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Division of Housing & Community Renewal

As approved by the U.S. Department of Housing and Urban Development December 29, 2005

[ Table of Contents ]

[ Strategic Plan | Action Plans | Monitoring ]

New York State Action Plan 2006

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General Requirements

Section 91.320(a) through (e) Action Plan - General Requirements

"The action plan must include the following:"

(a) Form application. Standard Form 424;

(b) Resources-

(1) Federal resources. The consolidated plan must describe the Federal resources expected to be available to address the priority needs and specific objectives identified in the strategic plan, in accordance with Sec. 91.315. These resources include grant funds and program income.

(2)Other resources. The consolidated plan must indicate resources from private and non-Federal public sources that are reasonably expected to be made available to address the needs identified in the plan. The plan must explain how Federal funds will leverage those additional resources, including a description of how matching requirements of the HUD programs will be satisfied. Where the State deems it appropriate, it may indicate publicly owned land or property located within the State that may be used to carry out the purposes stated in Sec. 91.1;

(c) Activities. A description of the State's method for distributing funds to local governments and nonprofit organizations to carry out activities, or the activities to be undertaken by the State, using funds that are expected to be received under formula allocations (and related program income) and other HUD assistance during the program year and how the proposed distribution of funds will address the priority needs and specific objectives described in the consolidated plan;

(d) Geographic distribution. A description of the geographic areas of the State (including areas of minority concentration) in which it will direct assistance during the ensuing program year, giving the rationale for the priorities for allocating investment geographically;

(e) Homeless and other special needs activities. Activities it plans to undertake during the next year to address emergency shelter and transitional housing needs of homeless individuals and families (including subpopulations), to prevent low-income individuals and families with children (especially those with incomes below 30 percent of median) from becoming homeless, to help homeless persons make the transition to permanent housing and independent living, and to address the special needs of persons who are not homeless identified in accordance with Sec.91.315(d);

Overview

This section describes the proposed activities and accomplishments of the State of New York for the first year of the 2006 - 2010 Consolidated Plan - the program year beginning January 1, 2006 and ending December 31, 2006. The federal fiscal year (FFY) 2006 grant amounts appearing on the HUD Standard 424 forms are based on FFY 2004 funding levels. This amount is subject to 108 Loan Guarantee commitments made by HUD prior to October 21, 1999. A portion of the funds must also cover interest subsidies and grants awarded by HUD for the Canal Corridor Initiative.

HUD regulations at 24 CFR 91.320 require a discussion on the resources, activities, distribution, and program-specific requirements of the CDBG, HOME, ESGP and HOPWA Programs. Although the regulations do not specify the organization of the section, the State's Action Plan has been organized to provide a separate, full discussion of the requirements pertaining to each of the four programs, followed by a separate discussion of other actions New York state intends to take which are not specific to the four programs.

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CDBG

Section 91.320(g)(1) Small Cities Community Development Block Grant (CDBG) Program

"The method of distribution shall contain a description of all criteria used to select applications from local governments for funding, including the relative importance of the criteria--if the relative importance has been developed. The action plan must include a description of how all CDBG resources will be allocated among all funding categories and the threshold factors and grant size limits that are to be applied. If the State intends to aid non-entitlement units of general local government in applying for guaranteed loan funds under 24 CFR part 570, subpart M, it must describe available guarantee amounts and how applications will be selected for assistance. If a State elects to allow units of general local government to carry out community revitalization strategies, the method of distribution shall reflect the State's process and criteria for approving local governments' revitalization strategies. (The statement of the method of distribution must provide sufficient information so that units of general local government will be able to understand and comment on it and be able to prepare responsive applications.)"

Overview

The State of New York Small Cities CDBG Program Action Plan for Program Year 2006 will address the needs and implement the objectives and priorities set forth in the State's 2006-2010 Consolidated Plan for affordable housing and for non-housing community development needs.

To that end, the Governor's Office for Small Cities (GOSC) will provide loans, grants or technical assistance for developing projects that provide decent and hazard-free affordable housing, increase access to safe drinking water, provide proper disposal of household wastewater, provide access to community-needed services in local facilities and expand economic self-sufficiency for low- and moderate-income (LMI) households by supporting development projects which are designed to create or retain jobs or foster micro-enterprise activities.

In support of the State's long-term goals, the CDBG Small Cities Program will:

• continue to support a mix of rehabilitation, conversion and construction activities to preserve and increase affordable housing, both for renters and owners;

• improve the economy of New York State's communities by encouraging and assisting local governments in developing comprehensive economic development strategies to create viable communities by providing economic opportunities for low- and moderate-income persons;

• revitalize and revive the vibrancy of our communities which will enhance the quality of life for the citizens of New York State.

• encourage and assist local governments to develop comprehensive public facility improvement strategies which support viable communities and primarily benefit low- and moderate-income persons; and

• develop and implement strategies which facilitate the coordination of CDBG Small Cities funding with other federal/state/local community development resources.

CDBG Small Cities Program/Federal Resources

The actual allocation available to New York State each year is reduced by an amount equal to the estimated annual repayment amount for debts incurred by HUD under the Section 108 Loan Guarantee Program prior to New York State's assumption of program administration. HUD calculates this amount each year. Such calculation does not include any potential defaults from HUD Section 108 projects. It is currently estimated that $50 million will be available in 2006.

The State may set aside up to two percent of the gross allocation plus $100,000 for costs associated with administration of the program and may use up to one percent for providing technical assistance. It may also use up to two percent for Imminent Threat/Contingency grants.

The Low-Income Housing Tax Credit Program provides a dollar-for-dollar reduction in federal income tax liability for project owners who develop rental housing serving low-income households. The credit may be used in conjunction with CDBG Small Cities grants. New York State is expected to receive an allotment of approximately $20 million in calendar year 2006.

Other federal resources used to address the priority needs and specific objectives identified in the State's Strategic Plan include HOME Investment Partnership Program funds; CDBG Small Cities Program income retained by a non-entitlement community from prior CDBG Small Cities projects; Federal Home Loan Bank assistance for affordable housing in projects sponsored by member lending institutions; Economic Development Administration and Small Business Administration funds; Clean Water Act and Safe Drinking Water Act allocations to New York State; USDA Rural Development and Appalachian Regional Commission funds; and funds provided through the Job Training Partnership Act.

Availability of Funds

New York State intends to make the allocated funds available to eligible non-entitlement grant recipients during the 2006 Program Year as follows: Approximately 60% of funds will be made available for the Annual Round competition involving the funding categories of Housing, Public Facilities and Micro-enterprise. Approximately 35% will be made available for the Economic Development Open Round. Approximately two percent may be used to meet "Imminent Threat" situations, as needed; up to two percent may be used for the State's administration of the Small Cities Program, as needed; and up to one percent may be used for Technical Assistance, either through direct grants to eligible municipalities, through the provision of direct technical assistance to potential participating municipalities or through other eligible means.

Other Resources - Agencies and Programs in Support of New York State's Community Development Objectives

New York State's primary long-term economic development and community infrastructure facilities and service goals for its Small Cities Program further federal objectives in that they aim to develop viable communities by creating and retaining jobs and by addressing community development needs that pose a serious and immediate threat to the health and welfare of the community, principally for low- and moderate-income persons. A primary mechanism for meeting the long-term objectives in the State's non-entitlement communities and rural areas will be the State's Small Cities Program.

In addition, other funds may be available through the following programs:

Federal Housing Programs:

• Low-Income Housing Credit Program;

• Public Housing New Construction Program;

• Section 514/516 RHS Farm Labor Housing Grants and Loans;

• Section 515 RHS Rental Housing Program;

• Section 523 RHS Self-Help Technical Assistance Program;

• Section 504 RHS Housing Repair Loan and Grant Program;

• Section 509 RHS Construction Defect Housing Compensation Program; and,

• Section 533 RHS Housing Preservation Grants Program.

Federal Non-Housing Community Development Programs:

• CDBG Program Income retained by a non-entitlement community from prior CDBG Program awards;

• Rural Development Agency;

• Community Facilities Loans and Grants;

• Federal Empowerment Zone and Federal Enterprise Communities resources;

• Department of Commerce, Economic Development Administration;

• Job Training Partnership Act funds;

• Community Services Block Grant Program (DOS);

• Community Support Services Program (OMH);

• Home and Community Based Services Program (OPWDD);

• Appalachian Regional Commission Area Development Program (DOS); and,

• Department of Health and Human Services (Office for the Aging).

State Housing Agencies and Programs

To the greatest extent possible, the State housing programs listed above and in the 2006-2010 Strategic Plan under housing objectives will be coordinated with the non-housing activities covered by these objectives. For example:

State Non-Housing Community Development Programs

To the extent that resources through the CDBG Small Cities Program will not be sufficient to meet the State's non-housing community development needs, and applicants applying for Program funds will require additional sources of funding to cover all costs for projects related to Objective Five, and to help meet the selection criteria regarding leverage for projects, the following non-federal State resources may be available to support such activities and programs that provide assistance to undertake community infrastructure, facilities, and services (public facilities) projects affecting public health, safety, and welfare.

In addition, localities frequently contribute municipal-owned land, in-kind services, a share of local municipal budgets and bond-raised monies to projects. Program operating assistance may be obtained from local housing preservation companies, economic development councils, industrial development agencies, county planning offices and the like. Occasionally, a private foundation may be a contributor to a project.

The State also anticipates that other private sector funds may be available to support the non-housing community development objectives outlined herein. Such support may be available from foundations, banking institutions, equity investors, private sector businesses, and other associations.

Finally, the Community Renewal Tax Relief Act of 2000 authorized up to $15 billion in equity that is eligible for tax credits under the New Markets Tax Credit (NMTC) program. This program is expected to stimulate capital investment in low-income communities. The Community Development Financial Institutions (CDFI) Fund in the Department of Treasury allocates the available tax credit authority to community development entities (CDE), which are entities that manage NMTC investments in low-income community development projects. In return for the tax credit, which may be claimed over seven years, investors supply capital to the CDEs that are to invest the capital in low-income communities.

Program Objectives

As outlined in Title I of the Housing and Community Development Act, the primary goal of the CDBG Small Cities program is "the development of viable communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low- and moderate-incomes."

Pursuant to the national goals, New York State's Small Cities Program is administered by the Governor's Office for Small Cities (GOSC) to:

• ensure flexibility to address community priorities;

• support housing rehabilitation and new construction that increases the supply of safe, decent and affordable housing;

• expand homeownership opportunities for low- and moderate-income persons;

• assist communities in the preservation and development of basic infrastructure;

• encourage the development of facilities in underserved areas needed to support job training, and child and elder care for lower income residents;

• promote economic development activities that principally benefit lower-income persons through job creation and retention;

• support communities in developing the capacity for strategic planning of short- and long-range community goals, as well as the capacity to implement their goals efficiently and maintain improvements;

• improve deteriorated residential and business neighborhoods in comprehensive approaches that combine housing improvement, public facilities development and job creation and/or other eligible activities;

• support the State's response mechanisms in the event of disasters; and,

• leverage other sources of public, private and not-for-profit support.

Geographic Allocation/Eligible Applicants

There are approximately 1,300 eligible units of general local government for New York State's Small Cities Program, excluding: metropolitan cities, urban counties, units of government which are participating in urban counties or metropolitan cities even if only part of the participating unit of government is located in the urban county or metropolitan city, and Indian tribes eligible for assistance under Section 106 of the HUD Act. New York State observes no geographic allocation or reservation of funds.

Since New York State began administration of the Small Cities CDBG program in 2000, the State has provided a significant amount of investment throughout the regions. Fairly evenly dispersed, the regional distribution of funds clearly shows that the regions with the greater economic need have received the greatest amount of funding from the Small Cities Program.

Exhibit 32
Small Cities Awards
2001 - 2005

Region	Total CDBG Funds Awarded
Capital	$23,382,990
Central	$20,341,569
Finger Lakes	$32,781,015
Hudson Valley	$15,549,586
Long Island	$1,150,000
Mohawk Valley	$24,557,488
North Country	$36,646,747
Southern Tier	$26,663,777
Western	$17,751,495
Total	$198,824,667

Note: New York City Region is not listed since it is ineligible for CDBG Small Cities funds.

The three regions with the greatest need that received the highest amounts of funding include the North Country, Finger Lakes, and Southern Tier regions. The North Country region, with an unemployment rate of 7.2% and a poverty rate of 14.3%, received the highest level of Small Cities' assistance. Although the poverty rate in the Southern Tier (13.4%) is higher than that in the Finger Lakes (10.3%), the unemployment rate in the Southern Tier (5.7%) is lower than the unemployment rate in the Finger Lakes (5.9%). This accounts for the Finger Lakes receiving a higher level of funding than the Southern Tier. However, the funding throughout the state has been fairly evenly distributed and is dependent upon the total number of applications received annually from each region.

The least amount of funding was provided to the Long Island Region. This lack of funding is due to the fact that Long Island has very few communities (47 villages) that have opted out of their county consortiums to make themselves eligible for assistance through the Small Cities program. In addition, the region submits the fewest number of applications annually.

Method of Distribution

As stated previously, approximately $50 million is anticipated to be made available for Program Year 2006. The description that follows outlines the fundamental rating methodology, then identifies the funding categories and summarizes the criteria used in making project selections. Applications within the funding categories of Housing, Public Facilities, Micro-enterprise and Comprehensive grants are rated and scored against four factors. A maximum of 580 points is possible. Evaluated applications are ranked against other applications within the same individual category.

• Factor Rating

1. Municipal Poverty Score		150 points
a. Absolute number of persons in poverty	75 points
b. Percent of persons in poverty	75 points
2. Program Impact		400 points
3. Outstanding Performance - FHEO		30 points
a. Provision of Fair Housing Choice	20 points
b. Equal Opportunity Employment	10 points
Total		580 points

Each of the factors is outlined below. All points for each factor are rounded to the nearest whole number.

Factor Rating

1. Municipal Poverty Score

   1. Absolute number of persons in poverty

      The State will use 2000 census data to determine the absolute number of persons in poverty residing within the applicant's unit of general local government. Applicants which are county governments are rated separately from all other applicants. Individual need scores are obtained by dividing each applicant's absolute number of persons in poverty by the greatest number of persons in poverty of any applicant and multiplying by 75.

   2. Percent of persons in poverty

      The State will use 2000 census data to determine the percent of persons in poverty residing within the applicant's unit of general local government. Individual need scores are obtained by dividing each applicant's percentage of persons in poverty by the highest percentage of persons in poverty of any applicant and multiplying by 75.

2. Program Impact

   Within each category, individual projects receive a program impact score dependent on the extent to which they meet the specific impact criteria of the category. Exceptional Impact projects receive a program impact score of 400 points, Substantial Impact projects receive 300 points, Moderate Impact Projects receive 200 points, and Minimal Impact Projects receive 100 points. The application materials provide abundant information for applicants on criteria to be met, the evidence of need to be provided in each category, project feasibility issues that must be addressed and what constitutes projects receiving maximum scores.

   Each project is rated against other projects of the same category. For example, housing projects will only be compared with other housing projects, according to applicable criteria. It should be noted that each project within an application will be given a separate impact rating, only if each one is clearly designated by the applicant as a separate and distinct project (i.e. separate Needs and Activity Descriptions, Benefit to Low- and Moderate-Income Persons, Impact Description, Activity Detail and Program Schedule forms have been completed).

   The capacity of the applicant to complete activities in a timely manner will affect the impact score. GOSC will review an applicant's prior history, beginning with Program Year 2000, to determine whether or not the applicant has completed and/or made appropriate progress with any and all prior GOSC grants. As a rule of thumb, grants other than technical assistance should be completed within 24 months of contract start date. Technical assistance grants should be completed within 14 months of contract start date.

3. Outstanding Performance - Fair Housing / Equal Opportunity

   Applicants will receive 20 points toward their total score for their efforts to provide assisted housing to low- and moderate-income families in ways that promote housing choice in areas outside of minority, or low- and moderate-income, concentrations. Specific criteria must be met as detailed in the application.

   Applicants will receive 10 points for documenting that their percentage of minority, full time permanent employees is greater than the percentage of minorities in the applicant's community. Strict documentation evidence is required and HUD definitions of minority status apply.

Funding Limits for Eligible Applicants

Annual Competitive Round Housing and Public Facilities:
Towns, Cities or Villages:	$400,000
Counties:	$600,000
Joint Applications:	$400,000 Housing
	$600,000 Public Facilities
Micro-Enterprise:
All eligible community applicants:	$400,000
Comprehensive:
All eligible community applicants:	$650,000
Open Round Economic Development:
All eligible community applicants:	$750,000
Maximum CDBG amount
per FTE job created:	$7,500
Minimum grant amount	$100,000:

Exceptions to these limits may be made in cases where it is found that a project or projects may have a significant impact beyond the immediate benefit of jobs created or retained inasmuch as the project/business may realize a potential for regional or even statewide economic impact. Eligible applicants can package more than one economic development project in an application in order to reach the minimum grant amount.

Other Limitations

• A town, village or city may not apply for more than a total of $400,000. Joint (two or more eligible municipalities) applicants may not apply for more than a total of $400,000 for Housing or $600,000 for Public Facilities. Counties cannot apply for more than a total of $600,000.

