A.        Introduction

The City receives Community Development Block Grant (CDBG) annually from the U.S. Department of Housing and Urban Development (HUD) to fund activities that primarily benefit low- and moderate-income (LMI) residents of the community. 

            Each year, the City uses a competitive application process to make a portion of its CDBG funds available to non-profit groups in the form of public service grants.  Eligible public service activities include, but are not limited to, programs concerned with housing, employment, crime prevention, childcare, health care, drug abuse prevention, education, mental health, welfare, or recreation.   

B.        Background on Federal Funding Sources

To help potential applicants determine whether or not their project might be eligible for a public service grant, it is important to be familiar with the basic requirements of the Federal program that provides the funding for the grants.  Potential applicants should also review the contractual requirements they will be expected to meet if they are selected for Federal funding (see Section D.  Contractual Requirements).

CDBG Program

The CDBG program provides the City with the opportunity to develop viable communities by funding activities that provide decent housing and a suitable living environment, and by expanding economic opportunities, principally for low- and moderate-income persons.  Funds may be used to carry out a wide range of community development activities such as neighborhood revitalization, economic development, and the provision of improved community facilities and services. 

The amount of CDBG funds available to non-profits for public service activities is capped under the CDBG regulations.  Thus, the City anticipates receiving approximately $2 million in CDBG funds for 2008, and the amount available to non-profits for public service grants will be approximately $200,000. 

CDBG National Objectives

Federal legislation and regulations have established national objectives that all CDBG funded activities must meet.  The City must assure that all activities meet one of these two national objectives of the program.  Each activity must:  1) benefit people with low- and moderate-incomes (LMIs); and/or 2) aid in the prevention of slums and blight.  Activities that do not meet one of these two broad national objectives cannot be undertaken with CDBG funds.

Low and Moderate Income Benefit:  Generally, public service activities meet the first requirement - benefit to LMI persons.  For an activity to meet this objective, it must either have income eligibility requirements that limit the activity’s benefits to LMI persons, or the activity must be located in and serve an area that is predominantly inhabited by LMI residents (a map of these areas can be found on page vi).  Under the CDBG regulations, programs that serve the elderly or persons with disabilities are usually considered to benefit low- and moderate-income persons.  Please reference the Housing Program Management Plan for 2007 Income Limits.  The 2007 Housing Program Management Plan can be found on our website at the following address:

http://www.cityoffortwayne.org/images/stories/community_development/hns/files/2007_hpmp.pdf

To meet this objective, each public service activity must serve no less than 51 percent LMI persons (although the City reserves the right to require that each activity serve a greater percentage of LMI persons).  The applicable percentage will be determined at the time a grantee’s contract is drafted, but applicants should plan to meet the highest number of LMI persons possible. 

It is imperative that applicants anticipate and plan for the methods they will use to determine and document the incomes of the persons that they serve through their CDBG funded activities.

            Slums and Blight:  For an activity to meet the second objective, it must be designed to address and ameliorate the conditions causing the slums and blight.  The City determines which areas qualify under removal of slums and blight.  It is rare for an application to be funded under this objective.

      In addition, CDBG regulations require that activities selected for funding must do one of the following:

§         Provide a new or an expanded level of an existing public service to populations with special needs, such as supportive services for the homeless, persons with HIV/AIDS, the elderly, abused persons, children-at-risk, persons with mental or physical disabilities, or new immigrant populations.

§         Eliminate conditions detrimental to health, safety, and public welfare.

§         Stimulate economic growth, development, and employment opportunities that will principally benefit LMI persons.

§         Support fair housing through education, counseling, legal assistance, and consumer protection programs.

CDBG Ineligible Activities

            Certain types of activities are ineligible for assistance from the CDBG funds.  The following types of activities generally are ineligible:

§         Construction of, or improvements to, general government buildings and schools.

§         Routine operation, maintenance, and repair activities for public facilities.

§         Assistance to churches or church-affiliated organizations unless a clear separation of purpose, mission, and organizational relationship can be established between the church and the CDBG-funded activities.

C.        City Policies and Priorities for Public Service Grants

            Each year, Fort Wayne receives many more applications for CDBG public service grants than there are funds available.  The competition is greatest among applicants requesting funds for costs associated with providing services to some of our most vulnerable residents: the elderly, children and youth, recent immigrants, the homeless, people with mental and physical disabilities, and victims of violence.

