March 15, 2016 CDBG FY2016 States & Small Cities CDBG Update for COSCDA Pamela Glekas Spring, Director States & Small Cities Division Office of Block Grant Assistance

CDBG State CDBG Update Recap on Key topics covered earlier in the conference included : In-depth discussions on: Grant-Based Accounting (GBA) Overview & a discussion of HUD’s Administrative Requirements The Interim Rule on CDBG Accounting Changes" which included: > The two tier admin cap; > including locally retained program income accounts in the annual action plan and OMB Super Circular [ aka 2 CFR ] W e also addressed” " New Functionality in IDIS" which included: the new local account (LA) fund and using it for UGLG repayments to the State, & Updates to the State PER...

 National Disaster Resilience Competition Winners  CDBG-DR Overview Update  Summary of FY2016 Program Budget  NSP Closeout & Program Income Update  Future CDBG Policy Development & Regulatory Revisions  Recent Policy Issuances  New CDBG TA Products CDBG Overview State CDBG Overview– Key Topics

Competition announced by the President June 14, 2014 Winners announced by HUD Secretary Julian Castro Jan. 21, 2016 Qualifying disaster in 2011, 2012, or Grantees were awarded out of a potential pool of applicants made up of – states, local governments, District of Columbia, and Puerto Rico Applicants had to tie their proposal to qualifying disaster Competition focused on resilience and recovery needs of a community National Disaster Resilience Competition

StatesCities/Counties California $70,359,459 New York City $176,000,000 Connecticut $54,277,359 New Orleans $141,260,569 Iowa $96,887,177 Minot, ND $74,340,770 Louisiana $92,629,249 Shelby County, TN $60,445,163 New Jersey $15,000,000 Springfield, MA $17,056,880 New York $35,800,000 Tennessee $44,502,374 Virginia $120,549,000  Winners announced on January 21, 2016 of a $1 billion National Disaster Resilience Competition (NDRC).  HUD Secretary Castro traveled to Norfolk, Virginia joined by Gov. Terry McAuliffe announcing the NRDC winners.  The NDRC winners are made up of 8 States & 5 Cities/Counties: And the Winners Are …

Breakdown of CDBG Disaster Funds for NDRC Awardees

NDRC Grantee Awardees

National Disaster Resilience Competition (continued) HUD will provide funding for resilient housing & infrastructure projects to states & communities impacted by major disasters between 2011 & 2013 Total of $1 billion available - $181 million reserved to Sandy-region Geographic diversity was considered in selection of winners Minimum grant size $1M – Maximum $500M Review of Phase 2 applications began in late November 2015 & wrapped up in late December For more info, go to HUDexchange.info or

CDBG CDBG-DR Eligible Activities CDBG-DR program funds are for necessary expenses related to:  Disaster relief,  Long-term recovery,  Restoration of infrastructure, housing & economic revitalization in the most impacted and distressed areas. More info: CDBG-Disaster Recovery Program Overview

 Prepares action plan  Administers programs or activities and/or works with another entity to distribute funds Calculates & announces allocations Publishes a notice in the federal register Awards funds Approves Appropriation CDBG-DR Funding Process Congress HUD Grantee

Grantee Oversight  Guidance issued on two-year expenditure  Deadline extensions for Hurricane Sandy/ & 2013 Disasters  New/Revised CDBG-DR Monitoring Exhibits in CPD Monitoring Handbook ( Nov/Dec timeframe ) Disaster Training Efforts  CDBG-DR Regional Trainings – conducted July & August 2015  Nat’l Disaster Resilience Competition (NDRC) – Phase I & II 2015 & Topical Resilience Webinars  Disaster Recovery Grant Reporting System (DRGR) User Manual published for grantee users (released in the last 60 days, available on HUD Exchange)  Upcoming Consultation Calls & Webinars for NDRC Winners CDBG-DR Overview

A Look & Stats on CDBG-DR Grantees CDBG-DR Grantees across Appropriations  29 States  23 Local Governments CDBG-DR Financial Summary Total Appropriated ~ $46.5 billion (includes $1 million in NDRC) [FY ] Total Appropriated to States ~ $39.7 billion (includes $530 million in NDRC) Total Amount Drawn ~ $31.5 billion Amount Drawn (States) ~ $30.8 billion Source: Disaster Recovery Grant Reporting System (DRGR) – February 3, 2016

