JULY/AUGUST 1996
JULY/AUGUST 1996
In this issue . . . Iowa wins the 1996 Outstanding Achievement Award in CDBG Program and Policy Administration, with its HART review process and its Promise Jobs program. Missouri's Housing Infrastructure program provides site development for new housing construction on economically distressed areas.
Iowa Wins COSCDA’s CDBG Outstanding
Achievement Award
The state of Iowa is the 1996 winner of COSCDA’s Outstanding Achievement Award for CDBG
Program and Policy Administration. This year’s competition required states to submit proposals that
demonstrates how coordinated efforts with other state/federal agencies, non-profit groups and or
private sector entities have made accessing CDBG funding easier, less burden-some and less time
consuming for local governments. States were asked to include in their proposals examples of
policy and or program implementation that makes “navigating the maze of state and federal funding”
for subgrantees less burdensome and overwhelming. They were charged with indicating “how it
was,” and the changes that were made in the application processes and funds distribution more user
friendly. States were also asked to describe the improvements in the state’s CDBG administration
that have resulted from their coordinating efforts.
To assist states in putting together their entries, we offered suggestions of the types of programmatic
policy issues they should identify in their submissions. The following types of CDBG activities and
policy considerations were given the highest regard by the review team.
• What other state agencies does your agency or division work with through a Memorandum
of Agreement or other legal document in funding or administering projects?
• In what ways does your agency/division coordinate CDBG funding cycles with other
programs?
• Does your Consolidated Plan require coordination with other state agencies or programs
when funding projects with CDBG funds?
• What actions has your agency/ division undertaken to make application for community
development projects easier?
• Does your CDBG program’s ranking and rating criteria give additional points to applicants
for attempting to coordinate programs that improve the efficiency and effectiveness of
projects?
• Describe a program set-aside that specifically targets coordinating with other state or
federal programs to fund projects in which CDBG funds are involved.
This year’s competition included five state proposals, all of which met the goals of the theme;
coordinating processes to make it easier for potential grantees to access state and federal funds.
However, the review team made up of John Sidor, COSCDA’s Executive Director, Zita
Blanken-ship, Director of the States and Small Cities Division at HUD and last year’s winner, Alice
Lusk, Director of the Community Service Division in Mississippi determined that the state of Iowa’s
submission was the best example, overall, of state coordinating and assistance to grantees using
CDBG funds.
Iowa's Submission
HART
The Housing Assistance Review Team (HART), initiated by the Iowa Department of Economic
Development (IDED) is a process, in which representatives from housing funding agencies
throughout the state meet to discuss projects that may or may not consist of joint funding. State
staff, recognizing that housing practitioners and developers are constantly on the look out for as
much grant and low-interest loan money as possible often apply to as many funders as are available
to fund projects. This situation often leads to projects receiving multiple sources of funds. Staff also
realized that funds are scarce and wanted to make sure that the availability of funds was maximized.
Informally, at first, staff from many funding agencies would discuss potential projects, to determine
funding levels of the various sources. Soon phone calls were made on a regular basis to the different
sources, IDED decided to formalize the process with regular meetings of housing funders within the
state.
“HART has revolutionized how Iowa communities seek and secure funds for affordable housing.
Initiated by IDED, HART is made up of representatives from the agencies that fund housing
projects: the Iowa Finance Authority, USDA Rural Housing Service, the Iowa office of Housing
and Urban Development, the Federal Home Loan Bank and IDED’s Housing Fund (which
combines the state’s HOME funds with 25% of the states CDBG funds.)”
HART developed a one-page Housing Application Review Form for potential applicants, which
they submit along with a brief description of a proposed project or concept. The team meets
monthly to review and discuss submissions. After the meeting IDED issues a joint letter of response
on behalf of HART. The letter identifies potential funding sources for the project, highlights specific
concerns or questions and provides names and telephone numbers of persons the applicant can
contact for advice and assistance.
Throughout the state, HART is regarded as a tremendous success by participants and customers.
