[Code of Federal Regulations]

[Title 45, Volume 4]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 45CFR1309.11]



[Page 190-191]

 

                        TITLE 45--PUBLIC WELFARE

 

CHAPTER XIII--OFFICE OF HUMAN DEVELOPMENT SERVICES, DEPARTMENT OF HEALTH 

                           AND HUMAN SERVICES

 

PART 1309_HEAD START FACILITIES PURCHASE, MAJOR RENOVATION AND 

CONSTRUCTION--Table of Contents

 

                    Subpart B_Application Procedures

 

Sec. 1309.11  Cost comparison for purchase, construction and major 

renovation of facilities.



    (a) A grantee proposing to acquire or undertake a major renovation 

of a facility must submit a detailed estimate of the costs of the 

proposed activity and compare the costs of the proposed activity as 

provided under paragraph (c) of this section and provide any additional 

information requested by the responsible HHS official.

    (b) All costs of acquisition, renovation and ownership must be 

identified, including, but not limited to, professional fees, purchase 

of the facility to be renovated, renovation costs, moving expenses, 

additional transportation costs, maintenance, taxes, insurance, and 

easements, rights of way or land rentals. An independent appraisal of 

the current value of the facility proposed to be purchased, or which the 

grantee will continue to purchase with Head Start funds or to receive 

major renovation, made by a professional appraiser, must be included.

    (c)(1) Grantees proposing to purchase a facility, without requesting 

funds for major renovations to the facility, must compare costs of the 

proposed facility to the cost of the facility currently used by the 

grantee, unless the grantee has no current facility, will lose the use 

of its current facility, intends to continue to use its current facility 

after it purchases the new facility, or has shown to the satisfaction of 

the responsible HHS official that its existing facility is inadequate. 

Where the grantee's current facility is not used as the alternate 

facility, the grantee must use for comparison a facility (or facilities) 

available for lease in the grantee's service area and suitable for use 

as a Head Start facility or which can be made suitable through 

incidental alteration or renovations, the cost of which shall be 

included in the cost comparison. In the case of an application for 

approval of the use of Head Start funds to continue purchase of a 

facility, the



[[Page 191]]



cost of the present facility must be compared to the cost of the 

facility used by the grantee before purchase of its current facility. If 

the facility used by the grantee before the purchase of its present 

facility was deemed inadequate by the responsible HHS official, or the 

grantee had no previous facility, the alternative facility shall be an 

available, appropriate facility (or facilities) of comparable size that 

was available for rent in the grantee's service are at the time of its 

purchase of the current facility. Grantees which have established under 

Sec. 1309.10(f) that there is a lack of alternative facilities that 

will prevent or would have prevented operation of the program are not 

required to provide a cost comparison under this paragraph.

    (2) Grantees proposing to construct a facility must compare the 

costs of constructing the proposed facility to the costs of purchasing a 

suitable alternate facility or owning, purchasing or leasing an 

alternative facility which can be made suitable for use through 

incidental alterations and renovations or major renovations. The 

alternative facility is one now owned by the grantee or available for 

lease or purchase in the grantee's service area. If no such facility is 

available, this statement must explain how this fact was determined and 

the claim must be supported, whenever possible, by a written statement 

from a licensed real estate professional in the grantee's service area.

    (3) A grantee proposing to undertake a major renovation of a 

facility must compare the cost of the proposed renovation (including the 

cost of purchasing the facility to be renovated, if the grantee is 

proposing to purchase the facility) to the costs of constructing a 

facility of comparable size. In place of the cost comparison required in 

the preceding sentence, a grantee proposing to make major renovations to 

a leased facility must show that the monthly or annual occupancy costs 

for the term of the lease, including the cost of the major renovations, 

is less than, or comparable to, the costs of purchasing or leasing any 

other facility in the grantee's service area which can be made suitable 

through major renovations, if such a facility is available.

    (d) The grantee must separately delineate the following expenses in 

the application:

    (1) One-time costs, including but not limited to, costs of 

purchasing the facility to be renovated, the down payment, professional 

fees, moving expenses, the cost of site preparation; and

    (2) Ongoing costs, including, but not limited to, mortgage payments, 

insurance premiums, maintenance costs, and property taxes. If the 

grantee is exempt from the payment of property taxes, this fact must be 

stated.

    (e) The period of comparison for purchase, construction or major 

renovation of a facility is twenty years, except that for the purchase 

of a modular unit the period of comparison is ten years and the period 

of comparison for major renovation of a leased facility is the period of 

the lease remaining after the renovations are completed. For approvals 

of the use of Head Start funds to continue purchase of the facility the 

period of comparison begins on the date the purchase began.

    (f) If the facility is to be used for other purposes in addition to 

the operation of the Head Start program, the cost of use of that part of 

the facility used for such other purposes must be allocated in 

accordance with applicable Office of Management and Budget cost 

principles.



[68 FR 23221, May 1, 2003]