Strafford County seeks fast-moving CDBG-CV and tax-credit options to support warming center operations

Commissioner George (County commissioner) and other Strafford County commissioners discussed federal and state funding options on Oct. 9 after CDFA staff joined by Zoom to explain Community Development Block Grant (CDBG) rules and a limited round of pandemic-era CDBG-CV funds.

Molly (CDFA staff) told commissioners that regular state CDBG allocations typically cannot fund projects located inside HUD entitlement communities and that mortgage of beneficiaries matters: "the federal regulations ... say that entitlement jurisdictions may only receive incidental benefit from a state CDBG funded activity," meaning a majority of beneficiaries must be from non-entitlement areas. She added that the normal public-facilities rounds are competitive and generally cap requests at $500,000, while the typical statewide annual allocation yields roughly $1.3 million to $1.4 million for public-facilities awards.

That constraint matters because the county's proposed new warming center would be on county-owned land inside the City of Dover, and several likely beneficiaries would come from Dover and Rochester, both HUD entitlement communities. "We're not entitled to the CDBG money for for capital, because probably the majority or at least half the people we would be serving there [are] from Dover and Rochester," Commissioner George said during the discussion.

Molly said a separate, pandemic-related pool of CDBG funds (CDBG-CV) created under the CARES Act was distributed differently and that CDFA has a special round open now for activities tied to COVID impacts. "The funds have to be expended by next June," Molly said. She added that the CDBG-CV round permits requests for operating costs and services—unlike the state’s regular CDBG emphasis on bricks-and-mortar public-facilities projects—and that entitlement jurisdictions are eligible for this special round. CDFA staff said roughly $850,000 may be available in that round and applications are due Dec. 1; awards will be competitive.

Commissioners and staff clarified how the county currently operates winter services. The county is administering an overnight warming center in partnership with a private vendor referred to in the meeting as Evolution (provider), and the current facility in Somersworth—acquired with federal COVID funding—is being used for emergency purposes. The county’s plan is to sell that building and use proceeds toward constructing a new facility on the county complex, while continuing operations through a vendor in the near term. County staff said ongoing operating costs are partially covered by ARPA funding this season (about $100,000) and by municipal contributions; the current contract for operations is approximately $250,000 with additional in-kind municipal services tracked separately.

Commissioners discussed whether the county should submit a CDBG-CV application for operating support. Molly said the round will be scored and CDFA will publish criteria soon; she encouraged counties to coordinate quickly because the application timeline is short and the federal expenditure deadline is fixed. Donna (staff member) and county commissioners said they would arrange follow-up meetings with the provider and CDFA to determine eligibility and to hold the required public hearings quickly if the county decides to apply. Commissioners estimated a county request would likely be in the $100,000–$150,000 range if pursued.

CDFA also reviewed the state tax-credit program as an alternative financing route: the program has roughly $5 million in tax-credit authority per year and is competitive, with one application round (applications due in March). Molly recommended that the county and any nonprofit partners consult experienced tax-credit consultants; CDFA offered to provide a consultant list.

The commissioners asked CDFA to follow up and Donna agreed to coordinate county/provider conversations. CDFA staff cautioned that regular state CDBG funds are not a fit for a county-built facility located within an entitlement city, but the CDBG-CV round or tax credits might help with near-term operating costs or raise funds for the long-term project, respectively.