EEOST Info Sessions Q&A – FY2016
FY2016 Early Education and Out of School Time Capital Fund Grant
Questions and Answers
November 9, 2015
General Questions:
Q1.EEOST grants cannot cover the entire cost of the project, but is there a limit on the percentage of the Total Development Costs that an organization can request?
A1.There is no limit on the percentage of Total Development Costs except that it cannot be 100%. Please note that grant awards may be less than the original amount requested.
Q2.If administrative office space is included in the renovation, would it be an eligible cost for the EEOST program or must it be covered by other funding sources?
A2.Administrative office space would be an eligible cost as long as it is part of the child care program and part of a larger capital improvement project. Please note that the minimum total development cost is $400,000 per project.
Q3.For a multi-site agency, would you be able to combine projects, or does EEOST funding have to be site specific?
A3.An EEOST funding application is limited to one site at a time.
Q4.Can an agency submit more than one application for more than one project?
A4.No, an organization can only submit one application specific to a single site.
Q5.Can construction take place at two different sites?
A5.No. Please seeA3 and A4, above.
Q6.Will the PowerPoint slides be available online?
A6.Yes, the PowerPoint presentation will be posted on EEC'swebsite.
Q7.The EEOST program appears to be for facility projects that have already begun the development process. Our organization has two different sites: one we plan to acquire and another we own and need to renovate. We are just beginning to discuss next steps. Would we be eligible to apply?
A7.As the EEOST Program Guidelines state, key eligibility criteria is Project Readiness,requiring that a project has identified all necessary funding, produced final plans and specifications, secured all necessary public approvals, and can be completed within 24 months of the grant award. If your project will not meet these key criteria, it may be too soon to apply.
Q8.Have the EEOST regulations and guidelines changed?
A8.The regulations have not changed. The guidelines were slightly modified for clarity.
Q9.Our organization plans to acquire a child care facility that we have been leasing for some time. The building does not require any renovations. How should we explain that in the pre-application as there are some questions that aren’t relevant to our project?
A9.In the pre-application, simply explain the project and the details regarding your organization's proposed use of funds. If there is no work to be done aside fromthe acquisition, explain that. Please indicate that the project will not require an architect, change in zoning, etc.
Q10.Have you awarded any funds to an organization that leases from a municipality?
A10.To date, CEDAC/EEC has not awarded any funds to an organization that leases from a municipality. Please note that the site control requirements of the EEOST grant require a 25-year lease term for municipally owned buildings.
Q11.What types of projects were funded in the first EEOST round?
A11.Projects funded in the first EEOST round includedthree new construction projects andseven major renovations; grant sizes ranged from $400,000 to $1 million.
Q12.Were any of the projects funded in the first round located in low-income areas? It seems like the requirements here are slated for large scale projects that would not include centers in the inner cities. Would small nonprofits need a private/public partnership to get a project like this complete?
A12.Most of the projects funded to date were in distressed urban areas and Gateway Cities. While mid to largescale organizations are often in a better position to meet the project readiness criteria, there is no reason that smaller nonprofit centers cannot apply. Project readinessrequires strong organizational capacity, leadership, a real estate development team, capacity to do some amount of capital fundraising, and the ability tosecure loans. Every project in the previous EEOST grant roundhad fundraising and debt as part of project funding.
Bidding & Procurement Requirements:
Q13.Regarding the development team and a construction project manager – does the person have to be selected from a specific list?
A13.No, the construction project manager does not have to be selected from a specific list. If you need help identifying a consultant, Children’s Investment Fund (CIF) can provide a list of qualified consultants, but you can seek experienced consultants via recommendations from other centers or in your own community. There is a requirement for a competitive bid process as described in the Guidelines.
Q14.Is the bid process documentation sent with the pre-application?
A14.No, the bid process documentation is not sent with the pre-application. However, the pre-application will require that you have identifiedor selected a qualified project team. Be sure to review the information in the Program Guidelines that describes Development Services Procurement.
Q15.Can your project manager be someone on your staff, or does it have to be someone external?
A15.The project manager can be someone on your staff, but the staff membermust have experience as a project manager for a similar capital project. You will need to provide information on his/her qualifications and a resume. The project manager cannot be a family member or business partner or a senior-level staff member in your organization.
Q16.One of the questions on the pre-application is about the development team. Is the expectation that the whole team is already together?
