Safeguarding Tomorrow RLF_IUP_template_FY24_NOFO_12.19.2023_508compliant.docx

Safeguarding Tomorrow through Ongoing Risk Mitigation Revolving Loan Fund Program Intended Use Plan Template and Guidance December 2023

This Page Intentionally Left Blank Document Name (FEMA Header) Document Name (FEMA Headers—Even Page) Safeguarding Tomorrow RLF Program – Intended Use Plan Template and Guidance

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Document Name (FEMA Header) Document Name (FEMA Headers—Even Page) Safeguarding Tomorrow RLF Program – Intended Use Plan Template and Guidance

Guidance for Completing the Intended Use Plan The Intended Use Plan provides information to potential loan recipients and other interested parties about goals for the entity loan fund, the criteria for the distribution of loans, and the process for management of the loan fund.

FEMA will review the Intended Use Plan to ensure it is developed in accordance with the requirements outlined in Title 42 United States Code (U.S.C.) Section 5135(g): Grants to entities for establishment of hazard mitigation revolving loan funds. The table below has requirements from statute to help entities ensure they have met all requirements. Entities will be required to update their Intended Use Plan on an annual basis to ensure continued compliance with statutory requirements.

Each section contains prompts to help the entity with submitting all required information for the required Intended Use Plan. Each answer should contain, when it applies, background information, description and reasoning, and relevant supporting information. The information in italics is there as a guide to help create your answers. All italicized content in the Intended Use Plan Template should be deleted prior to submitting the plan to FEMA.

As entities prepare their Intended Use Plans and develop the Project Proposal Lists, they should use evidence-based, best-available climate data sets, information resources, decision-support tools, and federal resources, to identify current and future climate risks over the expected service life of the projects in their Project Proposal Lists. Climate projections, emission scenarios, or other suitable scenario conditions should be specified based on the project’s service life and an entity’s risk tolerance, as appropriate and available. Entities should document how their planned project design and operations are resilient to any identified current and future climate risks.

Refer to Additional Resources on page 25.

Table 1: Intended Use Plan Requirements The reference column sections below can be found at Title 42 United States Code (U.S.C.) Section 5135(g).

IUP Template Section 2.2.1, page 19.

IUP Template Section 2.3.1, page 14.

IUP Template Section 2.2.2, page 13.

IUP Template Section 2.2.2, page 13.

IUP Template Section 2.2.2, page 13.

IUP Template Section 2.2.3, page 13.

IUP Template Section 2.2.4, page 14.

IUP Template Section 2.3.1, pages 11–13.

IUP Template Section 2.3.1.1, page 15.

IUP Template Section 3.1, page 18.

IUP Template Section A.1, page 26.

IUP Template Section 3.2, page 18.

Address last fiscal year’s loan fund financial status.

Note: This is not required for new applicants.

42 U.S.C. Section 5135(g)(2)(G)

IUP Template Section 4.1.1.1, page 20.

Address current fiscal year’s loan fund financial status.

Note: This is not required for new applicants.

42 U.S.C. Section 5135(g)(2)(G)

IUP Template Section 4.1.1.2, page 21.

Provide information on standard loan terms.

Note: Initial loan term requirements are outlined in 42 U.S.C. § 5135(f)(1)(A). Entities may change loan terms if they meet or exceed these standards. Also, loan agreements will have to follow the grant award terms and conditions.

42 U.S.C. Section 5135(g)(2)(F)

IUP Template Section 4.2.1, page 22.

Provide information about loan terms for communities that are categorized as low-income or underserved.

Note: Minimum requirements for loan terms are outlined in 42 U.S.C. § 5135(f)(1)(A). Entities may change loan terms if they meet or exceed these standards. Also, loan agreements will have to follow the grant award terms and conditions.

42 U.S.C. Section 5135(g)(2)(F)

IUP Template Section 4.2.2, pages 22-23.

IUP Template Section 4.3, page 23.

IUP Template Section 6.2, page 25.

I. Introduction

1.1. Status of the (Entity Name) Safeguarding Tomorrow through On-going Risk Mitigation Revolving Loan Fund (Safeguarding Tomorrow RLF) Provide information about the following items:

Summary of Intended Use Plan Purpose, including the fiscal year it covers.

Entity agency responsible for emergency management and oversight and management of the fund program.

Body in charge of financial management and administration of the fund (if financial administration is combined as described in Section 4 – Financial Management).

Any other entity, agency or other party involved in managing the fund.