Team members confirm it has fostered greater communication and better understanding between the
state’s major housing funding agencies. Applicants feel that it helps them develop better housing
projects. With the successes of HART, team members are looking to expand their mission. They
would like to consider how they can conduct joint project monitoring to conserve resources and
limit the intrusion on grantees.
In the days before the HART process, applicants would spend months on a Housing Fund
application. IDED would review applications monthly, rejecting most, often for minor reasons.
Applicants would revise and resubmit, until IDED deemed the project fundable. Now applicants go
through the HART. Upon HART review, each applicant is assigned an IDED “staff contact”. This
contact works with the applicant to develop a good, feasible housing project. Instead of attempting
to put together a quality housing project in a vacuum, applicants can rely on technical assistance and
guidance. IDED has assumed the responsibility for developing “fundable” projects, lifting that
burden from applicants.
The Promise Jobs Program
Another initiative that demonstrates Iowa’s collaborative effects as it relates to the CDBG program
is its Promise Jobs program. In 1996, IDED setaside $3 million of its CDBG funds to help save the
state’s under-funded Promise Jobs program, an integral part of Iowa’s welfare reform initiative. The
program provides education and training, as well as child care and transportation to help
participants escape welfare.
The rescue of Promise Jobs has required IDED to carefully coordinate activities with the
Departments of Human Services and Employment Services, and with communities and providers in
service delivery areas across the state.
The Quality Jobs Program
The Quality Jobs program is designed to foster training services to Promise Jobs participants who
are on the waiting list for post-secondary classroom training. Promise Jobs funding is insufficient to
enroll these individuals in the training that has been identified in their Family Investment
Agree-ments. Therefore, the Department of Economic Dev-elopment has allocated funds from its
CDBG program to serve the needs of these participants.
The Quality Jobs program will operate as a demonstration project in several Service Delivery
Areas. In addition to meeting participant needs, the projects are intended to demonstrate the
efficacy of the post secondary component and re-emphasize the IDED’s commitment to a quality
trained workforce as a foundation to economic dev-elopment efforts. Project operators will monitor
and report the ac-hievements of program participants in support of increased levels of funding for
training. Projects will also be asked to provide examples of applied learning techniques and
industry-specific training, where possible.
Project Conditions
Operating Entities: JTPA/Promise Jobs contractors will be the service delivery system for the QJ
program.
Number to be served: The QJ program is designed to serve up to 1,000 participants in selected
Service Delivery Areas (SDA’s) beginning in the Program Year 1995.
Period of Operation: The total demonstration period is from July 1, 1995, through June 30, 1997.
QJ participants must be able to complete training within the demonstration period.
Areas of Operation: Due to the allocation process of CDBG funds, residents of the following
communities may not be served under these projects. Cedar Falls, Cedar Rapids Council Bluffs,
Davenport, Des Moines, Dubuque, Iowa City, Souix City and Waterloo. Eligible Promise Jobs
participants from all other areas of the state may be served.
Funding: Funds in support of training up to 1,000 participants will be available. No funds are
available for administrative costs.
Reporting: In addition to required fiscal and service level reports, follow-up information must be
gathered and reported at periodic intervals during the two years following each participant’s
termination from services.
Expression of Interest
In order to be considered for selection as an operator of a Quality Jobs project, JTPA/Promise
Jobs contractors must submit an Expression of Interest (EI). The EI must include the following
elements:
PARTICIPANT PROCESS: Quality Jobs participants must be selected from the Promise Jobs
waiting list. Since a limited number of slots will be available, the EI must describe the selection
process the SDA sill use. The EI must describe participant selection criteria that includes; the
participant’s need for training and the likelihood of the participant becoming employed and
self-sufficient, i.e., leaving the Family Investment Program (FIP). In addition, the EI may describe
selection criteria that includes the participant’s investment in the training plan as demonstrated by
going to school and/or working while on the waiting list, by serving as an Iowa Invest mentor or by
some other initiative taken by the participant. The EI must also identify the number of participants to
be served by the project in the SDA.
