South San Francisco CDBG Policies and Procedures 12.13.2023 Council — South San Francisco City Council, December 13, 2023

1 CITY OF SOUTH SAN FRANCISCO

CDBG AND CDBG-CV PROCEDURES MANUAL
UPDATED: December 2023
2 TABLE OF CONTENTS
Table of Contents ..........................................................................................................................................................2 Introduction and Purpose..............................................................................................................................................6 Definitions .....................................................................................................................................................................7 Planning and Project Management .............................................................................................................................12 Overview of Planning and Project Management.....................................................................................................12 City of South San Francisco Team................................................................................................................................14 Consolidated Plan and Annual Action Plan..................................................................................................................17 Working with the San Mateo County Consortium...................................................................................................18 Consolidated Plan Timeline .....................................................................................................................................18 Project Selection Process.........................................................................................................................................20 Project Implementation...............................................................................................................................................22 Pre-Contract Requirements.....................................................................................................................................22 Grant Agreement.....................................................................................................................................................23 Procedures for Amending Written Agreements......................................................................................................24 Compliance Training ................................................................................................................................................25 Equal Opportunity and Fair Housing........................................................................................................................25 Environmental Review Procedures..........................................................................................................................26 Davis Bacon Compliance..........................................................................................................................................32 Income Eligibility......................................................................................................................................................32 Subsidy Limit............................................................................................................................................................33 Relocation and Acquisition ......................................................................................................................................34 Lead Hazards Procedures ........................................................................................................................................34 Section 3 ..................................................................................................................................................................37 Periodic/Year End Reports.......................................................................................................................................42 3 In-House Programs......................................................................................................................................................44 Debris Box Program.................................................................................................................................................44 Emergency Home Repair Voucher Program............................................................................................................44 Housing rehabilitation loan program.......................................................................................................................45 Financial Procedures....................................................................................................................................................47 Grant Based Accounting ..........................................................................................................................................47 Procurement............................................................................................................................................................48 Hatch Act .................................................................................................................................................................51 Anti- Lobbying Certification .....................................................................................................................................51 Reimbursement of Costs .........................................................................................................................................52 Ineligible Costs.........................................................................................................................................................55 Equipment ...............................................................................................................................................................56 Drawdown Documentation .....................................................................................................................................57 Program Income ......................................................................................................................................................57 Leveraging and In-Kind Contributions .....................................................................................................................58 Accounting and Auditing .........................................................................................................................................58 Reconciliation ..........................................................................................................................................................60 Procedures for Reflecting Prior Period Adjustments and Accruals .........................................................................61 Federal Funding Accountability and Transparency Act (FFATA)..............................................................................61 Monitoring...................................................................................................................................................................62 Consolidated Subrecipient Monitoring Plan for Participating Jurisdictions in San Mateo County..........................62 Determining Who to Monitor/Risk Management ...................................................................................................62 Monitoring Schedules..............................................................................................................................................63 Pre-Monitoring Preparation ....................................................................................................................................63 Overview of the Monitoring Process.......................................................................................................................63 Levels of Monitoring................................................................................................................................................65 Follow Up/Enforcement ..........................................................................................................................................66 4 General Administrative Items......................................................................................................................................68 Equal Opportunity and Fair Housing........................................................................................................................68 Employment Policies and Procedures .....................................................................................................................69 Conflict of Interest...................................................................................................................................................69 Publicity and Promotion ..........................................................................................................................................70 Taxes........................................................................................................................................................................70 HUD-insured Financing ............................................................................................................................................70 Religious Criteria......................................................................................................................................................70 Personally Identifiable Information.........................................................................................................................71 Limited English Proficiency Access ..........................................................................................................................72 Grievances...................................................................................................................................................................73 Client Grievance.......................................................................................................................................................73 Dealing with Difficult Customers.............................................................................................................................74 Contractor Grievance and Conflict Resolution ........................................................................................................75 Project Closeout ..........................................................................................................................................................76 Record Retention and Post Contract Policies..........................................................................................................77 Land Use Restrictions ..............................................................................................................................................78 Access to Records....................................................................................................................................................78 Consolidated Annual Program Evaluation Report (CAPER) .........................................................................................79 Community Development Block Grant – Coronavirus.................................................................................................81 Amendment.............................................................................................................................................................81 Waivers....................................................................................................................................................................81 Project Justifications................................................................................................................................................82 Duplication of Benefits ............................................................................................................................................82 CDBG-CV: In-House Programs .....................................................................................................................................88 Small Business Loans ...............................................................................................................................................88 5 6

INTRODUCTION AND PURPOSE
The City of South San Francisco (CSSF) receives Community Development Block Grant (CDBG) funds each year to help build and strengthen the community, particularly those neighborhoods with a growing number of residents living in poverty. The intent of the CDBG program is to support efforts that improve the quality of life for low and moderate-income persons.

In the spring of 2020, the City of South San Francisco also received an allocation of CDBG CARES Act funding (CDBG-CV) in response to the COVID-19 pandemic. Special projects were instituted with this funding to respond to economic impacts of the pandemic. Additions to this document have been developed to accommodate those specific programs.

This Policies and Procedures Manual is a single-source overview of the primary institutional requirements for the CSSF community development program and covers administration of the program by the City as well as any consultants, subrecipients, contractors, and beneficiaries. This overview is, by definition, not comprehensive, but instead highlights the governing principles for each functional area within the organization. The intent of the Manual is to allow anyone – new employee, elected or appointed official, HUD auditor, outside observer, etc. – to holistically understand the set of rules by which the City’s program operates, as well as to understand the motivations (practical, legal, regulatory) behind those rules. Use or reliance upon any of the provision or forms contained herein does not, expressly or impliedly, directly or indirectly, suggest, represent or warrant that funded activities will follow the requirements of 24 CFR Part 570.

Other documents and policies (such as human resources and financial policies etc.) produced by the CSSF will go into more detail for those functions, and as a rule should not and do not contradict the policies and procedures set out in this document.

The U.S. Office of Management and Budget (OMB) requires agencies that receive federal funds to comply with 2 CFR Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Requirements outlined in those regulations supersede any guidance provided in this document.
7 DEFINITIONS
Action Plan: Annual update to the Consolidated Plan which outlines the goals, priorities, and funding for each new program year.

Affordable Housing: Generally defined by HUD as housing for which the occupant is paying no more than 30% of his or her gross monthly income for housing costs, including utilities.

Agency: Defined as an entity awarded Federal grant funds from the City of South San Francisco.

Beneficiary: The person(s), entity (ties), or organization(s) benefiting from the activity, project or program, e.g., a homeless individual, a low-income family.

Change Order: A Change Order must be executed for any deviation, addition, or deletion made to the approved scope of work, design specifications, project timeline, or project budget after construction starts.

Citizen Participation Plan: A plan that must be developed by the City to describe and document efforts that will be undertaken to provide for and encourage citizens to participate in the development of the Consolidated Plan, any substantial amendments to the Consolidated Plan, Annual Action Plan, and the year-end performance report.

Claim: A reimbursement request for expenses incurred and paid by an award subrecipient.

Commitment: A commitment is the point at which the City of South San Francisco and the subrecipient enter a written agreement, designating a specific amount of CDBG funds towards a specific address (or area) with a specific purpose or activity. If the funding is directed to a City agency as the subrecipient, the commitment is made as part of the Action Plan approval and begins at the start of the program year.

Community Based Development Organization (CBDO): A federally defined type of entity, CBDOs are governed by the regulations in §570.204 and can be either be nonprofit or for-profit entities. CBDOs can be treated as developers or subrecipients by the City. CBDOs perform neighborhood revitalization, community economic development, or energy conservation project activities.

Community Development Corporation (CDC): Private, non-profit, corporation established to serve a specific geographic area.

Concern: A deficiency in program performance not based on a statutory, regulatory or other program requirement. Sanctions or corrective actions are not authorized for concerns. However, the City should bring the concern to the subrecipient's attention and, if appropriate, may recommend (but cannot require) actions to address concerns and/or provide technical assistance. 8 Consolidated Annual Performance and Evaluation Report (CAPER): a year-end report to summarize the activities undertaking in the prior year. The CAPER includes cumulative beneficiary, activity, and financial reports.

Consolidated Plan: Plan describing the community needs, resources, priorities, and proposed activities to be undertaken under certain HUD programs (including CDBG) over a 5-year period. It is updated annually with an Action Plan.

Consortium: An agreement among multiple units of local government that would not have individual access to funds from HUD’s HOME program to participate, under the umbrella of a lead agency. Several San Mateo County municipalities, including the City of South San Francisco, participate in the San Mateo County HOME Consortium. While these funds have parallel requirements for participating agencies, these requirements are carried out by San Mateo County, and the County’s Consolidated Plan more fully addresses the use of HOME funds within the County (including in South San Francisco).

Davis Bacon: Reference to the Davis Bacon Act, which requires the payment of prevailing wages on certain construction projects funded by CDBG or HOME funds, in which case monitoring would involve confirming evidence in bidding and payment practices.

Eligible Activity: An activity that may be funded based on certain HUD criteria. In addition, an activity must meet a national objective of the Program.

Enterprise Resource Planning (ERP) system: a software-based platform used to manage and integrate essential City processes within a single system.

Environmental Review: The process of reviewing a project and its potential environmental impacts to determine whether it meets federal, state, and local environmental standards. It is mandatory for any project receiving federal funding.

Fair Market Rents (FMR): Guidelines published annually by HUD that estimate the rents and utility costs that would be required to rent privately-owned, decent, safe and sanitary rental housing of a modest nature with suitable amenities.

Finding: A deficiency in program performance based on a statutory, regulatory or subrecipient for which sanctions or other corrective actions are authorized.

Grantee: The public jurisdiction that is in direct subrecipient of the HUD CDBG or HOME funding.

Household: All persons, whether related or unrelated, living in a housing unit. 9 In-Depth Monitoring: A detailed compliance review for a selected subrecipient. An in-depth review can include one or more areas of concentrated review, including: specific activities, projects or programs, financial documentation, management, a review of known high-risk areas or other critical functions. This would also include randomly selected activity/project/program sample, sufficiently large to draw a valid conclusion.

Leverage: Financial commitments for an organization or project used to obtain additional or other funding to support the organization or project.

Limited Monitoring: A program compliance review reduced from In-Depth Monitoring in scope and size for the selected subrecipient that may include review of a smaller, selected activity/project/program sample.

Low-Income Housing Tax Credits/Rental Housing Tax Credits: The California Housing and Community Development Authority (IHCDA), a quasi-autonomous statewide government agency, administers the Rental Housing Tax Credit (RHTC) program. RHTCs are federal tax credits that IHCDA allocates to developers of affordable rental housing. By reducing a developer’s federal tax liability or selling of tax credits to investors, tax credits can contribute significantly to the financial viability of developing affordable rental units.

Median Family Income (MFI): The level at which 50% of households have a higher income and 50% of households have a lower income, with adjustments made for household size. Program eligibility is often relative to a client’s percentage of the MFI.

Monitoring Conclusion: The determination reached regarding a Subrecipient's performance based upon the monitoring results. Conclusions may be positive or negative.

N/A: Not applicable.

National Objective: The authorizing statute of the CDBG program requires that each activity funded, except program administration and planning activities, must meet one of three national objectives:

Benefit to low- and moderate-income persons; aid in the prevention or elimination of slums or blight; and meet a need having a particular urgency.

NEPA: National Environmental Review Protection Act requires that reviews be conducted to determine whether a proposed activity would have an impact on the environment prior to expending CDBG or HOME funds.

Notice of Funding Availability (NOFA): Public notice announcing the amount of CDBG funding that the City and South San Francisco expects to receive in a new program year. It begins the annual application process.
10 On-Site Monitoring: Monitoring that is conducted at the subrecipient's geographic location.

Participating Jurisdiction: The term given to any State or local government that HUD has designated to administer an Entitlement Program. HUD designation as a PJ occurs if a State or local government meets the funding thresholds, notifies HUD that it intends to participate in the program, and obtains approval by HUD of a Consolidated Plan.

Performance-Based Outcomes: Goals that measure the impact of the program on the client served.

Performance-based outcomes must be specific, measurable, achievable, realistic and time-bound.

Program Income: Includes but is not limited to proceeds from sale, lease, rental proceeds of property acquired or improved with CDBG funds; principal and interest payments on loans made from CDBG funds; proceeds from sale of CDBG loans or other obligations; interest earned on funds in a revolving loan fund account or on program income pending reuse. Further definitions found in 570-48g(e)(1).

Income generated from the use of grant funds. All Program Income must be reported, and in some cases, repaid to the City annually.

Programmatic Agreement: An operating Programmatic Agreement may outline an expedited review process for Section 106, list activities that are exempt from review, and give standard mitigation measures that may be used to resolve adverse effects.

Project (within the ERP system): a code assigned to a specific grant program that allows tracking of all revenue and expenditure transactions related to that program that have been recorded in the City’s ERP system.

Project–Based Rental Assistance: HUD rental subsidy assistance provided to a specific housing unit aimed at providing decent, safe and sanitary housing opportunities for low-income individuals.

Program Year (PY): A 12-month period that constitutes the basis for federal funding and accountability for any projects thus supported. The PY Starts on July 1st of the calendar year and ends on June 30th of the next year.

Purchase Order (PO): document issued by the City’s ERP system to a seller, indicating types, quantities, and agreed prices for products or services required, used to control the purchasing of products and services from external suppliers and as a means if budgetary control.

Quarterly Desk Review: Monitoring that is conducted off-site, typically at the City office, based upon analysis of information from the subrecipient, including interviews. Information forming the basis for conclusions from this remote type of monitoring can incorporate review of performance reports and audited financial statements, information in electronic databases, and other documentation submitted by the subrecipient.
11 Requisition: A formal request made within the City’s ERP system to obtain a product or service. If approved, the requisition usually leads to the creation of a Purchase Order.

San Mateo County Consortium: A partnership of localities that receives the HOME Investment Partnerships program (HOME) and Emergency Solutions Grant (ESG) funding.

San Mateo County Consortium Area: The area served by the San Mateo County Consortium which covers 18 of the 20 cities in the county plus the unincorporated areas of the County.

Section 106 Form: Form provided by the City of South San Francisco, which a Subrecipient needs to submit in order for the environmental review process to begin. It gives details on a project estimated funding amount, location, and scope.

Sub-subrecipient: Non-Profit or Faith Based organization receiving CDBG or HOME funds from an entitlement city (Grantee) who in turn receives funding directly from HUD. The subrecipient organization administers all or a portion of the community’s programs – not a specific project. Local government members of consortia that receive consortium funds and urban county members are also considered subrecipients. If not noted otherwise, subrecipients must follow the same rules noted for Subrecipients.

United States Department of Housing and Urban Development (HUD): The Federal Department responsible for the implementation and administration of programs designed to provide assistance for housing and urban development, housing production and mortgage credit programs. 12 PLANNING AND PROJECT MANAGEMENT

OVERVIEW OF PLANNING AND PROJECT MANAGEMENT
Under the City’s CDBG Program, planning and project management typically involve a predictable sequence of stages. This chapter outlines the basic procedures applying to projects and programs using the sequence of stages as a basis for organization, showing how a project moves from “cradle to grave”, from background planning that sets the stage for project identification, to project solicitation and evaluation, precontract evaluation, securement, implementation, evaluation and monitoring, and eventually closeout.

At the core of the process is the City’s Consolidated Plan, which includes a five-year strategy and a oneyear program of projects; the chapter begins by outlining these items. The Five-Year Strategy element describes the community’s needs, resources, priorities, and proposed activities to be undertaken with CDBG funds; the annual Action Plan describes the specific planned uses for CDBG funds. For both the five-year and one-year elements, the process for starting the Consolidated Plan begins in October and incorporates multiple opportunities for coordination with stakeholders and the public. The Consolidated Plan must be submitted by May 15th of each year for the upcoming program year (which runs from July 1 to June 30).

After outlining the main requirements for the Consolidated Plan, the Chapter switches in focus to individual projects and programs, including their identification and solicitation and the criteria by which they are judged worthy of funding. Since the proposed activities would be funded by CDBG funds, the federal criteria relevant to the project are applied and evaluated. From there, the process shifts to implementation and the actions that must be taken to secure the continued eligibility of the CDBG funds.

The end of the chapter switches back to the City’s community development program and the development of the required Consolidated Annual Performance Evaluation and Report, or “CAPER”. The chapter assesses the City’s progress towards reaching the objectives stated in the active five-year element, including how project monitoring/evaluation and closeout items integrate with the CAPER.

1. CDBG SNAPSHOT
CDBG funds are allocated to “entitlement communities,”, which are determined by HUD based upon population, income, and poverty performance measures. The City receives CDBG funds directly and annually from HUD, and must meet planning, programming, environmental review, and reporting criteria associated with the funds. A table outlining requirements is shown below.

Program Primary Objective The primary objective of the CDBG program is the development of viable communities through the provision of decent housing, a suitable living environment and expanded economic opportunities for persons with lowand moderate-income, defined by HUD as a person residing in a housing with income at or below 80% of the area median income adjusted for household size.
13 National Objective To achieve these objectives, the CDBG program includes a wide variety of eligible activities that may be implemented provided that a given activity meets one (1) of three (3) national objectives, including:
• Benefiting low- and moderate-income persons;
• Preventing and eliminating slum or blight; and,
• Meeting an urgent need.

To ensure that CDBG primarily benefits low- and moderate-income people, HUD requires at least 70% of CDBG funds spent on activities other than program administration meet the low to moderate income objective. This requirement, under the South San Francisco program, will be met during a one-year period.

Program Regulations The CDBG Program regulations, found at 24 CFR Part 570 govern the City’s use of program funds. These regulations are divided into several subparts, including the following subparts that are applicable to the City and its subrecipients:
• Subpart A – General Provisions
• Subpart C – Eligible Activities
• Subpart D – Entitlement Grants
• Subpart J – Grant Administration
• Subpart K – Other Program Requirements
• Subpart L – Loan Guarantees (Section 108 Loan Guarantee Program)
• Subpart O – Performance Reviews
Target Geography City-wide
Program Year July 1 – Jun 30
14 CITY OF SOUTH SAN FRANCISCO TEAM
The table on the next two pages outlines the staff from the City who will be fulfilling the roles outlined in this policies document. As the City’s CDBG allocation is small in nature, the City will hire a consultant to assist with the implementation of the City’s program. While approvals and financial work will remain inhouse, the consultant will assist with the daily work of the Consolidated Planning process and compliance of projects utilizing CDBG funding. The team will meet monthly, at minimum, to measure the progress of the CDBG programs and projects.

