Department of economic and community development 498 office of community development chapter 20: community development block grant (cdbg) program




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B. PUBLIC FACILITIES and PUBLIC INFRASTRUCTURE GRANT PROGRAMS
The Public Facilities and Public Infrastructure Grant (PF & PI) Programs provide funding for local infrastructure and public facility activities, which are part of a community development strategy leading to future public and private investments.
1. Special Threshold Criteria and Certifications: Public Facilities and Public Infrastructure Program funds will be distributed through an annual grant application submission and review process.
(a) Eligible Activities: Eligible activities in the PF & PI programs are construction, acquisition, reconstruction, installation, rehabilitation, site clearance, historic preservation, relocation assistance associated with public projects, and infrastructure in support of new affordable housing construction.
(b) Local Match: All communities applying for PF & PI funds must certify that they will provide a local match equivalent to 20 percent of the total grant award.
2. Program Activities:
Activity Breakdown: Applicants may apply for one or more activities within either the Infrastructure or Facilities groups, but cannot apply for activities from both.
Public Infrastructure Public Facilities
Water system installation/improvements Community, child, senior and

Sewer system installation/improvements health centers

Water/sewer system hookups * Fire stations

Storm drainage Sheltered workshops

Utility infrastructure Homeless shelters

Infras. to support new affordable housing Removal of architectural barriers

Streets/roads/sidewalks Fire fighting equipment

Parking, curbs and gutters Salt, sand storage shed

Transfer station

(*as a housing rehabilitation activity Public works garage

completed in conjunction with a public Pier/Wharf/Dams

infrastructure project) Libraries

Historic Preservation

Parks & Recreation


3. Special Program Requirements:
(a) Past Performance: In order to be eligible to apply for the 2001 Public Facilities and Public Infrastructure programs, communities that received CDBG grants in or prior to 1997 must have closed their grants prior to application date. Communities that received CDBG grants in 1998 must have conditionally closed their grants prior to application date. Communities that received CDBG grants in 1999 must have obligated 50% of their benefit activity funds by prior to application date.

Exceptions: Applicants may request a waiver of this requirement under the following circumstances: l) program delays have occurred beyond the control of the grantee due to unforeseen changes in availability of funds or acts of nature; 2) the recipient has received unanticipated program income and expenditure of grant funds has been delayed; 3) the job creation goals of a previous grant have not been fulfilled; or 4) special circumstances as determined and approved by the OCD Director.
(b) Maximum Public Facilities & Public Infrastructure Grant Amounts
Public Infrastructure

Activity group Max. $
Water system installation/improvements, Sewer system

installation/improvements, Water/sewer system hookups

Storm drainage, Utility infrastructure, Infrastructure

in support of new affordable housing $400,000


Streets/roads/sidewalks, parking, curbs and gutters $100,000
Public Facilities

Activity group
Community, child, senior and health centers, libraries

Sheltered workshops, Homeless shelters, Pier/wharf

Fire Stations $250,000
Removal of architectural barriers $100,000

(as a distinct, stand-alone project)


Historic Preservation $100,000

(as a distinct, stand-alone project)


Fire fighting equipment, Salt/sand storage shed

Transfer station, Parks and recreation facilities

Public works garage, dams $ 50,000
(c) Funding Restrictions: PF & PI funds may not be used to assist infrastructure for the purpose of job creation. Job creation infrastructure activities are eligible in the Economic Development Infrastructure Grant program. With the exception of proposals for infrastructure in support of new housing construction and sewer/water system hookups, no housing activities may be assisted with PF & PI funds. All other eligible housing activities are listed in the Housing Assistance Grant program.

(d) Demonstration of National Objective: Applicants must demonstrate that their project meets a threshold of benefiting 51% or more low-to-moderate income persons or will prevent or eliminate slum and blighting conditions. Where necessary to demonstrate project LMI benefit, income surveys must use HUD-approved methodology and be accepted by OCD. This “demonstration” must be made as part of the pre-application.


(e) Priority for Public Facilities and Public Infrastructure Projects: Service and specialized service center communities and activities supporting the revitalization of downtown areas will be given priority during the evaluation and selection process for awarding PF & PI program funds. A list of the service and specialized service center communities is attached.
4. Selection Process: The selection process will consist of two phases: a pre- application phase and a final application/project development phase.
Pre-Application: The pre-application deadline is December 8, 2000. The pre-application will be in the form of a questionnaire that will seek, at minimum, the following information:
1. Community, utility district and/or administrative agency information

2. Amount of grant request and summary of proposed use of funds

3. Specific health, safety, and community concerns to be addressed

4. Beneficiary profile

5. Municipal, utility and/or administrative agency financial information

6. Utility rate structure and affect of project on rates (where applicable)

7. Municipal tax structure and affect of project on rates (where applicable)

8. Specific conditions that warrant the project completion

9. How the project was identified and prioritized

10. Funding sources sought and/or secured for this project


Each pre-application will be reviewed and evaluated in relation to those of similar sized communities in its activity group by the OCD application review team. Communities will be grouped in population categories per current Maine Municipal Association information as follows: less than 999; 1000 to 2499; 2500 to 4999; and 5000 and greater. The review team will recommend a list of projects to the OCD Director to proceed into the final application/development phase. Upon initial approval, a Project Development Specialist will be assigned to the community to assist in the final application/development phase and will remain as the staff representative to the community until project completion.