A16.Yes, a key element of project readiness is the assembly of the development team. The projects that are most ready to proceed will be the most competitive. Projects without a development team in place will not be invited to apply for the grant.
Q17.What is the purpose of the development team? How do they work?
A17.The development team members are qualified, experienced professionals who will help your organization plan the project, and have expertise in areas like design, architecture, construction and fundraising that your in-house staff may not have the time or capability to manage in addition to their own responsibilities. It’s important to conduct an arm’s lengthbidand selection process to select qualified team members by reviewing their qualifications, prior work and rates. You will need their help in preparing some of the details in the EEOST grant application if your project proceeds beyond the pre-application process and is invited to submit an application for EEOST.
Budget – Capital:
Q18.For the other sources to support the project, could it be in-kind donation support, such as furniture, etc.?
A18.Given the scale of these projects, in-kind donations are likely to be a very small portion of the budget. It is important to have project plans and specifications that are sufficiently detailed so that you are able to present a realistic budget. If your organization receives in-kind services related to the project, the review team will consider those on a case-by-case basis, but do not rely on in-kind services to make up the difference between your EEOST grant request and the Total Development Costs of the project. All in-kind services must be related to the capital project, such as the services of an architect or donation of building materials, but should not include non-capital items.
Q19.For additional funding, do in-kind contributions count as a source?
A19.Please see A18.
Q20.Our organization's property plan and equipment policy is to capitalize furniture when the useful life is estimated to be greater than one year. As such, we have designated $25,000 in our capital expense budget to purchase furniture as part of our proposed renovation. Can this $25,000 be counted toward proposed matching funds for this project?
A20.No, furniture is not considered a capital item and cannot be counted toward matching funds.
Q21.If I have an in-kind service of painting the whole building, would that be considered construction?
A21.Please include that information with an estimate of the value of that in-kind service so that the review team can make a determination.
Q22.For clarity, the total development cost needs to be atminimum $400,000, but couldexceed above $1M.
A22.Yes, the minimum total development cost is $400,000 and, in most cases,will significantly exceed $1 million.
Q23.In terms of other sources of funds, can you give us a range of percentages for other sources of funds for projects from last year’s projects?
A23.Last year, the total EEOST award to ten projects was$7.4 million. The total development cost for those 10 projects was $25.8 million. For the aggregate total development costs across all projects, EEOST paid 29% of project costs, loans made up 33%, and capital campaigns 20%, although the percentage varied by individual project. The balance of funding across the ten projects included local sources, other state sources, new market tax credits and agency resources.
Q24.If the central focus of the project’s budget and EEOST application wereto fund a systems overhaul, does that change themembers of the development team listed in the pre-application? Is there is a preference of percentage of the EEOST request for that type of project?
A24.If a proposed project is for a systems overhaul, the development team should have qualifications for that project including an HVAC technician or general contractor. There is no preference for a percentageof total development cost that EEOST would consider for any project. It is important to note, however, that the EEOST grant to help pay for the HVAC replacement was made to a building that had undergone significant capital improvements over many years, so the rest of the building was in excellent condition, and the HVAC upgrade was the final investment. It is unlikely that improvements to mechanical systems would be funded in a building in poor condition unless those improvements were part of a major renovation.
Q25.As far as legal costs are concerned, how do we allocate funds for our attorney and a CEDAC/EEC attorney?
A25.The CEDAC/EEC attorney creates the grant agreements and oversees the closing. If your project includes a number of complicated funding sources or a great deal of negotiation between the attorneys, legal costs will increase.Ifit is straightforward, and the grant documents and Land Use Restrictionuse the standard boilerplate EEOST documents, legal costs will be less. The range of legal costs from the first round of projects was approximately $5,000 -$6,000 for straightforward projects, but significantly more for the complex ones.
Q26.We are in the process of assembling financing, if we are applying for other grants, should we include that information even if we don’t have the funds but applications submitted.
A26.For the pre-application process, you can list pending applications for other funds. If you are invited to submit a full application,the reviewerswill be looking forconditional or firm funding commitments to establish your project readiness.
Q27.There is no place in the application to explain the potential costs. How should we detail a breakdown of the constructions costs?
A27.Inthe pre-application, please provide the Total Development Cost estimate in Question 9, and describe the funding sources in Question 3. More detailed information on sources and uses is not necessary until the full application process.
Q28.Regarding Plans and Specifications, our architect has developed preliminary architectural plans and initial cost estimates for the project. Do you have any guidelines for how complete these plans and cost estimates need to be?
