North Carolina Department of Commerce Small Cities Community Development Block Grant Program (CDBG)

North Carolina Department of Commerce Small Cities Community Development Block Grant Program (CDBG) Environmental Review at the Community Level Scattered Site Housing Program Tiering Guidance and Instructions Division of Community Assistance Programs and Compliance Section

Table of Contents Introduction to Tiering... 3 Requirements of Tiered Review... 3 Tier 1... 4 Tier 2... 4 Documenting the Environmental Review Record... 4 Steps for Tiering... 5 Step 1: Defining the Project Scope... 5 Step 2: Conduct the Tier 1 Target Area Environmental Review... 6 Step 3: The Public Notice Process... 7 Step 4: Conduct Tier 2 Site Specific Reviews... 8 Instructions to Completing the Environmental Review Record Templates... 9 Tier 1 Area-Wide Review... 9 Tier 1 Written Strategy... 10 Tier 2 Site Specific Review... 10 Submitting the Environmental Review Record... 10 Tier 1 Area-Wide Review and Tier 1 Written Strategy... 11 Tier 2 Site Specific Reviews... 11

Introduction to Tiering There are projects where it is not possible, because of the nature of the activities to be carried out, to identify on the front-end the exact geographic location of the project's activities until they are underway. In these situations, a tiered environmental review may be prepared (24 CFR Part 58.15). Starting with the 2012 North Carolina Department of Commerce Division of Community Assistance (DCA) Community Development Block Grant (CDBG) Program, tiering is allowed for Scattered Site Housing Program category only. Single family housing is an appropriate use of tiering. Tiering is a mechanism for integrating the National Environmental Policy Act (NEPA) with other planning early in the process per 40 CFR 1501.2 (Federal Register Volume 60 No. 185 49466) to reflect environmental values and avoid delays or conflicts. This method is for evaluating projects at early stages when the particular sites are not yet known, streamlining the environmental review (ER) process for similar activities that are grouped into projects. The Tiering process occurs in two stages: Tier 1: Target Area Assessment (Non/Unspecified Site Strategy) Tier 2: Site Specific Reviews In the broad/general stage, an Unspecified Site Strategy is used for projects when sites have not yet been identified. The second stage is a Site-Specific Review process. A tiered environmental review allows for a general assessment of the impacts of any activity (e.g., acquisition of foreclosed homes, demolition of blighted properties, or land banking) on the environment prior to identification of a specific site. This allows the Responsible Entity (RE) to review broad ER impacts at the early stage of a project and site-specific impacts when the sites are identified. A tiered review focuses on a targeted geographic area (e.g., zip code, census tracts, cities) to address and analyze environmental impacts related to the proposed activities that might occur on a typical project site within that area. The specific addresses/locations of the individual properties are not known at this time. However, once individual activity sites are located, any remaining environmental compliance issues that could not be resolved until activity locations became known are now completed, according to standards for approval previously established for the target area. Tiering is not a way to avoid public notice of conducting the ER. Tiering allows for RE to obtain one Notice of Intent to Request for Release of Funds (NOI/RROF) for a particular project and timeframe prior to identification of the individual activities (24 CFR Part 58.15). Subsequent review notices or Requests for Release of Funds are required only if there are unanticipated or inadequately addressed impacts, or a activity requires completion of either an Environmental Assessment or Environmental Impact Statement. Requirements of Tiered Review A Tiered review requires a broad review with documentation and a written strategy, site specific compliance, and a well-maintained, complete environmental record. To begin the environmental review for a project where the sites are not yet known, the level of review must be determined, and the ER on the appropriate form must be conducted. In the case of DCA s Scattered Site Housing program, the level of environmental review is Categorically Excluded subject to 24 CFR 58.5 and DCA has created a template for grantees to use. Each of the compliance factors should be evaluated and documented. The compliance factors that would not be triggered in project area should be eliminated when developing the site specific strategy and checklist. For example, for non-coastal counties, Coastal Zone Management compliance can be eliminated in Tier 1.

