COLORADO Substantial Action Plan Amendment #4 Community Development Block Grant‐ Disaster Recovery (CDBG‐DR) January 29, 2016 (Revised March 4, 2016)

Disaster Relief Appropriations Act. 2013 Public Law 113‐2 v. 2.2

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Contents I.

Introduction ............................................................................................................................................ 3

II.

Economic Development Programs.......................................................................................................... 3 Small Business and Workforce Development Program .............................................................................. 3 Economic Recovery Grant and Loan Program ............................................................................................ 5 Consolidation of Economic Recovery Programs ......................................................................................... 5

III.

Recover Colorado Infrastructure Program.............................................................................................. 6 Disaster Risk Reduction Areas ..................................................................................................................... 6

IV.

Agriculture Business Grant Program ....................................................................................................... 7 Clarification of Definition of Small Businesses for Agriculture Enterprises ................................................. 7

V.

Public Outreach and Engagement........................................................................................................... 7

VI.

Response to Public Comments ............................................................................................................... 8

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I.

Introduction This document serves as Substantial Amendment 4 to the State’s CDBG‐DR Action Plan originally approved by HUD on April 23, 2014. The Amendment contains clarifications and changes to the below programs. 1. Economic Recovery Programs 

This amendment provides further clarification on eligibility requirements and application process for the Small Business and Workforce Development Program and revises the maximum award amount. The eligible applicants and funding levels have not changed for this program.



Revises maximum award amount to the Recover Colorado Business Grant and Loan Program allowing additional funding to businesses that are located in areas with disaster related access restrictions with impacts beyond December 2014.



Consolidates Economic Recovery funding under a single budget to allow funds to be shifted based on demand between the various economic recovery tools available. This includes business grants and loans, tourism marketing, workforce development and small business technical assistance.

2. Recover Colorado Infrastructure Program 

Expands the buyout program to include properties in the Disaster Risk Reduction Areas as approved in the 80 FR 72102 (November 18, 2015).

3. Agriculture Business Grant Program 

II.

Allows for the inclusion of additional farmers and ranchers utilizing the USDA eligibility criteria in accordance with 80 FR 72102 (November 18, 2015) in addition to the SBA requirements previously defined.

Economic Development Programs

Small Business and Workforce Development Program Total Allocation for Activity: $9,167,400 Recover Colorado Workforce Training Program Description The Recover Colorado Workforce Training Program is designed to provide a public service to employees in targeted industries that are in high demand in the impacted areas. Training will emphasize skills that build disaster resilience and economic diversity, with priority given to the construction related trades, since that is where the largest need exists due to the recent fires and floods, and construction capacity provides direct resiliency in case of future disasters. This will not only enhance opportunities for LMI individuals, but it will also provide additional capacity in impacted areas. This demand is evidenced by the current difficulty in attracting qualified bidders on construction projects in the disaster impacted areas.

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This training and associated delivery costs may consist of specialized group training, individualized training or on the job training. Business applicants may request customized training to better address the needs of their employees. Training will be focused on serving low to moderate income individuals, present and future employees. The program will be eligible in all disaster declared counties. A minimum of 80% of the funding must primarily benefit Boulder, Larimer and Weld Counties. Representatives from the Colorado Community College Systems (CCCS) and Workforce Development Training Centers will lead outreach efforts with assistance from trade industry associations and focus on outreach to private for-profit businesses, non-profit organizations, local governments in the impacted areas, local news media, housing authorities in the most impacted areas and other interested parties listed in their individual marketing plans. The outreach for this program will provide workforce training to the following groups or individuals. This program will meet the requirements of a Section 3 program. Priority Beneficiaries - Must be at least one of the following:  Low to moderate income  High school drop-out  Ex-felons in reentry programs  Underemployed individuals  Individuals living in Section 8 housing  Unemployed individuals  Homeless individuals Funding priority on construction related businesses: Consideration will be given to companies that train low to moderate income workers in the commercial and residential construction related businesses (grants to businesses for training that are not construction related are also eligible for funding). Training may include but is not limited to the following areas:            