 CDBG-DR Resource Page ( HUD Exchange )  Active disaster grants & grantee contact information  CDBG-DR Laws, Regulations, and Federal Register Notices  Relevant supplemental appropriations law(s)  CDBG-DR training materials  NDRC General Info & Winners  Disaster Recovery Grant Reporting System CDBG-R Resources

 President’s CDBG Request - $2.8 billion  Budget request for FY2017= $2.8 billion  For FY2016 Formula CDBG, Final Budget figure - $3 billion for States & Entitlement areas, same as FY15  $900 million for States  HUD is using ACS data + 7/1/14 Census population estimates for formula  An additional + $300 million supplemental funds for disaster recovery for major disasters was declared in 2016—funds will go to Texas & S. Carolina  Specifically:  $142,336 will go to Texas ( split amongst Houston, San Marcus & the State of Texas)  $156,664 will go to South Carolina ( split amongst Lexington & Richland counties, Columbia and the State of S.Carolina) CDBG FY 2015 CDBG Program Budget

Update on NSP Gearing up for NSP Closeout— It’s in Progress!

Neighborhood Stabilization Program (NSP) Closeout Update Funding Overview Program Income Update Closeout Process & Progress Status to date TA availability to NSP grantees Readiness checks Closeout Criteria Website materials Fast Facts for NSP Closeout- Guide issued

634 NSP Grants; 389 Grantees NSP # of Grants Awarde d Grant Amount Total Drawn Program Income Drawn Total Expended NSP1 308 $3,894,559,693$3,723,037,267 $825,974,492$4,566,414,609 NSP2 56 $1,929,543,319$1,929,675,433 $408,820,525$2,341,568,108 NSP3 270 $ 971,406,881$ 915,915,170 $160,489,392$1,086,208,218 Total 634 $6,795,509,893$6,568,627,871 $1,395,284,411 $7,994,190,936 U.S. Department of Housing and Urban Development Community Planning and Development17 NSP Funding

As of February 2016, NSP funds assisted in generating $1.3 billion in program income. Prog. Income WAIVER  February 2015 HUD published a waiver allowing 42 of 56 NSP2 grantees to draw down funds from their Line of Credit (LOC) BEFORE drawing funds from PI. NSP2 PI SP2-Program-Income-Waiver.pdf SP2-Program-Income-Waiver.pdf  Majority of grantees w/PI reinvesting NSP funds back into their NSP programs;  Many grantees confronting issues as a result of high housing markets. 18 NSP Program Income

 Grantees w/small amounts of PI ( between $10,000 to $60,000 ) find it challenging to spend their PI on hand given high costs of acquiring & rehabilitating housing in high cost markets, e.g. California.  Grantees with enough PI on hand to purchase housing units have very limited inventory of foreclosed properties available to chose from, often facing competition from investors. NSP Program Income (continued)

Snapshot of NSP Closeout  8 Step Process  Status  Technical Assistance  Readiness Review Checks – RRCs  Closeout Criteria & Review  Life After Closeout U.S. Department of Housing and Urban Development Community Planning and Development20

NSP Closeout – An 8 Step Process U.S. Department of Housing and Urban Development Community Planning and Development Grantee and HUD Jointly determine Grantee Ready 2. HUD sends Closeout Package to Grantee 3. Grantee completes package & submits to HUD 4. HUD reviews package 5. HUD executes Closeout Certification 6. Grantee has 90 days to submit final QPR 7. HUD Reviews QPR & prepares Closeout Agreement 8. Grantee and HUD Execute Closeout Agreement

 21 closed NSP grants  56 NSP-2 grants expired in September 2015, but still need to be closed out.  54 NSP grants ready to close.*  179 NSP grants not ready to close, many undergoing Disaster Recovery Grant Reporting ( DRGR ) TA to reconcile erroneous data.*  40 NSP grants require extensive help meeting statutory requirements. * As reported via Readiness Review Checks. U.S. Department of Housing and Urban Development Community Planning and Development22 NSP Closeout Status

Technical Assistance for NSP Closeout 7 CPD TA providers available to offer assistance to NSP grantees to assist in closing out their NSP grant. Approximately $4,389, is still available for TA. TA can be requested: U.S. Department of Housing and Urban Development Community Planning and Development23 NSP TA Providers Training And Development Associates – TDA Local Initiatives Support Corp - Lisc Cloudburst Consulting Group Econometrica Enterprise Community Partners Minnesota Housing Partnership - MHP W. Frank Newton, Inc.