Tier 1 The Tier 1 broad level review should: Identify and evaluate relevant items and specify which items may be excluded Establish the policy, standard, or process to be used in the site specific review Identify the significant issues to be considered in site specific reviews Tiered 1 Review must contain: Appropriate form for level of review (e.g. DCA s Categorically Excluded template or equivalent HUD Statutory Checklist) A clear statement of project activities and the source(s) of project funds Identification of the target area (including a map) Identification and evaluation of the environmental factors and effects that can be decided immediately (including mitigation) Specific written strategies explaining how unknown environmental factors will be handled and effects determined when specific sites are identified (i.e., Tier 2 - site acceptability criteria and standards, including any required mitigation measures) Source documents and other relevant information that support compliance decisions Each Tier 1 ERR submitted by a grantee must be in a single, complete package (i.e. a single submission of all information), including all the completed forms and supporting documentation Notice of Intent to Request for Release of Funds (NOI/RROF) The ER form must document compliance with the environmental factors that are not triggered in the project area(s). Items that are not in compliance must be in the written strategy. The strategy must explain how the remaining compliance factors will be addressed as the sites are identified, completed for each site, and must contain all items that were not documented to be in compliance at the broad level of review. Tier 2 As individual sites are identified, the sites must be screened on the Tier 2 Site Specific checklists and documented accordingly. The documentation for each compliance item on the site specific checklist should be attached to each site review and address factors that were not known when the Tier 1 review was completed.. There should be a separate unspecified site strategy for each aggregated project and sites should be evaluated individually as they are identified across the years the project is funded. Each form must be signed and dated on the Site Specific Review form by the Responsible Entity s Certifying Officer. Funds for an activity should not be committed prior to completion of the Tier 2 site specific review (24 CFR 58.22). Documenting the Environmental Review Record Throughout the process, the Environmental Review Record (ERR) must be documented. Document the ERR as follows: Include a copy of the area-wide review and strategies, with documentation supporting the environmental findings. Place a record of each activity (i.e., site specific action) in the ERR

Place evidence in the ERR documenting that the adopted strategy has been applied for each activity Document that the activities are in compliance with the other federal requirements listed at 24 CFR 58.6 Place a finding in the ERR which states that implementation of the action will not affect the environmental findings Any activities or sites falling outside the acceptability criteria specified in both the area-wide and site specific review components must have separate environmental reviews prepared Subsequent site-specific reviews will not require notices from the state, unless the Certifying Officer determines there are unanticipated or adequately addressed impacts from the prior tiered review. There must be written documentation of compliance before funds are committed to specific sites. Steps for Tiering The steps for completing a Tiered Environmental Review per 24 CFR Part 58.15 are as follows: 1. Define the scope of the project: Include all activities anticipated and aggregate geographically or functionally 2. Conduct the Tier 1 Area-Wide Environmental Review with a developed Written Strategy and Site Specific Checklist 3. Publish/Post a public notice for the project and wait to receive authority to use grant funds from the State (CI) 4. Conduct Tier 2 Site Specific Review(s): Sign, date, place in ERR, and submit a copy to CI before committing funds for the site Step 1: Defining the Project Scope Defining the scope of the project involves the following: Purpose of the project Define each activity funded Define the period of the project in years; months (do not exceed 5 years) Define the sources of funds (HUD and other funds) On a map, show the geographic area of the City/County for a Tiered review (this maybe the city-wide, county-wide or target areas) On a map, show the location of the City/County in relationship to the State Describe the project in writing listing all related housing activities (e.g., individual actions on acquisition, rehabilitation, spot demolition/reconstruction and resale). List all funding sources and the approximate amount of funding for the years covered. Explain/indicate in the ERR and the public notice the actual amounts from the various funding sources. A table such as the one below is a good way to indicate multiple sources of funds and define the period for which the ERR is valid. Program 2009 2010 2011 CDBG $ $ $ HOME $ $ $