• However, an applicant may apply for, and be awarded, an open round economic development grant in the same program year as it applies for, and is awarded, an annual competitive round grant.

• Recipients of prior CDBG Small Cities funding must resolve all outstanding audit, monitoring findings and/or other program exceptions which involve a violation of federal, State or local law or regulation prior to award or submission of any application to the Governor's Office for Small Cities.

• Grant recipients may retain program income for use in the same activity as identified in the original Small Cities contract.

Redistribution of Funds

Reallocated funds are those which HUD has recaptured from funded grantees and reallocated to the State. Recaptured funds are funds the State receives back from a State CDBG Small Cities Program recipient as a result of a CDBG Small Cities Program de-obligation or termination.

Any such funds received will be distributed by the State in the same manner as regular CDBG Small Cities Program funds. At the State's discretion, they may be used to fund additional Annual Competitive Round or Economic Development grants or used for Imminent Threat/ Contingency activities, or for technical assistance or State administration, subject to limitations set forth in the Housing and Community Development Act, as amended.

Applicants receiving grants but failing to have their projects underway within twelve months from the grant award may have their grants rescinded. Unexpended funds may be used to make additional awards to any open CDBG Small Cities contract, or to make new awards in any program category, or added to available monies for the next program year.

Application and Awards Process - Outline of Application Procedure

• Application Workshops are held across the State in the fall.

  • Notification of Funding Availability is published in the State Register. [An application kit is available by mail or on the GOSC Small Cities website (www.nysmallcities.org)].

  • The Governor's Office for Small Cities (GOSC) staff review applications for completeness, applicant eligibility, eligibility of activity and meeting of threshold criteria.

  • During the completeness review period, the GOSC staff may request additional documentation or information. Applicants are allowed 10 working days to submit requested material.

  • The GOSC may, at its discretion, consult with other agencies in their areas of expertise.

  • Applications are evaluation and scored.

  • Applications are ranked.

  • Grant awards are announced.

Primary Funding Categories

Eligible activities are generally found in Section 105 of the HUD Act of 1974, as amended, and 24 CFR Part 570.482, as amended. For the 2006 Program Year, the Governor's Office for Small Cities will provide opportunities for five primary categories of funding: housing; public facilities; micro-enterprise; comprehensive; and, economic development. All categories of projects must meet the primary objective that at least 70% of the funds are used to benefit low- and moderate-income persons. All funded activities must meet one of the HUD CDBG Small Cities Program's national objectives - benefit to low- and moderate-income persons, elimination of slums or blighting conditions, or meeting imminent threats to the health and safety of the community.

ANNUAL COMPETITIVE ROUND

Housing

There are three distinct types of housing projects eligible for CDBG Small Cities funding: housing rehabilitation and replacement; new housing construction; and, direct homeownership assistance. Each applicant determines the approach best suited to address the housing needs of low and moderate-income persons by increasing the supply of affordable housing to low- and moderate-income residents and improving the quality of housing for low- and moderate-income families, based upon a required needs analysis and detailed survey of housing conditions. Housing activities may include the acquisition or rehabilitation of property, replacement of severely substandard housing, conversion of non-residential structures, and new housing construction. At a minimum, all housing units assisted with Small Cities funding must meet Section 8 Housing Quality Standards and all applicable federal, State and local codes. Applicants often use Small Cities' funds to leverage additional resources such as owner contributions and grants from other public and private sources. Though such matches are not a requirement of the Small Cities Program, applicants are encouraged to supplement Small Cities funding with other available resources. Separate rating criteria apply to each type of housing project.

The application process for housing rehabilitation, replacement, housing construction and home ownership projects encourages proposals which affirmatively further fair housing choice. In addition, applicants are expected to conduct their housing survey, needs analysis, citizenship participation process, and outreach to qualified beneficiary households, in ways that ensure appropriate program components and program benefit for all low- and moderate-income households, including minorities or members of ethnic groups. Housing rehabilitation, homeownership and home replacement are direct benefit activities which require 100 percent benefit to low- and moderate-income persons. In general, projects which solve housing problems for the lowest income, most disadvantaged and most poorly housed residents would tend to score highly, assuming all other criteria are satisfied.

Housing Rehabilitation/Replacement:

In general, the Small Cities Program's primary emphasis in this category is the provision of safe and habitable housing which will principally be occupied by low- and moderate-income households, at standards of quality meeting New York's recently revised, higher-standard building codes as well as federal regulations. Applications should include all necessary repairs, including exterior work, to present the beneficiaries with rehabilitations that not only remove hazards but improve energy efficiency.

The GOSC expects that approximately 1,376 units of housing will be rehabilitated in Program Year 2006 with FFY 2003, 2004 and 2005 funds. [The State does not anticipate these units meeting Section 215 goals. The actual number will depend on the quantity of applications proposing such projects and their competitiveness with other proposals in the single purpose housing category.]

In general, housing rehabilitation projects will be evaluated on:

• The severity of need shown, in terms of sub-standard housing conditions, the extent of disrepair in the units including the number of code violations, and the income and accessibility of other resources of the residents.

• The extent of evidence demonstrating project feasibility, such as the commitment of other resources, compliance with federal, State or local regulations (environmental, lead paint, historic preservation, etc.), and sufficient potential and eligible participant households.

• The extent of documentation supporting the timely completion of the proposed activities within the term of the grant agreement.

• The number of LMI persons benefiting from the outcomes of the project.

• The appropriateness of the program design, including marketing/outreach to potential participants, designated grant limits, grants vs. loans, sliding scale grants, loan rates and terms, the availability of local contractors, and reuse of program income, as well as the extent to which the outcomes would support the community's goals for addressing its needs.

• The reasonableness of project costs, given the extent of disrepair and the level of deterioration of the units.

• The reasonableness and efficient use of program delivery and administrative costs.

• The measures taken to ensure compliance with the Section 8 Housing Quality Standards and all applicable federal, State and local codes.

• The degree to which the program supports Economic Development activities.

• The steps taken to ensure affordability of rental units after the rehabilitation.

• The extent to which the project supports the community's strategic plan.

Scoring will be based on a maximum of 400 points with the most points being awarded to projects that have demonstrated exceptional compliance with the evaluation criteria identified for each category; 300 points will be awarded to projects that have substantially demonstrated compliance with the evaluation criteria; 200 points will be awarded to projects that have moderately demonstrated compliance with the evaluation criteria and 100 points will be awarded to projects that have minimally demonstrated compliance with the evaluation criteria.

Construction of New Affordable Housing:

CDBG Small Cities funds may be used to support the construction of new housing units. New construction may be carried out by a local government, if it is last resort housing, or by an eligible not-for-profit entity. Typically, low vacancy rates of rental units affordable to low- and moderate-income households are documented. The construction of accessible new housing units intended to serve non-senior handicapped persons, or the modification of existing buildings into fully-accessible apartments, are eligible activities when no or insufficient numbers of such units are available locally for low- and moderate-income non-senior handicapped persons. In addition to the criteria below, such applications will be assessed on the degree to which they meet the specific needs of local disabled residents.

The Governor's Office for Small Cities did not receive any applications for new construction in Program Year 2005, and few applications are expected in PY 2006. If applications are received, the number funded and the units of housing created will depend on the quantity of proposals and their competitiveness within the entire housing category. Even if new construction awards are made in PY 2006, it is unlikely units would be placed in service before PY 2007. In general, proposals for the creation of new housing will be evaluated on:

• the severity of the need shown for new housing affordable to low- and moderate-income persons in the project area, demonstrated by a high occupancy rate of units affordable to low- and moderate-income persons, a waiting list for affordable housing projects in the service area and the percentage of overcrowding in the service area;

• the number of new housing units that will be made available to low- and moderate-income persons as a result of the project;

• the extent of evidence demonstrating project feasibility, such as the commitment of other necessary funding resources; demonstration of compliance with federal, State or local regulations (environmental, zoning, lead paint, historic preservation, etc.); site control; and administrative experience;

• the extent of documentation supporting the timely completion of the proposed activities within the term of the grant agreement;

• the number of LMI persons benefiting from the outcomes of the project;

• the reasonableness of the program costs;

• the reasonableness and efficient use of program delivery and administrative costs;

• the degree to which the program supports Economic Development activities;

• the steps taken to ensure affordability of rental units; and

• the extent to which the program supports the community's strategic plan.

Scoring will be based on a maximum of 400 points with the most points being awarded to projects that have demonstrated exceptional compliance with the evaluation criteria identified for each category; 300 points will be awarded to projects that have substantially demonstrated compliance with the evaluation criteria; 200 points will be awarded to projects that have moderately demonstrated compliance with the evaluation criteria and 100 points will be awarded to projects that have minimally demonstrated compliance with the evaluation criteria.

Homeownership Assistance:

The Small Cities Program's primary emphasis in the homeownership category is to provide down payment and closing costs, counseling services and minor rehabilitation to low-and moderate- income households. Counseling of prospective homeowners is encouraged to provide information on program obligations, the homebuyer process and home maintenance. Mortgages may be arranged through private local banks (which may assist the banks in meeting the Community Reinvestment Act requirements), or at reduced lending rates through state and federal housing programs such as the State of New York Mortgage Agency, the Federal Home Loan Bank, Fannie Mae or Rural Development.

The GOSC expects that 177 households will be assisted in purchasing their own homes in Program Year 2006 with FFY 2003, 2004 and 2005 funds. [The actual number will depend on the quantity of applications proposing such projects and their competitiveness with other proposals in the housing category.]

In general, the following criteria apply in evaluating homeownership proposals:

• demonstration of the severity of the need for homeownership opportunities to be made available to low- and moderate-income persons in the project area;

• the extent to which the project resolves the need described above;

• the extent of evidence demonstrating project feasibility, such as the commitment of other essential funding resources; a pool of interested, eligible participants; available properties in affordable price ranges, etc.;

• the extent of documentation supporting the timely completion of the proposed activities within the term of the grant agreement;

• the number of LMI persons benefiting from the outcomes of the project;

• the appropriateness of the Program Design, including designated grant limits, affordability to the beneficiaries, availability of grants vs. loans, the use of sliding scale grants, loan rates and terms, and reuse of program income. In particular, the amount of targeting done for first-time home buyers, the availability of counseling to first-time home buyers, how the project utilizes partnerships with local financial institutions, and how much the project furthers Fair Housing Choice, by reaching out to potential homeowners among minorities and ethnic groups, and by promoting homeownership opportunities throughout the community;

• the reasonableness and efficient use of program delivery and administrative costs;

• the degree to which the program supports Economic Development activities;

• the degree to which the program provides homeownership opportunities to low- and moderate-income families participating in the Family Self-Sufficiency Program; and,

• the extent to which the program supports the community's strategic plan.

Scoring will be based on a maximum of 400 points with the most points awarded to projects that have demonstrated exceptional compliance with the evaluation criteria identified for each category; 300 points will be awarded to projects that have substantially demonstrated compliance with the evaluation criteria; 200 points will be awarded to projects that have moderately demonstrated compliance with the evaluation criteria and 100 points will be awarded to projects that have minimally demonstrated compliance with the evaluation criteria.

Public Facilities

Public facilities and infrastructure activities are generally those which will assist in the creation of a safe and sanitary living environment, benefit low- and moderate-income people, aid in the elimination of slums or blight and provide public facilities that offer services to improve the public health, safety and welfare of residents. Activities funded under the public facilities category may include, but are not limited to:

• potable water and wastewater infrastructure development, replacement and upgrading;

• public works such as sidewalks, streets, parking, open space, and publicly-owned utilities;

• public transportation and related structures;

• demolition of dilapidated structures and site clean-up;

• structures (whether new or rehabilitated) to house or serve special needs populations, job training facilities, orphanages, senior services, and similar purposes;

• new, expanded or rehabilitated structures for health clinics, child care, Head Start, employment outreach/skills training for lower income persons;

• multi-purpose buildings housing several qualifying activities for the low-to-moderate income population;

• removal of architectural barriers for the disabled and handicapped (lifts, automatic doors, ramps, etc.);

• homeless and family violence shelters;

• flood protection and storm water/drainage improvements;

• environmental contamination clean-up; and

• fire stations/fire fighting equipment/access pipes to water sources for fire fighting.

The GOSC anticipates the completion of public facilities projects serving 45,000 people in Program Year 2006 with FFY 2003, 2004, and 2005 funds. [The actual number will depend on the quantity of applications proposing such projects and their competitiveness with other proposals in the Public Facilities category.]

In general, the following criteria apply in evaluating public facilities projects:

• the extent to which the need demonstrated is serious;

• the project's impact on resolving public health, welfare or safety concerns, as attested by third parties (e.g. DOH or NYSDEC violations and compliance orders where relevant or impact on other public agencies' purposes and goals);

• the proportion of the service area population which is low- to moderate-income (51% minimum, but higher is preferred), and the proportion of households which are either very low or at the poverty rate. Clear demonstration that the appropriate methodology was used to determine income eligibility of the entire population to be served;

• the extent to which the proposed solution has long-term viability, is appropriate in terms of capacity, sizing and demand; and completely resolves the problem. The engineering report or architect's design should be sufficient to provide reliable cost estimates;

• for projects creating structures in which public services are to be provided, demonstration of the source(s) of funding to sustain the services;

• for water/sewer projects, the impact of CDBG Small Cities funds on reducing the debt burden anticipated from the proposed project per household, and the existing annual average water/sewer debt costs (or equivalent private systems' costs);

• for water/sewer projects, the degree of reduction of connection costs afforded low/moderate income beneficiaries;

• the extent of feasibility issues, such as regulatory agency impediments that may delay or prevent approvals or lack of wide community support to pay project costs above the grant;

• the existence of sufficient documentation supporting the timely completion of the proposed activities within the term of the grant agreement;

• the number of LMI persons benefiting from the project;

• the project is designed to include components accommodating mobility, visual and auditory handicaps where relevant;

• the appropriateness of the facility design;

• evidence that the applicant has considered and, as appropriate, will use alternative cost-effective methods, manpower or materials in the execution of the project; and

• the extent to which the project supports the community's strategic plan or long-term infrastructure development and maintenance plan.

Scoring will be based on a maximum of 400 points with the most points awarded to projects that have demonstrated exceptional compliance with the evaluation criteria identified for each category; 300 points will be awarded to projects that have substantially demonstrated compliance with the evaluation criteria; 200 points will be awarded to projects that have moderately demonstrated compliance with the evaluation criteria and 100 points will be awarded to projects that have minimally demonstrated compliance with the evaluation criteria.

Micro-enterprise Projects

Although economic development projects are funded under an open round, as detailed below, a separate funding category exists for projects to support new or expanded Micro-enterprises.

The GOSC anticipates the creation of a total of 1,673 permanent full-time equivalent jobs, whether funded through Micro-enterprise projects or through Economic Development projects, in Program Year 2006 with FFY 2003, 2004 and 2005 funds.

The GOSC also estimates that a total of 20 businesses will be assisted through the Micro-enterprise program.

• A job created is a position that has been created and filled; a retained job is one that otherwise would have been eliminated without CDBG Small Cities Program assistance.

• A business has been assisted when the owner has been provided technical assistance, business support services and/or funding and that business is now in operation.

Section 807(c)(3) of the Housing and Community Development Act of 1992 provides that it is the intent of Congress that each state should devote one percent of its CDBG Small Cities grant funds for the purpose of providing assistance under section 105(a)(23) of the Housing and Community Development Act of 1974 to facilitate economic development through commercial Micro-enterprises. A Micro-enterprise is defined as a commercial enterprise with five or fewer employees, one or more of whom owns the enterprise. Successful Micro-enterprise programs demonstrate a blend of technical assistance and access to capital. Therefore evaluation of applications which propose the development or expansion of a Micro-enterprise program will be evaluated on the expertise available for both technical assistance provided to applicants and loan fund management.

Each application will be rated in relation to all other Micro-enterprise applications. The following key criteria will be evaluated:

• the documented need for small business assistance in the project area;

• the number of employment opportunities for LMI persons expected;

• the program's impact on increasing the viability of the "Main Street" business sector and/or targeted industry sectors;

• the extent of documentation that supports the timely completion of the proposed activities within the term of the grant agreement;

• demonstration of expertise in technical assistance and loan fund development;

• the number of LMI persons benefiting from the outcomes of the project;

• demonstrated assurance of the success of the project, all other required financing in place, leveraging of private and other public monies;

• the reasonableness of project costs; and,

• the extent to which the program supports the community's strategic plan.

Scoring will be based on a maximum of 400 points with the most points awarded to projects that have demonstrated exceptional compliance with the evaluation criteria identified for each category; 300 points will be awarded to projects that have substantially demonstrated compliance with the evaluation criteria; 200 points will be awarded to projects that have moderately demonstrated compliance with the evaluation criteria and 100 points will be awarded to projects that have minimally demonstrated compliance with the evaluation criteria.

Comprehensive Program Grants

Comprehensive programs must address a substantial portion of the identifiable community development needs of a defined area(s). The extent to which activities are linked will be a major consideration in the evaluation of program impact. In defining an appropriate area for comprehensive treatment, applicants should consider the severity of conditions within the area and the resources to be provided. The impact is greatest where community development needs will be substantially addressed over a reasonable period of time. Exceptions to the requirement that activities be concentrated within a defined area or areas may be made if the applicant can demonstrate that the proposed program represents a reasonable means of addressing the identified needs.

