TITLE 2 PUBLIC FINANCE
CHAPTER 110 LOCAL
GOVERNMENT GRANTS
PART 2 SMALL
CITIES COMMUNITY DEVELOPMENT BLOCK GRANT
2.110.2.1 ISSUING
AGENCY: Department of Finance and Administration
Local Government Division, Suite 202 Bataan Memorial Building Santa Fe, New
Mexico 87501.
[2.110.2.1
NMAC - Rp, 2 110.2.1 NMAC, 11/15/2016]
2.110.2.2 SCOPE:
All counties and incorporated municipalities, except the cities of
Albuquerque, Farmington, Las Cruces, Santa Fe and Rio Rancho.
[2.110.2.2
NMAC - Rp, 2 110.2.2 NMAC, 11/15/2016]
2.110.2.3 STATUTORY
AUTHORITY: Title 1 of the Housing and Community
Development Act of 1974, as amended.
[2.110.2.3
NMAC - Rp, 2 110.2.3 NMAC, 11/15/2016]
2.110.2.4 DURATION:
Permanent.
[2.110.2.4
NMAC - Rp, 2 110.2.4 NMAC, 11/15/2016]
2.110.2.5 EFFECTIVE
DATE: November 15, 2016, unless a later date is
cited at the end of a section.
[2.110.2.5
NMAC - Rp, 2 110.2.5 NMAC, 11/15/2016]
2.110.2.6 OBJECTIVE:
The objective of Part 2 of Chapter 110 is to establish procedures to be
used by counties and incorporated municipalities when applying for a small cities
community development block grant.
[2.110.2.6
NMAC - Rp, 2 110.2.6 NMAC, 11/15/2016]
2.110.2.7 DEFINITIONS:
A. “Asset management” means a systematic
process of maintaining, upgrading, and operating physical assets
cost-effectively. It combines
engineering principles with sound business practices and economic theory, and
it provides tools to facilitate a more organized, logical approach to decision
making. It is a planning process that
ensures the most value from each asset with a plan to rehabilitate and replace
them when necessary. An accurate and
up-to-date asset management plan will help communities comply with the government
accounting standards board's statement #34 (GASB 34), an accounting standard
for publicly owned systems.
B. “Blighted area” means, pursuant to the
Metropolitan Redevelopment Act, Section 3-60A-4 NMSA 1978 (as amended), “an
area within the area of operation other than a slum area that, because of the
presence of a substantial number of deteriorated or deteriorating structures,
predominance of defective or inadequate street layout, faulty lot layout in relation
to size, adequacy, accessibility or usefulness, unsanitary or unsafe
conditions, deterioration of site or other improvements, diversity of
ownership, tax or special assessment delinquency exceeding the fair value of
the land, defective or unusual conditions of title, improper subdivision or
lack of adequate housing facilities in the area or obsolete or impractical
planning and platting or an area where a significant number of commercial or
mercantile businesses have closed or significantly reduced their operations due
to the economic losses or loss of profit due to operating in the area, low
levels of commercial or industrial activity or redevelopment or any combination
of such factors, substantially impairs or arrests the sound growth and economic
health and well-being of a municipality or locale within a municipality or an
area that retards the provisions of housing accommodations or constitutes an
economic or social burden and is a menace to the public health, safety, morals
or welfare in its present condition and use.”
C. “CDBG” means the small cities community
development block grant program.
D. “Council” means the New Mexico
community development council.
E. “Council of governments” means a
regional association of municipalities, counties and special districts formed
to provide planning and other services to its member organization.
F. “Department” means the department of
finance and administration.
G. “Division” means the local government
division.
H. “Economic development” means an activity
that improves a community’s economic base by using private and public
investments that provide expanded business activity, jobs, personal income and
increased local revenues in a defined geographic area.
I. “Federal rules” means code of federal regulations,
housing and urban development 24 CFR Part 570 which governs the CDBG program.
J. “ICIP” means an infrastructure capital
improvement plan. An ICIP is a planning
document developed by a unit of local government, water association, or land
grant/merced that includes capital improvement
priorities over a five year period and is developed and updated annually. An ICIP includes policy direction, funding
time frames, estimated costs, justifications, and details of each specific
infrastructure capital improvement project proposed, by year, over the five year
period.
K. “Land grant/merced”
means a political subdivision of the state organized under Section 49-1-1
through 49-1-23 NMSA 1978, Land Grants General Provisions.
L. “Low and moderate income person” means
a member of a household whose income would qualify as “very low income” under
the Section 8 housing assistance payments program. Section 8 limits are based on fifty percent of
the county median income. Similarly,
CDBG moderate income is based on Section 8 “lower income” limits, which are
generally tied to eighty percent of the county median low and moderate income.
M. “Non-rural” means a county or an
incorporated municipality that does not meet the definition of rural.
N. “Program income” means amounts earned
by a unit of general local government or its sub recipient that were generated
from the use of CDBG funds.
O. “Rural” means a county with a
population of less than 25,000 and an incorporated municipality with a
population of less than 3,000. For
purposes of determining population a unit of local government, water
association, or land grant/merced must use Attachment
I at the end of 2.110.2 NMAC.
P. “SBA” means the United States small
business administration.
Q. “Set-aside” means a portion of all CDBG
funding received by the CDBG program that is annually allocated by the council
to be used only for certain set-aside categories that are chosen by the
council.
R. “Slum area” means, pursuant to the Metropolitan
Redevelopment Act, Section 3-60A-4 NMSA 1978 (as amended), “an area within the
area of operation in which numerous buildings, improvements and structures,
whether residential or non-residential, which, by reason of its dilapidation,
deterioration, age, obsolescence or inadequate provision for ventilation,
light, air, sanitation or open spaces, high density of population, overcrowding
or the existence of conditions that endanger life or property by fire or other
causes, is conducive to ill health, transmission of disease, infant mortality,
juvenile delinquency or crime and is detrimental to the public health, safety,
morals or welfare.”
S. “Units of local government” means an
incorporated municipality or county.
T. “Water association” means political
subdivisions of the state organized under Section 3-29-1 through Section
3-29-20 NMSA 1978, the “Sanitary Projects Act” or Section 73-21-1 through
Section 73-21-55 NMSA 1978, the “Water and Sanitation District Act”.
[2.110.2.7
NMAC - Rp, 2 110.2.7 NMAC, 11/15/2016]
2.110.2.8 INTRODUCTION:
A. The
council is responsible for allocating grants under the CDBG program to assist
local communities with basic infrastructure and community development needs.
B. These
application regulations will govern the CDBG appropriation allocated to the
state from the United States department of housing and urban development.
C. As
part of their administrative responsibility, the council and the division will
continue to provide technical assistance to prospective applicants and
grantees. The nature of these programs
requires a thorough outreach effort to ensure that units of local government
are aware of program requirements.
D. The
council and the division assure local entities and citizens of the state of New
Mexico that public comment will be solicited should the council choose to make
any substantial changes to these application regulations.
[2.110.2.8
NMAC - Rp, 2 110.2.8 NMAC, 11/15/2016]
2.110.2.9 PROGRAM
OBJECTIVES:
A. The
CDBG program was established under Title I of the Housing and Community
Development Act of 1974, as amended, to assist communities in providing
essential community facilities, providing decent housing for residents,
promoting economic development, and maintaining a suitable living environment.
B. State
and national objectives of the CDBG program require that assistance be made
available for activities that address at least one of the following, which are
described in greater detail in 2.110.2.16 NMAC:
(1) benefit principally low and moderate income families;
(2) aid in the prevention or elimination of slums or blight;
(3) meet other community development needs of recent origin
having a particular urgency because existing conditions pose a serious and
immediate threat to the health and welfare of the community where other
financial resources are not available to meet such needs.
C. The
state encourages successful applicants to award a fair share of contracts and
subcontracts to small, minority, and women's businesses and to commit itself to hire locally for any employment opportunities that
will be created as a result of project funding.