1.2. Updates for Fiscal Year (YEAR) Safeguarding Tomorrow RLF Note: If this is the first Intended Use Plan prepared by the entity, this section is not necessary.

Provide information that addresses the following prompts:

Provide a summary of updates about the fund management that the entity has established.

Provide any information about capacity-building efforts.

Provide updates about the use(s) of funds since the last capitalization grant.

Confirm if there have been any changes to the loan interest rates and explain the reason.

Provide information on any challenges concerning staffing capacity and implementation of the program. Is the entity loan fund adequately staffed and resourced, and contains critical knowledge, to manage the operations and finances of the entity loan fund? If not, please describe staffing/resource/knowledge gaps.

Please provide a narrative description of how the entity loan fund has promoted equity in the administration of funds and implementation of the program. In the narrative, consider how the entity loan fund works to:

Increase outreach Increase capacity-building work Increase trainings Increase meetings Additionally, please incorporate supporting data from projects/activities that can reinforce the narrative on equity benefits.

II. Uses of the (Entity Name) Safeguarding Tomorrow through On-going Risk Mitigation Revolving Loan Fund (Safeguarding Tomorrow RLF) The following sections allow entities to describe how they plan to use the grant for approved activities for the Safeguarding Tomorrow RLF program. Entities should provide details in the specified sections that apply to how they plan to use funds in their loan fund.

2.1. (Entity Name) Program Objectives Describe the objectives of the entity loan fund.

How will the entity loan fund provide loans to local governments most in need of financing assistance?

How will the entity loan fund support hazard mitigation projects and activities to reduce risks from natural hazards for homeowners, businesses, nonprofit organizations, and communities by decreasing the loss of life and property, the cost of insurance, and federal disaster payments?

2.2. (Entity Name) Program Goals

2.2.1. Connection to Other Plans and Goals

Describe how the fund will be used in line with existing planning efforts, including the entity’s Hazard Mitigation Plans, and other programs and efforts to reduce impacts of major disasters.

2.2.2. Mitigation and Resiliency Goals

Provide information about plans to achieve mitigation and resiliency benefits per 42 U.S.C. Section 5135(g)(2)(B), such as:

Reducing future damage and loss associated with hazards.

Reducing the number of severe repetitive loss structures and repetitive loss structures.

Decreasing the number of insurance claims due to injuries resulting from major disasters or other natural hazards.

Increasing community ratings under the National Flood Insurance Program’s (NFIP) Community Rating System (CRS).

2.2.3. Short-Term Entity Safeguarding Tomorrow RLF Goals

Include a list of short-term goals that will guide decisions for the loan fund. Entities may define short-term goals according to their needs or local communities’ needs. Short-term goals may include results that can be measured during the Period of Performance.

The following prompts may support creation of short-term goals:

How will the entity loan fund support recipients with completing projects?

How will the entity loan fund efficiently disburse loans to recipients?

How will the entity loan fund monitor and assess how the recipient executes the project?

How will the entity work together with low-income geographic areas and underserved communities?

How will the entity identify and arrange projects that achieve program priorities quickly and efficiently?

2.2.4. Long-Term Entity Safeguarding Tomorrow RLF Goals

Include a list of long-term goals that will guide the decisions for the entity loan fund. Entities may define long-term goals according to their needs or the needs of local communities. Long-term goals may include results that can be measured during the Period of Performance, the advancement of construction and implementation in phasing, coordination with loan recipients, etc.

The following prompts may support creation of long-term goals:

How will the entity loan fund be managed to maintain a lasting source of funds?

What financial metrics will be used to make sure the fund is well-managed and remains continuously effective?

How will the entity loan fund continue to select projects effectively and clearly?

How will the entity work with local communities to ensure a steady flow of eligible projects are submitted and ready for funding?

How will the entity promote equity for low-income geographic areas and underserved communities throughout the life of the loan fund?

How will the entity use current and future assets and choose local projects in need of funding?

What methods will be in place to ensure capitalization grants and revolving income are used effectively?

How will the entity ensure that it follows federal program requirements?

How will the entity support recipients with following federal requirements?

2.3. (Entity Name) Program Priorities Complete the following sections using information about the development of your Project Proposal List.

2.3.1. Increase Resilience and Reduce Risk

How will the entity loan fund support projects that increase resilience and reduce risk of harm to natural and built infrastructures? The following subsections offer potential actions to increase resilience and reduce risk.

Provide information that addresses the following prompts, as applicable:

2.3.1.1. Hazard Mitigation

How will the entity award loans to support hazard mitigation planning?