C. PUBLIC SERVICE GRANTS

The Public Service Grant (PSG) Program addresses community resource needs by providing funds for operating expenses, equipment and program materials for public service programs.


1. Special Threshold Criteria and Certifications: Public Service Program funds will be distributed through an annual grant application selection process.
(a) Eligible Activities: Eligible activities include operating and program material expenses for child care, health care, job training, recreation programs, education programs, public safety services, fair housing activities, senior citizen services, homeless services, drug abuse counseling and treatment, and energy conservation counseling and testing. Structural changes such as construction, renovation or rehabilitation are not eligible for PSG funding.
(b) Project Benefit: Eligible PSG projects provide benefits to a specific group of persons and not everyone in an area. The clientele of PSG projects are limited to:
(i) persons who are members of the following groups that are currently presumed by HUD to meet benefit requirements. The presumption may be challenged if there is substantial evidence the group served by the project is most likely not comprised of principally low/moderate income persons.
Abused Children

 Battered Spouses

 Elderly Persons

 Severely Disabled Adults

 Homeless Persons

 Illiterate Adults

 Migrant Farm Workers

 Persons Living with AIDS

- OR -
(ii) participants in a program designed to limit the PSG funded benefit exclusively to eligible Low and Moderate Income persons.
(c) All communities applying for PSG funds must certify that:
(i) the public service represents a new service to the community; or a quantifiable increase in the level of an existing service;
(ii) a local match equivalent to 20 percent of the total grant award will be provided; and,

(iii) the activity will meet the need or will continue after PSG funding is expended.


2. Special Program Requirements:
(a) Past Performance: In order to be eligible to apply for the 2001 Public Service program, communities that received CDBG grants in or prior to 1997 must have closed their grants prior to application date. Communities that received CDBG grants in 1998 must have conditionally closed their grants prior to application date. Communities that received CDBG grants in 1999 must have obligated 50% of their benefit activity funds prior to application date.
Exceptions: Applicants may request a waiver of this requirement under the following circumstances: l) program delays have occurred beyond the control of the grantee due to unforeseen changes in availability of funds or acts of nature; 2) the recipient has received unanticipated program income and expenditure of grant funds has been delayed; 3) the job creation goals of a previous grant have not been fulfilled; or 4) special circumstances as determined and approved by the OCD Director.
(b) Maximum Public Service Grant Amount: $50,000
3. Selection Process: The selection process will consist of two phases - an application phase and a project development phase.
Phase I Application: The maximum length of an application is eight pages. The application deadline is April 6, 2001.
Each application will be rated in relation to all others. A minimum of 80 points from the Problem Statement, Proposed Solution, Citizen Participation and Commitment sections will be required for an application to be considered for funding.
(a) Problem Statement (40 points):
Scope of Problem: (40 points) - Identification and description of the nature and magnitude of the problems to be addressed with PSG funds and the problems facing service providers as they address the issue.

(b) Proposed Solution (40 points):


(i) Project Description: (10 points) - Description of how PSG funds will be used to solve the problems. Include a project budget.
(ii) Project Feasibility: (10 points) - Identification of tasks, timetables and the parties responsible to implement the proposed solution.
(iii) Capacity: (10 points) - Identification and description of the qualifications and abilities of those who will implement the project.
(iv) Project Continuation: (10 points) – Description of how the program will continue after the PSG has ended or why there will no longer be a need for these services.

(c) Citizen Participation (10 points): Identification and description of the process, including public meetings, hearings and other methods to solicit involvement of residents, local organizations and public officials. Describe how the application reflects citizen concern and beneficiary involvement.


(d) Commitment/Match (10 points): Identification and description of how the community, organizations, and citizens will contribute financial and/or technical resources to the project, the status of those commitments, and a timeframe for the commitments.

