1. Agenda Program Thresholds ED Application Grant Agreement and Closing Documents Grant Administration Monitoring and Closeout RLF Procedures Q&A

2. CDBG Economic Development 2 types of projects – Loans Low interest, fixed-asset financing to businesses – Grants Grants to local units of government for public infrastructure improvements associated with for-profit business investment and job creation

3. CDBG ED - Loans Fixed-asset financing related to job creation At least 5 jobs (no minimum for RLF) Eligible Activities – Land/Building Acquisition – Machinery & Equipment – New Construction – Renovation/Leasehold Improvements – Site Preparation/On-site Infrastructure

4. CDBG ED - Grants Off-site, “publicly owned” infrastructure At least 5 jobs (no minimum for RLF) Eligible Activities – Electric – Gas – Rail – Sanitary Sewer – Street Improvements – Storm Sewer – Water

5. Job Creation/Retention CDBG regulations differ from other programs – Maintained = a job that will continue to exist even if the proposed project does not occur – Retained = Jobs will be lost without CDBG assistance – Created = New job as a result of CDBG-funded project

6. Program Thresholds Non-entitlement community For-profit business 51% LMI jobs Gap financing $25,000/job (loans); $9,999/job (grants) $1:$1 leverage ratio 5% cash equity 15% private financing Environmental Review

7. Non-entitlement community Non-entitlement counties and cities may apply Counties apply for villages, townships Counties may also apply for cities

9. For-profit business Common non-profits interested in program – Hospitals – Nursing homes – Non-profit business incubators

10. 51% LMI Jobs Who qualifies as LMI? – Household income for previous 12 months at or below 80% Median Income How to determine if jobs available to LMI? – No special skills or experience beyond high school education required

11. Gap financing Maximize private funding sources first CDBG should be last money in project budget CDBG is commonly a subordinated lender behind banks, SBA

12. Cost per job Loans - $25,000 per job Grants - $9,999 per job Common mistake is to tell applicants a business “can ‘get’ $25,000 per job” – Many other competitive factors to be considered when determining potential for CDBG assistance!

13. $1:$1 Leverage Ratio CDBG can fund no more than half of the total project cost (not to exceed $500,000) Again, funding thresholds are maximums. Funding not necessarily guaranteed at $1:$1 leverage ratio

14. 5% Cash Equity Borrower must commit cash equal to at least 5% of project’s total non-infrastructure fixed asset cost (i.e. private, on-site investment) Borrowed cash does not meet this requirement

15. 15% Private funds 15% of the fixed asset cost must be privately financed – SBA Direct Loan – Public – SBA Loan Guaranty – Private

16. Environmental Review Project Aggregation (24 CFR 58.32) – “A responsible entity must group together and evaluate as a single project all individual activities which are related either on a geographical or functional basis, or are logical parts of a composite of contemplated actions.”

17. Environmental Review (cont) Common project aggregation red flags – Purchase of M&E without a building – Rehabilitation of a building only – Construction without acquisition

18. Program Thresholds Non-entitlement community For-profit business 51% LMI jobs Gap financing $25,000/job (loans); $9,999/job (grants) $1:$1 leverage ratio 5% cash equity 15% private financing Environmental Review

19. Agenda Program Thresholds ED Application Grant Agreement and Closing Documents Grant Administration Monitoring and Closeout RLF Procedures Q&A

20. CDBG ED Application – The Process Step 1: Discuss Step 2: ER Step 3: Submit Application Step 4: Initial Review – REVISIONS Step 5: Committee Review – REVISIONS Step 6: Approval

21. CDBG ED Application – The Process Required Approvals – OCD ED Committee – OCD Management – ODSA Division Chief – ODSA Director

22. CDBG ED Application Section I: General Information – Contact information – Existing & projected employment – Description of project Section II: Project Profile – Site/environmental information – Employment profile (job retention, relocation, and training) – Revolving Loan Fund coordination – Impact analysis

23. CDBG ED Application Section III: Administrative Profile Section IV: Appropriate Determination – Availability vs. Affordability Gap – Public Benefit Section V: Budget Table – Sources and Uses

24. CDBG ED Application Section VI: Tax Information, Financial Liability, & Certification Company must sign Tax Information Disclosure Authorization, complete financial liability form, and sign Certification Community must also sign Certification

25. CDBG ED Application Exhibit 1: Authorization resolution or ordinance to apply Exhibit 2: Business/Developer Investment & Job Creation Commitment Letter Exhibit 3: Table of Organization Exhibit 4: Relocation Certifications – (A) Between Ohio communities – (B) Compliance with anti-pirating regulations

