Chapter 5 Public Facilities REV 10 19
Chapter 5 Public Facilities REV 10 19
Chapter 5 Public Facilities REV 10 19
CH 5 AND SERVICES
Introduction
Under the State’s Community Development Program, local recipients may utilize
CDBG funds to undertake a variety of public facilities and infrastructure
improvement projects. Communities may also undertake more comprehensive
programs involving neighborhood or commercial revitalization that include
infrastructure and/or public facilities activities as part of those projects. The
purpose of this chapter is to explain the requirements and key implementation
steps associated with infrastructure, public facilities and public service activities.
Revised10/19 Page 1
CH5: PUBLIC FACILITIES AND SERVICES
Compact and green building design
Community and stakeholder collaboration
To ensure the economic vitality of communities, it is necessary to support and
improve existing business centers. By building on assets, improving the physical
design and appearance, providing basic infrastructure services that protect the
health and safety of residents and guide a more compact development,
communities can build and retain a quality of life that is sustainable.
Although communities face many challenges, there is no one size fits all solution.
Communities should develop a plan and get the entire community involved.
They must seek partners, include the business community, and engage a corps
of volunteers to help. Communities must also be willing to invest in themselves
first in order to solve problems and create a new future. But with limited
resources, it is necessary to prioritize and target expenditures, and leverage
resources so that they serve as a catalyst for future investment. Communities
should plan carefully so that they carry out their plans in a timely manner and do
not create unexpected new tax burdens for its citizens.
CDBG grant funds should not be used to supplant local funds or to cause user
rates to be maintained at levels that are not viable. Rates should be adequate to
provide funding for necessary capital improvements, operations and
maintenance. The rates and user fee structure for water and sewer systems
should demonstrate an adequate level of local effort. Rates are considered
feasible if the annual user fee is 1% or more of the area median income.
Systems should generate sufficient revenues to cover operations and
maintenance and some level of repair and capital improvement. Grants
Administration reserves the right to reduce grant amounts in a proportional
manner for improvements to existing facilities where
rates are lower than the amount considered feasible. During the
Grants Administration may request such information as implementation of
necessary to make a determination of financial viability a public facility or
and local level of support as it relates to a proposed infrastructure
CDBG project. project, recipients
should follow the
A preliminary engineering cost estimate and report are Implementation
generally requested to be submitted with an Steps for Public
application to document the extent of need and Facilities Projects,
capacity of the existing and proposed infrastructure. which is provided
Additionally, preliminary planning should be done to in the attachments
determine the number, estimated cost and location of to this chapter.
any required easements or property for facilities.
The most feasible projects serve neighborhoods that are densely populated and
do not include a high number of vacant units on undeveloped property. For new
services to be considered a feasible investment, at least 70% of all homeowners
should be committed to connect to the system once installed. It is required that
signed user agreements/commitments be obtained prior to submission of the
If CDBG funds are used to provide water or sewer service to an area outside
municipal limits, a municipality may not require an area to be annexed as a
condition of receiving the water or sewer. It must also show a compelling
reason for going outside its county/municipal boundaries. The capacity of
water/sewer systems may only be designed to meet regulatory requirements for
the intended beneficiaries. Any excess capacity must be paid with non-CDBG
funds, but may be counted toward local match requirements. Any contracts
must be bid for CDBG eligible activities, with non-CDBG eligible activities (such as
for excess capacity) included as alternates or additional cost items in the bid.
While upgrades to an eligible area are allowed where the service area is eligible,
projects to primarily repair or maintain a water/sewer facilities or components
are not permitted. Replacement of facilities may be considered an upgrade if
there is an increase in the size or capacity or when sufficient justification is
approved. Evidence may include the type of materials and age of facilities
versus intended useful life, documentation that an increase in size is not
necessary, etc. A PER will be required to document existing conditions and the
extent of improvements beyond maintenance and repair. Equipment for
operation and maintenance is not eligible for CDBG assistance.
Generally, the local government must pay for cleaning and inspection services
(CCTV) as part of a system evaluation survey (SES) to determine the type,
extent and location of improvements needed prior to requesting a CDBG
application. Such expenses are eligible as local match. CDBG funds may not be
used for exploratory TV inspections or maintenance cleaning. It is permissible to
include TV services in a construction contract to remove and properly dispose of
any internal debris or obstructions that would interfere with cured in place pipe
CDBG funds may be used for connection costs in the right of way for LMI and
non-LMI occupied residential units only. CDBG funds may not be used to
connect non-residential or vacant units. Stub outs for future residential or non-
residential units or vacant units may not be paid with CDBG funds. New service
lines (on private property) may only be installed for LMI households with CDBG
funds, as this is considered rehabilitation of private property.
CDBG funds may only be used for hard construction and installation costs
(including meters in the right-of-way), and not to pay any water or sewer
connection, impact or capacity fees. Any associated fees for low and moderate
income hook up/connection to public water and sewer must be waived or paid
with non-CDBG funds, and may be considered part of the local match
requirement.
