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HUD-96 (7-66)
UNITED STATES GOVERNMENT DEPARTMENT OF
Memorandum HOUSING AND URBAN DEVELOPMENT
ALL REGIONAL ADMINISTRATORS ocT 14 1968
TO : Attention: Assistant Regional Administrator DATE:
for Model Cities
ALL CDA DIRECTORS In reply refer to:
FROM : Floyd H. Hyde
SUBJECT: Establishing the Beginning of the First Action Year
A number of cities have asked us about the time period of the First Action Year.
In particular, they have asked whether it starts at the time expenditures subse-
quently to be reimbursed from supplemental funds are first incurred under a Letter
to Proceed, or whether it starts after approval of the comprehensive program and
tender of the grant agreement.
This memorandum outlines the procedure to be followed in establishing the beginning
of the First Action Year. It does not deal with the question of adjusting the
length of the Action Year in order to even out the review load. This will be dealt
with in a subsequent memorandum. For the purpose of this memo, the First Action
Year is deemed to be a 12-month time period.
The First Action Year should begin following execution of the grant agreement, which
usually is the point at which the city is in a legal position to start all the
projects and activities included in the first approval action of its comprehensive
program.
The Action Year start may be placed before signature by HUD of the grant agreement
if the city has sought and received approval of a Letter to Proceed for all of the
projects and activities approved. Because of the short time span between the time
that a program is approved and the grant agreement is executed, it is not expected
that many cities will seek and receive a Letter to Proceed at this point in time.
A large number of cities sought and received Letters to Proceed, reimbursable from
supplemental funds, to carry out administrative functions during the period they
were awaiting approval of the comprehensive program. The First Action Year should
not be dated at the start of such a Letter to Proceed. Reimbursement for these
interim expenses should be handled in the following way:
1. All such expenses included in the budget of the earlier planning grant
contract should be charged to that contract up to the point of exhausting
all remaining planning grant funds, including the ten percent hold-back.
5.
ae
Interim expenses which cannot be charged to the planning grant contract,
either because there are insufficient planning grant funds to cover them or
because the expense items were not detailed in the planning grant contract
budget, then will be charged to supplemental funds.
To accomplish this, an amendment should be made to the 12-month administrative
budget for the First Action Year which adds the amount of interim expenses to
be covered. In a few cases, Letters to Proceed were given for expenses more
properly chargeable to other First Year Action budgets. In these cases amend-
ments should be made to those other budgets.
The actual steps to make such amendments should be:
(a) establish the start of the First Action Year. This date will normally
be shortly after signing of the grant agreement by the city and by HUD.
(ob) after charge-off of all possible interim expenses to the planning
grant contract, total up uncovered expenses incurred, or to incur,
under Letter to Proceed up to the established start of the First Action
Year.
(c) amend the administrative budget of the First Action Year (or project
and activity budget if appropriate) to add the uncovered expenses. The
budget so amended then would have a time period of more than 12 months,
running from the start of expenses incurred under Letter to Proceed
which cannot be charged to the planning contract budget to the end of
the First Action Year.
If the amendment amounts to less than ten percent of the budget being amended
and also amounts to less than $100,000, HUD approval is not required. However,
a@ properly approved amendment should be entered in the city files where it will
be available for Federal inspection. If the amendment amounts to more than ten
percent of the budget being amended, or $100,000, whichever is lesser, the
amendment must be submitted to HUD for review.
To find the additional funds to cover these interim expenses, corresponding
reductions should be made either within the administrative budget or other
budget being used to cover the interim expenses, or by reduction of any other
approved project or activity budget. Because of normal delays in the staffing
of new programs, cities should be able to make this type of transfer without
reducing the level of projects or activities. Cities whose presently approved
projects and activities do not total the total dollar amount of the grant
agreement tendered to them may, if they wish, transfer funds from the amount
not approved for projects and activities to the administrative or other budget
which is covering interim expenses. HUD will not approve increases in the
total grant amounts tendered for the purpose of covering interim expenses.
Here is an example of how a typical city may carry out this process.
March 1, 1969 -
March 15 =
May 1 -
June 25 -
July 10 -
July 21 -
August 1 -
The city then goes back
City submitted comprehensive program.
City received Letter to Proceed covering interim CDA
and citizen participation expenses during the review
period. Most of the expenses were for staff and other
items previously detailed in the planning grant budget.
Planning funds are exhausted.
HUD announces approval of program and tenders grant
agreement.
City council approves grant agreement and mayor signs
and returns to HUD.
HUD Regional Administrator signs grant agreement,
Start of First Action Year is established as of this date.
over the interim expenses, charges all those that were detailed
in the planning grant contract to that contract up through May 1. The city then amends
the approved administrative budget for the First Year Action program, so that its
dates read from May 1 to August 1, 1970, and its dollar amounts equal the previously
approved administrative
budget plus the amount required to cover expenses from May 1
to August 1, 1969. These interim amounts covered are detailed in accordance with
CDA Letter #6. To balance the amount added to the administrative budget, the city
makes transfers from other parts of the administrative budget or from project and
activity budgets, selecting for reduction line items in which expenditures have been
or are expected to be, at a slower rate then projected.
The amendments then are approved by the city council and filed with the city, unless
it requires HUD approval in accordance with paragraph 5 above.
Questions on this process or its particular application should be directed to the
fiscal officer in HUD Regional Office.
a. poe | (MCGR )
HUD-Wash., D. C.
