Code of Maine Rules
19 - DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT
498 - OFFICE OF TOURISM AND COMMUNITY DEVELOPMENT
Chapter 8 - COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM: 1993 FINAL STATEMENT
Section 498-8-3 - ECONOMIC DEVELOPMENT METHODS OF DISTRIBUTION

Universal Citation: 19 ME Code Rules ยง 498-8-3

Current through 2024-38, September 18, 2024

A. DEVELOPMENT FUND

The purpose of the Development Fund (DF) is to provide financial resources to local governments which in turn assist businesses to create jobs for low and moderate income people.

1. Threshold Criteria: DF applicants must meet the following threshold criteria:
(a) Eligible Applicants: All units of general local government in Maine, including plantations, are eligible to apply for and receive CDBG funds from the State. County governments may apply on behalf of unorganized territories.

(b) Ineligible Applicants: Entitlement, communities of Portland, Bangor, Lewiston, and Auburn are not eligible to receive DF assistance from the State. Except as described in l(a) above, County governments are not eligible applicants.

(c) the proposed activities must meet one of the national objectives described in 24 CFR, Part 570, Subpart I. .483, et. seq.;

(d) 51% of the jobs created or retained as a result of CDBG expenditures proposed by the DF applicant are provided to persons of low and moderate income ;

(e) undertake eligible activities, pursuant to 24 CFR Part 570, Subpart I, .482;

(f) Federal and State Certifications for Local Governments: All communities applying for Development Funds must certify that they will:
(i) minimize displacement and adhere to a locally adopted displacement policy in compliance with Section 104(d) of the Housing and Community Development Act of 1974, as amended;

(ii) take action to affirmatively further fair housing and comply with the provisions of the Civil Rights Acts of 1964 and 1968;

(iii) not attempt to recover certain capital costs of public Improvements funded in part with CDBG monies;

(iv) establish a community development plan;

(v) meet all required State and Federal public participation requirements;

(vi) comply with the Federal requirements of Section 319 of Public Law 101-122 regarding government-wide restriction on lobbying; and

(vii) with the exception of administrative or personnel costs, verify that no person who is an employee, agent, consultant, officer, or elected official or appointed official of State or local government or of any designated public allies, or subrecipients which are receiving CDBG, funding nay obtain a financial interest or benefit, have an interest in or benefit from the activity, or have an interest in any contract, subcontract or agreement with respect to CDBG activities; and

(g) complete the required DF application materials.

2. Special Program Requirements: DF proposals also must comply with the following special program requirements:
(a) Necessary and Appropriate: The DF Loan for profit businesses must be for projects that are necessary and appropriate. The application must describe the need for DF assistance, reasonableness of the amount requested, the repayment plan, 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 DF participation.

(b) Financing Plan: The DF application is to present a financing plan for a project in which the DF loan comprises the lesser of $100,000 or 40% of total project cost. Project activities and use of funds to calculate the non-DF financing must represent a new investment cm; a new project. The financing necessary to support at least 60% of the total project cost must be documented by binding commitment letters submitted with the application. Project activities or uses of funds used to calculate the non-DF financing also must represent new investment.

(c) DF Loan: The DF is provided as a grant to a unit of local government. The local government must use designated grant monies as a loan. to the business or the developer identified in the DF application. The loan must provided under the terms stated in a DF Letter of Conditions and the contract between DECD and the local government.

(d) Repayment Terms: Thresholds regarding interest rates or repayment terms have rot been established. Justification for the repayment terms relate to filling the financing gap, identifying the rate of return allowed through the repayment terms, or specifying the locational cost differentiations and the benefit derived from the assistance.

(e) LMI Benefit: In the aggregate, 70% of the program expenditures are provided to benefit persons of low and moderate income.

3. Selection Process: Eligible projects will be evaluated according to the following factors:
(a) Impact: The DF project will be evaluated as a viable business proposal. The following considerations will be the focus of the Impact factor.
(i) Chance of Success: The project demonstrates that a market exists for its product or service, the cost of the product or service is competitive in current market conditions, the cash flow projections are adequate to support operating expenses and indebtedness, and management has the capacity to carry out the business or development plan. The project must be complete in that there are no unidentified activities or project costs necessary to implement the project.

(ii) Financial Plan: The financing for the project is in place and legally, binding commitments have been submitted; the proposal has an appropriate leverage ratio of private and public dollars and is structured to meet cash flow projections; and the project pro forma has been reviewed by an independent qualified accountant, preferably a CPA. The financing plan must be complete in that there are no unidentified uses of funds necessary to complete the project.

(iii) Equity: The proposed loan recipient has made an equity commitment to the project, preferably through a cash equity injection. Other substantial participation may substitute for a cash equity injection with appropriate explanation regarding equity participation.

(iv) DF Loan repayment: Terms of the loan pay back are to reflect what is necessary to allow a project to be implemented while providing the maximum and most expeditious return of CDBG - DF monies for reuse.

(v) Security: The proposed loan recipient presents collateral appropriate to secure the DF Loan and indicates willingness to enter MD security agreements.