[2.110.2.9
NMAC - Rp, 2 110.2.9 NMAC, 11/15/2016]
2.110.2.10 ELIGIBLE
APPLICANTS:
A. All
counties, incorporated municipalities, and New Mexico mortgage finance
authority (MFA) are eligible to apply except:
the city of Albuquerque, the city of Farmington, the city of Las Cruces,
the city of Santa Fe and the city of Rio Rancho which cannot apply since they
receive funding directly from the department of housing and urban development
(Title I, Section 106) as entitlement cities.
B. Other
entities such as water associations, sanitation districts, land grants, public
nonprofit groups, council of governments, mutual domestic water consumer
associations, etc., cannot apply directly for assistance, other than planning
grants.
C. However,
these entities may be involved in the execution of an approved CDBG project if
the eligible applicant chooses to operate the program through such an entity
under a contractual agreement.
D. Indian
pueblos and tribes receive funding directly from the department of housing and
urban development (Title I, Section 107). Native American tribes are encouraged to
submit applications to the Albuquerque HUD Office of Native American Programs,
201 3rd St., N.W., Suite 1830, Albuquerque, New Mexico 87102-3368, (505)
346-6923.
[2.110.2.10
NMAC - Rp 2 110.2.10 NMAC, 11/15/2016]
2.110.2.11 ELIGIBLE
ACTIVITIES/CATEGORIES: Applicants may apply for
funding assistance under the following categories:
A. Community
infrastructure: Eligible activities
may include, but are not limited to:
(1) real property acquisition;
(2) construction or rehabilitation of the following:
(a) water systems;
(b) sewer systems;
(c) municipal utilities;
(d) roads;
(e) streets;
(f) highways;
(g) curbs;
(h) gutters;
(i) sidewalks;
(j) storm sewers;
(k) street lighting;
(l) traffic
control devices;
(m) parking
facilities;
(n) solid
waste disposal facilities.
B. Housing:
Eligible activities may include, but are not limited to:
(1) real property acquisition;
(2) rehabilitation;
(3) clearance;
(4) demolition and removal of privately-owned or acquired
property for use or resale in the provision of assisted housing;
(5) provision of public facilities to increase housing
opportunities;
(6) financing the repair, rehabilitation and in some cases
reconstruction of privately-owned residential or other properties through
either loan or grant programs;
(7) certain
types of housing modernization;
(8) temporary relocation assistance;
(9) code enforcement; and
(10) historic preservation activities;
(11) not to exceed sixty-five thousand dollars ($65,000) in CDBG
funds per home can be used on home rehabilitation/repair activities.
C. Public facility capital outlay: Eligible activities may include, but are not
limited to:
(1) real property acquisition;
(2) construction or improvement of community centers;
(3) senior
citizen centers;
(4) non-residential centers for the handicapped such as
sheltered workshops;
(5) other community facilities designed to provide health,
social, recreational or similar community services for residents.
D. Economic development: The economic development category is
established to assist communities in the promotion of economic development and
is described in 2.110.2.26 NMAC.
E. Emergency: The emergency fund provides funding for
emergency projects that address life threatening situations resulting from
disasters or imminent threats to health and safety.
(1) Applications
under this category will be accepted throughout the year.
(2) Application shall include
verification of emergency from an authoritative state agency documenting the
need for the emergency project, and shall be submitted no later than 18 months
from the date of the authoritative state agency’s written verification of
emergency.
(3) An applicant for emergency funding
must verify that it does not have sufficient local resources to address the
life threatening condition; and that other federal or state resources have been
explored and are unavailable to alleviate the emergency.
F. Planning: Municipalities, counties, water associations,
water and sanitation districts, and land grants are eligible to apply directly
for planning grants. Municipalities or
counties who have a comprehensive plan dated five years or greater from the
date of application submission are required to use CDBG planning grant funds
solely for the development of a comprehensive plan. A comprehensive plan must be focused on a
community’s physical development over the next 15-20 years related to the goals
and policies of the community, developed with input from all segments of the
community, adopted by resolution or ordinance, and include as a minimum the
following required elements and may include the following optional elements:
(1) required elements:
(a) land use
including:
(i) an analysis
and mapping of existing land patterns and an inventory of the amount, type and
intensity of uses by land category;
(ii) a projection of the distribution, location and extent of
future land uses by land use category over a 20-year period;
(iii) goals,
objectives and policies that address maintaining a broad variety of land uses,
including the range of uses existing when the plan is adopted or amended; and
(iv) specific actions and incentives that the entity may use to
promote planned development, reduction in greenhouse gas emissions, or
otherwise encourage certain identified development patterns and the locations
where such development patterns should be encouraged;
(b) housing
including:
(i) an analysis
of existing housing supply and demand, and forecasted housing needs;
(ii) goals,
objectives and policies for the improvement of housing quality, variety and
affordability, for reduction of greenhouse gas emissions, and for provision of
adequate sites for housing and housing opportunities for all segments of the
community;
(iii) a description of the actions that may be taken to implement
housing goals, objectives and policies; and
(iv) must comply with the affordable housing act.
(c) transportation
including:
(i) description and assessment of the
location, type, capacity and condition of existing transportation facilities,
such as freeways, arterial and collector streets, mass transit or other modes
of transportation as may be appropriate;
(ii) goals,
objectives and policies for encouraging safe, convenient, efficient and
economical transportation, including mass transit and facilities for bicyclists
and pedestrians, for reduction of greenhouse gas emissions, and potential funding
mechanisms; and
(iii) a
description and assessment of proposed location, type and capacity of proposed
transportation facilities designed to implement transportation goals,
objectives and policies and a description of funding mechanisms that will be
used to fund proposed transportation improvements;
(d) infrastructure
including:
(i) a description and assessment of the
location, type, capacity and condition of existing infrastructure, including
emergency services, sewage, drainage, local utilities and other types of
facilities;
(ii) goals, objectives and policies for promoting the efficient
provision of infrastructure; and
(iii) a description and assessment of proposed facility expansion
and improvements designed to support planned uses and implement infrastructure
goals, objectives and policies;
(e) economic
development including:
(i) a description of existing job
composition and trends by industry and location characteristics, such as access
to transportation or proximity to natural or human resources, that influence
the economic development potential of the entity;
(ii) goals, objectives and policies for promoting economic
development; and
(iii) a description of the actions that the entity will take to
implement economic development goals, objectives and policies;
(f) water
including:
(i) description
and assessment of the sources of water supply;
(ii) the existing demand for water by residential, commercial,
institutional, industrial and recreational sectors;
(iii) assessment of the unaccounted for water losses due to leaks,
theft or other reasons;
(iv) goals, objectives and policies for promoting the efficient
use of water and for managing periods of drought; and
(v) an
analysis of the demand for water that will result from future growth projected
in the plan, when added to existing uses, and how the demand for water that
will result from future projected growth will be served by current water
supplies, water conservation, water reuse or a plan to obtain additional water
supplies or increase water use efficiencies;
(g) hazard
including:
(i) an analysis
of the risks of hazards such as wildfire, floods, extreme weather conditions,
accidents, and terrorism;
(ii) goals, objectives and policies for hazard mitigation; and
(iii) a description of the actions that will be taken to mitigate
hazards; and
(h) implementation; a compilation of the
plan’s goals, objectives, policies, standards or guidelines, along with
specific actions to be completed in a stated sequence, which start with
adoption of the comprehensive plan by ordinance;
(2) optional elements:
(a) drainage;
(b) parks, recreation and open space;
(c) tourism;
(d) growth management;
(e) fiscal impact analysis;
(f) intergovernmental cooperation;
(g) social
services;
(h) historic preservation;
(i) asset
management plan.
