Code of Maine Rules
19 - DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT
498 - OFFICE OF TOURISM AND COMMUNITY DEVELOPMENT
Chapter 46 - COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM: 2018 FINAL STATEMENT
Section 498-46-3 - ECONOMIC DEVELOPMENT PROGRAMS

Universal Citation: 19 ME Code Rules ยง 498-46-3

Current through 2024-38, September 18, 2024

A. ECONOMIC DEVELOPMENT

The Economic Development program (EDP) provides communities with gap funding to assist identified businesses in the creation/retention of jobs for low-and moderate-income persons.

1. Eligible Activities by Group Number:

Group Numbers

Maximum Award

a) Grants to Municipalities: for acquisition, relocation, demolition, clearance, construction, reconstruction, installation and rehabilitation associated with public infrastructure projects. All public infrastructure must be owned by the municipality, or public or private utility, and be in support of an identified business.

$500,000*

b) Grants to Municipalities for Direct Business Support: for capital and non-capital equipment, land and site improvements, rehabilitation or construction of commercial or industrial buildings, job training, working capital and capital equipment and be in support of an identified business. Acquisition is not an allowable activity under this group.

$500,000*

2. Exclusions: Applicants may apply in only one specific activity group EDP funds cannot be used to refinance existing debt. All EDP activities must be in support of an identified business; speculative activities are excluded. Communities receiving an EDP award may not receive any other EDP award for the same project or business during the same program year or for the same project or business from a prior program year that has not met final closeout status. Communities that received an EDP award, for the same business in a prior year, must document, at submission of Letter of Intent, employment baseline information to show the company is at or above the employment number achieved as a result of previous CDBG assistance and that the CDBG assistance is vital to the project and cannot be obtained elsewhere. *Start-up businesses are limited to a maximum grant award of $250,000 Waivers to increase the maximum grant award amount, in instances where the impact of the project is substantial and can be documented, both through project investment and job creation, may be requested to the Director of the Office of Community Development.

3. Project Benefit: All projects must document that at a minimum, 51% of all jobs created or retained as a result of the funded activity must be taken/held by persons of low and moderate income as defined by HUD. Jobs created/retained must be in the community applying for the EDP award, new jobs to that community and not associated with any other branches of the assisted business located in another community. Transfer positions cannot be counted toward the job creation/retention requirements. In the event that job creation requirements are not met, the applicant community will be responsible for immediate repayment to DECD of all CDBG funds expended on the project.

4. Program Dollars per Job: The maximum CDBG participation per job created or retained with EDP funds is $30,000.

5. Full Time permanent Jobs: In determining CDBG National Objective compliance with jobs created or retained only Permanent jobs may be counted; temporary jobs may not. Full time jobs require a worker to work at least 1750 hours per year. Part time jobs require a worker to work at least 875 hours but less than 1750 hours per year. Part-time jobs must be converted to Full Time Equivalents (FTE). An FTE is defined as two part time jobs. Seasonal jobs may count only if the seasonal job lasts long enough and provides sufficient income to be considered the employee's principal occupation. (Contact OCD prior to counting seasonal jobs towards LMI benefit.) All permanent jobs created by the project must be counted, regardless of funding source(s). Jobs indirectly created by the project (i.e., remote location, "trickle down" jobs) do not count.

6. Maximum Project Size for Utilizing EDP Funds: $3,000,000 Phasing of projects to make the total cost appear to be below the maximum project size is expressly forbidden.

7. Program Requirements:
(a) EDP Letter of Intent Due Dates:

All communities wishing to submit an EDP application must submit a Letter of Intent. Please refer to Page 5 of this document for Program deadlines and due dates. After review for completeness and eligibility, units of general local governments may be invited to make a full application.

(b) EDP Application Due Dates: By invitation only as a result of accepted Letter of Intent. Please refer to Page 5 of this document for Program deadlines and due dates.