            In addition to the Federal requirements, Fort Wayne has developed policies and priorities to guide its use of CDBG funds.  These policies and priorities are based on federal requirements for the CDBG programs and local needs and funding priorities.

Policies

      These general policies and priorities apply to all applications for CDBG funds:

§         Public service grant amounts are capped at $20,000;

§         CDBG funds will not go to one organization for the same project (or a substantially similar project) for more than three (3) years unless the programs are run in the Synergy service areas. This policy began in 2006. All programs were considered first year applications in 2006.

§         Sub-recipients who receive funds in year one, are not guaranteed funding in years two and three – future funding is dependent on many factors, including performance;

§         Sub-recipients may only lease, not purchase, capital equipment with CDBG funds;

§         The acquisition of land, or the construction, acquisition, and/or rehabilitation of buildings is not eligible for a public service grant.  (For information on loan programs that may be available to fund these activities, please contact OHNS at 260- 427-1127.) 

Priorities

      Funding priority will be given to activities that:

§         have a high benefit to low- and moderate-income persons;

§         link affordable housing with case management and essential supportive services and support housing stability for special needs populations;

§         require a one-time only infusion of funds and have a detailed plan for permanent funding;

§         maximize the use of outside funds (non-CDBG/HOME/ESG or other City funds) and services and which are coordinated with other public and private efforts;

§         are clearly defined as to scope, location, need, budget, goals, and means for evaluation of program progress;

§         demonstrate the capacity of the applicant, and the capability to be carried out successfully;

§         support or coordinate with other community development efforts;

§         present a reasonable, sound budget; and,

§         are to be implemented by organizations with a solid track record.

       §         Priority may be given to activities occurring in Synergy areas (see linked  MAP of Synergy/CD Planning Areas)

            In addition, because the demand for these funds exceeds the amount received from HUD, the City is committed to funding projects that are ready to proceed immediately after funds are received, and those prepared to spend the funds within a twelve-month period (any funds that are not spent within this timeframe may be recaptured by the City).

D.        Contractual Requirements

            Each grantee selected to receive funds is required to sign a contract with the City.  Under City and Federal laws and regulations, certain requirements must be met in order to negotiate an agreement and disburse funds.  These requirements include the following:

1.      Applicants must demonstrate that they are a private nonprofit organization, or a governmental agency. 

2.      After an application is approved for funding, a contract will be prepared and sent by the City to the person identified by the applicant as the authorized official for signature.  The contract will specify the amount of the award, the period for which the project is approved, the contract term, and administrative provisions.  Special conditions attached to the award also will be specified in the agreement.  Sub-recipients and loan recipients will be required to file quarterly reports on expenditures, progress toward goals, and beneficiaries.  OHNS will provide forms for these reports.

3.      Sub-recipients and loan recipients are required to obtain adequate insurance, including workman’s compensation, bodily injury, property damage, or automobile liability, depending on the nature of the project.  Sub-recipients will be responsible for obtaining any necessary licenses and for complying with all applicable federal, state, and municipal laws, codes, and regulations.  If you are not a governmental agency, you can include the costs of insurance and licenses for the activity in the proposed budget.  Applicable insurance requirements may be reviewed in the “General Conditions of Contract Between City & Contractor” at the web link below:

            www.cityoffortwayne.org/commdev/hsn/housing/contractor_requirements.htm

4.      As part of any grant or loan agreement, recipients will be required to comply with affirmative action and equal opportunity laws.  In the event of non-compliance, the agreement may be terminated or suspended in whole or in part.

5.      All recipients will be required to comply with the federal government’s audit requirements as described in OMB Circular A-133 (for HUD’s programs, these requirements are codified at 24 CFR Part 84).  The cost of an audit is an eligible grant cost.

E.        Other Important Considerations for Applicants

            CDBG funds are not intended to be an on-going source of funds for an organization.  Under the CDBG Public Service Grant program, an organization may only receive funding for up to three years for the same program or activity.  However, there is no guarantee that approved projects will receive funding in years two and three.  In addition, for those organizations that are successful in receiving second and third year funds, the amount of CDBG funds awarded is often reduced from the previous years’ amounts.

            Finally, please be aware that even if your application is successful, you may be awarded a lower level of funding than was requested.  Please develop a contingency plan to account for a smaller CDBG award.