CDBG Disaster Recovery Administration Training, Newark, NJ Wednesday, March 20, 2013, Day 3

CDBG Disaster Recovery Administration Training, Newark, NJ Wednesday, March 20, 2013, Day 3 Addressing Public Housing Needs Post-Disaster One of the items that's discussed in the disaster recovery notice, which certainly you all have had a chance to read and a few of you, I'm sure, have bonded with it. A quick tip. Read it more than once. You'll find that not only do you understand more the more you read it, but you also may have some questions once you have a second chance and now that you have some context. One of the items that's unique to this notice that we haven't had in previous disaster appropriations are two things. A specific requirement that grantees not only address the needs of public housing in the disaster areas, but to also set aside funds to address those needs and a required consultation with public housing authorities. Those three things are unique to this round of funding. And let me be clear when I say -- and we have our public housing partners and HUD's PIH staff is here with us. Let me be clear. If you submit an action plan and it's not clear that you have a set aside, it's not clear that you did a consultation or it's not clear that you could articulate the needs of public housing authorities other than saying there were some places damaged, that's going to be problematic for HUD to review and we will end up having to come back to you for additional information and possibly recommending the Secretary consider not approving the plan on those grounds. So please do not treat this lightly. And not only do we have it for public housing, there's similar language in the notice for meeting the needs of the homeless as well. So let's walk through, just very quickly, what those requirements are. And I think you have them, but I'll go to the notice. And then we're going to open it up to questions and answers. And I'll try to couch the notice piece with process. Actually, let's start with process. Point number one and I share this with the PIH team and the public housing authorities team. HUD's client in this regard for the recipient of the funds, there's one grantee. That's the six entities named in the notice: the states of New York, New Jersey, Connecticut, Rhode Island and Maryland and the city of New York. Those are HUD's grantees for these funds. The reason why I start with that is that's who HUD is holding accountable to ensure that recovery activities are implemented and that they comply with the requirements of not only the statute, but the requirements of the notice. Each of those entities will have partners and beneficiaries. They will partner with other state agencies or other city agencies to help them undertake activities, but they'll also make awards to multiple organizations, which could include -- I should say multiple

entities, which could include public housing authorities, it could include nonprofits that are delivering a specific activities or services. It will also include assistance to individuals and businesses. Those are often referred to as subrecipients or sub-grantees; more often sub-grantees. They'll also be providing in the case of states funding to counties and cities within the state in the impacted areas. So HUD's grantee is the state or the states that I named plus the city and then those grantees could award funds to individuals, businesses, public housing authorities, other entities. That relationship is key because when we talk about requirements of the grantee this morning, they're focused on the grantee. And then that grantee has a requirement to share those requirements to you via an agreement. So if you're a public housing authority, if you're an entity, if you're a city or county. I know we had a few join us today. They will lay out an agreement with you what are the terms of that agreement and what are the requirements that go with that funding agreement. So we've established relationships. Now, let's talk about actual activities. So the grantees will identify a series of activities. Housing rehab, housing mitigation incorporated with that rehab, small business assistance, assistance to public housing authorities in their action plan. That action plan identifies the host of needs in addition to the activities that they are identifying activities and programs to address those needs and dollar amounts that will be allotted to those programs and activities to address those needs. That's how the public, that's how public housing authorities, that's how everyone who's eligible is supposed to understand how those grantees will use funds. Based on the terms of the action plan, they'll enter in an agreement with HUD the grant agreement that says we see this in your action plan. We understand you're asking for this amount of money. We're approving your use of that amount of money for these purposes as you've laid out in your action plan. You can begin funding activities with these dollars and carrying them out. In many cases, states, having seen that funding agreement, would have already laid out the terms by which they'll provide funds to cities and counties; and at a high level, terms by which they'll provide assistance to individuals, public housing authorities and businesses. So that's your first look at how, in the case of public housing authorities, you would receive assistance. Here is where the world of public housing authorities and PIH and HUD's Community Planning and Development Division and CDBG grantees begins to form the stew of collaboration. And I hope you like stew. If chili is your thing, okay. The chili, gumbo, jambalaya, you know it, in a bowl. The requirements that PHAs and PIH may be used to or that govern the use of capital funds, those aren't waived here. This notice, the CDBG requirements, those don't negate those items. What you must know as a state providing funds to public housing authorities, our PAH partners and public housing authorities is that there are another set of requirements that are unique to these dollars that you will have to live by, too.