Readiness Review Checks (RRCs) CPD has contracted w/TA Providers to conduct Readiness Review Checks (RRC) for NSP grantees. RRCs include, but are not limited to, Review of a grantee’s Disaster Recovery Grant Reporting system (DRGR), Quarterly Progress Reports (QPR); Associated receipts, vouchers & bills; and Reconciliation of any outstanding or erroneous reports or data submissions. RRCs for grantees can only begin once a grantee has $50K or less in their line of credit. U.S. Department of Housing and Urban Development Community Planning and Development24

NSP Closeout Criteria 4 Requirements necessary to complete NSP closeout! 1.All activities funded with even a penny of Line of Credit Funds are completed and have met a National Objective. 2.Grantee has met the LH 25% requirement. 3.All costs have been incurred. 4.Other regulatory requirements are met. 25U.S. Department of Housing and Urban Development Community Planning and Development

Review: Closeout Fast Facts NSP Closeout Guide released on April 22, provides detailed guidance on closeout closeout-guidance/ closeout-guidance/ Criteria for closeout is NOT the same as criteria for meeting expenditure deadlines No deadline established for closeout. You can continue to use remaining program income after closeout. 26U.S. Department of Housing and Urban Development Community Planning and Development

NSP Closeout & RRCs  21 NSP grants completed closeout.  Of 634 grants, 273 have received Readiness Review Checks (RRCs).  RRCs can be requested by HUD personnel, either FO, HQ staff or grantee. U.S. Department of Housing and Urban Development Community Planning and Development27

Currently -overall State Administrative Cap Ref: Section 106(d) of the Act and § Currently set at 3% for State Admin, Planning, &TA State determines how this is spent Fungability with Admin/Planning & TA ( this means a grantee can spread the 3% admin to areas where the highest need to use is 17% for UGLG administration State may use Maximum Feasible Deference (MFD) on level of admin provided & decide whether or not a match is required Based on expenditures not obligations  HUD is reviewing possible reform on the State grantee admin cap & possibly removing the matching requirement 28 Y2016 Administration Budget

The Latest CDBG Policy Development Affirmatively Furthering Fair Housing (AFFH) Rule. The final rule was published on July 16, The AFFH Tool/Template & supplemental TA materials was issued in late December 12/21/15. Fee Based Section 108 Final Rule published November 3, 2015 December 7, 2015 – CDBG Conforming Changes for Part 200 Final Rule published; this rule conforms our regs to Part 200  2 CFR Part 200 consolidates HUD Part 84 & 85 regulations, OMB Circulars A-87, A- 133, etc. December 7, 2015 – CDBG Conforming Changes for Part 200 Final Rule published; this rule conforms our regs to Part 200  2 CFR Part 200 consolidates HUD Part 84 & 85 regulations, OMB Circulars A-87, A- 133, etc. Section 3 Proposed rule published March —no word yet on timetable for final rule  CDBG Grant-Based Accounting (GBA) Interim Rule for grants published on November 12 & a technical correction on November 18, 2015

Addressing Program Challenges Program challenges: HUD developed legislative proposals designed to strengthen CDBG’s structure & management while retaining its fundamental focus on benefitting low- & moderate-income persons. Legislative package of reforms -developed by the Administration & will be submitted to Congress. Recommended changes can be grouped in several categories including: 1.Grantee eligibility, 2.Aligning program cycles, 3.Improving grantee accountability, and 4.Addressing issues in the State CDBG program, including increasing the set aside for colonias in states along US-Mexico border from 10 percent to 15 percent of the State allocation.

Proposed Legislative Reform Package CPD developed a comprehensive CDBG reform proposal to address concerns of its grant recipients. These proposals will:  Allow grantees, including states, to form regional combinations to achieve savings in administering their CDBG grants & pool resources for strategic investment decisions.  Reduce the growing number of small grantees to support local CDBG programs that are adequately staffed and support meaningful community investments. These changes include removing the “grandfathering” of CDBG grantees and setting a minimum grant threshold.

Proposed Legislative Reform Package (continued)  Allowing for a more equitable treatment of states and entitlement communities and counties by: 1.allowing states to also receive reallocated funds for disasters from the sanctions fund; 2.giving the Department the authority to sanction a state in a similar fashion to other CDBG grantees; and 3.increasing states’ administrative cap and removing the matching requiremen t.  Authorize an increase in the colonias set aside from 10 percent to 15 percent of State CDBG allocations in the states of Texas, New Mexico, Arizona and California.