Carpentry Electrical Mechanical HVAC Painting and Dry Wall Plumbing Sheet Metal Commercial Truck Driving Welding Heavy Equipment Operation Laborer Storm Water Management

      

Masonry Landscaping Lead Hazard Control Internet Technology Janitorial Security Supervisory and Soft Skills: (Project Management, Estimating, Planning, Scheduling, Materials Management, Contract Negotiation, OSHA and MSHA training)

While the focus of this training is on construction related industries due to the need for qualified contractors in the impacted areas, other industries such as transportation, manufacturing or services that can tie critical workforce needs directly or indirectly to eligible flood and fires, or to promote future economic resiliency, will also be considered. 4|Page

Maximum Award per Activity: $75,000 per training activity (exceptions may be considered on a case-bycase basis if the applicant can demonstrate additional funding would be reasonable and necessary) Maximum Grant Awards per Beneficiary: Each beneficiary may participate in up to three different training activities Eligible Applicants: Businesses, non-profits and other approved training entities serving the disaster declared counties Eligibility Requirements:  All training activities conducted under this program must have stated direct or indirect benefit to Colorado’s recovery from fires and floods of 2012 and 2013 (specifically, the eligible federallydeclared disasters which are the High Park and Waldo Canyon wildfires of 2012, the Royal Gorge and Black Forest wildfires of 2013, and the widespread severe storms and flooding of 2013).  Applicant is located in one of the disaster declared counties or can certify that they have submitted on bid proposals in one of the disaster declared counties since September 11, 2013 or they will demonstrate that they will bid on a project located in one of the disaster declared counties within 18 months of the training (preference will give to an applicant with an existing business office in Boulder, Larimer, Weld, El Paso or Fremont County).  Must certify and document that at least 51% of the persons being trained have a salary level at or below the one person 80% Medium Family Income (MFI) for the county per HUD Section 8 income limits or meet the limited clientele criteria.  100% of the persons being trained must be a permanent resident in one of the disaster declared counties. Eligibility Activity – Public Service: Projects meet the definition of a Public Service, because the need for this type of job training activity has drastically increased since the declared disasters occurred. Additional trained workforce to assist in the recovery and ongoing resiliency efforts is also greatly needed for a successful recovery. National Objective: Low and moderate income limited clientele and urgent need

Economic Recovery Grant and Loan Program An additional grant award up to $50,000 (in addition to Table 27 of Colorado Substantial Amendment #2 Maximum Award amounts) shall be allowed to businesses that reside in an area with limited access that have had or are still experiencing ongoing disaster-related limited access issues (e.g. due to road closures) that are impacting these businesses beyond December 2014.

Consolidation of Economic Recovery Programs The State is currently proposing to invest in Colorado’s economic recovery through four distinct programs totaling $24.2 million as outlined below:

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Table 1: Distributions for Economic Recovery Programs Economic Recovery Recovery Colorado Business Grants/Loans Tourism Marketing

Round 1 Funding Allocation $ 5,100,000

Total Allocation $ 13,538,500

$

728,300

$

1,228,300

$

242,800

$

70,959

$

313,759

Small Business and Workforce Development

$

6,667,400

$

2,500,000

$

9,167,400

$ 16,077,000

$

2,570,959

$ 24,247,959

$

500,000

Round 3 Funding Allocation

Technical Assistance for Small Businesses Total Economic Recovery

$

Round 2 Funding Allocation $ 8,438,500

5,600,000

These programs’ allocations were established early in the process with less knowledge of the long-term economic challenges in the flood and fire impacted areas. This consolidation allows the Office of Economic Development and International Trade to shift resources from the economic revitalization programs under their purview based on input and demand from their constituents in the business community, without a substantial amendment. This change neither reduces nor increases the overall amount of money available for economic recovery. The budget would read as follows: Table 2: Combined Funding for Economic Recovery Programs Economic Recovery Programs    

