67260 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

Office of the Assistant Secretary for

Community Planning and

Development

[Docket No. FR–4004–N–01]

Notice of Funding Availability for: the

HUD-Administered Small Cities

Community Development Block Grant

(CDBG) Program—Fiscal Year 1996;

and the Section 108 Loan Guarantee

Program for Small Communities in

New York State

AGENCY: Office of the Assistant

Secretary for Community Planning and

Development, HUD.

ACTION: Notice of Funding Availability

(NOFA) for Fiscal Year (FY) 1996.

SUMMARY: This Notice of Funding

Availability (NOFA) announces the

availability of approximately

$50,000,000 in FY 1996 funding for the

HUD-administered Small Cities Program

in New York State under the

Community Development Block Grant

(CDBG) Program and the availability of

approximately $200,000,000—

$250,000,000 in FY 1996 funding under

the Section 108 Loan Guarantee

program for small cities in New York

State. Amounts available under the

Section 108 Loan Guarantee program are

not awarded competitively and are not

rated under the criteria of this NOFA.

The Section 108 Loan Guarantee

Program is not subject to the HUD

Reform Act.

The funds announced in this Notice

provide small communities and

counties in New York State with a great

opportunity to propose programs that

focus on creating or expanding job

opportunities, addressing housing

needs, or meeting local public facilities

needs. HUD encourages communities to

propose programs that are creative and

innovative in addressing the needs of

their community. A community may

propose a program that is ‘‘single

purpose’’ in nature addressing only a

particular area of need or that

community may propose to undertake a

more comprehensive strategy that deals

comprehensively with the problems of a

particular area, for example. HUD has

increased the maximum grant amount

for a Single Purpose grant to $600,000

and for a Comprehensive grant to

$1,200,000. Communities that have a

comprehensive strategy requiring a

multi-year commitment may submit a

comprehensive, multi-year application

for up to a three-year period with a

maximum grant of up to $5,000,000.

Note that because last year’s multi-year

limit was $2,700,000, previous

recipients of a two or three-year

commitment may wish to submit a new

multi-year application in order to

‘‘trade-up’’ to the higher three-year

amount. If a community chooses to

trade-up, they can start a new three-year

cycle with FY 1996 representing the

first year.

IMPORTANT: Regardless of the option a

community wishes to pursue, all FY

1995 recipients of multi-year funding

commitments who wish to receive their

second year funds should submit an

abbreviated request (see the Application

Kit for details) for the approved FY 1996

funding increment in order for HUD to

award these funds to you.

Finally, HUD is encouraging

applications from joint applicants. Some

activities, such as economic

development revolving loans funds,

may be administratively impractical for

some very small communities to carry

out on their own. However, several

small cities together could put together

a joint economic development revolving

loan fund administered at one central

point and achieve economies of scale

that make such a program financially

feasible. Such a program coupled with

Section 108 Loan Guarantee funds, for

example, could result in a regional

approach to the economic development

needs of an entire region.

Note: The Congress has not yet enacted a

FY 1996 appropriation for HUD. However,

HUD is publishing this notice in order to give

potential applicants adequate time to prepare

applications. The estimate of the amount of

funds available for this program is based on

the level of funding available for FY 1995.

HUD is not bound by the estimate set forth

in this notice.

DATES: Applications are due by March

13, 1996. Application kits may be

obtained from and must be submitted to

either HUD’s New York or Buffalo

Office. Applications, if mailed, must be

postmarked no later than midnight on

March 13, 1996. If an application is

hand-delivered to the New York or the

Buffalo Office, the application must be

delivered to the appropriate office by no

later than 4:00 p.m. on the deadline

date. Application kits will be made

available by a date that affords

applicants no fewer than 30 days to

respond to this NOFA. For further

information on obtaining and

submitting applications, please see

Section II of this NOFA.

The above-stated application deadline

is firm as to date and hour. In the

interest of fairness to all competing

applicants, the Department will treat as

ineligible for consideration any

application that is not received by 4:00

p.m. on, or postmarked by, March 13,

1996. Applicants should take this

procedure into account and make early

submission of their materials to avoid

any risk of loss of eligibility brought

about by unanticipated delays or other

delivery-related problems.

FOR FURTHER INFORMATION CONTACT:

Stephen Rhodeside, State and Small

Cities Division, Office of Community

Planning and Development, Department

of Housing and Urban Development,

Room 7184, 451 Seventh Street SW,

Washington, DC 20410. Telephone (202)

708–1322 (voice) or (202) 708–2565

(TDD). (These are not toll-free numbers.)

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act Statement

The information collection

requirements related to this CDBG

program have been approved by the

Office of Management and Budget

(OMB) and have been assigned OMB

approval number 2506–0020.

Contents

I. Purpose and Substantive Description

A. Authority and Background

1. Authority

2. Background

3. Other Program Requirements

a. Abbreviated Consolidated Plan

b. Section 3

4. Accountability in the Provision of HUD

Assistance

a. HUD Responsibilities

(1) Documentation and Public Access

(2) Disclosures

b. Units of Local Government

Responsibilities

(1) Disclosures

(2) Documentation and Public Access

(3) Disclosures

B. Allocation Amounts

1. Total Available Funding

2. Imminent Threats

C. Eligibility

1. Eligible Applicants

2. Previous Grantees

3. Eligible Activities and National

Objectives

4. Environmental Review Requirements

D. Types of Grants

1. Comprehensive Grants

a. General

b. Grant Limits and Funding Requirements

2. Single Purpose Grants

a. General

b. Grant Limits and Funding Requirements

c. Applications with Multiple Projects

3. Distribution of funds between

Comprehensive Grants and Single

Purpose Grants

4. Applications with multiple projects

5. Multiyear Plans

a. General

b. Grant Limits and Funding Requirements

c. Previously Funded Multi-year

Commitments

E. Selection Criteria/Ranking Factors and

Final Selection

1. General

2. Performance Evaluation
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices 67261

a. Community Development Activities

b. Compliance with Applicable Laws and

Regulations

c. Performance Assessment Reports

3. Four Factor Rating

a. Need—Absolute Number of Persons in

Poverty

b. Need—Percent of Persons in Poverty

c. Program Impact—General

(1) Program Impact—Single Purpose Grants

(a) Program Impact—Single Purpose—

Housing

(i) Housing Rehabilitation

(ii) Creation of New Housing

(iii) Direct Homeownership Assistance

(b) Program Impact—Single Purpose—

Public Facilities Affecting the Public

Health and Safety

(c) Program Impact—Single Purpose—

Economic Development

(i) The Appropriate Determination

(ii) CDBG Assistance Must Minimize

Business and Job Displacement

(iii) Section 105(a)(17) requirements

(iv) National Objectives

(v) Application Requirements

(vi) Review Criteria

(vii) Scoring

(2) Program Impact—Comprehensive

Program Grants

(a) Criterion 1

(b) Criterion 2

(c) Criterion 3

(d) Criterion 4

(e) Criterion 5

(f) Criterion 6

(g) Criterion 7

(h) Criterion 8

(i) Criterion 9

(j) Criterion 10

d. Fair Housing and Equal Opportunity

Evaluation

(1) Housing Achievements

(a) Provision of Assisted Housing

(b) Implementation of HUD-Approved New

Horizons Fair Housing Assistance Project

or a Fair Housing Strategy Equivalent in

Scope to a New Horizons Project

(2) Entrepreneurial Efforts and Local Equal

Opportunity Performance

(a) Minority Contracting

(b) Equal Opportunity Employment

4. Final Selection

II. Application and Funding Award Process

A. Obtaining Applications

B. Submitting Applications

C. The Application

1. Application Requirements

2. Streamlined Application for Certain

Applicants

D. Funding Award Process

III. Technical Assistance

IV. Checklist of Application Submission

Requirements

V. Corrections to Deficient Applications

VI. Other Matters

I. Purpose and Substantive Description

A. Authority and Background

1. Authority. Title I, Housing and

Community Development Act of 1974

(42 U.S.C. 5301–5320); 24 CFR part 570,

subpart F.

2. Background. Title I of the Housing

and Community Development Act of

1974 authorizes the Community

Development Block Grant (CDBG)

Program. Section 106 of Title I permits

the States to elect to assume the

administrative responsibility for the

CDBG Program for nonentitled areas

within their jurisdiction. Section 106

provides that HUD will administer the

CDBG Program for nonentitled areas

within any State that does not elect to

assume the administrative responsibility

for the program. Subpart F of 24 CFR

part 570 sets out the requirements for

HUD’s administration of the CDBG

Program in nonentitled areas (Small

Cities Program). This NOFA

supplements subpart F of 24 CFR part

570, which sets out the requirements

applicable to the CDBG Program in

nonentitled areas.

In accordance with 24 CFR 570.420(e)

and 570.420(h)(3), and with the

requirements of section 102 of the

Housing and Urban Development

Reform Act of 1989 (HUD Reform Act),

HUD is issuing this NOFA for New York

State’s Small Cities Program for Fiscal

Year (FY) 1996 to announce the

allocation of funds for Single Purpose

and Comprehensive grants, and to

establish the deadline for filing grant

applications. The NOFA explains how

HUD will apply the regulatory threshold

requirements for funding eligibility, and

the selection criteria for rating and

scoring applications for Comprehensive

grants and for scoring projects in

applications for Single Purpose grants.

The Department has issued final

regulations at 24 CFR 570.420–32 which

govern the HUD-administered Small

Cities program in New York. These

regulations modify the HUDadministered Small Cities program to

allow for multi-year plans.

The multi-year plan competition

permits the Department to select multiyear plans of two or three years in a

competition that will allow the first year

to be funded. The Department intends to

fund future years of the plan on a noncompetitive basis, pursuant to

acceptable performance, submission of

an acceptable application and

certifications and the provision of

adequate appropriations for the HUDadministered Small Cities program.

Other information about the Small

Cities Program will be provided in the

application kit, which will be made

available to applicants by HUD’s New

York Office and Buffalo Office.

3. Other Program Requirements.

a. Abbreviated Consolidated Plan.

Each jurisdiction that applies for funds

under this NOFA must have submitted

a Consolidated Plan, as provided at 24

CFR part 91. A jurisdiction that does not

expect to be a participating jurisdiction

in the HOME program under 24 CFR

part 92, may submit an abbreviated

consolidated plan that is appropriate to

the types and amounts of assistance

sought from HUD. (See 24 CFR 91.235.)

Any applicant that plans to undertake a

housing activity with funds under this

NOFA needs to prepare and submit, at

a minimum, an abbreviated

consolidated plan that is appropriate to

the types and amounts of housing

assistance sought under this NOFA.

Even if the community’s Small Cities

application is approved, HUD must also

approve the consolidated plan before

the community may receive Small Cities

funding. Further, that applicant must

also include a certification that the

housing activities in its CDBG Small

Cities application are consistent with

the consolidated plan. For an applicant

seeking funds under this NOFA to

address non-housing community

development needs, it needs to prepare

an abbreviated consolidated plan that

describes the jurisdiction’s priority nonhousing community development needs

eligible for assistance under the CDBG

program by eligibility category,

reflecting the needs of families for each

type of activity, as appropriate, in terms

of dollar amounts estimated to meet the

priority need for the type of activity (see

24 CFR 91.236(c)(2)). The abbreviated

Consolidated Plan is subject to the same

citizen participation requirements as is

the jurisdiction’s Small Cities CDBG

application. Both must meet the citizen

participation requirements before they

may be submitted to HUD. (See 24 CFR

570.431) A Section 108 Loan Guarantee

application would also have to meet

these requirements if the jurisdiction

submits one to HUD for consideration.

If possible, applicants should

endeavor to submit the abbreviated

consolidated plan in advance of the

Small Cities application due date. The

latest time at which the abbreviated

consolidated plan will be accepted by

HUD for the HUD-administered Small

Cities Program in New York will be the

application due date for the Small Cities

application. Failure to submit the

abbreviated consolidated plan by the

due date is not a curable technical

deficiency. Questions regarding the

abbreviated consolidated plan should be

directed to the appropriate HUD field

office.

Any application that is fundable, but

does not have an approved consolidated

plan will receive a conditional approval

subject to HUD’s approval of the

abbreviated consolidated plan.

Unfortunately, if HUD is unable to

approve the abbreviated consolidated

plan within a reasonable period of time,

but not less than 60 days from the date
67262 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices

that the conditional approval is

announced, HUD will have no choice

but to rescind the award. In such event

the funding will be awarded to the

highest rated fundable applicant that

did not receive funding under this

competition.

b. Section 3. Assistance provided

under this NOFA is subject to the

requirements of section 3 of the Housing

and Urban Development Act of 1968,

and the implementing regulations in 24

CFR part 135, as amended by an interim

rule published on June 30, 1994 (59 FR

33866). One of the purposes of this

NOFA, which is consistent with section

3, is to give, to the greatest extent

feasible and consistent with Federal,

State, and local laws and regulations,

job training, employment and other

contracting opportunities generated

from certain HUD financial assistance to

low- and very low-income persons.

Public entities awarded funds under

this NOFA that intend to use the funds

for housing rehabilitation, housing

construction, or other public

construction must comply with the

applicable requirements set forth in the

regulations published on June 30, 1994.

4. Accountability in the Provision of

HUD Assistance: Documentation and

Public Access Requirements; Applicant/

Recipient Disclosures. HUD has

promulgated a final rule to implement

section 102 of the Department of

Housing and Urban Development

Reform Act of 1989 (HUD Reform Act).

The final rule is codified at 24 CFR part

12. Section 102 contains a number of

provisions that are designed to ensure

greater accountability and integrity in

the provision of certain types of

assistance administered by HUD. (See

also Section II.D. of this NOFA.) On

January 16, 1992, HUD published at 57

FR 1942, additional information that

gave the public (including applicants

for, and recipients of, HUD assistance)

further information on the

implementation of section 102. The

documentation, public access, and

applicant and recipient disclosure

requirements of section 102 are

applicable to assistance awarded under

this NOFA as follows:

a. HUD Responsibilities.

