Budget Crisis: How Will the Federal Stimulus Affect Minnesota Cities?

Transcription

1 Budget Crisis: How Will the Federal Stimulus Affect Minnesota Cities?

2 Purpose of Today s Presentation To describe components of the stimulus package of particular interest to cities To share what we currently know about how to access these resources along with applicable restrictions and timelines LMC will provide additional resources with more detailed information on specific provisions as it becomes available

3 Overview Signed by President Obama February 17, 2009 $789 Billion $463B in spending $326B in individual and business tax reductions Focus on accountability & transparency Approx. $4.5B to MN Funds allocated through existing programs; administered by state and federal agencies Estimated 66,000 jobs to be created in MN

4 3 Ways Funds Will be Distributed 1. Pass-through via state agencies Example: Transportation funds distributed by MnDOT 2. Federal agency formula program, Example: Community Development Block Grant program 3. Federal agency competitive grant program Example: Community Oriented Policing Services program

5 FedConnect Application System Cities that want to apply for federal grants are required to register via FedConnect for funding distributed by federal agencies Online website for federal discretionary grant applications Process can take 21 days register now! cpages/fedconnect_ready_set_go.pdf

6 FedConnect Steps Step 1: Request DUNS Number: Page.do Step 2: Register with Central Contractor Registry: Step 3: E-Business Point of Contact must register in FedConnect:

7 Potential Impact on State Budget Deficit Gary Carlson

8 Potential Impact on State Budget Deficit Governor assumed $920 million in flexible funding to reduce the state budget deficit in his proposed budget The enacted stimulus package is believed to include between $820 million and $2.8 billion in flexible funding The wide variation is due to the fact that the state has not fully quantified all of the pieces of the stimulus package

9 Potential Impact on State Budget Deficit Two key points: The deficit is expected to increase by at least $2 billion when the forecast is released next Tuesday (March 3) The federal stimulus funds are one-time resources that can be used to reduce the immediate deficit but cannot permanently fix the state s budget problems

10 Funding Areas of Interest to Cities Transportation Environment & Energy Housing Economic development Law enforcement Broadband

11 Transportation Anne Finn

12 Highways & Bridges $502M for Minnesota in pass-through grants $345M to MnDOT $155M sub-allocated to local units of government Must be spent on the Federal Aid System State Portion $180M committed to projects in greater Minnesota Local Portion Greater Minnesota portion distributed by MnDOT State Aid for Local Transportation Division (SALT) Metro projects administered by SALT, selected by Met Council Cities under 5,000 should contact MNDOT district office and county engineer

13 Highway & Bridges Contacts MnDOT District Offices: tml Cities under 5,000: Contact county engineer updates from MnDOT: m= &p=oi

14 Aviation $1.3B nationally as discretionary grants-in aid Between $15M and $20M to Minnesota airports 96 of 136 Minnesota municipal airports are Federal Aid eligible Projects prioritized by Federal Aviation Administration Funds available for pavement, expansion, and building projects At least 50 percent of the funds must be under contract within 120 days; 2 nd 50% within 365 days Funds must be used by 2010

15 Aviation Contact Peter Buchen MnDOT

16 Additional Transportation Contacts at MnDOT State Aid: Rick Kjonaas, , Freight: Bill Gardner, , Highways: Jon Chiglo, , Transit: Tom Gottfried, , Bike & ped: Tim Mitchell, ,

17 Environment & Energy Craig Johnson

18 Clean Water State Revolving Fund Funds to be used for sanitary sewer and stormwater projects $60M to Minnesota Half of funds to be grants Administered under existing Public Facilities Authority (PFA) program Projects scoring 35 or higher on Project Priority List likely to receive funding

19 Clean Water State Revolving Fund Under contract within 12 months or funds revert to federal government No state match required unlike the regular program May be preference for projects with green infrastructure Contact: Public Facilities Authority stance/pfa.htm

20 Drinking Water State Revolving Fund $35M to Minnesota Half of funds to be grants Administered under existing Public Facilities Authority (PFA) program Projects scoring 8 or higher on Project Priority List likely to be funded; PFA contacting those cities

21 Drinking Water State Revolving Fund Under contract within 12 months or funds revert to federal government No state match required unlike the regular program Shortage of ready-to-go projects; cities with projects encouraged to apply Contact: Public Facilities Authority stance/pfa.htm

22 USDA Rural Development $1.4B in nationwide competitive awards Funds for rural water, wastewater, and solid waste disposal projects under the USDA existing loan program Direct funding for community facilities Contact: Terry Louwagie, Program Director, (651) ,

23 Low-income Housing Weatherization Funds distributed according to existing US DOE Weatherization Assistance Program Funds allow low-income families to reduce their energy bills by making their homes more energy efficient Minnesota to receive $120M a tenfold increase Increase in eligible income level Contact: Energy Information Center (MN only), energy.info@state.mn.us