Round 1 Funding Allocation

Round 2 Funding Allocation

Round 3 Funding Allocation

Total Allocation

Business Grants and Loans Tourism Marketing Technical Assistance for Small Businesses Small Business and Workforce Development

Economic Recovery Totals

$

5,600,000

$ 16,077,000

$

2,570,959

$ 24,247,959

Table 2 Note: Combined Funding for Economic Recovery Programs replaces the Economic Recovery subtotal line item within Table 17 (CDBG-DR Budget and Requested Obligation) and entirely replaces Table 26 (Funding Distribution for Economic Recovery Activities) in Substantial Amendment #2. Based on waivers published in the Federal Register, the State would still be limited to a maximum of $1,228,300 to be expended on the Tourism Marketing program.

III.

Recover Colorado Infrastructure Program

Disaster Risk Reduction Areas Per Colorado’s Action Plan and subsequent Substantial Amendment #2, the State will expand the existing Acquisition and Buyout program, to include buyouts of homes located in Disaster Risk Reduction Areas in accordance with 80 FR 72102 (November 18, 2015) which states that a ‘‘buyout’’ in all prior notices is amended to mean: ‘‘ …acquisition of properties located in a floodway or floodplain that is intended to reduce risk from future flooding, or the acquisition of properties in ‘Disaster Risk Reduction Areas’ located outside of floodways and floodplains for the purpose of reducing risks from the hazard that was the basis of the Disaster Risk Reduction Area designation.” For a property to qualify, it must be determined to be at risk of a geologic hazard such as mudslide, landslide or erosion, as determined by state or local authorities based on Colorado’s defined Disaster Risk Reduction Areas. This revised eligibility criteria will be applied retroactively for any applications for 6|Page

voluntary buyouts received after the date of the initial disaster (September 11, 2013).

IV.

Agriculture Business Grant Program

Clarification of Definition of Small Businesses for Agriculture Enterprises The CDBG-DR program requirements for Agricultural Producers to meet the U.S. Small Business Administration definition, which limited annual receipts at a cap of $750,000 for most agriculture businesses, proved to be a barrier for some applicants to be assisted with the CDBG-DR funds. The State requested and is adopting the approved alternative method for qualifying applicants according to 80 FR 72102 (November 18, 2015) which states: “HUD is modifying its criteria for businesses engaged in agricultural enterprises to enable them to access CDBG-DR funds necessary for their recovery. Accordingly, paragraph VI.D.41, of the March 5, 2013 notice is amended to read: ‘‘To target assistance to small businesses, the Department is instituting an alternative requirement to the provisions at 42 U.S.C. 5305(a) to prohibit grantees from assisting businesses, including privately owned utilities, that do not meet the definition of a small business as defined by SBA at 13 CFR part 121. Grantees may also assist businesses that are engaged in ‘‘farming operations,” as defined at 7 CFR 1400.3, and that meet the USDA Farm Service Agency (FSA) criteria that are described at 7 CFR 1400.500 which are used by the FSA to determine eligibility for certain assistance programs.’’ The U.S. Department of Agriculture definition allows up to $900,000 in average adjusted gross income over three taxable years. The increased amount will provide flexibility to serve additional applicants in the program. This revised eligibility criteria will be applied retroactively for any applications for agriculture business assistance received after the date of the initial disaster (September 11, 2013).

V.

Public Outreach and Engagement

Citizen participation through extensive public outreach is an essential component of the State’s disaster recovery efforts. The State continues to engage on a regular basis with citizens, stakeholder groups, local officials, non-profit groups, the federal government and other recovery partners about issues related to recovery. Consistent with requirements in Federal Register Notice FR-5696-N-13 the State held a public hearing via webinar after making this Substantial Amendment available for public comment. The date, time and relevant information is as follows: Public Hearing and Webinar: Wednesday, January 20, 12 p.m. To join the webinar: http://codeptofla.adobeconnect.com/cdbgdr/ US (Toll): 1-719-387-5595 US (Toll Free): 1-866-502-8312 Participant code: 512931 Comments on the Substantial Amendment were able to be submitted on DOLA’s website, http://www.dola.colorado.gov/dola/disaster-recovery, via email (gov_crro.state.co.us) and at the public hearing/webinar. 7|Page