(1) Documentation and Public Access.

HUD will ensure that documentation

and other information regarding each

application submitted pursuant to this

NOFA are sufficient to indicate the basis

upon which assistance was provided or

denied. This material, including any

letters of support, will be made

available for public inspection for a fiveyear period beginning not less than 30

days after the award of the assistance.

Material will be made available in

accordance with the Freedom of

Information Act (5 U.S.C. 552) and

HUD’s implementing regulations at 24

CFR part 15. In addition, HUD will

include the recipients of assistance

pursuant to this NOFA in its quarterly

Federal Register notice of all recipients

of HUD assistance awarded on a

competitive basis. (See 24 CFR 12.14(a)

and 12.16(b), and the notice published

in the Federal Register on January 16,

1992 (57 FR 1942), for further

information on these requirements.)

(2) Disclosures. HUD will make

available to the public for five years all

applicant disclosure reports (HUD Form

2880) submitted in connection with this

NOFA. Update reports (also Form 2880)

will be made available along with the

applicant disclosure reports, but in no

case for a period of less than three years.

All reports—both applicant disclosures

and updates—will be made available in

accordance with the Freedom of

Information Act (5 U.S.C. 552) and

HUD’s implementing regulations at 24

CFR part 15. (See 24 CFR subpart C, and

the notice published in the Federal

Register on January 16, 1992 (57 FR

1942), for further information on these

disclosure requirements.)

b. Units of General Local Government

Responsibilities. Units of general local

government awarded assistance under

this NOFA are subject to the provisions

of either paragraph b(1), or paragraph

(b)(2) and (b)(3). For units of local

government awarded assistance under

this NOFA which in turn make the

assistance available on a NONCOMPETITIVE BASIS for a specific

project or activity to a subrecipient,

paragraph b(1) applies. For units of local

government awarded assistance under

this NOFA, which in turn make the

assistance available on a COMPETITIVE

BASIS for a specific project or activity

to a subrecipient, paragraphs b(2) and

(3) apply.

(1) Disclosures. The units of general

local government receiving assistance

under this NOFA must make all

applicant disclosure reports available to

the public for three years. Required

update reports must be made available

along with the applicant disclosure

reports, but in no case for a period less

than three years. Each unit of general

local government may use HUD Form

2880 to collect the disclosures, or may

develop its own form. (See 24 CFR 12

subpart C, and the notice published in

the Federal Register on January 16,

1992 (57 FR 1942) for further

information on these disclosure

requirements.)

(2) Documentation and Public Access.

The recipient unit of general local

government must ensure that

documentation and other information

regarding each application submitted to

the recipient by a subrecipient applicant

are adequate to indicate the basis upon

which assistance was provided or

denied. The unit of general local

government must make this material,

including any letters of support,

available for public inspection for a fiveyear period beginning not less than 30

days after the award of the assistance.

Unit of general local government

recipients must also notify the public of

the subrecipients of the assistance. Each

recipient will develop documentation,

public access, and notification

procedures for its programs. (See 24

CFR 12.14(b) and 12.16(c), and the

notice published in the Federal Register

on January 16, 1992 (57 FR 1942) for

more information on these

documentation and public access

requirements.)

(3) Disclosures. Units of general local

government receiving assistance under

this NOFA must make all applicant

disclosure reports available to the

public for five years. Required update

reports must be made available along

with the applicant disclosure reports,

but in no case for a period less than

three years. Each unit of general local

government may use HUD Form 2880 to

collect the disclosures, or may develop

its own form. (See 24 CFR subpart C,

and the notice published in the Federal

Register on January 16, 1992 (57 FR

1942) for further information on these

disclosure requirements.)

B. Allocation Amounts

1. Total Available Funding. The

nonentitlement CDBG funds for New

York State for FY 1996 total

approximately $50,000,000.

Approximately $43,900,000 is allocated

for distribution to eligible units of

general local government within the

jurisdiction of HUD’s Buffalo Office.

Approximately $6,100,000 is allocated

for distribution to eligible units of

general local government within the

jurisdiction of HUD’s New York Office.

HUD has the option to revise these

allocations in order to assure a

competitive distribution of funds.

Note: The Congress has not yet enacted a

FY 1996 appropriation for HUD. However,

HUD is publishing this notice in order to give

potential applicants adequate time to prepare

applications. The estimate of the amount of

funds available for this program is based on

the level of funding available for FY 1995.

HUD is not bound by the estimate set forth

in this notice.

2. Imminent Threats. All imminent

threat projects must meet the national

objective of benefitting low-and

moderate-income persons. The
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices 67263

Department may elect to set aside up to

15% of the Fiscal Year 1996 allocation

for imminent threat projects. These

funds will be available until the rating

and ranking process for funds

distributed under this NOFA is

completed.

C. Eligibility

1. Eligible Applicants. Eligible

applicants are units of general local

government in New York State,

excluding: metropolitan cities, urban

counties, units of government which are

participating in urban counties or

metropolitan cities even if only part of

the participating unit of government is

located in the urban county or

metropolitan city, and Indian tribes

eligible for assistance under section 106

of the HCD Act. Applications may be

submitted individually or jointly.

2. Previous grantees. Eligible

applicants, which previously have been

awarded Small Cities Program CDBG

grants, are also subject to an evaluation

of capacity and performance. Numerical

thresholds for drawdown of funds have

been established to assist HUD in

evaluating a grantee’s progress in

implementing its program activities.

(These standards apply to all CDBG

Program grants received by the

community.) An additional threshold

established this year relates to the

submission of annual Performance

Assessment Reports (PARs) which are

due annually for each grant which a

local government has received. Failure

to submit a PAR is not a curable

technical deficiency. Applicants

generally will be determined to have

performed adequately in the area(s)

where the thresholds are met. Where a

threshold has not been met, HUD will

evaluate the documentation of any

mitigating factors, particularly with

respect to actions taken by the applicant

to accelerate the implementation of its

program activities.

3. Eligible Activities and National

Objectives. Eligible activities under the

Small Cities CDBG Program are those

identified in subpart C of 24 CFR part

570. Each activity must meet one of the

national objectives (i.e. benefit to lowand moderate-income persons,

elimination of slums or blighting

conditions, or meeting imminent threats

to the health and safety of the

community), and each grant must meet

the requirements for compliance with

the primary objective of principally

benefitting low- and moderate-income

persons, as required under the

provisions of § 570.200(a)(2) and (3) and

§ 570.208. The principal benefit

requirement under the CDBG program is

70 percent. The method of calculating

the use of these funds for compliance

with the 70 percent overall benefit

requirement is set forth in

§ 570.200(a)(3)(i) through (v).

4. Environmental Review

Requirement. The HUD environmental

review procedures contained in 24 CFR

part 58 apply to this program. Under

part 58, grantees assume all of the

responsibilities for environmental

review, decision-making and action

pursuant to the National Environmental

Policy Act of 1969 and the other

provisions of law specified by the

Secretary in 24 CFR part 58 that would

apply to the Secretary were he to

undertake such projects as Federal

projects.

D. Types of Grants

1. Comprehensive Grants

a. General. Comprehensive grants are

available to fund projects which meet

the following criteria:

(1) Address a substantial portion of

the identified community development

needs within a defined area or areas;

(2) Involve two or more activities

related to each other that will be carried

out in a coordinated manner;

(3) Have a beneficial impact within a

reasonable period of time.

HUD may make an exception to the

requirement that all activities must be

carried out in a defined area or areas if

the applicant can demonstrate that the

comprehensive strategy is a reasonable

means of addressing identified needs.

If an application for a Comprehensive

grant does not meet the requirements of

the Comprehensive Grant Program, HUD

will rate the proposal as a Single

Purpose grant.

b. Grant Limits and Funding

Requirements. The maximum grant for a

Comprehensive grant is $1,200,000 (but

see the grant limitations under multiyear plans as well, below). Grant funds

requested must be sufficient, either by

themselves or in combination with

funds from other sources (including any

Section 108 Loan Guarantee resources

requested in conjunction with a Small

Cities application under this NOFA), to

complete the project within a reasonable

amount of time. If other sources of funds

are to be used with respect to a project,

the source of those funds should be

identified and the level of commitment

indicated.

2. Single Purpose Grants

a. General. Single Purpose grants are

designed to address and resolve a

specific community development need.

A Single Purpose grant may consist of

more than one project. A project may

consist of one activity or a set of

activities. Each project must address

community development needs in one

of the following problem areas:

—Housing

—Public Facilities

—Economic Development

Each project will be rated against all

other projects addressing the same

problem area, according to the criteria

outlined below. It should be noted that

each project within an application will

be given a separate impact rating, if each

one is clearly designated by the

applicant as a separate and distinct

project (i.e. separate Needs Description,

Community Development Activities,

Impact Description and Program

Schedule forms have been filled out,

indicating project names). In some

cases, it may be to the applicant’s

advantage to designate separate projects

for activities that can ‘‘stand on their

own’’ in terms of meeting the described

need, especially where a particular

project would tend to weaken the

impact rating of the other activities, if

they were rated as a whole, as has been

the case with some economic

development and housing projects. If,

however, the projects tend to meet

impact criteria to the same extent, or the

weaker element is only a small portion

of the overall project, there is no

discernable benefit in designating

separate projects.

b. Grant Limits and Funding

Requirements. The maximum annual

grant for a Single Purpose grant is

$600,000, except that counties may

apply for up to $900,000 in Single

Purpose funds. The maximum amount

for Single Purpose grant applications

made jointly by units of general local

government will be $900,000. If other

sources of funds are to be used with

respect to a project, the source of those

funds must be identified and the level

of commitment indicated.

3. Distribution of Funds Between

Comprehensive Grants and Single

Purpose Grants

Through the grant award process, of

the total amounts of assistance

announced in this NOFA, up to 25

percent of that aggregate amount may be

made available for Comprehensive

grants and up to 75 percent of that

aggregate amount may be made

available for Single Purpose Grants.

4. Applications With Multiple Projects

If an application contains more than

one project, each project will be rated

separately for program impact.

Applicants should note that regardless

of the number of projects, the total grant

amount cannot exceed the limits
67264 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices

identified in Section I.D.1.b and I.D.2.b.

of this NOFA.

5. Multi-year Plans

a. General. Multi-year plan grants are

available to fund projects that will have

a substantial and comprehensive effect

on meeting the grantees identified

community development needs. It is

envisioned that the large majority of

multi-year plan projects will address a

defined area or areas, but grantees may

apply for grants for activities that will

affect the grantees entire jurisdiction.

Multi-year plans may be for two or

three years. The action plan for each

year of the multi-year plan must be a

viable project on its own. The multiyear

plans will be rated competitively against

each other. Multi-year plans that are

selected will be funded for the first year

of the plan. HUD intends to fund

succeeding years of the plan on a noncompetitive basis, subject to acceptable

performance, submission of an

acceptable application and

certifications, and the provision of

adequate appropriations for the HUDadministered Small Cities Program.

HUD reserves the right to lower the

amount of funds for succeeding years if

nonentitled areas are not in compliance

with performance requirements and

applicable regulations.

b. Grant Limits and Funding

Requirements. The maximum annual

grant for a multi-year plan is $1,200,000.

The maximum funding for

implementing an entire multi-year plan

is $3,100,000 for a two year multi-year

plan, and $5,000,000 for a three year

multi-year plan. Grant funds requested

must be sufficient, either by themselves

or in combination with funds from other

sources, (including any Section 108

Loan Guarantee resources requested in

conjunction with a Small Cities

application under this NOFA) to

complete the project within a reasonable

amount of time. If other sources of funds

are to be used with respect to a project,

the source of those funds should be

identified and the level of commitment

indicated.

c. Previously Funded Multi-year

Commitments. An applicant that

received a multi-year commitment in FY

1995 was limited to $900,000 in the first

year; $1,800,000 for a two year plan and

$2,700,000 for a three year multi-year

plan. Because the maximum amounts

established for this year are significantly

higher than the amounts provided for in

FY 1995, a recipient of a multi-year

commitment in FY 1995 may elect to

either: retain its original FY 1995 multiyear funding level commitment; or,

submit a new application for up to an

additional three year multi-year

commitment up to the new FY 1996

higher grant amounts. A new

application does not necessarily have to

be for the same project that was funded

in the FY 1995 application, although it

may be. And similarly, a new

application may expand upon the scope

of the project that was approved in FY

1995, or the application may be any

combination of the above. An applicant

with a previous FY 1995 multi-year

commitment that wishes to ‘‘trade-up’’

by submitting a FY 1996 application for

a higher grant amount, a new three-year

period or different scope of activities,

may do so without jeopardizing its FY

1995 multi-year commitment.

Recipients choosing to ‘‘trade-up’’ may

do so with the understanding that if the

new multi-year application is not

competitive, HUD will still recognize its

previous FY 1995 multi-year

commitment and provide funds

consistent with that approval

PROVIDED THAT the community

submits an abbreviated application

request that delineates an action plan

for the original second increment,

proper certifications and provided that

last year’s performance was satisfactory.

Under these circumstances, the

community cannot lose.

E. Selection Criteria/Ranking Factors

and Final Selection

1. General

Complete applications received from

eligible applicants by the application

due date are rated and scored by HUD.

Regardless of the type of grant sought

(Single Purpose or Comprehensive),

applications are rated and scored

against four factors. These four factors

are discussed in more detail in

subsection 3 of this Section E. Previous

grantees of Small Cities Program CDBG

grants also undergo a performance

evaluation. The criteria for determining

adequacy of performance are discussed

in subsection 2 of this Section E.

2. Performance Evaluation

As noted in Section C of this NOFA,

previous grantees of Small Cities

Program CDBG grants are subject to an

evaluation of performance and capacity

to undertake the proposed program. For

purposes of making performance

evaluations, HUD will use any

information available as of the

application due date. Performance also

will be evaluated using information

which may be available already to HUD,

including previously submitted

performance reports, site visit reports,

audits, monitoring reports and annual

in-house reviews. Grantees may be

requested to submit additional

information, if generally available facts

raise a question as to capacity to

undertake the proposed program. No

grants will be made to an applicant that

does not have the capacity to undertake

the proposed program. A performance

determination will be made by

evaluation of the following areas:

a. Community Development Activities.

