Harris County Community and Economic Development Department

1. Harris CountyCommunity and Economic Development Department Community Development Block Grant (CDBG) General Workshop

2. Agenda • Overview of HCCEDD • Overview of CDBG – General • National Objectives • Eligible and Ineligible Activities • Recordkeeping & Monitoring • Questions & Wrap-up

3. Service Area

4. Service Area The Service Area included unincorporated Harris County and its 15 cooperative cities. Bellaire Seabrook Deer Park Shoreacres Galena Park South Houston Humble Tomball Jacinto City Waller Katy Webster LaPorte West University Place Morgan’s Point Houston, Baytown and Pasadena receive their own entitlement funds and are not included in the Harris County service area. In addition to Target Areas, there are now Disadvantage Zones located in the Harris County Service Area. (Target Areas with 60% or greater of low-moderate income individuals)

5. How it Works

6. The Consolidated Plan • Five-year plan that addresses: • Housing; • Social services; • Infrastructure; and • Community revitalization needs. • Specifies types of projects to be funded • Application for federal funds under HUD’s formula grant programs: • CDBG; • HOME / ADDI; and • ESG. • Basis for assessing performance

7. The Consolidated Plan aids decision makers in creating strategies to address the following. • Employment and employability • Affordable housing • Adequate streets • Water, sewage and drainage systems • Quality education and Workforce Development • Parks and green space • Community facilities • Quality health care • Crime awareness and public safety and • Safe, peaceful and productive neighborhoods for low- and moderate-income communities

8. Request for Proposals (RFP) • Solicitation and acceptance of proposals • According to federal and state procurement laws and standards • Applicants must: • Be a non-profit organization or governmental agency or entity; • Expend funds within a 12-month period; • Have sufficient working capital; • Meet one Consolidated Plan Objective; • Meet one National Objective; • Benefit eligible residents in HCCEDD’s HUD Service Area. • Used to address objectives identified in Harris County’s Consolidated Plan

9. Annual Action Plan (AAP) • Detailed description of the allocations of Harris County HUD entitlement dollars (CDBG, HOME, and ESG). • Discusses how resources generated by tax dollars will be utilized for the upcoming program year.

10. Agencies Receive Allocations • Contracts are developed between Harris County and agencies. • Funds are dispersed on a reimbursement basis. • Grants Management staff monitors all projects.

11. Consolidated Annual Performance & Evaluation Report (CAPER) • Describes progress. • Reports on and reviews county’s use of Entitlement funds. • Benchmark for projects to be funded. • Allows for self-assessment.

12. Community Development Block Grant General

13. CDBG Overview Local governments participate in one of these two programs. • Entitlement Program • Cities >50,000 in population • Urban counties >200,000 • States and Small Cities Program • Cities <=50,000 • States <=50,000

14. CDBG Overview The amount of CDBG funds that local governments receive annually are determined by the higher of two formulas: • Data based on overcrowded housing, population, and poverty; or • Data based on age of housing, population growth lag, and poverty.* * The regulations implementing the CDBG Program are found at 24 CFR Part 570.

15. CDBG Overview The Primary Objective of CDBG Program is: The development of viable urban communities through the provision of the following, principally for low- and moderate-income (LMI) persons: decent housing, a suitable living environment, and economic opportunity.

16. Income Levels* % of MFI Amount 30% of Median 0-30% $18,300 Very-Low Income 31-50% $30,500 Low/Moderate Income 51-80% $48,800 Source: U.S. Department of Housing and Urban Development, March, 2007 CDBG Overview Median Family Income (MFI) in the Harris County area is $61,000 for a family of four.

17. National Objectives Each eligible activity must meet one of three national objectives: • Aid in the prevention of slum and blight • Urgent Need • Benefit to low- and moderate-income persons

18. National ObjectivesAid in the Prevention of Slums and Blight Prevention or elimination of slums and blighted conditions must either: • Eliminate slum and blight on an area basis; • Eliminate slum and blight on a spot basis; or • Be in an urban renewal area.

19. National ObjectivesAid in thePrevention of Slums and Blight Activities may qualify under Slum/ Blight National Objective (Area Basis) if: • The area meets the definition of slum, blighted, deteriorated, or deteriorating area under state or local law; • Substantial number of buildings or public improvements are in a state of deterioration; • Documentation is maintained regarding boundaries and conditions which qualified the area; and • Activities address one or more of the conditions which contributed to the deterioration.

20. National ObjectivesUrgent Need Alleviates emergency conditions. • Existing conditions pose a serious and immediate threat to health or welfare; • Existing conditions occurred within past 18 months; • Recipient is unable to finance the activity on its own; and • Other sources of funding are not available.

21. National ObjectivesBenefit to Low- and Moderate-Income Persons • Area Benefit • Limited Clientele • Housing Activities • Job creation/retention

22. National ObjectivesBenefit to Low- and Moderate-Income Persons Area Benefit – Activities must: • Benefit all residents in an area where at least 51% of the residents are LMI.(Examples: Water/Sewer; Libraries; Neighborhood/Community Centers; Parks, Streets and Sidewalks). • Be of a nature and location that it can be concluded that primary clients are LMI; or • Benefit a clientele presumed to be LMI; or • Require documentation on family size and income to show that at least 51% of the clientele are LMI; and • Have income eligibility requirements; continued

23. National ObjectivesBenefit to Low- and Moderate-Income Persons Limited Clientele Eligible Activities must: • Be of a nature and location that it can be concluded that primary clients are LMI; or • Benefit a clientele presumed to be LMI; or • Require documentation on family size and income to show that at least 51% of the clientele are LMI; and • Have income eligibility requirements; continued

24. National ObjectivesBenefit to Low- and Moderate-Income Persons Limited Clientele Continued: • Serve a group primarily presumed to be LMI: • Abused children; • Battered spouses; • Elderly persons; • Severely disabled persons; • Homeless persons; • Illiterate adults; • Persons living with AIDS; • Migrant farm workers.