Comprehensive Program activity goals for Program Year 2006 to be attained with FFY 2003, 2004 and 2005 funds are included within the goals set forth in the Housing, Public Facilities, Micro-enterprise, and Economic Development sections.

The impact of the program will be assessed for each of the four program design criteria selected, based on the factors described below. Applicants must describe fully the extent to which the program will address each criterion selected.

Assignment of Program Impact points for a Comprehensive Grant application is a two-step process. First, the potential of the proposed program of activities to achieve the results intended by each selected criterion is assessed. A numerical value is assigned, based on whether the results would have:

• a maximum impact - 8 Points;

• a moderate impact - 4 Points;

• a minimal impact - 2 Points; and,

• an insignificant impact - 0 Points.

After each of the four criteria selected by an applicant is rated and a value assigned, the values are summed. A minimum of 12 points will be required at this stage in order for the application to be eligible for further consideration. A score of less than 12 points indicates that the proposed activities would have insufficient impact to warrant funding.

Following this process, the actual points for impact are determined by dividing each applicant's Program Impact Score by the highest Program Impact Score achieved by any applicant and multiplying the result by 400.

Listed below are the nine design criteria and the standards which have been developed to evaluate each criterion. The applicant must select and address four of the criteria. In addition to these standards, the Submission Requirements and Review Criteria for General Economic Development Projects apply in determining the eligibility and rating for economic development proposals that are part of a Comprehensive program. It is particularly important that applicants fully address the economic development criteria should Criteria five and six be selected.

Criterion 1 Supports Comprehensive Neighborhood Conservation, Stabilization, Revitalization, New Housing Construction or Promotes Homeownership.

The applicant must describe the degree to which the identified needs of a defined area or areas will be addressed in a coordinated manner. In defining an area or areas, applicants should examine carefully the extent of needs and the resources available to address those needs. Where an area has not been defined, the applicant should describe fully the appropriateness of implementing activities on a community-wide basis. In evaluating the impact of the proposed program, the following factors will be examined:

• nature and severity of neighborhood needs;

• extent to which needs will be addressed;

• amount of funds required to implement neighborhood activities;

• extent to which activities are coordinated to address housing, public facility and economic development needs (program impact will be the greatest where a substantial portion of the needs within a defined area will be met);

• extent to which the project promotes fair housing choice in homeownership among protected classes; and,

• extent to which the project supports the community's strategic plan.

The strongest consideration for housing rehabilitation programs is given to those applicants who have designed their housing programs by taking into account both structural conditions and appropriate financing mechanisms. The proposed program should be structured in a way to be marketable, given income and structural characteristics of the neighborhood area. The physical needs of residential or mixed use properties must be well stated and documented. Applicants will be expected to maximize the leveraging of private funds, encourage the participation of local financial institutions, and develop realistic program guidelines. Private funds available from financial lending sources should be established. If leveraging is unfeasible, the applicant must fully document that fact. The most effective housing programs will be those which address a substantial portion of the identified needs, while maximizing the impact of CDBG Small Cities funds.

For those programs that will support the construction of new residential units, project feasibility will be critical. While the extent of need and number of units to be created will be a primary consideration in evaluating the impact, issues of site control, marketability and assurance of private financing must be addressed and documented.

Homeownership activities will be reviewed in terms of how effectively the program will meet homeownership needs identified in the community; and the extent to which they will make effective use of available funds.

Public service activities also may be considered in conjunction with other activities under this criterion. Again, any such activities would need to meet demonstrated needs within the community.

The impact of public improvement activities will be assessed primarily on the documented severity of the need and extent to which the proposed program will address that need. Those needs which directly affect the public safety, health or welfare will be considered the most severe.

Economic development activities will also be evaluated by the extent to which they will alleviate the identified problems. However, the assessed impact for these activities is often diminished due to feasibility concerns.

In addition to quantifying the extent of the anticipated improvements, applicants must demonstrate that the proposed activities can be carried out (i.e. documentation with respect to private participation in such activities must be thorough. Letters of only general interest, by either property owners or other private sector participants, do not necessarily ensure their participation in the program, as some degree of assurance of participation should be presented.

Criteria and submission requirements described above for Housing programs apply in evaluating and rating housing proposals that are a part of a Comprehensive Program.

Criterion 2 Provides Housing Choice within the Community either Outside Areas with Concentrations of Minorities and Low- and Moderate-Income Persons or in a Neighborhood which is Experiencing Revitalization and Substantial Displacement as a Result of Private Reinvestment, by Enabling Low- and Moderate-Income Persons to Remain in their Neighborhood.

If a proposed program provides housing choice within the community outside areas with concentrations of minorities and low- and moderate-income persons, the application must document that there are existing areas which do, in fact, contain concentrations of low- and moderate-income families and minorities. The proposed program, if implemented, must result in additional housing assistance being provided in areas of non-concentration. Communities with no minorities or minority concentrations may receive impact points where opportunities are provided outside areas of low- and moderate-income concentration. The degree of impact will be based upon the severity of need, the number of units to be provided, and the nature and cost of the activities.

In a neighborhood which is experiencing revitalization and substantial displacement as a result of private reinvestment, the applicant must provide a detailed description of the revitalization efforts within the neighborhood, the amount of displacement of low- and moderate-income persons, and the manner in which the implementation of the proposed program will enable displaced persons to remain in the neighborhood. The degree of need, nature and cost of activities, and percentage of needs to be addressed will be evaluated to determine program impact.

Criterion 3 Supports the Expansion of Housing for Low- and Moderate-Income Persons by Providing Additional Housing Units Not Previously Available.

The proposed program clearly must support, or result in, additional units for low- and moderate-income persons. The units may result from the rehabilitation of currently vacant structures, conversion of non-residential structures to residential use, or new construction projects for which the proposed program will provide non-construction or construction assistance. Where the proposed project involves the use of federal- or state- assisted housing, the applicant must identify and document the current commitment status of the federal or state assistance. Lack of a firm financial commitment for assistance may adversely affect program impact. Applicants should address the areas of site control and marketability, in addition to addressing feasibility from the standpoint of project financing. Consideration will not be given to proposed programs which will rehabilitate occupied units or displace current occupants. The impact of the proposed programs will be based upon the degree of need, the number of units to be created, and the nature and cost of the proposed activities

Criterion 4 Addresses a Serious Deficiency in a Community's Public Facilities.

Consideration will be given to the extent of deficiencies, and their relative seriousness, of the identified need. The following factors will be considered:

• documentation of the extent and seriousness of deficiencies in existing public infrastructure or the community's need for new infrastructure (including sites in which public services are offered). [Appropriate documentation should be provided to substantiate the degree of seriousness. Those deficiencies which directly affect public safety, health or welfare will be considered most severe.];

• the nature and cost of the proposed activities in relation to the percentage of need to be addressed;

• the extent to which the proposed program will address a variety of deficiencies in public facilities within a defined area;

• coordination with other activities within the defined area;

• the degree to which the application addresses feasibility issues, including but not limited to, the validity of cost estimates by qualified sources, the availability of other funds, site control, and environmental constraints;

• the number of low- to moderate-income (LMI) persons to benefit, and the percentage of LMI in the project area;

• the extent to which the project addresses serious deficiencies in accessibility requirements and/or expands the number of accessible public facilities; and,

• the extent to which the project supports the community's strategic plan or long-term infrastructure development and maintenance plan.

Criterion 5: Expands or Retains Employment Opportunities.

Consideration will be given to proposed programs that will result in the creation of new jobs or retention of existing employment opportunities. The following factors will be considered:

• the number of jobs to be created or retained in relation to the identified needs [Documentation should be provided to substantiate the number and type (permanent or seasonal, full or part-time) of jobs claimed. Letters from local development agencies or expected participants which express more than general interest would be appropriate. With respect to job retention, evidence should be provided to demonstrate that without the proposed program, existing jobs would be lost. The applicant also must address the potential impact of job loss on the community.];

• the extent to which CDBG Small Cities funds are used to leverage private commitments [If leveraging is proposed, applicants should analyze the actual amount of additional funds required to make the project financially feasible. In designing a program to assist existing business expansion or retention, or to encourage new business development, applicants must address whether CDBG Small Cities funds will be used for infrastructure, land assemblage or other financial incentives. These factors may be important considerations for a firm deciding where to locate and whether to expand or reduce the scope of its operation. CDBG Small Cities funds may be more effectively used as a loan rather than a grant. In this regard, the CDBG Small Cities funds would generate additional program resources through loan repayments to the community. It is considered especially advantageous if a revolving loan fund is established and repayments continue to be used to expand or retain employment opportunities.];

• the relationship of the activity to other projects being implemented within the defined area; and,

• the number of persons to benefit.

Particular attention will be given to the extent to which the Review Criteria and submission Requirements for Economic Development Projects are addressed (see Economic Development Criteria) as demonstrated by:

• the extent to which the project supports the community's strategic plan; and,

• the extent to which the project results in the employment of persons on public assistance.

Criterion 6: Supports "Main Street" Revitalization or Attracts/Retains Businesses Which Provide Essential Services.

For "Main Street" revitalization, consideration will be given to proposed programs which address efforts to revitalize a commercial area. These include, among other things: the renovation or construction of commercial, mixed-use, and other supporting structures; adaptive reuse projects; facade improvements; streetscape improvements including lighting and pedestrian rights-of-way; enhancement or creation of parking; other public improvements; historic preservation activities; and, direct financial assistance to commercial businesses. The applicant must clearly describe the nature and anticipate the impact of the activities. The following factors will be considered:

• the extent to which the proposed activities implement an overall "Main Street" Revitalization Strategy;

• the amount of private and/or public investment;

• the extent to which the proposed activities will create quantifiable economic impacts in the form of new employment opportunities and increased property and sales taxes; and

• the extent to which there are feasibility issues which may prevent a timely completion of the CDBG activities and the overall strategy

For attraction or retention of businesses which provide essential services, consideration will be given to projects which support retail and service activities commonly associated with neighborhood needs (groceries, pharmacies, dry cleaners, day care, restaurants, recreational businesses, health care facilities, services to the elderly and/or families, etc.). The applicant must clearly demonstrate that essential businesses are either unavailable to area residents or are in jeopardy of becoming unavailable due to such factors as insufficient sales or profitability; lack of supporting infrastructure including parking, lighting, drainage, streets, and sidewalks; inadequate commercial structures due to such factors as space restrictions, inappropriate and expensive utilities, and nonfunctional or otherwise unusable upper floors; or problems associated with neighborhood deterioration including, but not limited to, crime, decreasing population, deteriorating housing, and unemployment. The applicant should clearly describe and explain the nature of the conditions which negatively impact the viability of neighborhood-based businesses, and clearly demonstrate the manner in which the CDBG-funded activities will assist in creating long-term commercial viability. The following factors will be considered:

• the seriousness of the demonstrated need as evidenced by the nature and extent of the unavailable or distressed services and businesses;

• the extent to which the proposed activities are likely to result in the attraction and/or retention of businesses which provide essential neighborhood services;

• the amount of private and/or public investment; and,

• the extent to which there are feasibility issues which may prevent a timely completion of the CDBG activities.

Criterion 7 Removes Slums or Blighting Conditions.

Consideration will be given to proposed programs which will have a direct impact on the removal of slums or blighting conditions. Appropriate areas may include, but are not limited to, deteriorated residential or commercial structures, inappropriate land uses or blighting conditions, such as repeated flooding and drainage problems or serious deficiencies in public facilities. Applicants should be aware that slum and blight activities can be carried out under the national objective of benefit to low- and moderate-income persons. If an applicant elects to qualify the activity on this basis, the degree of low- and moderate-income benefit must be demonstrated by the applicant.

Where residential or commercial rehabilitation activities are proposed as preventing or eliminating blighting conditions, the application must clearly document the number, type, and condition of deteriorating or deteriorated buildings in the designated target area. Detailed conditions of the physical condition of buildings or structures would be appropriate to establish the extent of substandard and blighting conditions. For rehabilitation of residential structures to eliminate blight and address an area's deterioration, the buildings must be considered substandard under local definition.

When it is determined that an area is blighted, there must be a substantial number of deteriorated or dilapidated buildings, or the public improvements throughout the area must be in a state of deterioration. The proposed CDBG Small Cities program or project must be designed to eliminate or address a substantial portion of the identified blighting conditions or physical decay. CDBG Small Cities assistance for facilities or structures which are in good repair and show no real signs of deterioration would not score well under this criterion. For instance, minor facade improvements to a commercial building alone would not indicate that a building is in poor condition. However, assistance to a commercial area which consists of deteriorating businesses, storefronts in serious need of rehabilitation, a high vacancy factor, and public improvements, such as parking areas and parking access improvements which are in need of physical upgrading, would have a direct impact on eliminating blighting conditions. Public improvements that are so deteriorated that they constitute a genuine threat to the continued viability of an area by discouraging private investment necessary to maintain properties may also be considered a blighting influence. The following factors will be considered:

• the extent and documented seriousness of conditions/needs [References to engineering studies, surveys or letters from appropriate local agencies should be included];

• the impact of the proposed program in relation to providing long-term permanent solutions to alleviate the identified need [Short-term or superficial improvements will not be considered to have a significant impact.];

• coordination with the projects and activities which will address needs within the defined area;

• the nature of any proposed re-use; degree of commitment for re-use; and,

• the extent to which the project supports the community's strategic plan.

Criterion 8: Resolves a Serious Threat to Health, Safety or Welfare

The applicant must describe the condition which poses a threat to public health, safety or welfare. A serious threat refers to a situation which demands immediate attention. This may be a condition that has just occurred or a condition which, though long standing, has intensified to become an immediate danger.

Applicants should be aware that imminent threat/urgent need activities can be carried out under the national objective of benefit to low- and moderate-income persons. If an applicant elects to qualify the activity on this basis, the degree of low- and moderate-income benefit must be demonstrated by the applicant. Consideration will be given to the following:

• the extent to which a serious threat to health, safety or welfare is documented, of recent origin, or which recently became urgent [Documentation should include the identification of the existing conditions by appropriate agencies.];

• the extent to which the serious threat will be resolved;

• the submission of documentation which demonstrates that other financial resources are insufficient or unavailable to resolve such needs;

• the degree to which the application addresses issues such as the validity of cost estimates by qualified sources; the availability of other funds; site control and environmental conditions; or other public body approvals; and,

• the number of persons to benefit, as well as the number of individuals actually threatened.

[Note: This criterion is generally more restrictive than Criterion 4. The existing condition must pose a serious and immediate threat to the health, safety or welfare of the target population.]

Criterion 9: Supports Other Federal or State Programs Being Undertaken in the Community or Deals with the Adverse Impact of Another Recent Federal or State Action.

[The Other Federal or State Program or Action Must be of Substantial Size or Impact in the Community in Relation to the Proposed Program.]

The application must contain a complete description of the federal or state program(s) (excluding the Small Cities CDBG Program) which currently are underway, or a complete description of the adverse impact of a recent federal or state action (e.g. the closing of a military base). A federal or state program or action not yet initiated will be considered only where the application provides documentation establishing the certainty and the approximate commencement date of the described program or action.

The applicant must demonstrate clearly the magnitude of the effect of the federal or state program or action on the community. The degree to which the proposed Small Cities CDBG project will support the federal or State program, and/or the extent to which the adverse impact of federal or State action will be mitigated, also must be demonstrated.

In addition to the above, the nature and costs of the proposed activities will be considered in determining the degree of impact.

Open Round Economic Development

Economic development activities supported by the Small Cities CDBG Program are projects that create and/or retain permanent, private sector job opportunities principally for low- and moderate-income persons, through the expansion and retention of business and industry in New York State. The minimum funding limit for an economic development grant is $100,000 and the maximum limit is $750,000 in a program year. GOSC may fund below the minimum or above the maximum in cases where there are potential impacts greater than the norm.

Applications will be accepted throughout the year in a non-competitive, open round format. Eligible communities will be required to submit preliminary information to determine proposed project eligibility. Communities participating in the economic development program during the program year may also apply for a single purpose grant or a comprehensive grant in the annual application cycle.

The GOSC expects to fund projects which create or retain 1,673 new permanent full-time equivalent jobs in Program Year 2006 with FFY 2003, 2004 and 2005 funds, whether funded under the Economic Development or Micro-enterprise categories. [A job created is a new position that has been created and filled; a retained job is one that otherwise would have been eliminated without CDBG Small Cities Program assistance.]

Economic Development Application Process

The Governor's Office for Small Cities will review applications as they are submitted and perform required loan underwriting to ensure compliance with federal requirements and to ensure successful, quality projects. The application review process will generally proceed as follows:

• Submit Preliminary Evaluation Questionnaire (PEQ) for review.

• GOSC will review the PEQ information and, upon receipt of all required information, will issue an invitation to apply to the community, generally within 30 days.

• The community will be asked to submit a full application within 75 days of such invitation.

• If full application is complete and approved, funding notification will be sent.