(3) if the entity has a comprehensive plan that is not more than
five years old at the date of application, it may apply for funding assistance
for any of the following planning activities:
(a) data gathering analysis and special studies;
(b) base mapping, aerial photography, geographic information
systems, or global positioning satellite studies;
(c) improvement of infrastructure capital improvement plans and
individual project plans;
(d) development of codes and ordinances, that further refine the
implementation of the comprehensive plan;
(e) climate change mitigation and adaptation plan;
(f) preliminary engineering report (according to United States
department of agriculture/rural utilities service (USDA/RUS) guidelines);
(g) related citizen participation or
strategic planning process;
(h) other functional or comprehensive planning activities;
(i) asset
management plan; or
(j) regionalization of infrastructure and service delivery.
(4) applicants may apply for planning assistance throughout the
year.
G. Colonias:
(1) The
Colonias category is established in the amount of ten
percent of the annual CDBG allocation for specific activities including water,
sewer and housing improvements, which are the three conditions that qualify
communities for designation to be carried out in areas along the U.S. - Mexican
border.
(2) Eligible
applicants for the Colonias set aside are
municipalities and counties located within 150 miles of the U.S. - Mexico
border.
(3) Colonias must be designated by the municipality or county
in which it is located. The designation
must be on the basis of objective criteria, including:
(a) lack of potable water supply; or
(b) lack of adequate sewage systems; or
(c) lack of decent, safe and sanitary housing.
(4) Appropriate
documentation to substantiate these conditions must be provided along with the
application for funding.
[2.110.2.11
NMAC - Rp, 2 110.2.11 NMAC, 11/15/2016]
2.110.2.12 OTHER
ELIGIBLE ACTIVITIES:
A. Administrative
costs associated with implementing a program such as preparing environmental
reviews, and other costs for services are eligible activities.
B. Although
the costs of conducting program audits are considered an eligible activity, it
is recommended that they be paid by the applicant to expedite grant closeout.
C. Applicants
may use fifteen percent of a CDBG grant for public facility program activities
including:
(1) employment;
(2) crime prevention;
(3) child care;
(4) drug abuse prevention;
(5) education;
(6) energy conservation;
(7) welfare and
recreation.
D. The
council may pledge future CDBG allocations to guarantee repayment of loans to
non-entitlement municipalities and counties for CDBG eligible projects in
accordance with Section 108 of the Housing and Community Development Act of
1974, as amended.
[2.110.2.12
NMAC - Rp, 2 110.2.12 NMAC, 11/15/2016]
2.110.2.13 INELIGIBLE
ACTIVITIES: The following are among the activities that
are not eligible for CDBG funding assistance:
A. construction
or rehabilitation of buildings used for the general conduct of government, such
as city halls or county courthouses; compliance with the Americans with
Disabilities Act is an eligible activity;
B. general
operation and maintenance expenses associated with public facilities or
services;
C. income
maintenance;
D. housing
allowance payments and mortgage subsidies;
E. expenditures for the use of equipment or
premises for political purposes, sponsoring or conducting candidates' meetings,
engaging in voter registration, voter transportation or other political
activities;
F. costs involved in the preparation of
applications and securing of funding.
[2.110.2.13
NMAC - Rp, 2 110.2.13 NMAC, 11/15/2016]
2.110.2.14 RURAL
ALLOCATION:
A. A minimum of
fifteen percent of the CDBG allocation will be awarded to rural counties and
municipalities.
B. Rural applicants
will compete for funding from the community infrastructure, housing, Colonias, and public facility capital outlay categories.
C. Rural and non-rural
applicants will compete for funding from the economic development, emergency
and planning categories.
[2.110.2.14
NMAC - Rp, 2 110.2.14 NMAC, 11/15/2016]
2.110.2.15 PROGRAM
PUBLIC PARTICIPATION REQUIREMENTS:
Applicants must provide opportunities for public participation in the
development of community development goals, objectives, and applications for
funding assistance by undertaking the following activities:
A. provide for and encourage citizen participation within their
areas of jurisdiction with particular emphasis on participation by persons of
low and moderate income;
B. provide citizens with reasonable and timely access to local
meetings, information, and records relating to proposed and actual use of
funds;
C. provide for
technical assistance as determined by the applicant, groups and representatives
of low and moderate income persons that request assistance in developing
proposals; the level and type of assistance is to be determined by the applicant.
D. provide for
public hearings to obtain citizen participation and respond to proposals and
questions at all stages;
E. prior to
selecting a project and submitting an application for CDBG funding assistance,
conduct at least one public hearing for the following purposes:
(1) to advise citizens of the amount of CDBG funds expected to
be made available for the current fiscal year;
(2) to advise citizens of the range of activities that may be
undertaken with the CDBG funds;
(3) to advise citizens of the estimated amount of CDBG funds
proposed to be used for activities that will meet the national objective to
benefit to low and moderate income persons;
(4) to advise citizens of the proposed CDBG activities likely to
result in displacement, and the unit of general local government's
anti-displacement and relocation plans;
(5) to obtain recommendations from citizens regarding the
community development and housing needs of the community:
F. After
considering all recommendations and input provided at the public hearing(s), the
governing body must select one project for which to submit an application for
funding assistance at an official public meeting.
G. The applicant
must conduct a second public hearing prior to the submission of the
application. Public hearing notices must
be published in the non-legal section of newspapers, or posted in a minimum of
three prominent public places within the project area, with public access. Notice of any public hearing must be
published or posted at least 10 days in advance of the hearing date. Emergency hearings may be called upon 72 hour’s notice unless threat of personal injury or property
damage requires less notice. Emergency
hearings may be called only under unforeseen circumstances, which demand
immediate action to protect the health, safety and property of citizens or to
protect the applicant from substantial financial loss. All applicants must be in compliance with all
provisions of the Open Meetings Act Section 10-15-1 NMSA 1978 et., seq.
H. Evidence of
compliance with these public participation requirements must be provided with
each application, i.e., hearing notice, minutes of public meetings, list of
needs and activities to be undertaken, etc.
I. Amendments to
goals, objectives, and applications are also subject to public participation.
J. Applicants must
provide for timely written answers to written complaints and grievances within
15 working days where practicable.
K. Applicants must identify
how the needs of non-English speaking residents will be met in the case of
public hearings where a significant number of non-English speaking residents
can be reasonably expected to participate.
[2.110.2.15
NMAC – Rp, 2 110.2.15 NMAC, 11/15/2016]
2.110.2.16 PROGRAM
REQUIREMENTS FOR MEETING NATIONAL PROGRAM OBJECTIVES: Each CDBG application must meet at least one of the following three national
objectives.
A. Low and moderate
income benefit - an activity identified as principally benefiting fifty one
percent persons of low and moderate income will be considered eligible only if
it meets one of the following criteria:
(1) the activity must be carried out in a neighborhood or area
consisting predominantly of persons of low and moderate income and provide
services to such persons; or
(2) the activity must involve facilities designed for use by a
specific group of people or clientele predominantly of low and moderate income;
or
(3) the activity must add or improve permanent residential
structures that will be occupied by low and moderate income households upon
completion; or
(4) the activity must involve creating or retaining jobs, the
majority of which must be for persons of low and moderate income.
B. Prevention or
elimination of slums or blight - an activity identified as aiding in the
prevention or elimination of a slum or blighted area must meet all of the
following five criteria.
(1) The
area must be designated by the applicant and must meet a definition of a slum,
blighted area.
(2) The
area must exhibit at least one of the following physical signs of blight or
decay.
(a) At
least one quarter of all the buildings in the area must be in a state of
deterioration.
(b) Public
improvements throughout the area must be in a general state of
deterioration. For example, it would be
insufficient for only one type of public improvement, such as the sewer system,
to be in a state of deterioration; rather, the public improvements taken as a
whole must clearly exhibit signs of deterioration.
(3) Documentation
must be maintained by the applicant on the boundaries of the area and the
condition that qualified the area at the time of its designation.
(4) The
activity must address one or more of the conditions that contributed to the
deterioration of the area.