Separately, the State incorporates all other criteria referenced in Section 5 of the State’s Action Plan. Among other things, this includes the State’s commitment to comply with Section 3 requirements and all applicable provisions of the Fair Housing Act, and all applicable provisions. In addition, certifications remain the same as the Action Plan submission. Summary of Citizen Participation is the last chapter to this Substantial Amendment to the State’s Action Plan. Citizen Participation Plan Requirements In developing this Substantial Amendment, the State has complied with all citizen participation plan requirements, including those requirements in Federal Register Notice FR-5696-N-17. These steps have included: The State issued this Substantial Amendment and did make it available to the public for a comment period of no less than seven calendar days prior to its submission to HUD. DOLA posted this Substantial Amendment prominently on its official website to afford citizens, affected local governments and other interested parties a reasonable opportunity to examine the Substantial Amendment’s contents. The Substantial Amendment was provided in both English and in Spanish for the full public comment period. Certain elements of the citizen participation requirements remain unchanged since the issuance of the State’s Action Plan. In preparing this Substantial Amendment, the State has complied with these elements of the citizen participation requirements as well, which include the following: The State notified the public that the draft Substantial Amendment was available for review and comment through public notices published in six regional daily newspapers (on or about Jan. 12, 2016) and as posted on DOLA’s website. The State has considered, and will consider, all oral and written comments it has received on this Substantial Amendment. The State continues to make the Action Plan, all amendments and all performance reports available to the public on its website and upon request. The State shall provide citizens, local officials and other stakeholders with reasonable and timely access to information and records relating to the Action Plan, this Substantial Amendment and the State’s use of CDBG-DR funds. Notably, the text in Section 5 of the Action Plan is not updated or replaced by this amendment and remains valid. Action Plan Amendment Outreach As referenced above, the State remains engaged on a regular basis with citizens, stakeholder groups, local officials, non-profit groups, the federal government and other recovery partners about issues relating to the recovery. That said, with HUD’s announcement of a third allocation of CDBG-DR funds to Colorado, the State, consistent with federal requirements, outlined and executed an outreach plan specifically intended to address unmet needs remaining after the 2013 Floods and determine how CDBG-DR funds might be used to meet those needs.

VI.

Response to Public Comments

Comment 1: Why is the training program so limited to the construction industry? I would request that more emphasis be given in the amendment, through examples or qualifiers, that other businesses needing help providing training to the identified population groups are eligible to apply as well, and maybe info on 8|Page

how they can access the funding. There have to be manufacturing companies that could use access to this training help as well as the construction industry. And folks are more likely to be able to move up into higher paying jobs via manufacturing jobs than through construction. Maybe the prior Action Plans spell this out more, I didn’t have time to review them, but this seems highly construction focused. Response: Thank you for your comment. The State has provided this additional language in the amendment to clarify this matter: “While the focus of this training is on construction related industries due to the need for qualified contractors in the impacted areas, other industries such as transportation, manufacturing or services that can tie critical workforce needs directly or indirectly to the flood and fires, or to promote future economic resiliency, will also be considered.”

Comment 2: Have any of the Workforce Development Program dollars been granted out yet? Response: The program has not yet launched. The State will be launching that program within 6090 days.

Comment 3: In regard to infrastructure and buyouts specifically, how much will meeting the qualification of LMI impact funding in round four? Response: There is no round four of CDBG-DR funding and none of the proposals in the Substantial Amendment offer additional allocations. In terms of the Buyout Program, the State will prioritize LMI buyouts. HUD requires that 50 percent of all CDBG-DR funding benefits low to moderate income Coloradans. We are not necessarily setting a strict dollar amount that needs to be LMI for these new buyouts, but we do need to meet that requirement.

