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CDBG-R
American Recovery & Reinvestment Act
www.recovery.gov logo and title

Community Development Block Grant (CDBG-R)

2009 Recovery & Reinvestment Act Funds

 

 

HUD has released the notice [Docket No. FR-5309-N-01] governing the use of nearly
$1 billion in Community Development Block Grant (CDBG) funding provided through the American Recovery and Reinvestment Act of 2009 (ARRA).  HUD is referring to the implementation of these funds as the CDBG Recovery program, or CDBG-R.

HUD's press release notes that HUD Secretary Shaun Donovan stated all CDBG-R entitlement communities should "be good stewards of Recovery Act funds and to invest in infrastructure that will create or sustain jobs in the near-term and generate maximum economic benefits in the long-term."

The CDBG-R notice is available here - pdf Adobe pdf icon.

Highlights of the CDBG-R Notice

Substantial amendment:  The City must submit a substantial amendment to the Program Year 2008 (7/1/08-6/30/09) Consolidated Action Plan to the Richmond HUD field office no later than June 5, 2009.   The CDBG-R notice provides detailed information on the required components of the substantial amendment.

HUD is providing an alternative to the regular CDBG program's citizen participation requirement.  The City must provide no fewer than 7 calendar days for citizen comments regarding the substantial amendment.  The amendment will be posted on the City’s official website along with a summary of citizen comments received within the 7-day comment period.

Expenditure deadlines: Entitlement communities must expend their entire allocation of CDBG-R funds by September 30, 2012.  All CDBG-R funding not expended by that deadline will be recaptured and returned to the U.S. Treasury.


Planning and administration costs:   The City may use up to 10 percent of their CDBG-R allocation for eligible planning and general administration activities.
Ineligible activities:  Activities generally prohibited under the regular CDBG program are also prohibited under CDBG-R.  The CDBG-R notice reflects additional prohibitions included in ARRA regarding certain specified activities and projects.  Accordingly, CDBG-R funding may not be used for swimming pools, golf courses, zoos, aquariums, and casinos or other gambling establishments. 

Beyond these special prohibitions, the notice states that "the full range of activities is available to grantees." However, HUD suggests that "grantees incorporate consideration of the public perception of the intent of [ARRA] in identifying and selecting projects for CDBG-R funding."  The notice also states "Congress clearly intends that CDBG-R funds should primarily be invested in economic development, housing, infrastructure, and other public facilities activities that will quickly spur further economic investment, increased energy efficiency, and job creation or retention." 

Urgent need under CDBG-R:  The Department is eliminating the requirement that entitlement communities document the nature, degree, and timing of the seriousness of the condition to be addressed by the activity if the urgent need is based on current economic conditions.  HUD will instead accept a City’s certification that current economic conditions are of recent origin and represent a serious and immediate threat to a community's welfare.  The grantee must still demonstrate that it is unable to finance the activity on its own and that other funding sources are unavailable. 

Public services cap:  The City may use up to 15 percent of their CDBG-R funding for public service activities.  Because there will be no program income attributed to the CDBG-R program, compliance with the public services cap will be based on overall expenditures of CDBG-R funding.

Section 108 and CDBG-R:  Because CDBG-R is a one-time appropriation, CDBG-R funds may not be used as a pledge of security for the repayment of a Section 108 loan.  CDBG-R funds may not be used to securitize borrowing under the Section 108 program, nor may these funds be used to repay an existing Section 108 loan.

Tracking CDBG-R funding:  The City will track CDBG-R funding separately from regular CDBG funding in the Integrated Disbursement and Information System (IDIS).  CDBG-R funding will have separate contract language and a different grant number.


Additional reporting requirements:  ARRA imposes additional reporting requirements beyond those required by the regular CDBG program.  Recipients of ARRA funding through HUD are required to submit quarterly reports that contain:

  1. the total amount of ARRA funding received from HUD;
  2. the amount of ARRA funding received that was expended or obligated to projects or activities; and
  3. a detailed list of all projects or activities for which ARRA funds were expended or obligated, including the name of the project or activity; a description of the project or activity; an evaluation of the completion status of the project or activity; an estimate of the number of jobs created and the number of jobs retained by the project or activity; and for infrastructure investments made by state and local governments, the purpose, total cost, and rationale of the agency for funding the infrastructure investment with funds made available under ARRA and the name of the person to contact at the agency if there are concerns with the infrastructure investment.  These reports must then be placed online within 30 days.

For each CDBG-R activity, the City must report on the number of jobs created and retained, if applicable, in addition to the regular CDBG  accomplishments and performance measures for the activity. 

HUD webcast on the CDBG-R program: HUD conducted a webcast on the CDBG-R program on May 13, 2009. The webcast reviewed the CDBG-R application process and deadlines associated with the program. It also discussed project selection and prudent spending criteria and identified the reporting requirements that accompany CDBG-R funding.

An archive of the webcast is available here.


CDBG-R Public Hearing Documents

 
 
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