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Subject 110-8-1 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM

Rule 110-8-1-.01 Name

The name of this program is the Georgia Community Development Block Grant Program for Non-Entitlement Communities.

Rule 110-8-1-.02 Statutory Basis

(1) State Law: The statutory basis for this program under state law is the Official Code of Georgia Annotated, Code Section 50-8-8.
(2) Federal Law: This program is funded by federal funds authorized by the Housing and Community Development Act of 1974, as amended. Federal implementation regulations are contained in 24 CFR Part 570.

Rule 110-8-1-.03 Scope and Purpose

(1) The Georgia Community Development Block Grant (CDBG) program provides grants to eligible units of general purpose local government to undertake community development activities eligible under the Housing and Community Development Act of 1974, as amended.
(2) The objective of the Georgia CDBG program is to improve living conditions and economic opportunities in Georgia's cities and counties, principally for persons of low and moderate income. Consistent with this primary objective, not less than 70% of the CDBG funds received each fiscal year shall be used for the support of activities that benefit persons of low and moderate income. To be funded, maximum feasible priority must be given to activities which benefit low and moderate income families, or aid in the prevention or elimination of slums or blight, or which meet urgent community needs.
(3) Recognizing that the needs of communities vary widely, the Georgia CDBG program is divided into five separate components:
(a) The Regular Annual Competition,
(b) The Immediate Threat and Danger Grant Program,
(c) The Employment Incentive Program,
(d) The CDBG Section 108 Loan Guarantee Program and
(e) The Georgia Redevelopment Fund.
(a) Applications under the regular annual competition must be for either a single activity or a multi-activity grant:
1. Single activity grant applications must be structured to address problems within one of the following three areas:
(a) housing,
(b) public facilities, or
(c) economic development.
2. Multi-activity grant applications must involve two or more activities which address identified community development needs in a comprehensive manner. This funding component requires an applicant to address problems within more than one of the areas listed above.
(b) Immediate Threat and Danger applications must address an event or situation which has a particular urgency and uniqueness which adversely affects or impacts a community and its citizens and where other financial resources are not available to meet such needs.
(c) Employment Incentive Program applications must address community development needs which provide for the creation and/or retention of jobs, or job training principally for persons of low and moderate income.
(d) The Redevelopment Fund applications should generally be targeted to projects that will leverage private sector investments in blighted downtown commercial and industrial areas. Projects that meet HUD's "slum and blight" national objective and will result in employment opportunities for low and moderate-income persons are encouraged.
(e) The CDBG Section 108 Loan Guarantee Program is an economic and community development-financing tool authorized under Section 108 of Title I of the Housing and Community Development Act of 1974, as amended. The program is a method of assisting nonentitlement local governments with certain unique and large-scale economic development projects that cannot proceed without the loan guarantee. In order to be eligible a project must meet all applicable CDBG requirements and result in significant employment and/or benefit for low and moderate income persons. Projects that are eligible for financing under existing federal, state, regional or local programs will generally not be considered for guarantee assistance unless the programs would fail to fully meet a project's needs.

Unlike the traditional CDBG or EIP Program, the Section 108 Program does not operate through assistance from the Department of Community Affairs (DCA). Rather, funds are raised through DCA's "Pledge of Grants" to the U.S. Department of Housing and Urban Development (HUD) in order to obtain a federal guarantee of notes issued by the local government. The federally guaranteed notes are sold into private markets through public offerings conducted by HUD. By approving the project, a State pledges its future CDBG funds as the ultimate repayment source should a Section 108 loan default. The State's participation in the Section 108 program does not involve a pledge of Georgia's full faith and credit nor does it commit any funding to the local government. HUD makes the ultimate approval or denial of the federal guarantee.