(c) Necessary and Appropriate: EDP assistance to a business must be for projects that are necessary and appropriate. The application must describe the need for program assistance, reasonableness of the amount requested, and assurance that the assistance provided is commensurate with the community benefits that will accrue from the project. Documentation must be provided that the project cannot proceed without program participation and that program funds provide gap financing.

(d) Compliance with Benefit Certification Requirements: The business and the applicant community, under the direction of the Program Manager assigned to the project, must comply with documentation requirements for jobs created/jobs retained on a project including but not limited to benefit surveys, income verification and periodic reporting that the Office of Community Development may require.

(e) EDP Matching Funds Requirements: Communities applying for Economic Development Program funds must certify that a 100% cash match of the total EDP award will be provided. Matching funds must be directly related to the activities undertaken with EDP funding.

(f) EDP Projects in Support of Retail Businesses: OCD may accept an EDP application in support of a retail business activity only under the following limited conditions: The retail business represents the provisions of new products and services previously unavailable in the community or is a tourism-related business; and The development or expansion of the retail business represents a net economic gain for the community and the region. Applications supporting a retail business or businesses are required to certify that the development represents a new overall gain for the region's economy and not a shift from existing established businesses to a new or expanded one; and The retail business is located in either a downtown district meeting the definition in 30-A M.R.S. Section4301(5-A); or a designated local growth area contained in an adopted and consistent comprehensive plan; and At least 50% of the jobs created by the retail business must be full time jobs.

9. Selection Process: The selection process will consist of two stages. Members of the Review Team will assign a Review Point Total for each application reviewed. Review Point Totals will consist of the sum of the three scoring areas below and any applicable bonus points. The following criteria will be used:
(a) Stage 1:

Letter of Intent: All communities wishing to submit an EDP application must first submit a Letter of Intent. After review for completeness and eligibility, units of general local governments may be invited to make a full application. Please refer to Page 5 of this document for Program deadlines and due dates.

(b) Stage 2:

Application: Members of the Review Team will assess the applications based on the following criteria:

Problem Statement

Scope

Detail the problems or needs facing the community/business to be assisted. Tell how these problems relate to job creation or job retention activities. Describe how the overall financial viability of the community/business is affected by the problems or needs.

Impact Identify how employment opportunities for persons of low/moderate income are negatively affected by the identified problems.

Emphasize the importance of the affected business in relation to the stability of the community/region and its current financial well-being including property tax analysis before and after the proposed activities.

Need Identify reasons why the community/business is unable to finance the proposed project on its own, or with assistance from other sources.

Include a narrative that highlights any recent efforts by the community/business to assist job creation/retention activities.

Solution

Project Description Detail the activities that the community/business will undertake using EDP funds to resolve the problems/needs presented in the Problem Statement.

Identify, in detail, the specific acquisition, equipment, real property improvements and/or fixtures that will be installed, modified, and upgraded, etc., with EDP funds. Explain how the solution directly solves the identified problems/needs. Include a firm figure of the number of jobs to be created or retained as a result of the project, and how these jobs relate to persons of low/moderate income. Clearly state the amount of EDP funds sought and how they will fit into the overall financing for the project. Include a graphic description (aerial photo, map, and sketch) of the sites involved. Provide a generalized location of the site relative to the community and a copy of a floodplain map showing the project location. Include existing and proposed site and/or building improvements.

Effect on Assisted Business

Describe the effect the EDP award and completion of the project, as a whole, will have on the ability of the community/business to remain competitive, and create/retain quality jobs. Describe the market including identification of competitors, price structure, resource availability, operating/manufacturing costs, transportation costs, demand, and other factors influencing the marketability of the product or service proposed. Also identify all project risks and the extent of the risks.

Project Timeline and Feasibility

Describe how the project is assured of successful completion within 12 months. Identify what work, such as pre-engineering, construction and improvements, or fixture purchases that have been completed, or are in process, and exactly how these relate to the proposed EDP project. Provide background information (including resumes) for the owners and/or managers of the business and specific information about the skills and experiences of the owners and/or managers as related to the successful management of the business and proposed project. Include a concise timetable for project implementation.

