Brownfields Revolving Loan Fund RLF 101 Presentation EPA

Brownfields Revolving Loan Fund (RLF) 101 Presentation EPA Regions 8, 9, and 10 February 5, 2009

Overview 1. Setting up RLF Team Roles and Responsibilities 2. Marketing 3. RLF Financial Management 4. Site and Applicant Eligibility 5. Eligible Use of Funds 6. EPA Review and Approval Roles Site testing and sampling at the Las Vegas, NV Armory Site. 2

Overview, cont’d 7. Cross-Cutting Requirements 8. Record-Keeping and Reporting 9. Program Income Tracking 10. Amendments and RLF Policies 11. Supplemental Funding 12. Closeout 3

Topic 1: Setting up RLF Team Roles and Responsibilities

Four Key Roles in RLF Program • EPA Project Officer • RLF Recipients (Grantee) • Borrowers • Sub-grantees Three-tiered process Setting up RLF Team Roles and Responsibilities 5

EPA's Role • Provide technical assistance • Assist in review of documents • Approve site and borrower eligibility • Monitor financial, environmental, and periodic progress reports • Monitor program and ensure compliance with cooperative agreement Setting up RLF Team Roles and Responsibilities 6

RLF Recipient (Grantee) • Administer RLF program - create RLF program manager/coordinator role • Ensure compliance with terms and conditions • Environmental cleanup • Financial management • Compliance with federal, state, local laws Setting up RLF Team Roles and Responsibilities The Villa Italia Mall in Colorado. 7

RLF Recipient (Grantee) • Fulfill two key roles • Fund Manager • Qualified Environmental Professional (QEP) Setting up RLF Team Roles and Responsibilities 8

RLF Two Key Roles • Fund Manager • Establish criteria for selecting borrowers and sub-grantees • Ensure prudent lending practices are used • Establish methods of payment and disbursement • Adhere to eligible cost requirements • Ensure cost share and program income requirements are met Setting up RLF Team Roles and Responsibilities 9

RLF Two Key Roles • Qualified Environmental Professional (QEP) • Coordinate, direct & oversee site-specific cleanups • QEP can be State agency, but does not have to be government employee; can be contractor • Determine whether cleanup is authorized • Review public comments • Ensure compliance with applicable laws and Setting up RLF Team Roles and Responsibilities regulations 10

Borrowers and Sub-grantees • Borrowers - contractually responsible to RLF recipient, not EPA • Can be public or private parties • Responsible for cleanup and documenting fund uses • Sub-grantees - cannot be private parties and applicant must own the site • Funds can only be used for eligible costs under the RLF program. Administrative costs not allowed Setting up RLF Team Roles and Responsibilities 11

Topic 2: Marketing

Marketing Recap • Marketing Plan as a grant deliverable. • Recap of the March 2008 RLF Best Practices Conference Call on Marketing: Marketing 13

Marketing Recap • It starts with identifying your target audience: Who in my community is a likely user of my loan product? • Making the connection with your target audience: What professional and/or information networks are these targets linked into? • Delivering the message: How do you make your message “stick” with your target audience? Marketing 14

Topic 3: RLF Financial Management

Financial Management RLF Fund Manager • Maintain accounting records • Develop internal budget controls for cash disbursement, revisions and record-keeping • Ensure source documentation (payroll, time card, loan award documents, etc. ) • Develop/maintain payment schedule • Ensure advances of loan funds are in an interest bearing account RLF Financial Management 16

Cost-Share (20%) • Can be in the form of cash, labor, materials or services that are eligible costs under the RLF Program • Provide adequate documentation • Federal funds cannot be used as match, except HUD CDBG dollars • Pass 20% share onto borrowers & sub-grantees • Program income such as loan fees and interest payments are eligible RLF Financial Management 17

Prudent Lending Practices • What are prudent lending practices? • Refer to the procedures the grant recipient establishes to ensure sound financial management of the RLF • Include establishing interest rates, repayment terms, fee structure, and collateral requirements • Grantees often partner with financial organizations to assist with lending RLF Financial Management Golden Urban Renewal Authority (GURA) cleanup and redevelopment. Golden, Colorado 18

Prudent Lending Practices • Collateral • EPA requirements • Assuming risk • Creative ways to secure collateral • Interest rates • Public vs. private borrowers • Repayment Terms • Meeting the needs of the borrower and your RLF program RLF Financial Management Cleanup underway in Missoula, Montana. 19