D. DOWNTOWN REVITALIZATION PROGRAM
The Downtown Revitalization Program (DR) will provide funds to enable communities to implement comprehensive, integrated and innovative solutions to the problems facing their downtown districts. These community revitalization projects must be part of a strategy that targets downtown service and business districts and will lead to future public and private investment. Qualified applicant communities must have a downtown district meeting the definition of PL 776 enacted by the 119th legislature.
1. Special Threshold Criteria and Certifications: Downtown Revitalization Program funds will be distributed through an annual grant application selection process.
(a) Eligible activities include all those eligible under the Public Facilities, Public Infrastructure, Public Service, Housing Assistance, Micro Loan or Business Assistance programs as relevant to the revitalization of a downtown district.
(b) Local Match - All communities applying for Downtown Revitalization funds must certify that they will provide a local match equivalent to 20% of the total grant award.
2. Special Program Requirements
(a) Past Performance: In order to be eligible to apply for the 2001 Downtown Revitalization program, communities that received CDBG grants in or prior to 1997 must have closed their grants prior to application date. Communities that received CDBG grants in 1998 must have conditionally closed their grants prior to application date. Communities that received CDBG grants in 1999 must have obligated 50% of their benefit activity funds prior to application date.
Exceptions: Applicants may request a waiver of this requirement under the following circumstances: l) program delays have occurred beyond the control of the grantee due to unforeseen changes in availability of funds or acts of nature; 2) the recipient has received unanticipated program income and expenditure of grant funds has been delayed; 3) the job creation goals of a previous grant have not been fulfilled; or 4) special circumstances as determined and approved by the OCD Director.
(b) Planning Requirements: Applicants must have completed either a CDBG funded Quality Main Street Planning process or an equivalent downtown revitalization planning process within the past five years. Communities with plans older than 5 years will be permitted to demonstrate that their plans are under active implementation and the action plan remains valid. The proposed DR activities must be cited in the plan as recommended actions for downtown revitalization.

(c) Maximum Award: $400,000


(d) Bonus Points for Service and Specialized Center Communities Applicants will receive three bonus points if they have been identified by the State Planning Office as a service or specialized center community.
3. Selection Process - The selection process will consist of two phases: an application phase and a project development phase.
Phase I Application: The maximum application length is ten pages. The application deadline is January 19, 2001.
Each application will be rated in relation to all others. A minimum of 80 points from the Problem, Solution, Commitment and Citizen Participation sections will be required for an application to be considered for funding.
(a) Problem Statement (40 points):
(i) Scope of Problems (25 points) - Identification and description of the nature and magnitude of the identified problems to be addressed with DR funds.
(ii) Impact on Economic Vitality (15 points) - Describe how the problems negatively impact the economy of the community and persons of low-to-moderate income.
(b) Solution (40 points):
(i) Project Description (15 points) - Describe how funds will be used. Include a project budget.
(ii) Comprehensive Nature of Solution (10 points) - Description of how the activities relate to the community’s total downtown revitalization effort.
(iii) Feasibility (15 points) - Identification of tasks, timetables and the responsible parties to implement the proposed solution.
(c) Citizen Participation (10 points) - Identification and description of the process, descriptions of public meetings, hearings and other methods to solicit the involvement of residents, local organizations and public officials, and how the involvement contributed to this application.
(d) Commitment/Match (10 points): Identify and describe how the community, organizations, and citizens will contribute financial and/or technical resources to the project, and the status of those commitments.
(e) National Objective: Applicants must demonstrate that the project meets the National Objective of 1) benefiting low/moderate income persons or 2) preventing or eliminating slum or blighting conditions. Census information, a target area survey or a declaration of slum/blight conditions must be submitted with the application.

E. URGENT NEED GRANTS


The Urgent Need Grant (UNG) Program provides funding to enable a community to address serious and immediate threats to health and welfare.
1. Special Threshold Criteria and Certifications:
(a) Eligible Applicants: All units of general local government in Maine, including plantations, are eligible to apply for and receive Urgent Need funds. Counties may apply on behalf of unorganized territories.
(b) Project Eligibility: Pursuant to Section104 (b) 3 of the Housing and Community Development Act of 1974, as amended, the applicant must address a community development need which:
(i) poses a serious and immediate threat to the health or welfare of the community;
(ii) originated or became a direct threat to public health and safety no more than 18 months prior to the submission of the application;
(iii) is a project the applicant cannot finance on its own. "Cannot finance on its own" means, that the town's tax burden, regulatory structure, utility user fees, bonding capacity, previous or existing budgetary commitments, precludes it from assuming this project's additional financial expenditure; and
(iv) cannot be addressed with other sources of funding.
2. Special Program Requirements:
(a) Necessary Documentation: The emergency situation must require immediate action to alleviate the serious and imminent threat of injury or loss of life resulting from a natural or man-made cause.
(b) Application Submittal: Applicants must submit a complete UNG application that includes all required information and documentation.
(c) Maximum UNG Amount: $100,000
3. Selection Process: The selection process will consist of two phases: an application phase and a project development phase.
Phase I Application: An UNG application must include the following:

(a) documentation that the emergency situation was prompted by natural or man-made causes that pose an imminent threat of injury or loss of life;