How will the loan fund be used to support local hazard mitigation activities that reduce the impacts of natural hazards? Include which hazards the entity plans to address. Eligible natural hazards may include:

Drought, Extreme heat, Severe storms, including hurricanes, tornadoes, windstorms, cyclones, and severe winter storms, Wildfires, Earthquakes, Flooding, including the construction, repair, or replacement of a nonfederal levee or other flood control structure, Shoreline erosion, High water levels, and Storm surges.

2.3.1.2. Zoning and Land Use Planning

If the loan fund will include projects for zoning and land-use planning, provide information that addresses the following prompt:

How will the entity loan fund be used to carry out zoning and land-use planning changes? The following bullets display approved zoning and land use activities.

Development and improvement of zoning and land-use codes to encourage low-impact development, resilient wildland–urban interface land management and development, natural infrastructure, green stormwater management, conservation areas next to floodplains, implementation of watershed or greenway master plans, and reconnection of floodplains.

Study and creation of agricultural risk compensation districts where there is a desire to remove or set-back levees protecting highly developed agricultural land to mitigate for flooding, allowing agricultural producers to receive compensation for assuming greater flood risk that would lessen flood exposure to population centers and areas with critical national infrastructure.

Study and creation of land-use incentives that reward developers for using low impact development stormwater best management practices. Such practices could swap density increases in some areas for increased open space in other areas, improve catch basins to mitigate urban flooding, reward developers for including and augmenting natural infrastructure near building projects without reliance on increased sprawl, and reward developers for addressing wildfire ignition.

Study and creation of an erosion response plan that accommodates river, lake, forest, plains, and ocean shoreline retreating or bluff stabilization due to increased flooding and disaster impacts.

2.3.1.3. Building Code Adoption and Enforcement

If the fund will be used to support building code adoption and enforcement, provide information that addresses the following prompt:

How will the entity loan fund be used to support building code adoption and enforcement?

2.3.1.4. Cost Share

An entity loan fund may provide a loan to a local government for its nonfederal cost share requirement of a grant under one of FEMA’s Hazard Mitigation Assistance (HMA) grant programs if the use follows all relevant program and legal requirements. An applicant should list any potential projects, where a loan may be used for this purpose, in the Project Proposal List submitted with its application. Federal funds that are used to meet the nonfederal cost-share requirement must meet the purpose and eligibility requirements of both the relevant HMA grant program and the Safeguarding Tomorrow RLF program. Local governments interested in using loan funding as matching funds for a HMA grant should work with the applying entity to understand funding priorities, ensure the project is captured in the entity’s Intended Use Plan and Project Proposal List, and to position loan funding with project and grant timelines. There is no limit to the percentage of grant funds that can be used for this purpose by loan recipients.

If it applies, provide information that addresses the following prompts:

How will the entity loan fund be used to support loan recipients paying the cost share for federal and nonfederal grants?

What is(are) the name(s) of the other grant program(s) for which the loans will provide matching funds?

2.3.2. Partnerships

How will the entity loan fund include partnerships between eligible entities to carry out a project or similar projects?

Note: This text can be similar to Question 17 in the grant application form but allows room for entities to fully describe their priorities in more detail and provide this information for public comment.

2.3.3. Regional Impacts

How will the entity loan fund support projects that consider regional impacts of hazards on river basins, river corridors, micro-watersheds, macro-watersheds, estuaries, lakes, bays, coastal regions, wildland-urban interfaces, and areas at risk of earthquakes, tsunamis, droughts, severe storms, and wildfires?

Note: This text can be similar to Question 18 in the grant application form but allows room for entities to fully describe their priorities in more detail and provide this information for public comment.

2.3.4. Major Economic Sectors and National Infrastructure

How will the loan fund help projects that make key economic sectors and critical national infrastructure more resilient? This includes areas like ports, power and water facilities, essential bridges and waterways for interstate commerce and global commodity supply chain assets located within the entity’s jurisdiction. Reference FEMA’s Community Lifelines Resources to inform the content.

Note: This text can be similar to Question 19 in the grant application form but allows room for entities to fully describe their priorities in more detail and provide this information for public comment.

III. Criteria and Method for Distribution of Funds

3.1. Loan Management Information

Provide the following information:

Does the loan fund currently contain funds that are available to be disbursed as loans?

What is the loan application process for financial assistance from the loan fund?

How will the entity use financial planning to ensure funding is available in the future?

What are the short-, medium-, and long-term financial projections for the fund?

Note: If available, provide a detailed loan application process and/or financial planning method and supporting materials in Appendix A; include a reference in your explanation above.