HUD-96 (7-66)
UNITED STATES GOVERNMENT DEPARTMENT OF
Memorandum HOUSING AND URBAN DEVELOPMENT
ALL REGIONAL ADMINISTRATORS ocT 14 1968
TO : Attention: Assistant Regional Administrator DATE:
for Model Cities
ALL CDA DIRECTORS In reply refer to:
FROM : Floyd H. Hyde
SUBJECT: Establishing the Beginning of the First Action Year
A number of cities have asked us about the time period of the First Action Year.
In particular, they have asked whether it starts at the time expenditures subse-
quently to be reimbursed from supplemental funds are first incurred under a Letter
to Proceed, or whether it starts after approval of the comprehensive program and
tender of the grant agreement.
This memorandum outlines the procedure to be followed in establishing the beginning
of the First Action Year. It does not deal with the question of adjusting the
length of the Action Year in order to even out the review load. This will be dealt
with in a subsequent memorandum. For the purpose of this memo, the First Action
Year is deemed to be a 12-month time period.
The First Action Year should begin following execution of the grant agreement, which
usually is the point at which the city is in a legal position to start all the
projects and activities included in the first approval action of its comprehensive
program.
The Action Year start may be placed before signature by HUD of the grant agreement
if the city has sought and received approval of a Letter to Proceed for all of the
projects and activities approved. Because of the short time span between the time
that a program is approved and the grant agreement is executed, it is not expected
that many cities will seek and receive a Letter to Proceed at this point in time.
A large number of cities sought and received Letters to Proceed, reimbursable from
supplemental funds, to carry out administrative functions during the period they
were awaiting approval of the comprehensive program. The First Action Year should
not be dated at the start of such a Letter to Proceed. Reimbursement for these
interim expenses should be handled in the following way:
1. All such expenses included in the budget of the earlier planning grant
contract should be charged to that contract up to the point of exhausting
all remaining planning grant funds, including the ten percent hold-back.
5.
ae
Interim expenses which cannot be charged to the planning grant contract,
either because there are insufficient planning grant funds to cover them or
because the expense items were not detailed in the planning grant contract
budget, then will be charged to supplemental funds.
To accomplish this, an amendment should be made to the 12-month administrative
budget for the First Action Year which adds the amount of interim expenses to
be covered. In a few cases, Letters to Proceed were given for expenses more
properly chargeable to other First Year Action budgets. In these cases amend-
ments should be made to those other budgets.
The actual steps to make such amendments should be:
(a) establish the start of the First Action Year. This date will normally
be shortly after signing of the grant agreement by the city and by HUD.
(ob) after charge-off of all possible interim expenses to the planning
grant contract, total up uncovered expenses incurred, or to incur,
under Letter to Proceed up to the established start of the First Action
Year.
(c) amend the administrative budget of the First Action Year (or project
and activity budget if appropriate) to add the uncovered expenses. The
budget so amended then would have a time period of more than 12 months,
running from the start of expenses incurred under Letter to Proceed
which cannot be charged to the planning contract budget to the end of
the First Action Year.
If the amendment amounts to less than ten percent of the budget being amended
and also amounts to less than $100,000, HUD approval is not required. However,
a@ properly approved amendment should be entered in the city files where it will
be available for Federal inspection. If the amendment amounts to more than ten
percent of the budget being amended, or $100,000, whichever is lesser, the
amendment must be submitted to HUD for review.
To find the additional funds to cover these interim expenses, corresponding
reductions should be made either within the administrative budget or other
budget being used to cover the interim expenses, or by reduction of any other
approved project or activity budget. Because of normal delays in the staffing
of new programs, cities should be able to make this type of transfer without
reducing the level of projects or activities. Cities whose presently approved
projects and activities do not total the total dollar amount of the grant
agreement tendered to them may, if they wish, transfer funds from the amount
not approved for projects and activities to the administrative or other budget
which is covering interim expenses. HUD will not approve increases in the
total grant amounts tendered for the purpose of covering interim expenses.
Here is an example of how a typical city may carry out this process.
March 1, 1969 -
March 15 =
May 1 -
June 25 -
July 10 -
July 21 -
August 1 -
The city then goes back
City submitted comprehensive program.
City received Letter to Proceed covering interim CDA
and citizen participation expenses during the review
period. Most of the expenses were for staff and other
items previously detailed in the planning grant budget.
Planning funds are exhausted.
HUD announces approval of program and tenders grant
agreement.
City council approves grant agreement and mayor signs
and returns to HUD.
HUD Regional Administrator signs grant agreement,
Start of First Action Year is established as of this date.
over the interim expenses, charges all those that were detailed
in the planning grant contract to that contract up through May 1. The city then amends
the approved administrative budget for the First Year Action program, so that its
dates read from May 1 to August 1, 1970, and its dollar amounts equal the previously
approved administrative
budget plus the amount required to cover expenses from May 1
to August 1, 1969. These interim amounts covered are detailed in accordance with
CDA Letter #6. To balance the amount added to the administrative budget, the city
makes transfers from other parts of the administrative budget or from project and
activity budgets, selecting for reduction line items in which expenditures have been
or are expected to be, at a slower rate then projected.
The amendments then are approved by the city council and filed with the city, unless
it requires HUD approval in accordance with paragraph 5 above.
Questions on this process or its particular application should be directed to the
fiscal officer in HUD Regional Office.
a. poe | (MCGR )
HUD-Wash., D. C.
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