Rule 110-8-1-.04 Terms and Conditions

(1) Maximum Grant Amounts: The maximum grant amounts are as follows:
(a) Regular Competition, Single Activity: $500,000
(b) Regular Competition, Multi-Activity: $800,000
(c) Immediate Threat and Danger Program: $50,000
(d) Employment Incentive Program: $500,000
(e) Redevelopment Fund: $250,000
(2) Funding Restrictions:
(a) Only one single or multi-activity award under the regular annual competition may be received by any general purpose local government.
(b) Recipients of prior CDBG funding must resolve all outstanding audit, and/or monitoring findings prior to submission of an application to DCA.
(c) Additional funding restrictions may be established in the Annual Action Plan submitted to HUD.
(3) Eligible Activities: The eligible activities under Georgia's CDBG program are those activities identified in the Housing and Community Development Act of 1974, as amended.
(4) Benefit to Low and Moderate Income Persons:
(a) To be eligible for competition and/or award under the Regular Competition Program each activity must be eligible under the ACT and not less than 70% of its CDBG cost must benefit low and moderate income persons.
(b) To be eligible for competition and/or award under the Employment Incentive Program or the Georgia Redevelopment Fund each activity must be eligible under the ACT and not less than 51% of its CDBG cost must benefit low and moderate income persons.
(5) Cash Match Requirement:
(a) All awards under the regular annual competition (except for single activity housing grants) must meet the following cash match requirement:
1. 0% for amounts up to $300,000 in CDBG funds;
2. 5% of amounts from $300,001 to $500,000 in CDBG funds;
3. 10% of amounts from $500,001 to $800,000 in CDBG funds.
(6) Compliance Requirements:
(a) All applicants and recipients under any of the grant programs described in this Chapter must comply with a number of state and federal laws, regulations and directives. These requirements are contained in the Annual Action Plan for Consolidated Funds, HUD regulations at 24 CFR Part 570, Subpart I, the CDBG Applicant's Manual and the CDBG Recipient's Manual.

Rule 110-8-1-.05 Eligible Recipients

Eligible recipients of CDBG grants are limited to units of general purpose local government, excluding those cities and counties participating in the urban counties or metropolitan cities "CDBG Entitlement Program" of the U.S. Department of Housing and Urban Development.