25. National Objectives Benefit to Low- and Moderate-Income Persons Housing Activities Provide or improve permanent residential structures to be occupied by LMI persons. Note: At least 51% must be LMI occupied, if the structure contains more than one unit.

26. National ObjectivesBenefit to Low- and Moderate-Income Persons Job creation or retention Creation or retention of permanent jobs, at least 51% to be made available to or held by LMI persons.

27. Eligible Activities The following activity types are eligible under the CDBG program: • Housing • Public Facilities and Improvements • Public Services • Economic Development • Other

28. Housing Housing activities can be divided into the following categories: • Owner-occupied housing • Renter-occupied housing

29. Owner-Occupied Housing Eligible owner-occupied housing activities include: • Homeowner rehabilitation; • Direct homeownership assistance.

30. Owner-Occupied Housing Homeowner Rehabilitation Eligible activities include: • Weatherization; • Energy efficiency; • Handicapped accessibility improvements; • Emergency repairs; • Lead-based paint testing and abatement.

31. Owner-Occupied Housing Homeowner Rehabilitation (continued) Labor and materials are eligible costs, as well as: • Replacement of principal fixtures and components of existing structures; • Energy efficiency improvements; • Water and sewer connections; and • Installation of security devices, including smoke detectors.

32. Owner-Occupied Housing Direct Homeownership Assistance for low-income households • Provide up to 50% of the required downpayment • Pay reasonable closing costs • Provide principal write-down assistance • Subsidize interest rates

33. Owner-Occupied Housing Special Housing Activities Only Community-Based Housing Organizations (CBDOs): • Construct housing, using CDBG funds; and • Sell the homes to only LMI homebuyers in conjunction with a neighborhood revitalization or community economic development project.

34. Owner-Occupied Housing Ineligible CDBG Owner-Occupied Housing Activities: • Subsidizing or assisting the new construction of housing, unless carried out by a CBDO; or • Purchasing construction equipment. (Leasing is allowable if the activity is eligible.)

35. Renter-Occupied Housing Eligible renter-occupied housing activities: • Acquisition of property for an eligible rental housing project; • Rental housing rehabilitation and acquisition/rehab projects; and • New construction of rental housing by a CBDO is eligible, if the construction activity is part of neighborhood revitalization, community economic development project.

36. Renter-Occupied Housing Ineligible renter-occupied housing activities: • Construction of new rental housing (except when carried out by a CBDO); • Assistance to rental properties in which less than 51% of the units will be occupied by LMI households; • Subsistence-type payments (income payments) for rent and utilities (except in emergency situations for up to three months).

37. Public Facilities & Improvements Eligible public facilities and improvements include: • Infrastructure improvements (e.g., street improvements, water and sewer lines). • Neighborhood facilities (e.g., recreational facilities, parks, playgrounds). • Facilities* for persons with special needs (e.g., facilities for the homeless or battered spouses, nursing homes or group homes for the disabled). * If the facility is owned by a nonprofit, it must be open to the public during normal working hours.

38. Public Facilities & Improvements Ineligible public facilities and improvements activities: • Maintenance and repair of public facilities and improvements(e.g., filling potholes, repairing cracks in sidewalks, mowing grass at public recreation areas, replacing street light bulbs); • Operating costs associated with public facilities or improvements unless part of a CDBG-assisted public service activity; • Construction, maintenance or historic preservation of buildings used for the general conduct of government.

39. Remember: Projects must benefit Harris County Service Area Residents.

40. Recordkeeping & Monitoring Overview • General recordkeeping requirements • Access to records • Retention of records • Monitoring • Reporting requirements

41. General Recordkeeping Requirements Records should be: • Accurate, complete, orderly; and • Maintained in order to: • Document all CDBG funded activities; and • Demonstrate compliance with all applicable program and other requirements.* * According to U.S. Department of Housing and Urban Development Department (HUD) 24 CFR Part 570 and Part 570.208.

42. General Recordkeeping Requirements CDBG funded organizations must establish and maintain: • Administrative records • Financial Records, and • Project/case files.

43. Access to Records Records are used to create audits, examinations, excerpts and transcripts. The following have access to records of CDBG funded organizations: • HCCEDD representatives; • HUD representatives; • Comptroller General’s Office of the United States; • Other authorized governmental agencies; • Citizens (24 CFR 570.508).

44. Retention of Records • Retain records for periods of time after annual project activities have been completed to avoid findings. • Retain records for five years from the date of submission of the CAPER in which activity is reported for the last time. For all organizations (per 24 CFR 570.502(b)(3), 24 CFR 85.42, and OMB Circular A-110, Attachment C)

45. Monitoring The primary mission of monitoring is to ensure that organizations are: • In compliance with all regulations governing their administrative, financial, and programmatic operations; and • Achieving their performance objectives within the schedule and budget, as outlined in the Agreement.

46. Monitoring Five steps in a monitoring visit • Notification letter • Entrance conference • Documentation, data acquisition and analysis • Exit conference • Monitoring letter

47. Reporting Requirements • Reporting requirements are specified by the Grantee (HCCEDD) in the Subrecipient Agreement*. • Programmatic and Financial Reimbursement Request Reports are due monthly. • Quarterly and Annual reports may also apply. * 24 CFR 570.503(b)(2)

48. Questions and Answers