Approximately $7 million in federal Community Development Block Grant (CDBG) funds are available on an annual basis to cities and counties through the state of Iowa’s Water/Sewer Fund.
This competitive program offers grants to assist cities and counties with water and sewer infrastructure improvements including sanitary sewer system improvements, water system improvements, water and wastewater treatment facilities, storm sewer projects related to sanitary sewer system improvements and rural water connections.
All incorporated cities and all counties in the State, except those designated as HUD entitlement areas, are eligible to apply for and receive funds under this program
The amount of assistance communities may apply for is based on the population:
- Communities with populations less than 1,000 can receive up to $300,000
- Communities with populations between 1,000 and 2,500 can receive up to $500,000
- Communities with populations between 2,500 and 15,000 can receive up to $600,000
- Communities with populations greater than 15,000 can receive up to $800,000
- Communities with populations less than 300 are limited to $1,000 per capita, as are unincorporated areas of a county proposing direct service projects.
To be eligible for funding, at least 51% of project beneficiaries (residents served by the project) must be low to moderate income. For purposes of the CDBG program, “low and moderate income” is defined at persons with incomes at or below 80% of the area median income as defined by the U.S. Department of Housing and Urban Development (HUD). Current income levels can be found on the IEDA website: https://www.iowaeda.com/cdbg/management-guide/.
Applications for funding are submitted and reviewed on an annual basis. Deadlines are January 1, April 1, July 1, and October 1 of each year. Funding decisions are made prior to the next quarterly deadline.
2 CFR 200 Audit Requirements
CDBG contracts may be subject to audit. Federal Code (2 CFR 200) requires that recipients that expend $750,000 or more in federal funds within a fiscal year must have a single or program specific audit. When budgeting for CDBG funds, applicants should be aware of these audit requirements:
- For recipients of $750,000 or more in federal funds received from more than one source of federal funding, an organization-wide audit must be conducted in accordance with federal requirements outlined in 2 CFR 200.514
- For recipients of $750,000 or more in federal funds received from a single source, a project audit, targeting only transactions dealing specifically with the project, may be performed in lieu of an organization-wide audit.
Communities should consult with their accountants regarding the applicability of an audit and audit requirements.
Audit costs are a CDBG-eligible expense. Organization-wide audits can be paid with CDBG funds proportional to the amount of all other funds included in the audit. The total cost of a project audit can be paid with CDBG funds.
Davis Bacon and Related Acts
Projects that include construction may be subject to the requirements of the Davis-Bacon Act and related laws and regulations. The Davis-Bacon Act applies to all contracts for construction, alteration and/or repairs in excess of $2,000 that involve CDBG funds. Cost estimates for the proposed project should reflect compliance with these requirements.
Uniform Relocation Assistance and Real Property Acquisition Policies Act
For projects that include acquisition and relocation, all recipients given the authority to acquire property are required to follow the guidelines in HUD Handbook 1378 – Tenant Assistance, Relocation and Real Property Acquisition. Cost estimates for the proposed project should reflect compliance with these requirements.
Historic Preservation Review Requirements
Federally funded activities are subject to the review requirements of Section 106 of the National Historic Preservation Act. The goal of the review process is to identify historic properties, both above and below the ground potentially affected by the undertaking, assess the effects of the undertaking and seek ways to avoid, minimize or mitigate any adverse effects on historic properties.
The review process involves review by IEDA and possible consultation with various agencies, groups and individuals, including the State Historical Preservation Office (SHPO), located in the Department of Cultural Affairs. Although consultation is not required prior to a CDBG award, if the project includes a property that may have historical significance, it is a good idea to contact IEDA early in the project development. For more information regarding Section 106 review and compliance, you may call IEDA at (515) 348-6202.
Environmental Review and project initiation
No HUD Funds or non-HUD funds may be committed to the project until the applicant has secured environmental approval from the State, as provided in HUD regulation 24 CFR Part 58. In addition, pending environmental approval and pursuant to 24 CFR Part 58.22(a), no grant recipient or participant in the development process, including contractors or sub-contractors, may undertake an activity that may limit the choice of reasonable alternatives. Such choice limiting actions include real propertyacquisition, conducting acompetitive sealed bid process for the project, leasing, rehabilitation, repair, demolition, conversion, and new construction.
For more information on the Water/Sewer program and applicable requirements, contact firstname.lastname@example.org or (515) 348-6214.