Rule 110-8-1-.06 Criteria for Award

(1) Criteria for Award: Regular Annual Competition: Single and Multi-Activity applications will be rated separately to address points for feasibility and strategy. Demographic scores will be calculated separately for cities and counties. For purposes of calculating the demographic score, joint or regional applications which include a county will be included in the county group and those including only cities will be included in the city group.
(a) Rating and Ranking Factors: The rating and ranking factors shall be those specified below, using any additional or supplemental information, data, analysis, documentation, commitments or assurances as may be required by DCA for the purposes of evaluating, rating and selecting recipients under this program:
1. Demographic Need: Absolute Number of People in Poverty: 40 points maximum.
2. Demographic Need: Percentage of People in Poverty: 40 points maximum.
3. Demographic Need: Per Capita Income: 40 points maximum.
4. Program Feasibility: 150 points maximum.
5. Program Strategy: 150 points maximum.
6. Leverage of Additional Resources: 30 points maximum.
(b) Assignment of Scores: Scores will be assigned as follows:
1. Demographic Need: Absolute Number of People in Poverty: Applicants will be compared in terms of the number of persons whose incomes are below the poverty level. Scores will be obtained by dividing each applicant's number of persons in poverty by the greatest number of persons in poverty of any applicant in the group and multiplying by 40.
2. Demographic Need: Percent of People in Poverty: Applicants will be compared in terms of the percentage of population below the poverty level. Scores will be obtained by dividing each applicant's percentage of persons in poverty by the highest percentage of persons in poverty of any applicant in the group and multiplying by 40.
3. Demographic Need: Per Capita Income: Applicants will be compared in terms of their per capita income (pci). Scores will be obtained by dividing each applicant's pci into the lowest pci of any applicant in the group and multiplying by 40.
4. Program Feasibility: Applicants will be compared in terms of project feasibility. At a minimum the following factors will be considered:
(i) Reasonableness and appropriateness of cost,
(ii) Compliance with applicable state and federal laws,
(iii) Project timetables, and
(iv) Confirmation of required resources.
(v) Points for feasibility will be awarded by a review panel, in accordance with the levels below, based on how well each applicant, compared to others, addresses the feasibility factors:
(I) Level One (poor): 0 points.
(II) Level Two (less than fair): 30 points.
(III) Level Three (fair): 60 points.
(IV) Level Four (good): 90 points.
(V) Level Five (very good): 120 points.
(VI) Level Six (excellent): 150 points.
5. Program Strategy: Applicants will be compared in terms of program strategy. At a minimum the following factors will be considered:
(i) Severity of documented need,
(ii) Consideration given to alternative solutions to the identified problem(s),
(iii) The number of persons benefiting and the cost per person,
(iv) The impact of the project on identified problems, and
(v) The extent of benefit to persons of low and moderate income.
(vi) In addition, multi-activity applications will also be compared in terms of the projects support of comprehensive community or neighborhood conservation, stabilization and/or revitalization.
(vii) Points will be awarded, in accordance with the levels below, by a review panel based on how well the applicant, compared to others, addresses the strategy factors.
(I) Level One (poor): 0 points.
(II) Level Two (less than fair): 30 points.
(III) Level Three (fair): 60 points.
(IV) Level Four (good): 90 points.
(V) Level Five (very good): 120 points.
(VI) Level Six (excellent): 150 points.
6. Leverage of Additional Resources: Leverage includes additional resources committed to and directly related to the project, including cash above the required minimum cash match amount, the purchase of equipment and furnishings with non CDBG funds, and additional grants and loans from other sources. Only items that would not otherwise have been provided will be counted. A "reasonable" value must be assigned to donated and "in-kind" items.
(i) The leveraged score will be calculated as follows:
(I) First the total dollar value of leverage for each applicant will be calculated and then divided by the total population of the applicant in order to obtain a per capita leverage figure reflective of each applicant's relative effort.
(II) Second, applications will be assigned to one of five groups: Multi-Activity; Housing; Economic Development; Water and/or Sewer; or all other Public Facilities.
(III) The applications will then be ranked within these groups, based on per capita leverage amounts, and points assigned by a staff review panel based on the ranking. Applications with no leverage will receive no points. Up to 30 points can be assigned for leverage of additional resources.
(c) Final Ranking and Award of Funds: The points received by each applicant on the rating factors above will be totaled and the total scores ranked accordingly. Grant awards will be based on this final ranking to the extent funds are available. In the event of ties, the applicant with the highest percentage of funds benefiting low and moderate income persons will be given priority.
(2) Criteria for Award: Immediate Threat and Danger Program: The Immediate Threat and Danger Program is intended to respond to events or situations which have a particular urgency and uniqueness which adversely affect or impact the health or welfare of the community and its citizens and where other financial resources are not available to meet such need. To be considered, the event or situation must have a sense of urgency and be of recent origin or have recently become urgent. Recent origin is defined as a condition that has developed or become critical generally within 18 months of application. Ample description of the cause of the threat and probable ramifications must be provided.
(a) Project Costs: A grant awarded under this program cannot be more than 50% of the total project cost. The applicant (local government) must provide at least 10% of the project cost.
(b) Major Disaster Exception: In the event of a "major disaster," the commissioner will determine the extent of DCA involvement. The Commissioner may waive the requirements of "Project Costs" and the maximum grant amount in the event of a "major disaster."
(c) Review of Applications: Upon receipt of a request for assistance, the Commissioner of the Department of Community Affairs will assign staff to review the application for completeness and degree of urgency. Staff may visit the locality to inspect the problem cited by the applicant and may consult with other appropriate state, federal or local agencies to determine the extent of the threat prior to funding decisions.
(d) Award of Funds: Funds will be awarded to eligible applicants which meet the threshold requirements described in Paragraph 2 above, as long as funds remain in the set-aside amount.