Staff Title Staff Member Name (as of
the date of this version)
Roles for Implementation of
CDBG
Management Analyst II Management Analyst II • Oversee Consolidated Plan Writing
• Oversee Action Plan Writing
• Oversee CAPER Writing
• Project Selection Team
• Contract Initiation/
Amendment Contact
• Compliance Training
• Environmental Review
Officer
• Project Monitoring – income
eligibility, bidding and
procurement
• Quarterly Reports to HUD
• Program Income Reporting
to HUD
• Create draws in IDIS based
on invoices
• Record Keeping of CDBG
Related Documents
• Program Marketing and
Public Outreach
• Pre-contract document
collection
• Compiling the contracts for
processing
• Complaint Procedures
Accountant II Accountant II • Approval of Claims and
approve draws in IDIS
Disbursement of funds –
payment of invoices
15 Staff Title Staff Member Name (as of
the date of this version)
Roles for Implementation of
CDBG
• Assist with financial quarterly
reports
• Financial Record Keeping
• Assist with annual financial
audit and working with
auditors
• Assist with creating new
projects and Purchase Orders
each year to track and
monitor programs
Public Works Department Senior Engineer • Inspections of construction projects (as needed)
Consultant(s) Renewed Annually • Consolidated Plan Writing • Davis Bacon Compliance
• Action Plan Writing
• CAPER Writing
• Compliance Training
• Assist with Environmental
Reviews
• Conduct Project Monitoring –
income eligibility, bidding and
procurement
• Assist with Quarterly Reports
to HUD
• Assist with Program Income
Reporting to HUD
• Record Keeping of CDBG
Related Documents
City of South San Francisco Housing Division Organizational Chart ECD
Director
Housing
Manager
Management
Analyst I
Management
Analyst II
Management
Analyst II
Admin
Assistant
16 City of South San Francisco Finance Department Organizational Chart Note: Housing Manager and Management Analyst II interacts with the Finance Director and Accountant II of the Finance Team regarding CDBG funds.
17 CONSOLIDATED PLAN AND ANNUAL ACTION PLAN
The City of South San Francisco Consolidated Plan constitutes the core document of the City’s federally funded community development programs. As outlined on HUD’s website, “The Consolidated Plan is designed to help states and local jurisdictions to assess their affordable housing and community development needs and market conditions, and to make data-driven, place-based investment decisions.

The consolidated planning process serves as the framework for a community-wide dialogue to identify housing and community development priorities that align and focus funding from the CPD formula block grant programs….”1
The Consolidated Plan can be viewed as two separate documents: a Five-Year Strategy and an annual Action Plan. Additionally, there is an annual reporting element referred to as a Consolidated Annual Program Evaluation Report, or CAPER. The CAPER is discussed following the writeup on project closeout procedures, below; the remaining elements are described in the following sections:
• The Five-Year Strategy contains an analysis of the market for housing and services, as well as public and stakeholder input, that guides the identification of strategies, programs, projects, and services that the CDBG Program will be used for.
• A sequence of Annual Action Plans outlines specific investment priorities for a particular program year, using the Five-Year Strategy as a guide.

The CSSF Consolidated Plan encompasses the investments funded through the City’s allotment of HUD’s Community Development Block Grant funds. San Mateo County also develops a Consolidated Plan that includes additional HUD programs, including the HOME Investment Partnerships Program, Emergency Shelter Grant, and Housing Opportunities for Persons with AIDS, which can also be used inside the City of South San Francisco under the County’s administration. The policies and procedures outlined in this document pertain solely to the CSSF’s administration of its program and are not intended to apply to San Mateo County’s administration of its community development program, despite the overlap in jurisdiction. Since both programs must adhere to the same set of State and Federal regulations and laws, there are similarities in the administration of these programs, but the reader should not assume that a provision in this document automatically applies to San Mateo County’s program.

The City of South San Francisco selects projects that address the housing and community development needs of low and moderate-income persons, particularly as they are outlined in the Consolidated Plan.

The criteria include:
• Meeting eligibility requirements under HUD rules
• Meeting a national objective under the HUD rules
• Meeting a goal of the 2023-2027 City’s Consolidated Plan • Serving an eligible area within the City of South San Francisco • Demonstrating a significance of need
• Creating a visual impact in the neighborhood, particularly if an infrastructure project At the successful conclusion of the Annual Plan process and its approval by HUD, a grant agreement for the pertinent program year is executed between the CSSF and HUD. 1 https://www.hudexchange.info/programs/consolidated-plan/ 18 WORKING WITH THE SAN MATEO COUNTY CONSORTIUM
The City of South San Francisco is a member of the San Mateo County Consortium. The San Mateo County Consortium includes the County, 18 of the 20 cities in the County plus the unincorporated areas of San Mateo County. As such, the communities share a Consolidated Plan and Action Plan process, with San Mateo County serving as the Consortium lead. The County and each city that receives its own CDBG allocation must write a Consolidated Plan/Action Plan document and submit them as a group under the County’s leadership.

To begin the process, San Mateo County must create the Consolidated Plan document in eCon Planning Suite. This will create each of the documents required from each of the cities. The City of South San Francisco can begin its own Consolidated Plan/Action Plan or work in concert with the County. For the 2023-2027 Consolidated Plan, the City contracted with a consulting firm, in partnership with the County to complete a Consolidated Plan and 2023 Action Plan.

Whether the City works in partnership with the County (hiring a consultant) or completes the documents on its own, it must cooperate with the County in the timing of the submission of its Consolidated Plan/Action Plan. Once the County submits its own Consolidated Plan/Action Plan in eCon Planning Suite, all documents required by the various CDBG Cities will be submitted via eCon Planning Suite.

The only document by which eCon Planning Suite separates within the Consortium is Consolidated Annual Performance and Evaluation Report, or CAPER. The CAPER is a year-end report to the public and HUD to provide status update and progress towards the City’s Consolidated Plan goals. Each City receiving its own allocation may create and submit its CAPER on its own, without coordination of the County in eCon Planning Suite.

CONSOLIDATED PLAN TIMELINE
The City works with San Mateo County and other entitlement jurisdictions to draft the local jurisdictions Consolidated Plans. The Consolidated Plan is due to HUD by May 15th and the timeline for development and public outreach is designed to meet that deadline. Planning for 5-year Consolidated Plan starts approximately 6 months prior to the start of the new program year. In January of the previous program year staff begin to identify dates for its CDBG Subcommittee and City Council public hearing.

The City utilizes the timeline that follows to meets its Consolidated Planning Process and implementation for its CDBG program. During some years the month a certain task falls in may move forward/back depending on how the City Council meeting calendar falls, this is a guide for the Planning cycle.
19 Month Tasks
January • NOFA - Applications Due
• NOFA - Staff Project Evaluation
• Document with staff recommendations
• CDBG – Quarterly Financial Report Due
(425)
February
March • Complete Consolidated Plan narrative
writing
• Begin Annual Action Plan narrative
writing
April • Begin 30-day Comment period for Action
Plan
• CDBG – Quarterly Financial Report Due
(425)
May • May 15 – Submit Action Plan to HUD
June • June 30 – Program Year Ends
July • July 1 - Program Year Begins for Action
Plan
• Final Beneficiary Reports and Draws from
Prior Program Year should be submitted
• CDBG – Quarterly Financial Report Due
(425)
August • Write CAPER document
September • Publish CAPER for 15 Day comment
period
• September 28 – 90 days after completion
of program year – submit CAPER to HUD
October • Begin public input process and
stakeholder interviews for Consolidated
Plan
• Create Consolidated Plan in IDIS
20 • Begin needs analysis and market analysis
sections for the Consolidated Plan
• CDBG – Quarterly Financial Report Due
(425)
• CDBG – MBE/WBE Report Due to HUD for
Previous Federal Fiscal Year
November • Starte public input process for
development of the Consolidated
Plan/Action Plan
• Draft priorities and goals for the
Consolidated Plan
December • NOFA for Action Plan Published – using
draft priorities and goals for the action
plan
• Continue Consolidated Plan narrative
writing

PROJECT SELECTION PROCESS
The City funds multiple community development activities with CDBG funds. This section provides an overview for identification, consideration, and selection of these activities.

The City of South San Francisco utilizes “City Data Services”, a cloud-based application and reporting system, to administer its application process. Subrecipients and grantees must apply through the City Data Services management portal. The application process begins with a Notice of Funding Availability or NOFA.

The CDBG application for funding will ask applicants to specify the type of CDBG funding requested (public service, minor rehab, micro-enterprise assistance, fair housing, public facilities, acquisition/rehab, etc.). Applicants will also be asked to describe the primary population(s) assisted by their program and to estimate the total number of beneficiaries served by the program, noting the number of low-income beneficiaries. In addition, applicants will be asked how they will obtain and verify beneficiary income data.

City staff will review all applications and complete an application checklist for each application. The application checklist will include an item where staff must decide if the proposed activity is an eligible CDBG activity per 24 CFR 570 subpart c- eligible activities. On the checklist, staff must also ascertain the national objective met by the activity (if any). The Management Analyst II will review all applications and completed application checklists to verify the eligibility of the proposed activities. 21 Distributed with all applications (and available on the City website when the CDBG application is released) is a CDBG informational packet which describes the CDBG funding cycle and what types of activities are eligible for CDBG funding. The informational packet encourages interested applicants to contact City staff if they have any questions about the eligibility of their proposed project.

After the CDBG applications are released to the public, an optional informational workshop will be hosted by City staff. At the workshop, City staff will provide information about the CDBG program and what types of activities are eligible for CDBG funding. The workshop typically occurs in January, a few weeks before applications are due. The following items pertain to CDBG applications:
• Applications must be received at the City offices on the due date. Any application received after the announced deadline will be ineligible for consideration. • City staff and the CDBG Subcommittee (see below) will be convened to review applications. A standard evaluation form will be used to assess each one, based on the criteria identified in the application instructions.
a) Staff will review each application for eligibility under the CDBG regulations and determine if the project or program meets a national objective. b) Staff will review each application for capacity to perform, which may include, but are not limited to past performance and outstanding monitoring findings c) Staff will compile the information from each of the applications into a summary page and make recommendations for funding.
• A subcommittee of the City Council, the CDBG Subcommittee (2 council members being assigned/designated) serves as the evaluator of applications. • The City, at its discretion, may allocate funding to projects or programs meeting a Consolidated Plan goal.
• The City Manager will review the CDBG recommendations and may amend these recommendations prior to submission to HUD.
• Applicants will receive written notification, indicating the level of support, if any, which will be awarded. Participation in further discussion regarding the outcomes of the application process and federal cross-cutting regulations will be at the discretion of review team members and City staff.
• Funds for those projects that have received approval will be made available upon the execution of a signed contract between the City and the Subrecipient. 22 PROJECT IMPLEMENTATION
This section outlines requirements and policies pertaining to the administration of Community Development Block Grant (“CDBG”) funds, particularly those that establish the eligibility of the project or activity for funding. Administered by the U.S. Department of Housing and Urban Development (“HUD”) and constituting one of the oldest federal block grant programs still in existence, the CDBG Program can fund a variety of public projects relevant for community and economic development.

Unlike many other federal block grants, the CDBG Program does not have a local match requirement; also, unlike other federal programs, CDBG may frequently be used as local match for other federal programs, subject to the requirements of those programs (e.g., transit, highway, economic development, etc.).

This section also addresses pertinent federal laws and regulations that are triggered by the use of CDBG funds, such as environmental review procedures, federal wage rates, and the like. These discussions are not meant to be exhaustive, but rather give an overview of the individual topic.

PRE-CONTRACT REQUIREMENTS
Prior to the execution of any contract or grant agreement, a potential subrecipient must verify their compliance with the requirements outlined below:
• Employer Identification Number: If a Subrecipient has not already been issued an employer identification number, one must be obtained from the Internal Revenue Service. Those sole proprietors/consultants who do not have an employer identification number, with City approval, may be allowed to use their social security number for identification.

To be entered as a vendor in the City’s accounting system, a W-9 with the employer identification number will be submitted to City staff prior to the issuance of contracts, in order for the Subrecipient to be set up as a vendor and be prepared to receive funds. • Federal Grants Single Audit Certification: 2 CFR Part 200 requires the City to monitor Subrecipients of federal awards and determine whether they have met the audit requirements of the regulation and whether they are in compliance with federal laws and regulations.

Subrecipients will be required to complete and return the Federal Grants Single Audit Certification worksheet before a purchase order will be issued. • Proof of Insurance: Subrecipients will be required to submit proof that their organization’s insurance policy is in compliance with its City contract, and the City must be listed as an additional insured on the policy. Each Subrecipient must also have workers’ compensation. The 23 Proof of Liability Insurance Certification must be presented to City staff before a purchase order can be created.
• SAM.gov Certification: Subrecipients will be required to submit proof that their organization participates and is active in system for award management (sam.gov) system of the U.S.

Government. Sam.gov is a free system and requires annual renewal. The subrecipient must provide proof of registration prior to contracting with the City. • Program Budget The estimated program budget is the projected expenditure schedule for the term of the Grant Agreement. The estimated program budget will be approved by the City of South San Francisco during the grant negotiation process and incorporated into the Grant Agreement. Grant Agreements cannot be executed without an approved budget. Requests for budget revisions must be submitted in writing to the City of South San Francisco for approval. • Business License - The Finance Department collects annual business license fees. All persons operating or doing business within the city limits of South San Francisco are required to obtain a business license and pay the applicable fee per the Municipal Code, including businesses that operate from home.

GRANT AGREEMENT
CDBG grants are for the general purpose of funding programs and capital projects that will provide services to low and moderate-income residents of South San Francisco. All pertinent employees of the Subrecipients must be trained on the requirements detailed in this manual.

The City relies on performance-based contracts to assist with meeting the goals of the Action Plan. During the contract negotiation process, all Subrecipients must submit project-based outcomes, timelines, and budget, to give City staff a mechanism to monitor the organization’s progress based on its projected results. The outcomes, timelines, and budget will be the standard by which City staff will monitor performance. Any changes to these standards during the course of the contract period must attain prior approval from City staff. This includes the reallocation of unused funds towards the end of the contract period.

In general, outcomes and benchmarks will be taken from the application unless otherwise specified by the subrecipient for those activities that will be funded and carried out specifically with City-grant funds.

Contracts cannot be drafted until the necessary information is received. Prior to contract execution, subrecipients may negotiate new outcomes and timelines with City staff. Award letters will include a specific scope of the project and federal cross-cutting regulations that will apply to the grant.

All Subrecipients must submit performance-based outcomes. Upon City approval, performance quarterly based outcomes will be included in grant contracts.
24 The Grant Agreement is a legally binding document that is executed between the City of South San Francisco and the organization receiving the funds for the purpose of carrying out an eligible activity.

Grant Agreements include the requirements that the Subrecipient must follow to receive the CDBG funds, a description of the tasks to be performed that are part of the funded activity, the schedule for completing the tasks and the estimated program budget. Consequences of not meeting the requirements may include delays in reimbursement, lowered scoring for future funding submittals, and greater City oversight of funded activities, up to and including termination of the agreement and a refund of prior disbursements.

The South San Francisco City Council, during approval of the City’s Annual Plan, authorizes staff to draft and execute all CDBG contracts and grant agreements under $150,000. Any contracts over $150,000 whose vendor is not specified at the time of the Annual Plan approval – typically public service projects where an outside contractor is engaged, must go before the Council for approval after the procurement process has been followed. Agreements are prepared by City staff, approved by pertinent City officials, then routed for finalization to the City Attorney, Director of Economic and Community Development, the City Manager, and finally the City Clerk.

The City staff will consult with the Subrecipient to determine if the timeline should be amended or if an alternate course of action should be taken to correct the situation. All requests for amendment to contracts must be submitted to City staff for approval no later than 90 days prior to the end of the year the contract is due to expire.

PROCEDURES FOR AMENDING WRITTEN AGREEMENTS
The City has well-defined policies regarding amendments to written agreements. For amendments which alter the value of a contract by less than $150,000 of the original budgeted amount, it is at the City Manager's discretion whether to bring the contract amendment before the City Council for approval. The City Manager may approve contract amendments of less than $150,000 without Council approval. Council approval must be received, however, for contract amendments that exceed $150,000 or more of the original contract value. All contract amendments must be reviewed by the Housing Manager before being forwarded to the City Manager and/or City Council for their approval.

Contract amendments that change the terms of the contract but result in no net change to the budgeted amount of the contract may be approved by the City Manager without Council approval. The Housing Manager may approve contract amendments in instances where the contractor/subrecipient wishes to fund various positions under the contract or wishes to amend the contract budget to fund more direct program costs versus indirect program costs. The Housing Manager may also approve contract amendments generated by regulatory guidance/new requirements from HUD. 25 All contract amendments will follow applicable federal rules and regulations regarding the CDBG and CDBG-CV programs.

Subrecipients who wish to amend their agreements must do so at least 60 days prior to the expiration date of their contract.

When considering an amendment, City staff need to determine if an Action Plan amendment will be required. City staff shall consult with the City’s Participation Plan requirements for substantial amendment versus minor amendment and the requirements for each. If a substantial amendment is required for an amendment to a contract, the City will need to complete the Action Plan amendment prior to amending the contract. In such case when a substantial amendment to the Action Plan is a result of the contract amendment request, it is recommended the City and the subrecipient begin the amendment process at least 90-100 days prior to the end of the contract period. Amendments to the Action Plan, must be coordinated with the San Mateo County Consortium for submission to HUD.

COMPLIANCE TRAINING
Prior to contract execution, it is recommended that two representatives of each subrecipient meet with City staff for a training session sponsored to ensure Subrecipient familiarity with the rules and regulations of grant programs. Training will provide an overview of all HUD and City requirements. All forms and documentation that will be required for claiming funds and reporting activities will be discussed during these sessions. In the case of a public health emergency, this training may be held via a virtual platform.