The following thresholds for

performance in expending CDBG funds

have been established for FY 1996 and

pertain to all Single Purpose and

Comprehensive Grants:

FY 1990 and earlier—Grants must be

closed out

FY 1991—Grant funds 100% expended

FY 1992—Grant funds 75% expended

FY 1993—Grant funds 30% expended

FY 1994—Recipients must be on target

with respect to the latest Small Cities

Program Schedule received by HUD

Note: These standards will be used as

benchmarks in judging program performance,

but will not be the sole basis for determining

whether the applicant is ineligible for a grant

due to a lack of capacity to carry out the

proposed project or program. Any applicant

that fails to meet the percentages specified

above may wish to provide updated data to

HUD, either in conjunction with the

application submission or under separate

cover, but in no case will data received by

HUD after the application due date be

accepted.

b. Compliance with Applicable Laws

and Regulations. An applicant will be

considered to have performed

inadequately if the applicant:

(1) Has not substantially complied

with the laws, regulations, and

Executive Orders applicable to the

CDBG Program, including applicable

civil rights laws as may be evidenced

by: an outstanding finding of civil rights

noncompliance, unless the applicant

demonstrates that it is operating in

compliance with a HUD-approved

compliance agreement designed to

correct the area(s) of noncompliance; an

adjudication of a civil rights violation in

a civil action brought against it by a

private individual, unless the applicant

demonstrates that it is operating in

compliance with a court order designed

to correct the area(s) of noncompliance;

a deferral of Federal funding based upon

civil rights violations; a pending civil

rights suit brought against it by the

Department of Justice; or an unresolved

charge of discrimination issued against

it by the Secretary under section 810(g)

of the Fair Housing Act, as implemented

by 24 CFR 103.400;

(2) Has not resolved or attempted to

resolve findings made as a result of

HUD monitoring; or

(3) Has not resolved or attempted to

resolve audit findings. An applicant will
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices 67265

be ineligible for a grant where the

inadequate performance in compliance

with applicable laws and regulations

evidences a lack of capacity to carry out

the proposed project or program. An

application also will not be accepted

from a unit of general local government

which has an outstanding audit finding

or monetary obligation for any HUD

program. Additionally, applications will

not be accepted from any entity which

proposes an activity in a unit of general

local government that has an

outstanding audit finding or monetary

obligation for any HUD program. The

Director of the Community Planning

and Development Division of the HUD

field office may provide waivers to this

prohibition, but in no instance will a

waiver be provided where funds are due

HUD, unless a satisfactory arrangement

for repayment of the debt has been

made.

c. Performance Assessment Reports.

Under 24 CFR 570.507, Small Cities

CDBG grantees are required to submit

Performance Assessment Reports (PARs)

annually on the date when the grant was

originally executed. For an application

for FY 1996 funds to be considered for

funding, the applicant must be current

in its submission of Performance

Assessment Reports. Failure to submit a

PAR is not a curable technical

deficiency under Section V of this

NOFA.

3. Four Factor Rating

As noted in subsections 1 and 3 of

this Section E, all applications are rated

and scored against four factors. These

four factors are:

— Need based on absolute number of

persons in poverty;

— Need based on the percent of persons

in poverty;

— Program Impact; and

— Outstanding performance in fair

housing and equal opportunity.

A maximum of 600 points is possible

under this system with the maximum

points for each factor being:

Need — absolute number of

persons in poverty.

75 points.

Need — percent of persons in

poverty.

75 points.

Program Impact ...................... 400 points.

Outstanding performance —

FHEO

Provision of fair housing

choice.

20 points.

Fair Housing Programs ... 20 points.

Equal opportunity employment.10 points.

Total ............................. 600 points.

Each of the four factors is outlined

below. All points for each factor are

rounded to the nearest whole number.

Applicants should note that there is a

distinct difference in the methods used

to evaluate Program Impact for Single

Purpose grants versus Program Impact

for Comprehensive grants. These

differences are more fully discussed

below.

a. Need — Absolute number of

persons in poverty. HUD uses 1990

census data to determine the absolute

number of persons in poverty residing

within the applicant unit of general

local government. Comprehensive and

Single Purpose grant applicants are

grouped and rated separately for this

factor. Applicants which are county

governments are rated separately from

all other applicants. Applicants in each

group are compared in terms of the

number of persons whose incomes are

below the poverty level. Individual

scores are obtained by dividing each

applicant’s absolute number of persons

in poverty by the greatest number of

persons in poverty of any applicant and

multiplying by 75.

b. Need — Percent of persons in

poverty. HUD uses 1990 census data to

determine the percent of persons in

poverty residing within the applicant

unit of general local government.

Comprehensive and Single Purpose

grant applicants are grouped and rated

separately for this factor. Applicants in

each group are compared in terms of the

percentage of their population below the

poverty level. Individual scores are

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 75.

c. Program Impact — General. In

evaluating program impact, HUD will

consider:

— Extent and seriousness of the

identified needs;

— Results to be achieved;

—Number of beneficiaries, given the

type of program;

—Nature of the benefit;

—Additional actions that may be

necessary to fully resolve the need;

—Previous coordinated actions taken by

the applicant to address the need;

—Environmental considerations;

—Whether displacement will be

involved and what steps will be taken

to minimize displacement and to

mitigate its adverse effects or related

hardships; and

—Where appropriate, housing site

selection standards.

Assessments are done on a

comparative basis and, as a result, it is

important that each applicant present

information in a detailed and uniform

manner.

In addressing Program Impact criteria,

applicants should adhere to the

following general guidelines for

quantification. Where appropriate,

absolute and percentage figures should

be used to describe the extent of

community development needs and the

impact of the proposed program. This

includes, but is not limited to,

appropriate units of measure (e.g.,

number of housing units or structures,

linear feet of pipe, pounds per square

inch, etc.), and costs per unit of

measure. These quantification

guidelines apply to the description of

need, the nature of proposed activities

and the extent to which the proposed

program will address the identified

need.

Appropriate documentation should be

provided to support the degree of need

described in the application. Basically,

the sources for all statements and

conclusions relating to community

needs should be included in the

application or incorporated by

reference. Examples of appropriate

documentation include planning

studies, letters from public agencies,

newspaper articles, photographs and

survey data.

Generally, the most effective

documentation is that which

specifically addresses the subject matter

and has a high degree of credibility.

Applicants which intend to conduct

surveys to obtain data are advised to

contact the appropriate HUD office prior

to conducting the survey for a

determination as to whether the survey

methodology is statistically acceptable.

There are a number of program design

factors related to feasibility which can

alter significantly the award of impact

points. Accordingly, it is imperative that

applicants provide adequate

documentation in addressing these

factors. Common feasibility issues

include site control, availability of other

funding sources, validity of cost

estimates, and status of financial

commitments as well as evidence of the

status of regulatory agency review and

approval.

Past productivity and administrative

performance of prior grantees will be

taken into consideration when

reviewing the overall feasibility of the

program. Overall program design,

administration and guidelines are other

feasibility issues that should be

articulated and presented in the

application, since they are critical in

assessing the effectiveness and impact

of the proposed program.

(1) Program Impact—Single Purpose

Grants. Each project will be rated

against other projects addressing the

same problem area, so that, for example,
67266 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices

housing projects only will be compared

with other housing projects, according

to the criteria outlined below. It should

be noted that each project within an

application will be given a separate

impact rating, if each one is clearly

designated by the applicant as a

separate and distinct project (i.e.

separate Needs Descriptions,

Community Development Activities,

and Impact Description and Program

Schedule forms have been filled out,

indicating separate project names).

In some cases, it may be to the

applicant’s advantage to designate

separate projects for activities that can

‘‘stand on their own’’ in terms of

meeting the described need, especially

where a particular project would tend to

weaken the impact rating of the other

activities, if they were all related as a

whole, as has been the case with some

economic development projects. If,

however, the projects tend to meet the

impact criteria to the same extent, or the

weaker element is only a small portion

of the overall program, there is no

discernable benefit in designating

separate projects.

Applicants should bear in mind that

the impact of the proposed project will

be judged by persons who may not be

familiar with the particular community.

Accordingly, individual projects will be

rated according to how well the

application demonstrates in specific,

measurable terms, the extent to which

the impact criteria are met. General

statements of need and impact alone

will not be sufficient to obtain a

favorable rating.

(a) Program Impact—Single

Purpose—Housing. There are three

distinct types of Single Purpose Housing

projects: Housing Rehabilitation,

Creation of New Housing and Direct

Homeownership Assistance. Separate

rating criteria are provided for each type

of project.

(i) Housing Rehabilitation.

Needs. Each application should

provide information on the total number

of units in the project area, the number

that are substandard, and the number of

substandard units occupied by low- and

moderate-income households. The

purpose of this information is to

establish the relative severity of housing

conditions within the designated project

area compared to other housing

rehabilitation applications. The

application also should describe the

date and methodology of any surveys

used to obtain the information,

including an explicit and detailed

definition of ‘‘substandard’’.

Surveys of Housing Conditions.

Surveys of housing conditions serve

several purposes in evaluating

applications for housing rehabilitation

activities. These include establishing

the seriousness of need for such

assistance in the project area, providing

a basis for estimating overall budgetary

needs, and providing an indication of

the marketability of the project.

Project Design and Feasibility. The

application should describe the project

in sufficient detail to allow the reviewer

to assess its feasibility and its probable

impact on the conditions described. It

also should describe project

requirements in such a way that

regulatory and policy concerns will be

addressed.

In reviewing applications from

grantees with prior housing

rehabilitation projects, reasonableness

of cost-per-unit, stated in the

application, will be compared against

the grantee’s actual past performance.

All applications should provide

documentation to justify the cost-perunit estimates, particularly grantees

where past performance does not

support the estimates in the

applications.

It should be noted that HUD

encourages communities to design

projects supplementing CDBG

rehabilitation funds with private funds

wherever feasible and appropriate,

especially in the case of rental units and

housing not occupied by lower income

persons. In such cases, the CDBG

subsidy should be as low as possible,

while retaining sufficient incentive to

attract local participants. On the other

hand, projects designed for low income

homeowners should not require private

contributions at a level that puts the

project out of reach of potential

participants.

Where the creation of new units is

proposed through conversion, the

application should document the need

for additional units based on vacancy

rates, waiting lists, and other pertinent

information. The proposed project

clearly must support, or result in,

additional units for low- and moderateincome persons. The units may result

from the rehabilitation of currently

vacant structures, conversion of nonresidential structure for residential use,

or new construction projects for which

the proposed project will provide nonconstruction assistance.

Where the proposed project involves

the use of Federally assisted housing,

the applicant must identify and

document the current commitment

status of the Federal assistance. Lack of

a firm financial commitment for

assistance may adversely affect project

impact. Applicants should address

issues of site control and marketability,

in addition to addressing feasibility

from the standpoint of market financing.

The impact of the proposed project

will be based on the degree of need, the

number of units to be created, overall

feasibility and the nature and cost of the

proposed activities.

For projects consisting of more than

one activity, the activity that directly

addresses the need must represent at

least the majority of funds requested.

Other activities must be incidental to

and in support of the principal activity.

For example, public improvements

included in a rehabilitation project that

addresses housing need must: be a

relatively small amount in terms of

funds requested; clearly be in support of

the housing objective; and demonstrate

a positive and direct link to the national

objective.

For incidental activities claiming

benefit to low- and moderate-income

persons on an area basis, the application

must document that at least 51 percent

of the residents of the service area meet

the low- and moderate-income

requirement. Funds should not be

requested for activities that are not

incidental to, and in support of the

principal activity.

Scoring. Individual projects often vary

in the extent to which they meet the

criteria outlined above. Accordingly, it

is difficult to define precisely those

combinations of characteristics which

constitute, for example, ‘‘maximum’’

versus ‘‘substantial’’ impact. Not all

projects receiving a particular rating

will match all the criteria point-bypoint, in the same manner. The

objective for non-target area projects, in

as much as they are sparsely populated,

only should be to assist low- and

moderate-income persons. Accordingly,

the following standard will be used for

rating housing rehabilitation projects:

MAXIMUM (up to 400 Points)

1. Severe need is shown in the project

area, in terms of the proportion of units

that are substandard and the extent of

disrepair in the units.

2. The project would bring all, or

almost all, of the units in the project

area up to standard.

3. There are no feasibility questions,

such as availability of other resources,

marketability, or appropriateness of

project design, which would hinder the

timely completion of the project as

proposed.

4. Benefits a large number of persons

when compared to other housing

projects.

5. Significantly supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices 67267

SUBSTANTIAL (up to 300 Points)

1. Serious need is shown.

2. Project would bring most of the

units in the area up to standard.

3. There are no major feasibility

questions.

4. Benefits a substantial number of

persons.

5. Substantially supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

MODERATE (up to 200 Points)

1. Serious need is shown, but is not

as well documented as in other

applications.

2. Project would bring units up to

standard, but not to the same extent as

other applications.

3. There may be some minor

feasibility questions.

4. Benefits a significant number of

persons.

5. Moderately supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

MINIMAL (up to 100 Points)

1. Some need is evident, but it is not

serious compared to other applications,

or is not well documented.

2. Project may bring most units up to

standard, but not to same extent as in

other applications.

3. There are serious feasibility

questions.

4. Benefits a small number of persons.

5. Minimally supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

INSIGNIFICANT (0 Points)

1. Very little need has been

demonstrated.

2. Project would not rehabilitate most

units.

3. There are serious feasibility

questions.

4. Benefits a very small number of

persons.

5. Does not support the strategic plan

of a designated Empowerment Zone or

Enterprise Community.

(ii) Creation of New Housing. CDBG

funds may be used to support the

construction of new housing units, and,

in certain circumstances, to finance the

actual cost of constructing new units.