24 Energy Efficiency Block Grants Projects to improve energy efficiency technologies or materials in public buildings $32.3M directly to 10 largest MN counties and cities over 35,000 as of 2000 Census $7.6M in competitive grants to smaller Minnesota communities Cities can apply to state together

25 Energy Block Grant Contacts Cities under 35,000 Energy Information Center (MN only) Cities over 35,000 U.S. Department of Energy FedConnect (can take 21 days) es/fedconnect_ready_set_go.pdf

26 State Energy Program $55M to Minnesota $5.7M as part of block grant program Funds for any project related to renewable energy except research Public Building Energy Efficiency Program (PBEEP) subsidies being discussed at legislature Subsidize repayment of lease Contact: Energy Information Center (MN only)

27 Bond Programs Clean Renewable Energy Bonds $1.6B in new bonds available nationwide 1/3 to state/local/tribal; 1/3 to public power providers; 1/3 to electric cooperatives Qualified Energy Conservation Bonds $3.2B in new bonds available nationwide All managed by IRS due to tax credits Contact: U.S Department of Energy, Energy Efficiency and Renewable Energy, ews_id=12249

28 Housing Hue Nguyen

29 Neighborhood Stabilization Program Purpose is to purchase foreclosed or abandoned homes to rehabilitate, resell, or redevelop in efforts to stabilize neighborhoods $2B in nationwide competitive grants for states, local governments, and nonprofits 50% of allocated funds must be spent within 2 years; 100% within 3 years

30 Neighborhood Stabilization Program (cont.) HUD will publish eligibility criteria within 75 days of enactment Applications to HUD within 150 days of enactment MHFA is encouraging dialogue between potential applicants

31 Neighborhood Stabilization Program Contacts Katy Linblad Assistant Commissioner, Community Development, MN Housing Finance Agency John Swanson HUD, Minneapolis Field Office , ext

32 Community Development Block Grants (CDBG) To provide affordable housing, services, and jobs for the most vulnerable community members $9.8M to Minnesota grantees that received funding in FY entitlement cities and counties in MN Metropolitan cities over 50,000; counties over 200,000 Priority given to projects ready within 120 days Allocation amounts to be posted on HUD website

33 CDBG Contact for Entitlement Cities John Swanson, Program Manager Office of Community Planning & Development HUD, Minneapolis Field Office , ext

34 Public Housing Capital Fund Funds to be used for capital activities for public housing agencies Operating and rental assistance not allowed $3B in formula grants nationwide $47.3M to Minnesota PHAs $1B in nationwide competitive grants Funds available until Sept. 30, 2011

35 Public Housing Capital Fund Contact Lucia Clausen HUD, Minneapolis Field Office , ext

36 Additional Housing Provisions Assisted Housing and Energy and Green Retrofits $250M in nationwide competitive grants or loans for energy retrofit & green investments for assisted housing $2B in formula grants for rental assistance nationwide HOME Investment Partnership Program $28.4M to Minnesota projects receiving low-income housing tax credits Distributed competitively through MHFA

37 Additional Housing Contacts Assisted Housing and Energy &Green Retrofits Paul Woxland HUD, Minneapolis Field Office , ext HOME John Cegla MN Housing Finance Agency

38 Economic Development Jennifer O Rourke

39 Small Cities Development Program (CDBG) Cities under 50,000 and counties under 200,000 are eligible Provides funding for a variety of community development projects Housing, public facilities and comprehensive grants $5.6M in new funding for Minnesota Available on competitive basis through DEED DEED has $40M in requests; always taking applications Projects must comply with fair housing & equal opportunity requirements

40 SCDP Contact Reed Erickson Community Assistance Unit, DEED

41 EPA Clean-up Revolving Loan Fund $3.4M in statewide competitive awards Low-interest loans to cover a portion of costs to convert a contaminated property into a marketable asset Cities, counties, developers, sub-units of local governments, and for-profit & non-profit organizations are eligible for funding DEED currently accepting applications

42 EPA Clean-up Revolving Loan Fund Contact Kristin Lukes DEED

43 Rural Business Enterprise Grants Program 20M available nationwide through USDA Rural Development $500,000 to $750,000 expected in Minnesota Grants for rural projects that finance and facilitate development of small & emerging rural businesses and distance learning networks Eligible projects include: Land acquisition or development, construction and renovation of buildings, parking areas, utilities, pollution control and abatement Rural public entities under 50,000 are eligible

44 Rural Business Enterprise Grants Program Contact David Gaffaney Business Program Director USDA Rural Development, MN Office

45 Law Enforcement Anne Finn

46 Office of Justice Programs (OJP) Grants Distributed as pass-through grants Justice Assistance Grants (JAG)/Byrne Grants $18M for state $11M for Minnesota local units of government Must be spent in high crime communities Victim Compensation Grants $350,000 to Minnesota To assist victims with medical costs, counseling, funeral & burial costs, and lost wages or loss of support