Recent Policy Guidance Issuances Jan CPD Notice on submission of FY16 Action Plans (hang up has been pre- award cost language for 3 other programs + HTF, as a result of 2 CFR ) Jan. 22 Webinar Friday, on HOME Consortia, CDBG grantees/urban counties, and ConPlan & AFFH submission timetables Next round of TA videos and/or products Webinar 2/8 on Section 108 program – will include discussion of fee-based rule changes, plus other TA products including underwriting January 2016 Feb March 2016

AFFH: Tool for States : We expect the tool to be available for States by later this year. The AFH Assessment Tool, which includes instructions & data provided by HUD, consists of a series of questions designed to help program participants identify:  fair housing issues pertaining to patterns of integration & segregation;  racially & ethnically concentrated areas of poverty;  disparities in access to opportunity; and  disproportionate housing needs, along with contributing factors for those issues. The Assessment Tool is intended to help communities understand & identify local barriers to fair housing choice. AFFH: Tool for States : We expect the tool to be available for States by later this year. The AFH Assessment Tool, which includes instructions & data provided by HUD, consists of a series of questions designed to help program participants identify:  fair housing issues pertaining to patterns of integration & segregation;  racially & ethnically concentrated areas of poverty;  disparities in access to opportunity; and  disproportionate housing needs, along with contributing factors for those issues. The Assessment Tool is intended to help communities understand & identify local barriers to fair housing choice. What to be on the Lookout for in 2016 FY 2017 Administration Budget – released in mid-February 2016 OIG audits – OIG will be conducting 6 major audits of CDBG/Disaster/NSP. Most notably & first, looking at acquisition & disposition of property with CDBG $$ going back to1995. CPD Notice on mandatory underwriting for economic development to for-profit businesses still in the works NDRC Use of ACS/CENSUS Data : 3 Things that ACS is used for that affect CDBG (and other formula programs): 1.Annual Formula Allocations- affects CDBG, HOME, ESG allocations 2.Section 8 Income Limits- affects CDBG & HOME beneficiaries 3.Low/Moderate Income Summary Data (LMISD) – affects national objectives for CDBG

 1 interactive, multi-media scrapbook  Project profiles website  Our Re-branded webpage “Explore CDBG”-“Featured Project” rotates, Twitter feed, etc. CDBG What’s New with the CDBG Program 20 new TA Learning Products in 2016! Existing website & content  4 high quality, professionally produced videos 1.The Role of the CDBG Program in Creating a Viable Community 2.The Role of the CDBG Program in Creating Decent Housing 3.The Role of the CDBG Program in Creating a Suitable Living Environment 4.How Communities can use the CDBG Program to Create Economic Opportunities 20 new TA Learning Products in 2016! Existing website & content  4 high quality, professionally produced videos 1.The Role of the CDBG Program in Creating a Viable Community 2.The Role of the CDBG Program in Creating Decent Housing 3.The Role of the CDBG Program in Creating a Suitable Living Environment 4.How Communities can use the CDBG Program to Create Economic Opportunities

CDBG What’s New with the CDBG Program  7 new products using various modalities- short + substantive 1.CDBG 101 (video) 2.CDBG Formula and Appropriation Process (white board video) 3.Urban County Qualification Process (video) 4.Smart Management of PI- two paths (white board video) 5.Grant Lifecycle- Part I- Planning (Prezi) 6.Grant Lifecycle- Part II- Implementation (Prezi) 7.Using CDBG for Disaster Response and Recovery (video)  Updated Project Profiles website- online submission of projects  Features & benefits  7 new products using various modalities- short + substantive 1.CDBG 101 (video) 2.CDBG Formula and Appropriation Process (white board video) 3.Urban County Qualification Process (video) 4.Smart Management of PI- two paths (white board video) 5.Grant Lifecycle- Part I- Planning (Prezi) 6.Grant Lifecycle- Part II- Implementation (Prezi) 7.Using CDBG for Disaster Response and Recovery (video)  Updated Project Profiles website- online submission of projects  Features & benefits  Coming Soon – New Web portal on the HUD Exchange to submit project profiles. HUD encourages grantees to showcase how your community has been helped by CDBG by either ing  THANK YOU – for sharin g your inspirational stories that remind people what a great program CDBG is.

New TA Products Videos, White Board videos & Prezi formats

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Wrap-Up Pamela Glekas Spring Director State and Small Cities Division