(vi) Benefit: The DF proposal will be evaluated on the basis of the community and economic benefits that will result from the project. Benefit considerations are given below.

(vii) Cost: The number of permanent jobs created or retained as per DF project dollars will be compared with current and past DF projects. The increase in local tax dollars resulting from the project will be evaluated. Overall project cost effectiveness also will be considered.

(viii) Low and Moderate Income Benefit: Benefit to low and moderate income persons and families will be evaluated. The integration of job training programs, job advancement opportunities, education and training programs, and referral services from JTPA and Job Service will also be reviewed.

(ix) Community and Economic Development: The primary and secondary impacts of the DF project on the community's plans for future economic development will be evaluated. The review will also examine the ripple effect of the proposal on the community as a whole.

4. Approval Process:
(a) Application: Applications shall be submitted on the first Thursday of each month. DECD staff will review the applications to determine if the threshold criteria have been met. A. credit analysis will be conducted by DECD or its designee for each job creation proposal. Following staff analyses, applications will be evaluated by a review committee. As a review body, the DF Committee will make recommendations to the Director of the OCD. We DF Committee is appointed lay the Director and consists of a representative of local government, a certified public accountant, and attorney, a representative of private financing, a business person, an at-large appointee, and a housing person.

(b) DF Committee Recommendations: The DF Committee will review staff reports and make recommendations to the Director for awards. The committee will have four general options to recommend on any individual project. The options are:
(i) approval of requested amount and terms;

(ii) approval of requested amount but under different terms proposed;

(iii) rejection with staff recommendation for complete/partial resubmission; and

(iv) rejection.

(c) Quarterly Allocation: The quarterly allocation will be limited to $250,000 plus any unobligated portion of allocations of previous quarters. This limit can be waived by the Director. The Director also reserves the right to reject any or all applications in any month.

If, while nearing the end of the quarter, available funds are not sufficient to finance creditworthy proposals, the review process will incorporate an objective needs factor (the distress factor described in Section 2.A 3.(v). Those proposals with the highest score in the needs factor will receive assistance first.

B. REGIONAL ASSISTANCE FUND

The purpose of the Regional Assistance Fund (RAF) is to provide financial resources to local governments or regional organizations which can use the RAF assistance as leverage to obtain funds under the Economic Development Administration (EDA) Economic Adjustment Assistance Program (Title IX) and the EDA. Public Works Program (Title I or the Farmers Home Administration (FmHa Rural Business Enterprise (RBE) Grant and the Intermediary Relending Program (IRP and/or other Federal, State, and private programs. The purpose of the RAF is to bring additional money into the State and therefore RAF cannot be used as match with the State's Small Cities CDBG program or conventional lending institutions.

1. Threshold Criteria: RAF applicants must meet the following threshold criteria:
(a) Eligible Applicants: All units of general local government in Maine, including plantations and Counties, are eligible to apply for and receive RAF funds from the State. County governments may also apply on behalf of unorganized territories. Groups of local governments may apply for a regional or joint RAF project. Multijurisdictional applications require designation of one local government as the lead applicant and consent for that designation. by each participating local government.

(b) Ineligible Applicants: Entitlement communities of Portland, Bangor, Lewiston, Auburn are not eligible to receive RAF funds from the State.

(c) the proposed activities must meet one of the national objectives described in 24 CFR, Part 570, Subpart I,.483 et. seq.;

(d) 51% of the jobs created as a result of CDBG expenditures proposed by the RAF applicant are provided to persons of low and moderate income;

(e) undertake eligible activities, pursuant to 24 CFR, Part 570, Subpart I,.482.

(f) Federal and State Certifications for Local Governments: All communities applying for RAF must certify that they will:
(i) minimize displacement and adhere to a locally adopted displacement policy in compliance with Section 104(d) of the Housing and Community Development Act of 1974, as amended;

(ii) take action to affirmatively further fair housing and comply with the provisions of the Civil Rights Acts of 1964 and 1968;

(iii) not attempt to recover certain capital costs of public improvements funded in part with CDBG monies;

(iv) establish a community development plan;

(v) meet all required State and Federal public participation requirements;

(vi) comply with the Federal requirements of Section 319 of Public Law 101-122 regarding government-wide restriction on lobbying; and

(vii) with the exception of administrative or personnel costs, verify that no person who is an employee, agent, consultant, officer, or elected official or appointed official of State or local government or of any designated public agencies, or subrecipients which are receiving CDBG funding may obtain a financial interest or benefit, have an interest in or benefit from the activity, or have an interest in any contract, subcontract or agreement with respect to CDBG activities;

(g) complete the required RAF application materials; and

(h) be designated by EDA as eligible to receive funds under the Title IX program, and must have submitted a Title IX or Title I preapplication to EDA and be working with EDA toward submission of a full application; or,

(i) be designated by FmHA as eligible to receive funds under the either the Rural Business Enterprise Grant or the Intermediary Relending Program and be working with FmHA toward submission of a full application; or,

(j) be designated by the appropriate organization providing matching funds as eligible to receive funds.

