2009-27097 ResoRESOLUTION NO. 2009-27097
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING AN AMENDMENT
TO THE FY 2008 ONE YEAR ACTION PLAN TO INCLUDE THE USE
OF FEDERAL COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS
FROM TITLE XII OF DIVISION A OF THE AMERICAN RECOVERY AND
REINVESTMENT ACT OF 2009 ("CDBG-R") TO BE USED FOR THE
FOLLOWING TWO ACTIVITIES: 1) THE NORTH BEACH SENIOR
CENTER PROJECT CAPITAL IMPROVEMENTS; AND 2) THE TEEN
JOB CORPS PROGRAM, AS APPROVED BY HUD; AUTHORIZING
THAT IN THE EVENT THAT HUD DISAPPROVES OF THE
AFORESTATED USES OF THE CDBG-R FUNDING, THEN THE CITY
MANAGER IS AUTHORIZED TO IDENTIFY, WITH THE ASSISTANCE
OF THE LOCAL HUD FIELD OFFICE, HUD-ELIGIBLE PROJECT(S)
WHICH WILL BE REPORTED BACK TO THE CITY COMMISSION BY
LETTER TO THE COMMISSION; AUTHORIZING THE CITY MANAGER
TO EXECUTE AN AGREEMENT AND ANY AND ALL NECESSARY
DOCUMENTS BETWEEN THE CITY AND THE DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT IN ORDER TO RECEIVE THE
GRANT FUNDS; AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE AGREEMENTS WITH PROVIDERS OF ACTIVITIES; AND
FURTHER AUTHORIZING THE APPROPRIATION OF CDBG-R
FEDERAL FUNDS IN THE AMOUNT OF $467,896
WHEREAS, the American Recovery and Reinvestment Act of 2009 allocates to
the City of Miami Beach $467,896 under Title XII of the Act of Community Development
Block Grant funds (CDBG-R) in addition or the City's regular annual allocation; and
WHEREAS, in order to receive these funds, the City, as an eligible grantee, must
complete a Substantial Amendment to the 2008 Action Plan, follow its Citizens'
Participation Plan, and submit the Substantial Amendment to HUD no later than June 5,
2009; and
WHEREAS, the proposed projects were presented on May 18, 2009, to the
Neighborhood/Community Affairs Committee and on May 19, 2009, to the Community
Development Advisory Committee to obtain their input and recommendations; and
WHEREAS, the Substantial Amendment to FY 2008 Action Plans proposes
funding to the following organizations and/or projects: UNIDAD North Beach Senior
Center Capital Improvements and Teen Job Corps, Inc.; and
WHEREAS, the City complied with the public comment period required by HUD;
and
WHEREAS, HUD may disapprove a proposed amendment to the FY 2008 Action
Plan if is inconsistent with the requirements of the Recovery Act or the requirements of
HUD Notice FR-5309-N-01; and
WHEREAS, in the event that HUD disapproves any or all of the proposed
projects, the City Commission authorizes the City Manager to identify, with local HUD
field office, an eligible project in order to receive HUD approval within the required 15
calendar days period; and
WHEREAS, upon HUD's approval of the City's Substantial Amendment to the FY
2008 Action Plan for the CDBG-R funds, a grant agreement will be entered into by HUD
and the City which will require that funds be spent by September 30, 2012; and
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission of the City of Miami Beach, Florida, approve a Substantial Amendment to
the City's 2008 Action Plan to include the use of Federal Community Development
Block Grant funds from Title XII of Division a of the American Recovery And
Reinvestment Act of 2009 ("CDBG-R") to be used for the following two activities: 1) The
North Beach Senior Center Project Capital Improvements; and 2) The Teen Job Corps
Program, as approved by HUD; authorizing that in the event that HUD disapproves of
the aforestated uses of the CDBG-R funding, then the City Manager is authorized to
identify, with the assistance of the local HUD field office, HUD-eligible project(s) which
will be reported back to the City Commission by letter to the Commission; authorizing
the City Manager to execute an agreement and any and all necessary documents
between the city and the department of housing and urban development in order to
receive the grant funds; authorizing the Mayor and City Clerk to execute agreements
with providers of activities; and further authorizing the appropriation of CDBG-R federal
funds in the amount of $467,896
PASSED AND ADOPTED THIS 3rd DAY OF .Tune , 2009.
ATTEST:
~ ~~~
CITY CLERK AYOR
Robert Parcher Matti Herrera Bower APPROVED AS TO
FORM & LANGUAGE
T:WGENDA\2009Wune 3\Regula~\HUD CDBG-R Reso.doc
Condensed Title:
COMMISSION ITEM SUMMARY
A resolution approving a Substantial Amendment to the 2008 Action Plan filed with the U.S. Department of Housing and Urban
Development (HUD) for use of funding from Title XII Of Division of the American Recovery And Reinvestment Act of 2009 for Community
Development Block Grant Program funds (CDGB-R) and authorizing execution of all the necessary documentation in order to receive and
allocate the grant funds; and further authorizing the appropriation of federal funds in the amount of $467,896.
Ke Intended Outcome Su orted:
Ensure well-designed, quality capital projects. j
Supporting Data (Surveys, Environmental Scan, etc.):
83% of residents surveyed felt that recent capital improvement projects were either excellent or good.
issue
Shall the Mayor and City Commission approve a Substantial Amendment to the 2008 Action Plan for the use of HUD funds for the CDBG-R
and authorize the City Manager to execute an agreement and any and all necessary documents between the City and HUD?
item summ
The City, through the American Recovery and Reinvestment Act of 2009, has been allocated $467,896 of CDBG-R funds. HUD established
clear purposes for the use of these funds, i.e., to stimulate the economy through measures that modernize the nation's infrastructure, improve
energy efficiency, and expand educational opportunities and access to health care. HUD strongly urges grantees to use CDBG-R funds for
hard development costs associated with infrastructure activities that provide basic services to residents that promote energy efficiency and
conservation through rehabilitation or retrofitting of existing buildings. HUD requires that in selecting CDBG-R projects to be funded,
recipients shall give priority to projects that can award contracts based on bids within 120 days from the date the funds are available.
Furthermore, grantees must ensure that 70 percent of the CDBG-R funds are for low and moderate income residents in target areas, and that
funds be allocated for shovel-ready projects.
In order to receive funds, the City is required to submit a Substantial Amendment to its 2008 Action Plan to US HUD by June 5, 2009. The
City's proposed use of CDBG-R funds, must be outlined in the Amendment and must be consistent with the Recovery Act requirements and
intensions: In considering eligible uses of CDBG-R funds, the Administration considered current infrastructure and public service needs in our
community that may qualify for this funding source and capital projects with funding gaps which fall within the target areas. The North Beach
Senior Center Capital Improvement Project was identified as an eligible project for all of the CDBG-R funding.
On May 18, 2009, the Neighborhood/Community Affairs Committee considered eligible uses of the CDBG-R funding and recommended
presenting the Administration's recommendation to the Community Development Advisory Committee (CDAC). On May 19, 2009, CDAC
recommended that in addition to funding the North Beach Senior Center Project, which meets all of the HUD requirements for use ofCDBG-R
funding, that a portion of the CDBG-R funds be allocated to the Teen Job Corps Program. The Teen Job Corps Program had applied for
regular CDBG public service funding through the regular CDBG funding cycle but was not recommended by staff due to limitations of funding.
Based upon CDAC's recommendation, the Administration recommends that the City Commission approve a Substantial Amendment to the
City's 2008 Action Plan for use of CDBG-R funding as shown below in the Financial Information section, subject to HUD's approval, and, in
the event that HUD disapproves of the proposed uses of the CDBG-R funding, that the City Manager be authorized to identify, with the
assistance of the local HUD field office, HUD-eligible project(s) which will be reported back to the City Commission via a Letter to the
Commission.
Havrso esoara reecommenaation:
May 18, 2009 -Neighborhoods/Community Affairs Committee
Ma 19, 2009 -Community Development Advisory Committee
Financial Information:
Source
of Funds: Amount Account
CDBG-R 1 $391,107 - NB Senior Center Capital Improvements
2 $ 30,000 -Teen Job Corp In.
3 $ 46,789 -Program Administration
Total $467,896
Financial Impact Summary: N/A
vl~ V16tA .1 V1114C LC ~s~auve iracrtin
Anna Parekh
Sign-Offs
Department Director Assistant ity Manager City Manager
'°` FiMI... JMG ~
T:WGENDA\2009\June 3\Regular\HUD CDBG-R Summary.doc
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AG~MDA ITEM I ~ /
DATE %'3,d ~
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City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Com fission
FROM: Jorge M. Gonzalez, City Manager
DATE: June 3, 2009
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, AUTHORIZING AN AMENDMENT TO THE FY 2008 ONE YEAR ACTION
PLAN TO INCLUDE THE USE OF FEDERAL COMMUNITY DEVELOPMENT BLOCK
GRANT FUNDS FROM TITLE XII OF DIVISION A OF THE AMERICAN RECOVERY AND
REINVESTMENT ACT OF 2009 ("CDBG-R") TO BE USED FOR THE FOLLOWING TWO
ACTIVITIES: 1) THE NORTH BEACH SENIOR CENTER PROJECT CAPITAL
IMPROVEMENTS; AND 2) THE TEEN JOB CORPS PROGRAM, AS APPROVED BY HUD;
AUTHORIZING THAT IN THE EVENT THAT HUD DISAPPROVES OF THE AFORESTATED
USES OF THE CDBG-R FUNDING, THEN THE CITY MANAGER IS AUTHORIZED TO
IDENTIFY, WITH THE ASSISTANCE OF THE LOCAL HUD FIELD OFFICE, HUD-ELIGIBLE
PROJECT(S) WHICH WILL BE REPORTED BACK TO THE CITY COMMISSION BY
LETTER TO THE COMMISSION; AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT AND ANY AND ALL NECESSARY DOCUMENTS BETWEEN THE CITY AND
THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT IN ORDER TO RECEIVE
THE GRANT FUNDS; AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE
AGREEMENTS WITH PROVIDERS OF ACTIVITIES; AND FURTHER AUTHORIZING THE
APPROPRIATION OF CDBG-R FEDERAL FUNDS IN THE AMOUNT OF $467,896.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANALYSIS
The American Recovery and Reinvestment Act of 2009 ("Recovery Act") was signed into law by President
Obama on February 17, 2009. The Recovery Act awards $1 billion in CDBG Recover (CDBG-R) funds to be
distributed to cities, counties, insular areas and states of which $10 million has been reserved by the U.S.
