2012
INFRASTRUCTURE PROGRAM GUIDELINES
Community Development Block Grant (CDBG)
Community Investment
Mailing Address:
4313 Mail Service Center
Raleigh, NC 27699
Street Address:
100 E Six Forks Road, 2nd Floor
Raleigh, NC 27609
(919) 571-4900 (voice)
(919) 571-4951 (fax)
(800) 735-2962 (TDD)
www.nccommerce.com/cd
North Carolina CDBG Infrastructure Program Guidelines
Table of Contents
Introduction .................................................................................................................................3
National Objectives ......................................................................................................................4
Eligible Recipients ........................................................................................................................4
Eligible Applicants ........................................................................................................................4
Assistance to ETJs ........................................................................................................................5
Maximum Application Submissions .............................................................................................5
Award Amounts and Administration Costs .................................................................................5
Grant Period .................................................................................................................................5
Matching Funds Requirements....................................................................................................5
Local Government Roles and Responsibilities .............................................................................6
Use of an Experienced CDBG Administrator ...............................................................................6
Performance Measures ...............................................................................................................6
Threshold Requirements .............................................................................................................7
Evaluation Criteria .......................................................................................................................7
Guidance on Eligible Infrastructure Activities .............................................................................9
Types of Public Water or Public Sewer Projects Acceptable for Submission and Level of
Readiness .....................................................................................................................................9
Program Amendments, Budget Amendments and Budget Revisions ........................................10
Public Hearings ............................................................................................................................10
Compliance Requirements...........................................................................................................10
Application Process and Submission Requirements ...................................................................21
Program Contact ..........................................................................................................................22
Submission of Application ...........................................................................................................22
Infrastructure Program Policies ...................................................................................................24
Funding Eligibility Criteria ............................................................................................................26
Definitions for Water and Wastewater (Sewer)..........................................................................29
Water ...........................................................................................................................................29
Wastewater (Sewer) ....................................................................................................................30
Contamination In Drinking Water ...............................................................................................32
Citizen Participation Plan (Sample Template) .............................................................................33
Sample Resolution .......................................................................................................................35
2012 Infrastructure Preliminary Information Form…………………………………. …………………………..36
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North Carolina CDBG Infrastructure Program Guidelines
Introduction
The primary purpose of the State of North Carolina’s Community Development Block Grant (CDBG)
Program is to provide grants to non-entitlement local governments to develop viable communities by
providing decent housing and a suitable living environment and expanding economic opportunities,
principally for persons of low and moderate income. The CDBG Program is administered by the North
Carolina Department of Commerce, Office of Community Investment (CI). All programs developed
using CDBG funds will promote the goals of the North Carolina Consolidated Plan.
In 2012, North Carolina expects to receive approximately $42,500,000 in CDBG funds. Of this amount,
approximately $17.0 million will be made available on a non-competitive basis for the Infrastructure
(IF) Program.
The purpose of the Infrastructure Program category is to improve the quality of life in a residential
area (target area project) or in a local government’s jurisdiction (area-wide jurisdictional project) by
using CDBG funds to eliminate severe water and wastewater (sewer) problems with health and
environmental consequences. Activities include:
 the installation of new public water or sewer lines;
 the replacement of public water or sewer lines or appurtenances where the condition
threatens public health or the environment; and
 improvements to water or sewer treatment plants that have specific problems such as being
under moratoriums or special orders of consent.
Supplemental information is contained in the CDBG administrative rules, Title 4, Subchapter 19L of the
North Carolina Administrative Code. Applicants are encouraged to consult the administrative rules as
well as these guidelines prior to contacting CI about submitting an application.
The IF guidelines are designed to assist local governments, with a ready infrastructure project, that are
interested in applying for CDBG funds. A ready project means that the Preliminary Engineering Report
(PER) is complete (or design and specs, permits, etc. are complete), one public hearing has been held,
and beneficiaries have been surveyed.
The preliminary application window for the 2012 IF program cycle opens Friday, August 31, 2012 and
closing at 5:00 pm Friday, September 14, 2012.
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National Objectives
Since the IF Program uses Community Development Block Grant (CDBG) funds, all project activities
must meet at least one of three national objectives in order to be eligible. The three national
objectives in the CDBG program are: (1) benefiting low-and-moderate income (LMI) persons; (2)
preventing or eliminating slums or blight; and (3) meeting other community development needs
having a particular urgency because of existing conditions pose a serious and immediate threat to the
health and welfare of the community, and other financial resources are not available to meet the
need.
The IF Program activities will focus on the LMI national objective. Benefit to LMI persons may be
either area-wide or direct. Direct benefits are those activities that actually serve certain persons (e.g.
connecting low-income households to public water and sewer lines.). Area-wide benefits are those
activities that benefit communities as a whole and are not participant specific (e.g. neighborhood
parks). Applicants must ensure that both area-wide activities benefit at least 51% low and moderateincome persons and direct activities benefit at least 70% LMI.
Low and moderate income households in metropolitan areas are defined as those with incomes equal
to or less than eighty percent (80%) of the median family income of the metropolitan area. For
families residing in non-metropolitan areas, low and moderate income is defined as eighty percent
(80%) or less of the median income of the county. “2012 Income Limits,” published by the
Department of Housing and Urban Development (HUD), defines income limits for low and moderateincome families according to family size for non-metropolitan and metropolitan areas of the state.
The document is available at www.hud.gov or from Community Investment (CI).
Eligible Recipients
All municipalities except 23 entitlement cities that receive funds directly from HUD are eligible to
apply for State CDBG funds. North Carolina's 23 entitlement cities are: Asheville, Burlington, Cary,
Chapel Hill, Charlotte, Concord, Durham, Fayetteville, Gastonia, Goldsboro, Greensboro, Greenville,
Hickory, High Point, Lenoir, Jacksonville, Kannapolis, Morganton, Raleigh, Rocky Mount, Salisbury,
Wilmington, and Winston-Salem.
All counties except Cumberland, Mecklenburg, and Wake Counties, which have been designated as
urban counties, are eligible to receive State CDBG funds. As urban counties their municipalities are
ineligible, except Holly Springs (Wake), and Linden (Cumberland) are eligible for state funding.
Eligible Applicants
Eligible applicants are local governments that (1) meet specific funding and threshold criteria, (2) meet
a specific level of readiness to proceed, and (3) are acknowledged by CI in writing as eligible to submit
an application.
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To be eligible to apply, a local government must meet or exceed a set percentage of severe and
moderate need and a set percentage of benefit for low and moderate-income households. CI will view
need based on specific water or wastewater problems, either on-site or public. Priority, however, will
be given to local governments with projects under moratoriums or special orders of consent.
Assistance to ETJs
Eligible local governments may submit applications to undertake eligible activities within their
jurisdictions. The jurisdiction may be the corporate limits of the municipality, it’s extraterritorial
jurisdiction (ETJ) or areas outside of the extraterritorial jurisdiction, depending on project activities.
Each applicant is required to certify that it possesses legal authority to carry out the proposed
activities. Unless contradictory evidence is submitted to CI, the Division will accept the applicant's
certification of legal authority.
Maximum Application Submissions
Local governments may only submit one Infrastructure project application per program cycle. A
project is defined as one or more activities submitted under the Infrastructure category.
Award Amounts and Administration Costs
The maximum award for an Infrastructure application is $750,000. There is no minimum amount. As
of 2012, IF will have a single pool of funds. CI will, however, give special consideration to economically
disadvantaged local governments. CDBG funded planning and administration limited to 12% of the
total CDBG costs. CI will allow reimbursement of pre-award costs incurred prior to the effective date
of the grant award that are essential to negotiating in anticipation of receiving the grant. The preaward costs are also subject to following proper procurement regulations at 24 CFR 85.36. For eligible
pre-award and administration costs, see OMB Circular A-87.
Grant Period
The grant period for IF is 30 months.
Matching Funds Requirements
Economically Disadvantaged Communities: There is no match requirement. However, an applicant
may have to include local funds if there are oversized lines or there is vacant land over ¼ miles or the
project is more than $750,000.
All Other Applicants: Matching local funds of 5% of the CDBG request are required (i.e., 5% of
$750,000 is $37,500). However, an applicant may have to include more than 5% if there are oversized
lines or vacant land over ¼ mile or the total costs exceeds $750,000.
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Examples of Matching Funds include revenue from property taxes, utility tax, sales tax, waiving of tap
fees. Local funds required because of oversized lines or vacant land may be included as part of the
match. Non-local funds such as grants or loans cannot be used as match.
Local Government Roles and Responsibilities
The local government’s roles and responsibilities are outlined in 24 CFR Part 570.501. As the
applicant, the local government is responsible as follows:
 Management and Oversight: The elected officials are legally, financially, contractually and
programmatically responsible for the CDBG project. The local government is responsible to the
State of North Carolina and the Federal government even if they have a contract administrator
or sub-recipient relationship.
 Financial Management: The local government must ensure proper accounting of funds in
order to avoid disallowed costs. This includes accurate identification of project costs and cash
balances and proper internal controls.
 Statement of Assurances and Certifications: The local government elected officials and
administrators should read and understand these documents and the implementation
obligations.
 Grant Agreement (24 CFR Part 570.501 and .502): If awarded, the local government will
receive a grant agreement and funding approval from the State. These documents are
contractually binding. The documents cannot be changed without State approval.
Use of an Experienced CDBG Administrator
The local government applicant must have the capacity to administer the proposed project with either
its own CDBG-experienced staff or the assistance of an experienced CDBG administrator (e.g., CDBGexperienced consultant, Council of Government, non-profit). “Experienced” means someone who has
administered more than one CDBG project. All applicants must also meet basic performance
requirements for prior CDBG grants.
Performance Measures
The Government Performance and Results Act of 1993 (GRPA) mandates that federal programs
improve their effectiveness and public accountability by focusing on results. The U.S. Department of
Housing and Urban Development (HUD) has developed the CPD Performance Measurements System
for recipients of HUD funds to use to fulfill the requirements of the Act. The Infrastructure Program
will use the following measures for all infrastructure activities except administration, which has no
performance measures.
Performance Measures for Infrastructure
Objective:
Creating Suitable Living Environments
Outcomes: (a) For new public lines where none previously existed or new system:
Accessibility
(b) For replacing existing lines or jurisdictional problem: Sustainability
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Threshold Requirements
Although the IF Program is a non-competitive program, CI will conduct a threshold review by verifying
that:
• the Letter of Interest and application were physically received at CI by the stated deadline;
• the applicant is an eligible applicant in this cycle (i.e., was invited to apply);
• CI received two complete original applications;
• the Application Summary Form is complete and signed by the chief elected official;
• the proposed project addressed the LMI national objective;
• the IF application is complete, ready, and feasible;
• the request does not exceed $750,000;
• the applicant has not received awards or have under consideration more than $1,250,000 in
applications at any given time in any of the CDBG categories and demonstration programs
except Urgent Needs, Scattered Site Housing and Capacity Building grants.
• previous CDBG grants were administered in compliance with applicable regulations, and all
monitoring and audit findings on closed or open grants were resolved;
• progress toward completing previous Economic Development and Micro-Enterprise grants
meet performance requirements set by the Commerce Finance Center; and
• CDBG grants are not opened beyond the contracted grant period; and
• neither the applicant nor a critical partner/sub-recipient is on the Federal or State Suspension
of Funds or Debarment list.
Problems with previous grants must be resolved to the satisfaction of CI. These threshold
requirements will be discussed with the applicant at its meeting with CI (if invited) unless the
problems are severe enough to prohibit moving forward in the process.
An applicant may be able to resolve the threshold issue between the date of the Letter of Eligibility
(Day 1) and the date the application is received by CI (Day 60), provided that no more than 60 calendar
days have lapsed.
Evaluation Criteria
Infrastructure applicants will be rated according to the following criteria:
 Severity of Need: This is based on the severity of the public water or sewer problem that
affects the entire jurisdiction with the remedy benefiting everyone equally. A local
government without public water or sewer would use the same percentage of on-site
problems identified above for the project area applications. These problems must be
documented by a public agency such as the North Carolina Department of Natural Resources
(DENR) or the local health department. Income and Need Surveys will also be reviewed for this
assessment.
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 Benefit: All project activities must meet a national objective in order to be eligible for CDBG
funds. There are three national objectives in the CDBG program. The LMI national objective is
applicable to the IF Program. Benefit to LMI people may be either area-wide or direct (actual
people served). LMI direct benefit must demonstrate at least 70% LMI and area-wide projects
at least 51% LMI.
 Feasibility of the Project: CI will review the project to ensure that the overall project makes
sense as proposed. This assessment will include a review of items such as the project
description, budget, funding sources, implementation timeline, proposed outcomes, and
accomplishment and beneficiaries’ forms.