Impact and capacity fees are not eligible to be paid with CDBG funds, partly
because they are providing funds for future, undefined public improvements and
there is no way of telling whether the use of those CDBG funds would be for an
improvement that would meet a national objective of the program. CDBG will
allow waiver of such fees for LMI persons to count as local match.
Limited Rehabilitation
A housing unit will not be brought up to a minimum housing code in its entirety;
however, the work that is being performed should be done to the HQS or
appropriate local codes and standards.
If the LMI service lines on private property are included in a larger water and/or
sewer contract, Davis-Bacon labor standards requirements will apply (refer to
Chapter 9 for more information). If service lines are bid separately from a larger
water and/or sewer contract, it is considered housing rehabilitation and Davis-
Bacon requirements do not apply to individually-owned properties.
Recipients should note that if indoor plumbing is provided or if the CDBG costs to
connect LMI residents exceed $3,500, it is necessary to verify the income status
of households assisted prior to providing the assistance (i.e., the self-certification
is not sufficient with indoor plumbing assistance). Refer to Chapter 7 and
Chapter 13 for more information.
An agreement must be obtained from the homeowner to install the service line
and connection on the owner’s private property. The agreement can be obtained
as part of the self-certification of income process, or can be a separate
document.
Prior to applying for CDBG assistance for a public facility, the applicant must
determine the service area of the proposed facility. In order to meet a CDBG
national objective, the facility must serve a residential area which consists of 51
percent LMI persons, or the facility must be designed to serve one of the Limited
Clientele categories (i.e., severely disabled adults) allowed under the CDBG
regulations. In determining the service area, the applicant must evaluate the
location of other facilities in the vicinity and the services provided at such
facilities in order to avoid duplication of facilities and/or services. For health
facilities there must be documentation that the proposed service area is
underserved with regard to health care based on DHEC or other similar
documentation.
The next step is to determine what services and/or activities will be carried out in
the facility. These services/activities must be identified in the CDBG application.
The applicant must determine if the services/activities can result in a primary
benefit to LMI persons. (An example of an ineligible benefit might be if a training
program offered courses that would serve all residents in the county in a facility
that is located in an LMI neighborhood. Simply because of its location, it cannot
be assumed that only the neighborhood residents will benefit if the entire county
can attend.) Some communities conduct surveys of area residents or hold public
meetings to determine what services may be desired at a facility. Once the
services/activities are identified, the community should obtain written
commitments from any organizations or agencies that will be providing such
activities/services in the facility. Please note that inherently religious services
and some political activities are prohibited.
Once the service area and the activities have been determined, the applicant
must estimate the number of persons who will benefit from the project.
A public facility that is part of a multiple use building containing both eligible and
ineligible uses may still be eligible for CDBG assistance if the eligible portion of
the building:
Will occupy a separate, designated area within the larger facility; and
Residents and visitors may be charged fees for using such facilities, but the fees
must be reasonable and not preclude or restrict low and moderate-income
persons from using the facility. User fees which total more than $35,000
annually are considered CDBG program income. Generally, applicants will be
allowed to keep the program income if their program income plan (PIP) proposes
that the income be used for continued operation and improvement of the
building as a CDBG eligible public service. (See Chapter 4 for more information
on program income.)
Recipients should follow the Implementation Steps for Public Facilities Projects,
which is provided as an attachment to this chapter, when undertaking public
facility activities. The Public Facilities Implementation Flow Chart included in the
chapter attachments is also a tool to assist in understanding and implementing
public facilities projects.
The purpose of this strategy is to help rebuild and restructure communities that
have suffered because of criminal activity and social decay. Strategies should be
designed to prevent, control, and reduce crime, drug abuse, and gang activity in
targeted high-crime neighborhoods and bring in services that promote crime
CDBG funded public service activities are only eligible for new or expanded
services to residents, not just to continue or improve existing services. The unit
of local government must commit to continue such services after the grant
HUD has placed restrictions on the amount of CDBG funds the State may use for
public services. In order to meet this requirement, the State reserves the right to
reduce the amount of funding approved for grantees proposing such activities.
To accomplish their goals, a community may wish to follow the national model of
the Main Street USA program or similar planning and organizational processes.
The Four Points of the Main Street Program are:
(1) Organization involves getting everyone working toward the same goal
and assembling the appropriate human and financial resources to
implement a Main Street revitalization program. A governing board and
standing committees make up the fundamental organizational structure
of the volunteer-driven program. Volunteers are coordinated and
supported by a paid program director as well. This structure not only
Neighborhoods that are safe, healthy and vibrant are the building blocks for
sustainable communities. Smart growth concepts include a mix of affordable
housing options within walking distance of work, stores, schools and services.
They pay attention to details like the physical appearance, sidewalks, lighting,
and community facilities that encourage neighborhood pride and interaction.