The City may coordinate this training with other members of the County Consortium. As members require the same level of documentation and utilize the City Data Services system, if a subrecipient attends another training, it may count as attending a training offered by the City of South San Francisco.

The subrecipient employees who will be managing the contract should attend. City staff will provide each of the Subrecipients with electronic copies of forms to be used for the term of the grant period.

City staff should also provide technical assistance for compliance upon request by existing or potential grantees. Technical assistance may also be requested in advance of funding application windows, so that applicants are familiar with the requirements in advance of submitting proposals.

EQUAL OPPORTUNITY AND FAIR HOUSING
In accordance with Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, the Americans with Disabilities Action of 1990 (“ADA”), and other federal regulations, the Office of the Mayor, City of South San Francisco, requires all organizations doing business within the City to agree not to discriminate against any specified groups for specified reasons. The City follows federal laws that prevent the treatment of a person, including exclusion or segregation, because of race, color, sex, sexual orientation, gender identity, disability, national origin, religion, income status, veteran states, limited 26 English proficiency, or any other protected classification under federal law. If organizations cannot fulfill all the requirements of the federal requirements, then any City Grant Agreement with them is null and void.

All grant agreements will enforce the federal, state and local fair housing and equal opportunity laws, including the Fair Housing Act, the Age Discrimination Act, Sect 504 of the Rehabilitation Act, Executive Order 11246 (Equal Employment Opportunity), Fair Housing Amendments Act of 1988, Title IV of the Civil Rights Act of 1964, Title VIII of the Civil Rights Act of 1968, Americans with Disabilities Act, Executive Order 13279, Section 3 of the Housing and Urban Development Act of 1968 and the Equal Access to Housing Programs Regardless of Sexual Orientation and Gender Identity. Specific requirements are listed in the grant agreement and carry the full weight of federal law.

The City will enforce these regulations by the City’s Corporation Counsel; however, some discrimination complaints are referred to the California Department of Justice and/or the U.S. Department of Housing and Urban Development’s (HUD) Division of Fair Housing and Equal Opportunity.

ENVIRONMENTAL REVIEW PROCEDURES
An environmental review is the process of reviewing a project and its potential environmental impacts to determine whether it meets federal, state, and local environmental standards. The process is required for all federally assisted projects to ensure that the proposed project does not negatively impact the surrounding environment and that the property site itself will not have an adverse environmental or health effect on end users. Not every project is subject to a full environmental review (i.e., every project's environmental impact must be examined, but the extent of this examination varies), but every project must be in compliance with the National Environmental Policy Act (NEPA), and other related Federal and state environmental laws.

Before a project can be approved for CDBG funding, an environmental review must be performed by the City’s designated staff or consultant and approved by the City’s Environmental Review Officer for the activities and property (or properties) intended to receive federal funds. Note that environmental review is separate from eligibility review, that is, a proposed activity for CDBG funding must be evaluated for both activity eligibility (in terms of national objectives, activity eligibility, etc.) and environmental review. Meeting one requirement does not imply meeting the other.

No work may begin without a completed Environmental Review and the City will not reimburse any costs prior to the completion of the environmental review. When determining if CDBG funds can be invested in a project, the City must consider choice and non-choice limiting factors. Non-choice limiting actions will not have an adverse impact or limit the choice of alternatives as a consequence of using those non-CDBG funds, such as option agreements or conditional sales contracts (Refer to 24 CFR

58.22). By comparison, choice-limiting actions include acquisition, demolition, disposition, rehabilitation, repair, new construction, site preparation, and leasing or any other activities that commit to future 27 activities. The City will provide a copy of the completed environmental review to each project as a notice to proceed.

For CDBG-funded projects, the City shall ensure that its procedures follow 24 CFR PART 58 ("Environmental Review Procedures for Entities Assuming HUD Environmental Responsibilities") by utilizing the HUD Environmental Review Online System or HEROS. HUD Exchange has a series of videos on how to utilize the HEROS system. Employees new to the City may utilize these videos to learn how to prepare an environmental review.

There are four (4) levels of environmental review:
• Exempt. These activities, defined by HUD, are by their nature highly unlikely to have any direct impact on the environment. Accordingly, these activities are not subject to most of the procedural requirements of environmental review. One example is public services. • Categorical Exclusion. These activities, defined by HUD, have been determined to be categorically excluded from NEPA requirements. Documentation requirements are generally minimal compared to the remaining two categories (below). An example of an activity falling into this category is owner-occupied housing rehabilitation. • Environmental Assessment. This level of review applies to activities which are neither exempt nor categorically excluded, yet not large enough in scope to warrant an environmental impact statement (next category). An example is a public facilities construction project. Generally, this category is not applicable to CSSF projects.
• Environmental Impact Statement. The largest and most significant scope of review, this type applies to projects that are determined to have a significant impact on the environment (positive or negative). Subrecipients must follow prescribed steps in the course of preparing, filing and reviewing an EIS. An example is a sanitary sewer project that serves 2,500 or more housing units. Generally, this category is not applicable to CSSF projects; in fact, its usage in CDBG-funded projects overall is quite rare.

An abbreviated description of the utilization of the HEROS system in conducting environmental reviews for pertinent CSSF activities can be found below; more complete instructions on navigating the HEROS system can be found at https://www.hudexchange.info/resource/3150/heros-user-guide/.

The typical environmental review process as administered in HEROS is the initiation of the environmental review by the responsible entity (in this case, the City of South San Francisco), followed by an initial analysis and uploads of pertinent documentation (maps and other documents). The City then enters any information provided by third-party providers (such as public service agencies), makes findings and determinations, and requests the release of funds (RROF) of HUD. HUD then reviews the information, and, if appropriate, approves the environmental review and releases the funds, or alternately requests additional information. The HEROS application manages the public comment period for the responsible entity. While the purpose of HEROS is to streamline and consolidate all 28 required documentation for environmental review and release-of-funds information, the City should continue to maintain separate electronic documentation of the review.

The workflow for conducting an environmental review in HEROS generally consists of entering projectspecific information, including the location, sponsor, scope, and timeframe of the project. The City, as the responsible entity then makes a preliminary identification of the review category. HEROS does utilize a “Level of Review Determination Assistant” to assist users who are unsure what level of environmental review applies.

The following elements are included in an environmental review:

1. Historic Preservation (aka Section 106)

2. Flood Plain Review

3. Noise Abatement and Control

4. Explosive and Flammable Hazards

5. Airport Hazards

6. Protection of Wetlands

7. Toxic Chemicals & Radioactive Materials,

8. Other 24 CFR 50.4 Related Federal Laws and Authorities An Environmental Site Assessment (ESA) conducted by an outside party, while supportive, cannot substitute the review conducted by the City.

For those funded programs where, specific sites have not yet been selected, a two-tier review system may be adopted, with the environmental review for the program specifying the parameters that individual sites must meet, and documentation for meeting those parameters being subsequently collected and maintained during program administration.

What follows below are some examples of environmental review procedures for project types that are commonly encountered in the administration of the CSSF’s community development program. This is not an exhaustive list.

Approved environmental reviews will remain current for up to five years unless there is a significant change to the property or scope of work to be completed. If there is a change, the Subrecipient should contact the City to determine if an updated environmental review will be required.

The City Manager signs all environmental reviews to complete the process. If the City Manager is not available to sign the environmental reviews and there is an urgent need to complete the review for a small home repair or project or the position of City Manager is vacant, the Assistant City Manager or the named Acting/Interim City Manager may sign to complete reviews. 29 PROCEDURE FOR PUBLIC SERVICES AND ADMINISTRATION PROJECTS In general, public service activities that will not have a physical impact or result in any physical changes are considered “exempt” under environmental review regulations. After the user enters pertinent background information and selects the level of review, HEROS then asks the user a series of questions common to all projects. First, the user is asked to confirm the project’s compliance with varied federal laws and authorities, then whether any mitigation with those federal laws and authorities are required. For public services, the answers to these questions are straightforward. The user is then asked to electronically sign the form, at which point the review is complete as an Exempt activity.

The Management Analyst will complete all environmental reviews for public service activities and administration activities in HEROS prior to entering any contracts. As such, the HEROS reviews mut be completed prior to the program year start for administration projects and prior to entering any contracts with organizations providing public service activities. The suggested timeline for completion of these reviews is after submission of the Action Plan for the program year, but prior to the program year beginning (May/June).

PROCEDURE FOR SMALL RENOVATION PROJECTS – ADDRESS KNOWN The Subrecipient must submit an Environmental Review Form in City Data Services (CDS) to the City, along with colored photos of each property or lot intended for construction or rehabilitation activities, to start the review process. The Environmental Review Form, which will be provided by the City, should be as detailed as possible in the description of the project scope. The submitted photos should depict the front of the property, the rear of the property, the adjacent houses on either side, the property across the street, and, if applicable, the subject of repair. If the subject of repair is difficult to visually depict (i.e., electrical work, plumbing, etc.) the description of the work to be completed will aid greatly in the review process.

In general, small renovation projects will be considered “categorically excluded subject to 24 CFR Part 58” under environmental review regulations. After the user enters pertinent background information and selects the level of review, HEROS then asks the user a series of questions common to all projects.

First, the user is asked to confirm the project’s compliance with varied federal laws and authorities, then whether any mitigation with those federal laws and authorities are required. For residential housing rehabilitation projects, the City shall decide as to whether a project falls under the purview of the City's programmatic agreement with SHPO that expires in 2024. Staff will work in advance of the expiration date of the agreement to execute an updated programmatic agreement with SHPO or amend/update relevant policies and procedures if there is no longer a valid agreement. If a rehab project is not covered by the City's programmatic agreement with SHPO, the City shall follow the prescribed environmental review procedures under 24 CFR Part 58.
30 In the event of an emergency repair, the Subrecipient only needs to submit an Environmental Review Form to City. The standard review process will then be expedited, and a copy of the review will be emailed. Emergency repairs will only be granted for issues that may risk the health or safety of the individuals or families living in the residence. Some of these repairs include but are not limited to: Hot water heater; Furnace; Leaking roof; Residence contaminated by sewer water (plumbing).

After creating a review and verifying that a project is in compliance with all relevant laws and authorities, the Environmental Review Officer will notify the Subrecipient of any findings. In certain cases, mitigation factors will be required of the Subrecipient in order to proceed with a project. If mitigation factors are required, the City will complete a public process to request a release of funding from HUD.

If no mitigation factors are required, the project will convert to Exempt status and the City’s authorized Environmental Review officer will sign the review to complete the review.

Once the environmental review is complete a copy of the review will be sent by email which gives approval to begin the project. If applicable, restrictions and additional guidance will be outlined in the email.

PROCEDURE FOR LARGE RENOVATION PROJECTS – ADDRESS KNOWN In general, rehabilitation activities fall under the “Categorical Exclusion” category of environmental review; these activities typically require the grantee to demonstrate compliance with the laws, authorities and Executive Orders as per 24 CFR Part 58.5 (a).

New construction, expansion/construction projects or projects that change the use of a property require an Environmental Assessment.

The City, as the responsible entity, must demonstrate compliance relative to a HUD recommended Statutory Checklist, or an equivalent format, to document its environmental findings; again, this process is managed in HEROS. After the user enters pertinent background information and selects the level of review, HEROS then asks the user a series of questions common to all projects.

If no mitigation factors are required, the project will convert to Exempt status and the City’s authorized Environmental Review officer will sign the review to complete the review. 31 Once the environmental review is complete a copy of the review will be sent by email which gives approval to begin the project. If applicable, restrictions and additional guidance will be outlined in the email.

PROCEDURE FOR NOTICE OF INTENT/REQUEST OF RELEASE OF FUNDS/AUTHORITY TO UTILIZE FUNDS The HUD Environmental Review Online System (HEROS) allows Responsible Entities (REs) to complete and certify their environmental reviews online. The Request for Release of Funds (RROF) screen, 7015.15, can be submitted to HUD using HEROS two ways. The first option is for the paper form of the 7015.15 to be signed by the Certifying Officer outside of HEROS and uploaded to HEROS (Option A). The second option is for the 7015.15 to be certified within HEROS by the Certifying Officer (Option B). Both options can be submitted to HUD using the Assign Review feature in HEROS. The City will utilize Option A to submit an RROF.

A notice of intent to file a RROF must be published in the local newspaper and available for comment for a period of 15 days. Once the Notice of Intent – Request for Release of Funds (NOI-RROF) screen is completed in HEROS, users will be able to navigate to the 7015.15 screen. From the 7015.15 screen, users can upload public notifications. Indicate that the Certifying Officer completed a paper 7015.15. A prompt will then appear to upload the signed 7015.15 and enter the date the 7015.15 was signed by the Certifying Officer. After selecting “Save and Continue” at the bottom of the screen the system will assign the review to HUD upon submittal of the 7015.15. HUD, upon approval of the environmental review will issue an Authority to Utilize Grant Funds 7015.16. The City will download and save the authority to utilize grant funds prior to executing any CDBG funded contract.

PROCEDURE FOR TIERED REVIEWS – ADDRESSES UNKNOWN
Environmental review for housing rehabilitation activities with multiple addresses are typically tiered, meaning that there is a general description for the program that is developed and assessed, followed by site-level documentation as projects funded by the program are initiated. In the general level of review, users enter information summarizing the project and outlining the scope and intent of the broad-level review. This will include project description, location, maps, and site photos if applicable. Users will also provide information about the associated activities involved in the project.

Tiered reviews cannot convert to exempt and must follow the Notice of Intent – Request to Release of Funds process. However, the notice of intent cannot include a finding of no significant impact. A sample notice can be found at https://www.hudexchange.info/resource/5160/sample-notice-of-intentto-request-release-of-funds-for-tiered-reviews/. 32 DAVIS BACON COMPLIANCE
The Davis-Bacon Act of 1931 (and Related Acts) requires federally funded or assisted contracts over $2,000 for the construction, alteration, or repair (including painting and decorating) on public buildings or public works to pay local “prevailing wages” to contractors and subcontractors performing the work.

The U.S. Department of Labor is charged with determining the amount and associated wage categories for locally prevailing wage rates.

The City of South San Francisco will notify each Subrecipient in writing as to the applicability of DavisBacon requirements on their project. The City of South San Francisco shall notify Subrecipients of the potential applicability of Davis-Bacon wage rates. Where Davis-Bacon is applicable:

1. The applicable Wage Decision and HUD Form 4010 (Federal Labor Standards Provisions) must be incorporated and physically attached to all construction contracts and bid packets.

2. Pre-Construction training is recommended in order to review Davis-Bacon requirements and regulations. Subrecipients and contractors will receive a copy of the Davis-Bacon Requirements information booklet.

3. All contractors and subcontractors performing work on a Davis-Bacon project must complete and submit (a) Contractor Agreement and (b) Wage and Fringe Benefit Certification form.

4. Subrecipients are responsible for conducting site visits and employee interviews unless specified otherwise by South San Francisco staff or specialized consultants hired to act on the City’s behalf. Interviews must be conducted or attempted with at least 10 percent of employees from each trade utilized as part of the project.

5. A Davis-Bacon Payment Review form signed by City staff must accompany all reimbursement claims. Claims submitted for projects not in compliance with the Davis Bacon requirements will not be approved for payment.

EXCEPTIONS:

The Davis-Bacon Act does not apply to CDBG used for supportive services or operational costs, except where funds are received for the same project from other federal sources that are applicable to the Act.

INCOME ELIGIBILITY
Individuals served under the CDBG programs, must meet and/or track and report on persons served by the income limits established by HUD on an annual basis. The City of South San Francisco currently uses the Part 5 Definition for determining a beneficiary’s income. Subrecipients must also use this definition when calculating the eligibility of a program subrecipient or client.

HUD establishes income limits annually and posts them on its website located at:
https://www.hudexchange.info/programs/home/home-income-limits/. New limits are typically posted 33 every spring or summer. Subrecipients calculating potential beneficiaries’ income are required to use the Part 5 Annual Income method for determining income.

Subrecipients are required to collect and use no less than 2 consecutive months of paystubs and bank statements in order to calculate income eligibility. City staff will monitor programs for meeting the source documentation requirements.

Subrecipients are encouraged to use the CPD Income Eligibility Calculator found at https://www.hudexchange.info/incomecalculator. The income calculator is free of charge and provides step by step guides for documenting income. When using the calculator, you will want to use .06% Passbook Rate in the Guided (Step-by-Step) Method.

Public Services, as designated by their contract, may allow a self-certification of income. For those designated public services (and public services only) funded with CDBG monies, at least 20% of clients must provide full income documentation and calculations. This may be a random sample of the clients being served.

For some public services, as noted in the project specific contract, may allow for the provider to presume the low to moderate income persons benefit. Per 24 CFR 570.208, activities that exclusively serve a group of persons in any one or a combination of the following categories may be presumed to benefit persons, 51 percent of whom are low- and moderate-income: abused children, battered spouses, elderly persons, adults meeting the Bureau of the Census' Current Population Reports definition of “severely disabled,” homeless persons, illiterate adults, persons living with AIDS, and migrant farm workers.

Awardees are responsible for verification of income for each household participating in the program.

As noted above, the method of verification may vary depending upon the type of activities being funded.

Income eligibility, following HUD regulations, will be good for a 12-month period. If a client is on a waiting list for longer than 12 months before receiving assistance, the income calculation must be redone to ensure eligibility.

SUBSIDY LIMIT
The City of South San Francisco will limit the amount of funds that may be used for rehabilitation/construction projects in order to maximize the use of grant funds for housing and community development activities.
• Funding for acquisition-rehabilitation activities may not exceed $100,000 per unit for homeownership opportunities.
34 • Funding for direct homeownership assistance may not exceed $14,999 per unit. • Per unit funding may only exceed established limits with prior, written authorization from the City of South San Francisco staff.
• A minimum of $1,000 of CDBG funds will be provided per unit.

Additional subsidy may be available to subrecipients/developers that provide housing costs that are at or below 30% of the beneficiary’s income, be it a renter or homebuyer.