Loan Underwriting Requirements

For a loan to be eligible for funding, the local government must undertake basic financial underwriting that meets the requirements of 24 CFR 570.482(e). The purpose of the underwriting is to select Small Cities CDBG-assisted economic development projects which are financially viable and make the most effective use of Small Cities CDBG funds.

The objectives of the underwriting guidelines are to ensure that:

• project costs are reasonable;

• all sources of project financing are committed;

• to the extent practicable, Small Cities CDBG loan funds are not substituting non-federal financial support;

• the project is financially feasible;

• to the extent practicable, the return on the owner's investment will not be unreasonably high; and,

• to the extent practicable, Small Cities CDBG loan funds are disbursed after, or on a pro-rata basis with, the other financing provided to the project.

  1. Project costs are reasonable. Reviewing costs helps the recipient avoid providing either too much or too little Small Cities CDBG assistance for the proposed project. Therefore, it is suggested that the grantee obtain a breakdown of all project costs and that each cost element making up the project be reviewed for reasonableness. The amount of time and resources the recipient expends evaluating the reasonableness of a cost element should be commensurate with its cost. Third-party price quotations should be used by a reviewer to help determine the reasonableness of cost elements. If a recipient does not use third-party price quotations to verify cost elements, then the recipient would need to conduct its own cost analysis using appropriate cost estimating manuals or services.

     The recipient should pay particular attention to any cost element of the project that will be carried out through a non-arms-length transaction. A non-arms-length transaction occurs when the entity implementing the Small Cities CDBG-assisted activity procures goods or services from itself or from another party with whom there is a financial interest or family relationship. If abused, non-arms-length transactions misrepresent the true cost of the project.

  2. Commitment of all project sources of financing. The recipient should review all projected sources of financing necessary to carry out the economic development project. This is to ensure that time and effort is not wasted on assessing a proposal that is not able to proceed. To the extent practicable, prior to the commitment of Small Cities CDBG funds to the project, the recipient should verify that: sufficient sources of funds have been identified to finance the project; all participating parties providing those funds have affirmed their intention to make the funds available; and the participating parties have the financial capacity to provide the funds.

  3. Avoid substitution of Small Cities CDBG funds for non-Federal financial support. The recipient should review the economic development project to ensure that, to the extent practicable, Small Cities CDBG funds will not be used to substantially reduce the amount of non-federal financial support for the activity. This will help the recipient to make the most efficient use of its Small Cities CDBG funds for economic development. To reach this determination, the recipient's reviewer would conduct a financial underwriting analysis of the project, including reviews of appropriate projections of revenues, expenses, debt service and returns on equity investments in the project. The extent of this review should be appropriate for the size and complexity of the project and should use industry standards for similar projects, taking into account the unique factors of the project such as risk and location.

  4. Financial feasibility of the project. The public benefit a grantee expects to derive from the Small Cities CDBG-assisted project (the subject of separate regulatory standards) will not materialize if the project is not financially feasible. To determine if there is a reasonable chance for the project's success, the recipient should evaluate the financial viability of the project. A project would be considered financially viable if all of the assumptions about the project's market share, sales levels, growth potential, projections of revenue, project expenses and debt service (including repayment of the CDBG assistance if appropriate) were determined to be realistic and met the project's break even point (which is generally the point at which all revenues are equal to all expenses). Generally speaking, an economic development project that does not reach this break-even point over time is not financially feasible.

     In addition to the financial underwriting reviews, the recipient should evaluate the experience and capacity of the assisted business owners to manage an assisted business to achieve the projections. Based upon its analysis of these factors, the recipient should identify those elements, if any, that pose the greatest risks contributing to the project's lack of financial feasibility.

  5. Return on equity investment. To the extent practicable, the Small Cities CDBG-assisted activity should provide not more than a reasonable return on investment to the owner of the assisted activity. This will help ensure that the grantee is able to maximize the use of its Small Cities CDBG funds for its economic development objectives. The amount, type and terms of the Small Cities CDBG assistance should be adjusted to allow the owner a reasonable return on his/her investment given industry rates of return for that investment, local conditions and the risk of the project.

  6. Disbursement of Small Cities CDBG funds on a pro rata basis. To the extent practicable, Small Cities CDBG funds used to finance economic development activities should be disbursed on a pro rata basis with other funding sources. Recipients should be guided by the principle of not placing Small Cities CDBG funds at significantly greater risk than non-Small Cities CDBG funds. When the recipient determines that it is not practicable to disburse Small Cities CDBG funds on a pro rata basis, the recipient should consider taking other steps to safeguard Small Cities CDBG funds in the event of a default, such as insisting on securitizing assets of the project.

     In addition to reviewing underwriting provided by the applicant, the State will conduct an independent underwriting analysis based upon the above criteria and will determine whether the proposed interest rate and term offers an acceptable risk by considering at least the following factors:

     • the length of the proposed repayment period;

     • the term matches the use of funds (real estate, equipment or working capital);

     • the impact of expected annual debt service; and,

     • the specific for-profit business's ability to furnish adequate security pursuant to 24 CFR Section 570.705(b).

Evaluating Economic Development Projects

In evaluating general economic development projects, the GOSC will analyze the following specific factors:

• the demonstrated financial need for the project [The applicant must show the amount of CDBG funds requested matches the financial need of the project];

• impact on employment opportunities for low- and moderate-income persons and the amount of funds needed to create each full time equivalent (FTE) job for low- to moderate-income people;

• the project is financially and technically feasible. Issues which might hinder timely project completion must be addressed. [A demonstrated assurance of the success of the project must be provided. Market data for the products and services of the business or businesses should be provided];

• CDBG funds should not exceed 40% of eligible costs;

• the current and future community impact of the project and public benefit;

• the project costs are reasonable and are supported by third party estimates;

• the project significantly supports the community's strategic plan; and,

• the capacity of the community to expend CDBG funds in a timely manner.

Small Cities CDBG grant funds may only be used for the construction or rehabilitation of commercial property, or its supporting infrastructure (e.g., water or sewer lines), when a private business has committed itself to utilizing the property for a business purpose that will result in the creation or retention of the requisite number of low- and moderate-income jobs.

Market-driven businesses (e.g. restaurant, retail) will only be considered when development of that business is an integral part of a comprehensive or geographically-targeted community revitalization effort. Startup businesses will be considered on a case-by-case basis.

In addition, when reviewing economic development applications, the following factors will be taken into consideration:

• commitment of all funds from other sources, in particular the equity investment of the private business [The infusion of Small Cities CDBG dollars should leverage a substantial investment of private and other dollars.];

• the extent to which the project would create permanent, full time jobs for low- and moderate-income persons [At least 51% of created or retained employment opportunities must be held by, or made available to, persons of low-and moderate- income.]; and,

• how the community plans to utilize program income from loan repayments.

Strategic Plan Objectives

The following exhibit illustrates which State strategic objectives outlined in the State's Strategic Plan are addressed by each funding category.

Exhibit 33
New York State
CDBG Strategic Objectives
And Funding Categories

Strategic Plan Objectives Met	Funding Categories
Preserve and increase the supply of decent, safe and affordable housing available to all low- and moderate-income households, and help identify and develop available resources to assist in the development of housing. Improve the ability of low- and moderate-income New Yorkers to benefit from affordable rental housing and homeownership opportunities.	Housing Comprehensive
Provide communities with assistance to undertake economic development initiatives.	Economic Development Comprehensive Micro-enterprise
Provide assistance to help communities undertake community infrastructure, facility and service projects affecting public health, safety and welfare.	Public Facilities Comprehensive

Secondary Funding Categories

Imminent Threat/Contingency Grants

The State reserves the right to set aside up to two pecent of the annual allocation for imminent threat or contingency situations affecting the public health, welfare and/or safety requiring immediate resolution. The projects to be funded should be in a federal- or state-declared disaster area. These funds will be available until the process for funds distributed through the regular program Notice of Funding Availability (NOFA) is completed or other funds become available.

Technical Assistance

In accordance with Section 811 of the Housing and Community Development Act of 1992, the Governor's Office for Small Cities may use up to one percent of the State's federal allocation for technical assistance to eligible local governments. The types of technical assistance to be offered will be developed in consultation with eligible local governments and in accordance with regulations.

Capacity Building and Planning

Within the program year, the State may develop a program that would allow units of general local government to apply for funding for the development of:

• a comprehensive community development plan, and,

• a policy-planning-management capacity so that the recipient of assistance may more rationally and effectively:

• determine its needs,

• set long-term goals and short-term objectives,

• devise programs and activities to meet these goals and objectives,

• evaluate the progress of such programs in accomplishing these goals and objectives, and,

• carry out management, coordination, and monitoring of activities necessary for - effective planning implementation.

In funding Capacity Building and Planning activities, the CDBG Small Cities Program will follow all requirements in accordance with Federal Regulations.

Section 108 Loans

The State may aid non-entitlement units of general local government in applying for guaranteed loans under 24 CFR part 570, Subpart M (Section 108 Loans). It should be noted that Section 108 projects receive intense scrutiny because any loan defaults are guaranteed by future Small Cities CDBG funds and therefore could have significant and deleterious effect on all eligible communities.

An extension of the federal CDBG Program, the Section 108 Loan Program provides a source of financing for community development projects of larger scale that address public needs or stimulate economic development. Section 108 notes are issued to investors through private underwriters. All projects are required to provide additional security, demonstrate that the loan can be paid back in full, and meet requirements outlined in 24 CFR 570 Subpart M. The State must pledge future CDBG Small Cities funds as the final source of security.

Applications will be accepted on a year-round basis. Eligible communities will be asked to submit preliminary information establishing that the proposed project meets federal eligibility requirements. The amount of loans available statewide to eligible communities is the maximum allowed under HUD regulation 24 CFR 570.705.

For communities having Section 108 Guaranteed Loans that closed on or after October 21, 1999, the following conditions apply:

Any repayment of Section 108 Guaranteed Loan debt obligations made with CDBG grant funds by a community as a result of default will be applied to the community's annual funding limit.

Repayment of a Section 108 Guaranteed Loan is the responsibility of the local government if the activity funded by the loan is determined to be ineligible or in violation of federal rules or regulations.

HUD must approve all guaranteed loan applications.

Section 108 Loan Guarantee Application Process:

The Governor's Office for Small Cities has experience in reviewing loan applications and performing required associated underwriting. The state review process is expected to be completed approximately 60 days from the receipt of a completed application. In general, the process will follow the standard Economic Development process.

• All Section 108 Loan Guarantees must be approved by the State before submission to HUD.

• Within thirty days, a review of preliminary information will be completed and a determination made if the proposed project meets federal eligibility requirements.

• If federal eligibility requirements are met, the local government will submit an application.

• Applications will be reviewed for completeness and additional information requested as appropriate.

• Program eligibility criteria will be reviewed and eligibility determination made pursuant to Federal CDBG and Section 108 Loan guarantee regulations will be reviewed.

• Economic feasibility, credit, and assess risk will be assessed.

• Amount and terms of program financing will be determined, including appropriate security.

• Appropriateness review in conformance with HUD guidelines;

• A written report for approval, by required State Boards will be prepared.

• Upon State approval, all requisite information will be submitted to HUD for review.

Section 108 Evaluation Criteria

Section 108 loans will be evaluated in accordance with 24 CFR Part 570, the Section 108 Final Rule, along with consideration being given to:

• Section 108 guaranteed loan funds used per permanent job created (cost-effectiveness);

• actual number of jobs created;

• documentation/demonstration that the project will have a significant impact on defined community needs;

• consistency with local planning and development strategies; and,

• certifications provided by the local government.

Section 108 Loan Underwriting Requirements

For a loan to be eligible for funding, the local government must undertake an underwriting analysis that meets the requirements of 24 CFR 570.482 (e). The financial analysis must determine:

• that all project costs are reasonable;

• that all sources of funding are committed;

• Section 108 guaranteed loan funds are not substituting for non-federal financial support;

• that the project is financially feasible;

• that adequate security is provided;

• that to the extent practicable, the return on the owner's investment will not be unreasonably high; and,

• that to the extent practicable, Section 108 guaranteed loan funds will be disbursed after, or on a pro-rata basis with, the finances provided to the project.

In considering Section 108 Loan Guarantee applications, the State will determine whether the proposed loan interest rate and term offer an acceptable risk by considering at least, but not limited to, the following factors:

• the length of the proposed repayment period;

• the ratio of expected annual debt service requirements to expected annual grant amount;

• the local government's ability to furnish adequate security pursuant to 24 CFR Section 570.705 (b); and,

• the amount of program income the proposed activities are reasonably estimated to contribute toward repayment of the guaranteed loan.

Section 108 Loan Management

Following HUD loan approval, the Governor's Office for Small Cities will be responsible for approving/monitoring project aspects such as, but not limited to, release of funds, associated loan documents, compliance with Federal requirements, periodically submitted financial information, and loan repayments.

CDBG Goals and Objectives

In administering the Small Cities Program, the GOSC captured the accomplishments of its recipients through a reporting process which requires recipients to report on the beneficiaries of CDBG funded projects. This reporting process allows the GOSC to record its accomplishments in a quantitative manner that measures productivity.

As a result of the June 10, 2005 Federal Register, Notice of Draft Outcome Performance Measurement System for Community Planning and Development Formula Grant Programs, the GOSC has reviewed its current method of measuring productivity and has determined that the data currently collected translates to indicators in the draft outcome performance measurement system.

Upon the issuance of the Outcome Performance Measurement System Final Notice, the GOSC will transition its existing output indicators to performance measurement indicators and adopt the overarching objectives as stated in the Final Notice and currently identified as: (1) Creating Suitable Living Environments; (2) Providing Decent Affordable Housing, and, (3) Creating Economic Opportunities.

The following demonstrates the GOSC's existing output indicators within the outcome performance measurement framework:

Goal: Suitable Living Environment

In an effort to provide a suitable living environment within New York State's communities the Small Cities program will encourage and assist local governments to develop a comprehensive public facility improvement strategy, as well as housing and economic development strategies which develop viable communities and primarily benefit low-to moderate-income persons.

Objectives: Improve Availability/Accessibility; Improve Affordability; Improve Sustainability.

Outcomes: Enhance a suitable living environment through improved/new accessibility, affordability and sustainability.

Indicators:Housing:

• total number of rental housing units rehabilitated to standard condition;

• total number of owner occupied units rehabilitated to standard condition;

• total number of persons residing within the rental or owner occupied units;

• total number of low- and moderate-income persons residing within the rental or owner-occupied units;

• total number of elderly and disabled persons residing within the housing units;

• total number of units of housing purchased by low- and moderate-income persons;

• total number of low- and moderate-income persons residing within homes purchased through homebuyer programs; and,

• total number of units assisted within a target area helping to eliminate slums and blighting conditions.

Public Facilities:

• total number of persons benefiting from access to safe drinking water;

• total number of persons benefiting from access to safe sewer/septic systems;

• total number of persons benefiting from general public facilities improvements including sidewalks, streetscapes, visual improvements;

• total number of special clientele (seniors, disabled,) benefiting from the development of senior centers, handicapped accessibility and other public services;

• total number of buildings/public facilities improvements conducted within a defined area to help eliminate slums and blighting conditions; and,

• total number of persons assisted through imminent threat projects to help resolve immediate threats to health, safety, and welfare,

Economic Development - Including Microenterprise

• total number of businesses assisted;

• total number of low- and moderate-income businesses assisted;

• total number of full-time and full-time equivalent jobs created or retained;

• total number of low- and moderate-income full-time and full-time equivalent jobs created or retained;

• total monetary assistance provided within a defined geographic area (target area or community); and,

• total number of buildings improved within the defined geographic area.

Goal: Improve Affordable Housing

In an effort to improve affordable housing throughout New York State's communities the Small Cities program will continue to support a mix of rehabilitation, conversion and construction, as well as homeownership activities to preserve and increase affordable housing, both for renters and owners, principally low-to moderate- income persons.

Objectives: Improve Availability/Accessibility; Improve Affordability; Improve Sustainability.

Outcomes: Create decent and affordable housing through improved/new accessibility, affordability and sustainability.

Indicators: Housing:

• total number of rental housing units rehabilitated to standard condition;

• total number of owner occupied units rehabilitated to standard condition;

• total number of persons residing within the rental or owner occupied units;

• total number of low- and moderate-income persons residing within the rental or owner-occupied units;

• total number of elderly and disabled persons residing within the housing units;

• total number of units of housing purchased by low- and moderate-income persons;

• total number of low- and moderate-income persons residing within homes purchased through homebuyer programs; and,

• total number of units assisted within a target area helping to eliminate slums and blighting conditions.

Public Facilities:

• total number of persons benefiting from access to safe drinking water;

• total number of persons benefiting from access to safe sewer/septic systems; and,

• total number of persons benefiting from general public facilities improvements including sidewalks, streetscapes, visual improvements.

Economic Development - Including Micro-enterprise:

• total number of full-time and full-time equivalent jobs created or retained;

• total number of low- and moderate-income full-time and full-time equivalent jobs created or retained;

• total monetary assistance provided within a defined geographic area (target area or community); and,

• total number of buildings improved within a defined geographic area.