2. Special Program Requirements: RAF proposals also must comply with the following:
(a) RAF Funds: Provided an initial RAF application is successful, a grant contract will be executed between DECD and the local government to reserve. RAF funds for the applicant, and an RAF Letter of Conditions will be included in the contract to describe the terms that will govern the release of funds from the reserve. The local government must use the designated RAF funds as a match to leverage additional funds. Depending on the matching requirements, requests to use funds from, the reserve may have to meet additional special requirements that are similar to those described in Section 3.A.2. (a and b) of this Final Statement.
(i) EDA Title IX Economic Adjustment Assistance defined: Funds under the Title IX Program are used to assist areas experiencing long-term economic deterioration (LTED) and areas threatened or Impacted by sudden or severe economic dislocation (SSED).

Long-term economic deterioration (LTED): The LTED Program assists eligible applicants to develop and/or implement strategies designed to halt and reverse the long-term decline of their economies. The most common type of activity funded under the LTED Program is Revolving Loan Funds (RLFs), although other types of eligible Title IX activity may be funded.

Sudden and swore economic dislocation (SSED): The SSED Program assists eligible applicants to respond to actual or threatened job losses (dislocation) and other severe economic adjustment problems. It is designed to help communities prevent a sudden, major job loss; to reestablish employment opportunities and facilitate community adjustment as quickly as possible after one occurs; or to meet special needs resulting from severe changes in economic conditions. SSED assistance is intended to respond to permanent rather than temporary job losses. Assistance may be in the form of a grant to develop a strategy to respond to the dislocation (Strategy Grant) ox, a grant to implement an EDA approved strategy (Implementation grant).

In light of the current high level of economic distress in rural areas, EDA is particularly interested in Title IX projects designed to mitigate serious rural economic adjustment problems.

(ii) EDA Title I Public Works Program defined: Funds under Title I Program are used to assist distressed communities attract new industry, encourage business expansions and generate long-term, private sector jobs through projects to improve water and sewer facilities primarily serving industry, build access roads to industrial parks or sites, and construct business incubator buildings.

(iii) FmHA Rural Business Enterprise Grant: Grants are made to finance and facilitate development of small and emerging private business enterprises in rural areas.

(iv) FmHA Intermediary Relending Program: Grants are used to finance business facilities and community development projects in rural areas.

(b) Limit on Amount of RAF assistance: EMS region of the State will be eligible for one RAF grant. Additional grants within regions will be made at the discretion of the Director of OCD. The RAF application must present a plan in which the RAF funding comprises the lesser of $200,000 or up to 100% of the matching funds required from the local government. The local government must also demonstrate that it is not possible to get funding from any other source for the portion of matching funds sought from the RAF.

(c) Program Income Plan: Thresholds regarding interest rates or repayment terms for RAF assistance to revolving loan, funds have not been established. Justification for the repayment terms relate to filling the financing gap, identifying the rate of return allowed through the repayment terms, or specifying the locational cost differentiations and the benefit derived from the assistance. To meet matching requirements, program income generated from RAF funds may be retained by the local grantee or by the local grantees assignee with the approval of DECD.

3. Selection Process: Eligible projects will be evaluated according to the following factors:
(a) Impact: The RAF project will be evaluated as a viable CDBG proposal. The following considerations will be the focus of the Impact factor.
(i) Chance of Success:

LTED: To receive funding under the LTED/RLF Program, an area must be experiencing at least one of three economic problems:

1) very high unemployment;

2) low per capita income; or,

3) chronic distress (failure to keep pace with national economic growth trends over the last five years). Priority will be given to those areas with two or more of these indicators.

SSED: To receive priority consideration for funding under the SSED Program, an area must show actual or threatened permanent job losses that exceed the following threshold criteria.

1) If the unemployment rate of the labor Market Area exceeds the national average, the dislocation must be the lesser of four (4) of the employed population, or 500 direct jobs.

2) If the unemployment rate of the Labor Market Area is equal to or less than the national average, the dislocation must be the lesser of four (4) percent of the unemployed population, or 1,000 jobs.

(ii) Financial Plan: The financing need for the project will be based on an assessment of its financial resources. The proposal must have an appropriate leverage ratio of private and public dollars.

(iii) Benefit: The RAF proposal will be evaluated on the basis of the community and economic benefits that will result from the project.

(iv) Cost: The number of permanent jobs created or retained as per RAF project dollars will be reviewed on a case by case basis. The increase in local tax dollars. resulting from the project will be evaluated. Overall project cost effectiveness also will be considered.

(v) Low and Moderate Income Benefit: Benefit to low and moderate income persons and families will be evaluated. The integration of job training programs, job advancement opportunities, education and training programs, and referral services from JTPA and Job Service will also be reviewed.

(vi) Community and Economic Development: The primary and secondary impacts of the RAF project an the community's plans for future economic development will be evaluated. This review will also examine the ripple affect of the proposal on the community as a whole.

4. Approval Process:
(a) Application: Once the applicant has submitted a preapplication to the appropriate agency is working toward a full application, it may submit an RAF pre-application to DECD. DECD staff will review the RAF pre-applications on a first come basis to determine if the threshold criteria and special program requirements have been met. If so and when the application process has been successfully completed, the applicant will be invited to continue into the project development phase where the CDBG pail: of their project will be more fully developed. An analysis will be conducted by DECD or its designee for each proposal.