Department of Housing and Urban Development (HUD) for its administrative costs, and $10 million of which
will be awarded to Indian tribes. Recipients of the remaining $980 million of CDBG-R funds will be
approximately 1,200 entitlement jurisdictions that received CDBG funding in Fiscal Year 2008. The City of
Miami Beach has been allocated $467,896 CDBG-R funds.
As outlined and presented to the Neighborhoods/Community Affairs Committee on May 18, 2009 (Committee
Memorandum, Summary ofCDBG-R Funding to Miami Beach, and HUD Notice of Program Requirements are
attached), in order to obtain the funds, grantees such as the City of Miami Beach will be required to submit an
amendment to their approved FY 2008 Action Plan. HUD has determined that amendments to the action
plans are due no later than Friday, June 5, 2009, in the local HUD field offices. Therefore, the City's
Substantial Amendment to the 2009 Action Plan must be approved by the City Commission at its June 3, 2009
meeting. If the City fails to submit a substantial amendment by the specified deadline, HUD may cancel our
allocation.
Memo to Commission HUD CDBG-R
Page 2 of 3
ALLOWABLE USES
Pursuant to HUD's Notice of Program Requirements, the funding has clear purposes: to stimulate the
economy through measures that modernize the nation's infrastructure; improve energy efficiency; and expand
educational opportunities and access to health care. HUD strongly urges grantees to use CDBG-R funds for
hard development costs associated with infrastructure activities that provide basic services to residents or
activities that promote energy efficiency and conservation through rehabilitation or retrofitting of existing
buildings. The HUD Notice requires that in selecting CDBG-R projects to be funded, recipients shall give
priority to projects that can award contracts based on bids within 120 calendar days from the date the funds
are made available.
Furthermore, grantees must ensure that 70 percent of the CDBG-R funds are used for activities that benefit
low and moderate-income persons, and the HUD instructions encourage that funds be allocated for
infrastructure or other "bricks and mortar" projects within target areas (as identified in the US Census as
containing a certain percentage of eligible recipients). North Beach and South Beach contain the highest
concentration of low and moderate income persons in the City. These target areas contain Census tract/block
groups that display evidence of greater than 51 % of households with incomes at or below 80% of the median
income and are a priority for allocation of resources.
In considering eligible uses of CDBG-R funds, the Administration considered current infrastructure and public
service needs in our community that may qualify for this funding source. A review of pending "shovel-ready"
capital projects with funding gaps that fall within the HUD target areas was undertaken. The North Beach
Senior Center Capital Improvement Project was identified as an eligible project for all of the CDBG-R funding.
On May 18, 2009, the City presented to the Neighborhood /Community Affairs Committee a proposed
amendment to the City FY 2008 Action Plan for uses of CDBG-R funds. The Committee recommended
presenting the amendment to the Community Development Advisory Committee (CDAC) for its comments and
recommendation.
On May 19, 2009, CDAC recommended that in addition to funding the North Beach Senior Center Project
which meets all of the HUD requirements for use of CDBG-R funding, that a portion of the CDBG-R funds be
allocated to the Teen Job Corps Program, which had applied for regular CDBG public service funding through
the annual competitive process, but was not recommended for funding by staff as a recipient of regular CDBG
funding due to limitations of funding. It should be noted that a maximum of 15% of all CDBG and CDBG-R
funds may be used for public service programs. Administrative funding in the amount of ten (10%) percent of
the total allocation is retained by the City to pay for program monitoring and required reporting.
Therefore, it is recommended that the following activities be approved to be included in the Amendment to the
FY 2009 One Year Action Plan, and that in the event that HUD disapproves of these uses, that the Ciry
Manager be authorized to identify, with the assistance of the local HUD field office, an eligible project or
projects within the necessary time frames. Any such change to the City Commission's recommendation will
be reported back to the Commission by the City Manager in the form of a Letter to the Commission.
Activity #1 -North Beach Senior Center Project Capital Improvement - $391,107
This project will provide a comprehensive Senior Center located in the Bandshell Park at 7251 Collins Avenue.
The North Beach Senior Center will provide comprehensive services designed to serve the large number of
low to moderate-income and elderly residents in the North Beach area. The center will have over 8,000 sq. ft.
of program space and approximately 10,000 sq. ft. of terraces and walkways. The environmental review
process, which is required by HUD prior to drawdown of CDBG or CDBG-R funding, has been successfully
completed for this project, and the project is in its final permit process. The bid process is scheduled to take
place between June and September 2009, and construction is expected to commence by October, 2009. The
new center will provide over 100 temporary jobs during the one year construction period, which is scheduled
be completed by November 2010.
Memo to Commission HUD CDBG-R
Page 3 of 3
Once completed, the Center will provide a variety of services to the senior community including job training
and placement. Approximately 130 seniors per yearwill receive paid training and employment placement and
over 500 job referrals will be made for unsubsidized employment during the same time period.
Activity #2 -Teen Job Corps - $30,000
The Teen Job Corps Program will provide at-risk, low income youths with employment activities and vocational
skills. The program operates six (6) days a week, 52 weeks a year. Eligible program participants are enrolled
full-time students, ages 14 to 18 years old, living in the City target areas (target areas are made are made up
of 51 % or more low-income residents) of North Beach and South Beach. Participants will learn job skills and
pertorm public service job duties after school and on Saturdays. Program eligibility involves a comprehensive
intake assessment that will determine family income according to HUD guidelines and the need for additional
family referral services. The CDBG-R funds, in combination with other sources of funding received by the
Teen Job Corps, will create approximately 20 part-time jobs for qualified participants.
The City will be responsible for the administration of CDBG-R funds to ensure all required HUD regulations are
followed. Teen Job Corps, Inc. will provide the part-time employment and vocational services to the qualified
students recruited from referrals from Miami Beach Police Department, school counselors and various
community based organizations.
Activity #3 -Program Administration - $46,789.00
Funding will be used to provide program administration of CDBG-R fund ensuring that all activities and
expenditures are in compliance with all HUD requirements. The total allocation for this activity is $46,789.00
which represents 10% of the total allocation.
CONCLUSION
The Administration recommends that the Mayor and City Commission approve a Substantial Amendment to
the City's 2008 Action Plan for use of $467,896 of CDBG-R funding as shown below in the Funding Summary,
as approved by HUD, and, in the event that HUD disapproves of the proposed uses of the CDBG-R funding,
that the City Manager be authorized to identify, with the assistance of the local HUD field ofFce, HUD-eligible
project(s) which will be reported back to the City Commission via Letter to the Commission.
Funding Summary
- - ~ '.i,`r r y F .~ y1,4, s
~;
,~ , {.
ALL'~1, TION
North Beach Senior Center Pro'ect Ca ital Im rovements $ 391,107.00
Teen Job Cor s $ 30,000.00
Pro ram Administration $ 46,789.00
TOTAL ALLOCATION $ 467,896.00
JMG/HMF/
T:WGENDA\2009Uune 3\Regular\HUD CDBG-R Memo.doc
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NEIGHBORHOODS/COMMUNITY AFFAFRS-CONtMITTEE~-MEETING ~ ---- - ---------- --
SUPPLEMENTAL MATERIAL .
CITY COMMISSION CHAMBERS, 3RD FLOOR, CITY HALL
MAY 18, 2009 2a3OPM
Neighborhoods/Community Affairs Comnpittee
Commissioner Jerry Libbin, Chairperson
ice-Mayor Edward L. Tobin, Vice-Chairperson
Commissioner Jonah Wolfson, Member
Commissioner Victor M. Diaz, Jr., Alternate
SUPPLEMENTAL MATERIAL(S) .,
~. -
1. DISCUSSION REGARDING THE ISSUE OF DOGS OFF LEASH IN CITY PARKS AND
OTHER PUBLIC PROPERTIES IN GENERAL.
Kevin Smith, Parks and Recreation Department Director
6. DISCUSSION REGARDING THE CITY OF MIAMI BEACH'S PROPOSED SUBSTANTIAL
AMENDMENT TO THE 2008 ACTION PLAN AS REQUIRED BY THE DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT IN ORDER TO RECEIVE COMMUNITY
DEVELOPMENT BLOCK GRANT FUNDS INCLUDED IN THE AMERICAN RECOVERY
AND REINVESTMENT ACT OF 2009.
Anna Parekh, Real Estate, Housing, and Community Development Director
Hilda M. Fernandez, Assistant City Manager
C: Mayor and Members of the City Commission
Hilda M. Fernandez, Assistant City Manager
Tim Hemstreet, Assistant City Manager
Robert C. Middaugh, Assistant City Manager
Jose Smith, City Attorney
Robert Parcher, City Clerk
Dolores Mejia, Special Projects Administrator
__
Neighborhoods/Community Affairs Committee Meeting
May 18, 2009
DISCUSSION REGARDING THE CITY OF MIAMI BEACH'S PROPOSED SUBSTANTIAL
AMENDMENT TO THE 2008 ACTION PLAN AS REQUIRED BY THE DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT IN ORDER TO RECEIVE COMMUNITY DEVELOPMENT BLOCK
GRANT FUNDS INCLUDED IN THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009.
Anna Parekh, Real Estate, Housing, and Community Development Director
Hilda M. Fernandez, Assistant City Manager
ITEM #6
m MIAMIBEACH
OFFICE OF THE CITY MANAGER
COMMITTEE MEMORANDUM
TO: Members of the Neighborhoods/Community Affairs Committee
FROM: Jorge M. Gonzalez, City Manager
DATE: May 18, 2009
SUBJECT: COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM -
Funding Under the American Recovery and Reinvestment Act of 2009
The United States Department of Housing and Urban Development's(USHUD) just released its Notice
of Program Requirements for the American Recovery and Reinvestment Act of 2009 (Recovery Act)
Community Development Block Grant (CDBG) funds. The Notice, which was provided to the City last
Wednesday, May 6, 2009, is attached for your reference (Attachment B). The City of Miami Beach has
been allocated $467,896 in additional Recovery Act-related CDBG funding (CDBG-R). This CDBG-R
allocation is over and above the City's regular FY 2009/2010 CDBG entitlement allocation
($1,737,602).
TIMELINES/DEADLINES
As we learned last week, in order to obtain the funds, grantees such as us will be required to submit
what is called a "substantial action plan amendment" to their approved FY 2008 action plan. Actions
Plans identify how entitlement (formula) funds will be allocated; they are filed on an annual basis and
identify the funding allocated to each particular activity. For entitlement communities such as we are,
the Policy document sets forth that amendments to our action plan are due no later than Friday, June
5, 2009 in the local USHUD Field Office. Therefore, the City's Substantial Amendment to the 2008
Action Plan will need to be approved by the City Commission no later than the June 3, 2009 meeting.
