(1) Subgrant Agreement.
    (a) After the Department approves an application the Recipient shall enter into a subgrant agreement with the Department. The Recipient shall not receive any funds until a subgrant agreement is entered into between the Department and the Recipient.
    (b) If a Recipient’s proposed modification to the subgrant agreement will result in a reduction of the number of beneficiaries or accomplishments listed in the original Application for Funding, then the Recipient shall conduct a public hearing on the proposed changes prior to submitting the modification request. The hearing must be noticed as set forth in subsection 73C-23.0031(27), F.A.C.
    (c) Subgrant Recipients shall monitor project activities to ensure compliance with time schedules, milestones, and other performance goals set forth in the Activity Work Plan of the subgrant agreements.
    (2) Financial Management.
    (a) CDBG subgrant Recipients shall establish a financial management system for administering subgrant funds that complies with Florida Statutes § 218.33, and 2 C.F.R. § 200.302.
    (3) Environmental Review.
    (a) CDBG subgrant Recipients must comply with the procedures set forth in 24 C.F.R. part 58, Environmental Review Procedures for Title I Community Development Block Grant Programs, and 40 C.F.R. § part 1500-1508, National Environmental Policy Act Regulations, as incorporated in Fl. Admin. Code R. 73C-23.0030
    (4) Procurement.
    (a) Procurement Policy. Each subgrant Recipient shall adopt and follow a local CDBG Procurement Policy that complies with the provisions of 2 C.F.R. § 200.317 – 200.326. For covered professional services contracts, the policy shall comply with Florida Statutes § 287.055 The policy shall also comply with Florida Statutes § 255.0525, when advertising for competitive bids or proposals for construction projects.
    (5) Subgrant Agreement Closeout.
    (a) The Recipient must submit a subgrant agreement closeout package to the Department within 45 days of the contract termination or within 45 days of the completion of all activities.
    (b) Recipients of economic development projects may not submit an administrative closeout package until:
    1. The cost per job is less than $10,000; or
    2. One year after the date that all CDBG-funded activities were completed.
    (6) Program and Non-Program Income.
    (a) Liquidated damages, rebates, refunds, or any other “”non-program income”” received by the Recipient from any party previously paid (or from whom payment was withheld) shall be used to conduct additional eligible activities or returned to the Department. Additional direct and quantifiable costs (i.e., legal fees, court costs, engineering fees or administrative fees) generated by the incident creating the liquidated damages may be deducted from the total liquidated damages prior to undertaking additional activities or returning funds to the Department. Use of the funds for additional eligible CDBG activities must be preceded by an amendment to the CDBG subgrant detailing their use.
    (b) Program income generated after closeout of the subgrant producing the program income shall be returned to the Department unless the local government has another open CDBG subgrant and can demonstrate that:
    1. The program income is used to fund CDBG activities referenced in the open subgrant under which the program income was generated; and,
    2. The funds are to be expended pursuant to the provisions of 24 C.F.R. § part 570, sections 290.046-.048, F.S., and as set forth herein; and,
    (c) Program income generated prior to closeout of a subgrant shall be returned to the Department unless:
    1. The program income is used to fund additional units of CDBG activities referenced in the subgrant under which the program income was generated;
    2. The Recipient amends the subgrant to encompass expenditure of the program income prior to administrative closeout; and,
    3. The funds are to be expended pursuant to the provisions of 24 C.F.R. § part 570, sections 290.046-.048, F.S., and as set forth herein.
    (7) Conflict of Interest.
No CDBG funds may be expended to assist or benefit any person with a conflict of interest as set forth in 24 C.F.R. § 570.489(h), or Florida Statutes § 112.3143, unless a waiver has been approved by the Department pursuant to 24 C.F.R. § 570.489(h)(4). Any funds to be expended without prior Departmental approval must be repaid by the Recipient.
    (8) Architectural and Engineering Costs.
The maximum percentage of CDBG funds that may be spent on architectural and engineering design costs, excluding additional engineering services, shall be based on the total initial construction budget for eligible subgrant activities, which require architectural and engineering design. These costs shall not exceed the Rural Development/Rural Utility Service (RD/RUS) fee schedule in Florida. found in Form SC-60 at Part 9, which is incorporated by reference in Fl. Admin. Code R. 73C-23.0030, Architectural and engineering inspection services during construction shall not exceed the RD/RUS fee schedule in Florida and RUS Bulletin 1780-9 (rev. 6/2007), as set forth in Form SC-60.
    (a) If more than one design professional is needed for an activity or activities (i.e., a landscape architect in addition to an engineer for sidewalk construction in a commercial revitalization project), the local government shall not exceed the appropriate RD/RUS fee curve for each activity covered by each design professional negotiated separately.
    (b) For projects involving both Table I and II activities, engineering costs shall be pro-rated appropriately.
    (c) For each additional engineering service and for preliminary engineering, the local government shall negotiate a reasonable fee for the service following procurement procedures in 2 C.F.R. § part section 200, as incorporated in Fl. Admin. Code R. 73C-23.0030
    (d) Preliminary engineering costs not to exceed one-half of one percent of the estimated construction cost may be paid with CDBG funds over and above the amounts included the RD/RUS fee schedule.