(b) Staff Recommendations: Following the project development analysis, staff will make one of the following three recommendations to the Director of the OCD for awards:
(i) approval of requested amount and requested or different terms;

(ii) approval of lesser amount and requested or different terms; or,

(iii) rejection.

(c) Allocation: The RAF allocation will be $570,760 and will be available after May 14, 1993. RAF proposals that meet all criteria may be awarded funds until the amount of funds available in the program has been committed. Having committed all funds in the programs the State reserves the right not to accept any further applications.

C. MICRO-LOAN PROGRAM:

The purpose of the Micro-loan Program is to provide Maine communities with funds to assist existing and new businesses create or retain jobs for low and moderate income individuals. These needs must be part of a community development strategy which will lead to future public and private investments.

Communities are encouraged to enter into partnerships to request Micro-Loan assistance when demand is sufficient on a regional basis and communities would be better served through at regionally administered loan program.

1. Threshold Criteria: The State will distribute funds to communities to establish a commercial loan program through the annual Micro-Loan application process. The threshold criteria for the process are listed below:
(a) Eligible Applicants: All units of general local government in Maine, including plantations, are eligible to apply for and receive Micro-Loan funds tram the State. County governments may apply on behalf of unorganized territories. Groups of local governments may apply for regional or joint Micro-loan programs. Multijurisdictional applications require designation of one local government as the lead applicant and consent for that designation by each participating government.

(b) Ineligible Applicants: Entitlement communities of Portland, Bangor, Lewiston and Auburn are not eligible to receive Micro-Loan funds from the State. Except as described in 1(a) above, County governments are not eligible.

(c) Eligible Activities: Eligible activities include the establishment of a local commercial loan program for the purpose of assisting for-profit and non-profit businesses.

(d) Project Eligibility: Upon receipt by the OCD, applications will be reviewed to determine the eligibility of the activities that the applicant proposes to undertake with Micro-Loan funds. Those activities mist included in l(c) above and be eligible under 24 CFR, Part 570, Subpart I 482. Under this program, activities that construct, support or assist housing related projects are ineligible to receive Micro-Loans. Applications will only be accepted for the development of a Micro-Loan program. In the event that an application contains any proposed activity unrelated to We establishment of a Micro-Loan Program, or the activity listed in Section l(c) above, the entire application will be judged not to have met the project eligibility criteria. In all cases the applicant will be notified in writing of the determination made by OCD.

(e) 51% of the jobs created or retained as a result of Micro-Loan expenditures must be made available to or taken by persons of low and moderate income.

(f) Federal and state Certifications for Local Governments: All communities applying for Micro-Loan funds must certify that they will:
(i) minimize displacement and adhere to a displacement policy set forth, by Section 104(d) of the Housing and Community Development Act of 1974, as amended.

(ii) comply with the provisions of the Civil Rights Acts of 1964 and 1968;

(iii) establish a community development plan;

(iv) meet all required State and Federal public participation

(v) comply with the Federal requirements of Section 319 of Public law 101-122 regarding government-wide restriction an lobbying; and

(vi) with the exception of administrative or personnel costs, verify that no person who is an employee, agent, consultant, officer, or elected official or appointed Official of State or local government or of any designated public agencies, or subparticipants which are receiving CDBG funding nay obtain a Financial interest in any contract, subcontract or agreement with respect to CDBG activities.

(g) Prohibition on multiple Grants: Units of local government and unorganized territories may not benefit from more than one Micro-Loan Program per grant year.

2. Special Program Requirements: Micro-Loan applicants are regulated by the following general program requirements:
(a) Past Performance: In order to be eligible to apply for the 1993 Micro-Loan Program, cities that received CR grants in 1988 mist have conditionally closed their grants by May 14, 1993.

Communities that received CR grants in 1989 must have expended 100% of their benefit activity funds by May 14, 1993. Communities that received CR grants in 1990 must have obligated 100% of their benefit activity funds kg, May 14, 1993. Communities that have received CR grants in 1991 must have obligated at least 50% of their benefit activity funds by May 14, 1993. Communities that received CR grants in 1992 must have obligated at least 25% of their benefit activity funds by May 14, 1993.

(b) Exceptions: Grant recipients may only submit a request to DECD for a waiver of this special requirement under the following extraordinary circumstances: 1) the recipient has received unanticipated program income and is unable to meet the above performance requirements or 2) program delays have occurred that are beyond the control of the grantee due to acts of nature or unforeseen changes in scheduled availability of essential leveraged funds.

(c) Necessary and Appropriate: All loans made from the Micro-Loan Program to for-profit and non-profit businesses must be for projects that are necessary and appropriate as defined by the federal government. Documentation must be provided that the project cannot proceed without Micro-Loan participation.