(b) certification that the proposal is designed to address an urgent need and an immediate response is required to halt the threat of injury or loss of life;
(c) information regarding when the urgent need condition occurred or developed into a threat to health and safety;
(d) evidence confirming the applicant is unable to finance implementation on its own; and,
(e) documentation that other financial resources are not available to implement the proposal.
Phase II Project Development: Urgent Need Grants will be made on a first-come first-served basis. Prior to consideration of a grant award, all UNG proposals must meet the four Threshold Criteria and the Special Program requirements. Project Development Phase applications must comply with the following:
(a) Project Planning: Details of the project including engineering, cost analysis, feasibility and structural analysis as necessary.
(b) Management Plan: Details of the structure and methods established by the community for program management.
(c) Regulations: Project Development Phase applications will be reviewed for compliance with State and Federal regulations.
4. Approval Process: The UNG funds will be available beginning March 2, 2001. Applications will be accepted on a first-come first-served basis. Following receipt of an application, OCD shall review the application and verify that it contains all the required information. Notification to the applicant of the CDBG Program Manager's decision will initiate the Project Development Phase process necessary for contract award.
F. City of Augusta – Capitol River Improvement District
The City of Augusta will receive a special set-aside grant for $500,000 for improvements to its downtown district. The project area includes an economically and physically distressed portion of the downtown generally defined as being from the Father Curran Bridge westerly up Bridge Street to State Street, then northerly to a point adjacent to the Edwards Manufacturing Company site, then southerly along Water Street to the Father Curran Bridge.
The City must complete a Downtown Revitalization program application and a “Project Development Phase” application. These documents must demonstrate that all funded activities are eligible for CDBG funds, meet a CDBG national objective and that the project will significantly contribute to the downtown’s revitalization.


SECTION 3. ECONOMIC DEVELOPMENT
A. DEVELOPMENT FUND
The Development Fund (DF) Program provides funding to local governments to assist businesses to create or retain jobs for low and moderate-income persons.
1. Threshold Criteria:
(a) Eligible Applicants: All units of general local government in Maine, including plantations, are eligible to apply for and receive DF funds. County governments may apply on behalf of unorganized territories.
(b) At least 51% of the jobs created or retained as a result of DF expenditures proposed by the applicant must be taken by persons of low and moderate income;
(c) the cost per job created or retained with DF funds shall not exceed $35,000.
(d) complete the required DF application materials.
2. Special Program Requirements:
(a) Necessary and Appropriate: A DF loan to a business must be for projects that are necessary and appropriate. The application must describe the need for DF assistance, reasonableness of the amount requested, the repayment plan, and assurance that the assistance provided is commensurate with the community benefits that will accrue from the project. Documentation must be provided that the project cannot proceed without DF participation. The Development Fund is gap financing.
(b) Financing Plan: The DF application shall present a financing plan for a project in which the DF loan comprises the lesser of $200,000 or 40% of total project cost. Project activities and use of funds to calculate the non-DF financing must represent a new investment or a new project. The financing necessary to support at least 60% of the total project cost must be firm commitments from non-CDBG funds and must be documented by binding commitment letters submitted with the application.
(c) Maximum Grant Award: $200,000
(d) DF Loan: The DF is provided as a grant to a unit of local government. The local government must use designated grant monies as a loan to the business identified in the DF application. The loan must be provided under the terms stated in a DF Letter of Commitment and the contract between DECD and the local government.
(e) Repayment Terms: Justification for the repayment terms relate to filling the financing gap, identifying the rate of return allowed through the repayment terms, or specifying the locational cost differentiations and the benefit derived from the assistance.

3. Selection Process: The DF project will be evaluated as a viable business proposal. The following will be considered:
(a) Strategy Priority: The Development Fund program will give priority to business activities that support the state’s economic development strategy. The Development Fund will, whenever possible, be targeted towards economic sectors identified in the strategy.
(b) Eligible activities: Acquisition, relocation, demolition, clearance, construction, reconstruction, installation, rehabilitation and working capital.
(c) Chance of Success: The business must demonstrate that a market exists for its product or service, the cost of the product or service is competitive in current market conditions, the cash flow projections are adequate to support operating expenses and indebtedness, and management has the capacity to carry out the business or development plan. The project must demonstrate that there are no unidentified costs necessary for implementation.
(d) Financial Plan: The financing for the project must be in place and legally binding commitments must be submitted; the proposal is structured to meet cash flow projections; and the project pro forma must be reviewed by an independent qualified financial professional. The financing plan must be complete with no unidentified uses of funds necessary to complete the project.
(e) Equity: The proposed loan recipient has made an equity commitment to the project, preferably through cash injection. Other substantial participation may substitute for a cash equity injection with appropriate explanation regarding equity participation.
(f) DF Loan repayment: Loan repayment terms will allow a project to be implemented while providing the maximum and most expeditious return of CDBG DF monies.
(g) Security: The proposed loan recipient presents collateral appropriate to secure the DF Loan and indicates willingness to execute security agreements.

(h) Benefit: The DF proposal will be evaluated on the basis of the community and economic benefits that will result from the project. A fundamental component of CDBG assistance is the provision of Public Benefits.