Development is planned so people can spend less time in their cars.
Revitalization and improvement is focused on existing communities, so that
outlying farmland and open space remain protected.
The core communities that are made up of downtown business centers and
nearby neighborhoods constitute a valuable resource to build upon. The Main
Street Program has been a successful model for revitalizing downtowns. The
program’s four point plan of action (as listed in the previous section) can be
applied to these adjacent neighborhoods, which often suffer from low property
values, deteriorating infrastructure, older housing and vacant properties. By
linking neighborhoods with the local economy and undertaking revitalization
strategies in both, it increases the sustainability of the community as a whole.
Cost estimates for CDBG eligible activities and other planned activities
Public Facilities – sidewalks, security lighting and cameras, police and fire
substations, technology, multi-service centers to address crime risk
factors, walking trails, green space, landscaping.
The most successful projects have community buy in and take a self-help
approach. Under the Main Street Program, having a strong organization is a key
to success. The organization provides volunteers, organizes community events
and helps to keep the community informed. Resident contributions may include
a variety of other activities including trash pickup, clean up vacant lots, plant a
community garden, set up a community crime watch, install neighborhood signs,
build a neighborhood play ground or picnic area, create an elderly support group
(calls to check on them, rides to doctor or grocery store, etc.), after school
programs, educational programs, and other activities that result in a healthy
neighborhood.
Brownfields
Acquisition
The purchase of real property by the grant recipient or other entities under this
eligibility category is subject to the requirements of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act. Among other things, this
could mean that persons displaced as a result of the acquisition must be
provided with financial assistance.
An option to purchase property can be obtained (for 6 months at least) prior to
grant award, but it must contain language making the option contingent upon
environmental review and removal of environmental conditions. Prior to
obtaining an option, a voluntary sale letter or notice of interest in acquiring
property (for involuntary transactions) must be sent, and wording should be
added that public funds are being sought for the project and an offer might not
be pursued if funds are not obtained. The voluntary letter must include an
estimate of fair market value (obtained from comparable sales in the
neighborhood), and a statement that no eminent domain powers will be used.
Sample letters are included in the attachments to Chapter 10: Acquisition.
CDBG funds may be used for clearance of debris and/or demolition of vacant,
dilapidated structures. Generally, non-housing structures to be demolished with
CDBG funds must be publically owned.
Where activities under this category are integral to the construction of a building
or improvements on the cleared property, and where such construction is also to
be assisted with CDBG funds, the clearance activities may be treated as a part of
the construction costs.
Localities must have a written anti-displacement and relocation plan and must
follow it in the implementation of these activities.
State law at Title 31, Chapter 15 also provides procedures for local governments
to deal with dwellings that are unfit for human habitation. A link to this law can
be found at:
http://www.scstatehouse.gov/code/t31c015.php
If after being properly cited, the property owner does not bring the property into
code compliance, the locality must use its own funds to demolish the unit and
then place a lien on the property to recoup the expenses of the demolition and
clearance from the owner of the property. A lien also ensures that there is no
windfall profit to the owner for improvement of the property.
If the structure is privately owned and the local government does not follow the
state and local codes enforcement procedures, a voluntary demolition assistance
agreement is required prior to demolition which specifies the conditions of the
assistance. The agreement grants written permission from the property owner
prior to carrying out any demolition/clearance and documents that no persons or
businesses will be displaced by the demolition and that the property was vacant
for at least 3 months prior to the grantee’s application for CDBG assistance.
Liens
When CDBG funds are used to help a locality pay for the upfront costs of
demolition a lien to recoup those costs will be required, unless:
The demolition is done to address and support crime prevention efforts in
a targeted LMI neighborhood; and
The total CDBG cost related to demolition (such as legal, lead/asbestos
testing and removal, air monitoring, demolition, disposal, etc.) does not
exceed $10,000 per property.
If the cost of demolition for multiple properties owned by one landowner exceeds
$10,000, liens should be placed on each of the properties.
Properties demolished or cleared that do not meet the above guidelines will
require a lien:
Generally the lien should be repaid if the property is sold within 5 years of
the demolition or clearance.
If the property is redeveloped for an LMI purpose the lien can be forgiven
in whole or in part depending on the amount of assistance.
Re-Use Plans
A plan for the re-use of property must be submitted prior to grant close out.
Citizen input should be obtained on the re-use plan. The re-use plan should be
submitted with the grant application or may be required as part of the grant
conditions. The plan should describe:
Short term and potential long term plans for use of the property
How the use fits in with the overall neighborhood or surrounding areas
Any planned improvements
Conditions required for a change to be warranted
Cost and commitment to maintain the property without causing undue
burdens
Planned national objective
Whether the property will be available for use by the public
Whether restrictive covenants are to be used to ensure eligible uses
Commitment to advise GA of any change of use within five years of grant
close out
Plan signed and dated by the Mayor or County Chairman