3.2. Criteria and Method for Loan Distribution

Provide the following information:

What are the criteria and methods for disbursing funds to loan recipients? The following prompts may support defining criteria and methods.

How will the entity determine if loan applicants have the required skills and resources to meet requirements?

How will the entity loan fund target funding for low-income geographic areas and underserved communities? How will interest rates vary?

How will the entity determine different types of assistance and interest rates for loan applicants based on their needs?

Note: If applicable, provide a complete loan distribution procedure in Appendix B.

3.2.1. Creating a Project Proposal List

Entities are required to provide a list of project proposals that include local government hazard mitigation projects per 42 U.S.C. Section 5135(b)(1)(A). These lists should be prioritized to identify how the entity will use the capitalization grant funds.

Provide confirmation that the entity submitted a Project Proposal List with the grant application.

Note: FEMA offers a Project Proposal List template spreadsheet to support the entity with drafting.

3.2.1.1. Prioritization Methodology

Provide a summary of the methodology the entity used to prioritize projects in the Project Proposal Lists. FEMA recommends creating a ranking system to determine the priority order of projects to be funded. Categories for ranking may include, but are not limited to:

Duration of a project (multi-year vs. annual), Population served, Projects aligned with the statutory objectives, Projects aligned with the Hazard Mitigation Plan, Readiness to proceed, and Projects that promote equity objectives.

Note: Provide a complete ranking system for prioritization in Appendix C.

3.2.1.2. Tie-Breaking Procedure

Provide information about how the entity will determine which project to select if the projects have equal scores.

IV. Financial Management

4.1. Financial Status of the (Entity Name) Safeguarding Tomorrow RLF If the entity intends to combine the financial administration of the loan fund with the financial administration of another revolving loan fund established by the entity and not associated with the Safeguarding Tomorrow RLF program, provide the following:

Provide the name of the agency handling the program's finances and explain the entity's role in managing the financial side of the program.

Describe how the entity will separately account for the following: the capitalization grant, entity share, repayment of loans, and interest earned on amounts in the entity loan funds.

Describe how the emergency management agency will keep control over assistance priorities and oversight activities.

Provide the name of any other revolving loan fund(s) with that will be combined with the entity’s loan fund under this program for the purpose of financial management.

How will the entity loan fund be used to pay the administrative costs for starting the loan fund and operating it, as per 42 U.S.C. Section 5135(f)(6)(A)?

What percentage of funding for this fiscal year is expected to be used for administrative costs?

4.1.1 Address the Financial Status of the Entity Loan Fund

This information is required for the previous and current fiscal years if the information is available. For new applicants, this information is NOT required. FEMA suggests making a table using the following prompts:

4.1.1.1. For the previous fiscal year:

What are the sources of the funds in the entity loan fund? This includes the capitalization grant, entity match, bonds, loan repayments, interest repayments, and investment earnings.

How are the funds in the entity loan fund used? This covers administrative expenses, transfers, capital projects, and bond debt service.

If it applies, include details about any loan refinancing activity.

4.1.1.2. For the current fiscal year:

Where are the sources of the funds in the entity loan fund? This includes the capitalization grant, entity match, bonds, loan repayments, interest repayments, and investment earnings.

How are the funds in the entity loan fund used? This covers administrative expenses, transfers, capital projects, and bond debt service.

If it applies, include details about any loan refinancing activity.

Table 2: Example Sources Table

Table 3: Example Uses Table

4.2. Financial Terms of Loans

Financial terms of loans have limits set by statute. The requirements are as follows:

Interest rates cannot exceed 1% but can be lower.

Annual principal and interest payments from the borrower must start no later than one year after the project is completed. The entity has the option to begin payments earlier.

Standard loans must be repaid within 20 years of project completion. Loans to low-income geographic areas must be repaid within 30 years of project completion. This is the longest period allowed for repayment; entities can choose to have borrowers fully repay the loans earlier than this timeframe.

All loans should be repaid before the project’s design life ends.

Borrowers must identify a specific revenue source to repay the loan.

Borrowers must have a FEMA approved Hazard Mitigation Plan.

All payments made by borrowers for both principal and interest must be deposited into the entity loan fund.

Entities should also describe if they intend to collect fees, how they will be collected, where they will be deposited, and its intended use.

4.2.1. Standard Loans

Provide information on standard loan terms using the loan term limits in 4.2 and the following prompts:

How will the fund set terms for standard loans?

What will interest rates be?

What is the expected repayment timeline?

How will the entity confirm that borrowers have or will establish a dedicated source of revenue?

