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Action Grants, for the purposes of 88 570.201-207, the term "Community Development Program" as used in this subpart shall also mean the "Urban Development Action Program."

(c) Model cities activities. Notwithstanding anything to the contrary in this subpart, any ongoing model cities activity being carried out in a model cities program shall be eligible for funding under this Part from that portion of the hold-harmless amount attributable to such model cities program until the applicant has received five years of funding for such activities as calculated pursuant to § 570.103(c)(2)(iii). For the purpose of this paragraph, the term "ongoing activity" means any model cities activity underway as of January 1, 1975, that was approved and funded by HUD on or before June 30, 1974. Upon expiration of the eligibility of activities under this paragraph, applicants should refer to the other requirements of this subpart which must be satisfied in order for block grant assistance to continue to be provided for model cities activities.

(d) Special policies governing facilities. The following special policies apply to: (1) Facilities containing both eligible and ineligible uses. Where a facility, otherwise eligible for assistance under the block grant program is to be provided as a part of a multipleuse building and/or facility that also contains otherwise ineligible uses, the portion of the costs attributed to the eligible facility may be assisted with block grant funds where:

(i) The facility, which is otherwise eligible and proposed for assistance, will occupy a designated and discrete area within the larger facility; and

(ii) The applicant can determine the costs attributable to the facility proposed for assistance as separate and distinct from the overall costs of the multiple-use building and/or facility. For example, a senior center, which is to occupy space within a building that is otherwise used for the conduct of general governmental business, may be assisted when it exclusively occupies a separate and designated area within the building (i.e., the senior center does not "float" to different lo

cations within the building that happen to be available on a less than permanent basis) and the applicant can determine the cost associated with providing the senior center as distinct from those costs associated with all remaining ineligible portions of the building.

(2) Facilities located on school property. Any facility eligible for assistance pursuant to § 570.201(c), which is designed primarily for a public purpose other than education is not considered to be a school or educational facility where, although it is to be located on a site controlled by a school district, school board or similar body responsible for public education, the facility will only be used by any adjacent school or educational facility on an incidental basis. In order to determine whether the facility is to be used on an incidental basis, the applicant shall at a minimum demonstrate that:

(i) After school hours and on weekends, the facility shall be available for use by the general public to the same extent as similar facilities operating within the applicant's jurisdiction; and

(ii) During school hours, the facility is not used for school purposes for more than four hours each day.

(e) Activities outside an applicant's boundaries. Applicants may conduct activities which are otherwise eligible for black grant assistance outside of their boundaries which are not inconsistent with State or local law and which are not plainly inappropriate to meet identified needs of the applicant. This may include an urban county carrying out otherwise eligible activities within a metropolitan city with block grant assistance where the activities are not plainly inappropriate to meeting identified needs of the urban county.

(f) Special assessments under the block grant program. The following policies relate to the use of special assessment under the block grant program:

(1) Definition of special assessment. The term "special assessment" means a fee or charge levied or filed as a lien against a parcel or real estate as a direct result of benefit derived from the installation of a public improve

ment, such as streets, curbs, and gutters. The amount of the fee represents the pro rata share of the capital costs of the public improvement levied against the benefitting properties. This term does not relate to taxes, or the establishment of the value of real estate for the purpose of levying real estate, property, or ad valorem taxes.

(2) Special assessments to recover block grant funds. The general rule is that special assessments shall not be used to recover any of the capital costs of a public improvement provided with block grant funds. When both block grant and local funds are used to provide public improvements, any special assessment shall be prorated in proportion to the investment of each. Applicants may request an exception to this rule where the use of special assessments as a means to leverage private investment is necessary and appropriate to implement the applicant's strategy for economic development or neighborhood revitalization. Exceptions will not be granted by HUD for any special assessment which will recover costs of public improvements provided with block grant funds from properties owned and occupied by lowand moderate-income persons. Block grant funds recovered through special assessments authorized by HUD will be considered program income pursuant to § 570.506.

(3) Special assessments paid with block grant funds. Block grant funds may be used to pay special assessments levied against properties owned and occupied by low- and moderateincome persons for the capital costs of eligible public facilities and improvements financed from local revenue sources, other than block grant funds, which (i) are described in the Community Development Program; (ii) are initiated after the effective date of this provision; and (iii) represent the pro rata share of the capital cost of the eligible facility or improvement to the benefitting property.

(g) Consultant Activities. Applicants may employ consultants to provide professional assistance in program planning, application preparation, and other general professional guidance relating to program execution. The

use of consultants is governed by the following:

(1) Program requirements, including the requirements of this Part, Federal Management Circular 74-4, OMB Circular A-102, and applicable Federal, State, and local laws;

(2) Written agreements shall be executed between the parties which detail the responsibilities, standards; and fees;

(3) Compensation of consultants. No person employed as a consultant, or by a firm providing consultant services, shall receive more than a reasonable rate of compensation for personal services paid with block grant funds which, on a daily basis, shall not exceed the maximum daily rate of compensation for a GS-18 as established by Federal law; and

(4) Adjustments of rates of compensation and payments under consultant contracts may be made where audit and monitoring reviews indicate that the rates of compensation were not reasonable, or exceeded the maximum daily rate for a GS-18.