26. CDBG ED Application Exhibit 5: Acquisition, Relocation, and Demolition Questionnaire – Website links for sample forms are provided Exhibit 6: OHPO Coordination Letter Exhibit 7: Environmental Certification – (A) ER Certification – (B) ER Certification for general administration, fair housing, and planning

27. CDBG ED Application Exhibit 8 – National Objective – Exhibit 8a: Job Creation Table – Exhibit 8b: Job Retention Table – Exhibit 8c: Job Benefit Verification Form – Exhibit 8d: Job Certification Summary – Exhibit 8e: Payroll Report Exhibit 9 – Public Infrastructure Funding Justification Exhibit 10 – Site Control

28. CDBG ED Application Exhibit 11: Tax Information & Financial Liability Exhibits – A: Three years historical financial statements – B: Interim financial statement – C: Three years projected financial statements – D: Personal financial statements (if applicable) – E: Resumes – F: Working capital line of credit

29. CDBG ED Application Exhibit 11: Tax Information & Financial Liability Exhibits (continued) – G: Real estate and/or used M&E appraisal – H: Site plan – I: Third-party cost estimates Infrastructure & fixed asset costs – J: Estimated taxes – K: W-9

30. Agenda Program Thresholds ED Application Grant Agreement and Closing Documents Grant Administration Monitoring and Closeout RLF Procedures Q&A

31. Grant Agreement & Closing Binder The process: – Grant Agreement issued / ER Released – Community drafts Closing Binder (CB) – OCD Reviews and Approves CB to form – Community may draw funds

32. Grant Agreement & Closing Binder The process: – Grant Agreement issued / ER Released – Community drafts Closing Binder (CB) – OCD Reviews and Approves CB to form – Community may draw funds

33. Grant Agreement & Closing Binder Grant Agreement binds ODSA to Grantee Closing Binder binds Grantee to business

34. Closing Binder Contents Both loans and grants require: – ROF – Evidence of Site Control – Evidence of Financing – Evidence of Equity – Compliance with Special Conditions (Section B15) – Legal Counsel approval

35. Closing Binder Contents - Loans Loan-specific documents – Loan Agreement – Security Agreement – Mortgage – Cognovit Promissory Note – Guaranty(s) – Intercreditors/Subordination Agreement

36. Closing Binder Contents - Grants Grant-specific documents – Guaranty of Completion

37. Agenda Program Thresholds ED Application Grant Agreement and Closing Documents Grant Administration Monitoring and Closeout RLF Procedures Q&A

38. CDBG ED Grant Administration 2 Key Responsibilities – Collect Invoices, Maintain evidence of expenditures – Periodically collect job documentation Also… – Bid and manage construction project (grants only) – Manage Davis-Bacon Federal Prevailing Wage (when applicable)

39. CDBG ED Grant Administration Tracking expenditures – New Fiscal Spreadsheet template Tracking jobs – New Job Certification Toolkit

40. Agenda Program Thresholds ED Application Grant Agreement and Closing Documents Grant Administration Monitoring and Closeout RLF Procedures Q&A

41. Monitoring & Closeout Keys to a successful monitoring – Clear documentation of expenses and payments – Loan payment history and status – Evidence of collateral filed

42. Agenda Program Thresholds ED Application Grant Agreement and Closing Documents Grant Administration Monitoring and Closeout RLF Procedures Q&A

43. RLF Program Requirements The RLF is program income received from ED loans and can be used for projects with the same national objective (LMI job creation) RLF dollars must be retained by the community

44. RLF Program Thresholds Same thresholds apply to the RLF as the ED program, except: – Loans can be issued to non-profit entities – No minimum job creation requirement

45. Typical Steps 1.Community receives application from a business for assistance 2.Community goes through its RLF Board to determine the viability of the project and financing details – RLF Board must include members representing LMI community, members with financing experience and members representing an active ED organization

46. Typical Steps 3.Submit initial LRRF electronically to OCD 4.Receive feedback from OCD on initial review of the LRRF 5.Revise LRRF and submit any required documentation electronically to OCD 6.OCD reviews the LRRF and supporting documentation, then notifies community to submit signed LRRF via mail (if no other revisions are needed)

47. Typical Steps 7.Community submits signed LRRF via mail to OCD 8.Community will receive a review letter from OCD indicating the project can move forward * Community must submit appropriate ER documentation and receive ER Release of Funds from OCD prior to moving forward with the project

48. Agenda Program Thresholds ED Application Grant Agreement and Closing Documents Grant Administration Monitoring and Closeout RLF Procedures Q&A

49. What recommendations do you have on keeping a Revolving Loan Fund active? How do you generate projects?

50. Q&A What are the some of the most common challenges you face when structuring a CDBG ED project and working through the application phase?

51. Q&A What are some common challenges when administering a CDBG ED project?