ACTIVITIES AND SERVICES: This part of the EI must identify and describe the activities and
support services that will be provided to the participants. The EI must follow these guidelines:
• Pell and other grants will be used for tuition, fees, books, and supplies. The QJ program will pay
remaining costs up to the rates charged at Iowa Regentsinstitutions. There will be no PELL spend
down process.
• The QJ program is the child care payor of last resort. If the participant can access another child
care program, it must be accessed. When such child care is not available, actual child care costs will
be paid. Hourly, daily or weekly rates must be used to the greatest advantage in limiting program
costs. The EI should demonstrate coordination with Child Care Resource and Referral (CCR&R).
In addition, the EI should demonstrate collaborative efforts between Head Start and the Quality
Jobs program where possible.
• Transportation will be paid on an reimbursement basis. The mileage rate for the QJ program is 12
cents a mile. Regional transportation services and bus transportation may be utilized when
necessary, and these transportation providers may be reimbursed directly for services provided.
Distance traveled is limited to 100 miles per round trip for mileage reimbursement.
• Except for the above provisions, program rules and policy of the Promise Jobs program apply to
the Quality Jobs program unless approval is received from the Department of Economic
Development to waive specific rules or policies.
Based upon these guidelines, the EI must describe planned ser-vices to QJ participants in the SDA.
Innovative approaches to training and partnerships with the employer community should be
emphasized where possible. The following methods are not required in the EI, but are offered as
possible suggestions to enhance service delivery.
APPLIED LEARNING: Abundant research exists to demonstrate that people learn best and
retain knowledge longer if they are able to take concepts and knowledge learned in a classroom
setting and apply it in a real world context, preferably in a workplace setting. For example,
traditional classroom instruction could be coupled with parallel participation in an on-the-job training
experience. Registered apprenticeship programs have used this approach for many years.
Traditional job training programs are not designed to reflect what we know about how people learn
best. The QJ program is intended to afford opportunities to build applied learning into local
operations. To receive special consideration, the EI should indicate how the SDA will customize
training using applied learning approaches.
• Financial Commitment: Innovative ideas that increase the area’s business commitment to the
Quality Jobs program will enhance the EI. For example, businesses that hire workers trained in the
QJ program may contribute financially to the cost of training for future program participants.
• Hiring Process: Businesses participating in the QJ program that also receive CEBA or other
financial economic development incentives should commit to interviewing and hiring qualified QJ
participants. For example, at least five percent of new hires should be QJ participants or Family
Investment Program (FIP) participants.
• Other innovative ideas that promote a skilled workforce and Iowa’s economic development will
enhance the EI.
STAFFING: This portion of the EI must designate the staff positions that will be involved with the
program and explain the roles and responsibilities of those staff, including the designation of the staff
position(s) that will be responsible for coordinating the program, collecting data and completing and
submitting required reports. The EI must describe how the staff will manage the caseloads, including
participant contact, joint staffing with Promise Jobs staff, monitoring FIA progress, follow up, etc.
Local commitment to the QJ program, such as staff numbers, financial resources, etc., must be
described in the EI.
FINANCIAL MANAGEMENT: The EI must describe the process by which funds will be
received and expanded on behalf of participants. The contracting process for these funds requires
that a governmental entity receive the funds from the Department. EI must therefore identify a city or
county with the SDA which agrees to serve in that capacity. The process by which the Promise
Jobs contracting agency will manage the funds must also be described.
The Promise Jobs manage-ment information system will be used for tracking participants with the
QJ projects. However, a major objective of the QJ program is to measure returns on the investment
in training and education. The EI must therefore indicate commitment to collect and report
information on employment status, earnings, and occupations at intervals during the two years
following termination of services for each participant. While no funding will be available to reimburse
the costs of collecting follow-up information beyond June 30, 1997, a commitment to secure this
information is a prerequisite for receiving QJ program funding.