Citizen Participation

Public Hearing Process

Describe how citizen participation contributed to the actual development of this application, including how the required public hearing contributed to the process. (Submit a public hearing record consisting of the published public hearing notice, hearing minutes, and attendance list with the original and all three copies of the application.) Business/Local Involvement Outline other input from businesses, chambers of commerce, development organizations, local groups and individuals have had in increasing the citizen participation process for the proposed project. Highlight how the use of any media (TV, radio, newspapers, etc.) increased public awareness and participation in the EDP project.

10. Business Friendly Community Designation Bonus-3 bonus points will be assigned to each applicant community certified as a Business-Friendly Community at time of application.

11. Final Score. EDP applications will be awarded funding based on the consensus of the review team together with the analysis completed by OCD's financial underwriter.

12. Project Development Phase: The project development phase must be completed within 6 months from the date of award. The goal of this phase is a grant contract for CDBG funds. During this phase an OCD Development Program Manager will be assigned to work with the community to finalize their project. OCD reserves the right to rescind the CDBG program award of the community is not under contract within this time. The Office of Community Development may grant waivers for just cause.

B. MICRO-ENTERPRISE ASSISTANCE GRANT PROGRAM

The Micro-Enterprise Assistance Grant (MEA) Program provides grant funds to assist in innovative solutions to problems faced by micro-enterprise businesses. Assistance to businesses may be in the form of grants or loans at the discretion of the community.

1. Eligible Activities: Eligible activities under the Micro-Enterprise Assistance category are grants or loans to for-profit businesses that can be used for working capital and interior renovations, façade grants or loans for exterior improvements, including signage, painting, siding, awnings, lighting, display windows and other approved improvements; and eligible planning activities necessary to complete the Project Development Phase.Sewer, water, storm drainage, parking, roads or streets and other infrastructure improvements and buildings solely for residential use are not eligible.

2. Exclusions: See Section 1H(3)

3. Micro-Enterprise Assistance Loan Repayments - Communities that establish Micro-Enterprise Assistance as loans, and anticipate receiving $35,000 or more in loan repayments, must utilize the services of a Community Development Financial Institution (CDFI) or a Community Based Development Organization (CBDO) as defined in Section 105(a)(15) of the Housing and Community Development Act of 1974, to manage repayments and subsequent relending. Micro-Enterprise Assistance Grants will be structured as forgivable loans.

4. Maximum MEA Grant Amount: $150,000 per Community per year.

5. Maximum Amount of Micro-Enterprise Assistance to an individual Business: $50,000

6. Project Benefit:
(a) Micro-Enterprise Grant/Loan: Existing or developing businesses that have five or fewer employees, one of whom owns the enterprise, and whose family income is LMI will meet the project benefit. Applicants will need to submit a copy of their 2016 Income Tax filing with their Letter of Intent. For those businesses whose owners are Low-to moderate-income existing employees' incomes are not considered in meeting project benefit.

(b) Businesses with owners who do not qualify as low-to moderate-income must create up to two (2) full-time equivalent (FTE) jobs (depending on funds requested), which must be taken by low-to moderate-income individuals. The new jobs must be maintained for a minimum of one year. Proof of employee income for 12 months prior to date of hire will be required. Businesses applying for MEA funds must have a business plan not older than 18 months and must have met with a Small Business Development Center (SBDC) business counselor in the three months prior to submitting an application for assistance.

(c) Business Facade Grants: Project benefit will be met when exterior improvements and signage on an existing business take place in a designated slum/blight area, or documentation is submitted showing that a business qualifies under a spot blight basis.