    (9) National Objective and Public Benefit Documentation.
    (a) Achievement of national objectives. Applications must demonstrate that the proposed activities meet the national objectives criteria for compliance as set forth in 24 C.F.R. § 570.483, as incorporated in Fl. Admin. Code R. 73C-23.0030, for complying with a national objective and the meeting public benefit standards set forth in 24 C.F.R. § 570.482(f).and that they address community need as outlined in sections 290.046(3)(a)-(c), F.S.
    (b) Public Benefit Achievement. Determination of benefit to persons of low- to moderate-income is established through the following methods:
    1. HUD Census Data – LMI benefit can be documented by using HUD-provided Census Data where the service area geographically corresponds with block groups, census tracts, or local government geographical limits. A jurisdiction-wide activity using census data rather than a survey to establish the national objective of benefit primarily to low- and moderate-income persons can score VLI points by calculating a percentage of VLI benefit using census data. VLI beneficiaries are calculated by totaling, for each block group in each census tract, the numbers shown in the PVLOW column. The total of VLI beneficiaries is divided by the total beneficiaries in the LOWMODUNIV column to establish the VLI percentage for scoring the appropriate VLI beneficiary points.
If a service area contains an entire block group or census tract and portions of other groups or tracts, the data from the block group or tract that is contained entirely in the service area can be used, but the remaining portion(s) of the service area must be surveyed to get LMI and VLI data.
    2. Random Sample Survey Methodology – A sample-based survey of the beneficiaries must use the Household Income Certification Form. The survey methodology must correspond with the random sampling requirements established by HUD in Notice CPD-14-013, issued on September 23, 2014, and which can be located at: http://www.flrules.org/Gateway/reference.asp?No=Ref-09415, which is hereby adopted and incorporated by reference and is also available on the CDBG website: www.FloridaJobs.org/CDBGApplicantInfo. The survey methodology must include a confidence level of 95%.
    a. The survey process must verify eligibility of any proposed direct benefit activities, certify the number of projected very low, low- and moderate-income households and beneficiaries, and the total number of beneficiaries.
    b. Section III of Form SC-49 does not have to be completed if the Applicant is using the survey for scoring purposes only and plans to use census data for reporting the racial makeup of beneficiaries upon completion of the project.
    3. Small Service Area Survey Methodology – For surveys of service areas with fewer than 50 households, all households must be surveyed using Form SC-49.
    a. Section III of Form SC-49 shall be completed for reporting the racial makeup of beneficiaries in a small service area.
    b. Any non-responding household must be assumed to be above income.
    c. Section III of Form SC-49 shall be completed for reporting the racial makeup of beneficiaries in a small service area.
    4. The number of household members for non-responding households in a survey shall be based on the average household size for all responding households.
    5. A survey approved by the Department for a funded CDBG application remains valid for the same geographic service area for up to five years from the date the survey was completed and can be resubmitted.
    6. A survey that was submitted as part of a previous CDBG application that was not funded can be submitted as part of a new application package if the survey was completed less than 5 years prior to the application submission date. The survey will be subject to Department review and approval. If the survey is found to be inaccurate or does not document that a national benefit will be met, the application shall be rejected.
    7. Only the methods of LMI benefit determination provided for in this rule shall be used.
    (10) Beneficiaries of Public Improvements.
    (a) CDBG-funded activities may not extend beyond the location of the last LMI beneficiary, except where it is required for sound engineering, operation, or design reasons as certified by a licensed engineer.
    (b) Where hookups or connections are required as a condition for beneficiary access to a CDBG funded public improvement, fees shall not be charged to very low-, low- or moderate-income beneficiaries. Very low, low, and moderate-income beneficiaries in Neighborhood Revitalization project service areas with hookups as an activity shall be hooked up unless the beneficiary, or property owner in cases of rental property, provides written refusals. If written notice of refusal cannot be obtained, it must be noted on the Household Income Certification Form, Form SC-49.
    (c) For non-LMI beneficiaries required to pay a one-time fee (i.e., assessment, impact fee) for connection or access to the CDBG funded public improvement, and charged a periodic service fee (i.e., water bill, sewer bill), the proposed non-LMI beneficiaries will be advised of the estimated cost of the one-time fee. The Recipient shall notify all beneficiaries in writing of the estimated amount of any periodic service fee. The application narrative must outline the estimated costs to be paid by non-LMI beneficiaries.
    (d) Surveyed beneficiaries shall be advised of both fees in writing prior to application submission. If census data is used, a random sample representing ten percent of the beneficiaries must be advised in writing prior to application submission.
Rulemaking Authority 290.048 FS. Law Implemented 290.044, 290.046, 290.047, 290.0475 FS. History-New 5-23-06, Amended 2-26-07, 6-6-10, Formerly 9B-43.0051, Amended 4-21-15, 3-1-16, 5-27-18.