Level of Readiness: In addition to the completed Preliminary Engineering Report (PER), the
public hearings, and the surveys of the beneficiaries, CI will review the strength of the
commitments, the completeness of the income and need surveys and/or LMI documentation,
and determine whether or not the project can begin implementation immediately after the
grant award.

Commitment of Local and Non-CDBG Funds (Leverage): In addition to the minimum local
match requirement, CI will credit projects for non-CDBG funds that exceed the minimum
requirement. All commitments must be identified and documented in the IF application.

Capacity: Community’s capacity and organizational structure that will be responsible for IF
Program. For example, someone will need to coordinate the various components. Someone
will need to see that all financing is firmly committed and matching funds spent, that contracts
are properly secured, that benefit is measured, etc. In addition, someone will need to
administer the grant. That is, someone will need to see that environmental reviews are
conducted, financial systems set-up, reports filed with the local board and CI, etc. There may be
a different coordinator of each of the components of the project or the same person may
coordinate all of them. While a coordinator and administrator are necessary for leadership and
management, a successful project needs an experienced competent team. To assist CI with this
assessment, submit an organizational chart that outlines the team members responsible for
implementation of the project. Create a bullet list of the team members/providers and what
activities/duties for which they are responsible. Also describe the capacity and experience of
each project team member for their component of the project. Attach resumes of project team
members in an appendix
Most important, a local government must meet threshold requirements for current or previous
CDBG grants and any state financing programs through the Commerce Finance Center. These
minimum performance requirements measure an applicant's capacity to adequately implement
and administer a CDBG program. CI will review progress on CDBG programs currently underway
in the locality, and will consider all unresolved audit and monitoring findings on active CDBG
grants in determining capacity.
 Overall Priorities: CI will review the applications given priorities to local governments that:
 Have projects with moratoriums or special order consents;
 Are classified as economically disadvantaged; and
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
Are addressing drought issues.
 Basic Required Criteria: All projects will be reviewed to ensure all required criteria are met.
Guidance on Eligible Infrastructure Activities
The Infrastructure Program Policies are attached to these guidelines and are designed to help
applicants to determine whether or not their projects meet the program requirements. Additionally,
some highlights are provided below.
Types of Public Water or Public Sewer Projects Acceptable for Submission and Level of Readiness
Simple water and/or sewer line installation
Simple in design - Project small enough to be easily completed - Only CDBG funds or combination
CDBG funds and Local funds
 Necessary public water or sewer lines, force mains, etc., to which the new lines in this
project will be connected, are already installed and working.
Preliminary Engineering Report (PER) completed.
 Final design and specs do not have to be completed prior to award.
 Engineer committed to preparing design and specs within 90 calendar days from release of
all grant conditions.
 Project will move through NCDENR’s design and specs phase and permit process easily.
 For Fast-Track Permitting: Projects must be in accordance with NCDENR’s permits,
regulations, and design criteria.
 Project ready to proceed to design once CDBG award made.
 Project will be completed prior to deadline to close out grant.
Complex water and/or sewer projects
Complex in design – Project Area or Jurisdictional-wide projects – Multi-funding sources
 If applicable, necessary public water or sewer lines, force mains, etc., to which the new
lines in this project will be connected, are already installed and working.
 Preliminary Engineering Report (PER) completed.
 NCDENR has approved final design and specifications.
 NCDENR has approved permits or has given preliminary or indication of approval.
 For Fast-Track Permitting: Projects must be in accordance with NCDENR’s permits,
regulations, and design criteria.
 All non-CDBG funding sources have been awarded.
 CDBG funds provide “gap” financing. (Documentation of other funds awarded must be
provided prior to meeting with CI.)
 Project ready to go to bid once CDBG funds received or permit and CDBG funds received
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
Project will be completed prior to deadline to close out grant.
Program Amendments, Budget Amendments and Budget Revisions
In an Advisory Notice called “Application Amendment” dated January 25, 2010 and posted on the
North Carolina Commerce website CI outlined the application amendment process. Additionally, in
September 2010, CI released Bulletin 10-3 which replaces Bulletin 96-2 which defines what constitutes
a change from the approved application and requires prior approval by CI. The Bulletin also outlines
the procedural requirements for submitting an amendment. When making any change to the
approved application, grantees should contact the CI Grants Management Representative (GMR)
assigned to the grant and discuss the changes. The GMR will assist the grantee with the program
amendment, budget amendment, and/or budget revision process.
When changing activities or the scope of the project, the environmental review record must be
updated. After revisions, the environmental review must be submitted to the CI Compliance Specialist.
Public Hearings
In order to meet the minimum requirements for citizen participation during the application phase, the
applicant must hold two public hearings to obtain citizens' comments prior to its submission to
Community Investment. Two public hearings are required to be held by the unit of local government
during the application process. Both hearings must be advertised in a newspaper having general
circulation in the area. The timing of the hearing notices must follow CDBG regulatory requirements,
including publication not less than 10 days or more than 25 days before the date of the hearing.
The first public hearing should be held at the beginning of the application process. The notice should
provide enough information about the project(s) to allow citizens to be able to provide input. The first
public hearing is required at least once every twelve months (or prior to submission of an application)
to discuss and receive feedback on housing, community and economic development needs.
The second notice of public hearing to obtain citizens' views must also contain a description of the
proposed activities to be carried out, including the total cost of the activities. The public hearing must
be conducted by the governing board of the applicant. The second public hearing should be held after
the application is drafted but prior to its submission to CI.
The publisher’s affidavit of the notices and minutes of the hearings signed by the local government
clerk must be submitted to CI as a part of the application and/or Funding Approval as outlined above,
if awarded.
Compliance Requirements
The local government is responsible for conformity with all Federal and State regulations governing
the CDBG program. Please refer to the Federal Certifications and State CDBG Regulations in the
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application for specific details. If you have questions about the documentation needed, please
contact the IF Program Manager for assistance.
Per the Housing and Community Development Act of 1974, as amended, the CDBG program has
certain federal and state requirements that must be met. Local government project administrators
should be familiar with the Act, along with rules published in the Federal Register of November 9,
1992 under 24 CFR Part 570. NC Administrative Code requirements of 4 NCAC Subchapter 19L (NC
Community Development Block Grant Program) must also be met.
It is important that applicants understand the commitment they will be undertaking with a CDBG
grant. This description of requirements and responsibilities of grantees should be read carefully.
Please contact CI Staff with any questions regarding federal program regulations. The following list is
intended to provide local government and business CDBG program participants with a brief list of
basic federal and state administrative requirements for compliance areas that must be addressed.
1. Conflict of Interest
Per 24 CFR Part 570.489 (h), the following people or their immediate family members shall not have
any direct or indirect financial interest in any contract, subcontract or the proceeds thereof for work
to be performed in connection with the grant during their tenure or for one year thereafter: 1)
employees or agents of the recipient who exercise any function or responsibility for the CDBG project,
and 2) officials of the recipient including members of the governing body. The applicant will be asked
to determine if a potential conflict exists. Questions regarding this item are in the program
application. Please note that sub-recipients must comply with these regulations as well. Consult with
Community Investment Staff regarding conflict of interest questions or North Carolina Community
Development Block Grant Program Regulations (4NCAC 19L.Section.0914).
2. Citizen Participation
Applicants must certify in their application that they are following a written citizen participation plan
that provides for access to information and participation in all stages of the project. This includes
proper advertising of public hearings in the non-legal section of a newspaper with general circulation
in the area, and timely access to meetings, information, and records related to the project. In addition
to a minimum of two public hearings before submitting a final application, a third hearing is required
prior to the formal close out of a grant after completion of all project activities.
Applicants must certify in their application that they are following a detailed citizen participation plan
which provides for and encourages citizen participation at all stages of the project, from initial design
and application through implementation and closeout.
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This plan must provide for reasonable and timely access to meetings, information, and records;
provide technical assistance to groups representative of low and moderate income persons that
request assistance; provide for public hearings at all stages of the community development program;
provide timely written answers to written complaints; and provide for the needs of non-English
speaking persons.
In order to meet the minimum requirements for citizen participation during the application phase,
applicant must hold a public hearing to obtain citizens' comments at the beginning of the application
process, and another hearing after the application is drafted but prior to its submission to CI. Public
hearing notices must be published at least once in the non-legal section of a newspaper having
general circulation in the area. The notice must be published at least 10 days but no more than 25
days before the date of the hearing.
The notice of public hearing to obtain citizens' views after the application has been prepared, but prior
to its submission to CI, must also contain a description of the proposed project(s), including proposed
project location, activities to be carried out, and total costs of activities. The governing board of the
applicant must conduct the public hearings.
Local governments also must provide citizens, especially residents of the proposed project areas or
those whose homes will be included, an adequate opportunity to participate in the planning and
development of CDBG applications beyond the public hearing requirements described above.
Examples of actions applicants may take to ensure adequate citizen participation in the application
stage include meeting with community groups and leaders prior to public hearings, holding
informational meetings for those citizens whose homes will be affected by the project and distributing
notices of meetings and public hearings directly to them. Applicants may also choose to distribute
public hearing notices to local community action agencies; legal services offices and other public and
private organizations.
Please note that the applicant certifies in the application Certification Form that it is following the
requirements described in the first paragraph of this section, and that it will adopt a detailed written
Citizen Participation Plan that includes these requirements if the project receives a grant award.
Applicants should refer to 4 NCAC 19L Section .1002(c) and (d) for information regarding the
development and implementation of this plan.
If funded, grantee will have documentation on file of compliance with citizen participation
requirements in the application process 4 NCAC 19L.1002(b): publisher’s affidavits of notices for and
minutes signed by the town or county clerk of the two required public hearings.
3. Program Income
Program income resulting from the CDBG project may be retained at the local level with approval from
CI. For example, program income will result from loan repayments or the sale of assets purchased
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with CDBG funds. Prior to expenditure of program income, the applicant must have a plan for reuse of
program income approved by CI.
4. Administration of Project
If funded, grantee will meet minimal levels of supervision in implementing the project as follows:
(a) Administrators of the project will give at least quarterly written status reports to the elected
board.
(b) At least two persons from the local government will review invoices and requests for
payment.
(c) The local government manager reviews and signs off on all project reports.
(d) All project files will be maintained at the local government offices and made available to
citizens during regular business hours.
5. Audits/Compliance
CDBG grantees expending $25,000 or more in a fiscal year are required to have funds audited for the
CDBG program. CDBG funds can be used to pay for the CDBG portion of the audit provided the
grantee has expended $500,000 or more in the fiscal year in total federal awards (CDBG and other
federal funds). If the grantee has expended less than $500,000 in total federal awards, the grantee
may budget local funds in the administrative line item in the CDBG application to pay for the CDBG
portion of the audit and claim the local administrative funds as local commitment.
6.
Water and Wastewater (When using CDBG funds for water and wastewater activities.)
If funded, grantee will adhere to the following:






Utilize only 6” to 8” diameter lines for water and 6” to 12” diameter lines for sewer unless
there is an engineering explanation acceptable to CI; otherwise, it will pay the costs of any
oversized lines or undersized lines.
Install residential water and/or sewer improvements serving no more than 1/4 mile of vacant
land unless there is an explanation acceptable to CI.
Provide the following: (a) an on-site service connection (private property) to all occupied LMI
dwelling units; and (b) provide a service lateral (public property) to vacant occupiable dwelling
units owned by a LMI owner.
The CDBG Program does not permit a local government to charge low and moderate-income
beneficiaries tap fees, assessments, or impact fees for water or sewer improvements.
If undertaking water improvements, maintain an approved water supply plan as required by
G.S. 143-355 on file or a plan has been submitted for approval.
Adopt an acceptable sewer use ordinance in a public sewer project which will be placed in
effect on or before completion date of the project and has established an equitable schedule
of fees and charges for each category of users that will provide sufficient revenue for adequate
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