A28.If you are invited to apply, submit the preliminary architectural plans, specifications, and cost estimates that you receivedwith the full application.Also, provide a summary of what your development team concludes about the preliminary cost estimates, such as whether they are low, moderate, high orlikely reliable due to comparable projects the development team has worked on.
Q29.When is the predevelopment funding awarded? Should those costs be included in the total project budget?
A29.Predevelopment funding is not awarded separately from the rest of the EEOST grant, even though those costs are incurred during the planning process. Predevelopment costs incurred within one year prior to submission of the Pre-Application, i.e., costs incurred on or after November 17, 2014, are eligible for reimbursement and can be included in your request.
Q30.We have a sources and uses budget that shows the total development costs of the project and a credible plan for assembling all financing. Do we need to submit a preliminary budget? If so, is there a sources and uses format we should follow? My understanding from reading the procurement document is that we do NOT need to submit a budget with the pre-application?
A30.For the pre-application, please provide the Total Development Cost estimate in Question 9, and describe the funding sources in Question 3. More detailed information on sources and uses is not necessary until the full application process.
Q31.Regarding the question where you ask us to provide total development costs, building area in square feet, and outdoor play area in square feet, if your project only involves capital improvements to the building area and not the outdoor space, do you include only building area square feet (and leave the outdoor play space "blank")?
A31.Please include the information about the outdoor play space but explain why it is not part of the project for which your organization is seeking funding.
Budget – Operations:
Q32.If during the construction process, we would need to move our program to another location, are we allowed to request funds for relocation costs?
A32.Yes, relocation costs for a program should be included in your development budget.
Q33.Is the operations budget only needed for the final application?
A33.Yes, the operations budget is submitted with the final application.
Q34.Explain the 25 year operating budget as it relates to the agency and the site.
A34.If you operate a multi-service organization, the requirement is to submit a 25 year operating budget and 25 year cash flow budget for the entire organization in addition to a 25 year operating budget for the child care site. If you operate a single site, the requirement is to submit a 25 year operating budget and 25 year cash flow budget. If you operate in leased space, the same requirements are necessary except the term is for 15 years.
EEC License Requirement:
Q35.Do you have a description of what School Age wrap around services would be exactly?
A35.School age wraparound care consists of full time care during the summer and school vacations in addition to the out-of-school time care during the school year.
Conditional Commitment:
Q36.What type of bonding or insurance is required for the general contractor?
A36.The general contractor is required to submit a payment, performance and lien bond.If the contractor is unable to meet this requirement, at CEDAC's/EEC’s discretion, the general contractor will be required to obtain a letter of credit for a minimum of 15% of the construction contract amount.
Financial Eligibility:
Q37.What is covered by EEOST in terms of total development cost and predevelopment?
A37.Predevelopment costs incurred within 12 months prior to your grant pre-application can be included in the Sources and Uses budget. Acquisition costs prior to 24 months of your grant pre-application can be included. The pre-application is due on November 17, 2015, so we would recognize those costs incurred since November 17, 2014 for predevelopment costs and November 17, 2013 for acquisition costs.
Q38.On the predevelopment costs, the 12 months is from the pre-application date?
A38.Yes, 12 months before November 17, 2015, i.e. since November 17, 2014.
Q39.If you have already completed a portion of the construction, can those costs be included in the EEOST request?
A39.No, the EEOST grant does not reimburse for work already done.
Q40.Regarding eligibility requirements for low income families, do supportive contracts, teen parent slots, other EEC categories in addition to Income Eligible contracts and Vouchers all qualify towards the 25% low income requirement?
A40.Yes, all EEC subsidies qualify towards the 25% capacity for low income families.
Q41.Regarding the additional points for programs serving more than 25% low income families, should we choose to develop a site that serves 100% low income families?
A40.Preference will be given to projects where the number of child care slots serving families receiving public subsidy exceeds 25% of the total child care slots.
Full time Care Requirement:
Q42.Are there a certain number of hours per day required for full time requirement?
A42.The facility mustbe open and providing child care at least10 hours perday, five days per week, year round to meet the full time requirement.
Future Grant Rounds:
Q43.Is this an annual fund?
A43.The EEOST Capital Fund is a five year program and is subject to appropriation in the Annual Capital Budget for the Commonwealth of Massachusetts. The current year for FY2016 is the third year of grant funding. It is our hope the EEOST grant program will receive state appropriations in future years.