New construction may be carried out by

an eligible non-profit entity pursuant to

24 CFR 570.204, or as last resort

housing. Support of new construction

could include activities such as the

acquisition and/or clearance of land, the

provision of infrastructure, or the

payment of certain planning costs.

Where the creation of new units is

proposed, the application should

document the need for additional units

based on vacancy rates, waiting lists,

and other pertinent information. The

proposed project clearly must support,

or result in, additional units for lowand moderate-income persons. The

units may result from new construction

projects for which the proposed project

will provide non-construction

assistance.

Where the proposed project involves

the use of Federally assisted housing,

the applicant must identify and

document the current commitment

status of the Federal assistance. Lack of

a firm financial commitment for

assistance may adversely affect project

impact. Applicants should address

issues of site control and marketability,

in addition to addressing feasibility

from the standpoint of market financing.

The impact of the proposed project

will be based on the degree of need, the

number of units to be created, overall

feasibility and the nature and cost of the

proposed activities.

Scoring. Individual projects often vary

in the extent to which they meet the

criteria outlined above. Accordingly, it

is difficult to define precisely those

combinations of characteristics which

constitute, for example, ‘‘maximum’’

versus ‘‘substantial’’ impact. Not all

projects receiving a particular rating

will match all the criteria point-bypoint, in the same manner. Accordingly,

the following standard will be used for

rating projects supporting new housing

construction:

MAXIMUM (up to 400 Points)

1. Severe need for new housing

affordable to low- and moderate-income

persons is shown in the project area.

2. Project would create a large number

of new housing units affordable to lowand moderate-income persons.

3. There are no feasibility questions,

such as availability of other resources,

marketability, or appropriateness of

project design, which would hinder the

timely completion of the project as

proposed.

4. Benefits a large number of persons

when compared to other new housing

projects.

5. Project would affirmatively further

fair housing choice by resulting in the

spatial deconcentration of minorities

throughout the community, or would

provide spatial deconcentration of lowand moderate-income households if

there are no areas of minority

concentration.

6. Significantly supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

SUBSTANTIAL (up to 300 Points)

1. Serious need for new units

affordable to low- and moderate-income

persons is shown.

2. Project would create a substantial

number of new housing units.

3. There are no major feasibility

questions.

4. Benefits a substantial number of

persons.

5. Project would affirmatively further

fair housing choice through significant

efforts toward the spatial

deconcentration of minorities

throughout the community, or would

provide significant efforts toward spatial

deconcentration of low- and moderateincome households if there are no areas

of minority concentration.

6. Substantially supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

MODERATE (up to 200 Points)

1. Serious need is shown, but is not

as well documented as in other

applications.

2. Project would create new units but

not a substantial number.

3. There may be some minor

feasibility questions.

4. Benefits a significant number of

persons.

5. Project would have some effect of

affirmatively furthering fair housing

choice by encouraging spatial

deconcentration of minorities

throughout the community, or would

encourage spatial deconcentration of

low- and moderate-income households

if there are no areas of minority

concentration.

6. Moderately supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

MINIMAL (up to 100 Points)

1. Some need is evident, but it is not

serious compared to other applications,

or is not well documented.

2. Project will create a few new units

but not as many as in other applications.

3. There are serious feasibility

questions.

4. Benefits a small number of persons.

5. Project would minimally

affirmatively further fair housing choice

by encouraging spatial deconcentration

of minorities throughout the

community, or would encourage spatial

deconcentration of low- and moderateincome households if there are no areas

of minority concentration.

6. Minimally supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

INSIGNIFICANT (0 Points)

1. Very little need has been

demonstrated.
67268 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices

2. Project would not provide for new

units.

3. There are serious feasibility

questions.

4. Benefits a very small number of

persons.

5. Project would have no effect of

affirmatively furthering fair housing

choice through the spatial

deconcentration of minorities

throughout the community, or would

not encourage spatial deconcentration of

low- and moderate-income households

if there are no areas of minority

concentration.

6. Does not support the strategic plan

of a designated Empowerment Zone or

Enterprise Community.

(iii) Direct Homeownership

Assistance. Homeownership activities

are defined as activities which would

promote homeownership within the

applicant jurisdiction, focusing

particularly on aiding low- and

moderate-income persons in becoming

homeowners. While declining to

identify any particular type of proposed

project as superior, HUD is identifying

several criteria which must be

addressed within the project design, in

order for the application to receive the

maximum project impact.

Applications must include a well

developed description of

homeownership needs in the applicant

jurisdiction, focusing particularly on the

needs of low- and moderate-income

persons. The description also should

include, if applicable, any alternative

approaches which have been considered

in meeting homeownership needs.

Project feasibility must be addressed as

part of the application.

The application must demonstrate

that the proposed project would make

effective use of all available funds. This

would include any local, State or other

Federal funds which would be utilized

by the proposed project. If other such

funds are included as part of the

proposed project, the applicant must

demonstrate that such funds are

committed and truly available for the

project.

Any efforts which would affirmatively

further fair housing, by promoting

homeownership among minorities as

well as homeownership throughout the

community, must be outlined in the

application.

The application must explain how the

project would benefit low- and

moderate-income homebuyers,

particularly focusing on first-time and

minority homebuyers. The application

also should address any

homeownership counseling services,

including counseling pertaining to

Federal, State, and local fair housing

laws and requirements, which would be

provided to persons selected to

participate in the proposed project.

Finally, the application should describe

how the project would utilize public/

private partnerships to promote

homeownership, particularly in the

sense that private sector financing

would be accessible, as necessary, to

project participants to complement

available public sector funds, including

CDBG money.

HUD will review each application

which meets the threshold against the

following criteria:

MAXIMUM (up to 400 Points)

1. Project design is appropriate to

meet demonstrated homeownership

need and alternative approaches to

meeting the need are shown to have

been considered. Additionally, there are

no feasibility questions regarding the

implementation and execution of the

proposed project according to the

schedule.

2. The application documents serious

homeownership needs in the

community and the proposed project

would make effective use of available

funds.

3. The proposed project would

affirmatively further fair housing by

including initiatives to reach out to

potential minority homeowners and by

promoting homeownership

opportunities throughout the

community.

4. The proposed project would target

first-time homebuyers.

5. The proposed project would

provide homeownership counseling to

project participants.

6. The proposed project would

complement other Federal, State or local

programs which promote

homeownership.

7. The proposed project would utilize

public/private partnerships in

attempting to promote homeownership,

particularly in regard to participation by

local financial institutions.

8. Significantly supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

SUBSTANTIAL (up to 300 Points)

1. Project design demonstrates a

workable approach to homeownership

assistance needs, and there are no major

feasibility questions regarding

implementation of the proposed project.

2. Substantial homeownership needs

are documented by the application, and

the proposed project would make

effective use of available funds.

3. The proposed project would

affirmatively further fair housing by

promoting homeownership

opportunities throughout the

community.

4. The proposed project would

encourage homeownership among firsttime homebuyers.

5. The proposed project would

encourage local financial institutions to

lend to assisted homebuyers.

6. Substantially supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

MODERATE (up to 200 Points)

1. The proposed project has potential

to meet homeownership needs in the

community, and there are minor

feasibility questions regarding

implementation.

2. Homeownership needs in the

community are documented, but not as

well as in other applications.

3. The proposed project would

include efforts to affirmatively further

fair housing through homeownership.

4. The proposed project would

educate and inform citizens of

homeownership assistance available

through the project.

5. The proposed project would not

include private sector involvement.

6. Moderately supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

MINIMAL (up to 100 Points)

1. There are serious feasibility

questions regarding the implementation

and execution of the proposed project.

2. The proposed project would have

little impact upon homeownership

needs in the community.

3. The proposed project would

contribute minimally to fair housing in

the community.

4. The proposed project would

marginally aid first-time homebuyers

versus all homebuyers.

5. Minimally supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

INSIGNIFICANT (0 Points)

1. The proposed project has major

feasibility questions which would

inhibit its implementation and

execution.

2. The proposed project does not

address identified homeownership

needs in the community.

3. The proposed project would not

actively affirmatively further fair

housing.

4. The proposed project would be of

little benefit to first time homebuyers.

5. Does not support the strategic plan

of a designated Empowerment Zone or

Enterprise Community.

(b) Program Impact—Single

Purpose—Public Facilities Affecting
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices 67269

Public Health and Safety. In the case of

public facility projects, documentation

of the problem by outside, third-party

sources is of primary importance. In the

case of water and sewer projects,

documentation from public agencies is

particularly helpful, especially where

such agencies have pinpointed the exact

cause of the problem and have

recommended courses of action which

would eliminate the problem. Such

supporting documentation should be as

up-to-date as possible: the older the

supporting material, the more doubt

arises that the need is current and

immediate. Applicants also should be

sure to indicate how the project would

address public health and safety needs

and conditions. Quantification also is

essential in describing needs.

Documentation from those affected

should be included.

In order to show that the project is

likely to impact upon the problem, the

following items should be covered:

(1) Total project costs. Total project

costs should be documented by

qualified third party estimates, and be

as recent as possible.

(2) Source of other funds. To the

extent that CDBG funds will not cover

all costs, the source of other funds

should be identified and committed. If

local funds are to be used, the applicant

should show both the willingness and

the ability to provide the funds.

(3) How the project will solve the

problem. The applicant should

demonstrate that the project will

completely solve the problem and, if

applicable, the applicant should address

whether the proposal would be

satisfactory to other State/local agencies

which have jurisdiction over the

problem.

(4) Cost effectiveness of the proposal.

The applicant should address whether

the proposal is the most cost effective

and efficient among the possible

alternatives considered.

(5) Reasonableness of service area.

The applicant should address whether

the service area claimed for the project

is reasonable, in view of the nature of

the proposed project, and if not, the

applicant should address what effect a

more realistic appraisal would have on

overall benefit to low- and moderateincome persons.

(6) Project impact on public health

and safety; and

(7) Other applicable feasibility issues

have been addressed. Individual

projects often vary in the extent to

which they meet the criteria outlined

above. Therefore, it is difficult to define

precisely those combinations of

characteristics which constitute, for

example, ‘‘maximum’’ versus

‘‘substantial’’ impact. Not all

applications receiving a particular rating

will match point-for-point all the

criteria in the same way. The following

standards will be applied:

MAXIMUM (up to 400 Points)

1. Need is serious, current and

requires prompt attention.

2. Program would resolve the problem

completely, either through funds

requested or with the support of other

resources already committed.

3. No other obstacles to timely and

effective implementation of the program

exist.

4. Benefits a large number of persons

when compared to other public facility

projects.

5. Demonstrates that the applicant has

considered and, as appropriate, will use

alternative cost effective methods or

material in the execution of the project.

6. Public health and safety concerns

are fully resolved by the project.

7. Project would significantly address

serious deficiencies in accessibility for

disabled persons and/or provide a

substantial increase in the number of

public facilities accessible to disabled

persons.

8. Significantly supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

SUBSTANTIAL (up to 300 Points)

1. Serious need is shown.

2. Program would resolve the problem

completely.

3. There are no major feasibility

questions.

4. Benefits a substantial number of

persons.

5. There is evidence that efforts have

been made to minimize project costs

through use of alternative methods and

materials, as appropriate.

6. Public health and safety concerns

are substantially resolved by the project.

7. Project would substantially address

serious deficiencies in accessibility for

disabled persons and/or provide a

significant increase in the number of

public facilities accessible to disabled

persons.

8. Substantially supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

MODERATE (up to 200 Points)

1. Serious need is shown, but is not

as serious or well documented as other

applications.

2. Program may not meet the need as

completely as in some other

applications.

3. There may be some questions

relative to feasibility.

4. Benefits a significant number of

persons.

5. There is evidence that efforts have

been made to minimize project costs.

6. Public health and safety concerns

are partially met by the project.

7. Project would somewhat address

serious deficiencies in accessibility for

disabled persons and/or provide some

increase in the number of public

facilities accessible to disabled persons.

8. Moderately supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

MINIMAL (up to 100 Points)

1. Some need is evident, but is not

serious.

2. Only a portion of the need would

be met or the problem would not be

resolved completely.

3. There are serious feasibility

questions.

4. Benefits only a small number of

persons.

5. There is little evidence that efforts

have been made to minimize costs.

6. Public health and safety concerns

are minimally addressed by the project.

7. Project would minimally address

serious deficiencies in accessibility for

disabled persons and/or provide a

minimal increase in the number of

public facilities accessible to disabled

persons.

8. Minimally supports the strategic

plan of a designated Empowerment

Zone or Enterprise Community.

INSIGNIFICANT (0 Points)

1. No clear need has been

demonstrated.

2. Program is not appropriate to

meeting described needs, or there is

serious doubt that there would be much

impact on needs.

3. There are major feasibility

questions.

4. Benefits a very small number of

people.

5. There is no evidence that efforts

have been made to minimize project

costs.

6. Public health and safety needs are

not addressed by the project.

7. Project would not address serious

deficiencies in accessibility for disabled

persons and/or would not provide an

increase in the number of public

facilities accessible to disabled persons.

8. Project does not support the

strategic plan of a designated

Empowerment Zone or Enterprise

Community.

(c) Program Impact—Single Purpose—

Economic Development Projects. As

discussed earlier in this section of the

NOFA, each individual Single Purpose

project will receive a separate impact

rating. Applicants whose proposed

economic development program will
67270 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices

include multiple proposals should

determine the most appropriate form of

submission. This determination will

require a choice as to either the

incorporation of all proposals into a

single project or the submission of

separate projects for each proposal (each

transaction will be considered a

separate project). The single project

format presents an ‘‘all or nothing’’

situation. In determining the

appropriate submission format,

applicants should consider the ability of

a transaction to rate well on its own,

based on the magnitude of employment

impact, size of the financial transaction

and the other factors discussed in this

section.

The submission of proposals as

separate projects must be clearly

designated by the applicant with

individual Needs Descriptions,

Community Development Activities,

Impact Descriptions and Program

Schedule forms, including an

appropriate name for each project on

HUD Form 4124.1.