operation, maintenance, administration, and reasonable expansion; or is in the process of
adopting such an ordinance as described above.
Use CDBG funds or local funds in an infrastructure project to clear all abandoned outhouses or
septic tanks in accordance with local health department regulations.
Use CDBG funds or local funds to close or cap all wells in accordance with local health
department regulations.
7. Costs Associated with Preparation of the CDBG Application
Applicants that receive CI funding approval for project(s) may charge the cost of application
preparation to a current program provided that procurement procedures consistent with 24 CFR 85.36
are followed.
8. Procurement
The grantee must have a written Procurement Policy that meets the requirements specified in 24 CFR
85.36. The procurement procedures must reflect applicable State and local laws should promote free
and open competition, and describe efforts to encourage minority and female owned businesses to
submit bids/proposals. Grantees must contract for the procurement of goods, services, and
construction projects including design services. CDBG grantees must enter procurement solicitation
for any contract over $25,000 in the Statewide Interactive Purchasing System (IPS) as well as provide
the information to the CI Compliance Office. All notices must be posted in IPS at least three days
before the procurement process begins.
The local government only must set-up in IPS to post solicitation documents electronically. The
process takes 15 minutes. The local government should contact N C Department of Administration at
(919) 807-4502 or www.ips.state.nc.us for information.
The use of IPS will be added to the program compliance monitoring process. Grantees must also
ensure compliance with 24 CFR 85.36 Procurement Process in addition to the IPS requirement.
9. Equal Opportunity
Applicants are required to insure that CDBG aided projects comply with equal opportunity and
nondiscrimination laws and that people in protected categories are not excluded from project
participation.
Applicants are required to take into consideration equal opportunity and non-discrimination laws in
designing CDBG programs to insure that people in protected categories are not excluded from
participation, denied the benefit of, or subjected to discrimination under any program or activity
funded in whole or in part with CDBG funds. The recipient of CDBG funds must describe the actions it
will take annually for each year the grant is open in the areas of enforcement, education and removal
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of barriers and impediments that affirmatively further equal access in employment and procurement.
This includes a description of steps to be taken in the areas of advertisement, compliance and
complaint tracking.
10. Fair Housing
Recipients of CDBG funds will be required to comply with fair housing and non-discrimination laws and
regulations. Applicants should consult Section .1001 of the CDBG administrative rules for further
information on equal opportunity requirements. Applicants will be required to submit a Fair Housing
Plan for the municipality and/or county. Applicants with 10,000 persons or more will be required to
complete an Analysis of Impediments to Fair Housing Choice Study. For each year that a CDBG project
is active, a recipient must describe the actions it will take in the areas of enforcement, education and
removal of barriers and impediments to affirmatively further fair housing. For guidance for developing
a Fair Housing Plan, grantees will refer to CI Bulletin 10-25 and the Implementation Notebook.
11. Language Access Plan (LAP)
As recipients of federal financial assistance, grantees have an obligation to reduce language barriers
that can preclude meaningful access by Limited English Proficient (LEP) persons to important
government programs, services, and activities. Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000(d)
and its implementing regulations require that recipients take responsible steps to ensure meaningful
access by LEP persons. Applicants will be required to submit a Language Access Plan using the
approved recommended template from CI. The plan will be submitted for municipality and or county
using the thresholds established by CI. The plan will address the LAP policy, translation of required
vital documents, and requirements for citizen participation.
12. Local Economic Benefit (Section 3)
Section 3 of the Housing and Urban Development Act of 1968, as amended, contains requirements
governing programs providing direct financial assistance to public recipients and related contractors
(or subcontractors).
For each year that a CDBG is active, a recipient must describe a strategy whereby opportunities in
employment and procurement arising out of a CDBG assisted project are identified and made available
to low income residents within the CDBG assisted area to the greatest extent feasible. This strategy
must include (1) identification of training and technical assistance resources to prepare low income
residents for employment and procurement opportunities, (2) attempts to reach the numerical targets
for new hires set forth in the Section 3 regulation, which applies to recipients receiving $200,000 or
more in non-administrative line items expended for construction contracts of at least $100,000 per
contract, and (3) education of low income residents within the CDBG assisted area about the
components and opportunities of the program. Once applicants are awarded funds, recipients will be
required to submit a Section 3 Plan using the approved CI template. In addition, applicants will be
required to coordinate additional activities as it relates to Section 3 with the CI Compliance Section.
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13. Environmental Review
Recipients of CDBG funds are required to comply with comply with the requirements of the National
Environmental Policy Act of 1969 (NEPA) found at 24 CFR Part 58 and the NC State Environmental
Policy Act and complete an Environmental Review Record (ERR). Do not submit ERR with the
application. Please follow procedures outlined in CI’s Environmental Technical Assistance Handbook.
Copies of the ERR can be secured from CI and/or on the North Carolina Department of Commerce
website, under Community Development Block Grant, Forms and Resources, Compliance Plans and
Templates, Environmental Review Process
[http://www.nccommerce.com/communitydevelopment/investment-assistance/formsresources/compliance-plans-and-templates/environmental-review-process]. 24 CFR Part 58
(Environmental Regulations) require certain notices to be prepared and published by the local
government applicant. This procedure is described in 24 CFR 58.40-47 and requires certain time
periods to be allowed for public comment. CI must receive evidence of the publication of these
notices as well as a Request for Release of Funds and Environmental Certification. Upon CI
determination that the public comment periods have elapsed, CI will issue a letter approving the
release of funds. No CDBG funds for non-administrative activities will be released prior to the date of
issuance of the letter approving the release of funds. Compliance Staff should be contacted
concerning questions with the environmental review process.
14. Floodplain
Recipients must provide CI with a certification signed by the CEO stating that the project area is not in
a floodplain; or with certification that the recipient participates in the floodplain insurance program,
all properties assisted in the project will be covered for floodplain insurance prior to beginning
construction of the property, and all public facilities will be constructed to comply with the applicable
floodplain regulations.
15. Section 504 of the Rehabilitation Act of 1973
The local government applicant must complete a Self-Evaluation plan and Transition Plan (if required)
as required by Section 504 to insure that it does not discriminate by reason of a person's disability.
Recipients of CDBG funds are required to comply with the provisions of Section 504 of the
Rehabilitation Act of 1973, as amended, and the HUD implementing regulations at 24 CFR, Parts 8 and
9. The requirements of Section 504 apply to any recipient of federal CDBG funds for any program or
activity carried out directly or through another recipient, successor, assignee, or transferee.
The Grant Agreement will require recipients to complete the Section 504 Survey and Transition Plan,
covering policies, practices and physical accessibility and notify affected persons that it does not
discriminate on the basis of handicap. (The latter notification action is a requirement if the recipient
has 15 or more employees.) This plan will not satisfy all the requirements of the Americans with
Disabilities Act, but it will meet the minimum requirements for a CDBG assisted project.
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16. Residential Anti-Displacement and Relocation Assistance Plan
A plan for residential anti-displacement and relocation must be documented or submitted with the
application.
All occupied and vacant occupiable low and moderate income dwelling units demolished or converted
to a use other than as low-moderate income housing must be replaced within three years of the
commencement of the demolition or rehabilitation related to the conversion.
Once CDBG funds are awarded, recipients must have a plan to minimize residential displacement and
to provide relocation assistance to displaced residents in a timely manner. Compliance with the plan
must be documented, including the information made public and the means used to make it public.
The plan must include a description of the activity, a location map, a time schedule, dwelling data on
target and replacement homes, funding sources, a schedule for replacement or relocation and the
basis for concluding that replacement dwellings will remain low/moderate income for at least 10
years. A guide form for developing the plan should be obtained from CI once an award is received.
Note: Due to potential changes regarding compliance with the Uniform Relocation Assistance and
Real Property Acquisition Policies Act (URA) and Section 104 (d) of the Housing and Community