(d) Financing Plan: Micro-Loans are limited to a maximum of $25,000 per loan. Micro-Loans may provide up to 100% of the financing for loans up to $15,000. Micro-Loans that exceed $15,000 require a dollar-for-dollar match for the portion of the loan that exceeds $15,000. Project activities and use of funds to calculate the non Micro-Loan financing must represent a new investment or a new project.

(e) Repayment Terms: Thresholds regarding interest rates or repayment terms for individual loans have not been established. The community reviewing the loan will establish these terms based on circumstances of the loan proposal.

(f) Local Loan Procedures: The procedure that the community uses to distribute loans must be certified by the OCD in Phase II of the grant process. OCD will generate guidelines for local loan procedures. A loan application must initially be reviewed by a local loan review committee. The review committee must determine that the assistance provided is commensurate with the community benefits that will accrue from the project.

3. Selection Process: The selection process will consist of two phases: an application phase, and a project development phase.
a. Phase I Application: The maximum length of an application is ten pages. It is designed to be a description of a community's business problems that it would like to address with Micro-Loan funds. The application deadline is May 14, 1993. These applications will be evaluated according to the following criteria. A minimum score of 85 points out of a possible 100 will be required for an application to be further considered for funding.
(i) Problem Statement (30 points): The Problem Statement is a description of the problems or needs the applicant wishes to address with Micro-Loan funds. Points will be awarded in the following categories:
(aa) Scope of Problem (15 points) - Description of the magnitude and nature of the lack of job opportunities and lack of business capital in the applicant's area.

(bb) Identification of Problem (15 points) - Description of the need for these funds and bow that need was identified.

(ii) Proposed Solution (30 points): The Proposed Solution is a description of how the applicant would use Micro-Loan funds to solve the problem(s) discussed in the Problem Statement. Points will be awarded in the following categories:
(aa) Scope of Solution (15 points) - Description of the actions that the applicant will undertake in the use of Micro-Loan Program funds to resolve the problem(s) presented in the Problem Statement.

(bb) Capacity (15 points) - Description of the capacity that the applicant has to conduct those efforts specified in the Scope of Solution section and the history of the community in administering lending programs.

(iii) Citizen Participation (30 points): Citizen Participation is a descriptive demonstration of how business groups, local citizens, community groups and others were involved in the identification of the problem(s) and solutions discussed in the application. Points will be awarded in the following categories:
(aa) Business Involvement (15 points) - Description of the involvement that the applicant's business community has had in the development of the application. This should include a description of any and all meetings that were conducted where governmental business assistance was discussed.

(bb) General Citizen Involvement (15 points) - Description of live involvement that the general citizenry has had concerning the concept of assisting business. General citizenry groups consist, but are not limited to, Community Development Advisory Committees, Area Betterment Associations, Community Groups, Planning Board, and the Board of Selectmen.

(iv) Distress (10 points): OCD will derive a community's distress score from the following two areas:
(aa) Unemployment (5 points): a score determined by taking the community's yearly average unemployment rate and dividing it by the standard of 10% (this figure represents 10% unemployment). This figure will be multiplied by the 5 points for this category to receive a final score. Communities with a yearly average unemployment rate greater than 10% will automatically receive the total points allowed.

(bb) LMI Percentage (5 points): a score determined by taking the community's most recent LMI percentage and dividing it by 51 percent. This figure will be multiplied by the 5 points for this category to, receive a final score. Communities with an LMI population greater than 51% will automatically receive the total points allowed.

b. Phase II Project Development:
(i) Invitation to Proceed: Successful applicants will be invited to proceed to Phase II. It is important to remember that an invitation is not a guarantee of funding. These applicants continue the process by completing the following criteria:
(aa) Project Planning: Details of the project including cost analysis and market feasibility study.

(bb) Project Eligibility: Proposed activities are verified for eligibility pursuant to 24 CFR, Part 570, Subpart I, .482 and are cleared through the environmental review process pursuant to 24 CFR, part 58.

(cc) Project Benefit: The proposed activities are verified to meet the national objective pursuant to 24 CFR, Part 570, Subpart 1, .483 et. seq. of providing direct benefit to low and moderate income persons.

(dd) Management Plan: Details of the structure and methods established by the community for program management.

(ee) Regulations: Both State and Federal regulations will be reviewed for compliance.

(ii) Phase II Planning Grants: Pursuant to Section 4A of this Proposed Statement, communities will receive financial assistance, on an as needed basis, in the form of Phase II Planning Grants to cover a portion of the costs associated with project development. The extent to which such assistance is needed shall be determined by OCD staff .

Two Year Grant criteria: Micro-Loan Programs are not eligible for a two year grant award.

4. Approval Process: The emphasis during the second phase will be to develop a partnership between the State, region and community to determine the best project that will meet the community's identified needs. The PDS assigned to the community will work closely with the community to identify eligible solutions. Through this process, the PDS will provide technical assistance to the community in verification of benefit, project cost justification and project budgets and schedules. Those communities successfully completing the Phase II criteria shall contract with DECD in order to receive Micro-Loan funds. Communities not having a signed contract with DECD within six months of receipt of a Phase II invitation will forfeit said invitation. The Director of the OCD reserves the right to waive this requirement in light of extenuating circumstances.