(i) Cost: The number of permanent jobs created or retained as per DF project dollars will be compared with current and past DF projects. The increase in local tax dollars resulting from the project will be evaluated. Overall project cost effectiveness also will be considered.
(1) Low and Moderate Income Benefit: Benefit to LMI persons will be evaluated. The integration of job training programs, job advancement opportunities, education and training programs, and referral services from Workforce Investment Act and Job Service will also be reviewed.
(2) Community and Economic Development: The primary and secondary impacts of the DF project on the community's current and future economic development will be evaluated.
4. Approval Process
(a) Application: Applications shall be submitted by the first Thursday of each month. DECD staff will review the applications to determine if the threshold criteria have been met. DECD or its designee will conduct a credit analysis. The DF Review Committee will then review applications. The Committee will make recommendations to the Director of the Office of Business Development. The DF Committee will consist of staff members of the Finance Authority of Maine and DECD.
(b) DF Committee Recommendations: The DF Committee will review staff reports, credit analysis and make recommendations to the Director for awards. The Committee will recommend one of four options:
(i) approval of requested amount and terms;

(ii) approval of requested amount but under different terms;

(iii) rejection with staff recommendation for resubmission; or,

(iv) rejection.


(c) Quarterly Allocation: The allocation will be limited to $300,000 per quarter, plus any unobligated portion of allocations of previous quarters. The Director of OBD can waive this limit. The Director reserves the right to reject any or all applications.

B. REGIONAL ASSISTANCE FUND
The Regional Assistance Fund (RAF) Program provides financial resources to local governments to be used as leverage to obtain funds from Federal, State and private programs. RAF money can be used as match to obtain funds from: the Economic Development Administration (EDA); Economic Adjustment Assistance Program (Title IX); and the EDA Public Works Program (Title I) or the Rural Development Agency (RDA), Rural Business Enterprise (RBE) Grant and the Intermediary Relending Program (IRP) and/or other Federal, State, and private programs. The purpose of the RAF is to bring additional money into the State, and therefore, RAF cannot be used as match with the State's CDBG program or conventional lending institutions.
1. Threshold Criteria:
(a) Eligible Applicants: All units of general local government in Maine, including plantations and Counties, are eligible to apply for and receive a RAF grant. County governments may also apply on behalf of unorganized territories. Groups of local governments may apply for a multi-jurisdictional or joint RAF project. Multi-jurisdictional applications require designation of one local government as the lead applicant and consent for that designation by each participating local government.
(b) be an eligible planning activity or a project with 51% of the jobs created or retained as a result of RAF expenditures proposed by the applicant are taken by persons of low and moderate income;
(c) be designated by the appropriate organization providing matching funds as eligible to receive funds; and
(d) complete the required RAF application materials.
2. Special Program Requirements:
(a) RAF Funds: Provided the RAF application is successful, a contract will be executed between DECD and the local government to reserve funds for the applicant. A Letter of Conditions will be included in the contract to describe the terms that will govern the release of funds.
(b) Limit on Amount of RAF assistance: Each Economic Development District will be eligible for one RAF grant per year. Additional grants within districts will be made at the discretion of the Director of Office of Business Development (OBD). The RAF application must present a plan in which the RAF funding comprises the lesser of $200,000 or up to 100% of the matching funds required from the local government. The local government must demonstrate that it is not possible to get funding from any other source for the portion of matching funds sought from the RAF.

(c) Program Income Plan: Thresholds regarding interest rates or repayment terms for RAF assistance to revolving loan funds have not been established. Justification for the repayment terms relate to filling the financing gap, identifying the rate of return allowed through the repayment terms, or specifying the locational cost differentiations and the benefit derived from the assistance. To meet matching requirements, program income generated from RAF funds may be retained by the local grantee or by the local grantee's assignee with the approval of DECD.


(d) Community Financial Commitment: Wherever appropriate the community must demonstrate a vested financial interest in the development project, ranging up to 33% of CDBG funds
3. Selection Process: The RAF project will be evaluated as a viable CDBG proposal. The following considerations will be the focus of the Impact factor.
(a) Financial Plan: The financing need for the project will be based on an assessment of its financial resources. The proposal must have an appropriate leverage ratio of private and public dollars.
(b) Benefit: The RAF proposal will be evaluated on the basis of the community and economic benefits that will result from the project. A fundamental component of CDBG assistance is the provision of Public Benefits.
(c) Cost: The number of permanent jobs created or retained per RAF project dollars will be reviewed on a case by case basis. The increase in local tax dollars resulting from the project will be evaluated. Overall project cost effectiveness also will be considered.
(d) Low and Moderate Income Benefit: Benefit to low and moderate income persons and families will be evaluated. The integration of job training programs, job advancement opportunities, education and training programs, and referral services from Workforce Investment Act and Job Service will also be reviewed.
(e) Community and Economic Development: The primary and secondary impacts of the RAF project on the community's current and future economic development will be evaluated.
(f) Local Commitment/Match: The commitment of local funds to the project. Additional weight will be given to applications showing a local commitment of funds.