As referenced on page six of the attached Policy document, if the City fails to submit a substantial
amendment by the specified deadline, USHUD may cancel our allocation.
HUD is waiving the requirement that the grantee follow its Citizen Participation Plan forthe Substantial
Amendment to the Action Plan by shortening the minimum time for citizen comments to seven (7)
calendar days instead of the customary thirty (30) calendar days, and requiring that the Substantial
Amendment materials be posted on the grantees' official website as the materials are developed,
published, and submitted to HUD (see Section II.A.3.a). As such, a conclusion on the City's use of the
CDBG-R funds for purposes of preparing the Substantial Amendment in order to provide for the
required public comment is necessary as soon as possible, as the Administration must publish the
Substantial Amendment by May 21, 2009, to allow for the seven (7) day public comment period and
completion of the Substantial Amendment for Commission consideration and subsequent submission
to USHUD. Below, please find reference to expenditure deadlines.
ALLOWABLE USES
The attached Notice establishes operating procedures and guidance forthe overall $1 billion in CDBG
funds appropriated by the Recovery Act, which directed HUD to distribute the funds to CDBG grantees
that received funds in FY 2008. The CDBG-R allocation to each grantee is approximately 27% of the
FY 2008 CDBG allocation (the City of Miami Beach was allocated $1,722,590 in 2008).
HUD will be issuing further guidance in the next few weeks on a range of issues relating to
implementation of the CDBG-R program. However, the Policy document states that the funding
Page 2 of 3
CDBG-R Funds
available under the Recovery Act (as set forth on page three of the attached), has clear purposes: to
stimulate the economy through measures that modernize the nation's infrastructure; improve energy
efficiency; and expand educational opportunities and access to health care. HUD strongly urges
grantees to use CDBG-R funds for hard development costs associated with infrastructure activities that
provide basic services to residents or activities that promote energy efficiency and conservation
through rehabilitation or retrofitting of existing buildings.
Additionally, for each activity proposed, the City must describe how the use of the CDBG-R funds will
maximize job creation and economic benefit" by either preserving and creating jobs; assisting those
most impacted by the recession; providing investment to increase economic efficiency; investing in
transportation, environmental protection or other infrastructure that will provide long-term economic
benefits; minimizing or avoiding reductions in essential services; or fostering energy independence.
The City must include the number offull-time orpart-time jobs estimated to be created and retained by
the activity to be funded. As expressed in Section I I.A.S, while typical CDBG-eligible activities can be
funded with this allocation, Congress' intent is that these funds be primarily used for economic
development, increased energy efficiency and job creation/retention. In speaking with our local
USHUD representatives, they are strongly encouraging local entitlement jurisdictions to use these one-
time funds for new activities currently not funded with the regular allocation. The Policy specifically
references their preference for "discrete, stand-alone" activities, if possible.
HUD emphasized that certain activities and/or projects may not be funded with CDBG-R funding.
Specifically, ineligible uses include swimming pools, golf courses, zoos, aquariums, and casinos or
other gambling establishments. Other activities generally prohibited under CDBG-Rare construction
of buildings for the general conduct of government, political activities, purchase of equipment, and
operating and maintenance expenses. There is also a ban on assistance to professional sports teams,
recreational facilities that serve a predominantly higher income clientele, and general promotional
activities for the grantee.
The Policy further requires that projects selected to be funded should be those that can award
contracts based on bids within 120 days from the date the funds are made available, with a goal of
using at least 50 percent of the funds for activities that can be initiated no later than 120 days after
enactment of the CDBG-R Act. As noted in Section II.F., USHUD has imposed a grant period and
expenditure deadline of September 30, 2012; funds not expended by this date are subject to recapture.
As such, Section II.A.5. encourages entitlement jurisdictions to use alternative procurement processes
to expedite the allocation of funds.
Lastly, as described in Section II.E., 70 percent of funds must be used for activities that benefit low-
and moderate-income persons. The limitation of the use of no more than 15 percent of the available
funds on public service also applies to this allocation.
ALLOCATION STRATEGY FOR CONSIDERATION
In light of economic conditions which are specific to Miami Beach and its CDBG-eligible target
population, the Administration has considered current infrastructure and public service needs in our
community that may qualify for this funding source. As the guidance documents appear to encourage
that funds be allocated for infrastructure or other "bricks and mortar" projects, the City is concluding a
review of any pending "shovel-ready" capital projects with funding gaps that fall within eligible areas
(areas identified in the US Census as containing a certain percentage of eligible recipients). The City is
also reviewing current CDBG capital funding requests. It is anticipated that we will provide options for
the consideration of the Committee at the meeting on Monday.
JMG/HF/AP
ATTACHMENT A
SUMMARY -CDBG-R FUNDING TO MIAMI BEACH
TOTAL FUNDING AVAILABLE/CDBG-R: $467,896
TOTAL FUNDING -REGULAR CDBG: $1,737,602
Available - Requested
regular CDBG
Public Service $260,640 $1,289,831
Housing & Capital Improvements $844,970 $2,945,149
ALLOWABLE USES:
• to stimulate the economy through measures that modernize the nation's infrastructure;
• improve energy efficiency; and
• expand educational opportunities and access to health care.
• HUD strongly urges grantees to use CDBG-R funds for hard development costs
associated with infrastructure activities that provide basic services to residents or
activities that promote energy efficiency and conservation through rehabilitation or
retrofitting of existing buildings.
• Additionally, for each activity proposed, the City must describe how the use of the
CDBG-R funds will "maximize job creation and economic benefit" by either
o preserving and creating jobs;
o assisting those most impacted by the recession;
o providing investment to increase economic efficiency;
o investing in transportation, environmental protection or other infrastructure that
will provide long-term economic benefits
o minimizing or avoiding reductions in essential services; or fostering energy
independence.
• The City must include the number of full-time or part-time jobs estimated to be created
and retained by the activity to be funded.
• As expressed in Section II.A.S, while typical CDBG-eligible activities can be funded
with this allocation, Congress' intent is that these funds be primarily used for economic
development, increased energy efficiency and job creation/retention.
• In speaking with our local USHUD representatives, they are strongly encouraging
local entitlement jurisdictions to use these one-time funds for new activities currently
not funded with the regular allocation.
• The Policy specifically references their preference for "discrete, stand-alone" activities,
if possible.
• 70 percent of funds must be used for activities that benefit low- and moderate-income
persons.
• Limitation of the use of no more than 15 percent of the available funds on public
service also applies to this allocation.
NOT ALLOWABLE:
HUD emphasized that certain activities and/or projects may not be funded w/ CDBG-R
funding.
• swimming pools, golf courses, zoos, aquariums, and casinos or other gambling
establishments.
• construction of buildings for the general conduct of government, political activities,
purchase of equipment, and operating and maintenance expenses.
• ban on assistance to professional sports teams, recreational facilities that serve a
predominantly higher income clientele, and general promotional activities for the
grantee.
EXPENDITURE TIMELINES:
• projects selected to be funded should be those that can award contracts based on bids
within 120 days from the date the funds are made available,
• a goal of using at least 50 percent of the funds for activities that can be initiated no
later than 120 days after enactment of the CDBG-R Act.
• USHUD has imposed a grant period and expenditure deadline of September 30, 2012;
funds not expended by this date are subject to recapture.
• USHUD encourages entitlement jurisdictions to use alternative procurement processes
to expedite the allocation of funds.
.~
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5309-N-O1]
Notice of Program Requirements for
Community Development Block Grant Program
Funding Under the American Recovery and Reinvestment Act of 2009
ATTACHMENT B
AGENCY: Office of the Assistant Secretary for Community Planning and Development,
HUD.
ACTION: Notice.
SUMMARY: This notice advises the public of the statutory and regulatory waivers granted
to grantees under the American Recovery and Reinvestment Act of 2009 (Recovery Act).
The Recovery Act appropriated $I billion in Community Development Block Grant (CDBG)
funds to states and local governments to carry out, on an expedited basis, eligible activities
under the CDBG program. HUD is authorized by statute to specify alternative requirements
and make regulatory waivers for this purpose. This notice also explains statutory issues
affecting program design and implementation. The Department is also using this notice to
provide grantees information about other ways in which the requirements for this grant vary
from regular CDBG program rules. Except as described in this Notice, the statutory and
regulatory provisions governing the CDBG program apply to this program.
DATES: Entitlement grantees, Insular Areas, and non-entitlement counties in Hawaii are to
submit the substantial amendments to their program year (PY) 2008 action plans to their
HUD field office by June 5, 2009. States are to submit the substantial amendments to their
PY2008 action plans to their HUD field office by June 29, 2009. The deadline for the
Homelessness Prevention and Rapid Re-housing Program (HPRP) funding pursuant to
2
HUD's March 19, 2009, Federal Register notice is May 18. Grantees that wish to submit a
single substantial amendment for both programs must do so by May 18, 2009.
FOR FURTHER INFORMATION CONTACT: Stanley Gimont, Director, Office of
Block Grant Assistance, Office of Community Planning and Development, Department of
Housing and Urban Development, 45I 7th Street, SW, Room 7286, Washington, DC 204]0;
telephone 202-708-3587 (this is not atoll-free number). Persons with hearing or speech
impairments may access this number through TTY by calling the toll-free Federal
Information Relay Service at 800-877-8339. Interested parties may also visit the CDBG-R
web page on HUD's Recovery Act website, http://www.hud.gov/recover, for updated
information and resources. Questions regarding the CDBG-R program may be submitted to
HudRecoveryAct~hud.gov.
SUPPLEMENTARY INFORMATION:
Authority to Provide Alternative Requirements and Grant Re ulatorv Waivers
Title XII of Division A of the American Recovery and Reinvestment Act of 2009
(Public Law 111-005, approved February 17, 2009) appropriates $1 billion to cant' out the
CDBG program under Title I of the Housing and Community Development Act of 1974 (42
U.S.C. 5301, et seq.) (the HCDA) on an expedited basis. These funds will be distributed to
grantees that received CDBG funding in Fiscal Year (FY) 2008 in accordance with the
provisions of 42 U.S.C. 5306. The grant program under Title XII is commonly referred to as
the CDBG Recovery (CDBG-R) program. When referring to a provision of the
appropriations statute itself, this notice will refer to the Recovery Act; when referring to the
grants, grantees, assisted activities, and implementation rules, this notice will use the term
CDBG-R.