7. Demonstration of National Objective: Applicants must demonstrate that the project meets the National Objective of 1) assisting existing or developing businesses that have five or fewer employees, one of whom owns the enterprise, and whose family income is LMI, or 2) creating up to two FTE jobs which must be taken by low- to moderate income individuals, or 3) preventing or eliminating slum or blighting conditions conforming to the requirements of Title 30-A M.R.S.A. §5202 and HUD,. These demonstrations must be made as part of the Letter of Intent and Verification of CDBG National Objective submitted to OCD

8. Selection Process: The selection process will consist of two stages:
(a) Stage 1:

Letter of Intent and Verification of CDBG National Objective: All communities wishing to submit a MEA application must submit a Letter of Intent and Verification of CDBG National Objective to OCD. Please refer to Page 5 of this document for Program deadlines and due dates. After review for completeness and eligibility, units of general local governments will be invited to make a full application.

(b) Stage 2:

Application: The maximum length of an application is four pages, not counting required attachments. Please refer to Page 5 of this document for Program deadlines and due dates. Members of the Review Team will assign a Point Total for each application reviewed. Point Totals will consist of the sum of the three scoring areas below and be determined by the total of each sub-scoring area. A maximum of 100 points is obtainable.

Impact (40 points):

State the problem and explain how it negatively impacts the local economy. - 30 points Explain why MEA funds are necessary for the project; describe efforts to secure other grant or loan funds, and tell why they are not are available locally to assist - 10 points

Development Strategy (40 points):

Provide Identification and description of potential business grant/loan applicants and their needs - 15 points Explain how the MEA project will stimulate business and assist in improving the area's long-term viability. - 15 points Provide a project timeline; list activities or actions completed to date. - 10 points

Citizen Participation (20 points):

Effective use of any media (newspapers, radio, TV, etc.). - 5 points Relevance of listed meeting/hearing activities/comments (not counting required public hearing) in application and project development. - 5 points Involvement of downtown and local businesses, Chambers of Commerce, development groups or other business related organizations in development of the application and project. - 5 points How other local resources (cash and in-kind) are directly related to the project. - 5 points

9. Business Friendly Community Designation Bonus- 3 bonus points will be assigned to each applicant community certified as a Business-Friendly Community at time of application.

10. Final Score - Each application will receive a Final Application Score consisting of the sum of the scores assigned by members of the Review Team, added to any applicable Business Friendly Community Bonus. Starting at the top of the scoring list, applicants will be invited to proceed to the Project Development Phase as funds allow.

C. UNDERGROUND STORAGE TANK PROGRAM

The Underground Storage Tank (UST) Program provides gap funding for petroleum tank replacement activities, which alleviates a threat to the health and safety of the general public. UST Program funds will be distributed through a set aside of CDBG funds provided to the County of A roostook as the lead community who will disburse funds to approved projects.

1. Eligible Activities: Eligible activities in the UST program are: purchase of new tanks, removal of existing tanks and installation of new ones by a Certified Underground Oil Storage Tank Installer (CTI). Tanks must meet the design and installation requirements of the Maine Department of Environmental Protection (DEP).

2. Match: All entities applying for UST funds must certify that they will provide a cash match of at least 20% percent of the total grant award. This match may consist of all non-CDBG loans, grants, etc. contributed to the project.

3. Maximum UST Grant Amount: $ 50,000

4. Demonstration of Need: Applicants must have demonstrated that they are unable to complete the project without the CDBG funds. This demonstration must include evidence of other available resources contacted.

5. Demonstration of National Objective: Applicants must demonstrate that the project meets the National Objective of benefiting 51% or greater low/moderate income persons. This demonstration must be made as part of the Letter of Intent and Verification of CDBG National Objective submitted to OCD.

6. Priority for Underground Storage Tank Projects: Applicants who are on DEP's list of critical projects and have received notification that their UST must be removed will be given priority during the evaluation and selection process for awarding UST program funds.

7. Selection Process: The selection process will consist of review of the information provided in Letter of Intent and consultation with DEP to determine the projects that are the most critical and are the highest priority for removal.

Disclaimer: These regulations may not be the most recent version. Maine may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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