4. Approval Process:
(a) Application: Once the applicant has submitted a pre-application to the appropriate agency (such as EDA) and is working toward a full application, it may submit a RAF application to DECD. DECD staff will review the RAF applications on a first-come first-served basis to determine if the threshold criteria and special program requirements have been met. Successful applicants will be invited to continue to the project development phase. A project development analysis will be conducted by DECD or its designee for each proposal.
(b) Staff Recommendations: Following the project development analysis, staff will make one of the following three recommendations to the Director of the OBD for awards:
(i) approval of requested amount with requested or different terms

(ii) approval of lesser amount with requested or different terms; or,

(iii) rejection.


C. MICRO-LOAN PROGRAM
The Micro-Loan Program (ML) provides communities with funds to assist existing and new businesses to create and/or retain jobs for low and moderate-income persons.
1. Threshold Criteria and Certifications: Micro Loan Program funds will be distributed through an annual grant application selection process.
(a) Eligible Activity: The establishment of a local commercial loan program for the purpose of assisting businesses.
(b) Project Benefit: At a minimum, 51% of the jobs created or retained as a result of EDI expenditures must be taken by persons of low and moderate income.
2. Special Program Requirements:
(a) Past Performance: In order to be eligible to apply for the 2001 Micro-Loan program, communities that received CDBG grants in or prior to 1997 must have closed their grants prior to application date. Communities that received CDBG grants in 1998 must have conditionally closed their grants prior to application date. Communities that received CDBG grants in 1999 must have obligated 50% of their benefit activity funds prior to application date.
Exceptions: Applicants may request a waiver of this requirement under the following circumstances: l) program delays have occurred beyond the control of the grantee due to unforeseen changes in availability of funds or acts of nature; 2) the recipient has received unanticipated program income and expenditure of grant funds has been delayed; 3) the job creation goals of a previous grant have not been fulfilled; or 4) special circumstances as determined and approved by the OCD Director.
(b) Maximum Micro-Loan Grant Amount: $100,000, part of which may be used to provide technical assistance to loan applicants. Funds not loaned out within 12 months of contract start date will be withdrawn.
(c) Necessary and Appropriate: All loans made from the Micro-Loan Program to for-profit and non-profit businesses must be for projects that are necessary and appropriate as defined by HUD. Documentation must be provided that the project cannot proceed without Micro-Loan assistance.
(d) Financing Plan: Micro-Loans are limited to a maximum of $25,000 per loan. Micro-Loans may provide 100% of the financing for loans up to $15,000. Micro-Loans exceeding $15,000 require a dollar-for-dollar match for the portion of the loan exceeding $15,000.

(e) Micro-Loan Program Income: Grantees who demonstrate demand for additional Micro-Loan Program (MLP) eligible loans will be able to capitalize a MLP revolving loan fund with their MLP loan repayments. Grantees that do not close MLP loans to three or more different businesses and do not demonstrate demand for additional eligible loans will return MLP repayments to DECD.


3. Selection Process: The selection process will consist of two phases - an application phase and a project development phase.
Phase I Application: The maximum length of an application is six pages. The application deadline is February 9, 2001.
Each application will be rated in relation to all other Micro-loan applications. A minimum of 80 points from the Problem Statement, Proposed Solution and Citizen Participation sections will be required for an application to be considered for funding.
(a) Problem Statement (35 points):
Scope of Problem: (35 points) - Description of the economic base and business trend problems of the community and the impact on job opportunities for LMI persons. Description of the need for funds including data on area capital availability and the inability of potential applicants to obtain loans.
(b) Proposed Solution (45 points):
(i) Scope of Solution: (17.5 points) - Description of how funds will be used to solve the identified problems.
(ii) Capacity: (17.5 points) - Description of the capacity of the applicant to market and conduct a Micro-Loan Program. Identify accomplishments in administering loan programs or completing similar responsibilities.
(iii) Potential Loan Applicants: (10 points) – Description of efforts to identify potential loan applicants, who these prospects are, and type of business and capital needs.

(c) Citizen Participation (20 points):


(i) Business Involvement: (10 points) - Description of how the business community participated in the development of the proposed program such as repayment policies, targeted sectors, etc.
(ii) General Citizen Involvement: (10 points) - Description of how the need for, and priority of, a Micro-Loan program was defined by the general citizenry in the application process.