RELOCATION AND ACQUISITION
The City of South San Francisco and agencies using CDBG funds for projects must comply with 42 U.S.C. 4601 and 49 CFR part 24, which contain the government wide regulations of implementing the Uniform Relocation Assistance Act of 1970 (URA). Assistance must be provided to any dislocated person affected by CDBG or HOME assisted acquisition, construction or rehabilitation. Such assistance shall be undertaken by and paid for from the budget of affected subrecipients. All relocation activities will be coordinated with and approved by the City of South San Francisco.

LEAD HAZARDS PROCEDURES
All subrecipients receiving federal assistance for rehabilitation activities for projects constructed prior to 1978 must comply with the following notification requirements.

All unit occupants must receive the HUD/EPA/CPSC pamphlet "Protect Your Family from Lead in Your Home". Subrecipients must document each homeowner has received a copy of the pamphlet.

If a unit is known to contain lead-based paint or lead-based paint hazards, the Subrecipient must notify occupants or prospective purchasers.

All unit occupants must be notified of any lead hazard evaluation results (or the presumption of leadbased paint/hazards) and of the hazard reduction activities and clearance. Subrecipients must keep a Lead Paint Checklist as part of the files.

Exemptions to the Lead Based Paint Requirements:

1. Exemptions still applicable from the Current Regulations a. Residential Structures built after January 1, 1978

b. Emergency activities

2. Existence of Lead-Based Paint Unlikely
35 a. Areas where state and local governments banned lead-based paint prior to January 1,

1978.
b. Properties found not to have lead-based paint during earlier testing that meets the

requirements of proper evaluations.
c. Properties where all lead-based paint has been identified and removed using approved

methods.

3. Human Threat Unlikely
a. Unoccupied units that will be demolished.
b. Property not suitable for human habitation.
c. Rehabilitation that does not disturb paint.

4. Child Occupancy Unlikely

a. Zero-room dwelling units.
b. Elderly and disabled housing.

Requirements for properties constructed prior to 1978 and receiving less than or equal to $5,000 of federal funds per unit for rehabilitation activities include the following:

1. Lead hazard evaluation
• Paint testing must be conducted to identify lead-based paint on painted surfaces that will be disturbed or replaced, or
• Subrecipients may assume that these surfaces contain lead-based paint.

2. Lead hazard reduction
• If lead-based paint is detected, safe work practices must be used during rehabilitation. • If lead-based paint is assumed, all paint disturbed during rehabilitation must be repaired using safe work practices. Safe work practices include protecting occupants from leadbased paint hazards associated with lead hazard reduction activities, preparing the worksite to prevent the release of lead dust and debris, and appropriate worksite cleanup to remove dust and debris from the work area.

3. Clearance
• Clearance is required only for the work area.
• Clearance must be performed by a certified risk assessor, certified lead-based paint inspector or clearance technician.

Requirements for properties constructed prior to 1978 and receiving federal assistance between $5,000 and $25,000 per unit for rehabilitation activities include the following:

1. Lead hazard evaluation
36 • Paint testing must be conducted to identify lead-based paint on painted surfaces that will be disturbed or replaced, or Subrecipients may assume that these surfaces contain lead- based paint.

2. Lead Hazard Reduction
• If lead-based paint or lead-based paint hazards are detected during the evaluations, safe work practices and interim controls must be implemented to reduce lead-based paint hazards.
• Safe work practices include protecting occupants from lead-based paint hazards associated with lead hazard reduction activities, preparing the worksite to prevent the release of lead dust and debris, and appropriate worksite cleanup to remove dust and debris from the work area.
• Interim control methods include paint stabilization; treatment for friction and impact surfaces; treatment for chewable surfaces; lead-contaminated dust control; and leadcontaminated soil control. • If lead-based paint or hazards are assumed, the Subrecipient must follow safe work practices and perform standard treatments in lieu of interim controls on all applicable painted surfaces and lead-based paint hazards.
• Safe work practices include protecting occupants from lead-based paint hazards associated with lead hazard reduction activities, preparing the worksite to prevent the release of lead dust and debris, and appropriate worksite cleanup to remove dust and debris from the work area.
• Standard treatments include paint stabilization, smooth horizontal surfaces that can be cleaned, correcting dust generating conditions, and bare residential soil.

3. Clearance
• Clearance is required when lead hazard reduction activities are completed in the unit, common areas servicing the unit, and exterior surfaces where hazard reduction took place. • Clearance must be performed by a certified risk assessor, certified lead-based paint inspector or clearance technician.

Requirements for properties constructed prior to 1978 and receiving federal assistance over $25,000 per unit for rehabilitation activities include the following:

1. Lead hazard evaluation
• Paint testing must be conducted to identify lead-based paint on painted surfaces that will be disturbed or replaced, or Subrecipients may assume that these surfaces contain lead- based paint.
• A risk assessment must also be conducted prior to rehabilitation to find lead-based paint hazards in assisted units, in common areas that service those units, and on exterior surfaces, including soil; or Subrecipients may assume that lead-based paint hazards are present. 37 2. Lead hazard reduction
• If lead-based paint hazards are detected during the evaluation, abatement must be completed to permanently reduce these hazards. Abatement permanently removes leadbased paint and lead-based paint hazards by removing lead-based paint and its dust, or permanently encapsulating or enclosing the lead-based paint, replacing components with lead-based paint, and removing or permanently covering lead contaminated soil.

Encapsulation and enclosure require ongoing maintenance to check their effectiveness. • If lead-based paint hazards are detected on the exterior surfaces that are not disturbed by rehabilitation during the risk assessment, interim controls may be completed instead of abatement to reduce these hazards. Interim control methods include paint stabilization; treatment for friction and impact surfaces; treatment for chewable surfaces; leadcontaminated dust control; and lead-contaminated soil control. • If lead-based paint is detected or assumed, safe work practices must be used during lead hazard reduction. Safe work practices include protecting occupants from lead-based paint hazards associated with lead hazard reduction activities, preparing the worksite to prevent the release of leaded dust and debris, and appropriate worksite cleanup to remove dust and debris from the work area.

Subpart B of 64 CFR 50202 (link) outlines general requirements for lead-based paint and establishes uniform definitions for terms associated with lead-based paint. Requirements for lead-based paint abatement vary according to the scope of the funded project and the degree of federal assistance provided. Standard notification requirements to residents and other concerned parties are also outlined in the rule, as are possible exemptions/waivers and prohibited means of mitigating lead-based paint.

SECTION 3
Section 3 is a provision of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) that is regulated by the provisions of 24 CFR 75. Section 3 regulations ensure that employment and other economic opportunities generated by certain HUD financial assistance shall, to the greatest extent feasible, and consistent with existing Federal, State, and local laws and regulations, be directed to lowand very low-income persons, particularly those who are subrecipients of government assistance for housing, and to business concerns which provide economic opportunities to low- and very low-income persons.
38 APPLICABILITY
For housing and community development financial assistance, this plan applies to housing rehabilitation, housing construction, and other public construction projects that exceed $200,000 or more of housing and community development financial assistance from one or more HUD programs. Applicability is determined at the project level.

When a subrecipient receives an award for non-construction activities at any dollar amount or for construction activities for less than $200,000, Section 3 requirements will not apply to the City or the subrecipient. When a subrecipient receives an award for construction activities totaling $200,000 or more, Section 3 will apply to the City and the subrecipient. When a subrecipient receives an award for construction activities totaling $200,000 or more and the project involves contracts and subcontracts that exceed $100,000, Section 3 will apply to the City, the subrecipient, contractors and subcontractors.

Although not required, the contractor awarded this project is encouraged to provide employment and other economic opportunities generated by HUD assistance or HUD-assisted projects to low and verylow-income persons, particularly those who are subrecipients of government assistance for housing or residents of the community with which the Federal assistance is spent. The Contractor is also encouraged to provide outreach to Section 3 businesses for needed subcontractors, utilize the Section 3 opportunity portal at https://hudapps.hud.gov/OpportunityPortal/, and to encourage all subcontractors to do the same. Contractor is encouraged to report actions taken to the City.”

IMPLEMENTATION
A Section 3 worker seeking certification shall submit self-certification documentation to the subrecipient contractor or subcontractor, that the person is a Section 3 worker, or a Targeted Section 3 worker as defined in 24 CFR Part 75. For the purposes of Section 3 worker eligibility, the City of South San Francisco will use individual income rather than family/household income to determine eligibility. The income limits will be determined annually using the guidelines published at https://www.huduser.org/portal/datasets/il.html.

Persons seeking the Section 3 worker preference shall demonstrate that it meets one or more of the following criteria currently or when hired within the past five years, as documented:
1) A low- or very low-income resident (the worker’s income for the previous or annualized calendar year is below the income limit established by HUD); or 2) Employed by a Section 3 business concern; or
3) A YouthBuild participant
39 Persons seeking the Targeted Section 3 worker preference shall demonstrate that it meets one or more of the following criteria:
1) Employed by a Section 3 business concern; or
2) Currently meets or when hired met at least one of the following categories as documented within the past 5 years:
a. Living within the service area or neighborhood of the project, as defined in 24 CFR Part 75.5; or
b. A YouthBuild participant
A Section 3 business concern is any businesses that believes it will meet the Section 3 Business requirements and may self-register in the HUD Business registry at http://www.hud.gov/Sec3Biz.

Businesses may seek Section 3 Business Concern preference by demonstrating that it meets one or more of the following criteria:
1) At least 51 percent of the business is owned and controlled by low- or very low- income persons; or
2) At least 51 percent of the business is owned and controlled by current public housing residents or residents who currently live in Section 9-assisted housing; or 3) Over 75 percent of the labor hours performed for the business over the prior three-month period are performed by Section 3 workers.

All contract and subcontract agreements related to the project must include the following language:

Compliance with Section 3 Final Rule—Contracts over $200,000 During the performance of this contract, the Contractor agrees as follows:

1. The work performed under this contract is subject to the requirements of Section 3 Final Rule (24 CFR Part 75) of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u. The purpose of Section 3 is, to the greatest extent feasible and consistent with existing Federal, state, and local laws and regulations, to provide employment and other economic opportunities generated by HUD assistance or HUDassisted projects covered by Section 3 to low- and very low- income persons, particularly those who are subrecipients of government assistance for housing or residents of the community in which the Federal assistance is spent.

2. The parties to this Contract agree to comply with HUD’s regulations in 24 CFR Part 75, which implement Section 3 Final Rule. As evidenced by their execution of this Contract, the parties to this Contract certify that they are under no contractual or other impediment that would prevent them from complying with part 75 regulations. 40 3. Pursuant to 24 CFR Part 75, all parties to this Contract agree to make, to the greatest extent feasible and consistent with existing Federal, state, and local laws and regulations, qualitative efforts to provide employment and other economic opportunities to low- and very low- income individuals. All parties to this Contract agree to track labor hours of all employees, labor hours of Section 3 workers, and track labor hours of Targeted Section 3 workers to meet required benchmarks. The benchmarks established in Section 3 state that 25% of total labor hours worked shall be worked by Section 3 and Targeted Section 3 workers. If established benchmarks are not met, the parties to this Contract agree to provide documentation of the qualitative efforts made to hire and retain Section 3 workers. Where feasible, parties to this Contract should give priority for opportunities and training to:
a. Section 3 workers residing within the service area or the neighborhood of the project, and
b. Participants in YouthBuild Programs

4. All parties to this Contract are required to retain records to demonstrate Section 3 compliance. This includes, but is not limited to, documentation of workers’ selfcertification of Section 3 status, documentation of hours worked by all employees, Section 3 workers, and Targeted Section 3 workers along with documentation that benchmarks have been met and/or documentation of qualitative efforts made to assist, employ, and provide various economic opportunities and trainings to low- and very lowincome persons. Records must be maintained for 5 years for the purposes of monitoring at a Federal, state, or local level.

5. The Contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR part 75, and agrees to take appropriate actions, as provided in an applicable provision of the subcontract in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR part 75. The Contractor will not subcontract with any subcontractor where the Contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR part 75.

6. Noncompliance with HUD’s regulations in 24 CFR part 75 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUDassisted contracts.

GOALS
The City of South San Francisco has established employment and training goals that subrecipients, contractors, and subcontractors should meet to comply with Section 3 requirements outlined in 24 CFR 41 Part 75.19 for housing and community development financial assistance. The safe harbor benchmark goals are as follows:
1) Twenty-five (25) percent or more of the total number of labor hours worked by all works on a Section 3 project are Section 3 workers;
Section 3 Labor Hours/Total Labor Hours >= 25%
And,
2) Five (5) percent or more of the total number of labor hours worked by all workers on a Section 3 project are Targeted Section 3 workers, as defined at 24 CFR Part 75.21; Targeted Section 3 Labor Hours/Total Labor Hours >= 5%
If a project is unable to meet the goals, they must demonstrate qualitative efforts in one of the following ways:
● Outreach efforts to generate job applicants who are receiving Section 8 rental assistance ● Direct, on-the-job training (including apprenticeships) for Section 3 workers ● Indirect or technical training such as arranging for, contracting for, or paying tuition for off-site training
● Outreach efforts to identify and secure bids from Section 3 business concerns ● Technical assistance to help Section 3 business concerns understand and bid on contracts ● Division of contracts into smaller jobs to facilitate participation by Section 3 business concerns ● Provided or connected residents with assistance in seeking employment, including drafting resumes, preparing for interviews, finding job opportunities, or connecting residents to job placement services
● Held one or more job fairs
● Provided or connected residents with supportive services that can provide direct services or referrals
● Provided or connected residents with supportive services that provide one or more of the following: work readiness health screenings, interview clothing, uniforms, test fees, or transportation
● Assisted residents with finding childcare
● Assisted residents to apply for/or attend community college or a four-year educational institution
● Assisted residents to apply for or attend vocational/technical training ● Assisted residents to obtain financial literacy training and/or coaching ● Bonding assistance, guaranties, or other efforts to support viable bids from Section 3 business concerns
● Provided or connected residents with training on computer use or online technologies 42 REPORTS
All subrecipients receiving federal funds for construction related activities are required to complete quarterly reports and at the completion of the term of the Grant Agreement. The year-end report tracks all contractor/subcontractor activities, including Section 3 contractors.

Final payment will be withheld until these reports have been completed and submitted to the City. All reports are due 15 days after the completion of the program year, if not sooner. This is date is October 15th of each program year.

COMPLIANCE
Subrecipients that do not meet numerical goals identified in this policy shall demonstrate why it was not feasible to meet the numerical goals and explain the efforts undertaken to comply with Section 3.

PERIODIC/YEAR END REPORTS
The City of South San Francisco will use progress reports, submitted with claims and at year-end, to measure the progress of recipient activities throughout the year.

City staff must receive reports no later than the 15th of the month following the close of each quarter.

The federal grant year is a program year beginning July 1st through June 30th, September 30th is the close of the first Fiscal quarter, December 31st closes the second quarter, March 31st the third, and June 30th the fourth (as well as the fiscal year).

At the end of each Federal Fiscal year (ending June 30th) the recipient is responsible for submitting a cumulative report for each Public service grant. This year-end report should detail annual accomplishments, and provide insight into a number of other areas, including the average duration of the activities, the amount of funding used per activity, and demographic information concerning the individuals who benefited from the use of grant funds throughout the year.

If a recipient’s reports are not submitted and completed by the due date, City staff will withhold payment on all federal claims until all reports are current. In addition, failure to return reports in on a timely manner will reflect on future funding decisions and may be cause for termination of the current or pending contract. All construction and rehab unit reports must reflect the completed work prior to reimbursement for that unit.

City staff will update the Integrated Disbursement and Information System within 30 days of receiving a Recipient’s report. City staff will closely monitor the activities reported on a quarterly basis. If the quarterly reports reveal that the activities being reported vary significantly from the timeline established prior to contract execution, City staff will meet with the recipient to determine a proper course of action. 43 Financial leveraging and allowable match for the entire project shall be included on the quarterly report, not just federal funding received.
44 IN-HOUSE PROGRAMS
The CSSF offers a few programs, operated and managed by its own staff. This section discusses the community development programs that are most frequently and consistently offered by the City of South Francisco and are discussed here for the purpose of staff and board orientation. The policies for these programs are briefly outlined, but more complete details can be found in the Appendices to this document, and those separate policy documents should take precedence if there is any contradiction between them and their summaries found here.

DEBRIS BOX PROGRAM
The City’s Economic Development & Housing Division (EDH) administers a housing rehabilitation voucher program that makes debris box vouchers available to qualified low-income homeowners.

Vouchers are provided to remove accumulated debris and yard waste from their properties. Vouchers are used only for limited amounts of money when the usual loan process is prohibitively expensive or too time consuming. This program is only available to homeowners.

Eligible applicants must meet the following criteria to be considered for the debris voucher program. • Must be a homeowner in South San Francisco
• Household cannot have an income greater than 80% of the area median income. • Demonstrated the materials they want to remove meet the criteria set by the City.

EMERGENCY HOME REPAIR VOUCHER PROGRAM
The City’s Economic Development and Housing Division (EDH) administers a housing rehabilitation voucher program that makes emergency home repair vouchers available to qualified low and moderateincome homeowners. Vouchers are provided as grants of up to $5,000 for qualifying homeowners.

These vouchers apply to emergency repairs and code violations, such as broken sewer lines, roof repairs, broken windows, etc. Please note that this program is only available to homeowners.

This program is a grant program and does not require a payback by the homeowner, because of the low cost.

Eligible applicants must meet the following criteria to be considered for the debris voucher program. 45 • Must be a homeowner in South San Francisco
• Household cannot have an income greater than 80% of the area median income. • Housing unit may be a manufactured home, as defined by the Division of Planning. A Manufactured Home is a residential building, dwelling unit or an individual dwelling room or combination of rooms thereof, or building component, assembly or system that is either wholly or is in substantial part manufactured off-site location to federally preemptive construction standards and which is transportable in one or more sections. A Manufactured Home mounted on a permanent foundation and connected to all utilities required for a Dwelling Unit built on the site is considered a Dwelling Unit. Factory-built housing does not include a mobile home, as defined in Health and Safety Code Section 18211.

The following types of homes are ineligible for repairs. • Mobile Homes
• Tiny Homes not affixed to a permanent foundation
• Multifamily units in which the homeowner does not reside, unless the repair addresses an item that improves all units in the building.