Topic 4: Site and Applicant Eligibility

Eligible Sites • The site must meet the brownfield definition, which is: “. . . real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. ” • Abandoned, idled, or underused industrial or commercial properties • Reuse/redevelopment is complicated by real or perceived environmental contamination Site and Applicant Eligibility 21

Eligible Sites with the following contaminants can be eligible for RLF loans and sub-grants: • • • Hazardous substances Petroleum contamination Asbestos & lead based paint Controlled substances (e. g. , meth labs) Mine-scarred lands Among other contaminants Site and Applicant Eligibility 22

Petroleum Sites State review based on statutory requirements to determine whether the site is: • • Relative low risk No viable responsible party Applicant not responsible party No RCRA order Site and Applicant Eligibility 23

Properties not considered Brownfields by EPA • Listed sites or sites proposed for listing on the National Priorities List (NPL); • Sites subject to CERCLA orders or consent decrees; or, • Federal properties (except land held in trust for an Indian tribe) Site and Applicant Eligibility 24

Eligible Borrowers and Sub-grantees Eligible Borrowers • Any public or private entity with control or access of the brownfields site Gold Hill Mesa Redevelopment, Colorado Springs, Colorado Site and Applicant Eligibility Eligible Sub-grantees • States • Local governments • Tribes • Non-profit organizations • Redevelopment agencies • Land clearance authorities • Other quasi-governmental entities created by state or local governments Site and Applicant Eligibility 25

Sub-grantee Eligibility Restrictions • Cannot sub-grant to yourself • Sub-grantee must own the land • For profit organizations are not eligible for subgrants • Max of $200, 000 sub-granted per site, and up to 40% of your grant • Cannot pair two sub-grants from separate RLFs for work on one site. • It is ok to pair a $200 k cleanup grant and a $200 k RLF sub-grant Site and Applicant Eligibility 26

Eligible Borrower/Sub-grantee The borrower/sub-grantee cannot be a potentially liable party under CERCLA 107: • Past owner or operator during release of contamination • Cause or contributor to contamination • Generator or transporter of contamination Site and Applicant Eligibility 27

All Appropriate Inquiries (AAI) • AAI is the process of evaluating a property for: • Potential environmental contamination • Potential liability for environmental contamination • Requires Phase I environmental site assessment within in one year prior to voluntary acquisition. • Also known as: “Environmental due diligence” and “Environmental site assessment standards” • ASTM Standard E 1527 - 05 • AAI Rule available at: www. epa. gov/brownfields. regneg. htm Site and Applicant Eligibility Idalia Court RLF Cleanup, Aurora Colorado 28

Topic 5: Eligible Use of Funds

Eligible Activities and Costs Activities Costs • Removing, mitigating a or preventing a release • Capping contamination • Excavation, consolidation or removal of contaminated soils • Site assessment activities that are necessary to the cleanup process • Site monitoring including sampling and analysis • Installation of drainage controls • Installation of fences and signs • Among other cleanup activities • Expenses for site cleanup activities • Financial management expenses • Costs for monitoring groundwater or soil for contamination • VCP or State cleanup program fees • Expenses for travel, training, equipment and contractual support • Purchasing environmental insurance Eligible Use of Funds 30

Ineligible Activities and Costs Activities Costs • Pre-cleanup assessment, identification and characterization • Construction, demolition and development activities that are not cleanup actions • Public or private drinking water supplies that have deteriorated through ordinary use • Among other activities not related to the cleanup • A penalty or a fine • A federal cost share requirement • Costs of complying with federal laws other than those of the applicable cleanup • Administrative costs Eligible Use of Funds 31

Topic 6: EPA Review and Approval Roles

EPA Review and Approval Roles • • • The process will vary by Region, state program, and project A more detailed checklist is available Project Activities/Items: Task/Activity Site and Applicant Eligibility EPA Role Approv e X Analysis of Brownfields Cleanup Alternatives (ABCA) X Cleanup Plan Endangered Species Act (ESA) & National Historic Preservation Act (NHPA) Loan or Sub-grant Documents Quality Assurance Project Plan (QAPP) No Further Action (NFA) Letter Property Profile Form (PPF)/ACRES EPA Review and Approval Roles File X X Community Involvement Plan (CIP) Decision Document Review X X X 33

Topic 7: Federal Cross-Cutting Requirements

Federal Cross-Cutting Requirements • What are they? • Requirements of other federal laws and Executive Orders that apply to federal financial assistance and activities • Who is responsible? • EPA retains ultimate responsibility but often the grantee is doing the on-the-ground work • In sum, we’re in this together Federal Cross-Cutting Requirements 35