Development Act, potential projects involving acquisition, relocation, and demolition will be reviewed
closely by CI. Program Bulletin 94-1 will be revised and other documents provided to clarify the new
requirements.
17. Davis-Bacon and Related Labor Acts
Construction contracts financed whole or in part with CDBG funds must comply with Davis-Bacon and
Related Acts (DBRA). Local government grantees are responsible for enforcement of the DBRA
requirements, such as on-site interview of workers, review of contractor's payrolls, and conducting a
pre-construction conference. Construction contracts in excess of $2,000 "financed in whole or in
part..." with CDBG program funds require specific minimum wage levels.
Recipients will also be required to comply with any subsequent requirements issued by the U.S.
Department of Housing and Urban Development (HUD) and/or the Community Investment.
Public Facilities
Public facility contracts in excess of $2,000 must comply with Davis-Bacon and Related Acts.
Private Facilities constructed with CDBG Funds
Contracts in excess of $2,000 for building constructed with CDBG funds, must comply with Davis-Bacon
and Related Acts.
Rehabilitation of Single Family Dwellings
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As a rule, Davis-Bacon and Related Acts (DBRA) do not apply to the rehabilitation of a single-family
dwelling. However, under special circumstances the rehabilitation of eight or more single dwellings,
typically rental units, can trigger DBRA. To avoid any delays in the rehabilitation program, applicants
are encouraged to determine if their projects have the potential for triggering DBRA at the time of
application.
HUD has established the following criteria as a test to determine when "related" units become a
covered "property" governed by DBRA:
(1) The property includes eight or more units.
(2) The property initially will be commonly operated, meaning dwellings are to be rehabilitated as part
of the CDBG project activities.
(3) The property initially will be commonly owned.
(4) The property for the most part is located on contiguous lots or parcels.
For situations where it is unclear as to whether the "contiguous lots" criterion is applicable, CI will
request a determination from HUD officials. Grantees are responsible for initiating the request with
CI, and should allow 45 days for a reply.
18.
Americans with Disabilities Act (ADA)
State and local governments are required to comply with the provisions of Title I of the Americans
with Disabilities Act (ADA) which protects qualified individuals with disabilities from discrimination in
all state and local government programs and activities including employment.
Governments with 25 or more employees were subject to the law after July 26, 1992, and
governments with 15 or more employees after July 26, 1994. If a government is not covered by Title I
of the Act, Section 504 of the Rehabilitation Act of 1973 applies. All governments receiving federal
financial assistance will continue to be covered by Section 504. CI will continue to monitor for only
Section 504 compliance until otherwise required by HUD.
19. Lead-Based Paint Hazards
Projects involving rehabilitation of residential structures require compliance with the federal LeadBased Paint Hazard Reduction Act of 1992 and the "Lead-Based Paint Hazard Reduction Guidelines"
issued November 1, 1993 by CI. While residential structures are not likely to be involved with most
Infrastructure projects, local government grantees are advised to determine state and county health
requirements if there is any rehabilitation or demolition of structures that are likely to have leadbased paint present.
20. Reporting
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Recipients must submit written quarterly progress reports to CI. In addition to providing an update on
the status of project activities, jobs created, and financial expenditures, CI will expect participants to
share their success stories with CI. CI requests copies of all published press articles, TV coverage,
scheduled ribbon cuttings, and other events and milestones. Periodic photographs should document
project stages, training, events and successes.
An Annual Performance Report (APR) is due at the close of each calendar year and an annual financial
audit of the CDBG program is due at the close of each fiscal year in which at least $25,000 in CDBG
funds were received. The audit may be performed in conjunction with the regular independent audit
of the recipient and will contain an examination of all financial aspects of the CDBG program as well as
a review of the procedures and documentation supporting the recipient’s compliance with applicable
statutes and regulations. A Final Performance Report and audit will be required prior to grant
closeout.
21. Monitoring
CI will monitor the project through mechanisms, including review of quarterly and annual reports
received from the grant recipient, through phone/email/letter correspondence, through receipt of all
published press articles about the project as provided to CI by the local government, and through onsite monitoring visits.
CI staff will notify the grantee at least 10 days before on-site monitoring visits and will provide copies
of monitoring forms to be used. Any performance findings or administrative concerns resulting from
the monitoring review must be mutually resolved before a grant can be formally closed.
22. Demonstration Program Participation
By participating in this CDBG grant program, grant recipients agree to be a part of a state-wide
demonstration/pilot program. As a part of such a demonstration program, CI will expect participants
to share their success stories with CI and with other program participants throughout the program. CI
requests copies of all published press articles, TV coverage, scheduled ribbon cuttings, and other
events and milestones. Periodic photographs should document project stages, training, events and
successes.
23. Financial Management Requirements
CI will monitor the grantee to determine compliance with the financial management requirements. In
particular, the review will determine if records are maintained in compliance with 24 CFR Part 85,
OMB Circular A-87 and other State of North Carolina requirements. This monitoring is performed
through desktop audit and at each on-site visit. Typically, ledgers, invoices, canceled checks, bank
statements and requisitions are reviewed to see that the grantee has an adequate system of financial
management. CI staff may also make specific requests to review information or documentation
relating to financial management of a grant.
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24. CCR Registration
The Federal Funding Accountability and Transparency Act (FFATA) of 2006 mandates specific reporting
requirements for recipients of federal funds. Grants Administration is required by FFATA to submit
information to the Office of Management and Budget (OMB) through an electronic Sub Award
Reporting System (FSRS) on all grant awards greater than $25,000 which are awarded on or after
October 1, 2010. In order to report in this system, each sub award recipient is required to register in
the Central Contractor Registration (CCR) system. The CCR is a government-wide registry for
organizations that do business with the federal government.
For all CDBG grants equal to or greater than $25,000 awarded after October 1, 2010, the recipient
must register with the Central Contractor Registration (CCR) system. The CCR system may be accessed
online at http://www.ccr.gov .
Since Community Investment is required to report information as a part of FFATA for grants awarded
after October 1, 2010, the CCR registration will be required prior to submission of a CDBG application.
Once obtained, the CCR registration must be updated or renewed at least once a year. CI staff will
monitor for compliance with this requirement.
25. Use of NC Licensed Professionals
While not mandatory, CI strongly encourages the use of North Carolina licensed professionals on all
projects. This includes housing inspectors, electricians, HVAC installers and repairers, plumbers, and
general contractors.
26. Other Requirements and Attachments
Recipients will also be required to comply with any subsequent requirements issued by HUD and/or
Community Investment. Consult the IF Application Checklist in the application. Please note that if key
items are not submitted with the application, it will be returned to the local government.
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Application Process and Submission Requirements
There are three (3) steps in the process for applying for funds for the Infrastructure Program.
STEP 1: Submit a Letter of Interest
Potential applicants must submit a Letter of Interest (no telephone calls) signed by the chief elected
official including statements that:
(a) a Preliminary Engineering Report (PER) (or, if appropriate, final design and specs, permits
ready, all funding in place); and
(b)
Income and Need surveys of beneficiaries completed. (See guidance and form on
www.nccommerce.com .)
The following must also be attached to the Letter of Interest to be considered:
o Preliminary evidence of a first public hearing: copy of notice, affidavit of publication and
minutes of the public hearing.
o Documentation of need from an official source – health department or the appropriate state
agency or regional office in the Department of Environment and Natural Resources.
o A completed Preliminary Information Form.
A potential applicant may then be invited to a meeting based upon CI receiving all the information
listed above and based on the IF Program priorities.
The letter of interest cannot be postmarked or delivered prior to the opening of the window on
Friday, August 31, 2012.
STEP 2: Meet with CI Staff.
a. A local government staff or elected official, the engineer, and the preparer must attend the
meeting.
b. To show readiness, the local government must bring the following to the meeting:
 Copy of certified minutes of the public hearing if not available to send with the letter of
interest.
 Preliminary Engineering Report (PER)
 Preliminary map of the project area showing the proposed lines and houses in the project
area.
 For complex projects, any documentation on design/specs, permits, and/or
correspondence with or from NCDENR.