When defining the project period consider the 2,500 unit threshold at 24 CFR Part 58.37 and the requirement that adequate public notice be provided (24 CFR Part 58.43). It is HUD s policy that an ERR cannot be valid for more than five (5) years. Depending on how your community allocates funds, the geographic area you define may be city-wide, countywide or by target areas. The areas should be defined by zip codes and/or census tracts. Include maps, street names, community names and other information to define the covered geographic area. For more information and guidance on the environmental review process, please refer to DCA s Environmental Review Technical Assistance Handbook available on our website at http://www.nccommerce.com/cd/investment-assistance/formsresources/compliance-plans-and-templates/environmental-review-process. Step 2: Conduct the Tier 1 Target Area Environmental Review The focus of a Tier 1 review is on a targeted geographic area. It is important that the boundaries of the target area are clearly defined so the scope of the environmental conditions under consideration is evident. The Tier 1 review addresses and analyzes those environmental impacts related to the proposed activities that might occur on a typical site within the geographic area. This includes examining the applicable laws and authorities (e.g., floodplains, coastal zones, wetlands, aboveground storage tanks, etc.). Conduct the Tier 1 area-wide broad environmental review by addressing the related laws and authorities in 24 CFR Part 58.5 and documenting compliance with 24 CFR Part 58.6 using DCA s Tier 1 template (or HUD equivalent Statutory Checklist). When conducting the broad review, document compliance with as many of the statutory or regulatory compliance factors as possible in the geographic area identified in the project description. The ERR should contain conclusions about environmental impacts and compliance with applicable laws and authorities which will not change no matter where the project is located within the geographic area that is the focus of the area-wide review. Examples include floodplains, wetlands, endangered species, and impact categories that are not applicable or relevant. There must be justification of all such conclusions. However, the Tier 1 review also identifies those compliance requirements that cannot be resolved until specific project locations become known. For items that need more specific site information to document compliance and conclusions cannot be reached until a specific site becomes known, indicate see the written strategy, must be addressed on a site-by-site basis. Site specific issues that cannot be resolved in a Tier 1 review may include : above ground storage tanks that present a safety hazard to building and occupants of buildings or new residential units (or reconstruction units) located in close proximity to a freeway that generates high levels of noise. The Tier 2 Site Specific Review will address such issues. Example: If your community is not on the coast, you can document that Coastal Zone requirements do not apply on an area wide basis. If you are on the coast you may determine the project is in compliance after consulting with the Coastal Zone Management Agency. Alternatively, for Endangered Species if you write to the Fish and Wildlife Service and they write back that no impact to Endangered Species is anticipated based on the proposed activities or that no Endangered Species exist in your community include that documentation in the ERR for endangered species. Once compliance is documented for a particular compliance factor, no further action is required for that compliance factor.