Project implementation shall begin upon execution of a contract. OCD staff will remain involved with the community through the end of the project to provide technical assistance and to monitor compliance with federal and State regulations.

The maximum grant amount is $125,000 for a single grant year. The level of funding will be established in Phase II pursuant to the level of demand that can be demonstrated by the applicant.

D. ECONOMIC DEVELOPMENT INFRASTRUCTURE PROGRAM

The purpose of the Economic Development infrastructure (EDI) Program is to provide Maine communities with funds in which to develop or rehabilitate public infrastructure so that existing and new businesses can create or retain jobs for low and moderate income individuals.

1. Threshold Criteria: The State will distribute EDI funds through the EDI Program. The threshold criteria for the process are listed below:
(a) Eligible Applicants: All units of general local government in Maine, including plantations, are eligible to apply for and receive EDI Program funds from the State. County governments may apply on behalf of unorganized territories. Groups of local governments may apply for regional or joint EDI projects. Multijurisdictional applications require designation of one local government as the lead applicant and consent for that designation by each participating local government.

(b) Ineligible Applicants: Entitlement communities of Portland, Bangor, Lewiston, and Auburn are not eligible to receive EDI funds from the State. Except as described in 1(a) above, county governments are not eligible.

(c) Eligible Activities: Eligible activities include acquisition, relocation, demolition, clearance, construction, reconstruction, installation, and rehabilitation associated with such public infrastructure projects as water and sewer facilities, flood and drainage improvements, parking, streets, curbs, gutters, sidewalks, etc. which are deemed necessary to create or retain jobs for low and moderate income persons.

(d) Project Eligibility: Upon receipt by the OCD, applications will be reviewed to determine the eligibility of the activities that the applicant proposes to undertake with EDI funds. Those activities must be included in l(c) above and be eligible under 24 CFR, Part 570, Subpart I 482. Applications will only be accepted for infrastructure related activities that lead to job creation or retention. In the event that an application contains any proposed activity unrelated to this, or an activity not listed in Section 1(c) above, the entire application will be judged not to have met the project eligibility criteria. in all cases the applicant will be notified in writing of the determination made by OCD.

(e) 51% of the jobs created or retained as a result of EDI expenditures must be made available to or taken by persons of low and moderate income.

(f) Federal and State certifications for Local. Governments: All communities applying for EDI funds must certify that they will:
(i) minimize displacement and adhere to a displacement policy set forth by Sect. 104(d) of the Housing and Community Development Act of 1974, as amended.

(ii) comply with the provisions of the Civil Rights Acts of 1964 and 1968;

(iii) establish a community development plan;

(iv) met all required State and Federal public participation

(v) comply with the Federal requirements of Section 319 of Public law 101-122 regarding government-wide restriction on lobbying;

(vi) with the exception of administrative or personnel costs, verify that no person who is an employee, agent, consultant, officer, or elected official or appointed official of State or local government or of any public agencies, or subrecipients which are receiving CDBG funding may obtain a financial interest in any contract, subcontract or agreement with respect to CDBG activities; and

(vii) Provide a local match equivalent to 20 percent of the total grant award.

(g) Prohibition on Multiple Grants: Units of local government and unorganized territories may not benefit from more than one EDI grant per grant year.

2. Special Program Requirements: EDI Program applicants are regulated by the following special program requirements:
(a) Past Performance: In order to be eligible to apply for the 1993 EDI Program, communities that received CR. grants in 1988 must have conditionally, closed their grants by May 14, 1993. Communities that received CR grants in 1989 must have expended 100% of their benefit activity funds by may 14, 1993. Communities that received CR grants in 1990 must have obligated 100% of their benefit activity funds by May 14, 1993. Communities that have received CR grants in 1991 must have obligated at least 50% of their benefit activity funds by May 14, 1993. Communities that received CR grants in 1992 must have obligated at least 25% of their benefit activity funds by May 14, 1993, September 14, 1993, or January 14, 1994 depending on the cycle in which an application is submitted.

(b) Exceptions: Grant recipients may only submit a request to DECD for a waiver of this special requirement under the following extraordinary circumstances: 1) the recipient has received unanticipated program income and is unable to meet the above performance requirements or 2) program delays have occurred that are beyond the control of the grantee due to acts of nature or unforeseen changes in scheduled availability of essential leveraged funds.

(c) Grant Termination: The OCD reserves the right to terminate a community's EDI grant if progress on the project is not apparent within 12 months from the date of signing a contract with DECD.

(d) Legally Binding Agreement: The applicant must have a firm and legally binding agreement with the party that is proposing to create or retain jobs with EDI Program funds at the time of application. This agreement must include but not limited to: details of the project's timeframe, the entire funding package of the project, and the number of proposed jobs for low and moderate income persons created or retained by the use of EDI funds.

3. Selection Process: The selection process will consist of two phases: an application phase, and a project development phase.
(a) Phase I Application: The maximum length of an application is ten pages. It is designed to be a description of a community's economic development problems that it would like to address with EDI funds.