It could include things like, for example, ensuring that the activity is eligible. So some of the things that perhaps would be eligible under public housing may not be eligible under CDBG. So let's just talk about a few eligibility categories that are of interest to you. Housing rehabilitation. What we consider to be eligible housing rehabilitation covers the full building, the units, outside of the building, inside of the building. So damaged common areas, damaged units, administrative offices of the Public Housing Authority that were also impacted. Roofs, windows, exterior property that deals with making sure that the unit is operable. I'm looking for the word for those. There you go. Those are things that are eligible for rehabilitation in the community development block grant program. The states and the city will identify in their action plan, here's the type of rehab that we're willing to fund for public housing authorities and they'll spell out to you what they're looking for. That rehab is also inclusive of mitigation measures. And in fact, we encourage that as buildings and properties are being brought back online and returned to use that they actually have mitigation measures incorporated. That they have elevated as were necessary that what was built back will be more resilient and more able to withstand potential future storms as well. For us, that's all wrapped in the category of rehab for CDBG. And that's how you would know. Again, your states would articulate in much more detail how you would know if a property, if your properties, if your communities are eligible for funding. Another area that often comes up that I shouldn't say often, but comes up in the standard administration of community development are activities that public housing authorities may be undertake for economic development. Job training is often something I think I've heard from a few PHAs that you're undertaking. CDBG Disaster Recovery dollars can be used for economic revitalization and activities that include supporting job seekers with specific training so that you're -- so that the community's economy can bounce back. The PHAs should work with their states and states would need to identify this if this is something they choose to fund to align their economic recovery goals with perhaps some of the training that public housing authorities already offer. The other area that we received questions on -- I know with the call with some of the public housing authorities a week or two ago-- relates to communities or specifically properties that may have some additional losses; that they lost revenue during the time period. This is where there may be some concerns by the state. So the state has a mandate or I should say the states and the city each have a requirement to, of course, set aside funding for addressing public housing needs. But they always must make sure that every project they fund is eligible under the CDBG program, it meets a national objective and there's an actual tie back to the disaster. So while your public housing inventory in your communities may have a host of needs. The needs that are tied to the disaster are the ones that the grantees are able to assist. If it can't be tied back to the disaster, this may not be the appropriate funding source for that.

I noted being eligible, meeting a CDBG national objective, there are three CDBG national objectives low and moderate income persons is the primary objective. And much of that is very simple for public housing authorities because of the existing income limits. Addressing conditions that contribute to slums or blight, that's one of the national objectives. And then the last is meeting the -- addressing needs of a particular urgency most likely associated with the disaster. And I'm sure many grantees will use that. On top of that is a requirement that the grantees expend at least 50 percent of all of their funding to meet the needs of low and moderate income persons. Note to grantees, note to PHAs, providing funds to public housing authorities to address their post disaster needs is a way for you to meet that low and moderate income requirement. And in fact, the history of our program, many of our grantees that came back and presented and did roundtables, they provided funds to public housing authorities. And it worked well and that's how they were able to count those activities toward their low-mod benefit requirement. So in addition to not only the requirement, this is a way for grantees to be able to meet that overall benefit requirement. That 50 percent of the grantees total allocation has to benefit low and moderate income persons. So I've given a brief overview of the funding, the relationships, examples of eligible activities, and the means by which a grantee would communicate those activities to public housing authorities. One of the things that we'll take a few more minutes on then is to open up for questions. And I would note the questions can come from both grantees and PHAs. It's not just one or the other. But it's helpful to have the conversations now. I don't want to leave the room with the impression though that the question and answers counts as your sole consultation. You actually do need to talk, sit down in another room without all the people and find out what those needs are if you haven't already. With that, I believe my team is circling around with microphones and we'll begin taking questions from the floor. Question: You mentioned that in addition to the requirements for CDBG PHAs would have to comply with the normal requirements that they have with the funding that they normally get through HUD. Would that include, as a couple of examples, section 3 requirements, stuff like the annual plan? I'm just wondering how CDBG correlates with what we normally have in our annual plan. Obviously, the CDBG activities are not in our annual plan. So how do those two mesh together? Tennille Parker: Excellent question. Each of the grantees -- and we passed this to grantees and they will pass this to you. Each of the grantees in that funding agreement with you and the grant agreement with you will lay out the specific requirements. They will have to tell you that we're holding them accountable to Section 3 Economic Opportunities Act requirements or I should say Section 3 economic opportunities