3
In administering CDBG-R funds, the Secretary may waive or specify alternative
requirements for any provision of any statute or regulation in connection with the obligation
by the Secretary or the use by the recipient of these funds except for requirements related to
fair housing, nondiscrimination, labor standards, and the environment, upon a finding that
such waiver is necessary to expedite or facilitate the timely use of such fiends and would not
be inconsistent with the overall purpose of the statute. Such regulatory relief as HUD
deemed necessary and is authorized to provide under 24 CFR 5.110 and 24 CFR 91.600 to
permit implementation of CDBG-R is provided in this notice.
The Secretary finds that the alternative requirements.outlined in Section II. of this
notice are necessary to expedite the use of these funds for their required purposes.
Except as described in this notice, statutory and regulatory provisions governing the
CDBG program, including those at 24 CFR part 570 subpart I for states and those at 24 CFR
part 570 subparts A, C, D, E, F, J, K, and O for CDBG entitlement communities, as
appropriate, shall apply to the use of these funds. Subpart M, concerning the Section 108
Loan Guarantee program, is not applicable to CDBG-R. Other sections of the notice will
provide further details of the changes, the majority of which deal with adjustments
necessitated by Recovery Act provisions to expedite the use of CDBG-R funds.
Ensuring Responsible Spending of Recovery Act Funds
Funding available under the Recovery Act has clear purposes - to stimulate the
economy through measures that modernize the Nation's infrastructure, improve energy
efficiency, and expand educational opportunities and access to health care. In implementing
the Recovery Act, Federal agencies are undertaking unprecedented measures to ensure
transparency and accountability in the use of the funds. Concurrently, Federal agencies must
ensure that the funds are employed in a prudent manner consistent with applicable program
requirements.
The Department desires that CDBG-R grantees carefully evaluate proposed projects
for consistency with.the overarching goals~of the Recovery Act, especially the above-cited
purposes. To this extent, HUD strongly urges grantees to use CDBG-R funds for hard
development costs associated with infrastructure activities that provide basic services to
residents or activities that promote energy efficiency and conservation through rehabilitation
or retrofitting of existing buildings. While the full range of CDBG activities is available to
grantees, the Department strongly suggests that grantees incorporate consideration of the
public perception of the intent of the Recovery Act in identifying and selecting projects for
CDBG-R funding.
On March 20, 2009, President Obama issued a memorandum to the heads of
executive branch agencies, entitled "Ensuring Responsible Spending of Recovery Act
Funds". (This memorandum was published in the Federal Register on March 25 at 74 FR
12531.) This memorandum lays out principles and steps that federal agencies are to take to
ensure responsible distribution and use of Recovery Act funds. Grantees should ensure that
the activities that they select for CDBG-R funding adhere to the expectations of this notice,
particularly those of Section 2(c).
The Department must emphasize the following points to recipients of CDBG-R funds.
Certain specified activities and/or projects may not be funded with CDBG-R funds pursuant
to the Recovery Act and this includes swimming pools, golf courses, zoos, aquariums, and
casinos or other gambling establishments. Other activities generally prohibited under
regulations governing the regular CDBG program are also prohibited under CDBG-R. This
includes prohibitions on the construction of buildings for the general conduct of government,
political activities, purchase of equipment, and operating and maintenance expenses. Other
CDBG restrictions may also apply including bans on assistance to professional sports teams,
recreational facilities that serve a predominantly higher income clientele, and general
promotional activities for the grantee.
Table of Contents
I. ALLOCATIONS
A. Formula: Allocation
B. Formula: Reallocation
II. ALTERNATIVE REQUIREMENTS AND REGULATORY WAIVERS
A. Pre-Grant Process
1. General
2. Contents of a CDBG-R Action Plan Substantial Amendment
3. Citizen Participation Alternative Requirement
4. Submission Deadlines
5. Program Design Considerations
B. Reimbursement For Pre-Award Costs
C. Recovery Act Requirements For CDBG-R Expenditures
D. Program Income Requirements
E. Eligibility, Allowable Costs, and National Objective Waivers
F. Timeliness of Use and Expenditure of CDBG-R funds
G. Reporting
H. Certifications
I. Paperwork Reduction Act
K. Environmental Impact
I. ALLOCATIONS
A. Formula: Allocation. The Recovery Act appropriates $1 billion of CDBG funding and
is distributing $980 million to grantees that received CDBG funding in FY2008. Pursuant to
provisions of the Recovery Act, HUD has reserved $10 million to address its administrative
costs and has allocated $10 million to the Indian CDBG program, as required by 42 U.S.C.
5306(a). Any unit of local government that did not apply for its FY2008 funds is not eligible
to receive CDBG-R funding. The formulas for the allocation of CDBG-R funds are the same
as the formulas used for the annual allocation of CDBG funds to the states, entitlement
grantees, and Insular Areas. On February 25, 2009, HUD announced the list of the CDBG-R
allocations, and these may be found at http://www.hud.gov/recovery/cdblock.cfm.
B. Formula: Reallocation. To expedite the use of CDBG-R funds, the Department is
specifying alternative requirements to 42 U.S.C. 5306(c) and 42 U.S.C. 5306(d)(3)(C). The
Department has determined that it is necessary to employ an alternative reallocation process
in order to expedite grantees' timely use of any reallocated funds. Under the existing
provisions of 42 U.S.C. 5306, funds that become available for reallocation would be
reallocated as part of the process for allocating the next fiscal year's appropriation of regular
CDBG funding; this means any unawarded CDBG-R funds would not get reallocated until
sometime in federal fiscal year 2010. To expedite the reallocation process, HUD is adopting
the following procedure instead.
If a unit of general local government, State, or Insular Area receiving an allocation of
CDBG-R funds under this notice fails to submit a substantial amendment to its program year
2008 action plan for its grant allocation by the deadlines specified in Section II.A.4. of this
notice, or submits an application for less than the total allocation amount, or if HUD is
unable to approve any entity's submission, HUD may notify the jurisdiction of the
cancellation of all or part of its allocation amount. Once HUD determines the amount of
funds (if any) that are not awarded to any jurisdictions, the Secretary will establish
performance criteria by which to award these funds to other entities. These criteria will be
published in the Federal Register. However, these criteria will be established only if funds
become available for reallocation.
R. ALTERNATIVE REQUIREMENTS AND REGULATORY WAIVERS
This section of the notice provides a justification for alternative requirements and
describes the necessary basis for each regulatory waiver. The section also highlights some of
the statutory provisions applicable to the grants. This background narrative is followed by
the CDBG-R requirement(s).
Each grantee eligible for aCDBG-R grant has already received an annual allocation
of FY2008 CDBG funds, has carried out needs hearings, has a consolidated plan, an annual
action plan, a citizen participation plan, a monitoring plan, an analysis of impediments to fair
housing choice, and has made CDBG certifications. The consolidated plan already discusses
housing needs related to up to four major grant programs: CDBG; Home Investment
Partnerships Program (HOME}; Emergency Shelter Grants (ESG); and Housing
Opportunities for Persons With AIDS (HOPWA). A grantee's annual action plan describes
the activities budgeted under each of those annual programs.
The CDBG-R grant is a supplemental appropriation. As such, HUD is treating a
grantee's use of its CDBG-R grant to be a substantial amendment to its current approved
consolidated plan and PY2008 annual action plan. (For grantees that received an allocation
under the Neighborhood Stabilization Program (NSP), this will constitute a second
substantial amendment to the PY2008 annual action plan.) Treating the CDBG-R as a
substantial amendment and requiring grantees to amend the PY2008 annual action plan will
expedite the distribution of CDBG-R funds, while ensuring citizen participation on the
specific use of the fimds. HUD is also waiving the consolidated plan regulations to the
8
extent necessary to adjust the reporting requirements for the use of CDBG-R funds to comply
with the Recovery Act.
These waivers and alternative requirements apply only to the grant funds appropriated
under the Recovery Act and not to the use of regular formula allocations of CDBG funds,
even if they are used in conjunction with CDBG-R funds for a project. The waivers and
alternative requirements provide expedited program implementation and implement statutory
requirements unique to this supplemental appropriation.
A. Pre-Grant Process
Pursuant to Recovery Act provisions, HUD is treating CDBG-R funds as a special
allocation of CDBG funding. HUD is requiring grantees to provide a substantial amendment
to their PY2008 annual action plans. To receive CDBG-R funding, each CDBG grantee must
submit to HUD a substantial amendment to its action plan in accordance with this notice, by
the deadlines specified in Section II.A.4. of this notice. This submission will include a
signed standard federal form SF-424, signed certifications, and a substantial action plan
amendment meeting the requirements of paragraph 2. below. Grantees may immediately
begin to prepare and submit substantial amendments to their action plans for CDBG-R funds,
in accordance with this notice.
HUD will consider any existing cooperation agreements between a local government
and an urban county governing FY2008 CDBG funding (for purposes of either an urban
county or a joint program) to automatically cover CDBG-R funding as well. These
cooperation agreements will continue to apply to the use of CDBG-R funds for the duration
of the CDBG-R grant. For example, a Local government presently has a cooperation
agreement covering participation in an urban county for federal FYs 2007, 2008, and 2009.
9
The local government may choose to discontinue its participation with the county at the end
of the applicable qualification period for purposes of regular CDBG entitlement funding.
However, the county will still be responsible for any CDBG-R projects funded in that
community, and for any CDBG-R funding the local government receives from the county,
until those funds are expended and the funded activities are completed.
Each grantee will have until the deadlines specified in paragraph 4. below to complete
and submit a substantial amendment to its annual action plan. HUD encourages grantees,
during development of their action plan amendments, to contact HUD field offices for
guidance in complying with these requirements.
In the regular CDBG program, a grantee is required to provide 30 calendar days for
soliciting comments from its citizens before it submits an annual action plan to HUD. Then,
HUD has 45 calendar days to accept or reject the plan. To expedite the process and to ensure
that the CDBG-R grants are awarded in a timely manner, while preserving a reasonable
citizen participation process, HUD is waiving the requirement that the grantee follow its
citizen participation plan for this substantial amendment. HUD is shortening the minimum
time for citizen comments to 7 calendar days and requiring the substantial amendment
materials to be posted on the grantee's official website as the materials are developed,
published, and submitted to HUD. Grantees are cautioned that, despite the expedited
application and~plan process, they are still responsible for ensuring that all citizens have
equal access to information about activities assisted with CDBG-R funds. 1n addition,
grantees must ensure that non-English speaking persons and persons with disabilities have
access to copies of substantial amendments. Since not all citizens have Internet access, HUD
]0
encourages grantees to make copies of substantial amendments available in public places
such as libraries and government buildings.