(3) Criteria for Award: Employment Incentive Program: EIP pre-applications will be rated and scored against each of the following factors. The rating and ranking factors shall be those specified below, using any additional or supplemental information, data, analysis, documentation, commitments or assurances as may be required by DCA for the purposes of evaluating, rating and selecting recipients under this program. The maximum possible score is 475 points. Demographic scores will be based on the latest available data, consistent as of the same point in time for each factor and will be based on county data.
(a) Demographic Need: Absolute Number of People in Poverty: 40 points maximum.
1. All eligible local governments will be compared in terms of the absolute number of people whose incomes are below the poverty level. Individual scores will be obtained by dividing each government's absolute number of persons in poverty by the greatest number of persons in poverty of any eligible local government and multiplying by 40.
(b) Demographic Need: Percentage of People in Poverty: 40 points maximum.
1. All eligible local governments will be compared in terms of the percentage of people whose incomes are below the poverty level. Individual scores will be obtained by dividing each government's percentage of persons in poverty by the highest percentage of persons in poverty of any eligible local government and multiplying by 40.
(c) Demographic Need: Per Capita Income: 40 points maximum.
1. All eligible local governments will be compared in terms of their per capita income. Individual scores will be obtained by dividing each government's per capita income by the lowest per capita income of any eligible local government and multiplying by 40.
(d) Program Feasibility: 110 points maximum. The following factors will be considered:
1. Severity of the locality's and business's need for assistance;
2. Organizational status of the business;
3. The business's past credit history;
4. The business product's market potential;
5. The business's marketing strategy;
6. The business's historical sales and financial performance;
7. The reasonableness of the business's financial projections;
8. An assessment of the business management team's ability to carry out the project as proposed;
9. The proposed project's compliance with federal "appropriate" requirements;
10. Verification of project costs;
11. Verification of project financing sources;
12. Adequacy and reasonableness of the job commitment;
13. Completeness of any needed engineering plans and specifications; and
14. Documentation that the project can be carried out in accordance with federal, state, and local laws, regulations, and permitting requirements.
15. Points for feasibility will be awarded by a staff review panel, in accordance with the levels below, based on how well the applicant addresses the feasibility factors.
(i) Level One (poor): 0 points.
(ii) Level Two (less than fair): 27.5 points.
(iii) Level Three (fair): 55 points.
(iv) Level Four (good): 82.5 points.
(v) Level Five (excellent): 110 points.
(e) Program Impact: 110 points maximum. The following factors will be considered:
1. Number of jobs created and/or retained;
2. EIP cost per job;
3. Availability of jobs to low and moderate income persons;
4. Quality of jobs and employee benefits; and
5. The project's impact on local unemployment rates.
6. Points for impact will be awarded by a staff review panel, in accordance with the levels below, based on how well the applicant addresses the impact factors.
(i) Level One (poor): 0 points.
(ii) Level Two (less than fair): 27.5 points.
(iii) Level Three (fair): 55 points.
(iv) Level Four (good): 82.5 points.
(v) Level Five (excellent): 110 points.
(f) Program Strategy: 110 points maximum. The following factors will be considered:
1. The ratio of private funds to EIP funds (a minimum ratio of at least 1 to 1 is required);
2. Documentation that the public benefits to be achieved are reasonable and to the extent practicable EIP funds will not substitute for other available funds;
3. Adequacy of financing strategy (adequacy of equity injection, collateral, and loan terms);
4. Relationship between the subrecipient's infrastructure needs and the size and capacity of any infrastructure to be provided;
5. Validity of subrecipient's commitment to fulfill hiring and investment commitments (has subrecipient agreed to provide a letter of credit or other surety to "bond" its performance);
6. Project's conformance to local planning and development strategy;
7. Project's conformance to federal, state, and local laws and regulations; and
8. Relationship to overall objectives of the EIP and CDBG Program, including the extent of benefit to persons of low and moderate income.
9. Points for strategy will be awarded by a staff review panel, in accordance with the levels below, based on how well the applicant addresses the strategy factors.
(i) Level One (poor): 0 points.
(ii) Level Two (less than fair): 27.5 points.
(iii) Level Three (fair): 55 points.
(iv) Level Four (good): 82.5 points.
(v) Level Five (excellent): 110 points.
(g) Bonus for Return of RLF Assets: 25 points. Localities which have a local Revolving Loan fund (RLF) capitalized with EIP or CDBG proceeds may, at their discretion, return the RLF assets to the State in exchange for greater consideration and access to future EIP financing for eligible projects. The consideration will consist of an extra 25 points for use in any one EIP funding decision. In order to receive the points, a locality must return all RLF assets to the state so as to remove itself from the administrative requirements of the RLF program. This will generally require that a locality "sell" its loan receivable(s) and return all cash on hand to DCA.
(h) Invitation to Submit a Final Application: The points received by a pre-applicant on the rating factors will be totaled. In order to receive an invitation to submit a final application, a pre-application must receive at least 300 points. In cases where fundable pre-applications exceed available funds, the pre-applicant with the highest number of jobs benefiting low and moderate income persons will be given priority.
(i) Final Application Funding Determination: Final applications are invited only for those projects which meet the pre-application threshold requirements. The final application review will ensure that all appropriate funding criteria have been considered, and that the project conforms to the objectives of Title I of the Housing and Community Development Act of 1974, as amended. Grant awards will be made to those final applications that receive a funding recommendation until all available funds are exhausted.
(j) Available Funds: Five (5) million dollars or eleven percent (11%) (whichever is greater) from each federal fiscal year's allocation to the State for the Community Development Block Grant Program will be set-aside for the EIP program.
(4) Criteria for Award: the Georgia Redevelopment Fund: The Redevelopment Fund provides flexible financial assistance to local governments to assist them in implementing challenging economic and community development projects that cannot be undertaken with existing public sector grant and loan programs. The Redevelopment Fund will reward locally initiated public/private partnerships by providing financing to leverage private sector investments in commercial, downtown and industrial redevelopment and revitalization projects that need Redevelopment Fund investment to proceed. Applications for the Redevelopment Fund must be submitted in conformance with the format and applicable instructions specified by the Department of Community Affairs.
(a) Rating and Review Procedure:

Applications will be rated and points awarded based on the following point system:

(1) Demographic Need 120
(2) Project Feasibility 210
(3) Project Strategy and Innovation 240
(4) Leverage of Additional Resources 30 In order to be funded, an application must achieve a minimum score of 475.
(b) Rating and Review Criteria:

Redevelopment Fund applications will be rated and scored against each of the following factors:

1. Factor 1: Demographic Need

Demographic need points will be calculated by DCA based on three factors:

i) Absolute number of people in poverty: Applicants will be compared in terms of the number of persons whose incomes are below the poverty level. Scores will be obtained by dividing each applicant's number of persons in poverty by the greatest number of persons in poverty of any applicant and multiplying by 40.
ii) Percent of people in poverty: Applicants will be compared in terms of the percentage of population below the poverty level. Scores will be obtained by dividing each applicant's percentage of persons in poverty by the highest percentage of persons in poverty of any applicant and multiplying by 40.
iii) Per capita income: Applicants will be compared in terms of their per capita income. Scores will be obtained by dividing each applicant's per capita income into the lowest per capita income of any applicant and multiplying by 40.
iv) Submission of data with respect to "Demographic Need" is not required. The number and percentage of persons in poverty will be based on the U.S. Bureau of the Census' most recent data that is consistent as of the same point of time for all applicants. Per capita income will be based on the most recent available data that is consistent as of the same point of time for all applicants.