(5) To
comply with this objective on a spot basis outside of a slum or blighted area
the proposed activity must be designated to eliminate specific conditions of
blight or physical decay including:
(a) acquisition and clearance of blighted properties;
(b) renovation and reuse of abandoned, historic properties;
(c) commercial revitalization through façade improvements; or
(d) removal of environmental contamination on property to enable
it to be redeveloped.
C. Urgent need - planning
grants are not allowed under urgent need.
Verification of the urgency of the need must be provided with written
documentation by the appropriate authoritative state agency. An activity identified as having urgent
community development needs will be considered only if the applicant verifies
the following:
(1) that the activity is designed to alleviate existing
conditions that pose a serious and immediate threat to the health and welfare
of the community;
(2) that the condition(s) to be alleviated is of recent origin,
i.e., it developed or became critical within 18 months preceding the
certification by the applicant; and
(3) that the applicant is unable to finance the activity on its
own and other sources of funding are not available.
[2.110.2.16
NMAC - Rp, 2 110.2.16 NMAC, 11/15/2016]
2.110.2.17 APPLICATION
REQUIREMENTS:
A. Number of
applications - all eligible applicants may submit one application for CDBG
funding assistance in the community infrastructure, public facility capital
outlay, or Colonias categories.
B. Planning
applicants may submit at any time an additional planning application that shall
not exceed fifty thousand dollars ($50,000).
C. Applications for
the economic development and emergency categories may be submitted at any time
and shall be limited to a maximum of five hundred thousand dollars ($500,000.00)
for applications without certified cost estimates; and a maximum of seven
hundred fifty thousand dollars ($750,000.00) for applications accompanied by a
certified cost estimate from an engineer, architect, or landscape architect
licensed to do business in the State of New Mexico, which must be certified no
more than 120 days prior to application submission.
D. Counties may
submit multiple applications for planning grants on behalf of eligible
applicants.
E. Planning,
economic development, and emergency applications may be submitted even if the
applicant has not completed previously awarded CDBG projects.
F. Single purpose
application -an application must be limited to a project specific activity or
set of activities that address a particular need in a designated target area of
a unit of local government.
G. Joint
applications - Joint applications are allowed when two or more eligible
applicants within reasonable proximity of each other wish to address a common
problem.
(1) Joint
applications must satisfy certain criteria found in federal rules and must
receive division approval prior to submitting an application for funding
assistance.
(2) One
community will be designated to serve as the lead applicant and will be subject
to administrative requirements and to the application limit requirements.
(3) Other
parties to the joint application may submit another application.
H. The following
minimum requirements apply to all applications for CDBG funding:
(1) Applications
must involve a project that will be fully functional on a stand-alone basis
once awarded CDBG and other committed funds have been expended.
(2) Projects
shall be completed within 24 months of an executed grant agreement signed by
both parties.
(3) Applications
shall be limited to a maximum of five hundred thousand dollars ($500,000.00) for
applications without cost estimates; and a maximum of seven hundred fifty
thousand dollars ($750,000.00) for applications accompanied by a certified cost
estimate from an engineer, architect, or landscape architect licensed to do business
in the State of New Mexico, which must be certified no more than 120 days prior
to application submission.
(4) Application
must be complete, with all documentation provided as listed on the submission
and attachment checklist included in the application, otherwise application
will be deemed ineligible and the application will be returned to the applicant
and will not be considered for funding.
(5) Applications
must include a determination of rural or non-rural status.
(6) Applications
must include estimates of both full and phased project costs.
I. Threshold
requirements - a project must be completed by the deadline for threshold
compliance.
(1) Any
open CDBG project must be completed at the time of application (certificate of
occupancy or certification of operation must be in place).
(2) Any
previous CDBG project’s monitoring findings and concerns must be resolved.
(3) The
current applicant’s fiscal operating budget must be certified by the division.
(4) The
applicant’s quarterly/monthly financial reports to the division must be
current.
(5) An
applicant must have submitted to the New Mexico state auditor its most current
audit(s) that were required to be conducted and submitted for review per the
New Mexico state auditor’s required report due dates for the previous fiscal
year(s) and an applicant must be in compliance with the budget certification
rule, 2.2.3 NMAC.
(6) The
set aside categories; planning, economic development and emergency, are exempt
from threshold requirements set forth in Subsections I of 2.110.2.17 NMAC.
J. Matching
requirements - to extend available resources and to ensure applicants are
invested in projects, the following matches will be required.
(1) Rural
applicants must provide, at a minimum, a five percent cash match during the
project period from local, state or other public resources, excluding local
work force or local equipment.
(2) Non-rural
applicants must provide, at a minimum, a ten percent cash match during the
project period from local, state or other public resources, excluding local
work force or local equipment.
(3) An
application in the economic development category must provide at least one private
dollar in match for each dollar of CDBG funds requested.
(4) Local
funds expended by an eligible applicant for engineering, architectural design
or environmental review prior to project approval can be applied towards the
required match.
(5) Applicant
may request a waiver of the matching requirement if documentation can be provided
to demonstrate the absence of local resources to meet the required match. Criteria used by the division to recommend council
approval/disapproval will be as follows:
(a) the required match must exceed five percent of the
applicant’s general fund budget;
(b) the required match must equal or exceed the available
balance of funds in the applicant’s overall budget.
K. Other funding
commitments - if other funding is necessary to make a proposed project
feasible, funding commitments must be in place and letters of commitment or
grant agreement from the funding agency must be submitted with the application.
L. Asset management
- communities that implement an asset management program and use that approach
as the basis for their rate analysis will be credited in the application
process for their achievement. To support
the long term operation, maintenance, repair and replacement of system
facilities, infrastructure, public facilities, or other eligible activities the
following will be required to be submitted at the time of application. The model for the asset management program is
the international infrastructure asset management model. This approach includes five core components:
(1) current state of the assets: an asset inventory that
includes at a minimum: asset name, asset location, asset condition, useful
life, and an estimate of replacement value;
(2) level of service: a description of type and level of service
provided;
(3) criticality: an evaluation of which assets are critical to
sustaining the operation;
(4) life cycle costing: at a minimum, a capital improvement plan
that describes the replacement of assets and some consideration of operation
and maintenance of the assets;
(5) financing plan: a description of the funding sources that
will be used to pay for capital and operational needs.
[2.110.2.17
NMAC - Rp, 2 110.2.17 NMAC, 11/15/2016]
2.110.2.18 APPLICATION
SUBMISSION PROCEDURES AND CONTENT: The application packet provided
by the division must be used. It is only
necessary to answer the questions on the application that pertain to the
relevant single project category.
A. An
applicant must submit an original (hard copy) and two separate electronic
copies of each application to the division, and one electronic copy to the
appropriate council of governments.
B. Applications for community infrastructure,
housing and public facility capital outlay must be date stamped by the division
on or before 5:00 p.m. on the designated application deadline. Applications received after that time will not
be processed.
[2.110.2.18
NMAC - Rp, 2 110.2.18 NMAC, 11/15/2016]
2.110.2.19 APPLICATION
REVIEW AND EVALUATION PROCESS:
A. Upon receipt of
an application, division staff will review for eligibility, completeness,
feasibility, and compliance and ensure that all other funding necessary to make
the project functional is in place. Applications
not meeting the criteria will be returned to the applicant and will not be
considered for funding.
B. Applications
will be forwarded to appropriate state agencies for technical review and
comment. Review agencies may include,
but are not limited to, the environment department, department of
transportation, department of health, state engineer's office, agency on aging
and long term services, economic development department, state fire marshal and
governor’s commission on disability.
C. An eligible
applicant will be allowed to make a presentation to the council and division
staff at the official hearing. Testimony
related to the application will be presented by an official or designee of the
applicant who may be assisted by technical staff.
D. Community
infrastructure, housing, public facility capital outlay, emergency, and Colonias rating criteria:
The following rating criteria will be used to evaluate and score CDBG
applications for the community infrastructure, housing, public facility,
capital outlay, emergency, and Colonias categories.