HUD will not require states to follow their existing citizen participation plan
requirements, either for the state's development of this substantial amendment or for the
development of funding proposals by units of general local government. The citizen
participation pursuant to CDBG-R will be conducted at the state level and must assure that
citizens and units of general local government have an opportunity to comment on all
proposed activities to be undertaken with these funds. HUD is therefore waiving the
provisions of 24 CFR 91.115(e) and 24 CFR 570.486(a). However, states are encouraged~to
establish alternative procedures for units of general local government that will provide
reasonable citizen access to information and participation in the local decision-making
process. To facilitate the timely development of states' substantial amendments, HUD is
waiving 42 U.S.C. 5306(d)(2)(C)(1)(iv) and 24 CFR 91.110 to the extent necessary to
eliminate the requirement that a state must consult with units of local government in
determining the expected use of CDBG-R funds.
Pursuant to the overall objectives of the Recovery Act to assure that funds are in
communities assisting in economic recovery, HUD is waiving 24 CFR 91.320 (d) and 24
CFR 9I.320(k)(1)(i) to the extent necessary to require states to submit a list of activities in
lieu of developing a method of distribution.
Substantial amendments to grantees' action plans are not normally approved by HUD,
but may be submitted to HUD as they occur or at the end of the program year. 24 CFR
91.505(c) is waived to the extent necessary to require submission of the substantial
11
amendment to the action plan to HUD for approval in accordance with this notice no later
than the deadlines specified in paragraph 4. below.
HUD is waiving provisions of 24 CFR 91.500(b) and (d) to provide for the following
modified action plan approval procedures. HUD will review each grantee's submission for
completeness and consistency with the purposes of the Cranston-Gonzalez National
Affordable Housing Act, the Recovery Act and the requirements of this notice, and will
disapprove incomplete or inconsistent action plan amendments. 24 CFR 91.500(d) permits
jurisdictions to revise or resubmit a plan within 45 days after written notification of
disapproval; it also states that HUD must respond to approve or disapprove the plan within
30 days of receiving the resubmission. HUD will allow revision and resubmission of a
disapproved action plan in accordance with 24 CFR 91.500 so long as the resubmission is
received by HUD 15 calendar days or less following the date of first disapproval, and any
further resubmissions in response to subsequent disapprovals are received no later than close
of business on July 20, 2009 for entitlement communities, Insular Areas or non-entitlement
counties in Hawaii. The deadline for states is August 13, 2009.
The substantial amendment to the action plan and citizen participation alternative
requirement will permit an expedited grant-making process, but one that still provides for
public notice, appraisal, examination, and comment on the activities proposed for the use of
CDBG-R grant funds.
Requirement
1. General.
a. Except as described in this notice, statutory and regulatory provisions governing the
CDBG program for states, entitlement communities, Insular Areas, and non-entitlement
12
counties in Hawaii, as applicable, shall apply to the use of these funds. Non-entitlement
counties in the state of Hawaii and Insular Areas should follow the requirements for
entitlement communities.
b. To receive its grant allocation, a grantee must submit to HUD, by the deadlines in
paragraph 4. below, a substantial amendment to its PY2008 action plan, in accordance
with the consolidated plan procedures for a substantial amendment under the annual
CDBG program as modified by this notice, or HUD may cancel the entire amount
allocated for that grantee and reallocate the funds.- 24 CFR 91.505(c) is waived to the
extent necessary to require submission of the substantial amendment to HUD for
approval.
c. 24 CFR 91.500(b) and (d) are waived to the extent necessary to implement alternative
procedures for HUD review and approval of grantees' action plan amendments. In
addition to the criteria in 24 CFR 91.500(b), HUD may disapprove a plan if it is
inconsistent with the requirements of the Recovery Act or the requirements of this notice.
HUD may disapprove a plan if it determines that the description of activities, as required
in paragraphs 2.a. and 2.b, below, does not adequately describe how an activity will
address the Recovery Act. This alternative requirement will allow revision and
resubmission of a disapproved action plan in accordance with 24 CFR 91.500(d) so long
as the first resubmission is received by HUD 15 calendar days or less following the date
of first disapproval, and any further resubmissions in response to subsequent disapprovals
are received no later than close of business on July 20, 2009 for entitlement communities,
Insular Areas or non-entitlement counties in Hawaii. The deadline for states is August
13, 2009.
13
d. After HUD processes and approves the plan amendment and both HUD and the
grantee have signed the grant agreement, HUD will establish the grantee's line of credit
in the amount of the grantee's CDBG-R funds included in the action plan amendment.
2. Contents of a CDBG-R Action Plan Substantial Amendment.
a. The required elements in the CDBG-R substantial amendment to the annual action plan
for entitlement communities, Insular Areas, and non-entitlement counties in Hawaii are:
i. Pursuant to 24 CFR 91.220(d), (e) and (I), a description of the activities the
jurisdiction will undertake with these funds to address priority needs and objectives.
24 CFR 91.220(1)(ii) is waived. The grantee shall instead identify any other
Recovery Act funding to be used in conjunction with each activity and total activity
budget from all funding sources. In addition, grantees must provide information
concerning CDBG-R assisted activities in an electronic spreadsheet provided by
HUD. The information that must be reported in the spreadsheet includes activity
name, activity description, CDBG-R dollar amount budgeted, eligibility category,
national objective citation, additional Recovery Act funds for the activity received
from other programs, and total activity budget. An electronic copy of the spreadsheet
and the format will be available on HUD's recovery website at
http:l/www.hud.g~ov/recovery. Grantees must include a paper copy of the spreadsheet
in their substantial amendment and must submit an electronic version of the
completed spreadsheet to CDBG-R@hud.gov.
ii. A description of how the distribution and uses of the grantee's CDBG-R funds
will meet the requirements of Title XII of Division A and Section 1602 of the
Recovery Act: that, in selecting projects to be funded, recipients shall give
l4
priority to projects that can award contracts based on bids within I20 calendar
days from the date the funds are made avai fable to the recipients; and that for
CDBG-R funds being used for infrastructure investments, recipients shall give
preference to activities that can be started and completed expeditiously, including
a goal of using at least 50 percent of the funds for activities that can be initiated
not later than 120 calendar days after February 17, 2009.
iii. For each activity, a written description of how the use of CDBG-R funds for the
activity will maximize job creation and economic benefit in relation to the
CDBG-R funds obligated, and will address the Recovery Act, by:
(A) Preserving and creating jobs and promoting economic recovery;
(B) Assisting those most impacted by the recession;
(C) Providing investment needed to increase economic efficiency;
(D) Investing in transportation, environmental protection, or other infrastructure
that will provide long-term economic benefits;
(E) Minimizing or avoiding reductions in essential services; or
(F) Fostering energy independence.
iv. For each activity, the number of full- and part-time jobs estimated to be created
and retained by the activity (including permanent, construction and temporary jobs).
v. A description of the activities that will be carried out with CDBG-R funds that
promote energy conservation, smart growth, green building technologies, or
reduced pollution emissions.
vi. Information on how to contact grantee program administrators, so that citizens
and other interested parties know who to contact for additional information.
15
vii. A signed standard federal form SF-424, and signed certifications as specified in
section II.H. of this notice.
b. The required elements in the CDBG-R substantial amendment to the annual action plan
required for States are:
i. A description of the activities that will be undertaken with these funds to address
priority needs and objectives, and outcome measures pursuant to 24 CFR 91.320(c).
The grantee shall identify any other Recovery Act funding to be used in conjunction
with each activity and total activity budget from all funding sources. In addition,
grantees must provide information concerning CDBG-R assisted activities in an
electronic spreadsheet provided by HUD. The information that must be reported in
the spreadsheet includes activity name, activity description, CDBG-R dollar amount
budgeted, eligibility category, national objective citation, additional Recovery Act
funds for the activity received from other programs, and total activity budget. An
electronic copy of the spreadsheet and the format will be available on HUD's
recovery website at http://www.hud.~ov/recovery. Grantees must include a paper
copy of the spreadsheet in their substantial amendment and must submit an electronic
version of the completed spreadsheet to CDBG-R@hud.gov. HUD waives 24 CFR
91.320(d) and 24 CFR 91.320(k)(l)(i) to the extent necessary to require states to
provide a list of activities it intends to fund with the CDBG-R allocation.
ii. A description of how the distribution and uses of the grantee's CDBG-R funds will
meet the requirements of Title XII of Division A and Section 1602 of the Recovery
Act: that, in selecting projects to be funded, recipients shall give priority to projects
that can award contracts based on bids within 120 days from the date the funds are
16
made available to the recipients; and that for CDBG-R funds being used for
infrastructure investments, recipients shall give preference to activities that can be
started and completed expeditiously, including a goal of using at least 50 percent of
the funds for activities that can be initiated not later than 120 calendar days after
February 17, 2009.
iii. For each activity, a written description of how the use of CDBG-R funds for the
activity will maximize job creation and economic beneft in relation to the CDBG-R funds
obligated, and will address the Recovery Act, by:
(A) Preserving and creating jobs and promoting economic recovery;
(B) Assisting those.most impacted by the recession;
(C) Providing investment needed to increase economic efficiency;
(D) Investing in transportation, environmental protection, or other infrastructure
that will provide long-term economic benefits;
(E) Minimizing or avoiding reductions in essential services; or
(F) Fostering energy independence.
iv. For each activity, the number of full- and part-time jobs estimated to be .created
and retained by the activity, which will include permanent, construction and
temporary jobs.
v. A description of activities that will be carried out with CDBG-R funds to promote
energy conservation, smart growth, green building techniques or reduced
pollution emissions.
vi. Information on how to contact grantee or unit of general local government
program administrators so that citizens and other interested parties will know who
17
to contact for additional information.
vii. A signed standard federal form SF-424, and signed certifications as specified in
section II.H. of this notice.
3. Citizen Participation Alternative Requirement, HUD is providing an alternative
requirement to 42 U.S.C. 5304(a)(2) and (3), to expedite distribution of grant funds and to
provide for expedited citizen participation for the CDBG-R substantial amendment.