provisions for providing job opportunities and contract opportunities for low and moderate income persons. They will have to pass that requirement on to you as well for the applicable project or activity. That would include Davis-Bacon. Again, for the applicable project or activity, the Davis-Bacon wage standards to ensure that for applicable projects, wages that are determined by DOL are paid for the specific trades and services. It includes environmental requirements. It includes requirements, of course, for fair housing and equal opportunity. All of those requirements that we have for grantees, grantees are required to share those with their subrecipients, with their sub-grantees because they're not only required to pass them down, they're to hold you accountable to them. There's a level of monitoring that grantees must do just like HUD must monitor its grantees, state grantees, city grantees, must monitor to ensure that the requirements of their individual funding agreements with PHAs and with others were actually fulfilled in compliant with the program regulations. A: What about the annual plan? Tennille Parker: So are you speaking of the annual plan that public housing authorities have to submit? A: Yeah. So the public housing authorities have to put in their annual plan and describe all the activities. Obviously, CDBG activities weren't contemplated in our previous annual plan. So how do we move forward with projects like that? Tennille Parker: And Jean, I'm going to punt that one to you because we would not dictate what would go in your annual plan. But the HUD Public and Indian housing unit may have guidance that you'll be receiving as it relates to updating your annual plan. Jean: And that's actually what I was going to say is we can reach back out to you guys on any PIH requirements, but the real focus is on those federal requirements that cover the CDBG funds. Do you include non PIH funds in your annual plan currently? A: Yes. We do. Jean: You do. Okay. So we can have a further conversation on that and make sure that there's clear guidance to all the PHAs on what the expectations are as it relates to the PIH specific requirements. Tennille Parker: Other questions? A: Tennille, thank you. Quick question. You have been speaking about PHAs in the venue of a subrecipient. And from my perspective, we're looking at PHAs as a recipient, not necessarily as a subrecipient. That's not prohibited, correct? Tennille Parker: Correct.

A: Okay. Thank you. A: If the state gives funds to a public housing and it's a large, large project but all the construction is done. It was rehab, elevation, whatever it needed. All of that is done. How close to full occupancy would you expect it to be before it closed? Or would it be 100 percent occupancy before you would let that project close? Tennille Parker: Wow. That's like a curveball question. So let me make sure I understand the question. When you ask about the occupancy rate or hitting the occupancy threshold before you close, what I hear with my CDBG hat on is in order for you to count this activity as complete and meeting a national objective, at what stage do you call it? At what stage is it compliant with the, in this case, national objective eligibility, etc? As I would imagine, most of the CDBG grantees we'll be using, though not exclusively, I will be using the low mod housing national objective when providing funds to public housing authorities. Under the existing CDBG regulations, that's at occupancy. When you can demonstrate that at least 51 percent of the units are occupied by low mod households, the national objective has been met. You can certainly, as grantees, have other requirements and depending on the way you're funding, you can state other things. But for purposes of national objective, those requirements still carry through occupancy. Still, at that point, we need to know whether you have 51 or not -- 51 percent. Other questions? One thing that the team from Newark shared and I'll recognize your question in just a moment -- the Newark PIH staff. For the HUD staff and for grantees, one thing to also note is the HUD relationships that are a little different things time around. So normally, public housing authorities work with the staff in the local offices and HUD's local offices regarding their questions and their concerns. And the cities and counties and states served by the local offices know their local point of contact. As it relates to the State of New York's disaster grant, the State of New Jersey's and the City of New York as well as Connecticut -- well, let me just stop with those three. So New York City, New York State and New Jersey. It's switched for them. Their local office is now headquarters. Because these are high dollar volume grants, we have the primary management. But we are working, I'm sure, and goodness, I feel like I'm next door. We're working with the local offices in a way that we haven't had to do before but it just takes that amount of effort to make sure that these funds are going to use their purpose. So when there are questions about funding and requirements for those grantees, they would reach out to headquarters and we're going to work with our local offices. For Connecticut, Rhode Island and Maryland, their HUD contact is still their local office and they will keep us in the loop as well about any additional questions or concerns. I know that question came up from our Newark PIH partners and I just wanted to let you know who to relate to as it pertains to funding.