(1) Description and need - (10 points) the
more severe the need as documented in the application, the higher the score.
(2) Benefit to low and moderate income
beneficiaries and appropriateness - (20 points) extent to which the CDBG
application:
(a) documents the number and percentage
of low and moderate income beneficiaries, also include race and gender; or
(b) addresses the prevention or removal of slum or blighting
conditions; or
(c) addresses conditions that pose a
serious and immediate threat to the health and welfare of the community (for
emergency applications only).
(3) Leveraging - (10 points) extent to
which state, local and other public resources, in addition to the required
match, will be used by the applicant for the proposed project.
(4) Citizen participation - (10 points)
extent to which the applicant evidences opportunity for citizen activities
related to the proposed project:
(a) (10 points) has provided four or more
citizen activities;
(b) (7
points) has provided three citizen activities;
(c) (5
points) has provided two citizen activities.
(5) Planning - (10 points) extent to which:
(a) (3
points) applicant has adopted a local ICIP, which has qualified for publication
in the most recent state published prior to the CDBG application deadline. Evidence of the adopted ICIP for the current
year must be provided as part of the application;
(b) (3
points) project has qualified for publication in the most recent state ICIP
prior to the CDBG application deadline and applicant has selected CDBG as one
of its possible funding sources.
Evidence of such publication identifying the project and selecting CDBG
funds as a possible funding source must be provided with application;
(c) (1
point) project shows consistency with applicant’s comprehensive plan;
(d) (1
point) applicant has adopted a drought contingency plan, setting in place
various drought management stages and accompanying restrictions on water use;
(e) (1
point) applicant has adopted a water conservation ordinance, setting in place
various methods for conserving potable water;
(f) (1
point) applicant has implemented a water conservation ordinance, accompanied by
evidence of exercising at least two various methods for conserving potable
water.
(6) Feasibility/readiness - (20 points)
extent to which the project is technically and economically feasible and ready
to be implemented;
(a) (5
points) necessary real property or easements acquired;
(b) (5
points) professional services contract executed;
(c) (5
points) completed plans, specifications, bid documents, or preliminary
engineering reports; and
(d) (5
points) completed environmental review process.
(7) Cost benefit - (10 points) the amount
of funds requested divided by the number of direct low and moderate income
beneficiaries of the project; the lower the ratio, the higher score.
(8) Asset
management plan - (maximum of 10 points).
(a) (1
point) attendance within the last three years at an asset management training
that includes the five core components as described in the international
infrastructure asset management model;
(b) (2
points) development of an asset management plan that includes some, but not
all, of the five core components;
(c) (10
points) development of a complete asset management plan with all five core
components.
(9) Council application scoring - (10
points) Each member of the council shall be allowed to award up to 10 points
per application in the application rating process, with one point for a low
priority, five points for a medium priority and 10 points for a high priority
project based on the criteria used for rating. The points will be averaged by totaling the
individual member scores and dividing by the number of members who scored the
project.
(10) Additional
Colonias criteria - When submitting a Colonias applicant
shall prove documentation of the Colonias designation
and documentation that the project shall address one of the following
conditions:
(a) lack of potable water; or
(b) lack of an adequate sewage system; or
(c) lack of safe, sanitary housing.
E. Planning grant criteria: The following rating criteria will be
used to evaluate and score CDBG applications for the planning category.
(1) Description and need - (20 points)
extent to which the application:
(a) provides detail for and documents community need for the project;
and
(b) describes the impact that the project will have on the
community; and
(c) is determined to be feasible.
(2) Benefit to low and moderate income
beneficiaries and appropriateness - (20 points) extent to which the CDBG
application:
(a) documents the number and percentage of low and moderate
income beneficiaries, including race and gender; and
(b) is in alignment with existing planning documents, or proposes
the development of a new comprehensive plan.
(3) Leveraging - (15 points) extent to
which federal, state, and local resources in addition to the required match, will
be used by the applicant for the proposed project.
(4) Citizen participation - (10 points)
extent to which the applicant evidences opportunity for citizen activities
related to the proposed project:
(a) (10 points) has provided 4 or more
citizen activities;
(b) (7
points) has provided 3 citizen activities;
(c) (3
points) pledges opportunities for actives;
(d) (2
points) has provided 1 citizen activity;
(5) Planning - (20 points) extent to which:
(a) (5
points): applicant has adopted a local ICIP, which has qualified for
publication in the most recent state ICIP published prior to the CDBG
application;
(b) (5
points): the proposed project has qualified for publication in the most recent
state ICIP prior to the CDBG application and applicant has selected CDBG as one
of its possible funding sources;
(c) (2.5
points): applicant’s proposed project shows consistency with applicant’s
comprehensive plan;
(d) (2.5
points): applicant adopts a drought contingency plan, setting in place various
drought management stages and accompanying restrictions on water use;
(e) (2.5
points): applicant adopts a water conservation ordinance, setting in place
various methods for conserving potable water;
(f) (2.5
points): applicant implements a water conservation ordinance, accompanied by
evidence of exercising at least two various methods for conserving potable
water.
(6) Cost benefit - (10 points) the amount
of funds requested divided by the number of low and moderate direct
beneficiaries of the project. The lower the ratio the higher the score.
(7) Comprehensive plan - (5 points) whether
the community has an updated comprehensive plan that is not more than five years
old.
F. Economic
development rating criteria is included in 2.110.2.26 NMAC.
G. Site visits will
be conducted as needed to verify or review information presented.
H. Emergency,
economic development and planning applications that are in compliance with all
applicable rules and regulations are received and evaluated throughout the
year.
I. The council
delegates to the division director the authority to award, in the division director’s
discretion, funding for applications for emergency, economic development, and
planning projects in compliance with applicable rules and regulations. The division will provide the council with an
update on all such awards at each council meeting.
[2.110.2.19
NMAC - Rp, 2 110.2.19 NMAC, 11/15/2016]
2.110.2.20 SELECTION
OF CDBG GRANTEES BY COUNCIL:
A. Division staff
will present its recommendation to the council at least seven days prior to each
allocation meeting.
(1) Staff
recommendation will present projects in high, medium and low groupings.
(2) Staff
recommendation will include specific funding allocation amount to each project,
within total available funds.
B. The council will
review staff recommendation and funding allocation and make funding decisions
in an open public meeting.
C. The council, in
making its final decisions, will consider the past performance of the applicant
in administering CDBG projects.
D. The council may
adjust the scope and dollar amount to stay within available funding or for
purposes of consistency.
E. The council may
deviate from staff recommendation and funding allocation, if the council by
majority vote determines and substantiates that any of the following conditions
apply:
(1) To
not fund a project recommended by the division staff other funding sources for
the project are available or other applications were deemed to be a priority or
circumstances have changed since the application was submitted.
(2) To
fund a project not recommended by division staff.
(a) the health and safety of area residents is at stake;
(b) funding committed to the project from other sources may be
jeopardized;
(c) significant economic benefits will be realized if the
project is implemented; or
(d) the need for the project is critical.
F. The council will
make funding determinations by a majority vote.
G. The council may
waive or adjust any division imposed CDBG application requirement as long as
the waiver will not result in violation of state or federal statutes, regulations,
rules, or penalize other applicants.
H. If the council
sets aside funding for emergency, economic development or planning; the council
may at any time during the calendar year, transfer funds between categories if
there is limited demand in the funded categories. The transferred funds may be used to fund
projects that were previously submitted for funding.
[2.110.2.20
NMAC - Rp, 2 110.2.20 NMAC, 11/15/2016]
2.110.2.21 REVERSIONS,
SUPPLEMENTAL FUNDING AND UNDERRUNS:
A. Decision of the
division to impose special conditions or fiscal agent requirements - if a CDBG
award is provided to a grantee that has deficiencies identified in the audit(s)
approved by the state auditor’s office, the division reserves the right to
impose special conditions or fiscal agent requirements dependent upon the
specific findings or opinions as described in the audit(s).