4.2.2. Loans for Low-Income Geographic Areas or Underserved Communities Provide information about loan terms for communities that are categorized as low-income geographic areas or underserved using the loan term limits in 4.2 and the following prompts:

How will the entity revolving loan fund set terms for loans to low-income geographic areas or underserved communities?

What will interest rates be?

What is the expected repayment timeline?

How will the entity check that borrowers have or will identify a dedicated revenue source for repayment?

4.3. Loan Disbursements

Provide information on the following prompts:

How much of the fund does the entity plan to use as loans for fiscal year (YEAR)?

What is the funds utilization goal?

The utilization goal measures how loan funds effectively disburse loans. The calculation is cumulative assets divided by cumulative funds available for projects. Entities establish a target measure that best aligns with their specific needs. FEMA suggests aiming for a pace level around or above 100%. If entities are falling behind or experiencing a decline, they should review loan policies, procedures, and outreach. Pace levels exceeding 100% typically indicate advanced loan commitment.

Has the entity worked with local governments to identify possible revenue sources to support projects and activities that do not make money, per 42 U.S.C. Section 5135(f)(1)(A)(iii)?

V. Entity Program Management

5.1. Technical Assistance

If applicable, provide information that addresses the following prompts:

How will the entity loan fund be used to provide technical assistance to recipients, per 42 U.S.C. Section 5135(f)(6)(B)?

What percentage of the fiscal year's funding is expected to be used for technical assistance?

5.2. Local Capacity Development

Provide information on how the loan fund is helping local communities by building their capacity.

5.3. Environmental and Historic Preservation Compliance

Describe how the entity plans to follow Environmental and Historic Preservation (EHP) compliance procedures. This includes how proposed projects will be pre-screened and which activity types will be submitted to FEMA for review.

Note: FEMA will provide entities with guidance and materials to complete this section.

5.4. Public Meetings and Comment Activities

Provide information on the following items:

How did the entity include public input, consultations with government agencies, and feedback from interested groups before submitting the annual Intended Use Plan?

How has the entity used information from public meetings and comment activities to assist in carrying out the loan fund?

Describe the public notice process and actions taken to address public comments for project proposals.

VI. Audits and Reporting

6.1 Compliance with Federal Reporting Requirements

Complete the template language below:

To ensure clarity, all program materials are posted on our website (Entity Website). We will use the services of an (enter preferred auditing agency [e.g., outside Certified Public Accounting firm]) to run an independent audit to ensure finances are correct for the one and two-year audits.

We commit to entering project and benefits data into the FEMA Non-Disaster Grants system (ND Grants) and financial data in Payment and Reporting System (PARS) to support the evaluation of the (Entity Name) Safeguarding Tomorrow RLF program. Among other requirements, FEMA will use the data from the audits and reporting to assess how the loan funds:

Efficiently administer the fund.

Provide project benefits to local communities.

Promote equity.

We will enter project benefits data into ND Grants by the end of the quarter in which the capitalization grant is received. After the Period of Performance, we will enter required project benefits data into FEMA’s ND Grants by the end of the fiscal year for this Intended Use Plan.

6.2 Publication of Information

Provide information about the frequency and location of the Publication of Information requirement. Per 42 U.S.C. Section 5135(h)(2), the entity should publish and periodically update all projects receiving funding from the loan fund. This includes project location, type and amount of assistance provided from the loan fund, the expected funding schedule, and the expected date of project completion.

Note: The recipient should publish information publicly on a preferred platform and at times most suitable to the recipient during, and after, the Period of Performance.

6.3 Loan Recipient Auditing and Reporting

Provide information on how the entity loan fund will monitor and evaluate the performance of loan recipients, to ensure they follow fund usage guidelines, if it applies.

Additional Resources This section is for informational purposes while developing your plan. Please remove this section before submitting.

· https://www.climate.gov/

· NOAA’s Sea Level Rise Viewer - https://coast.noaa.gov/slr/#/layer/slr

· U.S. Climate Resilience Toolkit - https://toolkit.climate.gov/#climate-explorer

· National Risk Index for Natural Hazards - https://www.fema.gov/flood-maps/products-tools/national-risk-index - for information on place-based vulnerabilities and current and historical natural hazard exposure

· https://www.drought.gov/

· https://heat.gov/

· https://wildfirerisk.org/

· National Climate Assessment - https://nca2018.globalchange.gov/

· Climate Mapping for Resilience and Adaptation (CMRA) - https://resilience.climate.gov/ Appendix A

Appendix B B.1. Loan Distribution Methodology Appendix C

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