Fort Walton Beach Council agenda — 06-02-09 special — reading text

income in an amount at least equal to the amount of float so used. Because program income generated from CDBG R - activities will not be treated as program income to the CDBG -R program, grantees may not use CDBG -R funds to assist any float -funded activity or guarantee. 24 CFR 570.301( b) is therefore waived. E. Eligibility, Allowable Costs, and National Objective Waivers Background Overall low- and moderate- income benefit alternative requirements: The requirement that 70 percent of funds are for activities that benefit low- and moderate- income persons [ found at 42 U. S. C. 5301( c), 42 U. S. C. 5304( b)( 3)( A), 24 CFR 570. 200( a)( 3) and 24 CFR 570.484] will apply to the use of CDBG -R funds. A grantee must ensure that 70 percent of its CDBG -- R grant be expended for activities that benefit low- and moderate - income persons. Compliance with the overall benefit requirement must be demonstrated separately for the CDBG -R grant and not in combination with regular CDBG funding or commitments under the Section 108 Loan Guarantee program; thus, there is no option for selecting the timeframe for compliance.  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 prograrn 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 prograrn. 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 government are, in aggregate, pennitted 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( x)( 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 10 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, HUD 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), ( 14), ( 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 conununity 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 a for -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 ofCDBG -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 hands 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( x)( 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)( 12)( 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 iixunediate 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 15 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 general administrative costs.