HOUSING REHABILITATION LOAN PROGRAM
The City's Housing Rehabilitation Program assists low to moderate income homeowners city-wide with loans and grants for housing rehabilitation. The program is funded by Community Development Block Grant (CDBG) funds. The City has also implemented a Revolving Loan Fund that dedicates program income received from prior housing loans to be used in owner-occupied housing rehabilitation projects.

The housing grants are used to complete minor repairs and are funded through the City’s annual CDBG entitlement. The housing loans can be funded through the Revolving Loan Fund, as funds are available.

The housing rehabilitation programs are administered by the City's Economic Development and Housing Division (EDH).

Eligible applicants must meet the following criteria to be considered for the home repair voucher program:
• Must be a homeowner in South San Francisco
• Household cannot have an income greater than 80% of the area median income. • Housing unit must be a single-family unit.
• Housing unit may be a manufactured home, as defined by the Division of Planning. A Manufactured Home is a residential building, dwelling unit or an individual dwelling room or combination of rooms thereof, or building component, assembly or system that is either wholly or is in substantial part manufactured off-site location to federally preemptive construction standards and which is transportable in one or more sections. A Manufactured 46 Home mounted on a permanent foundation and connected to all utilities required for a Dwelling Unit built on the site is considered a Dwelling Unit. Factory-built housing does not include a mobile home, as defined in Health and Safety Code Section 18211.

Ineligible applicants include the following:
• Mobile Homes.
• Tiny Homes not affixed to a permanent foundation
47 FINANCIAL PROCEDURES
All subrecipients of federal funds, including the City of South San Francisco, must follow financial principles laid out in 2 CFR 200.302(b), and the City imposes these same requirements on vendors paid with CDBG funds. Pertinent sections are of 200.302(b) are listed below for convenience:
1) The subrecipient must provide identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any.
2) The subrecipient must maintain accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. If a Federal awarding agency requires reporting on an accrual basis from a subrecipient that maintains its records on other than an accrual basis, the subrecipient must not be required to establish an accrual accounting system. This subrecipient may develop accrual data for its reports on the basis of an analysis of the documentation on hand. Similarly, a pass-through entity must not require a subrecipient to establish an accrual accounting system and must allow the subrecipient to develop accrual data for its reports on the basis of an analysis of the documentation on hand.
3) The subrecipient must maintain records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation.
4) The subrecipient must maintain effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. See § 200.303. 5) The subrecipient must document the comparison of expenditures with budget amounts for each Federal award.

GRANT BASED ACCOUNTING
The City of South San Francisco utilizes a commonly used Enterprise Resource Platform (ERP) for all City financial accounting including its CDBG Grant. It has the ability to track CDBG programs by assigning individual projects to each program. New project codes are created annually in order to differentiate between program years and effectively track and account for revenue and expenditure related to each specific program. All CDBG programs are managed within a single accounting fund to maintain separation from all other city funds and finances. The budget for each program from the approved 48 Annual Action Plan is added to the project to assist with effective financial tracking. ECD staff will complete New Project Set-Up Request Forms each year to develop new project numbers for each program for the forthcoming program year. The project set-up shall include:
• set the budget for the project
• describe the expenses that can be included or attributed to the project • The General Ledger (GL) account codes where revenues and expenditures will ultimately be recorded in the City’s financial system.

In addition to the use of project tracking, new Purchase Orders (PO) will also be created for each grant contract every year to assist in budgetary control of the contracts. ECD will create requisitions within the City’s ERP, attaching all pertinent documentation (contract, Certificate of Insurance, etc.). Finance will review and approve the requisition and create the PO. Each PO will have the appropriate program project code and GL account assigned to it such that when an invoice is received for payment, ECD will code up the invoice with the appropriate PO number during invoice entry into the ERP. This will ensure the invoice is recorded against the correct tracking project/GL code and the corresponding program budget liquidated as funds are spent.

PROCUREMENT
Policies in this section pertain to vendor procurement and contracting and are meant to outline higherlevel decisions about the process and requirements for obtaining private assistance for the City’s activities. All procurement activities should follow Federal and CDBG-specific procurement regulations as well as follow the City’s procurement policies and procedures. If any conflict, the CDBG regulations take precedence.

OVERVIEW
Subrecipients must solicit goods and services based on a clear and accurate description of the material, product or service to be procured and cannot contain features which unduly restrict competition, such as:
• unreasonable qualifying requirements;
• unnecessary experience or excessive bonding requirements; • specifying only brand name products, instead of allowing an “equal to” product; • non-competitive pricing practices between firms or affiliated companies; or, • non-competitive awards to consultants on retainer contracts.

All prospective bidders must receive the same Notice/Instruction to bidders. Questions must be answered in the form of an addendum to all prospective bidders. No negotiating may take place during or after bidding. Subrecipients may accept alternate bids. Any changes will be in the form of a change order and must be approved by the City staff prior to contract/change order signing. All bids must be based on written specifications, in writing and signed by the contractor. If an adequate number of bids 49 are not received, subrecipients must document the efforts made to ensure an open competition. City staff may request solicitation of additional bid at its discretion. All bids received by the subrecipient shall be organized, collated, and reviewed for accuracy and thoroughness.

Bidding procedures vary in their requirements based on the anticipated contract amount. Prior to implementing the bidding process, City staff must prepare a memo estimating the anticipated contract expenditures and document the assumptions accordingly. If bids are markedly different (higher) than anticipated by the City, and/or if the bids received would have required a more stringent bidding procedure if the general amounts been known, the City may elect to reject all bids and re-initiate the more stringent bidding process. In general, there are three (3) levels of requirements for bids:
• Micropurchases (anticipated contract amount is less than $10,000). Generally, competitive procedures are not required, although a good faith effort to review prices is recommended.

Note that the award threshold applies to the aggregate amount of goods and purchases pertinent to the project; subdividing the bid packages into smaller amounts, whether for award to a single vendor or multiple vendors, in order to avoid more stringent bidding procedures is not allowed. The recipient must still comply with all applicable policies, such as the environmental review, specifications, estimates, Davis Bacon, and approvals. • Small purchases (anticipated contract amount is greater than or equal to $10,000, and less than $250,000). Recipients must solicit bids from an adequate number of qualified sources, with a minimum of two bids. All bids must be based on approved specifications, in writing and signed by the contractor. If an adequate number of bids are not received, recipients must document the efforts made to ensure an open competition. City staff may request solicitation of a third bid at its discretion.
• Sealed bid process (anticipated contract amount is greater than or equal to $250,000).

Recipients must have a public bidding process; Notices or Instructions to bidders must include an open and close date. If an extension is needed, the proper notification must be submitted to all prospective bidders to ensure fair and open competition. The City will ensure compliance. No bids will be accepted after the close date.
• Professional services (regardless over $10,000). Recipients and the City may release a request for qualifications when seeking professional services, using a qualification-based selection. In many cases, utilizing professional services over several years offers continuity for a program and may be renewable up to three years.

Other requirements the City and subrecipient must ensure that the award is:
• Made to contractors, with the lowest and/or responsible bid and able to perform successfully under the terms and conditions of the proposed contracts; • Made to contractors who are licensed as required by the City of South San Francisco • Not made to any party which is debarred or suspended or is otherwise excluded from or ineligible for participation in federal assistance programs (verified via sam.gov); 50 • Not made to any contractor or persons that participated in the development or drafting of specifications, requirements, statements of work, invitations for bids and/or other requests for proposals.
• Not made to a construction manager, who does self-performing work. • Not made to any contractor or any person that is a member of the subrecipient’s board of directors.

If a pre-qualified list of contractors is used, it must be developed through an open solicitation that allows entry of other firms at any time during the solicitation period. They must also include an adequate number of qualified sources. The full list of pre-approved contractors must be used during the program year, or each contractor must be invited once per program year to work on a project.

MINORITY BUSINESS OUTREACH
Minority Business Enterprises (MBEs), Women Business Enterprises (WBEs) and Veteran Business Enterprises (VBE’s) shall have the maximum feasible opportunity to participate in the performance of Federal contracts. Subrecipients agree to comply with the requirements of Executive Orders 11625, 12432 and 12138 concerning Minority and Women’s Business Enterprise, which encourages the participation of minority and women owned business in the benefits of the Program by:

1. Contacting minority businesses which offer services needed by the organization in carrying out the Program with copies of any advertisements outlining information on where, when, and how to submit bids or proposals for such work; and

2. Keeping records on contracts made to minority and women businesses and any correspondence received from such businesses for any contracts let through the Program and relaying this information to the City.

CDBG projects that are publicized in the local electronic and print media will include specific mention of the desire of the City and its CDBG subrecipients to work with women and minority business owners.

Subrecipients may obtain a list of state certified minority and woman-owned businesses by contacting or visiting the website of the Minority and Women’s Business Enterprises Division of the State of California Department of Administration. The subrecipient is also encouraged to contact other appropriate groups for assistance in identifying new businesses that are women or minority enterprises.

SOLE SOURCE JUSTIFICATION
It may be necessary under certain circumstances to allow for non-competitive pricing of goods and services. Some examples of these circumstances follow:
51 • Compatibility – there is a demonstrated need for compatibility with an existing item with enough detail to demonstrate that compatibility is indeed necessary • Existing Contract – the Vendor holds a service contract and therefore must supply the parts as a part of this contract. Mention warranty invalidation, if appropriate • Unique -- the Vendor can provide a feature or service that is unique within the service area, and it can be established why these unique features are necessary for the project • Timeframe – Time is of the essence and only one known source can meet the needs within the required timeframe (note that administrative delays do not justify urgency for a sole source justification)
As a method of procurement, sole source justification is not intended, and should not be used, to sidestep competitive requirements, but rather is a tool to be applied when feasible alternatives are not available. Recipient inaction that leads to an urgent contracting need is not sufficient to establish solesource procurement.

HATCH ACT
Subrecipients must agree that no funds provided, nor personnel employed under this Agreement, shall be, in any way or to any extent, engaged in the conduct of political activities in violation of Chapter 15 of Title V U.S.C.

ANTI- LOBBYING CERTIFICATION
Subrecipients must certify that:

1. No Federal appropriated funds have been paid or will be paid, by or on behalf of the subrecipient to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment or modification of any Federal contract, grant, loan, or cooperative agreement.

2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the subrecipient shall complete and submit Standard Form LLL, “Disclosure Form to Report Lobbying”, in accordance with its instructions.
52 3. Subrecipients must require that the language of their certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.

REIMBURSEMENT OF COSTS
Claims are paid upon reimbursement only. The Subrecipient must have already paid all vendors or contractors for services provided prior to the submission of a claim. In order to submit a claim, the Recipient must submit copies of invoices or receipts totaling the amount to be claimed. The following sections detail the documentation that must be submitted along with a claim or reimbursement request.

SUBRECIPIENT REIMBURSEMENTS
Subrecipients shall submit for reimbursement via the City Data Services system no less than on a quarterly basis. Claims are paid upon reimbursement only. The Subrecipient must have already paid all vendors or contractors for services provided prior to the submission of a claim. In order to submit a claim, the subrecipient must submit copies of invoices or receipts totaling the amount to be claimed. Before the payment of a first claim submitted under a contract serving low- to moderate-income clientele, an audit of the client files will be completed to ensure that income documentation and other clientele-relevant eligibility information is being collected that can verify the admissibility of the activity.

All reimbursement requests by public service subrecipients shall include a summary detailing expenses by project budget line item and the amount being charged to the City's CDBG program. Where subrecipients serve clients from multiple jurisdictions in San Mateo County, the City's invoice review procedures include an evaluation that charges to City of South San Francisco are pro-rated based upon the actual number of City of South San Francisco residents served.

The table below outlines what supporting documentation must accompany reimbursement requests. 53 COST ITEM SUPPORTING DOCUMENTS
Salaries • Documented payrolls approved by a responsible official of the organization
• Signed personnel activity reports (timesheets) summarizing the distribution of activity of each employee. Timesheets should identify the amount of time spent on serving City of South San Francisco clients, or directly on the program.
• Timesheets shall be signed by the employee and their direct supervisor (in the case of an Executive Director, the Board President must sign the timesheet)
Fringe Benefits • Proof of payment of fringe benefits including health insurance statements, life insurance statements, etc. Fringe benefits will be calculated as a percentage of salaries. This percentage may generally not exceed 30 percent of salaries.

Materials and Supplies • Copies of invoices/receipts
Utilities • Copies of invoices/receipts
Other expenses • Copies of invoices/receipts/billing statements

PROCESS FOR APPROVAL OF REIMBURSEMENT REQUESTS FOR CONSULTANT SERVICES Based on the terms of the written agreement with the contractor, city staff reviews reimbursement requests for allowability, eligibility, and reasonableness. All reimbursement requests by the contractor shall include a summary detailing expenses and the amount being charged to the City's CDBG program.

The table below outlines what supporting documentation must accompany reimbursement requests.

COST ITEM SUPPORTING DOCUMENTS
Salaries • Requests for reimbursement shall include a summary of the position(s) billed to the contract, the dates that services were provided, total number of hours billed by each position per day, and the hourly billing rate of each position charged to the City of South San Francisco activity.

Materials and Supplies • Copies of invoices/receipts
54 COST ITEM SUPPORTING DOCUMENTS
Other expenses • Copies of invoices/receipts/billing statements

REIMBURSEMENT REQUESTS FOR CONSTRUCTION ACTIVITIES (INCLUDING PUBLIC FACILITIES) City CDBG staff shall work with staff from the Public Works Department and Finance Department to coordinate project management activities and invoice review, approval, and draw down of funds related to construction activities using CDBG funds. At the onset of each construction project, each staff person's responsibilities related to the project will be determined.

All reimbursement requests by the contractor shall include a summary detailing the work performed, the dates such work was performed, and the amount being charged to the City. If the project is utilizing more than one source of funding, the invoice should include a cover page that delineates the charges to each resource, i.e., CDBG versus other local, state or federal funding.

CDBG staff will review all invoices prior to approval for payment and draw down of CDBG funds from IDIS. Prior to approving payment, CDBG staff will confirm with the Public Works Department that all items billed by the contractor have been completed.

CDBG staff will not approve any invoice if the contractor has not complied with applicable federal rules and regulations that the construction activity is subject to, such as Davis-Bacon requirements. Invoices requiring Davis Bacon compliance shall provide proof of compliance per the Davis Bacon Wage section of these policies prior to seeking reimbursement.

If retention payments have been held by the City, the contractor will not be paid by the City until the City Council has certified completion of the project. CDBG staff will work with the Finance Department to ensure that retention payments are not paid to the contractor and drawn down in IDIS until the project has been certified as complete.

INDIRECT COSTS
If indirect costs are charged, the Subrecipient will develop an indirect cost allocation plan for determining the appropriate Subrecipient’s share of administrative costs and shall submit such plan to the City for approval, in a form specified by the City.

If a Subrecipient already has an indirect cost allocation plan filed and approved by another federal agency, that cost allocation plan shall be the one used by the City. 55 DISBURSEMENT OF FUNDS
Claims for Administration funds must be made in proportion to claims on program specific activities.

If City staff determines that insufficient documentation has been provided, he/she/they will contact the subrecipient and request additional information. The claim will not be processed and/or will be returned to the subrecipient.

All claims must be submitted no later than 15 days after the contract expiration date to be eligible for reimbursement. (Note: All expenses must have been incurred within the terms of the contract to be eligible for reimbursement.)
The CSSF will withhold the final 10 percent of the total contract amount until the project is complete and all objectives have been met. Invoices may be submitted no less than quarterly and no more frequently than monthly.

Situations may arise where a subrecipient expends their entire CDBG grant prior to the end of the fiscal year. This may occur particularly when a CDBG grant is small allowing for funds to be drawn down quickly and/or when a subrecipient devotes significant energy and time serving City of South San Francisco residents in the first and/or second quarter.

The City will allow the complete expenditure of a CDBG grant in the first or second quarter if a subrecipient can provide full documentation of allowable and eligible costs incurred during the respective time. When a subrecipient expends the entirety of their grant in the first or second quarter of the fiscal year, the subrecipient is still required to complete the entire fiscal year's contractual obligations, including quarterly and annual performance reporting.

The City will not allow for the expenditure of all grant funds in the first or second quarter if full documentation of eligible and allowable costs as required by the subrecipient's CDBG contract is not provided by the subrecipient for the relevant time period.

The Subrecipient must be in compliance with all City and Federal programs, grants, laws and regulations.

The City will withhold all funding on claims and activities until the Subrecipient is in full compliance.

Similarly, if quarterly reports or other required documents have not been submitted in a timely fashion, CSSF will withhold payment on claims until these outstanding reporting requirements are resolved.

INELIGIBLE COSTS
Ineligible costs include, but are not limited to the following:
56 • Advertising not associated with personnel recruitment, procurement of goods and services, and disposal of surplus property;
• Costs incurred by advisory councils or committees unless specifically authorized by HUD; • Costs of alcoholic beverages;
• Bad debts and/or any losses arising from un-collectible accounts; • Contributions and donations, including cash, property and services made by organization regardless of subrecipient;
• Donations to a contingency reserve or unforeseen events; g. Costs of entertainment, including amusement, diversion, and social activities and any costs directly associated with such costs (such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities); • Costs of organized fundraising;
• Fines and penalties resulting from violations or failure to comply with laws and regulations; • Membership expenses in lobbying organizations;
• Interest and other financial costs;
• Personal items;
• Legal fees;
• Costs associated with out-of-county air/ground travel, equipment and subcontracts that were incurred prior to obtaining written approval from the City; and • Stipends or subsistence-type grant payments.

Subrecipients are not allowed to charge indirect costs, which are administrative costs and carrying charges related to the planning and execution of community development activities.

For a complete description of eligible and ineligible costs, please see 2 CFR Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.

EQUIPMENT
Organization internal record keeping on non-expendable property or equipment must include the following standards:

1. Inventory. The recipient shall keep inventory records, acceptable to the City on all non-expendable property purchased under this Agreement. The recipient shall submit an inventory of all items at the end of the Program year and resubmit it each fiscal year with revisions as necessary.