(h) Transition policy for fiscal year 1978. A number of activities set forth in Subpart C contain, as a part of the criteria for eligibility for block grant assistance, requirements that activities be necessary and appropriate to the implementation of certain strategies for community development and housing described in Subpart D, or that activities take place within Neighborhood Strategy Areas (NSA).

(1) Interim strategy statement. For those applications submitted during fiscal year 1978 prior to the effective date for the submission of strategies, applicants may submit a brief narrative interim strategy statement for activities subject to this requirement.

The interim strategy statement shall include:

(i) A brief description of the activity; (ii) A brief description of the needs and conditions the activity is designed to address; and

(iii) A brief description of how the activity will impact upon the needs and conditions which it is designed to address.

(2) Interim NSA designation. For those applications submitted during

fiscal year 1978, applicants may designate interim NSA's for activities subject to this requirement. An interim NSA is selected by the applicant and designated in the Community Development Program. In determining the size of the NSA, the applicant shall take into account the severity of its problems and the amount of resources to be provided to address those problems. For each area designated as an NSA, the applicant shall include a brief narrative description of its plan for stabilizing and upgrading the area which:

(i) Provides for a combination of physical improvements, necessary public facilities and services, private investment and citizen self-help activities appropriate to the needs of the area; and

(ii) Coordinates public and private investment efforts.

§ 570.201 Basic eligible activities.

Grant assistance may be used for the following activities:

(a) Acquisition. Acquisition in whole or in part by a public agency, by purchase, lease, donation or otherwise, of real property (including air rights, water rights, rights-of-way, easements, and other interests therein) which is:

(1) Blighted, deteriorated, deteriorating, undeveloped or inappropriately developed from the standpoint of sound community development and growth, as determined by the recipient pursuant to State and local laws;

(2) Appropriate for rehabilitation or conservation activities;

(3) Appropriate for the preservation or restoration of historic sites, the beautification of urban land, the conservation of open spaces, natural resources and scenic areas, the provision of recreational opportunities or the guidance of urban development;

(4) To be used for the provision of public works, facilities and improvements eligible for assistance under this subpart; or

(5) To be used for other public purposes, including the conversion of land to other uses where necessary or appropriate to the community development program. Examples include an applicant purchasing land to be used

for the development of housing for low- and moderate-income persons, and an applicant which is a central city of a metropolitan area using block grant funds to purchase houses in a non-impacted suburban jurisdiction in order to provide a wider choice of housing opportunities for central city lower-income residents.

(b) Disposition. Disposition, through sale, lease, donation, or otherwise, of any real property acquired with block grant funds or its retention for public purposes, provided that the proceeds from any such disposition shall be program income subject to the requirements set forth in § 570.506. Further information regarding disposition is set forth in § 570.613.

(c) Public facilities and Improvements. Acquisition, construction, reconstruction, rehabilitation, or installation of certain publicly owned facilities and improvements This may include the execution of architectural design features, and similar treatments intended to enhance the esthetic quality of facilities and improvements receiving block grant assistance, such as decorative pavements, railings, sculpture, pools of water and fountains, and other works of art. Public facilities and improvements eligible for assistance under this paragraph include:

(1) Senior centers, but excluding any facility whose primary function is to provide residential accommodations or care on a 24-hour day basis (such as a group home).

(2) Parks, playgrounds and other recreational facilities which are designed for participation, but not spectator facilities such as stadiums.

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function is to provide residential care on a 24-hour a day basis (such as a group home or halfway house). Fcr example, a sheltered workshop would be a single purpose center for the handicapped, and a facility providing several services for the handicapped would be a multipurpose center for the handicapped, both of which are eligible for assistance.

(4) Neighborhood facilities. Such facilities may be of either a single purpose or multipurpose nature and be designed to provide health, social, recreational or similar community services primarily for residents of the neighborhood service area which is either:

(i) A geographic location within the jurisdiction of a unit of general local government (but not the entire jurisdiction) designated in comprehensive plans, ordinances or other local documents as a neighborhood or, in a new community as defined in § 570.403(a), a neighborhood, village or similar geographical designation; or

(ii) An entire unit of general local government or a new community as defined in § 570.403(a) which is under 25,000 population, with the exception of a facility which is designed solely as a communitywide facility in a new community with a currently projected population in excess of 25,000.

(5) Solid waste disposal facilities, which are defined as those physical parts of solid waste management systems commencing at and including the site or sites at which publicly or privately owned collection vehicles discharge municipal solid wastes, through the point of ultimate disposal including necessary site improvements and conveying systems, including appropriate fixed and movable equipment including vehicular containers used after the first stage of disposal at transfer stations, but not including the final collections.

