1. (1) Subgrant Agreement.

   1. (a) After the Department approves an application, the Subrecipient shall enter into a Subgrant Agreement with the Department. The Subrecipient shall not receive any funds until a Subgrant Agreement is entered into between the Department and the Subrecipient.
   2. (b) If a Subrecipient’s proposed modification to the Subgrant Agreement will result in a reduction of the number of beneficiaries or accomplishments listed in the original application, then the Subrecipient shall conduct a properly noticed public hearing on the proposed changes prior to submitting the modification request.
   3. (c) Subrecipients shall monitor project activities to ensure compliance with time schedules, milestones, and other performance goals set forth in the Subgrant Agreements.

2. (2) Financial Management.

   Subrecipients shall establish an appropriate financial management system for administering CDBG funds that comply with federal and state laws, rules, and regulations.

3. (3) Environmental Review.

   Subrecipients must comply with the procedures set forth in 24 CFR Part 58, Environmental Review Procedures for Title I Community Development Block Grant Programs, and 40 CFR 1500-1508, National Environmental Policy Act Regulations.

4. (4) Procurement.

   Procurement Policy. Each Subrecipient shall adopt and follow a local CDBG Procurement Policy that complies with the provisions of 2 CFR Part 200. For covered professional services contracts, the policy shall comply with Section 287.055, F.S. The policy shall also comply with Section 255.0525, F.S., when advertising for competitive bids or proposals for construction projects.

5. (5) Subgrant Agreement Closeout.

   The Subrecipient must submit a Subgrant Agreement closeout package to the Department within 45 days of the contract termination or within 45 days of the completion of all activities.

6. (6) Program and Non-Program Income.

   The Department is the final authority regarding determinations of program funds and program income. Program income must be used or disposed of consistent with the Subrecipient’s Subgrant Agreement including any survival provisions therein.

7. (7) Conflict of Interest.

   No CDBG funds may be expended to assist or benefit any person with a conflict of interest as set forth in 24 CFR 570.489(h), or Section 112.3143, F.S., unless a waiver has been approved by the Department pursuant to 24 CFR 570.489(h)(4). Any funds to be expended without prior Departmental approval must be repaid by the Subrecipient.

8. (8) Architectural and Engineering Costs.

   1. (a) If more than one design professional is needed for an activity or activities (i.e., a landscape architect in addition to an engineer for sidewalk construction in a commercial revitalization project), the local government shall not exceed the appropriate RD/RUS fee curve for each activity covered by each design professional negotiated separately.
   2. (b) For projects involving both Table I and II activities, engineering costs shall be pro-rated appropriately. Table I activities are: water facilities (treatment plants, tanks, or wells); sewer facilities (treatment plants); sewer lines (lines and lift stations); new sewage treatment plant; sewage treatment plant upgrades; new sewer lines and components; sewer line replacement; or sewer hookups. Table II activities are: building construction; water lines; flood and drainage; street improvements; parking facilities; relocation of utilities to underground; solid waste disposal; rehabilitation of commercial buildings; removal of architectural barriers in public buildings; historic rehabilitation and preservation; fire hydrants; fire protection; flood and drainage; hazard mitigation activities; parks or playgrounds; pedestrian malls/sidewalks; recreation/neighborhood center; removal of architectural barriers; senior center; temporary shelters; solid waste disposal; street improvements – new paving; or street improvements – repaving.
   3. (c) For each additional engineering service and for preliminary engineering, the local government shall negotiate a reasonable fee for the service following procurement procedures in 2 CFR Part 200.
   4. (d) Preliminary engineering costs not to exceed one-half of one percent of the estimated construction cost may be paid with CDBG funds over and above the amounts included the RD/RUS fee schedule.

   The maximum percentage of CDBG funds that may be spent on architectural and engineering design costs, excluding additional engineering services, shall be based on the total initial construction budget for eligible subgrant activities, which require architectural and engineering design. These costs shall not exceed the Rural Development/Rural Utility Service (RD/RUS) fee schedule in Florida. Architectural and engineering inspection services during construction shall not exceed the RD/RUS fee schedule in Florida and RUS Bulletin 1780-9 (rev. 6/2007), as set forth in Form COM-73C-23, Rural Development Rural Utility Service (RUS) Fee Schedule (effective date 04/2026), which is incorporated by reference and available at HYPERLINK "http://flrules.org/Gateway/reference.asp?No=Ref-19442"http://flrules.org/Gateway/reference.asp?No=Ref-19442.

9. (9) National Objective and Public Benefit Documentation.

   1. (a) Achievement of national objectives. Applications must demonstrate that the proposed activities meet the national objectives criteria for compliance.

   2. (b) Public Benefit Achievement. Determination of benefit to persons of low- to moderate-income is established through the following methods:

      1. HUD Census Data – LMI benefit can be documented by using HUD-provided Census Data where the service area geographically corresponds with block groups, census tracts, or local government geographical limits. A jurisdiction-wide activity using census data rather than a survey to establish the national objective of benefit primarily to low- and moderate-income persons.

      If a service area contains an entire block group or census tract and portions of other groups or tracts, the data from the block group or tract that is contained entirely in the service area can be used, but the remaining portion(s) of the service area must be surveyed to get LMI data.

      2. Random Sample Survey Methodology – Applicants shall use a sample-based survey of the beneficiaries. The survey methodology must correspond with the random sampling requirements consistent with HUD’s most recent Community Planning and Development Notice for establishing guidelines for conducting income surveys to determine the percentage of low-and moderate-income persons in the service area of a CDBG funded activity. The survey methodology must include a confidence level of 95%.

10. (10) Beneficiaries of Public Improvements.

    1. (a) CDBG-funded activities may not extend beyond the location of the last LMI beneficiary, except where it is required for sound engineering, operation, or design reasons as certified by a licensed engineer.
    2. (b) Where hookups or connections are required as a condition for beneficiary access to a CDBG funded public improvement, fees shall not be charged to low- or moderate-income beneficiaries. Low, and moderate-income beneficiaries in Neighborhood Revitalization project service areas with hookups as an activity shall be hooked up unless the beneficiary, or property owner in cases of rental property, provides written refusals.
    3. (c) For non-LMI beneficiaries required to pay a one-time fee (i.e., assessment, impact fee) for connection or access to the CDBG funded public improvement, and charged a periodic service fee (i.e., water bill, sewer bill), the proposed non-LMI beneficiaries will be advised of the estimated cost of the one-time fee. The Subrecipient shall notify all beneficiaries in writing of the estimated amount of any periodic service fee. The application narrative must outline the estimated costs to be paid by non-LMI beneficiaries.
    4. (d) Surveyed beneficiaries shall be advised of both fees in writing prior to application submission. If census data is used, a random sample representing ten percent of the beneficiaries must be advised in writing prior to application submission.

Rulemaking Authority 290.048 FS. Law Implemented 290.044, 290.046, 290.047, 290.0475 FS. History–New 5-23-06, Amended 2-26-07, 6-6-10, Formerly 9B-43.0051, Amended 4-21-15, 3-1-16, 5-27-18, 5-18-26.