Section 807(c)(3) of the 1992 Act

provides that it is the sense of Congress

that each grantee should devote one

percent of its grant for the purpose of

providing assistance under section

105(a)(23) of the HCD Act to facilitate

economic development through

commercial microenterprises. A

microenterprise is defined as a

commercial enterprise with five or

fewer employees, one or more of whom

owns the enterprise. This should be

considered in developing an economic

development application.

It is noted that in accordance with

section 806 of the 1992 Act, the

Department published on January 5,

1995, a final rule relating to evaluation

and selection of Economic Development

activities by grantees.

In addition to the standard

submission requirements, to receive

maximum points, Small Cities

applicants must submit information that

demonstrates that CDBG funds are

needed for the proposed project or

activity. HUD will evaluate this material

as part of its Eligibility Review prior to

considering an application for funding

in the FY 1996 competition. The

following is a discussion of some of the

factors HUD will consider in assessing

projects in these key areas:

(i) The Appropriate Determination.

HUD requires that economic

development activities undertaken with

CDBG funds be appropriate to carry out

an economic development project.

Applicants should attempt to

demonstrate that each economic

development project has a reasonable

likelihood of success.

Applicants must document the

financial analysis of the project’s need

for assistance, as well as public benefit

factors that were considered in making

its determination that assistance is

appropriate. The applicant is expected

to provide clear documentation on how

the decision was reached.

The written documentation of the

financial analysis of the project’s need

should use the following steps:

1. Reasonableness of Proposed

Costs.—The applicant must review each

project cost element and determine that

the cost is reasonable and consistent

with third-party, fair-market prices for

that cost element. The general principle

is that the level of CDBG assistance

cannot be adequately determined if the

project costs are understated or inflated.

2. Commitment of Other Sources of

Funds. The applicant shall review all

projected sources of funds necessary to

complete the project and shall verify

that all sources (in particular private

debt and equity financing) have been

firmly committed to the extent

practicable, and are available to be

invested in the project. Verification

means ascertaining that: the source of

funds is committed; that the terms and

conditions of the committed funds are

known; and the source has the capacity

to deliver.

3. No Substitution of CDBG Funds for

Private Sources of Funds. The applicant

shall financially underwrite the project

and ensure to the extent possible that

CDBG funds are not being substituted

for available private debt financing or

equity capital. The analysis must be

tailored to the type of project being

assisted (i.e. real estate, user project,

capital equipment, working capital,

etc.). Real estate projects require

different financial analysis than working

capital or machinery and equipment

projects. Applicants should ensure that

both a significant equity commitment by

the for-profit business exists, and that

the level of certainty of the end use of

the property or project is sufficient to

ensure the achievement of national

objectives within a reasonable period of

time.

4. Establishment of CDBG Financing

Terms. The amount of CDBG assistance

provided to a for-profit business ideally

should be limited to the amount, with

appropriate repayment terms, sufficient

to go forward without substituting

CDBG funds for available private debt or

cash equity. The applicant should

structure its repayment terms so that the

business is allowed a reasonable rate of

return on invested equity, considering

the level of risk of the project. It should

be remembered that equity funds

generally should bear the greatest risk of

all funds invested in a project.

5. Assessing Public Benefit. The

extent of public benefit expected to be

derived from the economic development

project must be assessed. The

applicant’s activities must meet the

public benefit standards found at 24

CFR 570.209(b).

(ii) CDBG Assistance Must Minimize

Business and Job Displacement. Each

applicant will evaluate the potential of

each economic development project for

causing displacement of existing

businesses and lost jobs in the

neighborhood where the project is

proposed to be located. When the

grantee concludes that the potential

exists to cause displacement, given the

size, scope or nature of the business,

then the grantee must, to the extent

practicable, take steps to minimize such

displacement. The project file must

document the grantee’s review

conclusions and, if applicable, the steps

the grantee will take to minimize

displacement.

(iii) Section 105(a)(17) Requirements.

Section 105 (a)(17) of the HCD Act

requires that an activity assisted under

that section achieve one of the following

criteria:

(1) Creates or retains jobs for low- and

moderate-income persons (note that a

project which meets the national

objective of principally benefitting lowand moderate-income persons by

creating or retaining jobs, 51 percent of

which are for low- and moderateincome persons, will be deemed to have

met this criterion without any

additional documentation);

(2) Prevents or eliminates slums or

blight (note that a project which meets

the national objective of aiding in the

prevention or elimination of slums or

blight on an area basis will be deemed

to have met this criterion without any

additional documentation);

(3) Meets an urgent need (note that a

project which meets the national

objective of meeting community

development needs having a particular

urgency will be deemed to have met this

criterion without any additional

documentation);

(4) Creates or retains businesses

owned by community residents;

(5) Assists businesses that provide

goods or services needed by and

affordable to low- and moderate-income

residents;

(6) Provides technical assistance to

promote any of the activities under (1)

through (5) of this subsection.

(iv) National Objectives. As

previously stated in this NOFA, all

CDBG-assisted activities must address

one of the three broad national
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices 67271

objectives. Since economic development

projects usually result in new

employment or the retention of existing

jobs, these activities most likely would

be categorized as principally benefitting

low- and moderate-income persons in

this manner. Such projects will be

considered to benefit low- and

moderate-income persons where the

criteria of 24 CFR 570.208(a)(4) are met.

HUD will consider an activity to qualify

under this provision where the activity

involves jobs at least 51 percent of

which are taken by or made available to

such persons, or retained by such

persons. The extent to which the

proposed project will directly address

employment opportunities for low- and

moderate-income persons in the

applicant jurisdiction will be a primary

factor in HUD’s assessment of the

proposed program.

In determining whether the person is

a low- and moderate-income person for

these activities, it is the person’s family

income at the time the CDBG assistance

is provided that is determinative. When

making judgments concerning whether

an individual qualifies as a low- and

moderate-income person, both family

size and the income of the entire family

must be considered. This consideration

is necessary because a low- and

moderate-income person is defined as a

member of a low- and moderate-income

family. The 1992 Act amends the HCD

Act by stating that a person may be

presumed to be a low- and moderateincome person if the employee resides

in a census tract where not less than 70

percent of the residents are low- and

moderate-income persons. See 24 CFR

§ 570.208(a)(4) for more information on

this subject. HUD will also accept a

written certification by a person of his

or her family income and size to

establish low- and moderate-income

status. The certification may simply

state that the person’s family income is

below that required to be low- and

moderate-income in that area. The form

for such certification must include a

statement that the information is subject

to verification. The application must

contain adequate documentation to

explain fully, and to support, the

process that will be used to ensure that

project(s) comply with the low- and

moderate-income employment

requirements. The documentation must

be sufficient to show that the process

has been developed and that program

participants have agreed to adhere to

that process.

(v) Application Requirements. To the

extent feasible, the material listed below

should be submitted for economic

development projects. The material

should be submitted for each proposed

activity (e.g., each loan will be

considered a separate activity), whether

the proposed activity is presented as a

separate project or as part of a project

involving multiple activities. Since

economic development projects are

rated against each other, the more

completely these submission

requirements are met, the greater the

potential exists for enhancing the

impact score of the project.

1. A letter from each appropriate

developmental entity which includes at

least the following information:

a. A detailed physical description of

the project with a schedule of events

and maps or drawings as appropriate.

b. The estimated costs for the project,

including any working capital

requirements.

c. A discussion of all financing

sources, including the need for CDBG,

the terms of the CDBG assistance, and

the proposed lien structure. The

amount, source and nature of any equity

investment(s) must also be provided as

well as a commitment to invest the

equity.

d. A discussion of employment

impact which includes a schedule of

newly created positions. The schedule

should identify the number, salary and

skill level of each permanent position to

be created. If jobs are made available to

low- and moderate-income persons, the

applicant must also demonstrate and

document how persons from low- and

moderate-income households will be

accorded first consideration for

employment opportunities.

e. A discussion of all appropriate

feasibility issues including, but not

limited to: site control, zoning, public

approvals and permits, impact fees,

corporate authorizations, infrastructure,

environment and relocation.

f. An analysis and summary of market

and other data which supports the

anticipated success of the project.

2. A development budget showing all

costs for the project, including

professional fees and working capital.

3. Documentation to support project

costs. Documentation generally should

be from a third party source and be

consistent with the following

guidelines:

a. Acquisition costs should be

supported by an appraisal.

b. Construction/renovation costs

should be certified by an architect,

engineer or contractor. Use of Federal

Prevailing Wage Rates should be cited

where applicable.

c. Machinery and equipment costs

should be supported by vendor quotes.

d. Soft costs (e.g., legal, accounting,

title insurance) need be substantiated

only where such costs are anticipated to

be abnormally high.

4. Letters from all financing sources

discussing (at a minimum) the amount

and terms of the proposed financing,

and the current status of the application

for funding.

5. Historical financial data of the

development entity, preferably for the

last three years. This information may

be submitted under separate cover with

confidentiality requested. It is

recognized that historical financial data

may be unavailable or inappropriate for

some projects (e.g., start-up companies

and real estate transactions).

6. A two to five-year cash flow pro

forma with accompanying notes citing

basic assumptions.

7. The applicant’s assessment of the

project’s consistency with the CDBG

program eligibility appropriate

standards and with the national

objectives requirements.

(vi) Review Criteria. In evaluating and

rating economic development projects,

HUD will analyze the following factors:

1. Employment: The extent to which

the proposed project will directly

address employment opportunities for

low- and moderate-income persons in

the applicant’s jurisdiction will be a

primary factor in HUD’s assessment of

program impact. Applicants are

reminded that for an activity to be

consistent with the statutory objective of

low- and moderate-income benefit, as a

result of the creation or retention of

jobs, at least 51 percent of created or

retained employment opportunities

must be held by, or made available to,

persons from low- and moderate-income

families. Applicants must fully

document and describe employment

benefits. In addition, applicants should

address the following issues:

a. All employment data must be

expressed in terms of full-time

equivalents (FTEs). Only permanent

jobs may be counted, and applicants

must take into account such factors as

seasonal and part-time employment. A

seasonal job may be considered

permanent if the season is long enough

to be considered the person’s principal

occupation; permanent part-time jobs

must be converted to the full-time

equivalent.

b. The amount of CDBG assistance

required to produce each full-time

equivalent job will affect the impact

assessment by HUD. Lower CDBG costs

per job are preferable to higher CDBG

costs per job. Such assessments of

impact will be done on a comparative

basis among all projects submitted,

rather than by comparison to a given

standard.
67272 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices

c. The use of CDBG funds to assist a

business with transferring to a different

community will generally be considered

as having no employment impact.

Exceptions to this rule may include an

expansion to the business as a result of,

or concurrent with, the transfer; or if the

business can demonstrate that it is

infeasible to continue operations at the

current site. If the applicant proposes to

assist in a transfer of operations based

on an exception to the general rule,

HUD should be contacted early in the

planning process to discuss the viability

of such a proposal. Failure to do so

could result in the application receiving

0 impact points.

d. Applicants are encouraged to use

CDBG funds for projects that provide as

many jobs as possible for individuals

that are currently receiving public

assistance. Providing employment to

recipients of public assistance will help

break the cycle of dependency and

empower low-income citizens to take

control of their lives.

2. Feasibility. A high-impact rating

will not be given to projects that are

likely to encounter feasibility issues

which would hinder the timely

completion of the project. Such issues

include, but are not limited to: site

control, zoning, public approvals and

permits, infrastructure, environment,

and relocation. Applicants should

address these and any other applicable

issues and provide documentation

where appropriate.

Applicants also must demonstrate the

reasonable likelihood of the project’s

success, from both a financial and

employment standpoint. An analysis or

market data, which indicates an

inordinate risk in the undertaking of the

project, will affect the overall rating of

program impact.

3. Leverage. Leverage is defined as the

amount of private debt and equity to be

invested as a direct result of the CDBGfunded activity. Projects which fully

conform with those requirements by

providing the maximum feasible level of

private investment will be considered as

having appropriate leverage. The extent

of firm commitments for private

financing will be reviewed as well as

the amount of equity investment. The

project will be reviewed to determine

whether CDBG funds are replacing

private sources of funds. In order to

receive maximum impact CDBG funds

may not replace private financing,

CDBG assistance must be limited to the

amount necessary to fund the project

without replacing CDBG funds for

private funds, and equity funds should

bear the greatest risk in the project.

4. Taxes. While not a primary factor

in the evaluation of impact, projects

which will augment the applicant’s tax

base may have a positive effect on the

rating of program impact. It is

recognized, however, that good projects

do not always result in increased tax

revenues due to their nature.

5. Repayment. Where CDBG

repayments are to be made in some

manner to the applicant, the proposed

use of those repayments for economic

development purposes will be

considered.

6. Cost Reasonableness. In order to

receive a rating greater than the

minimal, the costs must be reasonable,

i.e., not inflated.

7. Base Closures. The Department

recognizes that communities facing the

loss of a military base may need a wellplanned economic development project

to help alleviate the effect of the base

closure. Well-planned projects that will

help successfully alleviate the economic

impact of base closures will tend to

have a high impact and rate well in the

competition.

8. Empowerment Zones/Enterprise

Communities. The Department is

supportive of using funds from this

NOFA to support projects in designated

Empowerment Zones and Enterprise

Communities. A project that

significantly supports the strategic plan

of a designated Empowerment Zone or

Enterprise Community will receive a

maximum impact score provided that

the other factors for maximum impact

are met.

(vii) Scoring. Individual projects often

vary in the extent to which they meet

the criteria outlined above. It is,

therefore, difficult to precisely define

those combinations of characteristics

which constitute, for example,

‘‘maximum’’ versus ‘‘substantial’’

impact. Not all applications receiving a

‘‘maximum’’ rating will match all the

criteria, point by point, in the same

manner. The following standards will be

applied:

MAXIMUM (up to 400 Points)

1. The analysis of market and other

risk data provides reasonable assurance

that the project will be successful.