Applications for the EDI Program will be accepted three times during the grant year. The application deadlines are: May 14, 1993, September 14, 1993, and January 14, 1994. These applications will be evaluated according to the following criteria. A minimum score of 85 points cut of a possible 100 will be required for an application to be further considered for funding,

(i) Problem Statement (20 points): The Problem Statement is a description of the problems or needs the applicant wishes to address with an EDI Program. Points will be awarded in the following categories:
(aa) Scope of Problem (10 points) - Description of the problem facing a specific business in the community, or the community as a whole, in relation to job creation or retention activities.

(bb) Identification of Problem (10 points) - Description of the need for these funds and how that need was identified.

(ii) Proposed Solution (30 points): The Proposed Solution is a description of how the applicant would use EDI Program funds to solve the problem(s) discussed in the Problem Statement. Points will be awarded in the following categories:
(aa) Scope of Solution (10 points) - Description of the activities that the applicant will undertake in the use of EDI Program funds to resolve the problem(s) presented in the Problem Statement.

(bb) Role of Funding (10 points) - Description of the role that EDI funds play in the overall project and the status of other funding sources integral to project: completion.

(cc) Project Feasibility (10 points) - Description of how the project will progress within 12 months from the date of signing a contract with DECD and any obstacles that may be present that could hinder the project.

(iii) Citizen Participation (20 points): Citizen Participation is a descriptive demonstration of how business groups,, local citizens, community groups and others were involved in the identification of the problem(s) and solutions discussed in the application. Points will be awarded in the following categories:
(aa) Business Involvement (10 points). Description of the involvement that the specific business or applicant's business community, whichever the case, has had in the development of this application. This should include a description of any and all meetings that were conducted where governmental business assistance was discussed.

(bb) General Citizen Involvement (10 points) - Description of the involvement that the general citizenry has had concerning the concept of assisting businesses. General citizenry groups consist, but are not limited to, Community Development Advisory Committees, Area Betterment Association, Community Groups, Planning Board, and the Board of Selectmen.

(iv) Commitment (20 points): Commitment is a description of the other resources that will be contributed to the project. These may include commitments obtained or sought to date. In the evaluation of this section, commitments that have been obtained and that are legally binding will receive greater scores than those that are not. Points will be awarded in the following categories:
(aa) Sources (10 points): A description of all the other sources of funding that have been secured for this specific project, the arrangements that have been made to secure these funds, and a detailed description of the status of these sources at the time of this application.

(bb) Timeframe (10 points): A description of when the funds mentioned above will be injected into the overall project.

(v) Distress (10 points): OCD will derive a community's distress score from the following two areas:
(aa) Unemployment (5 points): a score determined by taking the community's yearly average unemployment rate and dividing it by the standard of 10% (this figure represents 10% unemployment). This figure will be multiplied by the 5 points for this category to receive a final score, Communities with a yearly average unemployment rate greater than 10% will automatically receive the total points allowed.

(bb) LMI Percentage (5 points): a score determined by taking the community's most recent LMI percentage and dividing it by 51 percent. This figure will be multiplied by the 5 points for this category to receive a final score. Communities with an LMI population greater than 51% will automatically receive the total points allowed.

(b) Phase II Project Development:
(i) Invitation to Proceed: Successful applicants will be invited to proceed to Phase 11. It is important to remember that an invitation is not a guarantee of funding. These applicants continue the process by completing the following criteria:
(aa) Project Planning: Details of the project including engineering, cost analysis and market feasibility study.

(bb) Project Eligibility: Proposed activities are verified for eligibility pursuant to 24 CFR, Part 570, Subpart I, .482 and are cleared through the environmental review .process pursuant to 24 CFR, Part 58.

(cc) Project Benefit: The proposed activities are verified to meet the national objective pursuant to 24 CFR, Part 570, Subpart I., .483 et. seq. of providing direct benefit to low and moderate income persons.

(dd) Management Plan: Details of the structure and methods established by the community for program management.

(ee) Regulations: Both State and Federal regulations will be reviewed for compliance.

(ii) Phase II Planning Grants: Pursuant to Section 4.A. of this Proposed Statement, communities will receive financial assistance, on an as needed basis, in the form of Phase II Planning Grants to cover a portion of the costs associated with project development. The extent to which such assistance is needed shall be determined by OCD staff.

(iii) Two Year Grant Criteria: EDI Programs are not eligible for two year grant awards.

4. Approval Process: The emphasis during Phase II will be to develop a partnership between the State, region and community to determine the best project that will meet the community's identified needs. The PDS assigned to the community will work closely with the community to identify eligible solutions. Through this process, the PDS will provide technical assistance in verification of benefit, project cost justification and project budgets and schedules. Those communities successfully completing the Phase II criteria shall contract with DECD in order to receive EDI funds. Communities not having a signed contract with DECD within six months of receipt of a Phase II invitation will forfeit said invitation. The Director of OCD reserves the right to waive this requirement in light of extenuating circumstances.

The maximum grant amount will be $400,000 for a single grant year. OCD reserves the right to use program funds allotted for the next. application cycle for current applications, provided that the current application being considered for funding meets all the requirements and obtains the minimum score. OCD's decision also resides on its determination of the feasibility of the project.