Comment 4: Will local/regional workforce centers be eligible and also involved in further program development? Response: Eligible workforce centers located in disaster-declared counties may participate in the program. The Workforce Training Program is being developed with Colorado Department of Labor and Employment (CDLE) staff. To provide input, county workforce centers should contact the CDLE Workforce Program office by visiting www.colorado.gov/cdle.

Comment 5: Regarding the Disaster Risk Reduction Areas (DRRA), Boulder County has no recommended changes to the description as drafted in the Substantial Amendment. We look forward to HUD approval of the Substantial Amendment so that many Boulder County residents whose properties are unsafe for redevelopment will be able to move forward with their lives through the DRRA buyouts. Regarding the Small Business and Workforce Development Program, we recommend that: 1) Eligible training categories are expanded to be more in alignment with Boulder County Emerging Industries, such as manufacturing as well as information technology, professional/scientific/technical services, and healthcare. -- These industries are the job-creators in Boulder County, per research by the 9|Page

Leeds School of Business at the University of Colorado Boulder as well as job posting and hire data tracked by Workforce Boulder County. Currently the focus of the Substantial Amendment is on disaster resilience and construction trades. While those industries require support, we recommend eligibility of the above industries that are in most demand in our region so that residents that receive job training can find jobs and so that the program effectively meets the industry demands and job availability found in Boulder County. 2) The maximum award per activity be increased and/or maximum grant awards per beneficiary be expanded. -- The $75,000 maximum award combined with the limit on each beneficiary to only participate in up to three training activities seems arbitrarily low or restrictive when the total allocation for the activity is $9.1M. Further, Workforce Centers and Community Colleges in particular have program capacity and likely the need for more than $75,000 per activity with a limit of three activities. We recognize that “exceptions may be considered,” and we still recommend increasing the maximum award to at least $100,000 in the Substantial Amendment, and increasing maximum activities to five or removing that requirement entirely. 3) The State involve local Workforce Centers in the design of the program and implementation planning for the program. -- Local Centers understand local and regional issues best, and as the most impacted county by the September 2013 flood we believe it is important that Boulder County’s Workforce Center (and other local entities in other affected counties) be involved in design and launch of the program so that the program can be implemented feasibly, effectively and efficiently, and also meets the needs of our residents and communities. Regarding the Economic Recovery Grant and Loan Program, we ask that the State expand eligibility of this category to local governments. Boulder County heard this week from the Mayor of Ward who is concerned because the Town of Ward will be impacted for a year or longer by flood recovery road closures. The Town of Ward depends on tourist and cyclist traffic as an economic driver of the Town, and that economic activity will be halted during lengthy road closures. The road closures will dramatically and perhaps disastrously impact sales tax revenue, which is approximately 40% of the Town’s total revenue, bringing into question the ability of the town to operate over the next year. Consolidation of Economic Recovery Programs seems very reasonable. We do not have any comments on the Agriculture Business Grant Program. As always, we thank the State for a productive and positive partnership as we all work together to help our residents and resources recover and become more resilient. Response: Thank you for your comprehensive input and continued engagement. The State received similar concerns about the scope of the workforce program and did make adjustments to clarify and include the eligibility of other industries (see comment and response 1). Regarding the maximum award amount for training programs and number of training events, the State will continue to monitor both components to ensure they meet the needs of impacted communities and will make adjustments as appropriate. The Colorado Office of Economic Development and International Trade (OEDIT) is working closely with the Colorado Department of Labor and Employment (CDLE) in the development of this program, which will 10 | P a g e

operate in close coordination with local Workforce Centers – ensuring they are included in the process as procedures for this program are finalized. Towns such as Ward are ineligible through the Economic Recovery Grant and Loan program as they do not meet the Small Business Administration definition of a small business, a specific HUD requirement. Generally, CDBG-DR funds cannot be used for general operation of government, therefore other funding option(s) would need to be identified.

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