Goal: Economic Opportunity

In an effort to increase economic opportunity throughout New York State's communities, the CDBG Small Cities program will continue to encourage and assist local governments to develop comprehensive economic development strategies which develop viable communities by providing economic opportunities, principally for low-to moderate- income persons.

Objectives: Improve Availability/Accessibility; Improve Affordability; Improve Sustainability.

Outcome: Create economic opportunity through improved/new accessibility, affordability and sustainability.

Indicators: Housing

• total number of units of housing purchased by low- and moderate-income persons; and,

• total number of low- and moderate-income persons residing within homes purchased through homebuyer programs.

Public Facilities:

• total number of persons benefiting from general public facilities improvements including sidewalks, streetscapes, visual improvements; and,

• total number of buildings/public facilities improvements conducted within a defined area to help eliminate slums and blighting conditions.

Economic Development - Including Micro-enterprise:

• total number of businesses assisted;

• total number of low- and moderate-income businesses assisted;

• total number of full-time and full-time equivalent jobs created or retained;

• total number of low- and moderate-income full-time and full-time equivalent jobs created or retained;

• total monetary assistance provided within a defined geographic area (target area or community); and,

• total number of buildings improved within the defined geographic area.

CDBG Program Monitoring

The Governor's Office for Small Cities recognizes, and will fulfill, the monitoring requirements of the CDBG Small Cities Program and will conduct them in accordance with HUD regulations. To ensure that each recipient of CDBG Small Cities funds operate in compliance with all applicable federal statutes and regulations, and according to all deadlines and requirements, the Governor's Office for Small Cities has a monitoring strategy that closely reviews the project implementation of recipients and provides extensive technical assistance for the prevention of non-compliance issues.

The Governor's Office for Small Cities maintains substantial records for the oversight and monitoring of each recipient, while also requiring each recipient to maintain its own records to facilitate the monitoring process and for public access. Recipient records are available for public inspection for a period of at least five-years. These records include documentation indicating the basis for which assistance was provided or denied, compliance with all federal and state statutory and program requirements and all required federal reports.

Monitoring each recipient requires the Governor's Office for Small Cities to conduct both on-site and off-site monitoring to track the progress of the project and compliance with all program requirements. Additionally, technical assistance is provided to recipients upon their request, or if the Governor's Office for Small Cities program staff determines that a technical assistance visit is required as a result of a field visit or the identification of potential non-compliance issues.

Monitoring activities may also include the following:

• an initial assessment of the capacity and needs of each recipient or a pre-funding site visit for potential recipients to check that conditions are as described in the funding application;

• yearly workshops to provide program and regulatory requirement information assistance to;

• meetings each year to review all contract conditions, requirements, procedures for requesting payments, etc.; and,

• detailed explanation of ways to improve grant administration procedures should a grantee be experiencing difficulty.

GOSC must further be satisfied in regard to the following compliance areas:

• Environmental;

• Fundability (eligibility and national objectives);

• Fair Housing;

• Equal Opportunity;

• Civil Rights;

• Financial;

• Federal Labor Standards;

• Acquisition and Relocation, URA and Section 104(d); and

• Lead-based Paint;

• Procurement;

• Drug-Free Workplace;

• Anti-lobbying;

• Citizen Participation;

• Benefit Standard;

• Excessive Force; and,

• File Maintenance.

The identification of compliance problems will result in a notification of the grant recipient and the setting of a deadline for response and compliance. Status shall be further monitored to insure resolution in a timely manner, or continued non-compliance. Where warranted, suspension of grant activities may occur. Prior to formal close-out of each grant, a final check will be made to be sure all monitoring has been completed and any unsatisfactory findings resolved.

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HOME

91.320(g)(2) HOME Investment Partnerships (HOME) Program

(i) "The State shall describe other forms of investment that are not described in Sec. 92.205(b) of this subtitle."

(ii) "If the State intends to use HOME funds for homebuyers, it must state the guidelines for resale or recapture, as required in Sec. 92.254 of this subtitle."

(iii) "If the State intends to use HOME funds to refinance existing debt secured by multifamily housing that is being rehabilitated with HOME funds, it must state its refinancing guidelines required under 24 CFR 92.206(b). The guidelines shall describe the conditions under which the State will refinance existing debt. At minimum, the guidelines must:"

(iv) If the state will receive funding under the American Dream Downpayment Initiative (ADDI) (see 24 CFR part 92, subpart M), it just include:

Overview

Title II of the National Affordable Housing Act of 1990 (NAHA) created the Home Investment Partnerships Program (HOME), with regulations published at 24 CFR Part 92. New York State was designated by the U.S. Department of Housing and Urban Development (HUD) as a participating jurisdiction in 1992. In 1995, Governor George Pataki designated the Housing Trust Fund Corporation (HTFC) to administer the New York State HOME Program. HTFC is a public benefit corporation, created by statute, which acts through a Board of Directors chaired by the Commissioner of the Division of Housing and Community Renewal (DHCR). The HTFC has a memorandum of understanding with DHCR for staff services to provide application reviews, technical services, professional services and project monitoring to the Corporation on an as-needed basis.

On December 16, 2003, the American Dream Downpayment Initiative (ADDI) was signed into law (Public Law 108-186). The Statute provides funding to eligible HOME-participating jurisdictions to assist low-income families to become first-time homebuyers. ADDI is administered as part of the HOME Investment Partnerships Program.

Strategic Plan Objectives

HOME Program funds will be used to support the following Strategic Plan objectives:

Objective: Improve availability by preserving existing privately-owned affordable housing while eliminating health and safety hazards;

Objective: Improve availability by building new workforce housing;

Objective: Improve availability by creating new rental and home ownership opportunities through expanded housing production;

Objective: Improve availability by building affordable senior housing;

Objective: Improve affordability by creating new homeownership opportunities; and

Objective: Improve affordability by creating new rental assistance opportunities.

The HOME Program Action Plan contains the following sections:

• The HOME resources (including program income) and the match and other resources reasonably expected to be available to produce the proposed units;

• A description of how the State will distribute program funds, consistent with priorities identified in the Consolidated Plan, including the amount of HOME funds that the State is reserving for Community Housing Development Organizations (CHDOs), and the activities that HOME funds will be used to support;

• The resale or recapture guidelines for projects providing assistance to first-time home buyers;

• A description of how HOME funds will be used for tenant-based rental assistance;

• The use of HOME funds for refinancing multifamily housing;

• Information on any form of investment of HOME funds that the State proposes that is not described in the regulations; and,

• A description of the policy and procedures to be followed by the State to meet the requirements for and to administer a minority- and women-owned business outreach program.

HOME Program Resources, Other Project Resources and HOME Matching Funds

New York State was allocated $38,324,643 in HOME funds and $738,115 in ADDI funds for FFY 2005. It is assumed that, excluding administrative funds, approximately $38 million in HOME and ADDI funding will be available to address housing needs for Program Year 2006. In addition, New York State anticipates receiving approximately $1,000,000 in program income during Program Year 2006.

An additional $8,750,000 in Low Income Housing Trust Fund Program resources will be available as a match to the HOME funding, to meet the expected match liability that the State will incur during 2006. The Low Income Housing Trust Fund Program (HTF) provides funding to not-for-profit, for-profit, and certain governmental entities to build or rehabilitate housing for low-income homesteaders, tenants, tenant cooperators and condominium owners. For the purposes of providing a match for the HOME program, certain projects that qualify as affordable housing and have received a commitment of HTF funds will be designated as "match" projects. An agreement will be executed with each project owner that subjects the project to the qualification requirements, and the State will monitor these projects to ensure that they continue to qualify as match for the required term.

The HOME Program generally attracts substantial private and other public dollars into its funded projects. It is anticipated that the $47 million of ADDI, HOME and Housing Trust Fund matching funds to be invested during the coming year will generate an additional investment of approximately $145 million - more than three dollars for every HOME dollar invested. These funds will come from other State and federal programs, from owner equity contributions, private financing, and other sources.

Activites to be Undertaken with HOME Funds

The HOME Program provides funds: to acquire, construct, or rehabilitate affordable housing; to provide rental assistance; and, for administrative expenses of public entities and not-for-profit organizations that undertake program activities. New York State may also undertake additional activities, where permitted by federal regulation. Assistance may be provided for both rental and homeownership housing. Any activity that qualifies under the HOME Final Rule, sections 24 CFR 92.205-209, may be financed by the State HOME Program, provided it is consistent with the Consolidated Plan and this Action Plan.

Funds provided under the American Dream Downpayment Initiative will be used for down payment assistance. Those funds provided in federal fiscal year 2004 and later may also be used for rehabilitation of units purchased by qualified first-time homebuyers. In most areas of New York State, homes that are suitable for purchase by low-income families require some amount of rehabilitation work and often purchase subsidies in excess of the $10,000 or 6% of the purchase price as allowed under ADDI regulations.

New York State estimates that these resources will create 1,850 new housing opportunities during the program year beginning January 1, 2006. These opportunities will be supported by the expenditure of approximately $34 million in HOME funds during Program Year 2006.

This estimate of housing opportunities to be created is based upon past experience and current commitments made by the State's HOME Program. This takes into consideration existing commitments that are expected to be completed during 2006 and includes only those units to be completed and delivered for occupancy during the program year (but not units committed but not yet completed).

The total amount of funding to be invested in assisted housing is based upon past experience. It is anticipated that the per-unit cost of housing rehabilitation and down payment assistance will increase in 2006 due to increases in acquisition and construction costs. The State reserves the right to revise these projections as additional cost information becomes available.

Methods of Distribution

New York State distributes HOME Program funds through a competitive process called Unified Funding. This system enables applicants to request funds for one or more development and housing assistance programs, including the HOME Program, without the need to submit multiple applications for funding for the same project. The process is being automated so that applicants for some activities can now apply on-line using a "paperless" application. Based on past experience the State anticipates requests for HOME funds for all eligible activity types, including home ownership, rehabilitation of owner-occupied units, rental housing production and rehabilitation, and tenant-based rental assistance.

HTFC utilizes a competitive process for distributing HOME Program funds. The competitive process was incorporated into the State's Unified Funding Application Process. Funds are distributed in the following manner:

• 15% of each federal allocation is reserved for community housing development organizations (CHDOs);

• 80% of the remaining funds are reserved for projects located within non-participating jurisdictions; and,

• All remaining funds are distributed on a statewide basis.

Less than 80% of funds remaining after the CHDO set-aside is deducted may be awarded in non-participating jurisdictions, if, after a notice of funding availability and request for proposals, HTFC makes a written finding that (i) eligible, complete, and feasible applications received for projects in non-participating jurisdictions will not totally utilize the remaining available reserved funds and (ii) such funds are subject to recapture by HUD pursuant to federal HOME regulations within 180 days.

American Dream Downpayment Initiative funds are distributed through the same competitive Unified Funding process. While ADDI funds are not subject to the same restrictions in terms of CHDOs and participating jurisdictions, it is expected that the distribution pattern will be generally the same as the pattern for HOME funds.

Participating jurisdictions may utilize up to 10% of each allocation of funds as reimbursement for administrative costs, and up to 5% of each allocation of funds for CHDO operating expenses. The State reserves the right to utilize these funds as it deems necessary. Funds used for administrative expenses and CHDO operating expenses are not subject to the distribution plan described above.

HTFC cannot predetermine the use of HOME funds by activity or tenure type. The amount of funds allocated for each activity or tenure type will be based on the applications submitted, the competitive criteria described in the next section, and the extent to which proposals are consistent with the priorities identified in this Plan.

Applications that will produce a quality housing product that most efficiently provides the greatest number of units for the longest period of time for the lowest-income New Yorkers, and which respond to a strategy to address housing needs will have the greatest likelihood of being funded. Applications that address transitional and permanent housing for the homeless are eligible for HOME funds. HTFC will strive to fund projects in support of the objectives identified in the Strategic Plan section of this document by providing scoring preference for those applications which demonstrate a feasible approach to meeting one or more objectives.

In Program Year 2006 applicants will be strongly encouraged to consider energy conservation in project design, and those applicants that incorporate energy conservation measures or coordinate with the federal Weatherization Assistance Program, which DHCR administers, may receive additional scoring consideration.

HTFC may also set aside approximately $500,000 to provide lead-hazard control work for units assisted by the Division of Housing and Community Renewal's Weatherization Assistance Program in areas where there is not an active HOME-funded housing rehabilitation program, and where the Weatherization program cannot provide the lead hazard control work that is needed, and would not be able to proceed with installation of energy conservation measures due to the presence of lead paint hazards.

HOME Program funds are also an important resource for serving households with special needs. The 2006 application materials will encourage applicants to submit proposals that target persons with special needs, including those with physical or mental disabilities and the developmentally disabled.

It is anticipated that HTFC will issue a Notice of Funding Availability (NOFA) prior to the start of the Program Year for Federal Fiscal Year 2006 HOME Program funds and any HOME Program funds from earlier years that are then available to the State.

Geographic Distribution

All projects and programs will be selected by a competitive process. To the extent that feasible, highly competitive applications are received, HTFC will allocate available program resources to meet housing needs in an equitable geographic distribution across the State. Funds may be awarded in any part of the State, including Native American reservations.

Competitive Application Process

All HOME and ADDI funds will be distributed competitively, according to the distribution plan described above, with HTFC as the administering agency. Eligible applicants will submit applications that will be reviewed and competitively ranked according to the criteria set forth below.

The competitive application process is initiated by a Notice of Funding Availability (NOFA). Applicants are required to provide documentation needed to determine project feasibility and marketability, including:

• a feasibility study and market analysis of the proposal;

• a proposed project development financing plan, project operating budget, and leveraging plan;

• a schedule, with specific dates, of the expected project commencement date, expected completion date, and if appropriate, the anticipated schedule for closing and occupancy of units;

• a description of the applicant's and development team's qualifications and previous experience;

• a statement by the applicant as to the status of all public approvals and clearances required to undertake the project;

• a plan as to how applicants will ensure compliance with all federally mandated regulations throughout the regulatory term;

• a statement describing the amount and source of any matching contributions required for the proposed project; and,

• a statement of need and how the project will further goals set forth within the State Consolidated Plan and any local consolidated plan or other development plan.

In selecting from among complete and eligible applications, consideration is given to:

• the extent to which the proposal will serve a demonstrated need;

• the degree to which the proposal leverages private investment or other funding sources;

• the likelihood of successful project completion, including consideration of the submitted market analysis, the prior experience of the applicant, and the viability of the submitted completion schedule; and,

• the type of assistance requested.

Eligible applicants who are selected to receive HOME funds for tenant-based rental assistance, rehabilitation of owner-occupied properties, home buyer assistance projects and rehabilitation of investor-owned rental properties that generally have four or fewer units, will be designated as State recipients or sub-recipients. Applicants who are selected to receive funding for first-time homebuyer activities (including downpayment assistance and related rehabilitation) may receive ADDI funding, HOME funding, or both. State recipients and sub-recipients may be permitted to set up projects and access project status on the Integrated Disbursement and Information System (IDIS).

Funding of Projects Located in Participating Jurisdictions

HTFC anticipates that some HOME funds and some ADDI funds may be used for eligible activities that are located in participating jurisdictions, within the limits described above. In that event, HTFC will work with the participating jurisdiction to ensure coordination of effort and will require project sponsors to coordinate efforts with participating jurisdictions where applicable.

In accordance with State policy, the State of New York will not transfer any HOME funds to any other jurisdiction in order for that jurisdiction to meet the threshold for designation as a participating jurisdiction. Also, it is against State policy to directly fund participating jurisdictions that apply for State HOME funds, although projects located in participating jurisdictions that are sponsored by other entities may be funded, according to the guidelines described above.

Community Housing Development Organizations (CHDOs)

The State will reserve a minimum of 15% of the total amount of HOME funds that it receives for CHDOs, in accordance with provisions of the National Affordable Housing Act of 1990. CHDOs apply to the State to develop, sponsor, or own projects, and will be eligible to undertake any eligible activity in accordance with 24 CFR Part 92 Subpart G (Community Housing Development Organizations).

HTFC will, as part of the competitive application process, issue a NOFA that will encourage participation by CHDOs. Due to the extensive network of not-for-profit housing providers in the State, HTFC anticipates that the actual participation of CHDOs may exceed 15% of total HOME funds.

For an organization to be considered a CHDO, it must be certified by the State of New York. The organization must submit for review certain information (organizational documents, financial documents, etc.) as prescribed by HOME regulations. After a CHDO is found to meet qualifying criteria, they are notified of their approval as a CHDO by the State. New York State does not accept certifications of other participating jurisdictions.

New York State conducts an extensive program of outreach and technical assistance to CHDOs and other partners. DHCR staff, consultants made available by means of technical assistance funds available to the State, and not-for-profit intermediaries designated by HUD are all involved in the provision of technical assistance to CHDOs and potential CHDOs. Each year, prior to the due date for applications for the HOME program, program workshops are conducted at locations throughout the State. During the year, smaller seminars and clinics are held that focus on particular topics related to the HOME program. DHCR Regional Office staff maintain frequent contact with CHDOs, and when it is determined that a group may benefit from individual technical assistance (either from DHCR staff, a consultant, or a not-for-profit intermediary) appropriate referrals are made. The State intends to continue these efforts in the future, to the extent that available resources permit.