Missouri’s Housing Infrastructure
Program
Jobs, jobs, jobs. For years this has been the battle cry, if not the mantra of many community
development professionals throughout the Midwest. With slow or no economic growth and the loss
of quality jobs due to corporate downsizing and restructuring, many Midwestern states have been
forced to use any and all available public and private resources to bring life back to once thriving
economies. It worked, almost too well. Slowly the economies of these Midwestern states have
turned around, largely due to concentrated efforts and creative problem solving that identified the
types of industries needed that were suitable for the markets, available raw materials and the
available labor supply. Job creation is rivaling that of the mid 1970’s, which included steady growth,
with good paying jobs. The low cost of living, moderate tax structure, and the availability of an
ample labor supply makes the Midwest very attractive to prospective industries. With all the growth
in jobs and the potential for attracting more, a critical situation has arisen. The influx of new jobs and
the persons to fill them has surpassed the availability of existing housing. Many regions are finding
themselves with a housing shortage. Part of any business plan for expansion or relocation identifies
several factors that will ultimately make the endeavor work. These include; a moderate tax
structure, quality schools, proximity to adequate transportation availability of raw materials and
adequate housing for company personnel.
The state of Missouri, one of those Midwestern states that has done a great job in addressing the
need for jobs and economic development, is attempting to ameliorate a by-product of this good
work by creating a program for low and moderate income persons (the persons the jobs were
initially targeted) “...to provide necessary funds to make feasible the provision of newly constructed
housing...through the provision of low -cost financing for infrastructure improvements. The program
will be targeted toward housing market areas where a shortage of housing units exists and a
shortage of household income to drive demand for newly constructed housing.”
The housing Infrastructure program, a component of the state’s CDBG program is designed to
provide funds for site development activities for new housing construction. This demonstration
program is funded at $1,500,000 for FY 1996. Eligible activities include; streets, street accessories,
storm sewers, drainage, site improvements, water, sewer, mini-parks, land acquisition, professional
services, engineering and inspection services. Land acquisition must have a 100% benefit to low and
moderate income persons and is ineligible to for-profit entities.
Minimum Eligibility Criteria
Public or Not-For-Profit Ownership. CDBG funds may be used only for facilities and land which
are owned by cities, counties, water or sewer districts, road districts, and other political
subdivisions, or by a not-for-profit organization as defined by the Missouri State Statutes. Public
facilities must be such that their use is not restricted to a single user, and is a typical facility that the
public entity provides. Public facilities owned by a private company (either for-profit-or nonprofit),
such as water, electric, gas, railroads, etc., are not eligible for CDBG funding under this program.
Multiple Users. Public facilities must be considered a public use, in that more than one entity must
potentially benefit from the proposed improvements. The grantee (city, county) must agree to survey
future beneficiaries of the CDBG activities for a period of three years after the date of the grant
agreement.
Local Improvements. All improvements must be local in nature and serve the identified housing
development only. For example, streets defined as collector streets, water lines 10 inches or greater
in diameter, and large parks that serve any area other than the housing development would not be
eligible applicants.
“But For” Test. The applicant must demonstrate that the public facilities proposed for this project
are necessary for the developer’s project. Developers must show why other sources of funding
cannot be used to finance the project; infrastructure and land acquisition.
CDBG funds will not be used to replace funds committed by a city or a county prior to the approval
of an application. If a public announcement of the project has been done prior to the approval of an
application, the project is ineligible. A developer cannot execute contracts for their project which
specify the award of CDBG funds as a contingency. Facilities should be designed in the most
cost-efficient manner possible recognizing maintenance considerations and comparable facilities
elsewhere in the area.
Demonstrated Need for Housing. Single family housing developments proposed to be marketed
in a community that has a high vacancy rate for similar priced single family housing will not be
funded. Market information must clearly indicate a need for the housing to be constructed based on
market demand or economic development in the area. Market data must clearly indicate that the
housing can be sold in a reasonable time period.
Maximum CDBG Funding. CDBG funding for these projects must be within the following limits.
Eligible project funding will be adjusted down to achieve these criteria, based on financial
projections made in the application.