Letters of commitment from other funding sources
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



Information as to whether infrastructure with sufficient capacity is currently available to
connect to proposed CDBG-funded lines. If not, the proposed project is not eligible for
funding.
Copies of income surveys to show low and moderate-income benefit. (Please do not bring
originals. Be sure the surveys comply with the guidance found on www.nccommerce.com .)
For jurisdictional-wide projects, local governments may need to bring additional information
as well as need surveys.
CI will send either a (1) Letter of Eligibility or (2) Letter of Ineligibility to the local government.
o If eligible, application forms will be provided to the local government’s preparer.
o Funds will be tentatively earmarked for a period not to exceed 60 calendar days. (Day 1
is date of Letter of Eligibility).
STEP 3: Submit Application to CI.
Award of funds is not guaranteed.
Note: CI will not accept applications from local governments unless they have followed Steps 1-2
and have a Letter of Eligibility.
Infrastructure Program Contact
The Infrastructure Program Manager will provide technical assistance to municipalities and counties
applying for infrastructure funds. Technical assistance is available at any time during the program
year. Local governments and their representatives can discuss questions concerning the application
and requirements with program development staff by telephone, e-mail, or fax machine prior to and
during the application process. For technical assistance, please contact:
Iris C. Payne, Neighborhood Stabilization, Program Development, and Compliance Section Chief
(919) 571-4900, extension 249
ipayne@nccommerce.com
Submission of Application
An applicant may submit an IF Application once it has received a Letter of Eligibility. The IF Program
Manager will e-mail an electronic copy of the forms to the preparer.
Application packages may be submitted by mail, overnight delivery or in person, but they must be
physically received (not postmarked) by CI’s Raleigh office by 5:00 p.m. on the 60th calendar day from
the date of the Letter of Eligibility. Day 1 is the date on the letter. The IF Program Manager is
available should you have questions.
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Deliberate Misrepresentation of Information (commonly called fraud)
Applications will be reviewed based on the information and numbers given by the applicant whose
chief elected official has certified the correctness of the contents. Any determination that deliberates
misrepresentation (or fraud) has occurred will result in the disqualification of the applicant and/or
the rescission of a grant at any point from the award to closeout.
Applicants must submit two (2) complete originals of the application. Both applications must have
the original signature of the chief elected official on the Application Summary Form and any other
documents that require official signatures.
If using the U. S. Postal Service, mail to:
Vickie L. Miller, Director
Community Investment
N C Department of Commerce
4313 Mail Service Center
Raleigh, N.C. 27699-4313
If using overnight or in-person delivery,
deliver to:
Community Investment
NC Department of Commerce
Anderson Plaza
100 E. Six Forks Road, 2nd Floor
Raleigh, N.C. 27609
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Infrastructure Program Policies
It is important that potential applicants understand the commitment they will be undertaking if they
are awarded a CDBG grant for an Infrastructure (IF) project. These policies detail the description of
requirements and responsibilities of applicants and grantees, and should be read carefully before
deciding to apply for CDBG funds.
Once a decision has been made to apply for CDBG funds, an applicant should also keep the
information below in mind as the application is being designed and developed.
A.
Policy for Completion of Grants within 30 Months
The recipient must satisfy all Funding Approval Conditions to release CDBG funds within 3
months from the date the CI Director executed the Grant Agreement and Funding Approval.
CDBG grantees must obligate all funds within 27 months of the date of the CI Director’s
signature on the Grant Agreement and Funding Approval. Obligated funds are funds
committed by a contract that has been executed by all parties. Funds not obligated within the
27 month period will be de-obligated by CI. All CDBG and non-CDBG funds must be expended
within 30 months of the date of the CI Director’s signature on the Grant Agreement and
Funding Approval. Expended means the grantee has mailed payment to pay an obligation.
Extensions will only be granted on an individual basis and must be based on extenuating
circumstances.
C.
Existing Water or Sewer Lines
In developing an infrastructure application, it is important not to claim as existing lines, water
or sewer lines that are planned, but have not yet been installed. An existing line is one that is
already in the ground and in use by residents along the line. Lines that are to be installed but
are delayed because of readiness to proceed or funding problems are not “existing” lines. If
the proposed project needs to connect to a line that does not meet the above definition of an
existing line, the project is not eligible for submission or funding.
D.
Preliminary Engineering Report (PER)
CI requires a comprehensive Preliminary Engineering Report (PER) to be completed prior to
submission of the Letter of Interest. The front page or cover must be signed and sealed by an
engineer licensed to practice in North Carolina. The PER should provide information on the
community and on the proposed project. It will be used by CI to review the feasibility and
structure of the proposed improvements. The PER should describe the current situation and
analyze the alternatives for addressing the water
or sewer need(s). An Environmental Assessment is not required to be conducted as part of
the PER. At a minimum, the PER must include the following unless nonapplicable:

Description of the project area including the larger planning area if part of a larger
plan.
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










Provide map(s) of the project area showing a schematic layout. Include scale and
legend. Include maps of other alternatives, if appropriate.
Describe the existing water or sewer system, either on-site or public.
Describe the critical need for the project as it relates to health and environmental
consequences.
Describe the alternatives available or considered.
Describe fully the selected alternative for the project. (If applicable, provide an
explanation for using pipe diameters less than or more than 6” – 8” water or sewer
if such diameters are necessary or essential to the project.)
Describe the project design. In a small project, the description may be part of the
above selected alternative description.
Provide a discussion of easements or right-of-way and any street repairs necessary
to the improvement.
Provide an itemized estimate of the project based on costs anticipated at the time
of bid and on the anticipated period of construction.
Provide an annual operating budget including income from an attached rate
schedule and project operating and maintenance costs. For local governments with
no public water or public sewer, attach the proposed rate schedule.
Provide information on permits needed and how long it will take for their receipt
once application is made to the N.C. Department of Environment and Natural
Resources (DENR).
Provide a section on conclusions and recommendations.
Note: All 12 items are important in the review of the project and must be addressed. (Put N/A if an
item does not apply to your project.) If the engineer has not addressed the applicable items, the
PER must be revised to satisfy this requirement.
The requirements for the PER are primarily based on requirements set by the North Carolina
Rural Economic Development Center, Inc. and the North Carolina Department of Environment
and Natural Resources. More detailed information on preparing a PER is available at the
following web sites: www.ncruralcenter.org and www.nccgl.net.
E.
Proposed Water or Sewer Lines
If the diameter of the water or sewer lines will be less than the required 6 to 8 inch diameter
allowed, the PER must explain why using smaller diameter pipe is necessary or essential to the
project. If larger diameter pipe is necessary or essential, the PER must contain an explanation.
Unless approved by CI, the local government will be solely responsible for the increased costs
of the larger line. Even if the explanation is acceptable, the applicant is expected to
contribute partial funding for the increased costs of the larger line. CDBG funds cannot be
used to connect over income persons.
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F.
Vacant Land Policy
CDBG funds can pay for water or sewer lines through vacant land (one or both sides) up to ¼ of
a mile. Non-CDBG funds must be committed to the project for vacant land beyond the ¼ mile
limit. Vacant land is measured from structure to structure at the time of the application. Nonresidential structures built on these sites following submission of the application cannot be
connected during the grant or for five (5) years following close-out of the grant unless the
grantee establishes a recovery assessment policy to recapture the capital cost of the line that
runs by the non-residential property being served. The assessment policy must also address
over-income residents served by the CDBG-funded line. Grants will be conditioned for an
assessment policy approved by CI.
Funding Eligibility Criteria
A. ELIGIBILITY REQUIREMENTS FOR APPLYING
Applicants must meet or exceed the following criteria:
1. Project Area Application:
Severity of Need
For each activity (water or sewer), there must be an overall minimum need of 76% of the
households with the following minimum requirements for severe and moderate need:
c. At least a minimum of 51% residential occupied houses must have a severe need.
d. No more than 25% of residential occupied houses can have moderate needs.
Severe and moderate needs must be based on a 100% survey of beneficiaries documented by an
official source* as having health or environmental consequences by an official source.
*(i.e. Health Department or Department of Environment and Natural Resources)
Benefit
For each activity (water or sewer), there must be a minimum of 70% benefit to low and moderateincome households in the project area. Applicants must ensure that activities do not benefit
moderate-income households to the exclusion of low-income persons, and that all funds are spent in
support of a national objective.
NOTE: In order to have benefit, once the lines are installed and operating, a house must be
connected to the line and the household must use the line.
 Income and Need Survey (See www.nccommerce.com for guidance and form.)
Benefit information must be based on a 100% survey of the household beneficiaries. Benefit
information must be collected on CI's “CDBG Income and Need Survey for Infrastructure”. Applicants
must submit two copies of the completed Income and Need Survey form for each household included
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in the project area. Originals should be retained in the applicant's files and kept separate from the
need surveys and other application documentation in order to maintain confidentiality.
Water and Sewer Problems Eligible for Treatment
These must be current problems at occupied residences. At least 51% of occupied residences must
currently have these severe water or wastewater problems. Moderate need conditions are listed on
the survey form included in Part A of the Application. (Problems caused by lack of maintenance are
not eligible.)
The following chart gives the severe water and wastewater conditions. If a condition is not listed,
then it is considered a moderate need.
Severe Water Problems
No water supply on-site
Contaminated water
Non-potable water
Dry well
Spring
Unapproved well
Public water failure: health/environment risk
Severe Wastewater Problems
No wastewater disposal system on-site
Pit privy
Black water straight piping
Failed septic tank
Public sewer failure: health/environment risk
2. Jurisdictional-Wide Application:
Severity of Need
Need is based on the severity of the public water or sewer problem that affects the entire jurisdiction
with the remedy benefiting everyone equally. A municipality without public water or sewer would use
the same percentage of on-site problems identified above for project area applications. These
problems must be documented by a public agency such as the North Carolina Department of
Environment and Natural Resources (DENR) or the local health department.
Benefit
There must be at least a 51% benefit to low and moderate-income people based on HUD Statistical
Data or a statistical method approved by CI.

Area-Wide Benefit
Applicants treating a system-wide problem that affects or may affect the health of residents within the
jurisdiction may be able to use HUD’s Low/Moderate Income Census Tract Data to establish LMI
benefit if the jurisdiction is 51% LMI. Applicants will need to be able to provide proof that all
households are hooked up. Applicants wanting to use this method must consult with their technical
assistance provider in Program Development.
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B. FEASIBILITY OF PROJECT
Project costs are expected to meet “usual and customary” standards for projects of similar scope. If
not, there must be an engineering explanation acceptable to CI. The cost per beneficiary household
will be reviewed to ensure that the cost is reasonable and can be justified given the activities and the
scope of the project. However, in estimating projects costs, an engineer must take into consideration
what the future costs of materials will be at the time of bids.
C. PROJECT REQUIREMENTS
The only eligible activities in infrastructure are related to public water and public wastewater (sewer)
to benefit homes in residential neighborhoods. Street repairs only to the extent necessary to repair
surfaces dug up in laying pipe may be included in the public water or public sewer budget line items.
Under certain circumstances, extension of a new line to reach the project area or repair of water leaks
caused by installation of the new line may also be allowed. Infrastructure allows only one project and
one project area in the project. A project cannot include 2 sub areas although a sub area may be
allowed when a line must go through an area of only 51% low and moderate-income (LMI)
households to reach the intended project area and the combined LMI percent will be less than 70%.
Projects may carry out either public water or public wastewater (sewer) activities or both.
D. LOCAL OPTION ELIMINATED
The Infrastructure Application no longer has a local option component. Activities normally carried out
under local option may be part of the regular project. These include (1) extending water and
wastewater (sewer) lines through an area of lower LMI benefit to reach the desired project area, and
(2) repairs to a LMI household’s plumbing if documented that water problems such as leaking pipes
were caused by the installation of the new water lines. Clearance of vacant units is no longer an
eligible activity.