Project implementation shall begin upon execution of a contract. OCD staff will remain involved with the community through the end of the project to provide technical assistance and to monitor compliance with federal and State regulations.

E. INTERIM FINANCE PROGRAM

The purpose of the Interim Finance Program (IFP) is to utilize funds not disbursed in the State's Letter of Credit for grants to communities to assist businesses or developers create housing and job opportunities for low and moderate income people through short-term loans.

1. Threshold Criteria: IFP applicants must meet the following threshold criteria:
(a) Eligible Applicants: All units of general local government in Maine, including plantations, are eligible to apply for and receive IFP funds from the State. County governments may apply on behalf of unorganized territories. Groups of local governments, acting as a partnership, may apply, provided one unit is designated as the lead applicant.

(b) Ineligible Applicants: Entitlement communities of Portland, Bangor, Lewiston and Auburn, and established counties and unorganized territories, except as described in 1 (a), above.

(c) The proposed activities must meet the low and moderate income objective as described below:
(i) at least 51% of the jobs created by IFP expenditures must be provided to low and moderate income persons ( 24 CFR Part 570, Section I, .483(a)(4)),

(ii) at least 51% of the housing units created by IFP expenditures must be occupied by low and moderate income households ( 24 CFR Part 570, Subpart I, .483(a)(3)), or

(iii) the IFP expenditures reduce the development costs for new multi-family, non-elderly housing construction where not less than 20% of the units will be occupied by low and moderate income households at affordable rents and the proportion of the total cost of developing the project to be borne by the IFP funds is no greater than the proportion of units in the project that will be occupied by low and moderate income households ( 24 CFR Part 570, Subpart I, .483(a)(3)(i)).

(d) Undertake eligible activities pursuant to 24 CFR 570, Section I, .482 et seq.

(e) Federal and State Certifications for Local Governments: All communities applying IFP funds must certify that they will:
(i) minimize displacement and adhere to a displacement policy set forth by Section 104(d) of the Housing and Community Development Act of 1974, as amended.

(ii) comply, with the provisions of the Civil Rights Acts of 1964 and 1968;

(iii) establish a community development plan;

(iv) meet all required State and Federal public participation requirements;

(v) comply with the Federal requirements of Section 319 of Public law 101-122 regarding government-wide restriction. on lobbying; and

(vi) with the exception of administrative or personnel costs, verify that no person who is an employee, agent, consultant, officer, or elected official or appointed official of State or local government or of any designated public agencies, or subrecipients which are receiving CDBG funding may obtain a financial interest in any contract, subcontract or agreement with respect to CDBG activities.

(f) Complete the required IFP application materials.

(g) The application amount must be between $500,000 and $5,000,000. The Commissioner of DECD may waive the $500, 000 minimum requirement if OCD determines that it is in the best interest of the State and if OCD incurs no additional administrative costs as a result of the smaller award.

2. Special Program Requirements: IFP applicants must also comply with the following special program requirements:
(a) Need for Financing: There must be a demonstrated need for an IFP loan in order for the project to be funded. That need may be based upon either a gap in available funding for the project or on a determination that the costs of financing so adversely affect the project's rate of return that the project would not be undertaken without additional assistance. IFP grantees must demonstrate that the proposed rate and term have been set to ensure that the assistance provided is the minimum needed and that the proposed assistance is necessary and appropriate to carry out an economic development project.

(b) Commitment of Non-CDBG Funds: The business being assisted must demonstrate that all non-CDBG financing, both permanent and interim, necessary for the project's completion has been secured.

(c) Community Benefit: The project must result in a substantial benefit to the community: job creation/retention, tax revenue increases, new housing opportunities, or public facility improvements relative to the public dollar investment.

(d) Irrevocable Letter of Credit: The business being assisted by the Interim Finance Program grantee must secure an unconditional, irrevocable letter of credit for the full amount of the Interim Financing Loan (principal plus accrued interest to term) from a lending institution acceptable to DECD which will be assigned to the State. The State may accept a FAME guarantee in lieu of an irrevocable letter of credit.

3. Selection Process: IFP grants will be made on a first come basis. Projects that meet requirements may be awarded IFP grants until the amount of funds available In the State's letter of credit has been committed. Following full commitment of the IFP, the State will maintain a waiting list of eligible projects to be funded. If projected funds will not be available for a minimum of six months, the State reserves the right not to accept any additional applications.

4. Approval Process: Through its Technical Assistance Providers, direct mailings, and other marketing methods, the State will advertise the availability of funds within the IFP. Communities interested in applying will: notify the State of its intent to apply, identify the proposed loan recipient and provide an application describing the project. Following the acceptance of a complete application by the State, the DECD or its designee will conduct a financial analysis of the project. DECD will determine if the IFP grant/loan is needed, if all non-CDBG permanent and interim funds are committed, and if an irrevocable letter of credit is in place. The DECD staff will recommend the loan terms and interest rates to the Director of the OCD. The State will review all other program requirements. If these requirements are met, the Commissioner of the DECD will make a grant award based an the project meeting all program requirements.

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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