For purposes of comparing data, applicants shall be divided into two groups: Cities and Counties. Joint applicants comprised of all cities shall be assigned to the city group and joint applicants including one or more counties shall be assigned to the county group.

2. Factor 2: Feasibility

Feasibility points will be based on an analysis of how each application addresses the following factors: eligibility of proposed activity; reasonableness of cost; compliance with applicable state and federal laws; project timetables; confirmation of all required resources; completeness of proposed plans and specifications; reasonableness of any sub-recipient's proposed business plan(s) and financial projections; reasonableness of any site clean-up proposal and plan; and conformance with applicable underwriting and review requirements contained in 24 CFR Part 570 and DCA's Application Manual for the Fund.

(a) Points for feasibility will be awarded by a DCA staff review panel as follows:

Level One (Poor) -0-

Level Two (Fair) 52.5

Level Three (Good) 105.0

Level Four (Very Good) 157.5

Level Five (Excellent) 210.0 3.

Factor 3: Strategy

Strategy points will be based on the following factors: an analysis of the severity of need; documentation that a project's public benefits will exceed project costs; documentation that the proposed strategy meets the eligibility criteria and the national objectives of the CDBG program; documentation that the project complies with all local ordinances, state law and state regulation.

(a) Points will be awarded by a DCA staff review panel as follows:

Level One (Poor) -0-

Level Two (Fair) 60.0

Level Three (Good) 120.0

Level Four (Very Good) 180.0

Level Five (Excellent) 240.0 4.

Factor 4: Leverage

Leverage points will be awarded based on a firm commitment of additional resources directly related to the project, including capital costs and new funds for operation of any proposed program(s). The "leverage ratio" of other private or public funds will be the criterion considered. A minimum leverage ratio of 1 to 1 must be documented in order to receive points under this criterion. A "reasonable" value must be assigned to donated and "in-kind" items. The leverage score will be calculated based on the total value of leverage for each applicant. Applications with no leverage will receive no points.

(a) Points will be awarded by a DCA staff review panel as follows:

Level One (Poor) -0-

Level Two (Fair) 7.5

Level Three (Good) 15.0

Level Four (Very Good) 22.5

Level Five (Excellent) 30.0

Rule 110-8-1-.07 Application Procedures

(1) General Application Requirements:
(a) An applicant must include sufficient information in the application to permit DCA to evaluate the application against the various rating and selection factors. All applications must be submitted on application forms provided by DCA.
(b) Submission of data with respect to "Demographic Need" (when used as a scoring factor) is not required. Data used in rating appli- cants with respect to Demographic Need are based upon the following:
1. Absolute number and percentage of persons in poverty will be based on the U.S. Bureau of the Census' most recent data which is consistent as of the same point or period in time for all applicants.
2. Per capita income will be based on the most recent available data which is consistent as of the same point or period in time for all applicants.
(c) Only one single or multi-activity application per general purpose local government, whether individually or jointly submitted, shall be eligible for competition under the regular annual competition.
(d) No recipient of a single or multi-activity award under the regular annual competition shall be eligible to compete for or receive another single or multi-activity award from the next fiscal year's regular competition allocation. This restriction does not apply to the Immediate Threat and Danger, Employment Incentive Program, the Georgia Redevelopment Fund Program, or the Section 108 Loan Guarantee Program.
(e) Applications for the Immediate Threat and Danger, Employment Incentive Program, the CDBG Section 108 Loan Guarantee Program and/or the Georgia Redevelopment Fund grants may be submitted notwithstanding the submission of an application under the regular annual competition.
(f) Subparagraph (d) shall not apply in the case of two or more counties applying together to carry out a project of regional impact. Such applications, however, which are not actually regional in nature (which could have been submitted by only one county) will be rejected. Counties which submit applications which are rejected for this reason will be prohibited (both individually and jointly) from applying in the next regular annual competition.
(2) Deadline: DCA shall establish deadlines for receipt of applications under the Regular Annual Competition. All other programs are on a "first come, first serve" basis.