D. ECONOMIC DEVELOPMENT INFRASTRUCTURE PROGRAM
The Economic Development Infrastructure (EDI) Program provides Maine communities with funds to develop or rehabilitate public infrastructure or facilities that is essential for the location or expansion of business and industry. EDI funds will leverage local and private sector capital to create and retain jobs for low and moderate-income persons, generates taxes and create market place opportunities.
1. Threshold Criteria and Certifications: Applications for the EDI Program will be accepted on an ongoing basis beginning January 4, 2001. The official application acceptance will be the 1st Thursday of each month.
(a) Eligible Activities: Eligible activities include acquisition, relocation, demolition, clearance, construction, reconstruction, installation, and rehabilitation associated with public infrastructure projects such as water and sewer facilities, flood and drainage improvements, publicly-owned commercial/industrial buildings, parking, streets, curbs, gutters, sidewalks, etc. which are necessary to create or retain jobs in the non-retail private sector for low and moderate income persons. Eligibility of projects that are not in support of a specific business, such as the development of an industrial park or incubator building, will be determined on a case-by-case basis by OCD.
(b) Cost per Job: The targeted cost per job created or retained with EDI funds is $10,000.
(c) Project Benefit: At a minimum, 51% of the jobs created or retained as a result of EDI expenditures must be taken by persons of low and moderate income.
(d) Local Match: All communities applying for EDI funds must provide a local match equivalent to 20 percent of the total grant award. This match must be directly related to the EDI infrastructure portion of the project and is in addition to any investment made by the assisted business.
(e) Applicant Surety: If the proposed EDI activity is not in support of a specific business, prior to contracting with OCD, the applicant community must have in place a surety instrument equal to the amount of the EDI grant.
2. Special Program Requirements:
(a) Past Performance: In order to be eligible to apply for the 2001 Economic Development Infrastructure program, communities that received CDBG grants in or prior to 1997 must have closed their grants prior to application. Communities that received CDBG grants in 1998 must have conditionally closed their grants prior to application. Communities that received CDBG grants in 1999 must have obligated 50% of their benefit activity funds prior to application.


Exceptions: Applicants may request a waiver of this requirement under the following circumstances: l) program delays have occurred beyond the control of the grantee due to unforeseen changes in availability of funds or acts of nature; 2) the recipient has received unanticipated program income and expenditure of grant funds has been delayed; 3) the job creation goals of a previous grant have not been fulfilled; or 4) special circumstances as determined and approved by the OCD Director.
(b) Maximum Economic Development Infrastructure Grant Amount: $400,000. In no case will the amount of EDI assistance be greater than 50% of the project cost including EDI, local, and business contributions. Projects involving collaboration among communities may be eligible for grants exceeding the maximum.
(c) EDI Projects in Support of Retail Businesses: OCD will accept EDI Program applications in support of retail businesses only under the following limited conditions:
(i) The retail business represents the provision of new products and services previously unavailable in the community or is a tourism-related business;
(ii) The development or expansion of the retail business represents a net economic gain for the community and the region. EDI applications supporting a retail business or businesses are required to certify that the development represents a net overall gain for the regional economy and not a shift from existing established businesses to a new or expanded one; and
(iii) At least 50% of the jobs created by the retail business must be full time jobs.
(d) Exclusions: Communities will be eligible to receive either Economic Development Infrastructure (EDI) or Business Assistance funds, but not both for the same project.


3. Selection Process: The selection process will consist of two phases – a pre- application phase and an application phase.
(a) Pre-Application: Eligible EDI applications must submit a completed pre-application to OCD. Pre-applications will be reviewed by the OCD Review Team to determine if the following threshold criteria are met:
(i) Applicant eligibility

(ii) Consistency with State Economic Development Strategy

(ii) Activities are eligible and comply with national and state CDBG objectives

(iv) No legal actions will significantly effect the project

(v) Financial profile of the applicant community and/developer

(vi) Financial condition of the business or development entity

(vii) Amount of proposed EDI assistance is reasonable

(viii) Match funds meet program requirements

(ix) Assessment of success of the project

(x) Project will not result in relocation of the business from community to another, unless:

(a) the current host community certifies it cannot meet the needs of the business

(b) there is a plan to mitigate the potential for dislocation of the current workforce


If all pre-application requirements are met, OCD will invite the applicant, in writing within 15 working days, into the application phase. A Project Development Specialist will be assigned to work with the applicant. If the pre-application is rejected, the applicant will be notified in writing of the reasons for rejection. Pre-applications may be re-submitted after 30 days of notification.
(b) Application Phase: The applicant must submit a completed application within 120 days from invitation. The OCD Review Team will evaluate the project using the following criteria:
(i) Completeness

(ii) Ability to proceed

(iii) Quality of LMI jobs

(iv) Status of matching funds

(v) Level of risk

(vi) Community benefit

(vii) Reasonableness of EDI assistance

(viii) Citizen participation

(ix) Environmental review
The Review team will complete its review within 15 working days from the date of official application acceptance. The Team will recommend either: 1) Approval; 2) Request further information or documentation; or 3) Denial.

Upon receiving the recommendation from the Review Team, the OCD Director will forward the recommendation to the DECD Commissioner for final action. The Commissioner has the authority to ask for reconsideration by the Review Team. Within five (5) working days of review completion OCD will notify applicants of the status of their application. Applicants approved for funding will begin the process of contracting with OCD. If an application requires further information or documentation, the applicant may re-submit the amended application at any time.