B. Decision by the
council to revert funds - if, within 12 months of a CDBG award for a project by
the council, the CDBG award has not resulted in a signed grant agreement
between the division and the applicant or the applicant has not made adequate
progress on the project or the council determines there was fraud or
misrepresentation regarding the project by the applicant, the division may
recommend to the council to revert all or part of the award and the council may
vote to revert all or part of the award. The applicant shall receive written notice
from the division of the council’s decision to revert all or part of award by
certified mail. The applicant may
appeal, in writing, the council’s decision to revert all or part of the award
within 30 days of receipt of the written notice of the council’s decision. The appeal of the council’s decision by the
applicant shall be held at a council meeting no later than 90 days from the
council’s receipt of the written appeal.
The council’s decision on the appeal of the reversion shall be final. The council may grant the applicant a
reasonable period of time to cure the particular default that was the basis of
the reversion. At the end of the cure
period, the council shall vote again on the issue of the reversion and this
decision shall be final.
C. Reversions
and supplemental funding - When funds are reverted from a previously approved
project grant or additional funds are made available for any other reason, the
council may decide that the funds will:
(1) be added to the emergency fund;
(2) be returned to the category of the program from which it was
awarded;
(3) go into any
other category; or
(4) take other action as deemed appropriate.
D. Underruns
- if upon completion of the approved activities a balance of funds remains
after all payments have been made, this balance shall be handled as follows: if
the grantee has not accomplished all work called for in the original
application submitted for funding consideration, the grantee may request
division staff to approve the expenditure of underrun funds for a portion or
all of the remaining work.
(1) if appropriate justification and sufficient funding exist,
division staff may approve the request for use of underrun funds and amend the
grant agreement accordingly;
(2) a negative
decision may be appealed to the council.
E. If the grantee proposes to undertake
activities not included in the approved application, the grantee may request
council approval to expend underrun funds for other eligible activities. The council may approve the request if
appropriate justification and sufficient funding exist.
F. If
the council disapproves a request for use of an underrun, associated funds
shall revert to the council for disposition.
G. The
processes described above for handling underruns are intended to encourage the
grantee to use the most cost efficient means possible to construct projects
funded by the council. Grantees shall
not take advantage of this process by inflating initial funding requests.
[2.110.2.21
NMAC - Rp; 2 110.2.21 NMAC, 11/15/2016]
2.110.2.22 PROGRAM
INCOME:
A. Grantees
must pay CDBG program income to the state, except that grantees will be
permitted to retain program income only if they always use the income for CDBG
eligible activities upon council approval of a program
income utilization plan.
B. Program
income received by the state will be placed in the economic development
category.
C. Program
income retained by grantees shall be used to fund CDBG eligible activities and
must meet CDBG requirements.
[2.110.2.22
NMAC - Rp, 2 110.2.22 NMAC, 11/15/2016]
2.110.2.23 CITIZEN
ACCESS TO RECORDS: Citizens and units of general local
government will be provided with reasonable access to records regarding the
past use of CDBG funds.
[2.110.2.23
NMAC - Rp, 2 110.2.23 NMAC, 11/15/2016]
2.110.2.24 NM
COMMUNITY ASSISTANCE FUNDS: The council will allocate and
administer New Mexico community assistance underrun funds in accordance with
the provisions of the Community Assistance Act.
[2.110.2.24
NMAC - Rp, 2 110.2.24 NMAC, 11/15/2016]
2.110.2.25 MEETING PROCEDURES:
A. Special
meetings. Special meetings of the
council may be called by a majority of the council members or the chairperson
of the council, and will be held at the time and place fixed by the division.
B. Notice. Written notice stating the time, place and,
if a special meeting, the purpose, will be delivered either personally, by
mail, or email by the division, to each council member at least 72 hours before
the scheduled date of the meeting. The
meeting notice and agenda will be available to the public and posted on the
department of finance and administration web site. The council may establish dates and times for
regularly scheduled meetings.
C. Quorum. A majority of the current members of the
council in attendance either in person or by telephone will constitute a quorum
at council meetings.
D. Record of
meetings. The meeting shall be recorded
and the division shall have the minutes made into a written record. The original of this record shall be retained
by the division and a copy shall be forwarded to the council members. Copies shall be available upon request.
E. Participation
methods. A member of council may
participate in a meeting of the council by means of a conference telephone or
other similar communications equipment when it is otherwise difficult or
impossible for the member to attend the meeting in person, provided that each
member participating by conference telephone can be identified when speaking,
all participants are able to hear each other at the same time and members of
the public attending the meeting are able to hear any member of the council who
speaks during the meeting.
[2.110.2.25
NMAC - Rp, 2 110.2.25 NMAC, 11/15/2016]
2.110.2.26 ECONOMIC
DEVELOPMENT PROGRAM GUIDELINES:
A. Goals and
objectives: The state's CDBG
economic development goals and objectives include:
(1) creating or retaining jobs for low - and moderate-income
persons;
(2) preventing or eliminating slum areas and blighted areas;
(3) meeting urgent needs;
(4) creating or retaining businesses owned by community
residents;
(5) assisting businesses that provide goods or services needed
by, and affordable to low - and moderate-income residents;
(6) providing technical assistance to promote any of the
activities under Paragraph (1) through (5) of Subsection A of 2.110.2.26 NMAC.
B. Eligible activities: CDBG eligible activities authorized under
Sections 570.200, 570.201, 570.202, 570.203, 570.204, 570.482 and 570.483 of
the federal rules and directly affecting the creation or retention of
employment opportunities, the majority of which are made available to low and
moderate income persons, may include activities carried out by public, private
nonprofit, or private for-profit entities when such activities are appropriate.
(1) To
meet the needs and objectives of the community economic development plan, a
project may include: acquisition of real property, construction, reconstruction
rehabilitation, or installation of public facilities, site improvements, and
utilities, and commercial or industrial buildings or structures and other
commercial or industrial real property improvements and planning.
(2) Grantees
and nonprofit sub recipients may carry out for the purpose of economic
development, a wide range of activities such as those listed in Section 570.203
of the federal rules.
(3) The
for-profit businesses, however, may carry out only the activities listed in
that section and rehabilitation activities listed in Section 570.202 of the federal
rules.
C. Financing policies
and techniques: The CDBG program, as
a development tool, can provide flexibility and take greater risks than
conventional lending sources in its lending policies and financing
techniques. For example, the program
may:
(1) offer a negotiated period for repayment of principal and
interest;
(2) take
greater risk than banks are traditionally prepared to take, provided
substantial economic development benefits will result if the loan is granted;
(3) leverage capital by reducing risk for commercial lenders and
by taking a subordinate security/collateral position; or
(4) provide more favorable rates and terms than are generally
available through conventional sources.
D. Project
requirements: Project requirements
for eligible CDBG economic development assistance include, but are not limited
to:
(1) specific employment commitments for low and moderate income
residents, generally with no more than fifty thousand dollars ($50,000.00) in
CDBG funds being used for each job created or retained;
(2) at least fifty-one percent of the jobs created/retained must
be held or made available to persons of low to moderate income persons;
(3) within six months of completion of the project, the grantee
is required to report to LGD, documentation to reflect the total number of jobs
created or retained;
(4) a
firm commitment for private financial participation in carrying out the
proposed project, contingent on award of CDBG funding only, must be included
with the application;
(5) a minimum leveraging ratio of one new private investment
dollar to one CDBG dollar is required additional; greater leveraging will
enhance a project's competitiveness;
(6) a
determination by the applicant and its governing body that there is a
well-documented need for CDBG assistance to make the project financing feasible
and that the level of assistance requested is commensurate with the public
benefits expected to be derived from the economic development project;
(7) evidence
of project feasibility including a business plan that contains financial
statements, project pro forma (cash flow projections) and specific source and
intended use of all funds or assets used in the project;
(8) generally, projects that directly assist in the relocation
of a business or industry from one community to another, intrastate or
interstate, will be disqualified;
(9) prior to submission of an application, applicants should
thoroughly review the credit worthiness of the proposed borrower and should
obtain appropriate credit reports, audited financial statements, tax returns
and verify collateral.