Provisions of 24 CFR 570.302, 24 CFR 570.486{a), 24 CFR 91.105(k) and 91.115(1), with
respect to following the citizen participation plan, are waived to the extent necessary to allow
implementation of the requirements below. In addition, for States, 24 CFR 91.110 is waived
to the extent necessary to eliminate the requirement that a state must consult with units of
local government in determining the state's method of distribution in its substantial
amendment.
a. 24 CFR 91.105(k) and 24 CFR 91.115(1) are being waived to specify that the grantee
will provide no fewer than 7 calendar days for citizen comment (rather than 30 days} for its
CDBG-R substantial amendment. At the time of submission to HUD, each grantee will post
its action plan amendment and any subsequent CDBG-R amendments on its ofBcial.website
along with a summary of citizen comments received within the 7-day comment period. HUD
encourages the grantee to make copies of the substantial amendment available in public
places such as libraries and government buildings. In addition, the grantee must ensure that
non-English speaking persons and persons with disabilities have access to copies of
substantial amendments.
b. The regulation at 24 CFR 91.505(c)(1) states that a grantee may submit a copy of an
amendment to its action plan to HUD as it occurs or at the end of the program year. 24 CFR
18
91.505 is waived to require each grantee to submit the substantial amendment to its action
plan for CDBG-R funds no later than the deadlines specified in paragraph 4. below.
4. Submission Deadlines. Except as otherwise provided in this paragraph, entitlement
grantees, Insular areas and non-entitlement counties in Hawaii are to submit their substantial
amendments to their 2008 action plans to their HUD field office by June 5, 2009. States are
to submit the substantial amendments to their PY2008 action plans to their HUD field office
by June 29, 2009. The deadline for the substantial amendment for HPRP is May 18, 2009;
therefore, grantees that wish to submit a single substantial amendment for both programs
must do so by May 18, 2009.
Any grantee that will be submitting its program year 2009 action plan between the
date of this notice and June 5, 2009, may wish to consider ways in which it can combine the
citizen participation and submission steps for its CDBG-R substantial amendment with those
for its 2009 action plan. Any entitlement grantee or non-entitlement county in Hawaii with a
program year start date of July 1 or earlier, and which has not yet submitted its program year
2009 action plan to its field office as of the date of this notice, may submit its CDBG-R
substantial amendment to its 2008 action plan simultaneously with the submission of its
program year 2009 action plan. However, in no case can such an entitlement grantee or non-
entitlement county in Hawaii submit its CDBG-R action plan amendment later than June 5,
2009. States that submit their substantial amendment to 2008 action plans by June 29, 2009,
will need to submit the 2009 action plan by its original deadline. However, the abbreviated
citizen participation process provided in this notice applies only to CDBG-R substantial
amendments, not to the submission of program year 2009 action plans. Existing regulatory
citizen participation requirements continue to apply to action plans submitted for regular
19
CDBG funding, even if a grantee wishes to submit its CDBG-R substantial amendment
simultaneously with its program year 2009 action plan.
A grantee's failure to meet the submission deadlines for CDBG-R, as applicable, may
constitute grounds for the Department to cancel the grantee's CDBG-R funding allocation
pursuant to the provisions of section I.B. of this notice.
5. Program Design Considerations
Although the Recovery Act applies additional or alternative requirements upon
CDBG-R funding that do not exist in the regular CDBG program, this additional
appropriation is otherwise subject to all regular CDBG program requirements. HUD has
minimized the number of additional changes between CDBG-R and regular CDBG program
requirements, to maximize grantees' flexibility in administering these funds. The Recovery
Act also contains language which, while not stating explicit mandates, makes clear that
Congress intends the use of Recovery Act appropriations to be targeted to address current
economic conditions. For example, Section 1602 of the Recovery Act states that,
"Recipients shall also use grant funds in a manner that maximizes job creation and economic
benefit." While grantees have the full range of CDBG eligible activities at their disposal for
CDBG-R, Congress clearly intends that CDBG-R funds should primarily be invested in
economic development, housing, infrastructure and other public facilities activities that will
quickly spur further economic investment, increased energy efficiency, and job creation or
retention. In selecting activities for CDBG-R funding, grantees should keep in mind that
some eligible activities under the Housing and Community Development Act are unlikely to
substantively address the intent of the Recovery Act.
20
At the same time, the broad purpose language of the Recovery Act does nod expand
the list of eligible activities beyond those specified by the Housing and Community
Development Act. Some uses of funds suggested by the Recovery Act's broad purpose
language do not necessarily fit into any CDBG eligible activity category, and may not be
eligible for CDBG-R funding. However, HUD has determined that the purpose language and
overall intent of the Act, particularly regarding local ftscal stabilization, supersedes the
requirement at 42 U.S.C. 5301(c) that CDBG funding not be used to substantially replace the
amount of local financial support previously provided to community development activities.
The Recovery Act also makes clear that grantees are to identify projects that can
achieve the Recovery Act purposes AND can be quickly implemented. Language at Title
XII of Division A of the Recovery Act, which appropriates the CDBG-R funds, states that,
"...in selecting projects to be funded, recipients shall give priority to projects that can award
contracts based on bids within ] 20 days from the date the funds are made available to the
recipients." Section 1602 of the Recovery Act further states, "In using funds made available
in this Act for infrastructure investment, recipients shall give preference to activities that can
be started and completed expeditiously, including a goal of using at least 50 percent of the
funds for activities that can be initiated not later than 120 days after the date of the enactment
of this Act."
Grantees should not assume that their normal CDBG funding distribution procedures
can meet the goals for obligation of funds described above. For example, if a grantee's
existing activity selection process mandates a lengthy Request For Proposals, lengthy
procurement actions, or other process that would take months to produce funding
recommendations, grantees should explore what local waiver authority or emergency
21
procedures they can implement to expedite the process. This may particularly be necessary
with some states, for which deviations from existing procedures could require state rule-
making. Some Urban County funding procedures that distribute funds on a proportional
basis among all participating jurisdictions could result in funding awards that are too small to
be used expeditiously and productively by the participating jurisdictions.
Grantees may have already identified activities that were approved to receive funding
out of the grantee's FY2009 funding allocation. Grantees should consider whether any of
these activities meet the additional CDBG-R requirements, and if so, whether their
implementation schedules could be accelerated so that they could instead be funded with
CDBG-R funds. However, moving an activity from a grantee's 2008 or 2009 program year
regular CDBG program to the CDBG-R program, and replacing that moved activity with a
new activity, would trigger a substantial amendment to a grantee's already-approved 2008 or
2009 action plan. This would trigger additional citizen participation requirements beyond
those required for the CDBG-R substantial amendment.
States should consider whether their existing method of distribution processes can be
employed to fund worthwhile activities that fell below the funding cut-off line from their
program year 2008 distribution process, or to fund applications already submitted for their
program year 2009 distribution process.
HUD encourages grantees to use CDBG-R funds for discrete, stand-alone activities.
whenever possible. As noted elsewhere in this notice, final guidance on reporting
requirements and applicability of the Davis-Bacon Wage Rate Act has not yet been issued.
Amending a construction contract to add CDBG-R funding to an existing project
(particularly one that is not otherwise federally funded) may subject the entire project to
22
Recovery Act reporting and other compliance requirements. Grantees should also avoid
using CDBG-R ft~nds to initiate a new project that cannot be completed within the
expenditure deadline for the CDBG-R program or that will require the commitment of future
years' allocations of regular CDBG funds.
However, HUD recognizes that the additional increment ofCDBG-R funding may
not be enough for some grantees to fully fund a new activity. (The amount of additional
funding allocated to grantees equals about 27 percent of their FY2008 regular CDBG
allocation.) Grantees should consider whether it is possible to issue a new contract to use
CDBG-R funds to fund an additional increment of work or services beyond that which is
already under contract or otherwise underway. For example:
• A grantee may have performed engineering and environmental review work on a project
to replace sanitary sewers, but scaled back the project before awarding a construction
contract due to funding constraints. Because engineering work has already been done, it
may be time- or cost-effective for the grantee to issue a separate construction contract for
the blocks of sewers that were excluded from the existing contract.
• ~ A grantee may use CDBG-R funds to finance the rehabilitation of several apartment
buildings that are on the waiting list for assistance under the grantee's CDBG rental
housing rehabilitation loan program.
• A grantee might consider physical improvements to a water treatment plant that will
reduce the energy costs of the plant's operations or will conserve water resources.
• A grantee that had to pare back funding for an activity (compared to the subrecipient's
original funding request or prior levels of service) might execute a subrecipient
agreement to provide CDBG-R funds that will restore the activity to "full funding" levels.
23
CDBG-R funding will be tracked separately from a grantee's regular CDBG funding
in the Integrated Disbursement and Infom~ation System (IDIS), will have separate funding
contract language, and will have a different grant number from a grantee's regular CDBG
funding. Grantees are cautioned against commingling regular CDBG and CDBG-R funds.
However, this does not prevent a grantee from using CDBG-R funding in conjunction with
an existing activity funded with regular CDBG funds, where the additional funding will be
covered under a new contract or subrecipient agreement. Grantees will need to set up this
additional increment of funding as a separate activity in IDIS.
Grantees who wish to use CDBG-R funds to expand an ongoing oralready-under-
construction project should keep the following additional considerations in mind.
Environmental review procedures: HUD legislation and regulations (24 CFR
58.22) prohibit CDBG grantees and any party to the development process from committing
HUD or non-HUD assistance to a project until the environmental compliance review process
has been successfully completed. In adding CDBG-R funds to an existing project, grantees
must carefully consider the implications of the Part 58 definition of a commitment of federal
funds. No new environmental review is required when aCDBG-R project has been reviewed
previously by the same responsible entity, no change to the project activities or location or
size results from additional funding, and no new environmental conditions have been
discovered. HUD regulations and law prohibit the commitment of HUD and non HUD
assistance to a project until the environmental compliance review is successfully completed.
Therefore, because Recovery Act projects must expend their CDBG-R funds in such a short
timeframe, it is very important to begin and complete your environmental compliance review
as -soon as possible. Grantees are urged to contact their Field Environmental Officer, and to
24
visit the HUD environmental website for more detailed information on environmental
clearance: http•//www hud Gov/offices/cpolener environ/environment/compliance/ga/clearance.cfin
Labor Standards applicability: HUD will issue guidance concerning the applicability
of prevailing wage requirements at a later date. For more information about the federal labor
standards requirements in HUD programs, please visit the Office of Labor Relations website
at www.hud.~ov/offices/olr.
B. Reimbursement for Pre-Award Costs
Background
CDBG-R grantees will need to move forward rapidly to prepare the CDBG-R
substantial amendment and to undertake other administrative actions, including
environmental reviews. Therefore, HUD is granting permission to states and entitlement
jurisdictions receiving a direct allocation of CDBG-R funds to incur pre-award costs
associated with the development of the substantial amendment to the action plan as if each
was a new grantee preparing to receive its first allocation of CDBG funds.