Example: If the target area is not within a 100-year floodplain or a Coastal Zone Management Area, none of the project sites will be affected no matter where they are located in the target area. On the other hand, if a portion of the target area is within a 100-year floodplain, then the grantee must complete the required compliance process to decide whether to fund any future projects within the floodplain, including whether mitigation measures are feasible. The Written Strategy During the Tier 1 review process the grantee develops and describes written standards that will be used during the Tier 2 Site Specific Review. These written standards are used to identify potential environmental impacts, as well as help the grantee choose appropriate sites. In developing the standards, the grantee must anticipate any special conditions, such as mitigation measures that must be met and carried out as part of an approved project by HUD if a potential environmental impact is associated with the site. The written strategy contains methods and criteria for selecting specific sites/activities and making certain the applicable laws and authorities identified at 24 CFR Part 58.5 or impact categories contained in the Tier 1 Review are addressed or mitigated when the specific site is identified. Include justification and/or evidence demonstrating why some factors need not be further evaluated when the specific site is identified. Place the written strategy and all related documentation supporting your determinations in the ERR (24 CFR Part 58.38(a)(3)). Upon completion of the Tier 1 review, including the written standards to be used during the Tier 2 process, the grantee must mail it to DCA, along with all the supporting documentation (letter, reports, maps, surveys, studies, etc.). The grantee should retain a complete copy for itself for processing Tier 2 reviews. It is responsible for ensuring that mitigation measures are incorporated into contracts, as necessary, and for the completion of the project. For more information and guidance about source documentation, please refer to DCA s Environmental Review Technical Assistance Handbook available on our website at http://www.nccommerce.com/cd/investment-assistance/formsresources/compliance-plans-and-templates/environmental-review-process. Step 3: The Public Notice Process Based upon the environmental conclusions reached about the geographic area, and the written strategies developed to comply with the remaining applicable laws, authorities, and impact categories for project sites identified later on, the recipient may publish/post the Notice of Intent to Request Release of Funds (NOI/RROF). Please note that when project activities trigger public notifications for a specific authority (e.g. historic preservation, floodplain management), those public notices must be completed for those activities. In the public notice, indicate that the project is for multiple years, the funding sources with approximate amount of funding, and the geographic area and the activities covered. It is HUD s policy that the maximum timeframe for tiering is no more than 5 years. However, since this tiering process is for DCA s Scattered Site housing grant program, the timeframe for the grant should be utilized (unless other funding is involved with a wider timeframe). The public notice must outline the proposed activities and identify the specific environmental factors that will be evaluated once a specific site is identified. It must also include a statement that any activities which do not comply with the review s acceptability criteria for activities or sites will be excluded. If

these activities are to be pursued, a separate review must be completed and cleared before they can be undertaken. With the exception of additional project description items in the public notice, the release of funds process for non-tiered environmental reviews is the same as for tiered environmental reviews. Upon conclusion of the local comment period, submit the Request for Release of Funds and Environmental Certification Form to DCA with a copy of the public notice and wait for the state objection period. Be sure the RE s Certifying Official signs the document after the comment period expires. Follow the instructions on the form. Do not commit funds until the grantee has received authority to use grant funds from Grants Management. Maintain all documentation in the ERR. For further guidance on the public notice process, please review the Release of Funds section in DCA s Environmental Review Process Technical Assistance Handbook available on our website at http://www.nccommerce.com/cd/investment-assistance/formsresources/compliance-plans-and-templates/environmental-review-process. Step 4: Conduct Tier 2 Site Specific Reviews The Tier 2 Review focuses on the environmental compliance requirements that could not be resolved in the Tier 1 Target Area Assessment. When the grantee identifies specific properties or sites within the target area for obligating funds (e.g., to buy a property, finance repairs, demolish a structure, etc.) the grantee uses the written standards (checklist and narrative) set forth in the Tier 1 review process to determine if there are any environmental issues associated with the site. The Site Specific Project Review documents in writing that compliance standards for the specific project are met, and the required mitigation measures, if any, will be incorporated into the project. The strategies/mitigation measures identified in the Tier 1 Review will be used to evaluate the individual sites. The checklist should cover all compliance areas that were not resolved as part of the area-wide Tier 1 Review. All compliance requirements satisfactorily resolved in Tier 1 Review are excluded from any additional examination or consideration (i.e., resolutions through mitigation requirements). The information and documentation of a Tier 2 Site Specific Review must include at least the following: Indicate the number of sites covered by the Tier 2, and if multiple sites are covered, attach a property list. Copies of the individual site reviews completed, including a description of the activities related to the project, location of the project, map of where the project is located, as well as photographs. Source documents and other relevant information that supports compliance with the written strategies. Documentation of compliance with 24 CFR 58.6 (whether purchase of flood insurance is required, evidence that CDBG funds will not be used in a Coastal Barrier Resources Area and, when applicable, the buyer/seller of the property were advised and signed a disclosure statement concerning the location of the property in a runway clear zone/clear zone). The State must review the grantee s compliance documentation for each site, so the grantee must submit all the documentation to DCA. A copy should be retained by the grantee. Each Tier 2 ERR submitted by a grantee must be in a single, complete package (i.e., a single submission of all information). The Tier 2 Site Specific review checklist used to evaluate individual sites has been created by DCA for grantee use. Once the grantee receives notification from DCA that the proposed specific project site and activity have successfully passed the environmental compliance review, project funds for the specific project site may be obligated and spent.