2. Insurance and Maintenance for all Non-expendable Property Purchased under CDBG Agreements. The recipient shall maintain sufficient insurance to cover the cost of replacement due to loss by fire, theft, or accidental damage. The recipient shall also be responsible for the maintenance and upkeep of all such property.
57 DRAWDOWN DOCUMENTATION
Supporting documentation, for the purposes of Reporting and Reimbursement, consists of those documents used to substantiate the incurred costs, and should be gathered and maintained in a file, grouped by drawdown submissions. These documents should not only show the cost, but what costs were incurred for, including proof of payment, reports, invoices, and backup to allow a third party to trace the expenditure from the invoice or receipt to the payment, and from the payment to the drawdown or third-party invoicing. Whether documents are stored in electronic or hard copy is determined (at least in part) from the requirements of the funding source(s).

Drawdowns for HUD grant programs are processed in the Integrated Disbursement and Information System (IDIS). The listed procedures will be followed authorizing draw downs in IDIS:
• The City’s Management Analyst will initiate the draw downs (IDIS) and approved check disbursements at the same time.
• IDIS draws will be created in IDIS at the time of the check disbursement. • IDIS drawdowns submitted will be accompanied by support documentation, utilizing a draw report, outlining each of the vouchers created in IDIS. • IDIS drawdowns will not be submitted earlier than 3 days prior to the associated expense being available to employees and vendors.
• ECD’s Management Analyst will send to Finance all documentation relating to a drawdown. • Finance will review all the documents provided and perform a cross-check with the accounting records in the City’s ERP system to ensure alignment, prior to approving a draw down in IDIS for reimbursement of program expenses.
• Drawdowns shall be approved in IDIS no less than quarterly.

PROGRAM INCOME
It is anticipated that quarterly IDIS drawdowns of CDBG expenditures will greatly exceed monthly program income. Interest earnings on program income that are not offset by monthly expenditures will be credited to the CDBG program.

There are currently two sources of CDBG program income:
• Program income from rehab program
o The loan servicer AmeriNational receives loan repayments and submits a monthly report to the City. The repayments are forwarded to the City and deposited in the CDBGspecific accounting fund in the City’s ERP system. As described above, this program 58 income is drawn down first when CDBG funds are drawn down for any CDBG activity. • Program income from housing activity
o A few housing development projects received CDBG funds and loan repayments are made when there is surplus cash or residual receipts at the end of the year, as evidenced by the developments' annual financial audits. The amount of CDBG program income is determined by the loan terms indicated in the promissory note or CDBG funding agreement. The Management Analyst records the loan repayment and forwards it to Finance to deposit in the CDBG-specific accounting fund in the City’s ERP system. As above, the program income is drawn down first when CDBG funds are drawn down for any CDBG activity.

LEVERAGING AND IN-KIND CONTRIBUTIONS
All projects are required to report leveraging at the end of the program year, or the completion of the contract period, whichever comes first. CDBG leveraging contributions can take the form of cash, noncash equivalent services, equipment, or other non-expendable property. Documentation for valuation of in-kind and other contributions must consist of verifiable records, and conform to the following cost principles for valuation:
• The contributions must not be included as a contribution for any other federally assisted program; • The value of services must be consistent with those paid for similar work; • The value of property is assessed at fair market value; • Appropriate documentation is maintained for volunteer services, including the names, addresses, dates and hours of work of volunteers; and
• The basis for determining the value of personal services, material, equipment, land and other fixed assets must be clearly stated.

ACCOUNTING AND AUDITING
Clear bookkeeping is an essential part of effective subrecipient management. Subrecipients will be subject to a formal agreement with the City that outlines the respective responsibilities and expectations of each party. This agreement will incorporate a program management plan (PMP) that specifies the financial controls that the subrecipient will be utilizing; in general, these financial controls must meet all the policies and expectations that the City places on itself (see “Fiscal Policy” section, above). All subrecipients should conduct a closeout audit upon completion or termination of the project; this audit is the subrecipient’s responsibility, including the prompt resolution to any resultant findings.
59 As with financial partners (below), subrecipients are expected to cover the local match requirements for any federal program funds being passed through the City. Timeframe commitments will be subject to review by the HUD. As a rule, subrecipients should be prepared to initiate closeout of the grant within 90 days of completion of the project activity.

AUDITS AND INSPECTIONS
All project records with respect to any matters covered by this Agreement shall be made available to the City, its designees, or the Federal government, at any time during normal business hours, as often as the City deems necessary, to audit, examine, and make excerpts or transcripts of all data pertinent to the administration of the grant or contract.

Agencies must have an annual agency audit or basic financial review, whichever is applicable, conducted in accordance with 2 CFR Part 200 and must submit a copy to the City. Any Recipient expending $750,000 or more in federal awards during the Recipient’s fiscal year must meet the single audit requirements of 2 CFR Part 200, Chapters I and II. Non-profit organizations that expend less than $750,000 annually in federal awards shall be exempt from an audit conducted in accordance with 2 CFR Chapter I, Chapter II, Part 200, et al., although their records must be available for review. These agencies are required by the City to submit “Reduced Scope” audits such as financial audits or performance audits, although they still may elect to follow the more stringent requirements of 2 CFR Chapter I, Chapter II, Part 200, et al.

In order to comply with 2 CFR Chapter I, Chapter II, Part 200, et al. (regardless of whether said compliance is required or voluntary) an audit shall be conducted for each federal award year that funded the contract (for instance, if a single contract utilizes CDBG funds from both PY 2022 and 2023, a separate audit for each of those years is required). A copy of the audit report must be completed within 9 months after the end of the fiscal year and the audit must be received by the City no later than 30 days of receipt of the auditor’s report(s). The City’s CDBG team will follow up with each recipient to ensure compliance at the completion of the fiscal year reported in the pre-contract single audit form.

Each audit shall cover a time period of not more than twelve months and an audit shall be submitted covering each assisted period until all the assistance received from this contract has been reported and completed.

Any deficiencies noted in the audit reports must be fully cleared by the recipient within 30 days after receipt.

If the Recipient is found in non-compliance with these audit requirements, the Recipient may be required to refund financial assistance received from the City, and furthermore may be barred from doing further business with the City.
60 RECONCILIATION
Bank and savings accounts utilized for community development programs, or the funds associated with them in the City’s finance system, should be reconciled quarterly. The term “account(s)” below is used generally, to include funds as well as literal bank accounts. Following are principles for conducting reconciliations:

Comprehensiveness
● Ensure all appropriate accounts are being reconciled, including new accounts. ● Ensure that each reconciliation includes a title, description of the account, and procedures and/or instructions on how to complete the reconciliation (applicable contacts, reports to run or obtain, etc.).
● Documentation supporting the account balance should be included with the reconciliation.

Accuracy
● The individual preparing and reviewing the account should have a basic understanding of what the account is used for and what should be used to support the balance. For example, cash accounts will most often need the general ledger and a bank statement to perform the reconciliation.
● Ensure that the correct, most updated balances are being reconciled. ● Ensure that the reconciliation supports the balance and is not just a repeat of the general ledger or a roll-forward of the balance.
● Watch for accounts that have unusual balances (such as an accrual with a debit balance or a receivable account with a credit balance).

Timeliness
● Create due dates for the reconciliations.
● Have a mechanism to track the status of each reconciliation. ● Make the high-risk account reconciliations due early in the close cycle to identify any potential problems.
● Review the unidentified differences and post the necessary adjustments while the accounting period is still open.

Account reconciliations should support the appropriate accounting principles. ● Ensure the reconciliations follow the principles, such as historical cost, matching, and full disclosure.
● Ensure the reconciliations are objective, that they identify material unidentified differences, that they are consistent, and that the transactions behind the general ledger balance followed the convention of conservatism.
61 PROCEDURES FOR REFLECTING PRIOR PERIOD ADJUSTMENTS AND ACCRUALS In preparation of the Consolidated Annual Performance and Evaluation Report (CAPER), City staff review the following reports:
• PR09- Program Income Details by Fiscal Year and Program (report generated by IDIS) • PR26- CDBG Financial Summary Report (report generated by IDIS) • CDBG program drawdown tracking spreadsheet produced internally by City CDBG staff to track drawdown of program expenses
• Expenditure reports generated from the accounting records in the City’s ERP system.

Staff reconciles discrepancies between the IDIS reports and the City's own reports and makes the necessary adjustments in the PR26 report. These adjustments are explained as Notes to the PR26, which is included as an appendix to the CAPER. The City also makes any necessary revenue and expenditure accruals within its ERP system to record them in the appropriate program year.

FEDERAL FUNDING ACCOUNTABILITY AND TRANSPARENCY ACT (FFATA) The Management Analyst, in partnership with Finance, will prepare the yearly FFATA reports in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for all contracts and awards equal or greater in value to $30,000. The City must have a single account for all reporting in FSRS, regardless if it is under CDBG or other federal grant. The Management Analyst will be the owner of the account and responsible for all reporting on behalf of the City. The Management Analyst will compile a listing of all contracts awards before entering into contract to complete the report.
62 MONITORING

CONSOLIDATED SUBRECIPIENT MONITORING PLAN FOR PARTICIPATING JURISDICTIONS IN SAN MATEO COUNTY The Consolidated Subrecipient Monitoring Plan was developed by the entitlement jurisdictions in San Mateo County to review performance over a period of time and to evaluate compliance of non-profit subrecipients funded with CDBG funding. The purpose of consolidating these principles was to allow potential subrecipients to have a clearer understanding of the criteria by which they would be evaluated, as well as to ensure that subrecipients receiving funds from multiple agencies would not receive conflicting requirements for establishing their compliance with applicable rules and regulations.

The Monitoring Plan specifies the criteria the City uses to determine potential areas and levels of risk, which include quarterly desk reviews, new subrecipients or organizational change, cumulative grant award amount, administrative history, program performance, and financial capacity. On a quarterly basis, the City conducts a limited review of all subrecipients, which includes reviewing quarterly performance reports and expense summaries that are submitted by the subrecipients. These quarterly performance reports update staff as to whether the non-profit is meeting its annual objectives and the status of the program. Additionally, the City will conduct on-site monitoring reviews of those subrecipients the City determines to have potential risks and/or have not been monitored in recent years.

DETERMINING WHO TO MONITOR/RISK MANAGEMENT
South San Francisco staff ("Staff') shall prioritize which subrecipients need to be monitored based on their deficiencies in meeting performance measures set in the CDBG contract or on elevated risk factors.

Such performance measures may include a reduction in the number of projected South San Francisco residents to be served, untimely expenditure of CDBG funds, and inadequately submitted required reports or documentation (i.e., narrative and expenditure reports, insurance). Elevated risk factors may include first-time subrecipients, subrecipients historically demonstrating poor performance, and subrecipients faced with high turnover.

Staff will monitor all noticeably problematic or elevated risk subrecipients each year at least once. With lower priority subrecipients (e.g., repeat subrecipients with a good monitoring track record), Staff will monitor them on a case-by-case basis using historic performance as a criterion. In short, if the subrecipient has been performing well over time, Staff can determine whether there is a need to conduct a monitoring visit based on a risk assessment. Those programs with the highest risk will be monitored in the program year.

During the first quarter of each program year, staff will identify the subrecipients that will be monitored for the program year. The list of subrecipients for monitoring will include a statement as to which of the above factors 63 apply (i.e., poor performance, newly funded). The City shall monitor at least 10% of its CDBG-funded activities during each fiscal year.

In addition to the risk level criteria stated above, the City shall consider the following as additional risk level criteria for subrecipient monitoring:
• The number of programs operated by the subrecipient on behalf of the City. • The total amount of grant funds provided.
• Material weaknesses or significant deficiencies identified through the A-133 audit process. • Identification of findings issued by other governmental agencies.

The City shall also annually monitor at least one of its housing rehabilitation subrecipients.

All programs and projects will be monitored at least once every three years.

Programs that will not be renewed in the coming fiscal year will have a full monitoring visit in the current fiscal year.

MONITORING SCHEDULES
At the discretion of Staff, the timing of monitoring visits shall vary. Depending on the type of project activity funded with CDBG funds or the subrecipients performance level, Staff shall determine the appropriate time(s) during the project to conduct monitoring visit(s).

PRE-MONITORING PREPARATION
Prior to the monitoring visit, Staff shall review the subrecipient's contract file. Items staff shall examine include the subrecipient's CDBG application, CDBG contract, narrative reports, expenditure reports, correspondence, audits, and any other relevant project- related information.

OVERVIEW OF THE MONITORING PROCESS
Staff shall send subrecipients a monitoring visit notification letter or email at least ten (10) working days prior to the visit. The notification letter/email shall indicate the time, date, and location of the monitoring visit, the general nature of the visit, the time schedule for the visit, and any specific monitoring needs (e.g., office space for a desk review, specific records or documentation, subrecipient personnel to be interviewed). Staff shall confirm deadline(s) for providing written responses to the concerns and findings. Unless, specific findings require additional time for an adequate response, subrecipient shall submit its written responses no later than ten working days from the date of the monitoring letter.
64 Staff may determine based on the subrecipient's written responses that intervening strategies are necessary to assist the subrecipient in resolving concerns or findings. Some intervention strategies which may be implemented include the following:
• provide training or technical assistance
• conduct another monitoring visit or more frequent monitoring visits • require subrecipient to submit more frequent or more in-depth reporting Upon receipt of adequate follow-up responses from the subrecipient, Staff shall send the subrecipient a letter confirming receipt of the responses and resolution of the findings.

If the subrecipient submits incomplete or inadequate written responses to the follow- up letter, Staff shall send an additional follow-up letter indicating clearly which findings still need to be resolved and how they should be corrected. The subrecipient shall have five working days from the date of the additional follow-up letter to respond.

If the subrecipient does not provide adequate responses to the additional follow-up letter or demonstrates no signs of improvement after intervening strategies have been implemented, Staff shall send a letter that will include the following:
• confirmation that Staff has not received subrecipient's written responses within the deadline. • identification of the potential sanctions which may occur if responses or noticeable progress are not received within two working days of the date on this letter.

Below are some sanctions which may be imposed based the subrecipients degree of noncompliance:
• freeze subrecipient's remaining balance from future reimbursement • disallow subrecipient expenses
• require repayment of disallowed expenses
• notify subrecipient that its future funding status will be affected due to noncompliance • suspend temporarily the subrecipient from carrying out project activities • terminate contract
65 LEVELS OF MONITORING
Monitoring will normally be conducted at one or more of three levels, depending upon the risk involved.

LIMITED REVIEW
A limited review is conducted of all subrecipients on a quarterly basis, previously described as a quarterly desk review. The timing of this monitoring coincides with an organization's submittal of a performance summary and supplemental report and an invoice for payment for expenses incurred against the CDBG or HOME grant over the previous 90 days.

At least one quarter review will focus on the year-end financial statement or audit, and where applicable, the single audit. If the single audit contains audit findings or contain a management letter, the subrecipient will be selected for an in-depth review. The goal of a limited review is to provide clarification to a specific unknown that cannot be determined from the subrecipient reports, and to identify areas of technical assistance needed by each subrecipient.

BASIC ON-SITE MONITORING REVIEW
A basic on-site monitoring review will typically be a site visit to a subrecipient program assisted with CDBG and will achieve a balance between programmatic and fiscal reviews, and much documentation review can be done prior to the on-site visit. The basic on-site monitoring includes a tour of the program facilities as appropriate, an explanation of the services provided, discussions with program and administrative staff, and introduction to one or more actual beneficiaries, if possible. As a result of this visit, staff may determine that an in-depth review is needed for further clarification of one or more issues that arose during the on-site visit.

PROGRAM REVIEW will focus on the specific subrecipient program activities. Program staff may be asked to define the strategic plans for the related programs and, as applicable, how those plans are used to help clients in those programs.

FINANCIAL REVIEW will make the connections between the program budget, expenditures and actual beneficiaries assisted, including evidence of case managers time in client files, reviewing payroll documents for the period clients are reported, determining eligibility of clients based on income documentation in client files, the general relationship between the contents of client files (excluding Attorney Client or HIPAA confidential data) and benefit data reported by the subrecipient on the same clients.

THE NUMBER OF CASE FILES to be reviewed will reflect approximately 10% of the total clients served in the program, or more if there appear to be any systemic issues to address. 66 INVOICES may be randomly selected for review and traced back from CDBG reimbursement to the original organization's advance expenditure and client assisted (if appropriate). For example, exact dollars billed for housing accessibility modifications can be traced directly to one client.

Conversely, a different review model is required when dollars billed provided case management for multiple homeless individuals. It is expected that staff will review original invoices, cancelled checks, and other such documentation evidencing the expenditure, the relationship to the CDBG program objective, the appropriate proportion of CDBG expenditure in comparison to other funding, and accounting receipt of the federal grant funds.

IN-DEPTH REVIEW
An in-depth review is a concentrated and focused review around an activity or program area. This would typically be a concentrated review of a known high-risk area or critical function, such as but not limited to:
• Financial review for expenditures for ineligible activities, • Financial review for expenditures that cannot be traced through supporting documentation, • A program which requires donations as a condition of receiving service, • Management practices in affordable housing,
• Section 504 compliance reviews upon receipt of a complaint from a person with disabilities, • A fair housing complaint from a home seeker treated differently while trying to obtain housing from the subrecipient,
• Denial of services for no valid reason, or
• Failure to meet prevailing wage requirements in activities subject to Davis Bacon, etc.

FOLLOW UP/ENFORCEMENT

FINDINGS
Where an identified deficiency results in a finding of non-compliance with CDBG rules, the finding must include the condition, criteria, cause, effect, and required corrective action. a. The condition describes what was wrong or what the problem was. b. The criteria cite the regulatory or statutory requirements that were not met. c. The cause explains why the condition occurred.
d. The effect describes what happened because of the condition. e. The corrective action identifies the action(s) needed to resolve the problem and, unless inapplicable or there are extenuating circumstances, should include the time frame by which the subrecipient is to respond to the finding.

The monitoring letter should also provide timelines for response and corrections, as well as actions the City may take if the subrecipient fails to make corrections in a timely manner. 67 CONCERNS
Monitoring concerns brought to the subrecipient's attention should include the condition, cause, and effect as described above. The reviewer should suggest or recommend actions that the subrecipient may take to address a concern, based on sound management principles or other guidelines. However, corrective actions are not required for concerns.

