Definitions, Application and Administrative Requirements, Specific Requirements for Competitive Categories., Grant Administration and Project Implementation, Nonrecurring CDBG Funding.

DEPARTMENT OF COMMUNITY AFFAIRS
Division of Housing and Community Development

RULE NO: RULE TITLE
9B-43.0031: Definitions
9B-43.0041: Application and Administrative Requirements
9B-43.0045: Specific Requirements for Competitive Categories.
9B-43.0051: Grant Administration and Project Implementation
9B-43.0081: Nonrecurring CDBG Funding.

NOTICE OF CHANGE

Notice is hereby given that the following changes have been made to the proposed rule in accordance with subparagraph 120.54(3)(d)1., F.S., published in Vol. 36 No. 7, February 19, 2010 issue of the Florida Administrative Weekly.

The changes are to the proposed rule and the application manual incorporated by reference in the rule. Application manual changes include revisions, in the Housing category, to activity goal points and clarification for when sewer/ water hookups are a complementary or primary activity and, in the Neighborhood Revitalization category, a requirement that water and sewer hookups occur in a service area where other activities are occurring. Some changes are in response to comments received at a public hearing held on March 16, 2010 in Tallahassee. Other changes are technical corrections for incorrect citations, typographical errors, and other non-substantive changes.

9B-43.0031 Definitions.

The Florida Small Cities Community Development Block Grant (CDBG) Program is governed by definitions provided in the Housing and Community Development Act of 1974, as amended, and Title 24 C.F.R. 570, Subparts A,C, I, J, K, M and Appendix A, both incorporated herein by reference for use throughout this chapter, as effective on _______00-00-00. These and other documents referenced in this rule are available either on the Department’s CDBG program website pages or upon request from the CDBG program office. The following additional definitions are provided for clarification.

(1) No change.

(2) “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 Florida Small Cities Community Development Block Grant 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 costs where State law or 24 C.F.R. Part 85, as effective on 00-00-00, requires sealed construction documents to obtain a building permit;

(b) through (c) No change.

(3) No change.

(4) through (13) No change.

(14) “Income” means annual income as defined by the U.S. Department of Housing and Urban Development as set forth in 24 CFR Section 5.609, incorporated herein by reference, as effective on _______ 00-00-00.

(15) through (26) No change.

(27) 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 C.F.R. Section 55.2(b)(1), incorporated herein by reference, as effective on _______, and used throughout this chapter.

(28) through (35) No change.

(36) “Section 3” means Section 3 of the Housing and Community Development Act of 1974 1968, as amended, and the implementing regulation, 24 C.F.R. Part 135, incorporated herein by reference, as effective on ________, relating to employment and other economic opportunities for lower income persons.

(37) through (39) No change.

Rulemaking Authority 290.048 FS. Law Implemented 290.042, 290.043 FS. History–New 5-23-06, Amended________.

 

9B-43.0041 Application Process and Administrative Requirements.

(1) through (2) No change.

(3) Citizen Participation Requirements.

(a) The applicant shall demonstrate that the citizen participation requirements required by this rule, sections 104(a)(1) and (2) and 106(d)(5)(C) of Title I of the Housing and Community Development Act of 1974, and Section 290.046(5), F.S., with public notice provided in accordance with subsection 9B-43.0031(35) Rule 9B-43.003, F.A.C., have been satisfied. Each applicant shall certify that it is following a Citizen Participation Plan pursuant to Section 104(a)(3) of Title I of the Housing and Community Development Act of 1974. The local government must inform and involve its citizens in the project planning and selection, and decision-making process regarding all CDBG-funded projects. These requirements are:

1. through 4. No change.

5. Both public hearings shall be given proper public notice as defined in subsection 9B-43.0031(35), F.A.C. Rule 9B-43.002 Program Definitions (35), herein. The advertisement for the second public hearing on the application shall not occur until after the date of the first public hearing; and

6. No change.

(b) No change.

(4) Application Preparation and Submission.

(a) through (b) No change.

(c) Application Forms. Application forms are in the application manuals, CDBG-A-1 Application for Funding, effective as of______, hereby incorporated into this rule by reference, effective as of 00-00-00, and which is are available from the Department of Community Affairs at the address specified in the NOFA. CDBG-A-1 includes the individual applications for the different program categories of CDBG funding:

1. through 4. No change.

(d) No change.

(e) No change.

1. through 2. No change.