Project Areas
All activities in an infrastructure application must be carried out within a project area. Project area
means the area in which project activities will occur that meets the following criteria:
Municipalities: (1) is developed for urban purposes whereby 60% of the area is used for
residential, commercial, industrial, institutional or governmental* purposes and is
subdivided into lots and tracts five acres or less in size according to the small municipality
annexation statute at NCGS 160A-36(c); (2) has conditions which qualify it as a blighted area
according to the redevelopment statute** at NCGS 160A-503(2); and (3) has ten or more units.
Counties: (1) is predominately residential* regardless of acreage size of lots and tracts; (2) has
conditions which qualify it as a blighted area according to the redevelopment statute** at
NCGS 160A-503(2); and (3) has ten or more units.
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*Only residential areas are eligible for CDBG assistance.
**An area only has to meet the conditions described in the statute; it does not have to be a
redevelopment area.

Project Area Boundaries
For infrastructure projects, project area boundary lines must follow property lines or streets or natural
topographical features such as gullies, dry creek beds, creeks, streams, rivers, ridge lines, and the base
of a hill or mountain, wetlands, etc. Each parcel within the project area should share a boundary line
with (1) another property or (2) the public right-of-way included in the project area. The project area
must encompass both sides of a street or public right-of-way so that all properties that will benefit or
could benefit from the improvements are included. No properties may be excluded from a side. The
map must include individual property lines for every property.
Note: Activities considered the responsibility of local governments for on-going maintenance,
repair, and replacement of public facilities are not eligible for funding in the CDBG program.
Problems caused by lack of maintenance including repairs and replacement are still considered the
responsibility of the local government.
Definitions for Water and Wastewater (Sewer)
WATER
1.
Water Supply System
a. A “water supply system” as defined for the NC Department of Environment, Health and
Natural Resources by GS 159G-3 means “a public water supply system consisting of facilities
and works for supplying, treating and distributing potable water including but not limited to,
reservoirs, wells, intakes, water filtration plants and other treatment facilities, tanks and other
storage facilities, transmission mains, distribution piping, pipes connecting the system to other
public water supply systems, pumping equipment and all other necessary appurtenances,
equipment and structures”.
b. Water supply or distribution lines in the CDBG Program refer to the lines supplying water to
residential neighborhoods.
2.
An eligible water supply system: The system is owned by a unit of local government including
counties, cities, towns, incorporated villages, county water and sewer districts, and water and sewer
authorities.
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3.
Water Problems
a.
Contamination in public drinking water
(1) Contamination constituting acute health risks
Contamination under the State CDBG program refers to micro-biological or parasitic
contamination that adversely affects health. (Contaminant levels in drinking water
which constitute acute health risks are defined in 40 CFR 141.32 (a) (1) (iii) which is
incorporated by reference at 15A NCAC 18C .1523.)
(2) Other contamination
Other contamination under the State CDBG program refers to the presence of
(1) organic chemicals including but not limited to gasoline, herbicides, pesticides, and
solvents or (2) inorganic chemicals including but not limited to nitrates, lead, mercury in
such quantities that the water does not meet drinking water standards contained in
Title 15A Subchapter 18 C of the NC Administrative Code.
b.
Contamination in drinking water from private on-site wells
(1) Contamination constituting acute health risks
Contamination under the State CDBG program refers to micro-biological or parasitic
contamination that adversely affects health. (Contaminant levels in drinking water
which constitute acute health risks are defined in 40 CFR 141.32 (a) (1) (iii) which is
incorporated by reference at 15A NCAC 18C .1523.)
(2) No potable water from on-site wells (including heavy mineral content)
No potable water under the State CDBG program refers to the presence of the
following other contaminants: (1) organic chemicals including but not limited to
gasoline, herbicides, pesticides, and solvents or (2) inorganic chemicals including but
not limited to nitrates, lead, mercury in such quantities that the water does not meet
drinking water standards contained in Title 15A Subchapter 18 C of the NC
Administrative Code.
c.
Inadequate water quantity or pressure
This refers to shallow wells that run dry, or small sized or corroded pipes with little or
no pressure or flow.
WASTEWATER (SEWER)
1.
Wastewater (Sewer) System
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a. A wastewater (sewer) system refers to the wastewater collection system or a wastewater
treatment works.
(1) A “wastewater collection system” as defined for the NC Department of
Environment, Health and Natural Resources by GS 159G-3 means “a unified system of
pipes, conduits, pumping stations, force mains and appurtenances other than
interceptor sewers for collecting and transmitting water-carried human wastes and
other wastewater from residences, industrial establishments or any other buildings, and
owned by a local government unit”.
(2) “Wastewater treatment works” as defined for the NC Department of Environment,
Health and Natural Resources by GS 159G-3 means “the various facilities and devices
used in the treatment of sewage, industrial waste or other wastes of a liquid nature,
including the necessary interceptor sewers, outfall sewers, phosphorous removal
equipment, pumping, power and other equipment and their appurtenances”.
b. Sewer collection lines in the CDBG Program refer to lines that collect sewage in residential
neighborhoods.
2.
An eligible sanitary sewer system: The system is owned by a unit of local government
including counties, cities, towns, incorporated villages, county water and sewer districts, and
water and sewer authorities.
3.
On-Site Wastewater Problems
a. Failed Septic Tank
Effluent surfacing at all times adversely impacting ground water quality or violating ground
water quality standards.
b. Periodically Failing Septic Tank
Effluent surfacing during periods of high use resulting in increased loading or effluent
surfacing when the water table is high adversely impacting ground water quality.
c. Black Water Straight Piping
Untreated wastewater from toilets and other indoor plumbing fixtures that flows directly to
the outside to a ditch or a body of water without going through an on-site wastewater
disposal system such as a septic tank.
d. Gray Water Straight Piping
Untreated wastewater from one or more indoor fixtures (e.g. washing machine or kitchen
sink) that flow directly to the yard or ditch without going through an on-site wastewater
disposal system such as a septic tank except the toilet which is connected to the septic tank.
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CONTAMINATION IN DRINKING WATER
In order to claim contamination in drinking water, applicants must be able to provide evidence that
the need identified in the application is based on one of the following five (5) health risks:
1. Contaminant levels in drinking water which constitute acute health risks as defined in 40 CFR
141.32 (a) (1) (iii) which is incorporated by reference at 15A NCAC 18C .1523.
2. Unreasonable risks to health from contaminant levels in drinking water as determined by the US
Environmental Protection Agency or the Environmental Epidemiology Section of the Department
of Environment, Health, and Natural Resources pursuant to the Guidance in Developing Health
Criteria for Determining Unreasonable Risk to Health.*
3. Contaminant levels in drinking water other than those which constitute acute health risks
described in item 1.
4. Inadequate treatment to remove or abate contaminant levels in drinking water.
5. Insufficient water for drinking or for sewage disposal purposes or inadequate water pressure to
prevent contaminant levels in drinking water.
* This material is available for inspection at the Department of Environment, Health, and Natural
Resource, Division of Environmental Health, 2728 Capital Blvd, Raleigh, North Carolina. Copies may be
obtained from the Department of Environment, Health, and Natural Resources, Division of
Environmental Health, Public Water Supply Section, PO Box 29535, Raleigh, North Carolina 27626-0536
at no charge unless subsequent editions exceed 100 pages.
Health risks taken from the North Carolina Administrative Code Section .0701 Public Necessity, Health,
Safety and Welfare
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Citizen Participation Plan (Sample Template)
This plan describes how the Unit of Local Government (ULG) Name will involve citizens in the planning, implementation
and assessment of the Community Development Block Grant (GDBG) program. The funds must be used for projects
which benefit low and moderate-income persons and aids in the elimination and prevention of slums and blight. The
program is intended to assist governments in understanding neighborhood improvement programs. The regulations
give ultimate responsibility for the design and implementation of the program to local elected officials and also require
that citizens be given an opportunity to serve in a key advisory role to these elected officials.
SCOPE OF CITIZEN PARTICIPATION
Citizens will be involved in all stages of the CDBG program, including program implementation, assessment of
performance and design of changes in the Citizen Participation Plan. There will be three (3) general mechanisms for
their involvement:
1. To serve as an advisory committee to the project;
2. To attend or hold public hearings or community meetings; and
3. To provide individual citizen efforts in the form of comments, complaints or inquiries submitted directly
to the Program Administrators or designated Town official.
PROGRAM IMPLEMENTATION
Citizen participation in program implementation will occur primarily through consultation with the Type of ULG. The
Type of ULG will be asked to review and comment on specific guidelines for approved projects. They will also meet to
review any program amendments, budget revisions and program modifications. All such changes will be discussed
with the Type of ULG and their comments considered prior to taking action. If program amendments require approval
from the North Carolina Department of Commerce, a public hearing shall be held specifically on the amendment.
Citizens may also be involved in implementation of projects specifically requiring citizen participation, such as selfhelp projects. Their roles will be defined as the project develops. Technical assistance will be available as needed.
PROGRAM ASSESSMENT
Program assessment activities by citizens will occur in a variety of ways. A performance hearing will be held thirty to
sixty (30 to 60) days prior to the start of planning for the next program year. The Program Amendment will be asked to
provide citizen commentary for the Grantee Performance Report.
As a part of the orientation to the program offered at the public hearing, citizens will be invited to submit comments on
all aspects of program performance through the program year. Comments should be submitted in writing to Name of
ULG Representative. He or She will respond in writing within ten (10) days. If the response is unsatisfactory, the
complainant should write directly to The ULG Chief Elected Official. He or She shall respond within ten (10) days.
If the citizen is still dissatisfied, he/she should write to the NC Department of Commerce, Community Investment, 4313
Mail Service Center, Raleigh, NC 27699-4313, Attention: Citizen Participation Matter. Program staff will also be
available during normal business hours to respond to any citizen inquiries or complaints at 919-571-4900.
The Citizen Participation Plan will be subject to annual review and proposed revision, to occur in the period between
the performance hearing and the public hearing on the subsequent year’s application.
TECHNICAL ASSISTANCE
Technical Assistance will be provided to citizen organizations and groups of low/moderate income persons or target
area residents upon request to Unit of Local Government (ULG) Name. Such assistance will support citizen efforts to
33
develop proposals, define policy and organize for the implementation of the program. It is expected that such
assistance will be provided directly to the Type of ULG in response to their request. Assistance could be provided in the
form of local presentations, informational handouts, research of a specific issue or other short-term efforts.
PUBLIC INFORMATION
The Unit of Local Government (ULG) Name will also undertake public information efforts to promote citizen
participation. These efforts will include the following:
1.
Public Notice of all Public Hearings will be published in the non-legal section of the local
newspaper at least ten (10) days before the scheduled hearing. These notices will indicate the date, time,
location and topics to be considered. These notices will also be made available in the form of press
releases, as a public service announcement to local radio stations and will be provided to churches within
the target area of distribution.
2.
Orientation Information will be provided at the first public hearing. The Program
Administrator(s) will make a presentation which covers: (a) the total amount of CDBG funds available and
the competitive basis for award; (b) the range of eligible activities; (c) the planning process and the
schedule of meetings and hearings; (d) the role of citizens in the program and (e) a summary of other
program requirements, such as the environmental policies, fair housing provisions and contracting
procedures.
3. A Public File containing program documentation will be available for review at the ULG
Office during normal business hours. Included will be copies of the Application, Environmental Review
Record, the Citizen Participation Plan and the Annual Performance Report. Other program documents are
also available for citizen review on request at the ULG Office consistent with applicable State and local
laws regarding personal privacy and obligations of confidentiality.
4.
Public Hearings an interpreter will be provided for all non-English speaking individuals
and/or deaf individuals.
ADOPTED, this the _________day of ________________________, 20____.
_______________________________________
ULG Chief Elected Official
_____________________________________
ULG authorized signor
Town/County __________________
Town/County ____________________
34
Sample Resolution
RESOLUTION FOR THE TOWN/CITY/COUNTY OF _____________ APPLICATION FOR COMMUNITY
DEVELOPMENT BLOCK GRANT FUNDING FOR THE __________________ PROJECT
WHEREAS, the __________’s Board of Aldermen/Commissioners/Council has previously indicated its
desire to assist in economic development efforts for small businesses/entrepreneurs within the
Town/City/County; and,
WHEREAS, the Board/Commissioners/Council has held two public hearings concerning the proposed
application for Community Development Block Grant funding to benefit (name _____________); and,
WHEREAS, the Board/Commissioners/Council wishes the (Town/City/County) to pursue a formal
application for Community Development Block Grant funding to benefit low income households; and
will invest monies in the amount of ([insert] cash match amount) into the project as committed to in
the application.
WHEREAS, the Board/Commissioners/Council certifies it will meet all federal regulatory and statutory
requirements of the State of North Carolina Community Development Block Grant Program,
NOW, THEREFORE BE IT RESOLVED, by the (Town/City/County’s) Board of
Aldermen/Commissioners/Council that the (Town/City/County of) is authorized to submit a formal
application to the North Carolina Department of Commerce for approval of a Community
Development Block Grant for the Infrastructure Program to benefit low-income households.
Adopted this the ___ day of ______, 20___ in ________, North Carolina.
_____________________________
Mayor/Chairman
ATTEST:
____________________
Clerk to the Board
35
2012 CDBG Infrastructure
Preliminary Information Form
(If requesting funds for both water and sewer, complete a separate form for each activity. DO NOT
PUT BOTH WATER AND SEWER ON THE SAME FORM.)
Name of Local Government: _______________________________________________
Activity: ________________ Amount of Request: _______________ (based on PER estimates)
Name of Project: _____________________________________________
National Objective: Benefit to Low and Moderate-Income (LMI) Persons
Project Area Projects
(Benefit is determined by a door-to-door survey of occupied houses in the project area.)