2. The project will have a direct and

positive impact on employment

opportunities for persons from low- and

moderate-income households, and the

extent of that impact compares

favorably with that of other applicants.

3. All appropriate feasibility issues

have been addressed (including the

submission of firm private financing

commitments) and there is reasonable

assurance that the project will be

completed in a timely manner.

4. The Public Benefits, consistent

with 24 CFR § 570.209(b), to be derived

from the project are considerable

relative to other proposals.

5. The infusion of CDBG funds will

leverage a substantial investment of

private and other dollars.

6. The project costs are reasonable

(i.e. not inflated).

7. CDBG funds will not replace

private financing, CDBG assistance will

be limited to the amount necessary to

fund the project without replacing

CDBG funds for private funds, and

equity funds will bear the greatest risk

in the project.

8. Project significantly supports the

strategic plan of a designated

Empowerment Zone or Enterprise

Community.

SUBSTANTIAL (up to 300 Points)

The criteria for Maximum (400 Points)

is met, with either of the following

exceptions:

1. While the project will have a direct

and positive impact on employment

opportunities for persons from low- and

moderate-income households, the extent

of that impact is less than that

demonstrated by applicants receiving

the maximum rating.

2. While there are no major feasibility

problems, there are feasibility issues

which have not been fully addressed

and/or may have a negative effect on

timely implementation of the project.

However, overall success of the project

appears achievable.

In addition:

3. The Public Benefits derived from

this project will be greater than that

received by the majority of applicants.

4. CDBG funds will leverage more

private and/or other public dollars than

the majority of projects in the

competition.

5. The project costs are reasonable

(i.e. not inflated).

6. CDBG funds will not replace

private financing, CDBG assistance will

be limited to the amount necessary to

fund the project without replacing

CDBG funds for private funds, and

equity funds will bear as great a risk as

other project funds.

7. Project significantly supports the

strategic plan of a designated

Empowerment Zone or Enterprise

Community.

MODERATE (up to 200 Points)

The project presents at least one of the

following deficiencies which would

affect the appropriateness of CDBG

funding:

1. An analysis of the project indicates

that the likelihood of the availability of

other required financing is questionable.

2. There is a major feasibility issue

which is likely to affect completion of

the project.
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices 67273

3. The analysis of market and other

risk data indicates a likelihood that the

project will not create a significant

employment impact.

4. The number of employment

positions to be created is significantly

low and/or the CDBG cost per

employment position is significantly

high in relation to other applications.

In addition:

5. There will be some Public Benefits

resulting from this project.

6. CDBG dollars will leverage a

moderate amount of private and/or

other public funds relative to other

projects.

7. The project costs are reasonable

(i.e. not inflated).

8. Project moderately supports the

strategic plan of a designated

Empowerment Zone or Enterprise

Community.

MINIMAL (up to 100 Points)

The project presents at least one of the

following serious deficiencies which

would affect the appropriateness of

CDBG funding:

1. An analysis of the project indicates

that other required financing is unlikely

to be available.

2. There will be few, if any, Public

Benefits resulting from this project.

3. CDBG dollars will leverage little

private and/or other public investment

in the project.

4. Project minimally supports the

strategic plan of a designated

Empowerment Zone or Enterprise

Community.

INSIGNIFICANT (0 Points)

The activity presents at least one of

the following serious deficiencies which

indicates the inappropriateness of CDBG

funding:

1. It is clear that the activity cannot

be accomplished based on any

combination of the following factors:

(1) Major feasibility issues.

(2) Inordinate risk.

(3) Unavailability of required

financing.

2. The activity will not have a direct

impact on employment opportunities

for persons from low- and moderateincome households.

3. The completion of the project will

result in no Public Benefits or will be

detrimental to the community.

4. No other investment will be

triggered by the use of CDBG funds for

this activity.

5. Project does not support the

strategic plan of a designated

Empowerment Zone or Enterprise

Community.

(2) Program Impact—Comprehensive

Program Grants. Comprehensive

programs must address a substantial

portion of the identifiable community

development needs of a defined area(s).

The extent to which activities are

coordinated will be a major

consideration in the evaluation of

program impact. In defining an

appropriate area for comprehensive

treatment, applicants should consider

the severity of condition within the area

and the resources to be provided. The

impact is greatest where community

development needs will be substantially

addressed over a reasonable period of

time. Exceptions to the requirement that

activities be concentrated within a

defined area or areas may be made if the

applicant can demonstrate that the

proposed program represents a

reasonable means of addressing the

identified needs.

HUD will assess the impact of the

program for each of the four program

design criteria selected, based on the

factors described below. Applicants

must describe fully the extent to which

the program will address each criterion

selected. HUD will compare all

programs which address a particular

criterion. The best proposal for that

criterion will be the standard by which

all others will be judged, although that

proposal will not necessarily be

awarded a significant impact.

Assignment of Program Impact points

for a Comprehensive Grant application

is a two-step process. First, the potential

of the proposed program of activities to

achieve the results intended by each

selected criterion when considered in

relation to other communities selecting

the same criterion is assessed. A

numerical value is assigned, based on

the following:

The results would have insignificant

impact—0 Points

The results would have minimal

impact—2 Points

The results would have a moderate

impact—4 Points

The results would have a maximum

impact—8 points

After each of the four criteria selected

by an applicant is rated and a value

assigned, the values are summed. A

minimum of 12 points will be required

at this stage in order for the application

to be eligible for further consideration.

A score of less than 12 points indicates

that the proposed activities would have

insufficient impact to warrant funding.

Following this process, the actual

points for impact are determined by

dividing each applicant’s Program

Impact Score by the highest Program

Impact Score achieved by any applicant

and multiplying the result by 400.

Listed below are the ten design

criteria and the standards which HUD

has developed to evaluate each

criterion. The applicant must select and

address four of the criteria. In addition

to these standards, the Submission

Requirements and Review Criteria for

Economic Development Projects under

the Single Purpose Program apply in

determining the eligibility and rating for

economic development proposals that

are a part of a Comprehensive Program.

It is particularly important that

applicants fully address the economic

development criteria should Criteria 5

and 6 be selected.

(a) Criterion 1—Supports

Comprehensive Neighborhood

Conservation, Stabilization,

Revitalization, New Housing

Construction or Promotes

Homeownership. The applicant must

describe the degree to which the

identified needs of a defined area or

areas will be addressed in a coordinated

manner. In defining an area or areas,

applicants should examine carefully the

extent of needs and the resources

available to address those needs. Where

an area has not been defined, the

applicant should describe fully the

appropriateness of implementing

activities on a community-wide basis.

In evaluating the impact of the

proposed program, HUD will examine

the following factors:

—Nature and severity of neighborhood

needs.

—Extent to which needs will be

addressed.

—Amount of funds required to

implement neighborhood activities.

—Extent to which activities are

coordinated to address housing,

public facility and economic

development needs. Program impact

will be the greatest where a

substantial portion of the needs

within a defined area will be met.

—Extent to which the project promotes

fair housing choice in

homeownership among protected

classes.

—Extent to which the project supports

the strategic plan of a designated

Empowerment Zone or Enterprise

Community.

The strongest consideration for

housing rehabilitation programs is given

to those applicants which have designed

their housing programs by taking into

account both structural conditions and

appropriate financing mechanisms. The

proposed program should be structured

in a way to be marketable, given income

and structural characteristics of the

neighborhood area. The physical needs

of residential or mixed use properties

must be well stated and documented in

terms of substandardness. Applicants
67274 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices

will be expected to maximize the

leveraging of private funds, encourage

the participation of local financial

institutions, and develop realistic

program guidelines. Private funds

available from financial lending sources

should be established. If leveraging is

infeasible, the applicant must fully

document that fact. The most effective

housing programs will be those which

will address a substantial portion of the

identified needs, while maximizing the

impact of Federal funds.

For those programs that will support

the construction of new residential

units, project feasibility will be critical.

While the extent of need and number of

units to be created will be a primary

consideration in evaluating the impact,

issues of site control, marketability and

assurance of private financing must be

addressed, and must be documented.

Homeownership activities will be

reviewed in terms of: how effectively

the program would meet

homeownership needs identified in the

community; and the extent to which

they would make effective use of

available funds.

Public service activities also may be

considered in conjunction with other

activities under this criterion. Again,

any such activities would need to meet

demonstrated needs within the

community.

The impact of public improvement

activities will be assessed primarily on

the documented severity of the need

and the extent to which the proposed

program will address that need. Those

needs which directly affect the public

safety and welfare will be considered

the most severe.

Economic development activities also

will be evaluated by the extent to which

they will alleviate the identified

problems. However, the assessed impact

for these activities is often diminished

due to feasibility concerns.

In addition to quantifying the extent

of the anticipated improvements,

applicants must demonstrate that the

proposed activities can be carried out—

that is, documentation with respect to

private participation in such activities

must be thorough. Letters of only

general interest, by either property

owners or other private sector

participants, do not necessarily ensure

their participation in the program. Some

degree of assurance of participation

should be presented.

Review Criteria and Submission

requirements for Housing described

under the Single Purpose Program apply

in evaluating and rating housing

proposals that are a part of a

Comprehensive Program.

(b) Criterion 2—Provides Housing

Choice within the Community either

Outside Areas with Concentrations of

Minorities and Low- and ModerateIncome Persons or in a Neighborhood

which is Experiencing Revitalization

and Substantial Displacement as a

Result of Private Reinvestment, by

Enabling Low- and Moderate-Income

Persons to Remain in their

Neighborhood. If a proposed program

provides housing choice within the

community outside areas with

concentrations of minorities and lowand moderate-income persons, the

application must document that there

are existing areas which do, in fact,

contain concentrations of low- and

moderate-income families and

minorities. The proposed program, if

implemented, must result in additional

housing assistance being provided in

areas of non-concentration.

Communities with no minorities or

minority concentrations may receive

impact points where opportunities are

provided outside areas of low- and

moderate-income concentration. The

degree of impact will be based upon the

severity of needs, the number of units to

be provided, and the nature and cost of

the activities.

In a neighborhood which is

experiencing revitalization and

substantial displacement as a result of

private reinvestment, the applicant must

provide a detailed description of the

revitalization efforts within the

neighborhood, the amount of

displacement of low- and moderateincome persons, and the manner in

which the implementation of the

proposed program will enable

displacees to remain in the

neighborhood. The degree of needs,

nature and cost of activities, and

percentage of needs to be addressed will

be evaluated to determine program

impact.

(c) Criterion 3—Supports the

Expansion of Housing for Low- and

Moderate-Income Persons by Providing

Additional Housing Units Not

Previously Available. The proposed

program clearly must support, or result

in, additional units for low- and

moderate-income persons. The units

may result from the rehabilitation of

currently vacant structures, conversion

of non-residential structures to

residential use, or new construction

projects for which the proposed

program will provide non-construction

or construction assistance. Where the

proposed project involves the use of

Federally assisted housing, the

applicant must identify and document

the current commitment status of the

Federal assistance. Lack of a firm

financial commitment for assistance

may adversely affect program impact.

Applicants should address the areas of

site control and marketability, in

addition to addressing feasibility from

the standpoint of project financing.

Consideration will not be given to

proposed programs which will

rehabilitate occupied units or displace

current occupants. The impact of the

proposed programs will be based upon

the degree of needs, the number of units

to be created, and the nature and cost of

the proposed activities.

(d) Criterion 4—Addresses a Serious

Deficiency in a Community’s Public

Facilities. Consideration will be given to

the extent of deficiencies, and their

relative seriousness, of the identified

need. The following factors will be

considered:

—Documentation of the seriousness of

deficiencies. Appropriate

documentation should be provided to

substantiate the degree of seriousness.

Those deficiencies which directly

affect the public safety and welfare

will be considered most severe.

—The nature and cost of the proposed

activities in relation to the percentage

of need to be addressed.

—The extent to which the proposed

program will address a variety of

deficiencies in public facilities within

a defined area.

—Coordination with other activities

within the defined area.

—The degree to which the application

addresses such feasibility issues,

including but not limited to, the

validity of cost estimates by qualified

sources, the availability of other

funds, site control, and environmental

constraints.

—The number of persons to benefit.

—The extent to which the project

addresses serious deficiencies in

accessibility requirements and/or

expands the number of accessible

public facilities.

—Extent to which the project supports

the strategic plan of a designated

Empowerment Zone or Enterprise

Community.

(e) Criterion 5—Expands or Retains

Employment Opportunities.

Consideration will be given to proposed

programs that will result in the creation

of new jobs or retention of existing

employment opportunities. The

following factors will be considered:

—The number of jobs to be created or

retained in relation to the identified

needs. Documentation should be

provided to substantiate the number

and type (permanent or seasonal, full

or part-time) of job claimed. Letters

from local development agencies or
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices 67275

expected participants which express

more than general interest would be

appropriate. With respect to job

retention, evidence should be

provided to demonstrate that without

the proposed program, existing jobs

would be lost. The applicant also

must address the potential impact of

job loss on the community.

—The extent to which CDBG funds are

used to leverage private

commitments. If leveraging is

proposed, applicants should analyze

the actual amount of additional funds

required to make the project

financially feasible. In designing a

program to assist existing business

expansion or retention, or to

encourage new business development,

applicants must address whether

CDBG funds will be used for

infrastructure, land assemblage or

other financial incentives. These

factors may be important

considerations for a firm deciding

where to locate and whether to

expand or reduce the scope of its

operation. CDBG funds may be more

effectively used as a loan rather than

a grant. In this regard, the CDBG

funds would generate additional

program resources through loan

repayments to the community. It is

considered especially advantageous if

a revolving loan fund is established

and repayments continue to be used

to expand or retain employment

opportunities.

—The relationship of the activity to

other projects being implemented

within the defined area.

—The number of persons to benefit.

—Particular attention will be given to

the extent to which the Review

Criteria and Submission

Requirements for Economic

Development Projects are addressed

(see Single Purpose Program Criteria).

—Extent to which the project supports

the strategic plan of a designated

Empowerment Zone or Enterprise

Community.