The question in the back. A: Yes. Could you provide some examples of hardening activities that have been disallowed by CPD in the past? Tennille Parker: Gosh, it's much easier to respond in the affirmative. If my team has one that didn't cut the mustard, please let me know. I'll start with the eligibles. We've had roof tie downs; shout out to my folks in Florida. Window shutters for those who are high wind damage areas. Those were all eligible. Doors. Thank you. Replacement of doors. Actually, in PHAs, in Florida, that was a lot of their -- a lot of their work was exterior. Doors, windows and roof work. They did that in a lot of PHAs. The things that come into question are the things that you can't tie back to the disaster. That seem more like things that have nothing to do with either helping the unit get back online or helping the property or helping the building get back online. Every day maintenance, that would be a concern and we would wonder how you were calling that hardening as opposed to routine maintenance or deferred maintenance. Or excuse me, I should say general maintenance. Those were things we would question. But the things that you can tie back to damage from the disaster or that are necessary in order to position the properties to stay online and continue operating, those would be spelled out. The other thing to keep in mind is that each state and each city in this appropriation -- in this case, New York City, will lay out exactly what type of mitigation and preventative funds or activities they will be willing to fund. They can prescribe that in their funding announcement to you and in their grant agreement for what you're being held to. Does that give you an idea of what has been -- or can you give me an example of perhaps a hardening activity that you wonder is eligible? A: Let's say you were building a three foot high retaining wall to protect basements. If you were going around the whole building or doing something else that wasn't strictly to repair the damage, but outside the building or structure to help make it more impervious to future storms. Berms -- whatever else might accomplish that goal. There's a lot of ways to get there. Tennille Parker: And here's the question that the HUD team would ask back. And it may seem like a simple question but it is exactly where we start. Why would you be building that -- why would you be undertaking those types of activities? What is it that happened as a result of the disaster that positioned you -- that makes you want to do that type of activities? And what will the outcome be? Those are the types of questions HUD would ask in order to discern whether or not this is a mitigation activity that's tied back to the disaster or if it's strictly a preventative measure that can't be tied back to anything. It's a good thing to do, but it had nothing to do with what just happened as a result of Sandy.

What we are hearing is that, for example, there are now properties that weren't in the flood plain before and now they are. Some of those actions are responsive to that. What we're also hearing is that in addition to properties that were or were not in the flood plain now, they're in different zones. So similar context, that's when we've been able to say, "Okay. We understand that you weren't damaged, but you now have a different level -- you're now in a different scenario than you were pre-storm. We understand why these types of mitigation measures may be undertaken." A: The issues -- we're supposed to consider flood plain damage and sea level rise. So if you re looking at flood plain levels or management and sea level rise. So if our overall program says we're not going to rebuild or build new construction in these areas and a housing authority wanted to do new construction, does our policy dictate? I mean, right now, they're grandfathered in where they are in that land. But we don't want -- the state's policy is that we're not going to build anything else in those areas. Tennille Parker: Your state policy would carry through, if you've made a declaration. One of the things you would need to do in your consultation with public housing authorities is walk them through some options. If they're asking for new construction because you know you have an existing housing need or I should say a post-disaster housing need, maybe we're looking at another location. But that's something you do want to talk about in your consultation, but your restriction on where rebuilding will take place in response your measures or to your actions to mitigate against future disasters, that is a response that we've heard before from grantees. Other questions? Really? Wow. Well, one, it's not that public housing authorities are shy. I was on the phone with you all about two weeks ago. You all had a ton of questions. And I appreciate hopefully that that call and the follow up and the PIH team addressed those questions. But if you have follow up, I know PIH staff and public housing authorities have been encouraged. Reach out to your headquarters contact so that we can consolidate and make sure we give you consistent answers. With that, I will close out or I'll go ahead and start closing out the training. One, just to begin with a series of thank yous. One, thank you to our audience. This -- our team has been remarking that this is a different group of grantees. We have, for the first time, our seasoned grantees not in droves, but they came out to assist as well and their input was valuable. But this is primarily an audience of folks who've had disaster funds for 24 months or less. And having an audience primarily with this group was a result of direct feedback from our training last year. So thank you for your participation. I know it's not easy to get travel requests through your offices certainly in a short time. So thank you not only for your attendance, but your participation. I'd also like to thank our partners that joined us from EPA, from SBA, from the HUD Hurricane Sandy task force. Thank you all for coming out and being a resource for team.

Labor Relations, Environment. I'd like to also thank my team who -- I care about them deeply, y'all. I really do. They are great. So I want to thank them for doing a great job and making sure that our grantees get the information and that our partners understand what they need to move forward. Going forward, then, and what's ahead, in the series of weeks and some of you, I know, it's days. We are expecting a couple of things to happen. There'll be submission of action plans to HUD for our review, and ultimately, the Secretary's approval of those. There are also grantees who will be posting their action plans for public comment. There'll be likely some consultations that will be beginning at the grantee level with various nonprofit and PHA and community partners to discuss needs. HUD will be gearing up to make announcements about the funding for grantees that had disasters in 2011 and 2012. There'll be additional guidance posted on our website as a result of some of the questions you raised today, particularly, again, around the two year funding expenditure requirement. And then there'll also be additional guidance on our website and the One CPD resource center that I pointed out early this morning and we'll make sure we also send out to grantees as well. With that, thank you all. I appreciate your attendance and have safe trips home.