Additional project-specific assistance may be made available to CHDOs in the form of technical assistance, site control loans, and seed money loans, in accordance with 24 CFR Part 92 Subpart G (Community Housing Development Organizations). The State will also work with the HUD-designated not-for-profit intermediary organizations to promote CHDO participation.

Home Buyer Resale/Recapture Provisions

When HOME or ADDI funds are used to assist a household in the purchase of a unit, restrictions will be placed on the unit to ensure compliance with the resale and recapture requirements described in 24 CFR 92.254(a)(5). This section sets forth methods that will be used by HTFC to enforce these requirements.

Home ownership projects undertaken by a State recipient, or sub-recipient will be secured by means of a note and mortgage given to the State recipient or sub-recipient by the low-income household being assisted. The period of affordability specified in the mortgage will be the minimum period for the project as specified in 24 CFR 92.254(a), sections (4) and (5), unless a longer period is imposed. The form of the note and mortgage is provided to State recipients and sub-recipients by HTFC.

The note and mortgage permits reduction of the amount of HOME or ADDI funds subject to recapture on a pro rata basis during the affordability period. It also allows for a method where any net proceeds from the sale are shared proportionally between the owner and the State recipient or sub-recipient. If the housing does not continue to be the principal residence of the assisted household, due to sale, foreclosure, or any other event, the note and mortgage will require repayment of the amount of HOME/ADDI funds subject to recapture at the time the event occurred. The amount of HOME/ADDI funds subject to recapture will be a share of the net proceeds (sale price minus loan repayments and closing costs) available to the project following the sale or transfer of the property. Where there are no net proceeds, or where the net proceeds are insufficient to repay the amount of HOME/ADDI assistance that is otherwise due, the amount subject to recapture will be calculated by multiplying the net proceeds by the percentage of total equity represented by the HOME/ADDI funds, where total equity is defined as the amount invested by the owner (down payment and capital investments made since purchase) plus the HOME/ADDI investment. HOME funds used as a development subsidy instead of for home buyer assistance will not be subject to recapture.

HTFC will permit recaptured funds and program income earned by a State recipient or sub-recipient to be used to assist additional units, upon prior notification and approval by HTFC. If the State recipient or sub-recipient no longer has an open contract with HTFC, or is unable to utilize the repayment or program income to assist additional projects, the funding will be returned to HTFC for reallocation to other State recipients or sub-recipients in accordance with the method of distribution of funds described elsewhere in this Plan.

When HOME Program funds are used for development of home ownership housing, as in CHDO home ownership projects, resale restrictions may be used instead of recapture restrictions described above. Resale restrictions will ensure that housing assisted with HOME funds is made available for resale only to low-income households. Resale provisions will be enforced by means of a deed restriction unless the project is located in an area that meets the conditions described in 92.254(a)(5)(i)(B). Generally, resale restrictions will be used when HOME funds are invested in a larger home ownership development, a condominium or co-operative project, or where a substantial per-unit investment of subsidy is provided.

In other cases, home ownership development will be secured by the recapture provisions described above. For home ownership projects developed by CHDOs that are secured by recapture provisions, the note and mortgage will be held by HTFC.

ADDI Provisions

Program administrators requesting funding for first-time home buyer programs, which may be funded with ADDI funds, will be required to provide a plan for targeted outreach to tenants of public housing and other families assisted by public housing agencies, and to manufactured housing occupants, to ensure that such households in the local area are aware of the first-time home buyer program. Suitability to undertake and maintain homeownership will be addressed by requiring all first-time home buyer program administrators to provide housing counseling to participating home buyers.

Tenant-Based Rental Assistance

Applicants proposing tenant-based rental assistance projects are required to submit an administrative plan that demonstrates how the applicant will comply with the regulations at 24 CFR 92.211 (Tenant-based Rental Assistance).

Administrative plans that are submitted for tenant-based rental assistance projects must contain evidence that the applicant will comply with the statute and regulations, and must also include the following elements:

• a certification that tenant-based rental assistance meets a need described in the Consolidated Plan, and a description of the local market conditions that justify the need for tenant-based rental assistance in accordance with 24 CFR 92.209;

• the method of selection of, or coordination with, a local public housing agency (PHA), including a copy of a memorandum of understanding between the project sponsor and the PHA, procedures for annual income and rent payment determinations, and evidence that a secure source of administrative funding will be available to the applicant for the duration of the rental assistance;

• sample rental assistance contracts;

• a sample lease, with the provisions contained in 24 CFR 92.253 (Tenant and Participant Protections);

• the proposed means for determining rent reasonableness;

• the proposed subsidy levels, tenant contribution requirements, and rent standards;

• copies of applicable utility allowance schedules;

• a plan for ensuring compliance with housing quality standards; and,

• a plan for ensuring that no assisted families will be displaced due to the expiration of the rental assistance subsidy.

Term of Rental Assistance Contracts

Project sponsors will be required to make rental assistance available for a term that shall not exceed 24 months.

Rental Assistance Certification

In accordance with the requirements of 24 CFR 92.209(b) regarding tenant-based rental assistance, the State certifies that the use of HOME funds for tenant-based rental assistance is an essential element of its Consolidated Plan, which includes, as one of its strategic objectives, to "increase the ability of New Yorkers to access rental housing".

The State will require any applicant who intends to use HOME funds for tenant-based rental assistance to document the local market conditions that will lead to the choice of this option prior to allocating the HOME funds for rental assistance.

Other Forms of Investment

The State will permit HOME funds to be invested as loans, grants, deferred payment loans, and other types of investment permitted by the regulations in housing rented or owned (held in fee-simple title) by eligible households. State recipients and sub-recipients will also be permitted to invest HOME funds to rehabilitate (but not acquire) housing occupied by low-income households that hold life-estate or life-tenancy rights to occupy the unit. For rehabilitation of existing owner-occupied housing, certain life-tenancy or life-lease arrangements may be permitted. Replacement of existing manufactured housing units with "stick-built" construction shall be considered rehabilitation for the purposes of the State HOME Program.

Any applicant who proposes to use any other form of investment not described in 24 CFR 205(b) (Forms of Investment) must include a description of the form of investment, justification for the need for the form of investment, and a description of the proposed means of securing the investment, if any, in the application that is submitted to HTFC. HTFC will not permit other forms of investment without the prior approval of HUD.

Refinancing Existing Debt

HTFC does not permit the use of HOME funds to refinance existing debt secured by multifamily housing that is being rehabilitated with HOME funds.

Fair Housing and Equal Opportunity

Pursuant to the State's responsibility to affirmatively further fair housing, as set out in the Consolidated Plan and consistent with the requirements of the Fair Housing Act and Section 504 of the Rehabilitation Act, HTFC is responsible for ensuring that the marketing of housing construction funded by awards from the HTFC is accomplished in a fair and equal opportunity manner.

All awardees of state funding and federal assistance are required to comply with state and federal laws concerning equal opportunity and fair housing in the sale and rental of their projects. The Fair Housing Act as amended in 1988, prohibits discrimination in the sale or rental of housing on the basis of race, color, religion, sex, disability, familial status and national origin. Section 504 of the Federal Rehabilitation Act of 1973, prohibits discrimination in the sale or rental of housing on the basis of disability in programs receiving federal financial assistance.

All awardees are required to submit an affirmative marketing plan to HTFC which describes the marketing strategy that will be used to comply with the policies and statutes described above. The HTFC ensures through a comprehensive review process that awardees' marketing plans for HOME awards comply with the relevant state and federal statutes concerning equal opportunity and accessibility.

The awardees' marketing plans must set forth how the project will be marketed and rented, so that the "least likely to apply" population, including those in the disabled community, have an equal opportunity for housing. An emphasis has been added to the process to ensure that the special needs community has an equal opportunity for notice and application for the housing.

Awardees are also required to collect data on affirmative marketing efforts to ensure long-term compliance. Awardee compliance in these areas will be monitored during specific monitoring visits. HTFC will assist awardees, as needed, with affirmative marketing efforts and related matters. In addition, DHCR provides technical assistance and training to awardees and potential awardees of HOME funds concerning relevant issues and requirements of fair housing.

HTFC will require project sponsors who receive HOME funds to fully comply with all federal and state fair housing laws, including the Fair Housing Act of 1968, as amended, the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the New York State Human Rights Law, and applicable provisions of the New York State Private Housing Finance Law. In accordance with 24 CFR 92.351, HTFC adopted the following affirmative marketing procedures:

• Each applicant for funds, project sponsor, or owner will be informed of these policies and applicable state and federal laws and will be required to make this information available to the public and potential tenants.

• Project sponsors and owners will be required to make all reasonable efforts to affirmatively market units assisted with HOME funds that are located in projects consisting of four or more units. A lien will be placed on each rental property assisted with HOME funds that will ensure compliance with these requirements.

• Project sponsors and owners must make all reasonable efforts to inform persons not likely to apply for housing without special outreach, including placement of advertising in publications that are distributed in minority or isolated communities, outreach through community-based organizations, and other direct outreach efforts.

• HTFC will maintain records to document outreach efforts and, where applicable, will require project sponsors to maintain such records, in accordance with the regulations and the above procedures.

• HTFC will assess the effectiveness of affirmative marketing efforts through periodic monitoring reviews and annual reports that each project sponsor will be required to submit.

In the event that HTFC determines that a recipient of HOME funds is not in compliance with the affirmative marketing requirements, the recipient will be given an opportunity to demonstrate, within a prescribed time limit, and on the basis of substantial facts and data, that it will take, or has taken, actions to comply with the requirement. If, in the opinion of HTFC, the recipient has failed to comply after the time period has expired, HTFC will impose corrective actions and sanctions, including recapturing unexpended HOME funds and requiring repayment of expended funds.

Minority and Women Owned Business Program

The HTFC is responsible for carrying out the mandates of Article 15-A of the Executive Law. Article 15-A of the Executive Law is the statute governing the award of contracts by state agencies and authorities to women- and minority-owned businesses. The New York State Department of Economic Development's (DED) Division of Minority and Women Business Development has overall statewide responsibility for overseeing State agencies and authorities in the administration of programs to assist minority and women owned business enterprises (M/WBE) in obtaining State awarded contracts. The DED has promulgated rules and regulations for carrying out this program. These rules and regulations govern the HTFC's M/WBE program.

A directory of State certified M/WBE firms has been created and is maintained by DED. DHCR staff assist State development awardees in contracting with State certified M/WBE to meet specific project goals designed to include minority and women businesses in the construction and procurement process. The use of certified M/WBE is encouraged on all projects and in the purchase of goods and services.

Awardees for State funding are required to submit utilization plans which document their intent to subcontract with and/or procure goods and services from M/WBE. In addition, awardees are required to meet specific goals set by HTFC for each project contracting with State certified M/WBE. Proof of payment to M/WBE is also required once project goals have been assigned. Contract compliance records consistent with Article 15-A requirements are maintained by the HTFC. The HTFC is also required to report data quarterly to DED concerning the goal achievement.

The HTFC conducts workshops for awardees, attends project planning meetings to monitor program compliance, offers technical assistance for awardees and continually endeavors to develop and streamline the process.

Ongoing efforts of the M/WBE compliance program will include:

• work with all staff including awardee and in house staff involved in the contract process to discover innovative ways to increase M/WBE participation;

• maintain current databases and spreadsheets to expedite reporting requirements and generate appropriate results;

• continue to establish appropriate goals for M/WBE participation; and,

• provide training to regional staff, awardees, contractors and project sponsors at regular intervals or as needed to communicate changes and/or updates

All HOME project awardees will be required to utilize local print media in their minority- and women-owned business utilization efforts and to take actions to facilitate local procurement opportunities.

The HTFC also conducts workshops and offers technical assistance for the Section 3 Program, which applies to all of recipients of housing and community development assistance in excess of $200,000 and subcontracts in excess of $100,000 awarded in connection with Section 3 covered activities. The HTFC has developed and disseminated the "Guide to Local Resources - Section 3 Initiative."

Monitoring

The State of New York has implemented two different monitoring procedures for HOME projects and programs, based upon whether the recipient of funding is applying to the State as a project sponsor or as a local administrator. HTFC is responsible for monitoring awards made with federal HOME funds allocated to New York State.

Monitoring Multifamily Rental Project Sponsor

The following briefly describes the procedures employed by DHCR/HTF to monitor sponsors who are awarded HOME funds to develop multifamily rental projects.

Selection

DHCR/HTFC reviews funding applications to ensure compliance with the statutory provisions regarding: project eligibility; fiscal and development/management capability; proposed tenancy of assisted projects; undertaking of affirmative fair housing, equal opportunity, drug-free environment, and other requirements applicable under NAHA; housing quality, lead-based paint standards, and the New York State Building Code compliance; Federal and State environmental review; and prior audit history.

Construction Monitoring

DHCR/HTFC monitoring includes the review and approval of: the schedule of values; disbursement requests for payment of construction draws on the construction amount of the project award; change orders; retainage amounts for unfinished work; and periodic inspection of the construction activity and appropriate follow-up. Upon completion, documentation of compliance with Housing Quality Standards (HQS) and applicable building codes is assembled for each project.

Post-construction monitoring

includes the annual review of affirmative marketing guidelines under 24 CFR 92.351(a). Implementation of affirmative marketing plans is reviewed through a series of interview or survey questions regarding tenant selection procedures, the waiting list, advertising, and the composition of the project. If the review occurs as part of a site visit, files are also reviewed.

Pre-Occupancy Meeting

The State monitors HOME multifamily rental projects through DHCR's Office of Housing Management (OHM), beginning with a pre-occupancy meeting approximately 90 days before rent-up. All HOME requirements are covered, and the developer/manager is provided with the DHCR Capital Programs Manual and HUD Fair Housing Booklet. The approved project affirmative marketing plan is discussed, focusing on tenant selection procedures and the waiting list to ensure compliance with 24 CFR 92.351(a).

Post-Construction Monitoring

HOME rental projects are subject to periodic on-site visits and desk audits to ensure ongoing compliance with HOME regulations involving tenant selection and income eligibility, rents charged, housing quality, file maintenance and financial reporting. These monitoring activities are performed by State agency employees who periodically visit the project management offices, review tenant files and application logs, sample financial records, and inspect units to verify compliance with housing quality standards as a minimum level of habitability.

A regulatory instrument is recorded against the title to the real property for each project. It is enforceable in the event of default by recourse to the project for noncompliance with statutory or regulatory requirements, including any unapproved proposed resale or refinancing of the project.

DHCR/HTFC's audit policy is substantially equivalent to the 24 CFR Part 84 requirements identified for HOME funded not-for-profits. Public entities are subject to Federal single-audit requirements and the related cost policies and compliance supplements and are expected to submit a copy of that audit to DHCR/HTFC. In addition, there may be certain items that pertain to non-Federal funds granted by DHCR, as required.

Monitoring Local Program Administrators

DHCR/HTFC has implemented monitoring standards and procedures required for monitoring local administrators, including both local governments (State Recipients) and not-for-profit organizations (Sub-recipients) selected to administer HOME local programs. Each local program administrator with an active program is monitored annually for compliance with federal program requirements and with the terms of the contract with HTFC. This monitoring may take the form of either a desk audit or an on-site review. State Recipient and Sub-recipient administrative plans are also reviewed closely during the project selection phase to ensure capacity to comply with program requirements.

Selection

DHCR/HTFC reviews funding applications to ensure compliance with the statutory provisions regarding: project eligibility; fiscal and development/management capability; proposed tenancy of assisted projects; undertaking of affirmative fair housing, equal opportunity, drug-free environment, and other requirements applicable under NAHA; housing quality, lead-based paint standards, and the New York State Building Code compliance; Federal and State environmental review; and prior audit history.

Project desk audits

These serve to verify the accuracy of HUD's Integrated Disbursement and Information System (IDIS). In-house monitoring regularly involves the use of IDIS and the Statewide Housing Activity Reporting System (SHARS) reports and telephone communication with project recipient staff. The IDIS and SHARS reports are used to track performance in the following areas: production (commitment to specific projects and funds expended for completed units); regulatory compliance (income group targeting, tenant assistance, unit affordability, matching requirements); performance in meeting Federal- and State-identified goals and targets; trends in committing and completing projects; tenant characteristics; project selection characteristics; and leveraging of public and private funds. Generally, program administrator performance is reviewed on a monthly basis.

Program Implementation Monitoring

HTFC's "Monitoring Guide for State Recipients and Sub-recipients" is provided to all recipients to explain program monitoring requirements. The guide covers all relevant regulatory requirements, includes site inspection forms and checklists for staff, and guidance for recipients to understand how staff implements monitoring procedures and how they can set up files and establish program operating procedures to ensure full compliance.

Post-Completion Monitoring

Post-completion monitoring of local programs is limited in scope. For home buyer and owner rehabilitation programs, there is no scheduled ongoing monitoring because the resale requirements are self-enforcing through the recorded note and mortgage documents. For tenant-based rental assistance, the programs are only active for two years (during which the recipients are monitored using the guides as indicated above), and then are closed out. Only a locally-administered rental rehabilitation program would have ongoing occupancy compliance issues that would require more extensive on-going monitoring.

