City amending CDBG, HOME funding plan
Updated Nov. 23
City Commissioners will be asked to adopt the amended 2023 annual action plan for the federal Community Development Grant and HOME Investment Partnerships Act programs.
The hearing was initially scheduled for Nov. 21 but was moved to Dec. 5.
The federal programs are overseen by the U.S. Housing of Urban Development, which requires that the city develop the annual plan that outlines allocated uses of the funds.
Commissioners adopted the plan during a May 2023 meeting, but the plan needs to be updated due to changes in the funding uses to comply with federal timeliness requirements, according to city staff.
Staff drafted the amendment, which has been available for public comment and was reviewed by HUD.
HUD requires that the city hold a public hearing before adopting the amendment.
CDBG and HUD dollars are distributed through HUD to fund programs benefitting low and moderate income individuals.
HUD administers the programs and identifies national objectives, eligible activities and required compliance activities.
Local governments are required to develop five-year strategic plans, which are the consolidated plan, to outline future activities and that plan is implemented through annual action plans that identify specific local goals and objectives, according to city staff.
The city’s current annual action plan identifies the following funding areas and amounts as goals for the year:
- public services: $117,380 of CDBG, with a 15 percent cap
- affordable housing: $2,828,624 of HOME and $15,000 of CDBG
- housing rehabilitation: $1,285,000 of CDBG
- economic development: $13,000 of CDBG
- public facilities and improvements: $1,208,656 of CDBG
- planning and administration: $156,508 of CDBG and $29,911 of HOME
Those activity categories, as approved by the city grant committee and the commission, serve as guidance for utilizing the funds and achieving the local goals, according to staff.
The $1,285,000 balance of CDBG funds apportioned to housing rehabilitation was allocated to provide financial assistance to programs upgrading affordable housing stock.
Of that, $1.2 million was allocated to the Madison Apartments project in a request approved by commissioners at their Aug. 16, 2022 meeting. The Madison project is a renovation of the former Cambridge Court facility.
On May 5, 2023, the city received a letter from HUD providing notice that the city was not in compliance with federal timely use of funds requirements.
A CDBG recipient is considered timely if its total CDBG line of credit balance is less than 1.5 times its annual allocation or less as of 60 days before the end of the program year, according to staff.
A recipient that is found to be untimely has 12 months to spend down its balance and regain compliance, according to staff.
The city’s current CDBG award is $764,295, making the city’s timeliness threshold $1,146,442.50.
Currently, the city’s line of credit balance is $2,888,854.27 so the city must draw a minimum of $1,742,411.77 from this balance by May of 2024 to meet the timeliness requirement, according to Tom Hazen, the city’s grant manager.
The Madison Apartment project was not going to meet the timeliness deadline due to the complexity of the project, so commissioners rescinded that award during their Sept. 19 meeting.
After commissioners rescinded that grant award, staff began amending the annual action plan to reallocated the $1.285 million housing rehabilitation balance to public facilities and improvements.
“This proposed amendment is intended to facilitate funding large scale projects that may be initiated and completed in such a way that the city will comply with HUD timeliness requirements,” according to the staff report.