Applications denied by OCD may not be re-submitted prior to 30 working days from notification and only after discussion between the applicant, Project Development Specialist, the OCD Technical Assistance Director or Program Manager.
The Office of Community Development reserves the right to fund only those applications deemed to be in the best interests of, and that offer definable benefits to, the State of Maine and the Community Development Block Grant Program.

E. BUSINESS ASSISTANCE PROGRAM
The Business Assistance (BA) program provides funds to assist businesses to create or retain jobs for low and moderate-income persons. The Business Assistance program will provide either loans, grants or a combination of each to meet the infrastructure, capital equipment and real property needs of businesses. The program will assist those economic initiatives and development opportunities that are of sufficient magnitude to have a significant impact on a local or regional economy.
1. Threshold Criteria: The state will distribute Business Assistance Program funds through an annual grant application selection process.
(a) Eligible Applicants: All units of general local government in Maine, including plantations, are eligible to apply for and receive BA funds. County governments may only apply on behalf of unorganized territories;
(b) Project Benefit: At a minimum, 51% of the jobs created or retained as a result of BA expenditures must be taken by persons of low and moderate income.
(c) Cost Per Job: The targeted cost per job created or retained with BA funds is $10,000.
2. Special Program Requirements:
(a) Necessary and Appropriate: A BA loan or grant to a business must be for projects that are necessary and appropriate. The application must describe the need for assistance, reasonableness of the amount requested, the repayment plan, and assurance that the assistance provided is commensurate with the community benefits that will accrue from the project. Documentation must be provided that the project cannot proceed without BA assistance.
(b) Financing Plan: The application shall present a complete financing plan for a project. The financing necessary to support the total project cost must be documented with binding commitment letters submitted with the application. Project activities or uses of funds used to calculate any non-CDBG financing must represent new investment.
(c) Funds: The Business Assistance funds are provided as a grant to a unit of local government. The local government will loan or grant to the business identified in the BA application. The loan or grant must be provided under the terms stated in a Business Assistance Letter of Commitment and the contract between DECD and the local government.
(d) Repayment Terms: Terms must be based on the business’ maximum capacity for principle and interest payments as documented in their pro formas and reviewed by DECD or its designee as appropriate to remain profitable.

(e) Maximum Business Assistance Grant Amount: $400,000


(f) Exclusions: Communities will be eligible to receive either Economic Development Infrastructure (EDI) or Business Assistance funds, but not both for the same project.
3. Eligible Activities: Eligible activities to be carried out with BA funds include acquisition, reconstruction, rehabilitation or installation of commercial or industrial buildings, structures, fixtures, capital equipment and real property improvements.
4. Selection Process: The BA Project will be evaluated as a viable business proposal. The following will be considered:
(a) Strategy Priority: The Business Assistance program will give priority to business activities that support the state’s economic development strategy. The Business Assistance Program, whenever possible, will be targeted towards economic sectors identified in the strategy.
(b) Chance of Success: The project demonstrates that a market exists for its product or service, the cost of the product or service is competitive in current market conditions, the cash flow projections are adequate to support operating expenses and indebtedness, and management has the capacity to carry out the business or development plan. The project must demonstrate that there are no unidentified costs necessary for implementation.
(c) Financial Plan: The financing for the project is in place and legally binding commitments have been submitted; the proposal has an appropriate leverage ratio of private and public dollars and is structured to meet cash flow projections; and the project pro forma has been reviewed by an independent qualified financial professional.
(d) Equity: The proposed loan/grant recipient has made an equity commitment to the project, preferably through a cash injection. Other substantial participation may substitute for a cash equity as determined by the Director.
(e) BA Loan repayment: Loan repayment terms will allow a project to be implemented while providing the maximum and most expeditious return of CDBG BA monies.
(f) Security: The proposed loan recipient presents collateral appropriate to secure the BA loan and indicates willingness to enter into security agreements.

(g) Public Benefit: The BA proposal will be evaluated on the basis of the community and economic benefits resulting from the project.


(h) Cost: The number of permanent jobs created or retained per BA project dollars and the increase in local tax dollars resulting from the project will be evaluated. Overall project cost effectiveness also will be considered.
(i) Low and Moderate Income Benefit: Benefit to LMI persons will be evaluated. The integration of job training programs, job advancement opportunities, education and training programs, and referral services from Joint Training Partnership Act and Job Service will also be reviewed.
(j) Community and Economic Development: The primary and secondary impacts of the project on the community's current and future economic development will be evaluated.
(k) Community Financial Commitment/Match: The community must demonstrate a vested financial interest in the development project. The program’s goal is to obtain community participation ranging up to 33% of CDBG funds.
5. Approval Process:
(a) Application: Applications may be submitted at any time. DECD staff will review the applications to determine if the threshold criteria have been met. A credit analysis will be conducted by DECD or its designee for each proposal. Following staff analysis, applications will be evaluated by a review committee appointed by the Director of the Office of Business Development.
(b) Review Committee Recommendations: The review committee will evaluate staff reports and make recommendations to the Director of OBD for awards.

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