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Eligible Activities—General/Native American and Colonias Grants.

Community Development Block Grant Program

For all of these activities at least 51 percent of the persons or households benefited must have annual incomes of less than 80 percent of the area median income, and you may not exclude low TIG (LTIG) persons and households with less than 50 percent of the area median income. The State refers to such persons and households as the "targeted income group" (TIG). (See Appendix D for income guidelines.)

Up to 7.5 percent of the total grant amount may be used for general administration costs of the grant such as clearing environmental review and other requirements, local staff time to conduct public hearings and prepare reports, office telephone and copier, and auditing costs related to the grant.

Activity delivery costs (the cost of implementing a specific activity) is not included in general administration but is a separate budget item in your grant, if applicable. It is a percentage of the grant amount after subtracting out general administration costs, and is limited to 18 percent for housing rehabilitation activities, and 8 percent for all other activities.

1. Housing rehabilitation: Eligible activities are health and safety and complementary improvements made to units occupied by TIG households. Such improvements may include repair or replacement of foundations, roofs, siding, flooring, plumbing, and electrical systems. Rehabilitation may also include repair or installation of water or sewer laterals on private property, and complementary rehabilitation activities such as repainting and recarpeting. Department policy also allows you to use up to 10 percent of your rehabilitation activity budget as approved in your application and contract to address complementary community needs such as drainage, streets, curbs and sidewalks in areas where housing rehabilitation is being done. Rehabilitation funds may be used to reconstruct a dwelling unit only where the jurisdiction has analyzed and concluded that the unit is in such disrepair that removing and rebuilding the unit is less costly than rehabilitating it. If this occurs, submit the request for reconstruction review (see form in Chapter 16) to the Department for review and approval.
   Repair and replacement of garages and driveways is generally ineligible unless the unit is being reconstructed or where the unit is being rehabilitated and a serious health and safety need exists. Other ineligible activities include landscaping, or general property improvements or repairs inconsistent with your local, State-approved program guidelines.
2. Activities in support of housing new construction may include: land acquisition; water and/or sewer improvements (to provide increased capacity needed); site improvements; clearing of site; construction of directly-related streets, curbs/gutters and sidewalks, parks, and recreation facilities; pre-construction studies, plans and funding applications; acquisition, rehabilitation or cost write-down of existing housing; and downpayment assistance and closing costs. CDBG funds may be used for construction of permanent housing only when carried out by a Community Based Development Organization (CBDO) pursuant to federal regulations.
   Ineligible activities include the construction of new permanent housing residential structures or subsidy of such construction except when they are carried out by a CBDO as noted above.
3. Community facilities: Eligible activities include acquisition, rehabilitation, or new construction of buildings and grounds for public purposes such as training, health, education, recreation, nutrition, emergency shelter, day care, or fire protection, or the removal of architectural barriers from public buildings.
   Ineligible uses include construction or rehabilitation or operation of permanent housing and centers of general local government (e.g., city offices, city hall).
4. Public services: CDBG funds may be spent for labor, supplies and materials used to provide or improve services (such as employment, crime prevention, child care, health, drug/alcohol abuse prevention, and/or recreation) with the following three conditions: the service must be new, that is never provided, or not provided in the twelve months prior to the application filing date; the service must be a quantifiable increase in the level of service over the past twelve months or maintenance of the existing level if it otherwise will decrease due to reasons not caused by local government action; and the State CDBG allocation for public services cannot exceed 15 percent of the total State allocation in that year.
5. Eligible public works activities to correct health and safety hazards include: acquisition, construction, rehabilitation or installation of projects such as: water wells, treatment, filtration and distribution facilities; sewer collection, treatment and disposal facilities; electrical power generation, transmission, lighting and service; natural gas distribution and service; drainage and flooding mitigation including the covering of drainage facilities, watershed-reservoir and stream development; and payment of "special assessments" as defined in 24 CFR 570.200 (c)(1), for the above activities.
   Ineligible public works activities include: activities that do not address a health and safety hazard; operating and maintenance expenses related to the operation of the facility, improvement or project including salaries for operation staff; purchase of equipment that is not integral to the operation of the public improvement such as a service utility truck; periodic fees based on the use of the public improvement; real estate, property or ad valorem taxes, even if such charges include the recovery of all or some portion of the capital costs of the improvements; special assessments to non-TIG households. (24 CFR 570.207(b) and 570.200(c))