(i) Such facilities or equipment must be located in or serve areas where other activities included in the Community Development Program being carried out, such as a NSA.

are

(ii) Equipment and appurtenances used in the initial collection of solid waste are not included among those

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solid waste disposal facilities eligible for assistance under this Part.

(6) Fire protection facilities and equipment. Such facilities and equipment must be located in or serve areas where other activities included in the Community Development Program are being carried out, such as a NSA.

(i) Fire protection facilities are defined as the land and necessary improvements thereto which are necessary for properly housing and storing fire protection equipment and personnel by a fire protection organization, but not including fire fighting schools and their appurtenances.

(ii) Fire protection equipment is defined as the appropriate equipment and apparatus which a fire protection organization requires for carrying out a program for protecting property and maintaining the safety and welfare of the public, including emergency medical aid, from the dangers of fire.

(7) Parking facilities. Such facilities must be located in or serve areas where other activities included in the Community Development Program are being carried out, such as a NSA.

(8) Public utilities, other than water and sewer, which include:

(i) Facilities necessary for distribution of the utility (but not production or generation, such as electrical generation plants);

(ii) Buildings and improvements that are an integral part of the utility and are of such a nature that the utility will not function without them; and

(iii) The placing underground of existing or new distribution facilities. Further information regarding the eligibility of assistance to privately owned utilities is set forth in § 570.201(1).

(9) Street improvements. Streets, street lights, traffic signals, signs, street furniture, trees, bridges, culverts causeways, curbs, gutters, sidewalks, and other normal appurtenances to streets and structures facilitating the passage on, or usage of, streets, but excluding expressways and other limited access ways and their appurtenances.

(10) Water and sewer facilities, including storm sewers, except for sewage treatment works and intercep

tor sewers which are described as in § 570.206(a)(6). The term "storm sewers" means sewers or other cor.. duits, open or closed, or their appurtenances which collect, transport and dispose of storm waters, surface water, street wash, other wash and ground water or drainage into an existing water course, but excluding domestic waste water and commercial and industrial wastes.

toward improving the community's public services and facilities, including those concerned with employment, crime prevention, child care, health, drug abuse, education, welfare or recreational needs, and which are directed toward coordinating public and private development programs. Such services may be provided by State or local governments, quasi-public, private or nonprofit agencies, including, but not

(11) Foundations and platforms for limited to, HUD-approved counseling air rights sites.

(12) Pedestrian malls and walkways. (13) Flood and drainage facilities, in cases where assistance for such facilities has been determined to be unavailable under other Federal laws or programs pursuant to the provisions of § 570.607. The term "flood and drainage facilities" means those undertakings designed to influence or affect the flow in a natural water course (such as a river, stream, lake, estuary, bay, ocean or intermittent stream) and excludes storm sewers.

(14) Other public facilities and improvements, not listed in this paragraph, except those described in §§ 570.207 (a)(1) and (f), which are necessary and appropriate to the implementation of the applicant's strategy for neighborhood revitalization housing.

or

(i) The applicant shall provide HUD with a description of the proposed facility or improvement and the relationship to applicant's strategy for neighborhood revitalization or hous

ing.

(ii) Among the factors HUD will take into account in authorizing assistance under this paragraph are the amount of benefit to low- and moderateincome persons, the degree of impact on the identified needs of the applicant, and the availability of other Federal funds for the activity.

(d) Clearance activities. Clearance, demolition and removal of buildings and improvements, including movement of structures to other sites. Demolition of HUD assisted housing units may be undertaken only with the prior approval of HUD.

(e) Public services. Provision of public services (including labor, supplies and materials) which are directed

agencies, selected by the applicant for funds provided under this Part. In order to be eligible for block grant assistance, public services must meet each of the following criteria:

(1) Public services are to be provided for residents of neighborhood strategy areas in which block grant assisted physical development activities are being carried out in a concentrated manner. Such public services may be supported with block grant funds during the period which block grant assisted physical development activities are being carried out in a concentrated manner, and may be continued for no more than three years after the completion of such physical development activities. For the purpose of this paragraph:

(i) Physical development activities include only those described in § 570.201 (a) through (d), (f) through (h), and (k), and § 570.202 through § 570.203.

(ii) The phrase "concentrated manner" shall mean that the block grant assisted physical development activities are being carried out within an area in a coordinated manner to serve a common objective or purpose pursuant to a locally developed plan or strategy.

(2) Such services must be directed toward meeting the needs of residents of such areas. Block grant assistance may incidentally be provided for such services only for those who are not residents of areas of concentrated physical development.

(3) A public service must be either (i) a new service, or (ii) a quantifiable in crease in the level of service above that which has been provided by or in behalf of the applicant from local revenue sources or State funds received

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