ACTIONS FOR NON-COMPLIANCE
Sub subrecipients who are found to be in non-compliance and receive a finding after their monitoring will be provided with technical assistance towards resolution, and actions taken by the City to achieve compliance may include, but not be limited to, withholding further disbursements of CDBG funds until satisfactory compliance with applicable regulations are achieved.

PARTNERSHIPS WITH OTHER PARTICIPATING JURISDICTIONS
The City of South San Francisco participates in a cohort of Participating Jurisdictions within San Mateo County. The City of South San Francisco will retain copies of the pre-monitoring notification, follow up and resolution to any concerns or findings. South San Francisco reserves the right to impose sanctions to a Subrecipient found to have a concern or finding by another cohort participating jurisdiction until all matters are found to be resolved and the program compliant. 68 GENERAL ADMINISTRATIVE ITEMS

EQUAL OPPORTUNITY AND FAIR HOUSING
Subrecipients must not exclude from participation in the Program or deny benefits to any person on the grounds of race, color, national origin, religion, Vietnam-era or disabled veteran status, familial status, sex, sexual orientation or status with regard to public assistance under the Program. In addition, subrecipients must comply with the following:

1. The requirements of the Fair Housing Act (42 U.S.C. 3601-20) and implementing regulations at 24 CFR 100; Executive Order 11063, as amended by Executive Order 12259 and implementing regulations issued at 24 CFR, Part 1, all of which require equal opportunity in housing and related facilities provided by Federal financial assistance;

2. The prohibitions against discrimination on the basis of age under the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and implementing regulations at 24 CFR 146, Executive Order 11246 as amended by Executive Orders 11375, 11478, 12107 and 12086;

3. The prohibitions against discrimination against handicapped individuals under Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR8, which prohibits discrimination against the individuals with disabilities or handicaps in any Federally assisted program;

4. The requirements of Executive Order 11246 (2 CFR 1964-55, Equal Employment Opportunity), and the implementing regulations issued at 41 CFR chapter 60;

5. The Fair Housing Amendments Act of 1988, which prohibits discrimination in the sale or rental of housing on the basis of a handicap or because there are children in a family;

6. The requirements of Title IV of the Civil Rights Act of 1964 as amended, Section 104(b) and Section 109 of Title I of the Housing and Community Development Act of 1974 as amended;

7. The requirements of the Americans with Disabilities Act of 1990; and

8. The requirements of non-discrimination in employment and contracting opportunities laws, regulations, and executive orders referenced in 24 CFR 570.607, as revised by Executive Order 13279.

9. The requirements of Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701U), which requires that:
a. The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u (“Section 3”). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD-assisted projects covered 69 by Section 3, shall, to the greatest extent feasible, be directed to low- and very lowincome persons, particularly persons who are subrecipients of HUD assistance for housing.
b. The parties to this contract agree to comply with HUD’s regulations in 24 CFR Part 75, which implements Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the Part 75 regulations. c. The contractor agrees to include this Sections 3 clause in every subcontract subject to compliance with regulations in 24 CFR Part 75, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR Part 75. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge the subcontractor has been found in violation of regulations in 24 CFR Part 75.
d. Noncompliance with HUD’s regulations in 24 CFR Part 75 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts.

10. The requirements of Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity, as shown in 24 CFR Parts 5, 200, 203, 236, 400, 570, 574, 882, 891, and 982.

EMPLOYMENT POLICIES AND PROCEDURES
Subrecipients must:
a)Maintain employment policies and procedures that address recruitment, hiring, promotion, demotion, suspension, termination, and grievances and include written job descriptions with qualifications, salary schedule, and benefits, and the line of authority of staff persons. Policies must also include a drug free workplace policy.
b)Maintain adequate employment records for every staff person including IRS withholding info and USCIS authorized work permits.

CONFLICT OF INTEREST
No officer, employee, consultant, elected or appointed official of the City or its designees or agents, member of the governing body of the City or the subrecipient (and no one with whom they have family or business ties) who exercises any functions or responsibilities with respect to the Program during his or her tenure or for one year thereafter, shall have any personal or financial benefit, direct or indirect, in any contract or subcontract, or proceeds thereof, for work to be performed in connection with the 70 Program assisted under this Agreement. Exceptions to these provisions may be granted on a case-bycase basis as described at 24 CFR 570.611(d). The Subrecipient agrees that it will incorporate into every written contract the following provisions:

INTEREST OF CONTRACTOR AND EMPLOYEES: The Contractor
covenants that no person who presently exercises any functions or responsibilities in connection with the CDBG Program, and no one with whom they have family of business ties, has any financial benefit, direct or indirect, in this Contract.

PUBLICITY AND PROMOTION
The City and subrecipient will mutually agree that either party is permitted to publicize and promote the activities funded under this Agreement. The City and/or subrecipient may host public relations events for the activity to increase community awareness of the program and the activity.

TAXES
Agencies using CDBG funds for projects must keep all taxes on the properties paid and current during the entire compliance period.

HUD-INSURED FINANCING
Agencies using CDBG funds must agree that financing secured by a mortgage insured by HUD will not be used in connection with the funded projects.

RELIGIOUS CRITERIA
Agencies using CDBG funding must certify in accordance with 24 CFR 570.200(j) that funds provided under the City Agreement shall not be provided to religious organizations for any religious activity to promote religious interests, or for the benefit of any religious organization.

Activities funded with CDBG funds must be used for secular activities that benefit all residents of South San Francisco. Religious organizations must follow the anti-discrimination laws of the Department of Housing and Urban Development, the State of Indiana, and the City of South San Francisco. 71 PERSONALLY IDENTIFIABLE INFORMATION
It is the policy of the City of South San Francisco to protect personally identifiable information those served by its subrecipients through its CDBG programs. The electronic restrictions and safeguards outlined in this policy provide guidance for employees, contractors and volunteers that have access to PII retained by the City of South San Francisco to ensure compliance with state and federal regulations.

Personally Identifiable Information (PII) is any information pertaining to an individual that can be used to distinguish or trace a person’s identity. Some information that is considered PII is available in public sources such as telephone books, public websites, etc. This type of information is considered to be Public PII and includes:
• First and Last name
• Address
• Work telephone number
• Work e-mail address
• Home telephone number
• General educational credentials
• Photos and video
In contrast, Protected PII is defined as any one or more of types of information including, but not limited to:
• Social security number
• Username and password
• Credit card number
• Banking information
• Data and place of birth
• Mother’s maiden name
• Criminal, medical and financial records
• Educational transcripts
• Photos and video including any of the above
All electronic files that contain Protected PII will reside within a protected information system location.

All physical files that contain Protected PII will reside within a locked file cabinet or room when not being actively viewed or modified. Protected PII is not to be downloaded to a personal or organization owned employee or contractor workstations, or mobile devices (such as laptops, personal digital assistants, mobile phones, tablets or removable media). PII will also not be sent through any form of insecure electronic communication E.g., E-mail or instant messaging systems. When disposing of PII the physical or electronic file should be shredded or securely deleted. 72 The subrecipient understands that client information collected under any City CDBG contract is private and the use or disclosure of such information, when not directly connected with the administration of the City’s or Subrecipient’s responsibilities with respect to services provided under the CDBG contract, is prohibited unless written consent is obtained from such person receiving service and, in the case of a minor, that of a responsible parent/guardian.

LIMITED ENGLISH PROFICIENCY ACCESS
Subrecipients/entities must ensure meaningful access to their programs and activities by persons who do not speak English as their primary language and who have limited ability to speak, read, write, or understand English, pursuant to Executive Order 13166. This Executive Order mandates that the federal government reduce language barriers to Limited English Proficiency (LEP) persons with regard to accessing federal benefits.

In certain situations, failure to ensure persons who have Limited English Proficiency have access to CDBG programs or services may violate Title VI’s prohibition against national origin discrimination.

If 25% or more of a CDBG Activity’s service clientele has limited English proficiency and speaks a nonEnglish language, the CDBG Activity must provide key documents translated in that population’s language.

If 50% or more of a CDBG Activity’s service clientele has limited English proficiency and speaks a nonEnglish language, the CDBG Activity must make every attempt to provide assistance to a person in their designated language, either through translation services or by employing staff who speak the language.

If CDBG funds are provided for counseling, mental health services, medical services, and/or case management, these services MUST be provided in the client’s native language, regardless of the size of the population the provider serves.
73 GRIEVANCES

CLIENT GRIEVANCE
All complaints should be documented by the employee taking the call. When possible, complaints, questions and requests for service should be resolved in “real time” on the same day they arrive.

However, in many instances, referral and follow-up are necessary to fully understand and resolve the issue. In such instances, the following standards for acknowledgement and resolution should be followed.

Acknowledgement:
● All complaints, questions and requests for service should be acknowledged within one business day.
● This acknowledgement should note the person to whom the issue has been referred and when the customer can expect a response.
● If the customer feedback is delivered by phone or in person, this acknowledgement should be given verbally during the call or visit.
● If the customer feedback is delivered by e-mail, the acknowledgement should be given by email. ● If the customer feedback is delivered by postal mail the acknowledgement should be sent via telephone, postal mail, or e-mail, whichever is appropriate. ● For written acknowledgements, templates with standard language should be used to minimize staff processing time.

Resolution:
● A substantive response should be provided within seven business days. ● This response should include THE CITY’s analysis of the issue and the proposed resolution. Clear reasons should be given if it is not possible for THE CITY to accommodate the customer’s request.
● If a resolution is not possible within seven business days, the customer should be notified and given the date by which they can expect a response.
● The resolution can be communicated to the customer verbally, by e-mail or by postal mail, depending on the communication method most appropriate to the situation. 74 DEALING WITH DIFFICULT CUSTOMERS
As with any service, City programs sometimes have customers or clients who, for various reasons, are displeased with the types of services they receive. Employees who handle such a call should bear the following principles in mind for their own conduct2:
● Do not argue with customers when they are angry, displeased or complaining. Allowing a customer’s anger to make the employee angry is to lose control of the situation. In addition, employees should avoid any display of boredom, irritation, disdain, or displeasure. ● The employee should listen and let the customer vent, letting the person talk, and paying close attention. Repeating or paraphrasing the customer’s main points is a very useful tactic in learning about the customer’s needs and/or grievances.
● The employee should show concern for the customer's feelings, maintaining a concerned, sincere, and interested attitude, and remembering that customers respond more to how something is said than what is said. An apology or statement of sympathy, even if THE CITY is not directly responsible for the customer’s outcome, can be very useful in establishing a good rapport.
● The employee should blame neither the customer nor the City for any adverse outcome. When explaining the City’s policy or trying to clarify what went wrong, use either the indirect approach ("It sounds like ...") or "I" statements ("I need additional information") as much as possible. ● The employee should try to solve the problem or get someone who can. The employee should get all the facts he or she can, and then tell the customer what the next steps are. Sometimes, helping the customer come up with a plan of action (even if it doesn’t involve the City’s programs or services) is enough to direct the customer in a positive direction. ● The employee should not make promises they cannot directly fulfill. It is better in this situation from someone who knows more or has the authority to make decisions that the employee cannot.
● If a call ceases to be productive (e.g., the caller has been given options but does not accept any of them) or is lasting for too long a period, the employee should wrap up the call, perhaps with a statement like, “I have helped you to the best of my ability and am now ending the call. I will refer your issue to my supervisor/program manager, and if they disagree with any information or service, I have provided for you, then they will be in touch with you. Thank you and have a good day!”
● If a caller is escalating into verbal abuse, then they are to be given one (1) warning, such as, “I am trying to help you as best I can within my scope of authority. If you continue to speak in an abusive manner, I will end the call”. If the caller persists, or if the caller is clearly aggressive, the employee will promptly end the call with the statement, “I am ending the call. You are welcome to call our office back when you are ready to talk without resorting to verbal abuse. Thank you and have a good day!”
2 Adapted from https://www.monster.com/career-advice/article/how-to-deal-with-difficult-customers. 75 CONTRACTOR GRIEVANCE AND CONFLICT RESOLUTION
Agencies using CDBG must have procedures to handle and resolve grievances relating to their program staff and beneficiaries. In addition, an agency that procures contractors, as part of its CDBG-funded program, must have contract resolution procedures to handle and resolve disputes relating to its contracts. Any dispute related to procurement must be reported to the City for review. The City will determine whether the agency’s contract resolution procedures have been followed and/or if any federal regulations have been violated. If after reviewing the subrecipient is found to be at fault, City will send a written response stating the findings and any required settlement actions. Violations of law will be referred to the local, state, or federal authority having proper jurisdiction.

Complaints relative to the CDBG Program may be registered with the City’s Finance Department at any time. However, for a formal written response, complaints must either be submitted in writing to the City Controller. The City Controller will investigate the complaint and determine if a corrective action is required, unwarranted, or should be directed to another office. A written answer will be provided to the complainant within fifteen working days, if practicable.

All records of disputes, complaints, investigations, notices, and corrective actions will be maintained by the City Controller.
76 PROJECT CLOSEOUT
The subrecipient agreement closeout process allows the CSSF to confirm that all required work under the agreement has been completed. This includes the resolution of all outstanding financial, administrative, reporting, and performance issues that have been identified through the course of the project.
24 CFR 570.509(a) describes the criteria that the CSSF will use to determine when a project is ready for closeout, namely:
● All costs paid with CDBG funds have been expended and drawn, with the exception of closeout costs (e.g., audit) or contingent liabilities (24 CFR 570.509(a)(1)). ● All work financed with CDBG has been completed, is eligible, and meets a national objective, including activities financed through escrow accounts, loan guarantees, or similar mechanisms; performance and expenditure reports have been submitted and account for program income and administrative expenditures (24 CFR 570.509(a)(2-5)). ● All other responsibilities under the agreement with the grantee have been met or the grantee has determined that there is no further benefit in keeping the agreement open to secure performance (24 CFR 570.509(a)(6)).

During project closeout, the CSSF requires that subrecipients provide final versions of all financial, performance, and other reports that were a condition of the award. These reports include:
● A final performance or progress report. The final report should be a cumulative report through city data services of all beneficiaries.
● A financial status report (including all program income). ● A final request for payment.
● A final inventory of property in the subrecipient’s possession that was acquired or improved with CDBG funds. The inventory should identify real property acquired with over $25,000 of CDBG funds including its current use, to facilitate compliance with requirements for the continuing eligible use of property in 24 CFR 570.505
In most cases, these reports will be due within 30 days of the expiration/termination of the subrecipient agreement or notification. Any obligations required by the subrecipient pertinent to the CDBG award must be liquidated within 60 days of expiration/termination of the subrecipient agreement and before the submittal of the final financial status report.

Upon receipt of the reports noted above, the CSSF will make upward or downward adjustments to allowable costs. Pursuant to 24 CFR 570.503(b)(7), the subrecipient agreement must specify that any grant funds remaining in the subrecipient organization’s possession at the expiration or termination of the agreement must be refunded immediately to the grantee. Similarly, the subrecipient must transfer to the CSSF any accounts receivable attributable to the use of CDBG funds. The agreement must also provide that, for any real property under the subrecipient’s control that was acquired or improved using more than $25,000 in CDBG funds, the subrecipient must either:
77 ● Use the property to meet one of the CDBG national objectives for at least five years after the expiration of the subrecipient agreement; OR
● Pay the CSSF the current market value of the property for any portion of the value attributable to the CDBG funds used for the acquisition or improvement of the property. (This payment would be designated as program income by the CSSF.)
Funds paid to the subrecipient in excess of the amount to which it is finally determined to be entitled under the CDBG program constitute a debt to the Federal Government (2 CFR 200.346). If not paid within 90 calendar days after demand, the CSSF may reduce this debt by making an offset against other requests for reimbursement from the subrecipient by withholding advance payments or by other action permitted by law.

Based on the final reports and other relevant information, the CSSF may elect to execute a closeout agreement that specifies:
● Closeout costs or contingent liabilities that are subject to payment with CDBG funds after the closeout agreement is signed.
● The amount of any unused CDBG funds.
● Your subrecipient’s responsibilities after closeout.
● Other provisions appropriate to special circumstances.

Note that subrecipients still have responsibilities following project closeout. Generally, the closeout of a CDBG award to a subrecipient does not affect:
● The right of the CSSF to disallow costs and/or recover funds on the basis of a later audit or other review.
● The subrecipient’s obligation to return funds due to the CSSF from subsequent refunds, corrections, or other transactions.
● The subrecipient’s responsibilities for records retention as specified in 2 CFR 200, Subpart D— Post Federal Award Requirements, Records Retention and Access, including 2 CFR 200.334-338, as modified by 24 CFR 570.502(a)(7)(ii).
● The subrecipient organization’s responsibilities for property management and disposition

RECORD RETENTION AND POST CONTRACT POLICIES
All CDBG project files will be kept for 5 years after project completion, unless the project includes a period of affordability beyond the 5 years, or unless there is litigation, claims, audit, negotiation, or other actions involving the records that have started before expiration of the 5-year period. In that case, the files will be kept until the end of the affordability period or until five years after all recordrelated issues have been resolved.

For projects with outstanding loans, records shall be kept for a period of 4 years after the satisfaction of the liabilities.
78 LAND USE RESTRICTIONS
For any real property acquired with more than $25,000 of CDBG funds, an annual certification must be filed for the first five (5) years following project opening stating that the project is still being used for the purpose stated in the project application. For projects not meeting this requirement, a penalty shall be assessed in the amount of 20% of the CDBG project assistance for each year remaining following project opening to the five-year target (that is, in the second year following opening of the If during a period of five (5) years after the completion and close-out of a CDBG Project Agreement related to building improvements, the building is transferred through sale, contract, lease, or other means, and/or its use is changed from that of a public facility, the subrecipient shall pay to the City an amount equal to the current market value of the property less any portion of the value attributable to expenditures of non-CDBG funds for the acquisition or improvement to the property.

These land use restrictions shall be enforced through a mortgage, promissory note, deed, or land use restriction. The subrecipient may request a waiver of this provision, in writing, if the change still serves a public purpose and complies with the requirements of 24 CFR 570.505.

ACCESS TO RECORDS
All projects must follow 2 CFR Part 200.336 to comply with access and security of records.