In such cases, DHCR/HTFC will review selected tenant and project files to ensure that tenant selection, tenant certification, and unit inspection activities have been undertaken consistent with the sub-recipient's administrative plan and HOME regulations. DHCR also surveys recipients who have undertaken rental rehabilitation programs to collect information on recipients' monitoring activities.

On-site Monitoring

DHCR staff monitor locally-administered programs for both fiscal and programmatic compliance. Periodic site visits are conducted by regional office staff. In addition to examinations of program and project records for statutory and regulatory compliance, staff visit several project sites to ensure that work is being completed as reported, and in compliance with HQS and applicable codes. Staff also provide technical assistance on the day-to-day operation of the program, and examine the integration of the program with overall State goals, (including how the program addresses community needs), any barriers to operation, and ways the program could become more effective.

Other monitoring of local administrators

Routine processing of setup reports, disbursement requests, and other paperwork submitted to HTFC provides additional opportunities to monitor program activities. Requests for reimbursement are examined to ensure that only reimbursement for approved program expenditures are being sought. If a program report does not accompany the voucher or if information submitted is problematic, the voucher is held pending resolution of the State's concerns. Resolution could involve additional site visits. Finally, local program administrators are required to report to HTFC annually. These reports capture information relating to program start-up and implementation, funds expended, minority participation, and certain other matter.

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ESGP

Section 91.320(g)(3) Emergency Shelter Grant (ESGP) Program

"The State shall state the process for awarding grants to State recipients and a description of how the State intends to make its allocation available to units of local government and nonprofit organizations."

Overview

The New York State Office of Temporary and Disability Assistance (OTDA) administers the Emergency Shelter Grants Program (ESGP) for New York State and coordinates activities to enhance the quality and quantity of homeless facilities and services for homeless individuals and families.

Resources

During calendar year 2006, the period covered by this Action Plan, FFY 2005 funds totaling $3,239,762 will be used to support ESGP activities. After deducting the State's 5% administrative share ($161,988), a total of $3,077,774 will be allocated to contracts, which will be required to provide an equal amount in match in support of program activities. Therefore, the total value of 2005 - 2006 ESGP contracts will be $6,155,548. [See Appendix V for a chart which provides summary information for each contract.]

New York State once again requests a one-year waiver of the 30% limitation on essential services expenditures.

ESGP Matching Funds

Grantees funded under the State's ESGP must provide matching funds from other sources in an amount equal to their grant. These other sources may include in-kind contributions, local share funding, or a combination of both. Funds used to match a previous ESGP grant may not be used to match a subsequent grant award. In addition, funds awarded must not supplant existing funds used for ongoing activities. Grantees must demonstrate clearly that funds will be used to develop new programs or enhance/continue those in existence.

In addition to the Emergency Shelter Grant Program (ESGP), NYS OTDA also administers several programs designed to alleviate homelessness and provide low-income households support services necessary to build self-sufficiency. These programs include:

• Homeless Housing and Assistance Program (HHAP);

• Single Room Occupancy Support Services Program (SRO);

• Homelessness Intervention Program (HIP);

• Supported Housing for Families and Young Adults Program (SHFYA);

• Supplemental Homelessness Intervention Program (SHIP);

• Housing Opportunities for Persons With AIDS Program (HOPWA);

• Operational Support for AIDS Housing Program (OSAH);

• Family Shelter Program;

• Emergency Assistance Re-housing/Rent Supplement Program;

• Preventive Housing Subsidy Program;

• Negotiated Rates Program; and,

• Emergency Shelter Allowance for Persons With AIDS.

Activities - Priority Needs

The NYS OTDA has taken full advantage of the flexibility of the ESGP to fund a wide range of services which address critical gaps in the housing continuum of care across New York State. In 2006, as in past years, the State will fund an array of projects designed to strengthen this continuum.

Funded projects will support the continuum of care, as follows:

• Outreach and assessment - street outreach programs, mobile outreach vans, food pantries and soup kitchens (with outreach components), storefront operations, etc.;

• Emergency Services - food pantries, soup kitchens, day drop-in centers, emergency shelters, overnight accommodations, drop-in medical care, short-term cash assistance for utilities, rent, etc.;

• Transitional Housing - transitional housing programs, homeless re-housing assistance, post relocation services, support services, etc.; and,

• Permanent Housing - legal interventions to prevent evictions, advocacy for entitlement benefits, cash assistance for security deposits, and support services in permanent housing programs, etc.

In its March 2004 RFP, the NYS OTDA determined that funds awarded under ESGP could be used for one or more of the following eligible activities:

• provision of essential services to the homeless including, but not limited to, employment, physical health, mental health, substance abuse and education services;

• development and implementation of homelessness prevention activities;

• payment for shelter maintenance and operation (rent, repairs, security, fuel, equipment, insurance, utilities, food and furnishings, etc.);

• renovation, major rehabilitation, or conversion of buildings for use as emergency shelters for the homeless; and,

• program administrative costs.

For 2005 - 2006, ESGP funds will be distributed among eligible service categories as follows:

• Essential Services: 57.4%;

• Homelessness Prevention: 22.3%;

• Maintenance and Operation: 11.4%;

• Renovation/Rehabilitation: 3.9%; and,

• Administration: 5.0%.

As discussed in the Needs Assessment section of this document, when selecting proposals for funding NYS OTDA gave special priority to projects that would fill identified gaps in the continuum of care in various regions of the State. Projects were also selected that demonstrated an ability to expend ESGP funds within the contract period. Finally, a special priority was given to applications that would provide supports and services to projects funded under the Homeless Housing and Assistance Program (HHAP), New York State's capital development program for homeless housing.

Methods of Distribution

Since the start of its ESGP, the NYS OTDA has distributed its funds through a biannual competitive bid process. Every two years, a competitive Request for Proposals (RFP) under the ESG program is issued by the NYS OTDA soliciting proposals from not-for-profit organizations.

The NYS ODTA subjects all proposals received in response to a RFP to a rigorous review and selection process. Proposals selected for funding are executed as one-year contracts with the option of a single renewal at the end of the first contract term. In the renewal year, the contracting organizations are not required to respond to an RFP. Instead, the contracts are renewed, based on submission of appropriate renewal documents and satisfactory performance. Satisfactory performance is determined by means of the on-going contract monitoring process, as well as self-evaluations completed by the contractors at the end of the contract term.

In March, 2004, the NYS OTDA issued an ESGP Request for Proposals (RFP). In response, 92 applications were received requesting over $11 million. Proposals were reviewed and selected for funding in the summer of 2004. Thirty-four (34) applicants were awarded contracts for funding which commenced October 1, 2004. All thirty-four (34) contracts were eligible for renewal in 2005, and with the slight increase in the FY 2005 appropriation, funding was available for one (1) additional contract which was awarded to Suffolk County United Veterans. All contracts will commence on October 1, 2005 and terminate on September 30, 2006.

During 2006, New York State anticipates that approximately 18,792 individuals will benefit from activities funded by the ESGP.

The following are the criteria used to evaluate and select proposals for funding under New York State's ESG program:

• applicant agency must meet all state and federal requirements as a threshold criteria for an award;

• demonstration of need within the proposed project area for the type of housing and/or services proposed;

• the appropriateness and quality of the site, the design and support services proposed for the population to be served;

• evidence of the applicant's ability to develop the proposed project, expend all funds within the required time-frames, and to operate the project over the required contract period;

• evidence of the applicant's ability to provide, either directly or through referral, the appropriate support services;

• the appropriateness of plans for participant selection and the consistency of these plans within the intent of ESG program;

• the reasonableness of the total project cost and the ESG program amount requested, and the eligibility of proposed expenditures;

• evidence that matching funds are firmly committed and available for obligation and expenditure;

• evidence that the applicant has approval for its proposed program from the local Department of Social Services;

• evidence that the focus of the project is on enabling participants to achieve the highest level of self-sufficiency possible;

• evidence of the financial feasibility of the project over the required operating period; and,

• the appropriateness of the qualifications and backgrounds on the personnel and staff to be assigned to the project.

The NYS OTDA has consistently sought to allocate its ESGP funds equitably to all parts of the State that have identified gaps in the emergency housing continuum for homeless individuals and their families. New York State's ability to fill these gaps is, however, limited by the availability of funds and by the number and type of proposals received in response to the RFP. Through the RFP issued in March 2004, ESGP funds were made available statewide. That approach will be continued in the renewal year.

The NYS OTDA places priority on geographic areas demonstrating an urgent need for funding. In the past, approximately 45% of the annual allocation has been awarded to projects in New York City. During 2006, 28.7% of the funding will be committed to New York City, 17.2% to downstate suburban counties (Westchester, Nassau and Suffolk), and 54.1% to counties elsewhere in the State. This allocation is consistent with ESGP's most recent years of funding and may be representative of an increase in requests for funds from areas outside of the metropolitan area as they become more aware of funding opportunities. It may also be because a greater amount of ESGP funds are already committed to these more densely populated geographical areas through direct entitlement grants.

Program Monitoring and Report Requirements

Periodically, recipients of ESGP funds are invited to attend a one-day meeting to discuss the program and contract requirements, including reporting and vouchering. Copies of all applicable federal rules and regulations are distributed along with material developed by NYS OTDA to assist groups with the vouchering and reporting process. These sessions, conducted regionally by the program coordinator, have been well received in the past. Major improvements in the contractor's adherence to the program requirements have been observed since this activity was initiated.

All ESGP contracts entered into by NYS OTDA are subject to on-going monitoring throughout the term of the contract. The primary methods of monitoring include:

• review of quarterly reports (due two weeks after the end of each quarter);

• review of final reports (due 30 days after the expiration of the contract);

• periodic site visits, including view of randomly-selected case files; and,

• on-going telephone contact with program staff.

Grantees must ensure that books, records, documents and other evidence pertaining to costs and expenses under the grant are maintained to reflect all costs of materials, equipment, supplies, services, building costs and all other costs and expenses for which reimbursement is claimed or payment is made. All expenditures are reported on an accrual basis.

NYS OTDA has direct access to any records relevant to the project, including books, documents, photographs, correspondence and records to make an audit, examinations, transcripts, and excerpts. All records pertaining to the grant including financial audits, budget, plans/drafts, supporting documents, statistical records, etc., are retained for a period of at least four years following submission of the final expenditure report. In the event that any claim, audit, litigation, or state/federal investigation is started before the expiration of the record retention period, the records are retained by the grantee until all claims or findings are resolved.

The contractual agreement requires grantees to submit quarterly and final reports. Quarterly reports describe a project's progress during the quarter through a detailed narrative describing contract activities and the results achieved. Guidelines or criteria, which new grantees developed for eligibility and participation selection, are also appended to the first quarterly report. Significant obstacles or problems in carrying out the contractual obligations are identified, along with plans to overcome these obstacles. Changes in contract staffing are addressed and resumes provided for new staff. To meet HUD reporting requirements, statistical data is also reported to track the type of activity carried out, and the number of individuals and families assisted, including data on the racial/ethnic characteristics of the participants. Other related data that are required by the Integrated Disbursement and Information System (IDIS) are also collected.

Final reports verify fulfillment of all contractual requirements and tabulate final demographic data on the program participants. They also trigger final reimbursement for contractual activities. The narrative follows the basic format established for quarterly reports, but emphasizes final outcomes. As outlined in the contract, a percentage of the grant award is withheld until the final report is received and approved. Grantees are advised that unless all reporting requirements are satisfactorily met, vouchers are not processed for payment.

Site visits by NYS OTDA staff are a critical component of project monitoring activities. The program manager attempts to visit all projects within a two-year cycle. The duration of each site-visit is usually a couple of hours, and consists of an overview of the agency and the program, a tour of the site, observation of direct service provision, and meetings with accounting staff. Extensive questions are asked pertaining to the information contained in quarterly reports and based upon the coordinator's knowledge of the program.

Another aspect of monitoring is frequent telephone conversations between program staff and the program coordinator. Contractors call with questions about changes in their program, contract requirements, vouchering, and other issues concerning their program. The program coordinator also initiates telephone calls to question information contained in reports. In unusual circumstances, programs may be requested to submit special reports or any media coverage the program has received.

Finally, prior to renewal of their contracts, all grantees funded under ESGP undergo a self-evaluation of the benefits realized by homeless and near-homeless households as a result of their ESGP funding. This evaluation examines the expansion of service capacity, the utilization of services, and the impact of the project in quantifiable terms. It examines the overall homeless population within a given community and the continued need for the type of assistance being provided. This evaluation also helps to determine whether the project would be viable in other locations across the State.

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HOPWA

Section 91.320(g)(4) Housing Opportunities for Persons with AIDS (HOPWA) Program

"The State shall state the method of selecting project sponsors".

Overview

The New York State Office of Temporary and Disability Assistance (OTDA) administers the HOPWA program for the State of New York.

Resources

During the period covered by the 2006 Action Plan, FFY 2005 funds totaling $1,776,000 will be used to support activities under Round 14 of this program. After deducting the State's 3% administrative share, a total of $1,722,820 will be allocated to contracts. Unexpended funds from previous rounds

may also be allocated. [See Appendix V for a chart which provides summary information for each contract.]

Please note that due to initial delays in starting up the program several years ago, New York State is approximately one year behind in the distribution of its annual HOPWA allocation. Thus, the Round 14 contracts that will begin in January 2006 will be supported with FFY 2005 funds.

NYS OTDA seeks to distribute its annual HOPWA allocation to underserved areas of the State, thus strengthening the continuum of care serving the special needs of low-income persons living with HIV/AIDS-related illness and their families.

There are no matching funding requirements under the HOPWA program. Therefore, there is no minimum percentage of non-federal and/or private financing to be leveraged. There are, however, a variety of funding sources at the State and local level that may be used in combination with HOPWA funding. Examples of such programs include:

• Operational Support for AIDS Housing (OSAH);

• Homeless Housing Assistance Program (HHAP including AIDS set-aside allocation);

• Homelessness Intervention Program (HIP);

• Supplemental Homelessness Intervention Program (SHIP):

• Single Room Occupancy Support Services Program (SRO);

• Supported Housing for Families and Young Adults (SHFYA);

• Emergency Shelter Grants Program (ESGP);

• Shelter Plus Care Program;

• Emergency Shelter Allowance for Persons with AIDS;

• Family Shelter Program; and,

• Negotiated Rates Program

Two of New York State's programs deserve special mention here because they are a special resource in responding to the housing needs of New Yorkers with HIV/AIDS. These are the Homeless Housing Assistance Program (HHAP) and the Operational Support for AIDS Housing (OSAH) program.

The HHAP is a State-funded program providing capital grants and loans to not-for-profit corporations, charitable and religious organizations, municipalities and public corporations to acquire, construct or rehabilitate housing for homeless individuals and families. The program provides capital funding for the development of a broad range of housing options for the very diverse homeless population in the State. In the 2004 State Fiscal Year, approximately $27 million was awarded to 17 projects throughout the State. Five of these projects totaling over $8 million will be used to provide housing for persons with AIDS. Since the beginning of the AIDS set-aside, the State has invested over $87 million in capital funds for AIDS housing projects throughout the State.

The second State-funded AIDS housing program is OSAH. Beginning in 1994, the State budget has appropriated $1 million annually to provide operational support to projects that have received capital financing through the Homeless Housing and Assistance Program (HHAP) to house homeless persons with HIV/AIDS and their families. This State funding can be used to supplement building operations costs as well as support services costs.

Both HHAP and OSAH exemplify New York State's commitment to strengthen the continuum of care for persons living with HIV/AIDS and their families. The NYS OTDA takes into account the location and types of HHAP and OSAH projects in making decisions regarding the distribution of the State's HOPWA funds.

Activities - Priority Needs

To assure that its HOPWA program is adequately addressing the housing needs of persons with HIV/AIDS and their families, the NYS OTDA has sought input and guidance from the NYS National Affordable Housing Act (NAHA) Task Force as well as AIDS advocacy organizations. The NAHA Task Force consists of housing providers, advocates, and representatives from other State agencies, including the New York State Department of Health AIDS Institute.

In accordance with the final HOPWA regulations promulgated by the U.S. Department of Housing and Urban Development (HUD), a broad range of housing-related activities may be funded. In the 2004 round (Round Twelve) of HOPWA, New York State continued with priorities and funded applications proposing a number of different activities that was established in the 2000 round (Round Nine). In its 2003 RFP, strong priority was given to proposals that, if funded, are likely to achieve the following objectives:

• continue operations of projects previously funded by NYS OTDA under HOPWA that have a demonstrated record of success in carrying out their contractual obligations;

• lead to actual expansion of housing units and critical support services for persons with HIV/AIDS and their families;

• serve geographic areas where persons with HIV/AIDS are underserved by existing housing and related services;

• fill gaps in housing and support services that cannot be funded through other federal, state, local, and/or private resources; and,

• help create an integrated, comprehensive approach to meeting the housing needs of persons with HIV/AIDS within a given geographic area.

In the past, such projects have included private rental units, publicly assisted housing, single room occupancy units, and community-based congregate living shelters or residences.

In the 2003 RFP, the State focused on 7 eligible activities grouped into 2 clusters. The first group was considered to be a higher priority because it actually expands the housing and services available to persons with HIV/AIDS. The second group was considered a lesser priority because it does not directly expand the housing supply and/or because funding could be more readily available from other sources.