3. For each additional engineering service as defined in subsection 9B-43.0031(3), F.A.C., and for preliminary engineering, the local government shall negotiate a reasonable fee for the service following procurement procedures in 24 C.F.R. 85.36, incorporated herein by reference, as effective on _______ 00-00-00.

4. through 5. No change.

(f) through (h) No change.

(5) National Objective and Public Benefit Documentation.

(a) No change.

1. through 3. No change.

4. Applications must demonstrate they meet the criteria specified in 24 CFR 570.483 for complying with a national objective and per 24 CFR 570.483, that they meeting public benefit standards as outlined in 24 CFR 483, and that they address community need as outlined in Sections 290.046(3)(a)-(d), F.S. Each annual action plan will identify which national objective(s) will be considered for funding.

5. No change.

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

1. No change.

2. Random Sample Survey Methodology – A sample-based survey of the beneficiaries must use the “Household Income Verification Certification Form,” included located in the Application Manual, which must correspond with the random sampling requirements established by HUD in Notice CPD-05-06, issued on July 26, 2005, and incorporated herein by reference as effective on 5-23-06.

a. through b. No change.

3. through 6. No change.

(6) Beneficiaries of Public Improvements.

(a) through (b) No change.

(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 survey form shall note such refusal to provide written notice.

(d) through (f) No change.

(7) 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 both 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) through (f) No change.

(8) through (9) No change.

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

(a) No change.

(b) Community-wide Needs Scores (CWNS) for All Categories. The Department shall calculate the community-wide needs score 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. through 4. No change.

5. Method of Calculation. All eligible local governments shall be compared on the factors identified in paragraph 9B-43.0041(10)(a), F.A.C. Eligible local governments shall be compared on each factor with all other applicants in their population group as designated in paragraph 9B-43.0041(1)(c), F.A.C. Calculating each applicant's score shall include the following steps:

a. Prior to calculating actual CWN scores, the Department prepares a spreadsheet that reflects the above information (numbers of persons below poverty, 1.01+ housing units and LMI population) for each eligible applicant. Eligible local governments are then compared by the three factors identified above.

Eligible applicants are compared by these factors with all other applicants in their population group:

LMI Population

1 – 499

500 – 1,249$750,000

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 community-wide needs score.

The highest statistic in each population group for each factor identified in paragaraph 9B-43.0041(10)(a), F.A.C., shall be the basis for relative comparison of all other eligible local governments in the population group.

statistic on factor_______

______= percentage to be used as factor multiplier

highest statistic on factor population group

b. through c. No change.

(c) through (h) No change.

(11) No change.

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,________.

 

9B-43.0045 Specific Requirements for Competitive Categories.

(1) Program Requirements for Neighborhood Revitalization.

(a) through (b) No change.

(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 C.F.R. 570.483(b), as effective on _______ 00-00-00. Sewer and water hookups shall only be performed in a service area in conjunction other activities. When all construction is limited to direct benefit activities (e.g., water or sewer hookups), no service area is needed because all households benefitting from the activity must be LMI.

2. through 5. No change.

(2) Program Requirements for Housing.

(a) through (b) No change.

(c) Low and Moderate Income Benefit for Housing.

1. No change.

2. Activities involving rehabilitation or acquisition of property to provide housing 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 C.F.R. 92.252, incorporated herein by reference, as effective on _________.

3. Water or sewer hookups may only be performed under this category as a complementary activity in conjunction with rehabilitation of a home. Water or sewer hookups must be performed under this category if there are no other activities besides the hookups other than related activities on the property required for the hookups, such as abandonment of a septic tank or modification of plumbing.

(d) The applicant shall adopt and implement procedures to fulfill regulatory and statutory requirements relating to Lead-Based Paint pursuant to 24 C.F.R. 570.487, 24 C.F.R. 35 36 and 37, Subparts B, J and R, incorporated herein by reference, all as effective on March 28, 2002 _______. and Section 302 of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. Section 1251 et seq.). The recipient is required to:

1. through 6. No change.

(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 implementing local Building Codes and local Maintenance Codes. If housing units must be replaced, construction of new units must be in full compliance with the 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 but uses which do not increase the property’s impervious surface are allowed;

2. through 5. No change.

(3) Program Requirements for Commercial Revitalization. Applications submitted under this category shall be designed to preserve conserve and revitalize commercial areas, which serve primarily low and moderate income persons.

(a) through (b) No change.