• $500,000 per project
• A minimum of 5% of the total cost of the project must be provided in the forma of a cash equity investment. This investment may not include a loan secured by any part of the project or any other public funding source.
• The developer’s return on sales price may not exceed 20% of the total cost of the development.
• Cost per unit shall not exceed $10,000
Zoning and Subdivision Regulations. A project will not be approved contingent upon an
application for rezoning. A project must be in compliance with the applicant’s subdivision
regula-tions before a funding proposal can be issued.
Building Codes. All pro-posed housing units must meet BOCA standards, NEC, have an exterior
least dimension of 20 feet, and Missouri Department of Economic Development (DED) Housing
Quality Standards. Preliminary specifications on the units must be provided with the application. To
receive funding approval, final designs must be provided to DED along with the plan review
authorized by the local official. DED will not ap-prove an application if major design problems exist.
Resources to pay for inspections services shall be the responsibility of the applicant.
Capacity of the Developer. DED will pre-approve all de-velopers before a project is approved.
The approval process will include an evaluation of the financial capacity and past performance of
the developer. Also, the developer must submit a list of the last three projects completed along with
references.
Public Support. DED will not fund any project where significant organized opposition to the
project exists within the applicant jurisdiction.
Public Services for the Project. Applicants must demonstrate that the proposed development will
not place an undue burden on existing water and sewer treatment facilities, roads, bridges, police,
fire, or existing public facilities.
Past Performance. Applicants must not have outstanding monitoring findings on past housing
infrastructure projects.
Other Program Requirements
Affordable Housing. In order to market housing to low and moderate income households, a city
must demonstrate that 51% of all units benefitting from public facility activities and 100% of the units
benefitting from all other activities are affordable. The price of houses in the development will be
considered affordable, when payments of principle, interest, taxes, insurance and utilities do not
exceed 33% of 60% of the median income for a household occupying a unit with two or fewer
bedrooms and 70% of the median income for a household occupying a unit with three or more
bedrooms. Unless pre-sold, the calculation must assume that each household will have a mortgage
with an 80% loan to value ratio.
Pre-sold Housing. For abbre-viated applications with pre-sold housing, the applicant should
document that each pre-sold house will be affordable for the proposed occupant with available
financing. Funding for the project will be conditional upon the submission of income documentation.
LMI Occupancy. All housing considered affordable must be initially occupied by an LMI
household. Housing targeted for LMI households cannot be sold to a non-LMI household for a
five-year period commencing upon the completion of each project. Income verification will be
reviewed by DED at project monitoring. Verifications will include signed certification of the
homeowner (or renter), and an independent verification of all sources of income as indicated on the
certification form.
Mixed Income Housing. For developments targeted for mixed income households, lower income
housing cannot be concentrated in one area of the development. Each street in the development
must contain some houses targeted toward lower income and other income levels. Houses not
targeted toward low-to-moderate income households cannot be sold by the buyer for any more
than the original purchase price of the unit, plus the value of any permanent improvements to the
property until a five-year period has elapsed.
Rental Units. CDBG funds for rental units is not an eligible cost of the program. Rental occupancy
is only allowed when a project developer is unsuccessful in marketing the units for
owner-occupancy. Not more than 20% of the units may be leased with less than a 100-year lease
arrangement.
-- Chandra Western
If you are interested in receiving the most current information on the stateadministered Community Development Block Grant program in a specific state or nationally, e-mail Chandra Western at cwestern@coscda.org with the following information:
State CDBG Update is published bimonthly by the Council of State Community Development Agencies (COSCDA) under cooperative agreement #DCBG000295 with the U.S. Department of Housing and Urban Development. The opinions expressed do not necessarily reflect the policies or positions of the Department of Housing and Urban Development, COSCDA, or COSCDA members.
Council of State Community Development Agencies
Hall of the States
444 North Capitol Street Suite 224
Washington, DC 20001
(202) 624-3630
(202) 624-3639 FAX
©1996 COSCDA. This publication cannot be reproduced in part or in whole without express written permission from COSCDA
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