Group I Program Activities:

• project or tenant-based rental assistance;

• supportive services;

• short-term rent, utilities, or mortgage payments to prevent homelessness; and,

• technical assistance.

Group II Program Activities;

• operating costs for housing;

• housing information services (including counseling, referrals, etc.); and,

• lease or repair of facilities to provide housing and services.

The above priorities were used in selecting Round Twelve contracts for 2004. These priorities will remain in effect in 2005 and 2006 (Rounds Thirteen and Fourteen). Most of the contracts recommended in 2003 focused on the provision of long-term rental assistance, short-term rental assistance, and support services.

Methods of Distribution

Since the start of its HOPWA program in 1993, New York State has distributed its HOPWA funds through a periodic competitive bid process. Every three years, the NYS OTDA issues a Request for Proposals (RFP) under the HOPWA program soliciting proposals from not-for-profit organizations. (In the early years of the HOPWA program, an RFP was released every two years. Now that the provider pool has attained some level of stability, an RFP is released every three years.) Contracts funded under an RFP can be renewed without further competition in each of the subsequent two years.

An RFP to make available FY 2003 HOPWA (Round Twelve) funds was released by NYS OTDA in June 2003. Proposals were received in July 2003, reviewed and selected. Fifteen (15) proposals for funding totaling $2,257,190 received awards in August 2003. Due to the formation of the Poughkeepsie Eligible Metropolitan Services Area (EMSA) in 2004, which includes the counties of Orange and Dutchess, only 13 of the current 15 contracts were renewed and two contracts were reduced by the percentage of services they are currently providing in either Orange or Dutchess Counties for FFY 2004 (Round Thirteen) contracts that commenced January 1, 2005.

The January through December contract term represented a change in the annual funding cycle for OTDA-funded HOPWA contracts. Previously, HOPWA contracts had begun on April 1 and ended on March 31 of the following year. In 2001, NYS OTDA initiated the new calendar year funding cycle for HOPWA in order to facilitate reporting to HUD in the State's annual progress report, which is also based on the calendar year.

With the exception of the contractors who will receive funding directly from their new EMSA, contracts awarded under the 2003 RFP will be eligible for renewal without competition in the years 2004 and 2005. Contracts are renewed only if, in the course of the ongoing contract, they have been able to demonstrate success in carrying out activities during the contract year. NYS OTDA will issue another HOPWA RFP in the year 2006 with new contracts to begin January 2007.

The NYS OTDA subjects all proposals received in response to an RFP to a rigorous review and selection process. The following is a listing of the criteria established for proposal evaluation and selection established under New York State's HOPWA program:

• demonstration of need within the proposed project area for the type of housing and/or services proposed;

• the appropriateness and quality of the site, the design and/or support services proposed for the population to be served;

• evidence of the applicant's ability to develop the proposed project and to operate it over the required contract period;

• the appropriateness of plans for participant selection to serve the target population and the consistency of these plans with the intent of HOPWA;

• the reasonableness of the total project cost and the HOPWA amount requested;

• evidence of the applicant's ability to provide, either directly or through referral, the appropriate support services;

• evidence of strong linkages with community-based service providers and health care providers (including home health care, primary care and emergency medical care);

• evidence that the focus of the project is on enabling participants to achieve the highest level of self-sufficiency possible;

• evidence of the financial feasibility of the project over the required operating period; and,

• the appropriateness of the qualifications and backgrounds of the personnel and staff to be assigned to the project.

Although contracts have not yet been negotiated and executed for FY 2006 funding, the NYS OTDA estimates that a total of 788 units will be assisted with HOPWA funds during that year as follows:

Geographic Distribution

The NYS OTDA consistently seeks to allocate its HOPWA funds equitably to all parts of the State that have identified gaps in the continuum of care for housing persons with HIV/AIDS and their families. HIV/AIDS is to be found in all 62 counties of New York and includes cases in urban, suburban, and even the most rural areas of the State. In recent years, AIDS cases in upstate rural counties have increased at a higher rate than cases in New York City and the rest of the State, with concomitant increases in the number of homeless persons with HIV/AIDS.

In recent years, the Rochester, Buffalo and Albany Eligible Metropolitan Services Areas (EMSA) have come online as HOPWA direct entitlement areas. When these cities came online, the grant to New York State was reduced commensurately. Because of the extensive need in upstate areas and the limited availability of HOPWA funds, an executive policy decision was made by NYS OTDA to limit the distribution of the State's HOPWA allocation to those areas that do not have direct access to HOPWA funds from HUD. In 2004, Poughkeepsie which includes Orange and Dutchess counties, came online as a HOPWA direct entitlement area. Therefore, in the 2004 program year, funding was not made available in support of any projects serving persons in any of the following HUD EMSA: New York City, including Westchester and Rockland counties; Nassau and Suffolk counties; and the Rochester, Buffalo, Albany, and Poughkeepsie, including Orange and Dutchess counties EMSA.

Program Monitoring and Reporting Requirements

All HOPWA contracts entered into by NYS OTDA are subject to on-going monitoring throughout the term of the contract. The primary methods of monitoring include:

• review of narrative and tabular quarterly reports (due two calendar weeks after the end of each quarter);

• review of final reports (due 30 days after the expiration of the contract);

• periodic site visits, including review of randomly-selected case files; and,

• on-going telephone contact with program staff.

Grantees must ensure that books, records, documents and other evidence pertaining to costs and expenses under the grant are maintained to reflect all costs of materials, equipment, supplies, services, building costs and all other costs and expenses for which reimbursement is claimed or payment is made. All expenditures are reported on an accrual basis.

NYS OTDA has direct access to any records relevant to the project, including books, documents, photographs, correspondence and records to make audit, examinations, transcripts, and excerpts. All records pertaining to the grant including financial audits, budget, plans/drafts, supporting documents, statistical records, etc. are retained for a period of at least four years following submission of the final expenditure report. In the event that any claim, audit, litigation, or state/federal investigation is started before the expiration of the record retention period, the records are retained by the grantee until all claims or findings are resolved.

The contractual agreement requires grantees to submit quarterly and final reports. Quarterly reports describe a project's progress during the quarter through a detailed narrative describing contract activities and the results achieved. Guidelines or criteria, which new grantees developed for eligibility and participant selection, are also appended to the first quarterly report. Significant obstacles or problems in carrying out the contractual obligations are identified along with plans to overcome these obstacles. Changes in contract staffing are addressed and resumes provided for new staff. To meet HUD reporting requirements, statistical data is also reported to track the type of activity carried out and the number of individuals and families assisted, including data on the racial/ethnic characteristics of the participants.

Final reports verify fulfillment of all contractual requirements and tabulate final demographic data on the program participants. They also trigger final reimbursement for contractual activities. The narrative follows the basic format established for quarterly reports, but emphasizes final outcomes. As outlined in the contract, a percentage of the grant award is withheld until the final report is received and approved. Grantees are advised that unless all reporting requirements are met satisfactorily, vouchers are not processed for payment.

Site visits by NYS OTDA staff are a critical component of project monitoring activities. Subsequent to a monitoring visit to NYS OTDA by HUD in 1999, a new monitoring system for ESGP and HOPWA (as well as other OTDA housing services programs) was fully implemented. In keeping with this system, monitoring visits for all housing services programs (including both HOPWA and ESGP) administered by the Bureau of Housing Service (BHS) take place regularly using the pooled staff resources of the BHS Services Unit. At a minimum, each multi-year contract is monitored at least once during the life of the contract. Monitoring of current HOPWA contracts began in program year 2004 and will continue through 2006.

The site-visits usually consist of an overview of the agency and the program, a tour of the site, observation of direct service provision, review of files and records, and meetings with accounting staff. Extensive questions are asked based on the information contained in quarterly reports and on the HOPWA program coordinator's knowledge of the program. Following each monitoring site visit, a formal letter is sent to the grantee relating findings and requesting a formal response when corrective action is needed.

Another aspect of monitoring is frequent telephone conversations between program staff and the program coordinator. Contractors call with questions about changes in their program, contract requirements, vouchering, and other issues concerning their program. The program coordinator also initiates telephone calls to question information contained in reports. In unusual circumstances, programs may be requested to submit special reports or any media coverage the program has received.

Continuum of Care

Throughout this HOPWA 2006 Action Plan, mention has been made on ways in which NYS OTDA has sought to strengthen the continuum of care for persons living with HIV/AIDS and their families. One activity funded by New York State under HOPWA is particularly worthy of note because it specifically addresses the continuum of care. For several years, the NYS OTDA has funded a contract with the Corporation for AIDS Research, Education and Services (CARES) to provide housing information, resource identification, and technical assistance in the development, management and evaluation of AIDS housing programs throughout the State.

Specifically, CARES has assisted not-for-profit housing providers, AIDS services organizations, and persons living with HIV/AIDS in establishing regional "chapters" of the New York State AIDS Housing Network. The Network works with local, state and federal government representatives to address gaps in the AIDS housing continuum in New York State. On the local level, the chapters of the Network focus their efforts on development of regional AIDS housing plans and inclusion of AIDS housing issues in local Consolidated Plans. Thanks to the funding provided by NYS OTDA, regional chapters of the New York State AIDS Housing Network have been established in New York City, Long Island, the Hudson Valley, Albany, Central New York, Rochester, Buffalo, and the Southern Tier regions.

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Other Actions

Section 91.330(f) Other Actions

(f) Other actions. Actions it plans to take during the next year to address obstacles to meeting underserved needs, foster and maintain affordable housing (including the coordination of Low-Income Housing Tax Credits with the development of affordable housing), remove barriers to affordable housing, evaluate and reduce lead-based paint hazards, reduce the number of poverty level families, develop institutional structure, and enhance coordination between public and private housing and social service agencies and foster public housing resident initiatives. (See Sec. 91.315 (a), (b), (f), (g), (h), (i), (j), (k), and (l).)

Overview

In addition the program specific CDBG, HOME, ESGP and HOPWA activities described in the previous sections, New York State will also take a variety of other actions during 2006. The following is a brief description of some of the many other actions New York State will take to address eight specific issues identified in Section 91.320(f) of HUD's regulation for Consolidated Planning. [Please note the "other actions" described below are illustrative but not exhaustive.]

Other Actions

Address obstacles to meeting underserved needs:

• New York State will continue to develop new programs and initiatives, improve existing programs and identify additional sources of funding to better serve those in need of affordable housing and related services.

Foster and maintain affordable housing (including the coordination of Low-Income Housing Tax Credits with the development of affordable housing):

• New York State's strategy will continue to focus on combining the LIHC with available public subsidies on the Federal, State, and local levels. It is through this combination that most of the low-income rental housing developed by New York attains financial feasibility and viability;

• predictable flow of LIHC accruing to New York will allow the State to continue to accurately forecast the amounts and types of government subsidies that can be leveraged through use of the LIHC;

• this predictability will also allow the State to forecast by way of its goals and priorities the types of subsidies that will be most effective in meeting the housing needs of the State over the next five years;

• virtually all of the projects receiving an allocation of LIHC from DHCR will continue to have at least one other public subsidy as part of the project financing package; and,

• DHCR will continue to use the LIHC to leverage private investment in projects using HOME and/or Housing Trust Fund monies. The LIHC reduces the need for HOME and/or Housing Trust Fund monies in projects, and thereby allows DHCR to produce additional affordable housing over and above what would be realized through the sole use of HOME and Housing Trust Fund monies.

Remove barriers to affordable housing:

• the Governor's Office of Regulatory Reform (GORR) will continue to review proposed rules to ensure that they are necessary and understandable and all state agencies will continue to streamline and expedite their review processes for applications and approvals;

• faced with the highest heating costs in the country, New York State will continue to administer several programs (e.g., the Low-income Home Energy Assistance Program and the Weatherization Assistance Program) which reduce the extent to which high energy costs are a barrier to affordable housing;

• the New York State Division of Housing and Community Renewal (DHCR) will continue to encourage the development of special needs housing in its programs by awarding extra points to applicants who seek funds to develop these units;

• DHCR will continue to work closely with the New York State Division of Human Rights (DHR) and the U.S. Department of Housing and Urban Development (HUD) to enforce all State Human Rights statutes and federal fair housing laws;

• DHCR's Design Services Unit will continue to review each project for compliance with all accessibility design requirements of the Fair Housing Act and the NYS Building Code; and,

• DHCR's Office of Fair Housing and Equal Opportunity will continue to review project marketing and require outreach to special needs organizations as part of the marketing effort for all projects. It will also continue to ensure compliance with Section 3 and M/WBE requirements and provide appropriate training and technical assistance to funding applicants and recipients and program administrative staff.

Evaluate and reduce lead-based paint hazards:

New York State agencies, guided by the Governor's Lead Poisoning Advisory Council, will continue to aggressively pursue the goal of eliminating childhood lead poisoning by 2010 by:

• implementing sophisticated lead hazard identification and reduction protocols;

• providing a wide range of technical assistance to localities;

• making lead hazard control a requirement of all DHCR/HTF housing rehabilitation programs;

• agencies administering federal grant programs covered by the Consolidated Plan will build upon recent improvements in the application processes;

• every aspect of the process will be re-examined to identify problems in processing applications or the application itself;

• the goal will be to operate the most efficient and effective programs possible;

• the private sector will be encouraged to continue to participate in the development of affordable housing; and,

• local housing providers will be encouraged to solicit participation by the private business community whether it be financial, expert advice or sitting on boards of directors of not-for-profits.

Reduce the number of poverty level families:

• New York State will continue to pursue a broad array of initiatives to reduce the number of poverty level families;

• the Empire State Development Corporation will continue to aggressively pursue its efforts to create and retain quality jobs throughout New Yor;.

• the New York State Department of Labor will continue to provide extensive workforce training and employment services to improve the skills of New York workers and help them find appropriate jobs;

• the New York State Office of Temporary and Disability Assistance (OTDA), working in close collaboration with the Department of Labor and the Office of Children and Family Services, will continue to help needy adults and families achieve economic self-sufficiency through work, job training, and child support enforcement;

• OTDA will also continue to provide economic assistance to aged and disabled persons who are unable to work, and transitional support to welfare recipients while they are working toward self-sufficiency; and,

• many New York State agencies, including the Department of Health, the Office of Mental Health, the New York State Office For People With Developmental Disabilities (OPWDD), the Office for the Aging, the Office of Alcoholism and substance Abuse Services and the Division of Veterans Affairs, will continue to actively address a wide variety of problems which often limit the extent to which many New Yorkers can live as actively, productively and independently as possible.

Develop institutional structure:

• New York State will continue to analyze the delivery system of affordable housing to identify areas of problem and issues;

• recommendations will be made on how to improve the administration of programs by State agencies; and,

• closer communication ties among agencies with housing programs will be pursued to improve program coordination.

Enhance coordination between public and private housing and social service agencies:

• New York State emphasizes coordination with public and assisted housing providers and private and governmental health, mental health, and service agencies;

• under the New York/New York III Supportive Housing Agreement, DHCR will work with the New York State Office of Mental Health (OMH), Office of Temporary and Disability Assistance (OTDA), Office of Alcohol and Substance Abuse Services (OASAS), and the City of New York to provide an additional 9,000 supportive housing units over the next ten years, for individuals and families who are living on the streets or in emergency shelters in New York City. This Agreement will provide housing and related services to those New York City individuals and families most in need;

• it is a priority of the State's Division of Housing and Community Renewal (DHCR), to strengthen and expand partnerships in housing and community development;

• these partnerships include all public and assisted housing providers as well as the private and governmental health, mental health and service agencies that do business with the State's housing programs;

• New York State will continue to employ a number of vehicles for communication and coordination which include: the National Affordable Housing Act Task Force and Consolidated Plan Partnership Advisory Committee; The Interagency Task Force on Housing for People with Special Needs; the Most Integrated Settings Coordinating Council; the Developmental disabilities Planning council; and, the Interagency Offender Reentry Task Force;

• New York State will continue to participate in conferences and training for housing and service providers and local governments and will continue to provide assistance to assure coordination among private and governmental health, mental health and service agencies for State-financed projects housing special needs populations; and,

• New York State will also continue to actively coordinate and cooperate with units of general local government in the preparation and implementation of its Consolidated Plan and Annual Action Plans.

Foster public housing resident initiatives:

• as noted in the Needs Assessment, New York State has a public housing program in which tenant participation in the management of housing authorities is not only encouraged but mandated by the State's Public Housing Law, which provides that authorities in cities having a population under one million be composed of up to seven members, including two tenants elected by public housing residents;

• New York State will continue to vigorously enforce this law;

• in addition, the State will continue to explore, where appropriate, the potential for restructuring public housing projects to preserve existing public housing units;

• DHCR has recently participated in a number of restructurings and these efforts will continue. Generally, resources committed include tax credit proceeds and state Public Housing Modernization funds. The housing remains affordable but is privately owned. The plans typically include substantial rehabilitation and a reconfiguration of units to accommodate larger families; and,

• in addition, New York State officials will continue to meet with representatives of Public Housing Authorities, owners and agents of Mitchell-Lama Housing projects and tenant groups such as the NYS Tenant and Neighborhood Coalition and the Mitchell-Lama Residents Coalition.

Last updated on 03/09/06