September 10, 2019

HUD Publishes CDBG Mitigation Notice for the U.S. Virgin Islands

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On September 4th, HUD published the requirements for its Community Development Block Grant–Mitigation (CDBG-MIT) Program for the U.S. Virgin Islands (USVI). The notice allocates more than $744 million in mitigation funding and details specific guidelines for the USVI. By providing these additional guardrails HUD says it hopes to “reduce risk and support the successful implementation of this CDBG-MIT allocation.” The notice includes rules, waivers, additional requirements, and grant conditions that: 

•    Limit the use of CDBG-MIT funds for electrical power system enhancements 
•    Put in place special conditions for large scale projects 
•    Require additional implementation plan capacity assessments 
•    Detail citizen engagement conditions 
•    Instruct the submission of internal audit reports and posting of reports 
•    Develop additional requirements for policies and procedures 
•    Call for enhanced review of grant reporting 
•    Set in place drawdown milestones 

Limit the use of CDBG-MIT funds for electrical power system enhancements

In 2018, when congress initially appropriated almost $16 billion in mitigation funding, they specified that $2 billion of those funds be used to repair and upgrade the electrical grid in Puerto Rico and the USVI in response to Hurricane Maria and Irma. HUD is still in the process of putting together a separate notice to guide this allocation. For this reason, HUD has prohibited the USVI from using CDBG-MIT funds for mitigation activities that reduce the risk of disaster related damage to electric power systems until HUD publishes their notice governing the use of the $2 billion set aside.

Detail citizen engagement conditions 

Citing the USVI’s “limited experience” in “engaging the community in an assessment of mitigation needs following a major disaster” HUD has put into place specific steps the grantee must take to ensure proper dialogue with citizens. The notice requires the USVI to staff a public affairs team with community engagement experience and calls on this team to produce a citizen participation plan with specific outreach actions to gather community input in the identification of mitigation needs within 120 days of the grant agreement.

Set in place drawdown milestones 

The notice requires the USVI at the time they submit a draw request that achieves 10, 25, and 50 percent of grant disbursement to provide various updates that will measure capacity and compliance. They will have to list all grant related internal audit issues and provide proposed solutions to any concerns raised by HUD’s Office of Inspector General (OIG). HUD will review this information in addition to other required reporting items to determine if the grantee has demonstrated enough capacity. If the grantee fails to demonstrate such capacity, HUD may take additional corrective actions such as restricting access to grant funds until the identified issue has been resolved. If the problem persists, HUD can block access to CDBG-MIT funds pending an onsite review. 

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