47 OJP Grants (cont.) Victim Assistance Grants $850,000 to Minnesota For crisis intervention, counseling, emergency shelter, criminal justice advocacy, and emergency transportation Services Training Officers Prosecution (STOP) Program $1M to Minnesota

48 OJP Grants Contact Office of Justice Programs Justice and Community Grants

49 Community Oriented Policing Services (COPS) Hiring Recovery Program $1B in competitive grants nationwide To be used for hiring and rehiring career law enforcement officers Funding provided to law enforcement agencies for Creating and preserving jobs Increasing community policing capacity and crime prevention efforts

50 COPS Hiring Recovery Program Grants provide 100% funding for entrylevel salaries and benefits for 36 months New hires Re-hires of officers laid off or scheduled to be laid off due to local budget cuts No cap on the number of positions agency may request; limited to available funding Grantees must retain all sworn officer positions awarded under the grant

51 COPS Contact COPS Office Application materials available by end of March Visit Account Access of COPS website to check online account status

52 Broadband Ann Higgins

53 National Telecommunications and Information Administration (NTIA) Provide and improve access to broadband services for unserved and underserved areas Target projects that provide public access to broadband education, awareness, training & equipment $4.8B in nationwide competitive grants $200M in grants to expand public computer center capacity; includes libraries & community colleges

54 NTIA Grants Awards to be made on technologically neutral basis Operating expenses are not eligible States encouraged to coalesce stakeholders and partners Projects must be completed within 2 years

55 NTIA Contact National Telecommunications and Information Administration Final rules and grant applications to be available by April

56 Rural Utilities Service (RUS) Broadband Programs Awards through existing Community Connect Grant and Rural Development Broadband Loan Programs Funds provided for broadband infrastructure, end-user equipment and limited operating expenses May cover costs of construction, improvement and acquisition of facilities & equipment

57 RUS Programs $2.5B in nationwide awards Minimum loan of $100k; maximum loan of $7.5M Priority given for projects that allow endusers a choice of more than one service provider 75% of the service area must be rural, outside an MSA, and be without sufficient access to high-speed broadband service

58 RUS Contacts Community Connect Grant Program Rural Development Broadband Loan Program RUS to publish a notice of funding availability in next 2 months

59 Miscellaneous Provisions Jim Miller

60 Human Resource Support Extension of unemployment benefits Continuation of 33-week provision through December 31, 2009 Federal funds cover benefits beyond what cities pay under state law Weekly benefit increase; average $25

61 Human Resource Support Consolidated Omnibus Reconciliation Act (COBRA) 65% subsidy up to 9 months for involuntarily terminated employees between Sept. 1, 2008 Dec. 31, 2009 Cash flow impact for cities with 20 + employees Those cities will receive reimbursement for subsidy via an employment tax credit

62 Human Resource Support Contacts MN Unemployment Insurance Program, US Department of Labor, Cities may also contact their COBRA administrator for guidance

63 Bonding Provisions Tax-Exempt Bank Qualified Bonds Raises small issuers exception from $10M to $30M for both 2009 and 2010 Provides financial institutions with de minimus exception of up to 2% of bank s assets for both 2009 and 2010 Provides more favorable treatment under the Alternative Minimum Tax Should help cities place bonds and achieve better interest rates with banks and other financial institutions

64 Bonding Provisions Build America Bonds New taxable bonds that provide federal subsidy through a tax credit of 35% of interest paid to either the issuer or holder Numerous other provisions for recovery zones, low-income housing, and other specific provisions Consult the city s financial advisor additional information and guidance

65 Other Provisions Army Corps of Engineers $4.6B for ongoing and new water projects Federal Emergency Management Emergency Food and Shelter Program $200M for local organizations to support food, shelter and other services Will provide update as details are learned

66 Other Details Cities Need to Know

67 Restrictions American-made iron, steel and manufactured goods used in construction, maintenance or repair of public buildings or public works Prevailing wage/davis-bacon Funds may not be used for casinos, gambling establishments, aquariums, zoos, golf courses or swimming pools Compliance with the National Environmental Policy Act is required

68 Accountability and Reporting Governor must certify acceptance of funds within 45 days Requirements for agency and individual recipients State setting up website for tracking Federal website:

69 Timelines Many programs have quick deadlines for committing funds Projects must be contracted within given timeline Funds that are not authorized within timeframe must be returned and will be reallocated Many state & federal agency websites are under development; check back often

70 Intergovernmental Relations and Other LMC Contacts Gary Carlson, IGR Director (651) or Impact on state deficit General provisions Anne Finn, Assistant IGR Director (651) or Transportation Law enforcement Lena Gould, Policy Analyst (651) or General information Ann Higgins, IGR Representative (651) or Broadband Craig Johnson, IGR Representative (651) or Environment and energy Laura Kushner, Human Resources Director (651) or Human resources and benefits Hue Nguyen, IGR Representative (651) or Housing Jennifer O Rourke, IGR Relations (651) or jorourke@lmc.org Economic development and redevelopment

71 Additional Contacts & Resources available at Today s PowerPoint presentation is online.