E. Program income: In addition to program income the
requirements of 2.110.2.22 NMAC the Housing and Urban Rural Recovery Act that
amended the Housing and Urban Rural Recovery Act 1983, provides, relative to
economic development, the following:
(1) states may require program income to be returned to the
state but local governments must be allowed to keep program income when used
for the same activity which generated the income;
(2) if the applicant intends to retain program income, a program
income utilization plan must be submitted with the application for approval.
F. Application cycle: Applications for economic development can be submitted
at any time, and the division staff has 30 days to review them.
G. Pre-application
conference: It is recommended that a
pre-application conference be held prior to the submission of the final
application to ensure that all elements are adequately addressed and to review
any new federal guidelines that may be issued that relate to economic
development activities. Contact the
division, economic development representative for information. More detailed and extensive financial and
project data may be required depending on the specific project. In addition, meeting the national objective
to benefit low and moderate income requires documentation certifying that the
majority of the jobs are created for or retained by low and moderate income
persons or the majority of jobs are considered available to them. Please contact the division for a copy of the
HUD guidelines.
H. APPLICATION
REQUIREMENTS: The following must be included along with the
regular CDBG application, and should be submitted in lieu of question #2 in the
regular application.
(1) Economic development plan: The applicant must submit as an attachment to
the application a short (five page maximum) description of its plan for
encouraging local economic development.
The plan, incorporating references to the proposed project, should
include a discussion of the following elements.
(a) Need - List the community's underlying
economic problems. Need might include
recent major industry shutdowns or extended layoffs, substantial increases in
population without a corresponding increase in job opportunities, substantial
population decreases due to lack of available or appropriate job opportunities,
a lack of industrial diversification, the existence of large numbers of workers
in the area with obsolete skills or skills for which there is no current
demand, or other problems unique to the applicant's community.
(b) Goals - Describe what the community
attempting to accomplish through its overall economic development program (not
just that activity for which CDBG funding is sought). Goals might include preserving existing
businesses or industries, encouraging community growth, fostering industrial
diversification, revitalizing the central business district, or creating
complementary industries to provide jobs in the off-season for workers now only
seasonally employed.
(c) Resources - List the public and private
resources, both financial and technical, available to available
to help the community carry out its economic development program. Resources may include for example, a local
development corporation or similar body has any agency organization assigned staff
member(s) to work on economic development activities for a major portion of
their time has the financial community’s demonstrated willingness to
participate in development activities, whether there is adequate available
labor force to meet the demands of new or expanding businesses and industries,
or whether the community has unique development advantages, e.g., location,
transportation facilities, industrial park or other plant sites, available raw
materials, abundant power supplies, employee training capabilities, a
locally-administered revolving loan fund to assist growing businesses or
industries, technical assistance programs to help business people deal with
marketing, management, or financial planning problems.
(d) Strategy - Describe the strategy the
community is using to pursue its economic development goals. Strategy might include the specific prioritized
activities that have been identified as components of the community's strategy
for encouraging local economic development costs of each strategy, funding
sources available, and how the local government will support the strategies. Strategies might include offering property
tax reductions to new or expanding industries, forming a local economic
development corporation, or preparing industrial or tourism promotion packages.
(e) Results - Describe actions the
community has already undertaken to implement its economic development plan,
the funding sources used and results achieved.
Results may include how many new jobs have been created or existing jobs
retained, how many new firms have begun operations in the community. Or how many existing firms have undertaken
expansion activities.
(2) Hiring and training plan:
(a) Applicants
must establish procedures for the project to ensure preferential recruitment,
hiring, and training of local workers, particularly those of low and moderate
income.
(b) In
the event of a grant award, the applicant's commitment to the hiring plan will
be considered binding and will be incorporated by reference in the grant
agreement between the local governing body and the division.
(3) Private sector commitments:
(a) Applicants
must provide evidence of firm commitments of financial resources from the
private sector.
(b) Such
commitments should be binding, contingent only upon receipt of CDBG funds.
(c) Investments
made or costs incurred prior to the grant application are not eligible for use
as matching funds or leverage but should be referenced as related to the total
project, if applicable.
(4) Public sector commitments:
(a) If
public sector resources are to be involved in the proposed economic development
project, applicants must demonstrate evidence of a firm commitment of public
funds or other resources.
(b) Such
commitments should be binding, contingent only upon receipt of CDBG funds to
the project.
(c) Evidence
may include resolutions or ordinances passed by the local governing body and
other appropriate local groups.
(5) Use of CDBG funds for economic development
loans (if applicable):
(a) Any
project that includes a loan should provide an explanation of the proposed
interest rate, terms and rationale for the proposed financing structure.
(b) Any
loan made by a local governing body with CDBG funds as a part of an approved
CDBG economic development project must be adequately secured.
(c) Subordinated
loans may be made when justifiable and appropriate in the sole discretion of
council.
(d) The
applicant must include a detailed description of the proposed use of program
income. (principal and interest). Applicants are encouraged to designate
program income to be returned to the state for future economic development
set-aside eligible activities.
(6) Viability of assisted enterprises: Any for-profit entity to be assisted with
CDBG funds must document that without participation of CDBG funds the proposed
activity would not be feasible and that after receipt of CDBG assistance the
enterprise will be viable and self-sustaining. All applicants proposing an economic
development activity shall submit the following for any entity to be assisted
with CDBG funds.
(a) a
business plan consisting of at least a description of the history of the firm,
background, and experience of the principals, organizational structure, a
description of its major products or services, market area and market share,
goals, and planned expansions or changes in operations; the plan should also
describe the impact the CDBG project, if funded, would have on the firm's activities;
(b) a three year to five year operating plan forecast (profit
and loss projection); applicants may use SBA forms or equivalent;
(c) a monthly cash flow analysis, SBA forms or equivalent;
(d) for any existing business, the two most recent year-end
financial statements, including an income statement and balance sheet.
I. RATING CRITERIA: The economic development rating criteria will
give priority to projects that firmly demonstrate the following: need, appropriateness, impact, and benefit to
low and moderate income persons. Since
each application will be unique, there are no “right” or “wrong” activities or
solutions. The ranking of
“appropriateness” and “impact” will necessarily be in part subjective, with the
division taking into account not only how well each applicant addresses the
problems it has defined, but also how its problems and responses compare with
those of other applicants.
(1) NEED - (200 points) - In analyzing an
applicant's need for a project, the division will use statistical information
provided by the New Mexico department of workforce solutions and the U.S.
bureau of the census which is uniformly available for all 33 counties. Since similar data is not accumulated at the municipal
level, cities and towns will be scored with the figures for the county in which
they are located. The three factors that
will be considered are: the average
number of unemployed persons in the county during the last calendar year; average
percent of unemployment in the county during the last calendar year; the
average unemployment rate in the county in the last five calendar years.
(a) The
data will be calculated and each applicant assigned a relative score.
(b) The
division will consider assigning a different score in exceptional cases, where
an applicant can conclusively demonstrate that the first two factors used to
measure economic need are not reflective of local economic conditions (such as
major recent plant closings) and the situation is substantiated by the New
Mexico department of workforce solutions. A request for consideration of local economic
data must be submitted with the application. The applicant should identify
sources of data and define methodologies.
