provisions or submit documentation of an established relationship between eligible jurisdictions which includes the following provisions:

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

(b) Authorizes the Applicant to undertake the activities in all jurisdictions included in the interlocal agreement; and

(c) Affirms that all activities are consistent with each local government’s comprehensive plan and provides applicable excerpts of each local government’s comprehensive plan in the supporting documentation section of the application.

(6) Administrative Costs.

The State’s Action Plan will limit the amount of funds that local governments may use for the administrative costs specified in 24 CFR 570.206. This does not include staff and administrative costs directly related to carrying out activities eligible under 24 CFR 570 since those costs are eligible as part of those activities.

(7) Program Income.

Any program income earned as a result of activities funded under a CDBG disaster recovery subgrant must be reported to the Department, but may be retained for the life of the subgrant by the local government and used to continue the activities from which the funds were generated. Contractual agreements will provide additional guidelines for utilization of program income funds.

(8) Other Funds.

Applicants and/or beneficiaries must provide documentation of funds received from other sources which were applied toward the costs of the project funded by CDBG disaster recovery funds.

(9) Beneficiaries of Public Improvements.

For activities where hookups or connections are required for beneficiary access to CDBG-funded infrastructure, 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. For activities where hookups or connections are required as a condition for beneficiary access to a CDBG funded infrastructure, no hookup or connection fees shall be charged to very low-, low- or moderate-income beneficiaries. Further, no portion of the project construction costs shall be charged to very low-, low- or moderate-income beneficiaries.

(10) Modifications.

All proposed modifications to the subgrant agreement must be approved by the Department.

(a) Documentation Required. All requests for modifications shall include the following written documentation for review by the Department:

1. A cover letter signed by the Chief Elected Officer or their designee which describes the need for the proposed changes and their effect upon the approved project.

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

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. A copy of the minutes of the meeting at which the modification was approved.

(b) The modification must be received by the Department at least 45 days prior to the end of the subgrant agreement. If the modification 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.

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

(d) Time Extensions to Subgrant Agreements. Any proposed modification extending the termination date of the subgrant agreement must be approved by the Department. The local government must explain any delay affecting project completion and must justify the need for the extension.

(11) Subgrant Closeout.

(a) At the time of submission of the closeout report form, 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 funds on hand. All funds drawn from the Department and not expended must be returned to the Department prior to, or with, the submission of the closeout documents.

(c) Upon completion of the activities contained in the local government’s CDBG subgrant agreement (including any modifications), the local government shall submit to the Department a closeout package which, at a minimum, gives the final statement of costs, certifies that the project and all non-administrative activities are completed and accepted, certifies that all costs except those reflected on the closeout forms have been paid and reports demographics of the program’s beneficiaries.

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

(e) When housing assistance is provided, the closeout documents must, at a minimum, include a list of the households assisted by the contract. Additional information required by HUD may be requested by the Department at any time.

(f) For activities where hookups or connections are required for beneficiary access to the public improvement, 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. Projects required to meet the LMI national objective must document 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 or the percentage required by HUD at the time of the application.

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

(h) 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.

(i) All closeout documentation is due within 45 days after expiration or termination of the subgrant agreement.

Rulemaking Authority 290.046(2)(b)2., 290.048 FS. Law Implemented 290.043 FS. History–New 6-6-10, Formerly 9B-43.0081, Amended__________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Roger Doherty, Division of Community Development

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Jesse Panuccio

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: October 2, 2014

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: June 19, 2014