(c) Service Area Requirements. 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 CRA in a portion of a county). The applicant shall document, using census data or a survey, that 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 subparagraph 9B-43.0041(5)(b)2., F.A.C.

(d) Requirements for Rehabilitation of Commercial Buildings. If CDBG funds will be used for rehabilitation of commercial buildings, the local government must prepare, receive Departmental approval, and then adopt procedures for providing rehabilitation assistance to building units occupied by businesses through the Rehabilitation of Commercial Buildings activity before requesting funds for that activity. The procedures shall include at a minimum, but not be limited to, the following:

1. through 5. No change.

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. through 10. No change.

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

12. No change.

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, 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 C.F.R. Part 8, adopted herein by reference, as effective ___________.

(4) Program Requirements for Economic Development.

(a) Applications submitted under this category shall be for the creation or retention of jobs, of which at least 51 percent are for low and moderate income persons. A governmental entity cannot be a Participating Party.

(b) Prohibited Uses of Funds.

1. Funds shall not be used for working capital, inventory or supplies or to refinance existing debt.

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

3.through 5. No change.

6. Funds cannot be used for a loan to a non-public entity which is determined not to be appropriate as defined in 24 C.F.R. 570.482(e), as effective on___________March 28, 2002.

(c) Eligibility Requirements for Loans.

1. 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 not for 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, data and reasonable projections of revenues and operating expenses, if applicable.

2. No change.

3. If based on the Department’s review of the financial underwriting analysis for the assistance, the funds requested exceeds the funds necessary, the application request shall be reduced by the Department.

4. The local government shall provide to the Department a financial underwriting analysis and other Participating Party documentation not required at the time of application. The underwriting analysis must meet the requirements of 24 C.F.R. Section 570.482(e), as effective on ________ March 28, 2002, and Appendix A. 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, and shall verify:

a. through f. No change.

5. through 6. No change.

(d) through (h) No change.

(5) No change.

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

 

9B-43.0051 Grant Administration and Project Implementation.

(1) Environmental Review. 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 Section 1500-1508 15-8, National Environmental Policy Act Regulations, incorporated herein by reference, both as effective on_______00-00-00.

(2) Procurement. CDBG funds shall be used to obtain commodities and services only in accordance with written procurement procedures adopted by the recipient and shall comply with the provisions of 24 C.F.R. Section 85.36, incorporated herein by reference, as effective on ________00-00-00, and for covered professional services contracts, Section 287.055, F.S. (Consultants Competitive Negotiation Act).

(a) Any procurement which requires public notice in a newspaper based on the local CDBG procurement policy shall be published in a daily newspaper of general circulation in a nearby federal Office of Management and Budget (OMB) designated metropolitan statistical area (MSA). Alternatively, a local government may substitute such notice with any solicitation procedure which generates at least three responsible and responsive bids or proposals which can be considered. Such procedure shall allow at least 12 days for receipt of the proposals or bids.

(b) through (c) No change.

(d) 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 Unlike 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.

(e) through (h) No change.

(3) through (6) No change.

(7) Audit Requirements.

(a) The annual financial audit report shall should be accompanied by management letters and the recipient’s response to all findings, including corrective actions to be taken. A Single Audit under OMB Circular A-133, incorporated herein by reference, as effective on_______00-00-00, or an attestation statement that a Single Audit is not required, must be received from a local government with either an open or administratively closed contract by the June 30 deadline date, 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 or attestation statement was received.

(b) through (f) No change.

(8) Displacement and Relocation.

(a) No change.

(b) If the CDBG project funded activity 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, as effective on_______ 00-00-00 federal “Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970,” as amended shall apply. 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) No change.

(9) through (11) No change.

(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 verification 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,________.

 

9B-43.0081 Nonrecurring CDBG Funding.

(1) No change.

(2) The objective of nonrecurring disaster funding is to address disaster relief, long-term recovery, and 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) through (9) No change.

(10) Amendments. All proposed subgrant agreement amendments must be approved by the Department.

(a) Documentation Required. All proposed subgrant agreement amendments must be approved by the Department.

1. through 6. No change.

7. Signature of the Chief Elected Official on Form DCA 07.02, Request for Amendment, provided by the Department upon request, which is hereby incorporated by reference, or documentation from the local governing body authorizing the proposed amendment.

(11) No change.

Rulemaking Authority 290.048 FS. Law Implemented 290.043 FS. History–New________.