Federal Cross-Cutting Requirements • What are the main requirements to look out for? • Endangered Species Act • National Historic Preservation Act • Occupational Safety and Health Act • Davis-Bacon Prevailing Wage Rates • MBE/WBE • AND there are others… Federal Cross-Cutting Requirements 36

Topic 8: Record Keeping and Reporting

Record Keeping • Quarterly Reports • Due 30 days after the quarter ends • Document progress of outputs/outcomes and project milestones • Budget recap including approved budget vs. costs incurred for quarter and remaining funds • Complete Property Profile Forms (PPF) and update as information obtained • i. e. types of contaminants removed, institutional controls, funds leveraged, jobs created, etc. Record Keeping and Reporting 38

Record Maintenance • Maintain records for at least three years after submitting last report • Obtain EPA approval prior to destroying records • Additional record keeping may be necessary if RLF continues to operate after closeout • RLF grants records are not subject to the Federal Freedom of Information Act Record Keeping and Reporting 39

Auditing • Grantees are required to secure an outside auditor to conduct periodic program audits • Costs incurred for securing the services of an outside auditor to conduct audits is an “ineligible” direct cost • Must ensure sub-grantee and borrower compliance with RLF terms & conditions Record Keeping and Reporting 40

Topic 9: Program Income Tracking

Program Income What is program income? • The amount of money earned during the period of the award • It refers to the funds that have come back to the RLF after you have made your loans and sub-grants • It is the grantee’s responsibility to track program income Program Income Tracking Belmar Redevelopment - Lakewood, Colorado 42

Program Income Program income includes: • Principal repayments • Interest earned on outstanding loan principal • Loan fees • Closing fees • Other income generated from RLF operations Program Income Tracking 43

A Few Things About Program Income • Grantee needs to loan/sub-grant program income before using grant funds • Does not affect the 40% sub-grant limit • i. e. , a grantee could sub-grant 100% of its program income budget if desired. • Program income still subject to $200, 000 per site limit on sub-grants • Program income no longer needs to follow the original petroleum/hazardous substance budget Program Income Tracking 44

Topic 10: Amendments and RLF Policies

Policies That Affect RLF Grantees • Amendments • Program Waiver allows for maximum project period of fifteen years • Extensions are linked to supplemental funding awards Amendments and RLF Policies 46

Policies That Affect RLF Grantees • Closeout • Accrued Program Income • Funds that return to you following closeout • Closeout agreement may include a reporting plan • How CERCLA and Federal requirements will apply to activities after closeout Amendments and RLF Policies 47

Policies That Affect RLF Grantees • Discounted Loans • Eligibility treated same as sub-grants (no private entities) • Amount of principal forgiveness is limited to 30% or $200 K • Amount of principal forgiveness plus sub-grants cannot exceed 40% of award Amendments and RLF Policies 48

Topic 11: Supplemental Funding

Supplemental Funding • National competitive request for proposals • Available to new rules RLF grantees* • Requests must be made in writing via a letter addressing the stated considerations • Letters must be postmarked by: February 11, 2009 • Awards are expected late Spring 2009 Supplemental Funding *if Considerations on next slide are met 50

Considerations • Must have successfully issued a loan and/or sub-grant • Substantially depleted existing RLF funds • Demonstrate need, including number of sites and community benefits • Ability & success to “revolve” the RLF grant • Illustrate ability to utilize RLF grant to address cleanup funding gaps • Community benefit from past and potential loan(s) and/or sub-grant(s) Supplemental Funding 51

Funding • If awarded, existing cooperative agreements and workplans will be amended • Grantees must note the type of funding requested (i. e. $500 k hazardous substance and $0 for petroleum) • Supplemental funding awards are typically between $200, 000 $500, 000 Supplemental Funding 52

Topic 12: Closeout

Closeout • Think of it as retirement planning • Do you envision a Brownfields program postcloseout? • Review the current policy • Stay tuned for updates Centennial Park in Englewood, Colorado. Closeout 54

Coming Up Next call – April – Suggestions for Topics? National RLF Grantee Workshop, June 2 -4, Minneapolis, MN

On Quick. Place • This presentation • Policy Documents • Closeout • Discounted Loans • Model Budget & Program Income Tracking Sheet • Project Approval Checklists • Other stuff? 56

RLF Best Practices Web Site 57

Questions? Ribbon-cutting ceremony at the Assistance League in Bakersfield, California. 58

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