For more information and guidance about source documentation, please refer to DCA s Environmental Review Technical Assistance Handbook available on our website at http://www.nccommerce.com/cd/investment-assistance/formsresources/compliance-plans-and-templates/environmental-review-process. Instructions to Completing the Environmental Review Record Templates Even though Scattered Site Housing is categorically excluded from NEPA (National Environmental Policy Act) requirements, the grantee must still comply with the environmental requirements of the related laws and authorities. This compliance must be documented in the ERR. Use the templates created by DCA (or HUD equivalent Statutory Worksheet). The checklists are used to identify the need for coordination, consultation, permits or reviews. The questions in the templates are based on the HUD recommended template for Categorically Excluded subject to 58.5 projects and HUD Handbook 1390.2 for conducting an environmental review. The questions after the boxes are intended to be used as a guide, rather than an all inclusive checklist. There is room for narrative explanation in the Comments and Source documentation area, or feel free to attach additional pages. Tier 1 Area-Wide Review 1) Grantee Name- Insert the name of the grantee. The local government is the Responsible Entity (RE). 2) Grant Number- Insert the grant number if known. 3) Mailing Address- Insert the mailing address 4) Project Name and Location- Insert the Project name and location: City and/or County, zip codes, census tracts. 5) Local Government Representative- Insert the name of the local government contact who will work closely with this project (e.g. city or county manager, community development director). This is not the same as the Grant Administrator. 6) Preparer- Insert the information of the person who compiled the data for the ERR. 7) RE Certifying Officer- Insert the information for the local government certifying officer (e.g. Mayor or Chairperson). The signature of the Certifying Officer (CO) should be the last signature in the document. 8) Grant Category- The grant category is Scattered Site Housing 9) Time Period- Indicate the time period for the project in months and/or years. 10) Checklists Included- Indicate which checklists are included 11) Project Activities- List all project actives and the budgeted amounts. Example Project Activities CDBG Funds Budgeted Other Funds Budgeted Single Family $70,000 Rehabilitation Administration $5,000 Total $75,000 12) Project Description- Provide a brief project description. Refer to earlier sections in this guidebook. 13) Determination- Mark which determination has been concluded for the environmental of the site. 14) Additional Studies- Attach or summarize any additional studies that were performed for this site. 15) For the remainder of the ERR, answer all questions and attach source documentation as to how the answer was derived. These questions are based on the HUD recommended template for categorically excluded projects and HUD Handbook 1390.2 for conducting an environmental review, and are intended to be used as a guide. There is room for narrative explanation in the Comments and Source documentation area, or feel free to attach additional pages. Record the determination made regarding