Grantees may also take advantage ofthe provisions of 24 CFR 570.200(h) regarding
activity-specific pre-award costs. Grantees may incur costs prior to grant award for specific
activities, as of the date the grantee submits its CDBG-R action plan substantial amendment
to HUD. Where a grantee amends an existing construction contract or issues a new contract
in order to use CDBG-R funding to expand an existing activity, the date on which the
CDBG-R costs are considered incurred for purposes of 24 CFR 570.200(h) will generally be
the date of the new or amended contract, not the date that funds were initially obligated for
the original project.
29
Urgent need national objective criteria: In the regular CDBG program, to meet the
urgent need national objective pursuant to 24 CFR 570.208(c) and 24 CFR 570.483(d), the
recipient must certify: that the activity is designed to alleviate existing conditions which pose
a serious and immediate threat to the health and welfare of the community which are of
recent origin or recently became urgent, that the recipient is unable to finance the activity on
its own, and that other sources of funds are not available. In the regular State CDBG
program, the local government provides this certification and the State makes the
determination of the same. For CDBG-R, HUD is eliminating the recordkeeping
requirement that grantees document the nature, degree and timing of seriousness of the
condition to be addressed by the activity if the urgent need is based on current economic
conditions. HUD will accept a grantee's certification that current economic conditions are of
recent origin and constitute a serious and immediate threat to the welfare of the community.
However, the grantee must still demonstrate that it is unable to finance the activity on its
own, and that other sources of funding are not available. For the State CDBG program,
states may make this certification on behalf of units of general local government.
Limitations on public services activities: In the regular CDBG program, entitlement
grantees are permitted to obligate no more than 15 percent of their annual CDBG allocation
plus 15 percent of the prior program year's program income for public service activities.
States are permitted to expend no more than 15 percent of each annual CDBG allocation plus
program income for public service activities. HUD is providing an alternative requirement
because there will be no program income attributed to CDBG-R, and because CDBG-R is to
be treated as a separate appropriation of funds. Compliance with the public service cap must
be demonstrated separately based on each grantee's total CDBG- R grant allocation and not
30
in combination with its regular CDBG funding or program income. For both states and
entitlements, compliance will be demonstrated based on expenditures of CDBG-R funds, not
on obligations as in the regular CDBG entitlement program. HUD is waiving 42 U.S.C.
5305(a)(8) to exclude program income from the amount of funds on which the cap is based.
Other provisions of that section remain in place.
Limitations on planning and general administration activities: Pursuant to 24 CFR
570.200(8), in the regular CDBG program, a CDBG entitlement grantee is permitted to
obligate no more than 20 percent of its annual CDBG allocation plus program income for
planning and administrative costs as defined in 24 CFR 570.205 and 24 CFR 570.206.
Pursuant to 24 CFR 570.489(a)(3), a state and its funded units of general local govemment
are, in aggregate, permitted to expend no more than 20 percent of the state's annual grant
plus program income for planning and administrative costs as defined at 42 U.S.C.
5305(a)(12), 5305(a)(13) and 5306(d)(3). HUD is providing an alternative requirement
because there will be no program income attributed to CDBG-R, and because CDBG-R is to
be treated as a separate appropriation of funds. Compliance with the planning and
administration costs cap must be demonstrated separately based on each grantee's total
CDBG- R grant allocation and not in combination with its regular CDBG funding or program
income. For CDBG-R, up to 10 percent of a CDBG-R grant directly provided to a
jurisdiction (State, entitlement community, Insular Area or non-entitled county in Hawaii)
may be used for general administration and planning activities. For all grantees, including
states, the 10 percent limitation applies to the grant as a whole. States should note that the l0
percent limitation includes any funds the State expends for technical assistance to units of
general local government and non-profit organizations pursuant to 42 U.S.C. 5306(d)(5) and
31
(6). Consistent with Recovery Act provisions to expedite the use of CDBG-R funds, HiJD is
waiving the requirement for matching State administrative funds. Requiring states to match
administrative funds may considerably slow down the expenditure of CDBG-R funds in
states struggling to stabilize their budgets.
Public benefit standards: In the regular CDBG program, the public benefit standards
at 24 CFR 570.209(b), (c) and (d) (for entitlement grantees) and 24 CFR 570.482(f) and (g)
(for states) apply to economic development projects under the authority of 24 CFR 570.203,
24 CFR 570.204, 24 CFR 570.208(a)(4)(vi)(F)(2), 24 CFR 570.483(b)(4)(vi)(F)(2), and 42
U.S.C. 5305(a)(2), (l4), (15), or (17), respectively. HUD is waiving portions of these
regulations to expedite the timely use of funds by grantees. HUD will presume that activities
that meet the requirements and Congressional intent of the Recovery Act provide sufficient
public benefit. Grantees are still encouraged to provide economic assistance at the lowest
possible cost per job, or cost per low- and moderate-income beneficiary.
Activities identified in these regulations as providing insufficient public benefit
remain ineligible for CDBG-R funding: general promotion of the community as a whole;
assistance to professional sports teams; assistance to privately-owned recreational facilities
that serve a predominantly higher-income clientele, where the recreational benefit to users or
members clearly outweighs employment or other benefits to low- and moderate-income
persons; acquisition of land for which the specific proposed use has not yet been identified;
and assistance to afor-profit business while that business or any other business owned by the
same person(s) or entity(ies) is the subject of unresolved findings of noncompliance relating
to previous CDBG assistance provided by the recipient. (Those ineligible activities are in
32
addition to those which the Recovery Act specifically prohibits: casinos, other gambling
establishments, aquariums, zoos, golf courses, or swimming pools.) Furthermore, HUD is
not waiving the provisions of 24 CFR 570.209(a) (for entitlement grantees) and 24 CFR
570.482(e) (for states) regarding underwriting guidelines.
Relationship of CDBG-R to the Section 108 Loan Guarantee program: In the Section
108 program, 24 CFR 570.705(a)(2}(i) permits a CDBG grantee to borrow an amount of up
to five times of its most recent CDBG grant for a Section 108 loan. 24 CFR 570.705(b)
permits CDBG funds to be used as a pledge of security for the repayment of Section 108
loans. 24 CFR 570.705(c) permits the use of CDBG funds to repay funds borrowed under
the Section 108 program. The Section 108 program is intended to provide longer-term
project financing and requires a pledge of CDBG future funds over the life of the Loan
guarantee, whereas CDBG-R is a one-time appropriation of funds of limited duration.
CDBG-R funds may not be used as a pledge of security for the repayment of Section 108
loans, may not be used to securitize borrowing under the Section 108 program, may not be
used as repayment for funds borrowed under the Section 108 program, and may not be
counted toward a grantee's maximum Section 108 borrowing authority.
Requirements
1.42 U.S.C. 5304(b)(3)(A), 24 CFR 570.200(a)(3) and 24 CFR 570.484 are waived to the
extent necessary to require that CDBG-R funds shall principally benefit persons of low and
moderate income in a manner that ensures that not less than 70 percent of such funds are
used for activities that benefit such persons, exclusive of any other funds received by the
33
grantee under 42 U.S.C. 5306 or as a result of a guarantee or a grant under 42 U.S.C. 5308.
A grantee must meet this requirement over the life of its CDBG-R grant.
2.24 CFR 570.506(b)(I2)(i) and (iii) are waived, and 24 CFR 570.208(c), 24 CFR
570.483(d), and 24 CFR 570.490(a) and (b) are waived to the extent necessary to allow
grantees to certify that an activity is designed to address current economic conditions which
pose a serious and immediate threat to the welfare of the community. HUD has determined
that current economic conditions are of recent origin and pose a serious and immediate threat
to the economic welfare of communities. States may provide this certification on behalf of
units of general local government. Grantees must maintain other documentation specified in
these regulations.
3. 42 U.S.C. 5306(a)(8), 24 CFR 570.201(e)(1) and 24 CFR 570.201(e)(2) are waived to the
extent necessary to require that no more than I S percent of CDBG-R funds shall be expended
for eligible public service activities, exclusive of any other funds received by the grantee
under 42 U.S.C. 5306. A grantee must meet this requirement over the life of this grant.
4. 42 U.S.C. 5306(d)(3), (5) and (6), 24 CFR 570.200(g) and 24 CFR 570.489(a) are waived
to the extent necessary to establish the following requirement: No more than 10 percent of
CDBG-R funds shall be expended for eligible planning and general administration activities
as defined in 42 U.S.C. 5305(a)(12), 5305(a)(13) and 5306(d)(3), and in 24 CFR 570.205 and
24 CFR 570.206, exclusive of any other funds received by the grantee under 42 U.S.C. 5306.
For states, this 10 percent limitation includes technical assistance eligible under 42 U.S.C.
5306(d)(5) and (6). A grantee must meet this requirement over the life of this grant. For
states, this requirement applies in total to the state and all entities it funds.
34
5. The requirements at 42 U.S.C. 5306(d)(3)(A) and 24 CFR 570.489(a) are waived to the
extent necessary to eliminate the state match requirement for genera! administrative costs.
6. 42 U.S.C. 5305(e)(3), 24 CFR 570.209, 24 CFR 570.482(f), 24 CFR 570.490(a) and 24
CFR 570.506(c) are waived to the extent necessary to permit grantees to carry out economic
development projects without meeting the public benefit standards, except that 24 CFR
570.209(b)(3)(ii)(A) through (E) and 24 CFR 570.482(f)(4)(ii)(A) through (E) are not
waived.
7. 42 U.S.C. 5308 and Subpart M of 24 CFR Part 570 are waived to the extent that they are
not applicable to the use of CDBG-R funds.
8. Uses of grant funds must constitute an eligible use under the Recovery Act. In addition to
being an eligible CDBG-R use of funds, each activity funded under this notice must also be
eligible under 42 U.S.C. 5305(a) and Subparts C and I of Part 570, and meet a CDBG
national objective under Subparts C and I of Part 570, as modified by this notice. Activities
not listed as eligible under 42 U.S.C. 5305(a), and activities that are specifically listed as
ineligible under 24 CFR 570.207 and 24 CFR 570.482, are ineligible for CDBG-R funding.
The last sentence of 42 U.S.C. 5301(c) is waived.
9. Pursuant to Section 1604 of the Recovery Act, CDBG-R funds may not be used for any
casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool.
F. Timeliness of Use and expenditure of CDBGR funds
Background
In accordance with the Recovery Act, HUD has imposed a grant period and
expenditure deadline of September 30, 2012, to ensure that the use of CDBG-R funds is
expedited. To that end, HUD has waived a number of regulatory and statutory provisions.