—Extent to which the project results in

the employment of persons on public

assistance.

(f) Criterion 6—Attracts or Retains

Businesses which Provide Essential

Services. Consideration will be given to

proposed programs which will address

the attraction or retention of businesses

commonly associated with

neighborhood needs (corner grocery

stores, dry cleaners, pharmacies, etc.).

The applicant must describe clearly the

nature and anticipated impact of

activities. Documentation in the form of

letters from existing or new potential

businesses offering a commitment to the

program should be included. (Letters of

only general interest by property owners

do not necessarily ensure their

participation in the program, or their

willingness to secure debt if private

lending is proposed). The following

factors will be considered:

—The impact of the proposed program

in relation to the identifiable

neighborhood needs. The extent of

area stability must be documented. In

describing the needs of a business

district or neighborhood commercial

area, such factors as overall structural

conditions, business turnovers, and

vacancy rates over a period of time

should be clearly presented. The

formulation of a commercial

revitalization program must be based

on a thorough assessment of local

needs and a realistic program design.

An important consideration is

whether the proposed program is

designed to be marketable given

income characteristics, local business

condition, etc. The condition of

supporting public facilities and

improvements and their influence on

the business environment must be

established. If public improvements

are proposed in connection with

economic expansion or retention,

applicants must address the extent to

which the lack of these improvements

impact on business.

—Attraction/retention must be fully

documented by the applicant. With

respect to business retention,

evidence should be provided to

demonstrate clearly and objectively

that without the proposed CDBG

Program, existing retail/commercial

businesses would curtail their

operations. The applicant also must

document and address the potential

impact of the business loss on the

community and/or target area. HUD

would accept as examples of clear and

objective evidence a notice issued by

the business to affected employees, a

public announcement by the business,

or financial records provided by the

business that clearly indicate the need

for closing or moving all or portions

of the business out of the area.

—The amount of private funds to be

leveraged. If leveraging is proposed,

applicants should analyze the actual

amount of private or public funds

needed to make the project financially

feasible. In this regard, the

establishment of a revolving loan

fund, in which repayments would

continue to be used to attract or retain

businesses providing essential

services, would be considered a

positive factor.

—The relationship of the activity to a

comprehensive approach to meeting

the overall needs of the neighborhood

area.

—The impact of the proposed program

in utilizing minority, women-owned,

and project area businesses.

—Extent to which the project supports

the strategic plan of a designated

Empowerment Zone or Enterprise

Community.

—Extent to which the project results in

the employment of persons on public

assistance.

(g) Criterion 7—Removes Slums or

Blighting Conditions. Consideration will

be given to proposed programs which

will have a direct impact on the removal

of slums or blighting conditions.

Appropriate areas may include, but are

not limited to, deteriorated residential

or commercial structures, inappropriate

land uses, or blighting conditions, such

as repeated flooding and drainage

problems or serious deficiencies in

public facilities. Applicants should be

aware that slum and blight activities can

be carried out under the national

objective of benefit to low- and

moderate-income persons. If an

applicant elects to qualify the activity

on this basis, the degree of low- and

moderate-income benefit must be

demonstrated by the applicant.

Where residential or commercial

rehabilitation activities are proposed as

preventing or eliminating blighting

conditions, the application must clearly

document the number, type, and

condition of deteriorating or

deteriorated buildings in the designated

target area. Detailed conditions of the

physical condition of buildings or

structures would be appropriate to

establish the extent of substandard and

blighting conditions. For rehabilitation

of residential structures to be designed

as eliminating blight and addressing an

area’s deterioration, the buildings must

be considered substandard under local

definition.

When an area is determined to be

blighted, there must be a substantial

number of deteriorated or dilapidated

buildings, or the public improvements

throughout the area must be in a state

of deterioration. The proposed CDBG

program or project must be designed to

eliminate or address a substantial

portion of the identified blighting

conditions or physical decay. CDBG

assistance for facilities or structures

which are in good repair and show no

real signs of deterioration would not

score well under this criterion. For

instance, minor facade improvements to

a commercial building alone would not

indicate that a building is in poor
67276 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices

condition. However, assistance to a

commercial area which consists of

deteriorating businesses, storefronts in

serious need of rehabilitation, a high

vacancy factor, and public

improvements, such as parking areas

and parking access improvements

which are in need of physical

upgrading, would have a direct impact

on eliminating blighting conditions.

Public improvements that are so

deteriorated that they constitute a

genuine threat to the continued viability

of an area by discouraging private

investment necessary to maintain

properties may also be considered a

blighting influence. The following

factors will be considered:

—Extent and documented seriousness of

conditions/needs. References to

engineering studies, surveys or letters

from appropriate local agencies

should be included.

—Impact of the proposed program in

relation to providing long-term

permanent solutions to alleviate the

identified need. Short-term or

superficial improvements will not be

considered to have a significant

impact.

—Coordination with other projects and

activities which will address needs

within the defined area.

—Nature of any proposed re-use: degree

of commitment for re-use.

—Extent to which the project supports

the strategic plan of a designated

Empowerment Zone or Enterprise

Community.

(h) Criterion 8—Resolves a Serious

Threat to Health or Safety. The

applicant must describe the condition

which poses a threat to public health

and safety. A serious threat refers to a

situation which demands immediate

attention. This may be a condition that

has just occurred or a condition which,

though long standing, has intensified to

become an immediate danger.

Applicants should be aware that

imminent threat/urgent need activities

can be carried out under the national

objective of benefit to low- and

moderate-income persons. If an

applicant elects to qualify the activity

on this basis, the degree of low- and

moderate-income benefit must be

demonstrated by the applicant.

Consideration will be given to the

following:

—The extent to which a serious threat

to health or safety is documented, or

of recent origin, or which recently

became urgent. Documentation

should include the identification of

the existing conditions by appropriate

agencies.

—The extent to which the serious threat

will be resolved.

—The submission of documentation

which demonstrates that other

financial resources are insufficient or

unavailable to resolve such needs.

—The degree to which the application

addresses issues such as the validity

of cost estimates by qualified sources;

the availability of other funds; site

control and environmental

conditions; or other public body

approvals.

—The number of persons to benefit, as

well as the number of individuals

actually threatened.

Note: This criterion is generally more

restrictive than Criterion 4. The existing

condition must pose a serious and immediate

threat to the health or welfare of the target

population.

(i) Criterion 9—Supports Other

Federal or State Programs Being

Undertaken in the Community or Deals

With the Adverse Impact of Another

Recent Federal or State Action. The

Other Federal or State Program or

Action Must Be of Substantial Size or

Impact in the Community in Relation to

the Proposed Program. The application

must contain a complete description of

the Federal or State Program(s)

(excluding other CDBG Programs) which

currently are underway, or a complete

description of the adverse impact of a

recent Federal or State action (e.g. the

closing of a military base). A Federal or

State Program or action not yet initiated

will be considered only where the

application provides documentation

establishing the certainty of, and the

approximate commencement date of,

the described Program or action.

The proposed CDBG Program must

demonstrate clearly the magnitude of

the effect of the Federal or State

Program or action on the community.

The degree to which the proposed

CDBG Program will support the Federal

or State Program, and/or the extent to

which the adverse impact of Federal or

State action will be mitigated, also must

be demonstrated.

In addition to the above, the nature

and costs of the proposed activities will

be considered in determining the degree

of impact.

(j) Criterion 10—Supports Energy

Production or Conservation. This

criterion will be judged, and points will

be awarded, based upon the

community’s ability to demonstrate that

the proposed program will support

energy production or conservation.

Applicants are urged to develop

innovative approaches toward

addressing energy needs with Small

Cities CDBG funds. Energy

considerations can be a factor in most

activities proposed by smaller

communities. Attention should focus on

new methods of producing energy or

conserving energy where possible. In

developing and evaluating proposals,

there are a number of energy aspects to

consider. The following factors will be

considered:

—Cost efficiency—Relationship of

dollar amount to benefits to be

derived. The applicant must

document estimates of energy costs

which are to be saved as a result of

the proposed program. The proposed

program should make maximum use

of non-CDBG resources as well as

CDBG funds. Appropriate

documentation must be provided to

ensure that the proposal is

economically feasible.

—The extent to which the proposed

program will support other programs

currently aimed at addressing energy

production or conservation needs of

the community. From a management

standpoint, proposed projects should

be consistent with needs or objectives

of any plan for energy management or

conservation. Applicants should

pursue the availability of other

resources from Federal or State energy

related programs. The degree of

commitment of other resources

should be established. State energy

offices, private as well as

municipally-owned utility companies,

and home heating oil companies may

be appropriate entities to be involved

in the development and planning of

proposals.

—The application should address

whether the project is based on

appropriate technology, materials and

methods to maximize energy

conservation. Engineering reports or

studies would be appropriate

evidence to support the overall

feasibility of the project. The

conversion of existing facilities,

where appropriate, rather than

proposing new construction may be

more economical.

—While housing rehabilitation

programs which include

weatherization/winterization

components will be considered, they

generally will not be presumed as

addressing a severe need unless

unique conditions are specifically

identified and cost savings are

properly documented.

d. Fair Housing and Equal

Opportunity Evaluation. Documentation

for the 50 points for these items is the

responsibility of the applicant. Claims

of outstanding performance must be

based upon actual accomplishments.
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices 67277

Clear, precise documentation will be

required. Maps must have a census tract

or block numbering area (BNA), and

they must be in accordance with the

1990 Census data. Additionally, maps

must identify the locations of areas with

minorities by census tract or BNA. If

there are no minority areas, state so on

the map. Only population data from the

1990 Census will be acceptable for

purposes of this section.

Please note that a ‘‘minority’’ is a

person belonging to, or culturally

identified as, a member of any one of

the following racial/ethnic categories:

Black, Hispanic, Asian or Pacific

Islander, and American Indian or

Alaskan Native. For the purposes of this

section, the separate category—

‘‘women’’ —is not considered a

minority.

Counties claiming points under this

criterion must use county-wide statistics

(excluding entitlement communities). In

the case of joint applications, points

will be awarded based on the

performance of the lead entity only.

The following factors will be used to

judge outstanding performance in these

areas. Please note that the criteria are

the same for Comprehensive and Single

Purpose applicants, and that points for

outstanding performance may be

claimed under each criterion:

(1) Housing Achievements (40 points

total). (a) 20 Points—Provision of

Assisted Housing—Providing assisted

housing for low- and moderate-income

families, located in a manner which

provides housing choice in areas

outside of minority, or low- and

moderate-income concentrations.

Points will be awarded where both of

the following criteria are met:

(i) More than one-third of the housing

assistance provided by the applicant in

the last five (5) years (excluding Section

8 existing and housing assistance

provided in place) has been in Census

Tracts (CT) or Block Numbering Areas

(BNA) having a percentage of minority

population which is less than the

minority population in the community

as a whole; and

(ii) With regard to the Section 8

Existing Program, a community must

show the location (CT or BNA) of its

currently occupied family units by race/

ethnicity. Points will be awarded if

more than one-half of the minority

assisted families occupy units in areas

which have a lower percentage of

minority population than that of the

community as a whole.

A community with no minorities

must show the extent to which its

assisted housing is located outside areas

of concentrations of low- and moderateincome persons. In order to receive

points under this criteria, applicants

should follow the process outlined in (i)

and (ii) above, substituting low- and

moderate-income persons and families

for minority persons or families.

Applicants addressing the first criterion

must use a map indicating the location

of all assisted housing and a narrative

which indicates the number of units and

the type of assisted housing. The map

also must show the general location of

low- and moderate-income households

and minority households, giving the

numbers and percentages for both.

To qualify as housing assistance

provided, the units being claimed must

be part of a project located outside

minority or lower income concentrated

areas which has, at a minimum,

received a firm commitment from the

funding agency.

(iii) Points also may be awarded for

efforts which enable low- and moderateincome persons to remain in their

neighborhood when such

neighborhoods are experiencing

revitalization and substantial

displacement as a result of private

reinvestment. Applicants requesting

points under this criterion would not

need to meet the requirements of (a) and

(b) in order to receive points. Points will

be awarded where more than one half of

the families displaced were able to

remain in their original neighborhood

through the assistance of the applicant.

Applicants must show that:

—The neighborhood experienced

revitalization;

—The amount of displacement was

substantial;

—Displacement was caused by private

reinvestment;

—Low- and moderate-income persons

were permitted to remain in the

neighborhood as a result of action

taken by the applicant.

If the community is inhabited

predominantly by persons who are

members of minority and/or low-income

groups, points will be awarded where

there is a balanced distribution of

assisted housing throughout the

community.

(b) 20 Points—Implementation of a

HUD-approved New Horizons Fair

Housing Assistance Project or a Fair

Housing Strategy that is equivalent in

scope to a New Horizons Project.

The applicant must demonstrate that

it is implementing a HUD-approved

New Horizons Fair Housing Assistance

Project or demonstrate participation in a

HUD-approved county/State/regional

New Horizons Project; or that the

applicant is implementing a fair housing

strategy that is equivalent in scope to a

New Horizons Project. If the applicant is

implementing a New Horizons Project,

it must include:

—The date it was approved (by HUD);

and

—Those actions taken to implement the

plan.

If the applicant is implementing an

equivalent fair housing strategy, it must

include:

—The strategy being implemented;

—Those actions taken to implement the

strategy.

Please note that a fair housing strategy

must include the four elements of a New

Horizons Project in order to be

considered equivalent in scope:

—Local compliance activities;

—Educational programs to enhance the

clarity and understanding of the

community’s fair housing policy. For

communities with few or no

minorities, this should include

publication in the surrounding

communities of the applicant’s policy

of fair housing for minorities and the

disabled;

—Assistance to minority families; and

—Special programs (e.g. utilization of

Community Housing Resource Board

(CHRB) Programs, efforts to encourage

local realtors to enter into voluntary

agreements to encourage equal access

to financial institutions, etc.).

The fair housing strategy must

include goals for each of the above

elements. The date of adoption or

development of the strategy should be

indicated, as well as the date proposed

activities will be or have been

implemented.