each listed statute, executive order, or regulation. Provide appropriate source documentation such as reviews or consultations, applicable permits or approvals obtained or required. Note dates of contact or page referenced. Provide compliance or consistency documentation. Attach additional material as appropriate. Note conditions, attenuation, or mitigation measures required. Refer to the appropriate regulations for guidance and to earlier sections in this guidebook. 16) Determination of Exemption Checklist- Insert the RE name (grantee), project name, and grant number at the top. Mark which activities have been evaluated as exempt by the RE. Insert the name of the program. Insert the name and title of the RE certifying officer. The RE s CO then needs to sign and date. 17) Categorically Excluded Not Subject to Checklist- Insert the RE name (grantee), project name, and grant number at the top. Mark which activities have been evaluated as CENST by the RE. Insert the name of the program. Insert the name and title of the RE Certifying Officer. The RE s CO then needs to sign and date. 18) Categorically Excluded subject to 58.5 Checklist- Insert the RE name (grantee), project name, and grant number at the top. Mark which activities have been evaluated as categorically excluded subject to 58.5 by the RE. Insert the name of the program. Insert the name and title of the RE Certifying Officer. The RE s CO then needs to sign and date. 19) Compliance Documentation Checklist for 24 CFR 58.6- Insert the RE name (grantee), project name, and grant number at the top. Answer the questions by marking in the boxes and attach appropriate source documentation (e.g. floodplain map with project area identified). Insert the name of the program. Insert the name and title of the RE Certifying Officer. The RE s CO then needs to sign and date. Tier 1 Written Strategy Complete the template for the Tier 1 Written Strategy. Inset the name of the County, project details, strategies to address area-wide and site specific issues. Samples of explanations are embedded in the template. Tier 2 Site Specific Review This template is almost identical to the Tier 1 Review template. The differences are: 1) Project Activity Site Address and Location- Insert the address or refer to a property list. Insert the Tier 1 that the site specific falls under (e.g. City and County, zip codes, census tracts). 2) Work Proposed- Insert the work proposed on the specific site(s). 3) List Mitigation- Insert any mitigation measures, if any, that need to be taken for the specific site(s) 4) Site Specific Determination- Mark which determination has been concluded for the environmental of the specific site(s). This is for consistency with Tier 1. 5) Compliance Documentation Checklist for 24 CFR 58.6- Insert the RE name (grantee), project activity site name, grant number, and address(es) at the top. Answer the questions by marking in the boxes and attach appropriate source documentation (e.g. floodplain map with project activity identified). Insert the name of the program. Insert the name and title of the RE Certifying Officer. The RE s CO then needs to sign and date. Submitting the Environmental Review Record Please remember, there is no prior approval of these documents by DCA Compliance Staff, as the local government is the Responsible Entity. The Tier 1 Area-Wide Environmental Review should be sent with the

NOI/RROF documentation. There is no prior approval of the ERR by Compliance Staff before the public notice. If you need technical assistance, it is recommended to email inquiries to compliance@nccommerce.com. The ERR still needs to be submitted to DCA for grant records and monitoring. Copies are encouraged to be double-sided. Maps should be in color. When documents are complete, follow the instructions below for submitting to DCA. Tier 1 Area-Wide Review and Tier 1 Written Strategy Submit one of the following: a. One original and 1 CD b. One double-sided color copy and 1 CD The Tier 1 documentation should be sent with the Request for Release of Funds and Environmental Certification documentation. Tier 2 Site Specific Reviews Submit one of the following: a. One original and 1 CD b. One double-sided color copy and 1 CD Table 1 below summarizes the process for Tiering. TIERING NON-TIERING 1. Complete Tier 1 Template (or HUD equivalent) 1. Complete CEST Template or HUD equivalent and Written Strategy 2. Follow NOI/RROF Process (required) 2. Follow NOI/RROF Process (if applicable) 3. When complete, send 1 copy of Tier 1 to State with RROF 3. When complete, send 1 copy of ERR to State with RROF 4. Complete Tier 2 Template (or HUD equivalent) 4. Wait for confirmation from Grant Representative 5. Wait for confirmation from Grant Representative before committing funds before committing funds For more information and guidance about environmental reviews, please refer to DCA s Environmental Review Technical Assistance Handbook available on our website at http://www.nccommerce.com/cd/investment-assistance/formsresources/compliance-plans-and-templates/environmental-review-process. Sources: NSP Training South Carolina CDBG Program NSP HUD Tips http://hudnsphelp.info/media/resources/erguide_nsp2nonprofits.pdf