35
The timely expenditure regulatory requirements for the entitlement CDBG program will not
apply to CDBG-R funds. These funds will not be included in determining compliance with
the requirements of 24 CFR 570.902. However, income generated from CDBG-R activities
will be treated as program income to grantees' regular CDBG program, and thus will be
included in timely expenditure compliance determinations. In selecting and designing
activities for CDBG-R funding, grantees should consider the indirect effects on their
compliance with the timely expenditure requirements for their regular CDBG funding. The
timely distribution regulatory requirements for states will not apply to CDBG-R funds.
Requirement
The timely distribution or expenditure requirements of 42 U.S.C. 5304(e) and 24 CFR
570.494 and 570.902 are waived to the extent necessary to allow the following alternative
requirement: All CDBG-R grantees must expend their entire allocation of CDBG-R funds by
September 30, 2012. Any funds not expended by September 30, 2012, will be recaptured by
HUD and returned to the U.S. Treasury.
G. Reporting
Background
HUD requires timely and accurate reporting on each CDBG-R grant in IDIS. HUD
will use the information from IDIS to exercise oversight for compliance with the
requirements of this notice and for prevention of fraud, waste, and abuse of funds. The
Recovery Act imposes greater (and more frequent) reporting requirements than those that
apply to grantees' regular CDBG funding.
Section 1512 of the Recovery Act requires that not later than 10 days after the end of
each calendar quarter, each recipient that received recovery funds from a federal agency shall
36
submit a report to that agency that contains: (1) the total amount of recovery funds received
from that agency; (2) the amount of recovery funds received that were expended or obligated
to projects or activities; and (3) a detailed list of a!I projects or activities for which recovery
funds were expended or obligated, including the name of the project or activity; a description
of the project or activity; an evaluation of the completion status of the project or activity; an
estimate of the number of jobs created and the number of jobs retained by the project or
activity; and for infrastructure investments made by State and local governments, the
purpose, total cost, and rationale of the agency for funding the infrastructure investment with
funds made available under the Recovery Act and name of the person to contact at the
agency if there are concerns with the infrastructure investment. Not later than 30 calendar
days after the end of each calendar quarter, each agency that made Recovery Act funds
available to any recipient shall make the information in reports submitted publicly available
by posting the information on a website.
Grantees' agreements with subrecipients or units of general local government must
contain a special contract condition requiring them to comply with the reporting requirements
established for CDBG-R funding. All grantees, subrecipients and contractors desiring to
participate in the CDBG-R program must obtain a Data Universal Numbering System
(DUNS) number. A DUNS number may be requested via the web at:
http•//www grants Gov/annlicants/request duns number.isp. HUD will post guidance on its
website regarding how to obtain a DUNS number.
Title XV, Section 1512 of the Recovery Act states that funding recipients that are
required to report information per subsection (c)(4} of the Recovery Act (detailed
information on any subcontracts or subgrants awarded by the recipient to include the data
37
elements required to comply with~the Federal Funding Accountability and Transparency Act
of 2006 allowing aggregate reporting on awards below $25,000 or to individuals) must
register with the Central Contractor Registration (CCR) database. CCR is the primary
registrant database for the U.S. Federal government. CCR collects, validates, stores, and
disseminates data in support of agency acquisition missions. Registration information on the
CCR website can be found at http•//www ccr.~ov/startre~istration.asnx. A CCR User
Account Guide can be found at htt~//www ccr.gov/doc/UserAccount.pdf. CCR frequently
asked questions can be found at httn•//www ccr aov/FAO.aspx#accounts.
Additional ipforrnation regarding subrecipients, other organizations, and contractors
receiving CDBG-R funding will also be required to comply with the Federal Funding
Accountability and Transparency Act of 2006 (Public Law 109-282) and to ensure
accountability and transparency as cited in Title XV of the Recovery Act. This may include,
but is not limited to, address and contact information as well as more detailed information
about the entity and its award under this activity.
The regular CDBG reporting requirements as well as the additional CDBG-R
reporting requirements will be strictly enforced. HUD reserves the right to restrict access to
grantees' CDBG-R funds for delinquent, incomplete, or inaccurate reporting. Each CDBG-R
activity, regardless of eligibility category and national objective, will not only report on the
regular CDBG accomplishments and performance measures for that activity but also on the
number of jobs created and retained, if applicable. (Grantees should note that this jobs
reporting requirement applies to all activities and has nothing to do with low- and moderate-
income benefit national objective compliance based on job creation or retention.)
38
The Recovery imposes additional reporting requirements including, but not limited to,
information on the environmental review process, the expected completion of the activity, the
type of activity, and the location of the activity. The Department has not yet determined how
these reporting requirements will be implemented. HUD will establish and disseminate
reporting requirements for CDBG-R assisted activities at a later date.
To collect these data elements and to meet its reporting requirements, HUD is
requiring each grantee to report on its CDBG-R funds to HUD using IDIS.
Requirements
1. Performance report alternative requirement. The Secretary may specify the form and
timing of reports provided by the grantee under both 42 U.S.C. 5304(e) (the HCD Act) and
42 U.S.C. 12708 (NAHA). Therefore, the consolidated plan regulation at 24 CFR 91.520 is
waived and the alternative reporting form and timing for the CDBG-R funds is that:
a. For infrastructure investments made by State and local governments, report the purpose,
total cost, and rationale of the agency for funding the infrastructure investment with funds
made available under this Act and name of the person to contact at the agency if there are
concerns with the infrastructure investment.
b. Provide detailed information on any subcontracts or subgrants awarded by the recipient to
include the data elements required to comply with the Federal Funding Accountability and
Transparency Act of 2006 (Public Law 109-282), allowing aggregate reporting on awards
below $25,000 or to individuals, as prescribed by the Director of the Office of Management
and Budget.
c. Information must be submitted using HUD's IDIS system. Pursuant to Section 1512 of the
Recovery Act, grantees must enter the data into IDIS on a quarterly basis for generation of
39
reports by HUD or other entities. 24 CFR 570.495 and 24 CFR 570.910 are waived to the
extent necessary to allow HUD to restrict access to funds in IDIS for any grantee that fails to
fully comply with CDBG-R reporting requirements.
d. Throughout 24 CFR parts 9] and 570, all references to "annual" requirements such as
submission of plans and reports are waived to the extent necessary to allow the provisions of
this notice to apply to CDBG-R funds, with no recurring annual requirements other than
those related to civil rights and fair housing certifications and requirements.
H. Certifications
Background
Because this is a separate appropriation of funds, the certifications that are required
for the CDBG program must also be submitted for the CDBG-R program; they are listed at
24 CFR 91.225 for entitlement communities and 24 CFR 91.325 for States. HUD is waiving
the requirements that grantees follow their existing citizen participation plan, and that a state
consult with units of general local government in preparation of its substantial amendment.
Therefore, HUD is also waiving the certifications associated with these requirements.
HUD is requiring additional certifications in addition to the certifications that are
normally required. The additional certifications are tailored to CDBG-R grants. Although
the CDBG-R is being implemented as a substantial amendment to the 2008 annual action
plan, HUD is requiring submission of this additional set of certifications.
Requirements
Certifications for states and for entitlement communities.
1. Each jurisdiction will sign and submit the certifications at 24 CFR 91.225 (a) and (b), or
24 CFR 91.325(a) and (b) as applicable, except that 24 CFR 91.225(b)(1), 24 CFR
40
91.225(b)(4)(ii), 24 CFR 91.325(b)(1), 91.325(b)(2)(i) and {v), and 24 CFR 91.325(b)(4)(ii)
are waived. 24 CFR 91.225(b)(4)(iii) and 24 CFR 91.325{b)(4)(iii) are waived to the extent
necessary to eliminate the phrase "including Section 1081oan guarantee funds" from the
certifications.
2. Each jurisdiction will also sign and submit the following certifications:
a. a certification that the jurisdiction will comply with Title XIt of Division A of the
American Recovery and Reinvestment Act of 2009.
b. a certification that in selecting projects to be funded, the grantee will give priority to
projects that can award contracts based on bids within 120 days from the date the funds are
made available to the recipients, and will ensure maximum job creation and economic
benefit.
c. a certification that when CDBG-R funds are being used for infrastructure investments, the
grantee will give preference to quick-start and finish activities, including a goal to use at least
50 percent of the funds for activities within 120 days of enactment of the Recovery Act.
d. a certification that all iron, steel and manufactured goods used in construction, alteration,
repair, or maintenance of a public building or public work project assisted with CDBG-R
funds under the Recovery Act must be produced in the United States unless the Secretary
finds that: (1) the requirement is inconsistent with public interest; (2) those goods are not
reasonably available or produced in sufficient quantity in the U.S.; (3) or the use of the goods
will increase the project cost by more than 25 percent.
e. a certification from the Governor, mayor, or other chief executive, as appropriate, that any
infrastructure investments have received the full review and vetting required by law and that
the chief executive accepts responsibility that the infrastructure investment is an appropriate
41
use of taxpayer dollars. Alternatively, a grantee's chief elected official may certify that
infrastructure investments will receive the full review and vetting required by law and that
the chief executive accepts responsibility that the infrastructure investment is an appropriate
use of taxpayer dollars.
f. a certification that, for activities carried out with CDBG-R funds using the urgent need
national objective where the urgent need is the current economic conditions, the activity is
alleviating current economic conditions which pose a threat to the economic welfare of the
community in which the activity is being carried out, the recipient is unable to finance the
activity on its own, and other sources of funding are not available.
g. a certification stating that the aggregate use of CDBG-R funds shall principally benefit
low- and moderate-income families in a manner that ensures that at least 70 percent of the
grant is expended for activities that benefit such persons over the life of the CDBG-R grant.
I. Paperwork Reduction Act
The information collection requirements in this notice have been approved by the
Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44
U.S.C. 3501-3520) and assigned OMB Control Number 2506-0184. In accordance with the
Paperwork Reduction Act, HUD may not
42
conduct or sponsor, and a person is not required to respond to, a collection of information
unless the collection displays a currently valid OMB control number.
J. Environmental Impact
A Finding of No Significant Impact (FONSI) with respect to the environment has been made
for this issuance in accordance with HUD regulations at 24 CFR part 50, which implement
section l02(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332{2)(C)).
The FONSI is available for public inspection between the hours of 8:00 a.m. and 5:00 p.m.
weekdays in the Regulations Division, Office of General Counsel, Room 10276, Department
of Housing and Urban Development, 451 Seventh Street, SW, Washington, DC 20410. Due
to security measures at the HUD Headquarters building, please schedule an appointment to
review the FONSI by calling the Regulations Division at 202-708-3055 (this is not atoll-free
number). Individuals with speech or hearing impairments may access this number via TTY
by calling the Federal Information Relay Service at (800) 877-8339.
Dated: ~~ U
S aun Donovan
Secretary
[FR-5309-N-01 [