Determination of Benefit
Number of Households: Total:
Total LMI:
Percent LMI:
%
Number of Vacant Occupiable Houses: Total: _____

Determination of Severe and Moderate Need
Total number of households in project area:
Number of households with severe need:
Number of households with moderate need:
Percent Severe Need
% + Percent Moderate Need
% = Percent Total Need
%
Jurisdictional Projects
(Benefit is determined using Census Data.)

This is a jurisdictional project with benefit determined using census data.
OR
36

This is a jurisdictional project with benefit determined using census data combined with surveys
for an area outside the jurisdiction.

Census Data Information:
County Code: _________
Census Tract Number: ___________
Percent LMI in Census Tract: _______%
Block Group Numbers: ________________; ________________; ________________
Determination and Type of Severe Need

Determination of Severe and Moderate Need
Total number of households in area:
Number of households with severe need:
Number of households with moderate need:
Percent Severe Need

% + Percent Moderate Need
% = Percent Total Need
%
Water Needs
For on-site needs, give the number of households with the problem. (To count as contaminated
water, the wells must be tested.) For public failure, just put a check mark or “X”.
No water supply on-site
Contaminated water
Non-potable water
Dry well
Spring
Unapproved well
Public water failure: health/environment
risk
37

Wastewater Needs
For on-site needs, give the number of households with the problem. For public failure, just put a
check mark or “X”.
No wastewater disposal system on-site
Pit privy
Black water straight piping
Failed septic tank
Public sewer failure: health/environment
risk
Connection to Existing Line
If installing public water or public sewer lines in a residential area, is there an existing line already in
use to which the new lines will be connected?
Yes
No
N/A for this project
If no, provide an explanation:
Water Treatment Plant or Wastewater Treatment Plant
(If this will be a water project, answers to the questions below should be about the water
treatment system. If this is a sewer project, answers should be about the sewer treatment system.
Put N/A if not applicable.)
1. Describe the water or wastewater treatment system. Include the following information:

Is there a treatment system currently serving the residences of the local government?
Yes _____
No _____

If yes, is it owned by the local government?
Yes ______
No ______

If yes, is this a regional system and explain what makes it a regional system.

If it is owned by another entity, who are they and is their system a regional one?
38

Explain what makes it a regional system.

If there is no system at all, name the entity whose system will receive and provide
treatment?

Does the current system or the one to be used for this project have capacity to receive and
treat the additional water or wastewater?
 Describe the system and its capacity.
2. Describe the proposed project. (May use a separate page if needed.)
_________________
Date
_________________________________
Local elected official/manager
39