(2) Entrepreneurial Efforts and Local

Equal Employment. The Department

encourages the use of minority

contracting, although it will not be used

as an evaluation factor in this NOFA.

(3) Equal Opportunity Employment.

10 points- Under this factor, the

applicant must document that its

percentage of minority, permanent fulltime employees is greater than the

percentage of minorities within the

county or the community, whichever is

higher. Applicants with no full-time

employees may claim points based on

part-time employment provided that

they document that the only permanent

employment is on a part-time basis.

4. Final Selection. The total points

received by a project for all of the

selection factors are added, and the

project is ranked against all other

projects from all applications, regardless

of the problem areas in which the

projects were rated. The highest ranked

projects will be funded to the extent

funds are available. Applicants will

receive a single grant in the amount of
67278 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices

the project or projects applied for which

were ranked high enough to be funded.

In the case of ties at the funding line,

HUD will use the following criteria in

order to break ties:

—The project receiving the highest

program impact rating will be funded;

—If tied projects have the same program

impact rating, the project having the

highest combined score on the needs

factors will be funded;

—If tied projects have the same program

impact ratings and equal needs factor

scores, the project having the highest

score on the percent of persons in

poverty needs factor will be funded;

and

—If tied projects have the same program

impact ratings, equal needs factor

scores, and an equal percent of

persons in poverty needs factor score,

the application having the most

outstanding performance in fair

housing and equal opportunity will be

funded.

As soon as possible after the rating

and ranking process has been

completed, HUD will notify all

applicants regarding their rating scores

and funding status. Thereafter,

applicants may contact HUD to discuss

scores or any aspects of the selection

process.

II. Application and Funding Award

Process

A. Obtaining Applications

All nonentitled communities in New

York State may obtain application kits

through HUD’s New York or Buffalo

Offices. The addresses for HUD’s

Buffalo and New York offices are:

Department of Housing and Urban

Development, Office of Community

Planning and Development,

Attention: Small Cities Coordinator,

26 Federal Plaza, New York, NY

10278–0068, Telephone (212) 264–

6500

Department of Housing and Urban

Development, Community Planning

and Development Division, Attention:

Small Cities Coordinator, 465 Main

Street, Lafayette Court, Buffalo, NY

14203, Telephone (716) 846–5768

B. Submitting Applications

A final application must be submitted

to HUD no later than March 13, 1996.

A final application includes an original

and two photocopies. In accordance

with HUD’s regulation at 24 CFR

570.443(a)(1), final applications may be

mailed, and if they are received after the

deadline, must be postmarked no later

than midnight, March 13, 1996. If an

application is hand-delivered to the

New York or Buffalo Offices, the

application must be delivered by 4:00

p.m. on the application deadline date.

Applicants in New York, in the counties

of Sullivan, Ulster, Putnam, and in nonparticipating jurisdictions in the urban

counties of Dutchess, Orange, Rockland,

Westchester, Nassau, and Suffolk

should submit applications to the New

York Office. All other nonentitled

communities in New York State should

submit their applications to the Buffalo

Office. Applications must be submitted

to the HUD office at the address listed

above in Section A.

The above-stated application deadline

is firm as to date and hour. In the

interest of fairness to all competing

applicants, the Department will treat as

ineligible for consideration any

application that is not received on, or

postmarked by March 13, 1996.

Applicants should take this practice

into account and make early submission

of their materials to avoid any risk of

loss of eligibility brought about by

unanticipated delays or other deliveryrelated problems.

C. The Application

1. Application Requirements

An application for the Small Cities

Program CDBG Grants is made by the

submission of:

(a) a completed HUD Form 4124,

including HUD Forms 4124.1 through

4124.6 and all appropriate supporting

material;

(b) a completed Standard Form 424;

(c) a signed copy of certifications

required under the CDBG Program,

including, but not limited to the DrugFree Workplace Certification, and the

Certification Regarding Lobbying

pursuant to section 319 of the

Department of Interior Appropriations

Act for Fiscal Year 1990 (31 U.S.C.

1352), generally prohibiting use of

appropriated funds, and, if applicable,

Disclosure of Lobbying Activities (SF–

LLL);

(d) Form HUD–2880, Applicant/

Recipient Disclosure/Update Report, as

required under subpart C of 24 CFR part

12, Accountability in the Provision of

HUD Assistance; and if applicable,

(e) Abbreviated Consolidated Plan.

2. Streamlined Application

Requirements for Certain Applicants

Applications submitted under the

Fiscal Year 1995 NOFA but not selected

for funding will automatically be

reactivated for consideration under this

NOFA, unless the applicant notifies the

Department in writing by March 13,

1996 that the applicant does not wish

the prior application to be considered in

the Fiscal Year 1996 competition.

Applications which are reactivated may

be updated, amended or supplemented

by the applicant provided that such

amendment or supplementation is

received no later than the due date for

applications under this NOFA. If there

is no significant change in the

application involving new activities or

alteration of proposed activities that

will significantly change the scope,

location or objectives of the proposed

activities or beneficiaries, there will be

no further citizen participation

requirement to keep the application

active for a succeeding round or

competition.

Applicants with activities approved

for funding under the Fiscal Year 1995

NOFA are eligible for additional

funding for those activities under this

NOFA. Applicants seeking additional

funding for activities selected for

funding under the Fiscal Year 1995

NOFA may notify the Department in

writing by March 13, 1996 that they

wish to seek additional funding for

those activities. Such applicants may

incorporate by reference the application

materials in the applicant’s Fiscal Year

1994 application, and may provide

material to update or supplement the

prior application.

All applicants are free to submit an

entirely new application in place of a

previous application should they so

desire.

D. Funding Award Process

In accordance with section 102 of the

Reform Act and HUD’s regulation at 24

CFR 12.16, HUD will notify the public

by notice published in the Federal

Register of all award decisions made by

HUD under this competition. In

accordance with the requirements of

section 102 of the Reform Act and

HUD’s regulations at 24 CFR part 12,

HUD also will ensure that

documentation and other information

regarding each application submitted

under this notice of funding availability

is sufficient to indicate the basis upon

which assistance was provided or

denied. Additionally, in accordance

with § 12.14(b) of these regulations,

HUD will make this material available

for public inspection for a period of five

years, beginning not less than 30

calendar days after the date on which

assistance is provided.

III. Technical Assistance

Prior to the application deadline, the

Buffalo Office will provide technical

assistance on request to individual

applicants, including explaining and

responding to questions regarding

program regulations, and defining terms

in the application package. In addition,
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices 67279

HUD will conduct informational

meetings around the State to discuss the

Small Cities Program, and will conduct

application workshops in conjunction

with these meetings. Please contact the

Buffalo Office for further information

regarding these meetings. Application

kits will be available at these meetings,

as well as from the HUD offices

previously identified in Section II of

this NOFA, and will also be available at

the informational meetings. In order to

ensure that the application deadline is

met, it is strongly suggested that

applicants begin preparing their

applications immediately and not wait

for the informational meetings.

In order to be considered for funding,

complete applications (an original and

two photocopies of the entire

application) must be physically received

by the appropriate HUD office on March

13, 1996 by 4:00 p.m. or, if mailed,

postmarked no later than midnight,

March 13, 1996. Applications must be

delivered or mailed to the appropriate

HUD office at the address indicated in

Section II.

IV. Checklist of Application Submission

Requirements

The following checklist is intended to

aid applicants in determining whether

their application is complete:

Application Completeness Checklist

Applicant: lllllllllllll

Comprehensive Grantlll

Single Purpose Grantlll

Multiyear lllllllllllll

Amount Requested $llllll

1. Is amount of funds requested

within established maximum?

2. Part I—Needs Description (HUD

Form 4124.1).

(a) Single Purpose Grants

i—Program Area

lllHousing

lllTarget Area

lllNon-target Area

lllPublic Facilities

lllEconomic Development (If an

‘‘appropriate’’ analysis is required

but is not included, the application

cannot be rated.)

ii—Is description of community

development needs included in

application?

(b) Comprehensive Grants

i—Have four design criteria been

selected and discussed in application?

ii—Is description of community

development needs included in

application?

(c) Multiyear

i—Is the plan for two or three years?

ii—Does the action plan for each year

present a viable project on its own?

3. Part II—Community Development

Activities (HUD Form 4124.2).

(a) Has national objective been

identified for each activity?

(b) Will 70 percent of grant funds

primarily benefit low- and moderateincome persons? (If not, the application

cannot be rated.)

4. Part III—Impact Description (HUD

Form 4124.3).

5. Part IV—Outstanding Performance

(HUD Form 4124.4).

6. Part V—Program Schedule (HUD

Form 4124.5).

7. Part VI—Maps.

(a) Location of proposed activities.

(Applicants must show the boundaries

of the defined area or areas.)

(b) Location of areas with minorities

by census tract. (If there are no minority

areas, state so on the map.)

(c) Housing conditions if project

involves housing rehabilitation.

(Number and location of each standard

and substandard unit should be clearly

identified.)

8. (a) Is Standard Form 424 complete?

Yes No

(b) Is original signature on at least one

copy?

Yes No

9. Is Certification signed with original

signature?

Yes No

10. Has the abbreviated Consolidated

Plan been prepared and submitted to

HUD (or included with this

application)?

11. Form HUD–2880, Application/

Recipient Disclosure/Update Report, as

required under subpart C of 24 CFR part

12.

V. Corrections to Deficient Applications

Under no circumstances will HUD

accept from the applicant unsolicited

information regarding the application

after the application deadline has

passed.

HUD may advise applicants of

technical deficiencies in applications

and permit them to be corrected. A

technical deficiency would be an error

or oversight which, if corrected, would

not alter, in either a positive or negative

fashion, the review and rating of the

application. Examples of curable

technical deficiencies would be a failure

to submit the proper certifications or

failure to submit an application

containing an original signature by an

authorized official. Situations not

considered curable would be, for

example, a failure to submit program

impact descriptions.

HUD will notify applicants in writing

of any curable technical deficiencies in

applications. Applicants will have 14

calendar days from the date of HUD’s

correspondence to reply and correct the

deficiency. If the deficiency is not

corrected within this time period, HUD

will reject the application as

incomplete.

Applicants should note that if an

abbreviated Consolidated Plan is not

submitted, the failure to submit it in a

timely manner is not considered a

curable deficiency.

VI. Other Matters

Environmental Impact

A Finding of No Significant Impact

with respect to the environment was

made in accordance with HUD

regulations at 24 CFR part 50,

implementing section 102(2)(C) of the

National Environmental Policy Act of

1969 (42 U.S.C. 4332) at the time of

development of the FY 1993 NOFA for

this program. Because no substantive

programmatic changes have been made,

that Finding remains applicable to this

NOFA and is available for public

inspection and copying between 7:30

am and 5:30 pm weekdays at the Office

of the Rules Docket Clerk, 451 Seventh

Street, SW, Room 10276, Washington,

DC 20410.

Federalism

The General Counsel, as the

Designated Official under section 6(a) of

Executive Order 12612, Federalism, has

determined that this NOFA will not

have substantial, direct effects on States,

on their political subdivisions, or on

their relationship with the Federal

Government, or on the distribution of

power and responsibilities between

them and other levels of government.

While the NOFA will provide financial

assistance to the Small Cities Program of

New York State, none of its provisions

will have an effect on the relationship

between the Federal Government and

New York State, or the State’s political

subdivisions.

Family

The General Counsel, as the

Designated Official for Executive Order

12606, The Family, has determined that

the policies announced in this NOFA

would not have the potential for

significant impact on family formation,

maintenance and general well-being

within the meaning of the Order. No

significant change in existing HUD

policies and programs will result from

issuance of this NOFA, as those policies

and programs relate to family concerns.

Accountability in the Provision of HUD

Assistance

See Section I.A.4 of this NOFA.
67280 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices

Prohibition Against Lobbying Activities

The use of funds awarded under this

NOFA is subject to the disclosure

requirements and prohibitions of

section 319 of the Department of Interior

and Related Agencies Appropriations

Act for Fiscal Year 1990 (31 U.S.C.

1352) and the implementing regulations

at 24 CFR part 87. These authorities

prohibit recipients of Federal contracts,

grants, or loans from using appropriated

funds for lobbying the Executive or

Legislative Branches of the Federal

Government in connection with a

specific contract, grant, or loan. The

prohibition also covers the awarding of

contracts, grants, cooperative

agreements, or loans unless the

recipient has made an acceptable

certification regarding lobbying. Under

24 CFR part 87, applicants, recipients,

and subrecipients of assistance

exceeding $100,000 must certify that no

Federal funds have been or will be spent

on lobbying activities in connection

with the assistance.

Indian Housing Authorities (IHAs)

established by an Indian tribe as a result

of the exercise of the tribe’s sovereign

power are excluded from coverage of the

Byrd Amendment, but IHAs established

under State law are not excluded from

the statute’s coverage.

Prohibition Against Advance

Information on Funding Decisions

Section 103 of the Reform Act

proscribes the communication of certain

information by HUD employees to

persons not authorized to receive that

information during the selection process

for the award of assistance that entails

a competition for its distribution. HUD’s

regulations implementing section 103

are codified at 24 CFR part 4. In

accordance with the requirements of

section 103, HUD employees involved

in the review of applications and in the

making of funding decisions under a

competitive funding process are

restrained by 24 CFR part 4 from

providing advance information to any

person (other than an authorized

employee of HUD) concerning funding

decisions, or from otherwise giving any

applicant an unfair competitive

advantage.

Persons who apply for assistance in

this competition should confine their

inquiries to the subject areas permitted

by 24 CFR part 4. Applicants who have

questions should contact the HUD

Office of Ethics (202) 708–3815 (voice/

TDD). (This is not a toll-free number.)

Dated: December 18, 1995.

Andrew Cuomo,

Assistant Secretary for Community Planning

and Development.

[FR Doc. 95–31383 Filed 12–27–95; 8:45 am]

BILLING CODE 4210–29–P