The pre-application deadline for Region IV’s (Grand Forks, Nelson, Pembina and Walsh counties) Community Development Block Grant is June 28, 2018. Anyone interested in applying for a potential project is strongly advised to contact CDBG Program Manager Stacie Sevigny as soon as possible. The Red River Regional Council will have $202,711 available for distribution to projects in Region IV in 2018.
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 recommendations for Region IV, which includes Grand Forks, Nelson, Pembina and Walsh counties.
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 & MODERATE INCOME
Low and moderate income (LMI) households are those that are up to 80% of the median household income based on household size. Data is derived from the 2010 U.S. Census and differentiates by household size and is defined as all persons living in a single household. Income of anyone age 18 or older is included in the total. To see what the current income limits are when defining LMI households, please review this chart: income limits.
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 LMI stat chart for a complete list of Region IV communities and LMI percentages.
- 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.
2. 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, at least 51% of whom are LMI.
- Project directed to removal of material and architectural barriers (ADA accessibility) in publicly owned and privately owned non-residential buildings and facilities.
3. Housing:
- An activity carried out for the primary purpose of providing or improving permanent residential structures which will be occupied by LMI households.
4. 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.
5. Prevention/elimination of slum or blight:
- Resulting area must remain perpetual greenspace or if new construction the end result must meet a national objective.
POSSIBLE PROJECTS
The 2018 CDBG allocation for Region IV is $202,711. The RRRC can split the allocation among public facilities, housing, and economic development, which will be determined by the needs and projects identified.
Region IV communities have been awarded CDBG funds for a variety of projects such as:
- Public infrastructure projects including: lagoon improvements, sanitary sewer lift station, reconstruction of street lights, replacement of fire hydrants, citywide street paving, etc.
- Housing rehabilitation, conversion, construction
- Removal of architectural barriers (handicap accessibility)
- Economic development: Part of the North Dakota Community Development Loan Fund (CDLF), which targets both primary and retail sector businesses and job creation/retention for LMI. Used for new business gap financing, business purchase, equipment, working capital and infrastructure. Recent economic development projects funded in our region include: extension of water and sewer infrastructure to support the construction of a new business; and business purchase as well as heating, cooling and roofing updates in the building.
APPLICATION PROCESS
Interested applicants must complete a two-step application process. The deadline for pre-applications to the RRRC for CDBG public facilities and housing projects is June 28, 2018, with the RRRC’s Community Development Committee reviewing pre-applications on or about August 16, 2018. 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 for public facilities and housing projects. 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 the ND Department of Commerce-Division of Community Services.
No work on the 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. If awarded 2018 funds, the construction timeline for public facilities projects would likely be fall of 2018 or spring/summer of 2019.
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.
- 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 engineering/architectural report. The RRRC can assist the applicant with bidding, etc., but the expertise of an architect/engineer is extremely helpful, especially when drafting bid specifications.
- The applicant share is the engineering/architect fees and grant administration which is 10% of CDBG award for public facilities and economic development projects; 15% for housing rehabilitation and public facility special assessment projects.
- An environmental review must be conducted for all projects prior to submission of the grant to the state. The process can take up to 60 days if the project is not in the floodplain. The review for projects in the floodplain can take 90 days or longer.
- 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 Davis Bacon wage rates which can increase the overall cost of a project. Contractors must pay employees weekly and submit weekly payroll reports to verify wage rate compliance.
- If a contractor is awarded more than $100,000 on a project or the applicant receives more than $200,000, Section 3 requirements will apply. Section 3 requires specific steps be taken so that low and very low-income residents and Section 3 business concerns have an opportunity to benefit from the project.
- Applicants that have not completed a Section 504 Self Evaluation Transition Plan (an evaluation of city/county owned facilities for accessibility) will be required to complete one prior to completion of the project. Communities that have a transition plan will be required to make any necessary updates. The plan requires local governments to evaluate their programs, activities, buildings and services to ensure they are accessible to individuals with disabilities.
Please contact Region IV CDBG program manager Stacie Sevigny at 701-352-3550 with questions on a potential project and/or the CDBG process. All potential applicants are strongly encouraged to contact the RRRC as soon as possible to ensure project and applicant eligibility.
CDBG Pre-Application Instruction Sheet
