In July, the Ohio General Assembly passed the Fiscal Year 2024-2025 Main Operating Budget which included another round of $350 million in funding for the Brownfield Remediation Fund. This second round of funding builds up on the very successful launch of the program in the prior State budget.
While the structure of the program largely remains the same, the Legislature did make some notable changes. The most significant changes are the following:
- Lead Applicants– Rather than applications being directly submitted to the Ohio Department of Development (ODOD), the Legislature required all applications to flow through a local lead applicant before they can be submitted to ODOD. The budget language allows any of the following to be designated as the lead applicant:
- For counties with a population of 100,000 or less, the County Commission Board will recommend a lead applicant to ODOD.
- For Counties with a population of 100,000 or more, the County Land Reutilization Corporation (Land Bank) will serve as the lead applicant (if a Land Bank operates in the County).
- If the County with a population of 100,000 or more does not have a Land Bank, the County Commission Board will recommend a lead applicant to ODOD.
- Allocation of Funding Over Two Years– The $350 million will be split ($175 million per year) over the two years of the biennium. For each fiscal year, $1 million will be set aside per county. Each fiscal year, $87 million of the $175 million will be available for competitive granting operating in the first-come, first-serve structure.
How will Lead Applicants Administer the Program?
There was no real indication why the Legislature forced all applications to flow through a designated Lead Applicant. In addition, the budget language did not really mandate that Lead Applicants perform any specific review function. Rather, it is anticipated that ODOD will continue to review all applications on a “first-come first-served” basis. Furthermore, it is also anticipated that, once applications are submitted to ODOD by the Lead Applicant, so long as the Lead Applicant timely submits the application and the application meets ODOD’s criteria for funding, the project will get funded.
County Landbanks or other designated Lead Applicants would have the option to place additional requirements as part of agreeing to submit an application to ODOD. For example, a Lead Applicant could rank local projects and only elect to submit the most important local projects to ODOD. However, such an approach would seem to be directly counter to the intent that the program be operated on a “first-come first-served” basis for awarding the money. Hopefully, Lead Applicants will simply agree to submit any project in an attempt to get the most money into their area as possible.
$1 Million Reserved for Each County
The Legislature retained the reservation of $1 million in funding for each of Ohio’s 88 counties. However, unlike the first two years of the program, it effectively reserved $176 million of the $350 million in funding for the individual counties by reserving $88 million ($1 million for each county) if both fiscal year 2024 and fiscal year 2025.
It is unclear why the Legislature elected to reserve $88 million in each of fiscal years when many counties did not use any or all of the funds reserved in the prior funding rounds. Based upon a white paper from Greater Ohio Policy Center, 30 counties did not use any of the brownfield funding in the prior funding rounds. However, those same counties who had no projects in the prior funding rounds will now have $60 million reserved for their use in the next two years of the program.
Because brownfields tend to concentrate in highly populated industrial counties, the vast majority of the funding was used in these high population counties. According to the GOPC white paper, nearly 70% of the funding ($175.1 million) went to the seven Ohio counties with the highest population. These are also the counties with the greatest need so the majority of funding should go to those counties.
The reserves for each of the 88 counties will make the $87 million in general funding highly competitive, especially in Round 1. Assuming ODOD continues to review applications on a first-come first-served basis, there are likely to be some eligible projects that won’t get funded because the first round of funding will likely be oversubscribed. Hopefully, any money that was reserved for counties that was not used will be placed in subsequent rounds of funding open to projects from any county.
Everyone is waiting for each of the designated Lead Applicants and ODOD to release their guidelines for the $350 million in additional funding for the next two years of the program. Right now, it appears that the first round will not be open to applications until December 2023 or January 2024. However, so long as ODOD doesn’t significantly change the program from the prior funding rounds, there is no reason why the State couldn’t open the program up this Fall.