(2) APPROPRIATENESS - (200 points) - Scores
will be based on the soundness of the applicant's economic development plan and
the related project for which CDBG funding is sought, and the strength of the
applicant's hiring and training plan for ensuring that local residents,
particularly those of low and moderate income, will be hired to fill the stated
number of jobs created or retained as a result of CDBG-funded activities. Points are available as follows:
(a) Plan and program - (140 points) - Scoring
will reflect whether:
(i) the applicant has developed a
complete, well-reasoned, appropriate, and achievable plan for dealing with its
total economic development needs, taking into consideration all available
public and private resources and local capacity;
(ii) the local governing body has officially adopted the economic
development plan as a matter of public policy;
(iii) the
proposed project is an integral part of that plan; (it need not be the first priority item
identified in the overall plan if other, more appropriate, resources are
available and already being used to meet higher priority items);
(iv) the applicant has made substantial local efforts to deal
with its economic development problems;
(v) the proposed CDBG project is realistic and workable, and the
job savings or creation expected to result from its implementation will occur
within a reasonable time following the date of grant award;
(vi) if
income is to be generated by CDBG-funded activities, and retained locally, a
plan for the use of that program income has been developed and submitted with
the application; this plan must include mechanisms established for
administration of the funds, (if a revolving loan fund is to be established
with program income, procedures must be outlined covering local application
processing, time frames, approval, negotiation, pricing, packaging, servicing,
etc.);
(vii) there has been active citizen participation in the
development of the economic development plan and in the selection of the
project.
(b) Hiring and training plan - (60 points)
- Each applicant must include in its application an employment and training
plan to be used in filling jobs created or retained as a result of CDBG
activities. Scoring will reflect whether:
(i) the applicant's employment and
training plan provides clear, complete procedures for outreach, recruitment,
screening, selection, training, and placement of workers which will ensure
maximum access of local residents, particularly persons of low and moderate
income, to jobs created or saved by the project;
(ii) attention has been given to necessary supportive services
for trainees needing them;
(iii) a complete training curriculum has been developed and all
training resources identified;
(iv) responsibility has been assigned for all phases of the
training program;
(v) a written agreement to follow the plan has been obtained
from each firm expected to benefit directly from the project.
(3) IMPACT - (200 points) - In weighing the
anticipated impact of the applicant's proposed CDBG activities on the
community's identified problems, the following four factors will be scored:
(a) Leverage - (50 points) - Applicants
will be scored based on the ratio of private non-CDBG dollars for each dollar
of CDBG funds requested.
(b) CDBG dollars per job - (50 points) - The
total CDBG funds to be used (exclusive of administrative funds) will be divided
by the total number of full-time jobs expected to result. In evaluating an applicant's job creation
projections, the division will consider the historical relationships of sales,
space, and machines to jobs. It will
also look at typical ratios for the industry of which the firm to be assisted
is a part. Applicants should be prepared
to justify job creation claims that substantially exceed industry norms or fifty
thousand ($50,000) per job created or retained.
(c) Type of jobs - (50 points) - Applicants
must indicate the percentage of jobs to be created or retained that are
full-time or part-time, skilled, semi-skilled, or unskilled. Scores will be higher to the extent and
application will create or retain full-time skilled,
and semi-skilled jobs.
(d) Overall economic impact - (50 points) -
The applicant must discuss both the direct and indirect effects the CDBG
program is expected to have on the community's economy. Some of the factors that will be scored are:
(i) the
additional payroll expected to be generated for the jobs created or retained by
the program;
(ii) the total number of jobs to be created or retained;
(iii) whether the firm to be assisted is an economic base industry
(producing goods or services mainly to be sold outside the area or state,
thereby importing dollars into the community and state economy); and
(iv) whether local property tax revenues will be significantly
increased as a result of the proposed business start-up, expansion, retention,
etc.
(4) BENEFIT TO LOW AND MODERATE INCOME PERSONS
- (200 points)
(a) This
ranking criterion assesses the extent to which persons of low and moderate
income will directly benefit from the expenditure of CDBG funds. To determine this score, the number of jobs
to be created or retained and made available to low and moderate income persons
will be divided by the total number of jobs to be created or retained as a
result of the CDBG program.
(b) The
highest score will receive up to a maximum of 200 points to be eligible for
consideration a project must demonstrate that it will benefit principally
persons of low and moderate income.
[2.110.2.26
NMAC - Rp, 2 110.2.26, 11/15/2016]
Attachment I |
|
(Referenced
by: 2.110.2.7 NMAC) |
|
CDBG
projects are designed to meet one of three national objectives: low and
moderate income, slum and blight, or emergency. For those projects that are designed to
meet the low and moderate income national objective, applicants may choose
between two different processes to determine low and moderate income
eligibility: (1) conduct a special survey using the HUD approved methodology
in accordance with Section A “Survey Methodology” and Section C “HUD Section
8 Income Limits” below; or (2) use the most recent low and moderate income
data from section B “American Community Survey” and Section C “HUD Section 8
Income Limits” below. |
|
A. Survey
Methodology |
The
division recommends using the following HUD approved methodology: |
This
survey methodology was designed by HUD to assist States and entitlement
cities in determining whether most of the individuals in a proposed target
area are of low and moderate income. |
|
Upon
requesting permission from the division to conduct a sample survey, an
applicant should indicate the justification for the sample survey. Applicants must provide to the division a
map of the project service area, a brief description of the proposed project,
and a description of how the six steps described in the suggested methodology
will be implemented. |
|
If the
applicant conducts a sample survey, such applicant must be prepared to
document all efforts. There must be a
master list (with telephone numbers, where possible) to match the surveys. The master list must be coded to the
individual surveys. |
|
Such
documentation must include a separate survey for each household, for unreachables that could not be replaced from the
universe, and for “non-households” in the survey area, such as empty lots,
business and government property. The
sixth step of the methodology provides a complete listing of the information
that an applicant must maintain in its files and submit to the division. |
|
The six
steps of the survey methodology are located on the department of finance and
administration website, local government division, community development
bureau, CDBG information page. |
|
B. American
community survey (ACS) |
The
U.S. census bureau provides a fact finder source for population, housing,
economic, and geographic information.
This source may be used by applicants to determine eligibility for low
to moderate income persons. This
source is located at the American FactFinder
website, community facts. |
|
C. HUD
Section 8 Income Limits |
HUD
Section 8 income limits must be used in conjunction with either the survey
methodology or ACS data to determine low and moderate income
eligibility. Applicants should contact
the division for the most current data sets. |
HISTORY OF 2.110.2 NMAC:
Pre-NMAC History: The
material in this part was derived from that previously filed with the State
Records Center and Archives:
DFA Rule 85-3, State of New Mexico Regulations Governing the 1986 Small
Cities Community Development Block Grant Program and 1985 New Mexico Community
Assistance Program, 10-4-85.
DFA Rule
87-3, State of New Mexico 1988 Small Cities Community Development Block Grant
Program New Mexico Community Assistance Program Application Regulations, 12-4-87.
DFA Rule
89-3, 1989 Small Cities Community Development Block Grant Program New Mexico
Community Assistance Program Applications Regulations, 3-22-89.
DFA Rule
90-1, 1990 Small Cities Community Development Block Grant Program New Mexico
Community Assistance Application Regulations, 12-28-89.
DFA
#91-1, 1991-1992 Small Cities Community Development Block Grant Program New
Mexico Community Assistance Application Regulations, 1-14-92.
DFA
#93-1, 1993 Small Cities Community Development Block Grant Program New Mexico
Community Assistance Application Regulations, 7-9-93.
DFA-LGD
No. 93-1, 1994 Small Cities Community Development Block Grant Program New
Mexico Community Assistance Application Regulations, 6-13-94.
DFA-LGD
Rule No. 95-1, 1995 Small Cities Community Development Block Grant Program New
Mexico Community Assistance Application Regulations, 5-31-95.
DFA-LGD Rule No. 95-2, 1996 Small Cities Community Development Block
Grant Application Regulations.
History of Repealed Material:
2 110.2 NMAC, Small Cities Community Development Block Grant -
Repealed, 08-30-01.
2.110.2
NMAC, Small Cities Community Development Block Grant - Repealed, 06-05-15.
2.110.2
NMAC, Small Cities Community Development Block Grant - Repealed, 11-15-2016.