April 9, 2020
Community Development Block Grant Funds Available for Public Facilities and Housing Projects
The pre-application deadline for Region IV’s (Grand Forks, Nelson, Pembina and Walsh counties) Community Development Block Grant (CDBG) has been set for June 24, 2020. Approximately $205,000 is expected to be available to projects in the region.
WHAT IS CDBG?
The Community Development Block Grant (CDBG) was established by Congress in 1974 and is administered by the U.S. Department of Housing and Urban Development (HUD). The North Dakota Department of Commerce – Division of Community Services administers the CDBG program for the state with funding recommendations developed by the eight regional councils. The Red River Regional Council (RRRC) makes funding recommendations for Region IV.
As defined by HUD, the primary purpose of CDBG is “the development of viable communities, by providing decent housing and suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.”
DEFINING LOW AND MODERATE INCOME
Low and moderate income (LMI) households are those that are up to 80% of the median household income based on household size. Household income is derived from Census data and differentiates by household size and includes income of anyone age 18 or older living in a single household.
The chart below illustrates the income limits based on household size in Region IV for 2019. Data for 2020 is not yet available.
MEETING A NATIONAL OBJECTIVE
In order to be eligible for CDBG funds, a project or activity must meet at least one of the national objectives:
Activities benefiting low and moderate-income persons:
• The benefits are available to all the residents in a particular area, where at least 51% of the residents are LMI.
• Where the assistance is to a public improvement that provides benefits to all the residents of an area that is limited to paying special assessments levied against residential properties owned and occupied by LMI persons.
• Any cities or counties having 51% or more of households meeting these criteria meet the definition of an LMI community. Please review the accompanying LMI chart below for a complete list of Region IV communities and LMI percentages. LMI communities are highlighted in yellow.
• In a community with 51% or more LMI residents, CDBG funds can be used for construction costs on public facilities projects. If the community is under 51% LMI, CDBG funds can only be used to pay the special assessments of the LMI provided the total LMI assessments do not exceed available CDBG funds.
Limited clientele activities. Limited clientele is defined as abused children, battered spouses, elderly, handicapped, homeless or illiterate persons, and migrant farm workers:
• An activity which benefits a limited clientele.
• Project directed to removal of material and architectural barriers (ADA accessibility) in publicly owned and privately owned non-residential buildings and facilities.
• An activity carried out for the primary purpose of providing or improving permanent residential structures which will be occupied by LMI households.
Job creation & retention:
• Create permanent jobs were at least 51% of which involve the employment of LMI persons.
• For job retention, the city or county must document the job would be lost without CDBG assistance and the job is known to be held by a LMI person; and/or the job can reasonably be expected to turn over within the following 2 years and will be filled by, or steps will be taken to ensure it is available to, an LMI person.
Prevention/elimination of slum or blight:
• Resulting area must remain perpetual greenspace or if new construction, the end result must meet a national objective.
The anticipated FY2020 CDBG allocation for Region IV is $205,407. The Red River Regional Council (RRRC) can split the allocation among public facilities, housing, and economic development.
Region IV communities have been awarded CDBG funds for a variety of projects including:
- Public infrastructure projects such as: lagoon improvements, sanitary sewer lift station, reconstruction of street lights, replacement of fire hydrants, street paving, water and sewer infrastructure, water meter replacement, fire hall construction, etc.
- Housing rehabilitation, conversion and construction – single and multi-family.
- Removal of architectural barriers (handicap accessibility). Any community, regardless of LMI, can use CDBG for these types of projects. Projects can be within a building and/or include sidewalks and ADA curb ramps.
- Economic development: Part of the ND Community Development Loan Fund (CDLF), which targets both primary and retail sector businesses and job creation/retention for LMI. Used for business gap financing, business purchase, equipment, working capital and infrastructure. Examples of projects funded in our region include extension of water and sewer infrastructure to support the construction of a new business; business purchase; heating, cooling and roofing updates on a building.
Interested applicants must complete a two-step process. The deadline for pre-applications to the RRRC for public facilities and housing projects is June 24, 2020, with the RRRC’s Community Development Committee reviewing pre-applications on or about August 20, 2020. Economic development applications are accepted at any time.
An applicant may be allocated all, part, or none of its request from the RRRC’s CDBG allocation. Factors including the number of applicants, types of projects, and amounts of requests are considered when making funding recommendations. When/if the RRRC Board of Directors recommends a project for funding, the applicant will then prepare a full application for submission to DCS.
No work on a project, even portions not funded with CDBG, can begin prior to grant award from the state. Applicants should apply for CDBG the year PRIOR to the year the project will be implemented. For example, communities applying for 2020 funds would be implementing their projects in 2021.
Below is a partial list of CDBG considerations and requirements:
- A city or county must be the applicant. The city or county must adopt a Resolution of Sponsorship which must be included with the pre-application (due June 24, 2020).
- If the estimated project cost is $25,000 or more, the applicant must procure a licensed architect or engineer, including drawings or plans and preliminary architect/engineer report.
- The applicant share is the engineering/architect fees and grant administration which is 10% of CDBG award for public facilities projects and economic development projects; 15% for housing and public facilities special assessment projects.
- An environmental review must be conducted for all projects prior to submission of the grant to the state.
- All applicants must conduct at least one public hearing and community needs assessment prior to submitting a grant to the state. At least one public notice regarding the intention to apply for CDBG will need to be published in the municipality’s official newspaper.
- CDBG requires contractors working on a project to pay applicable Davis Bacon wage rates which can increase the overall cost of a project.
All potential applicants are strongly encouraged to contact CDBG program manager Stacie Sevigny at 701-352-3550 or Stacie@redriverrc.com as soon as possible to ensure project and applicant eligibility. Documents, forms, and further information can be found here:
LMI Communities Chart: https://www.redriverrc.com/wp-content/uploads/2020/04/Region-IV-LMI-stat-chart-2.pdf
CDBG Instructions and Considerations: https://www.redriverrc.com/wp-content/uploads/2020/04/Pre-Application-Requirements-Considerations-2020.pdf
CDBG Public Facilities Pre-Application: https://www.redriverrc.com/wp-content/uploads/2020/04/2020-CDBG-Public-Facilities-Pre-Application.pdf
CDBG Housing Pre-Application: https://www.redriverrc.com/wp-content/uploads/2020/04/2020-CDBG-Housing-Pre-Application.pdf
FY2020 Scoring and Ranking Criteria for Public Facilities and Housing Projects: https://www.redriverrc.com/wp-content/uploads/2020/04/Scoring-Ranking-Criteria-FY2020.pdf
FY2020 Program Distribution Statement for Region IV: https://www.redriverrc.com/wp-content/uploads/2020/04/Region-4-2020-PDS.pdf