The Federal awarding agency, Inspectors General, the Comptroller General of the United States, and the pass-through entity, or any of their authorized representatives, must have the right of access to any documents, papers, or other records of the non-Federal entity which are pertinent to the Federal award, in order to make audits, examinations, excerpts, and transcripts. The right also includes timely and reasonable access to the non-Federal entity's personnel for the purpose of interview and discussion related to such documents.

Only under extraordinary and rare circumstances would such access include review of the true name of victims of a crime. Routine monitoring cannot be considered extraordinary and rare circumstances that would necessitate access to this information. When access to the true name of victims of a crime is necessary, appropriate steps to protect this sensitive information must be taken by both the non-Federal entity and the Federal awarding agency. The head of the Federal awarding agency or delegate, other than under a court order or subpoena pursuant to a bona fide confidential investigation, must approve any such access. 79 CONSOLIDATED ANNUAL PROGRAM EVALUATION REPORT (CAPER) The Consolidated Annual Performance and Evaluation Report (CAPER) provides annual performance reporting on client outputs and outcomes that enables HUD to assess the CSSF’s performance in achieving the desired outcomes stated in the Consolidated Plan 5-Year Strategy and Annual Plan. The CAPER, in conjunction with the Integrated Disbursement Information System (IDIS), fulfills statutory and regulatory program reporting requirements and provides both the CSSF and HUD with the necessary information to assess the overall program performance and accomplishments against planned goals and objectives.

Each program year ends with the development and submittal of a CAPER. However, development of the CAPER usually begins before the actual end of the year, as the CSSF begins identifying needed information, including data to be provided by contractors and subrecipients. It should be evident that contractors and subrecipients should do everything possible to assist the CSSF in developing the CAPER, since the continued flow of CDBG funding to the community is dependent on HUD’s determination of satisfactory administration of the program.

The CAPER is due 90 days after the end of the pertinent program year and is submitted via the aforementioned IDIS. As with the Consolidated Plan elements, the CSSF is responsible for the CDBG element that it directly administers; CAPER reporting requirements for the San Mateo HOME Consortium, which includes the CSSF, are developed by the County with support from the CSSF and the other member municipalities.

The data reported in the CAPER comes directly from IDIS, so proper ongoing entries on accomplishments and disbursements throughout the program year greatly facilitates the development of the CAPER. Any incorrect or inaccurate entries in IDIS must be corrected before the program year can be closed out.

Typical reasons why IDIS may not accurately reflect the status of the CDBG program include (but are not limited to):
• Not marking the Annual Plan as having its “Review Completed” (which should be brought to the local HUD field office’s attention);
• Amendments to the Annual Plan may not have been submitted or approved; • Duplicative entries for projects may be present;
• Projects from the prior CAPER program year may not have been copied correctly into the current year; and
• (Most common) Accomplishment data has not been recorded.

The IDIS report heavily utilized in development of the CAPER is the “PR03: CDBG Activity Summary” report. Activities are listed by the goals from the applicable Annual Plan. 80 CSSF staff shall begin reconciliation of data and financial information IDIS versus the City’s financial system no later than 30 days after the close of the program year. Staff shall provide IDIS reports listing draws by project and activity to be verified by the City’s financial staff, this includes the PR26 (both traditional PR26 and by grant year).

The CAPER has public review requirements comparable to those of the Annual Plan. These requirements should be accounted for in the development schedule of the CAPER. 81 CDBG-CV SPECIFIC POLICIES
COMMUNITY DEVELOPMENT BLOCK GRANT – CORONAVIRUS
Program year 2020 and 2021 were exceptional in that they saw supplemental allocations of CDBG funds to the City to help with local responses to and recovery from the COVID-19 Pandemic, called the “CARES Act” (Public Law 116-136, signed into law on March 27, 2020). These funds were subject to some mildly altered requirements from other CDBG allocations, some having to do with project and program eligibility, others having to do with administration.

Generally, supplemental CDBG allocations funded under the CARES Act follow CDBG policies, with the following exceptions:

AMENDMENT
The City did not need to amend its Con plan to incorporate new goals or increased goals as a result of the additional funding. Amendments to Consolidated Plans were not required by HUD – only the 2020 Action Plan had to be amended to incorporate the CDBG-CV allocation and projects funded with CDBGCV funds.

All changes after the initial amendment for CDBG-CV allocations will be made in the PY2020 Action Plan as directed by HUD. This includes any changes after the PY2020 year.

WAIVERS
The City of South San Francisco utilized the following waivers offered by HUD during the COVID pandemic.
• Citizen Participation and Public Hearings for Consolidated Plans (including Action Plans) – o 5 Day comment period for amendment to Action Plan
o Virtual or hybrid public meetings during the public health emergency • Public Service Activities - Elimination of the 15% public service cap on the amount of grant funds that can be used for public service activities.
• Reimbursement of Costs - Provides that grantees may use CDBG-CV grant funds to cover or reimburse costs to prevent, prepare for, and respond to coronavirus incurred by a State or locality, regardless of the date on which such costs were incurred, when those costs comply with CDBG requirements.
• Delay Submission of the Consolidated Annual Performance and Evaluation Report – allowing for a submission of the year-end report up to 180 days past the end of the fiscal year. 82 PROJECT JUSTIFICATIONS
Project justifications had to demonstrate how the activity would help prevent, prepare and respond to the COVID-19 Pandemic. For each public service project funded with CDBG-CV funding, the recipient must ask upon client intake the impact experienced by the individual or household. For each construction project funded with the CDBG-CV funding, the contractor or MOU would describe the rationale for responding to the COVID-19 pandemic.

DUPLICATION OF BENEFITS
The City is in receipt of Community Development Block Coronavirus (CDBG-CV) funds from the Department of Housing and Urban Development (HUD). The City recognizes that the COVID-19 pandemic has caused widespread and economic damage and has created an unprecedented need for assistance among individuals and families directly affected by these unanticipated economic changes.

The City will use federal funds to carry out activities to address the long-term recovery needs resulting from the COVID-19 pandemic. These activities include projects and programs that provide housing, economic development, public services and planning resources to households, governments and businesses impacted by the COVID-19 pandemic. These activities are carried out in partnership with other organizations and agencies through the implementation of a number of CDBG-CV funded programs.

Sec. 312 of the Stafford Act (42 U.S.C. 5155) requires all Stafford Act funded programs to ensure that beneficiaries of federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) funds are not compensated for the same damages through multiple sources. After a disaster, applicants may be eligible for a number of benefits, such as FEMA Individual Household Assistance, personal insurance, and/or SBA low-interest loans. Applicants may apply for one or all of the available assistance to help bridge financial shortfalls and aid their recovery. A duplication of benefits occurs when an applicant (1) receives assistance from multiple sources intended for the same purpose or (2) the amount of assistance provided exceeds the total identified need.

GENERAL POLICY
All CDBG-CV funded programs and projects are required to ensure appropriate procedures are in place to prevent Duplication of Benefit (DOB). Subrecipients must ensure that DOB prevention is specifically addressed in their policies and procedures, and all subrecipient agreements and/or contracts must pass that responsibility down to subrecipients, if applicable. Subrecipients providing direct benefits to 83 beneficiaries must utilize procedures in accordance with HUD guidance as outlined below. Administering agencies must have a DOB calculation worksheet prepared for each Beneficiary on file. Each beneficiary must sign a certification form regarding other assistance received. Both documents must be on file in accordance with 76 FR 71060. Third party verification of assistance is required, and every attempt to obtain verifications should be undertaken. When verifications are not obtainable and self-declaration can be used as a last resort but should be the exception.

All grant agreements must contain language indicating that any duplication of benefit received postaward will require repayment.

WHAT DOES NOT COUNT AS A DUPLICATION OF BENEFITS?
Total assistance does not include personal assets such as cash in a checking or savings account (excluding insurance payouts and disaster proceeds), retirement accounts, credit cards and lines of credit, in-kind donations (unless non-cash donations can reduce the total need), and private loans.

Assistance received that is intended for a purpose other than the assistance applied for does not count as duplication of benefits. For example, if an applicant applied to SBA for assistance with home repairs and they only received assistance from FEMA for rental assistance, there is no duplication of benefits because the assistance provided are not dedicated to meet the same identified need.

PROCEDURES

1. Prior to assistance
a. Identify total need
i. Determine the specific purpose for the CDBG-CV request ii. Total need will be determined by project type (e.g., public service cost estimate). The total need must be documented.
iii. All costs included in total need must be reasonable and necessary. b. Identify all sources of funding received and reasonably anticipated i. For families and individuals as well as entities, the application for assistance will require documentation for all sources of funding received or reasonably anticipated, and certification that all assistance is reported. ii. Third party verify all sources of assistance when possible (FEMA, SBA, Private Insurance, NFIP, EWP, etc.) When 3rd party verification is not available, document in the file the reason it was not available.
c. Recording the information in the DOB Calculation Worksheet, determine which funding sources to include in or exclude from the unmet need calculation (based upon guidance in Fed. Reg. 71,060 – 71,066, and deduct assistance determined to be duplicative d. Apply program cap, if applicable
e. Arrive at maximum assistance award amount
84 f. Execute grant/loan agreement with recipient/beneficiary, including provision that all additional funds received will be reported to the City or Project Sponsor within 30 calendar days. If the additional funds are determined to be duplicative, the award will be reduced and/or the recipient/beneficiary will be required to repay any disbursed duplicative benefit.

2. Upon completion of activity for which funds were awarded:

Require recipient/beneficiary to report and certify whether additional funds were received for COVID related expenses, the amount, and when funds were received. If additional funds were received that are determined to be duplicative, require repayment.

Reports must be submitted three months after completion of activity for which funds were awarded or upon project closeout. Closeout occurs after December 31, 2020.

DOCUMENTATION
Each beneficiary or project file must contain the following:

1. Duplication of Benefit calculation worksheet form to include:
a. Identification of unmet need
b. Identification of all sources of assistance provided to applicant c. Identification of those sources that are duplicative (with comments as needed) d. Final award calculation

2. Any required third party verifications of assistance and/or certifications as follows:
a. FEMA programs: letter/s from FEMA, including emails and/or data provided by FEMA b. Insurance: letter from insurance company and/or data if available- email from source acceptable
c. Small Business Association (SBA): letter/s from SBA and/or data provided by SBA d. National Flood Insurance Program (NFIP): letter/s from source or email from source e. Other federal, state, or local funding: letter/s from source or email from source

3. Other program documentation, as applicable.

4. Certification that no additional benefits have been received. This can be a signed affidavit from the beneficiary or other form as created by the program.

5. A signed subrogation agreement from the recipient.

Additionally, at the program level each implementing agency must have the following:

1.) A description/definition of Duplication of Benefit and likely sources within their program guidelines or in their application; and,

2.) Recapture policies and procedures.
85 Applies to private households or businesses (i.e., shelter, food, utilities, rent/mortgage assistance, business assistance and buyouts)

RECAPTURE POLICY
In the execution of these responsibilities, the City requires recipients who did not spend the funds according to the rules of the CDBG-CV Program, who received duplicative COVID-19 assistance funding for the same purpose after award of funds, who received duplicative COVID-19 assistance funding for the same purpose before the award of funds but the funding source is discovered after award of funds, or who were awarded funds erroneously, to return any such funding back to the City. HUD does not distinguish between persons who received funds due to an error on the part of staff or an error on the part of the applicant, however HUD does have different recapture (also referred to herein as “collection”) processes for recipients who deliberately withheld or falsified information in the application process, as this is fraud.

The Statute of Limitations for initiating recapture proceedings is six (6) years following signature on the application forms, pursuant to 24 CFR § 28.35(a).

NOTIFICATION
The City will provide notice to recipients upon determining that ineligible assistance was received. The notice will be delivered by registered or certified mail or will be delivered by some other means that can be confirmed and documented. Email is acceptable. The notice will:

1. Specify in detail the reason(s) that the assistance was determined to be ineligible, stating the amount of ineligible assistance to be repaid;

2. Offer a meeting for the recipient to discuss the basis for the claim giving the recipient an opportunity to provide facts, figures, written records, or other information that might alter the determination that the assistance was ineligible;

3. Outline the recipient’s appeal rights;

4. Specify the address to which a response must be sent;

5. Contain a statement that failure to submit a response within Thirty (30) days of receipt of the letter may result in the total recapture amount being due immediately.

Generally, the City will set the meeting within thirty (30) days of the date of the initial letter.

Upon request, the City may grant additional time for the recipient to assemble the necessary documentation. If additional time is granted, the recipient file will be documented, on a case‐ by‐case basis, as to why additional time was granted.

CORRECTIVE ACTION
86 If the problem causing the assistance to be ineligible can be corrected, appropriate corrective action will be required. For example, if those sources that are determined to be duplicative, meaning they cover costs previously covered by another source, then a Recapture Notification will be sent to the recipient. Sources include, but are not limited to:

1. FEMA programs

2. Insurance

3. Small Business Association (SBA)

4. National Flood Insurance Program (NFIP)

5. Other federal, state, or local funding

6. Other program with the same expenses

REPAYMENT
A repayment letter is a formal document prepared by the City and signed by the recipient, in which the recipient acknowledges the debt and the amount owed. The agreement specifies:

1. The amount to be paid;

2. How the amount owed is to be repaid;

3. Where payments are to be sent;

4. The specific date the payment is due;

5. Consequences for non-payment

REQUIREMENTS FOR COLLECTING INELIGIBLE ASSISTANCE
NOTE: 24 CFR § 28.10(d) states that “no proof of specific intent to defraud is required to establish liability” under this Program. If the City paid too much assistance on the recipient’s behalf because of discrepancies in information furnished by the recipient, and if the City has sufficient evidence that the recipient intentionally misrepresented its circumstances, the City must pursue debt collection. In cases where the City has compelling evidence that the recipient knowingly omitted or falsified information in order to receive a Rental Assistance, Utility Assistance, or other eligible expenses, the City will seek repayment of all ineligible assistance received by the recipient. The City may refer the case directly over to the HUD Field Office.

GENERAL ADMINISTRATIVE PROCEDURES
Pursuant to 31 CFR § 901.5, the City may choose to handle collections or may decide to hire a private collection agency to handle collections for this Program as long as the following conditions are met in the contract with the collection agency:

1. The collection agency is a City‐approved collector who can transfer funds to the City.

2. The City retains the right to resolve disputes, to compromise debts (negotiate settlement amounts less than the full amount), suspend or terminate collection, and 87 refer debt for litigation;

3. The collection agency cannot offer debtors discounts or incentives;

4. The contract with the collection agency requires the collection agency to follow the Privacy Act of 1974 and state and federal laws for debt collection practices, including the Fair Debt Practices Act, 15 U.S.C. § 1692; and

5. The collection agency accounts for all amounts collected.

The City will be responsible for file and documentation maintenance, communication with recipients, and arrangements for appeals hearings. The City is also responsible for reports to HUD. The City will manage procurement of a private collection agency and payment of same, if this method of collection is chosen, and other financial matters associated with the Program, using approved City and federal procurement and financial accounting standards if it chooses to hire a collection agency.

The City will maintain full and complete documentation of all debts, calculations performed, and communications with recipients. In all communications, precaution will be taken to prevent the distribution of any Personally Identifiable Information (PII).

ADMINISTRATIVE COSTS ON RECAPTURE WILL REFLECT ONLY THE ACTUAL COSTS OF RECAPTURE.

The City or designee will collect the monies due, and all collection data will be entered as a miscellaneous “COVID-19,” This category will be added to the City’s financial chart of accounts. The City will ensure that all money collected from the recipient is reported to HUD and repaid to HUD, if required.

REDISTRIBUTION PLAN
Any funds CDBG-CV funds recaptured will be returned to the City’s COVID-19 account. If allowed by HUD, these funds will be made available for redistribution by the City. Funds recovered from the program will be reassigned an eligible HUD program. New recipients will be selected from the wait list in priority order based on the existing Program rules. 88 CDBG-CV: IN-HOUSE PROGRAMS
The CSSF offers a few programs, operated and managed by its own staff. This section discusses the community development programs that are most frequently and consistently offered by the City of South Francisco and are discussed here for the purpose of staff and board orientation. The policies for these programs are briefly outlined, but more complete details can be found in the Appendices to this document, and those separate policy documents should take precedence if there is any contradiction between them and their summaries found here.

SMALL BUSINESS LOANS
The City Council of South San Francisco approved the use of CDBG funds for a Small Business Loan/Grant program on April 22, 2020. The City of South San Francisco’s Department of Economic and Community Development quickly spearheaded this program for immediate relief for small business owners with 2- 25 employees. The premise of developing the program was to fund immediate relief to small business as new federal and state relief program began ramping up.

Businesses are eligible to receive a forgivable loan up to $15,000. For a $10,000 loan, applicants must employ one low-income employee. For $15,000, applicants must employ at least two low-income employees. For the loan to be forgiven, businesses must demonstrate that they retained at least 1 or 2 low-income full time equivalent (“FTE”) employees, depending on the loan amount, within 90 days after the loan is dispersed.

All eligible businesses have been given equal consideration. Applications completed during the application period were preliminarily reviewed for eligibility. Those meeting basic eligibility criteria were entered into a lottery. The City worked with businesses selected from the lottery to confirm eligibility and creditworthiness, underwrite the loans, and disperse the funds.

For South San Francisco’s Small Business Loan/Grant Program, businesses must:
a. Demonstrate financial loss due to the pandemic;
b. Employ a low-moderate income employee;
i. Based on address living in a low-moderate census tract, or ii. Verified by 2-months’ worth of income documentation (pay stubs, W2 forms); c. Have at least 51% of the jobs created and/or retained must be of low/moderate income.

The low/moderate income group is a low/moderate income person whose household income does not exceed 80% of county median household income. To meet the criteria for created/retained jobs, the employees must be from the low/moderate income group at the time they are hired or retained;
d. Meet the Business Loan Program underwriting criteria and HUD underwriting standards; e. Have been in business in South San Francisco for three years; f. Have a physical location in South San Francisco;
89 g. Employ between 2 and 25 employees, or generate less than $5 million in annual gross receipts; and
h. Have a valid South San Francisco Business License.

South San Francisco City CouncilDecember 13, 2023

South San Francisco City Council
December 13, 2023