Code of Maine Rules
19 - DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT
498 - OFFICE OF TOURISM AND COMMUNITY DEVELOPMENT
Chapter 39 - COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM 2011 PROGRAM STATEMENT
Section 498-39-7 - AMENDMENTS TO THE PROGRAM STATEMENT

A. Background

The Maine Community Development Block Grant program traditionally uses a "community evaluation factor" as a part of its competitive project evaluation system. The purpose of the factor is to give some weight to the fact that some communities have greater needs than others - and when there are two proposals with roughly similar solutions and effectiveness, the one from the community with the greatest need should get the award.

The data and formula elements of the community evaluation factor have been updated several times over the years, reflecting changes in program design, as well as changes in the availability of standardized data. The last major revision was in 2007. At that time, the Office created a 20 point factor using current data to measure substandard housing, affordability, tax burden, and low income population. This factor was used in scoring housing assistance, infrastructure and public facilities grants.

Now that there has been some experience with the new system, it is an appropriate time to consider some revisions. In a meeting with Planning Decisions (the consultant hired by our Office to assist with updating the community evaluation factor) on May 17, 2010, state CD staff who score applications identified two problems with the current scoring system related to the community evaluation factor:

B. General scoring recommendations

With the two issues raised above in mind, and following the principles of the 2007 revisions, the following are the changes recommended by Planning Decisions for the 2011 scoring system.

C. Proposed components and weights of the community evaluation factor

Under the proposed system, the substandard housing and affordability measures, which comprised 8 of the 20 points in the old system, would drop out.

Tax burden and low incomes would remain measures. Two new measures would be added - unemployment and service centers.

The new community evaluation factor would be used for the following three programs:

Tax burden is relevant to public facilities and infrastructure in particular. The higher a community's burden is, the less room the community has for local funding through bonds and property taxes - and the less room a community has to provide help to new businesses.

The lower incomes are in a community, the less people have to pay property taxes, and the greater their need for good-paying jobs.

The higher the unemployment rate is, the greater the need for economic development programs. This also affects the ability of residents to pay for infrastructure and facilities projects.

If a community is a service center, or "contiguous" to a service center, then it has a greater need for infrastructure, because citizens from the wider region use local roads and services. Also, service centers are logical places to encourage new job development, because, by definition, they serve broad labor market areas.

These four factors were selected because they all have some relevance to both infrastructure, facilities and economic development proposals. It allows the CDBG program to have only one community evaluation factor (instead of several serving different programs), which is more transparent for applicants and easier to administer for staff.

Since all four address both infrastructure, facilities and economic development, all are proposed to have the same weights.

Table 1: Proposed measures and weights

D. Proposed measures of the proposed community evaluation factor

The principles for creating measures remain the same as in 2007: up-to-date, publicly available, fair to small and large communities.

A new tax burden measure is proposed. The 2007 measure was the state-adjusted property tax rate of the community. The problem with this measure is that it doesn't take into account home values or incomes. This year a new measure is proposed - the proportion of the community's total income that is absorbed by property taxes. This too is an imperfect measure. It is distorted by second homes and commercial property. But, in an improvement over the prior measure, it does take into account income levels. In the absence of up-to-date information on housing values for each of Maine's municipalities, this appears the most fair.

A new low income measure is proposed. It is simply the per capita income of the entire community. This is a broader measure, and reflects the broader community's ability to pay for improvements, and need for better-paying jobs. Specific low and moderate income benefit tests are included in other portions of the scoring system.

The unemployment test is simple - a comparison of 2009 unemployment rates by municipality in 2009.

The service center test is also simple, though much sophisticated calculation lies behind it. The test for this section is whether the Maine State Planning Office has designated the community as a "service center," or as an area "contiguous" to a service center. This calculation involves identifying communities with high per capita retail sales, jobs-to-workers ratios, federally assisted housing, and service sector jobs.

Each is scored on a 0 to 5 scale, according to the criteria in Table 2 below. This provides a rough urban - rural balance. The service center measure favors urban areas, the per capita income and unemployment data tend to favor rural areas. The data can be updated annually. Most is available from public sources (the exception is per capita income - the Census once calculated this annually for municipalities, but does not do so any more).

Table 2: Proposed scoring system

On the following page are summary community evaluation scores, using the methodology above. Detailed calculations are available from the State CDBG office.