[ Council Communication ]   [ Allocation of CDBG Funds (changes) ]

Council Communication

Title:	Community Development Block Grant (CDBG) Program Changes
Dept:	Community Development
Date:	March 5, 2002
Submitted By:	John McLaughlin, Director of Community Development Maria Harris, Associate Planner
Approved By:	Greg Scoles, City Administrator

Synopsis:	Council directed Staff to begin modification of the City's Community Development Block Grant (CDBG) program at the January 15, 2002 meeting. Changes to the program are considered a "substantial amendment" under federal regulations, and require the modification of the CDBG Consolidated Plan for 2000-2004. The draft changes are on page 87 of the attached portion of the Consolidated Plan. The proposed changes include modification of the allocation of the annual grant, a limit of two projects funded per year with one project being funded through the annual grant award process, the use of a two or three year funding cycle for the grant award project if workable, a change in the annual grant award process making the City Council the final decision making authority, and a change to the calendar year. This item was originally presented to the Council at the February 5, 2002 Council meeting, at which time the council directed staff to move forward with the proposed amendments with a slight wording modification, allowing for preferably one, but not more than two projects to be funded through the competitive grant process. This item has been properly noticed with a 30-day comment period prior to tonight's public hearing.
Recommendation:	After accepting and considering public testimony, Staff recommends that the Council adopt the modifications proposed to the CDBG Consolidated Plan for 2000-2004.
Fiscal Impact:	No fiscal impact. The U.S. Department of Housing and Urban Development (HUD) determines the amount of the annual Community Development Block Grant (CDBG) received by the City. The proposed changes to the local CDBG program will not affect the total amount. However, changes to local allocations are proposed.
Background:	Council directed Staff to begin the process of changing the City's Community Development Block Grant (CDBG) program at the January 15, 2002 meeting. Changes to the program are considered a "substantial amendment" under federal regulations, and require the modification of the CDBG Consolidated Plan for 2000-2004. The draft changes are on page 87 of the attached portion of the Consolidated Plan. The proposed CDBG program changes include the following. The proposed program change would shift the allocation of the annual grant to 75% for the competitive grant program, 5% for accessibility improvements to City-owned facilities and 20% for program administration. Currently, the City allocates the annual CDBG grant using the following percentages - 65% for the competitive grant program, 10% for sidewalk improvements, 5% for accessibility improvements to City-owned buildings and 20% for program administration. The total number of funded projects per year for the next three years would be limited to a maximum of three a year, with preferably one, but not more than two projects funded through the competitive grant program and one accessibility improvements to city facilities project. Currently, there isn't a cap on the number of projects funded per year. The City has used CDBG funds for an average of six projects per year for the first eight years of the program. The process for making the annual grant award would continue to be through a Request for Proposals (RFP). The Housing Commission would review the proposals and make a recommendation to the City Council. The City Council would make the final decision on the grant award. Currently, a budget subcommittee makes the grant awards and this is finalized when the budget is adopted. If workable, the project funded through the competitive process may be funded for a two or three year cycle. Currently, the grant award process is conducted annually. In 2003, the CDBG program year would change from the fiscal year to the calendar year. If the proposed changes are approved, the CDBG fund appropriations would be shown in the budget as 75% for the competitive grant program, 5% for accessibility projects and 20% for program administration. There would no longer be a budget subcommittee reviewing and approving the annual grant. Rather, this process would take place outside of the budget process. At the January 15 Council meeting, concerns were raised regarding the effect of the proposed program changes on the sidewalk projects and staff time used for program administration. Currently, there is approximately $50,000 in carryover for construction of sidewalk projects in eligible neighborhoods. In the past, three to four blocks of sidewalks were constructed using two to three years worth of the CDBG sidewalk funding. In terms of staffing, one Associate Planner and the Assistant Planner spend a combined an average of 24 hours a week or .6 FTE on CDBG program administration. As mentioned above, the change in the City's CDBG program requires an amendment to the CDBG Consolidated Plan for 2000-2004. This plan was adopted by the Council in May 2000, and the process for making a "substantial amendment" is outlined on page 93 (see attachment). A 30-day comment period is required for the public to review and comment on the proposed changes. To finalize the action, the Council must hold a public hearing on the proposed changes. Two public hearings were scheduled on February 5 and March 5 to give interested parties opportunities to comment. The public comment period was February 1 through March 5. An advertisement announcing the proposed changes and comment opportunities has run in the Friday, February 1 Ashland Daily Tidings. A flyer announcing the same information was sent to 55 local social service and housing organizations. Also, in December 2001, a letter was sent to the 55 local social service and housing organizations announcing the Council would begin consideration of possible program changes. The draft changes were also posted on the City's web page and a copy available at the Ashland Public Library. The Housing Commission has reviewed the proposal. The 30-day public comment period has run and the public hearing will be held on March 5. The City must continue to use the fiscal year for the program year for 2002-2003, and as a result is responsible for submitting an Annual Action Plan to the U.S. Department of Housing and Urban Development (HUD) by May 15, 2002. If the program changes are approved in March, this will result in overlap of activities. If program changes are approved, a RFP will be sent out shortly after the March 5 public hearing. Subsequently, another RFP will be sent out in August/September of 2002 for program year 2003.

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(Highlighted words are new wording added, struck out words are wording deleted.)

Allocation of CDBG Funds

The annual Community Development Block Grant (CDBG) that the City receives is has been allocated using the following percentages - 75% 65% for preferably one, but not more than two projects funded through the competitive grant program process, 10% for sidewalk/traffic calming measures improvements and construction, 5% for accessibility improvements to City-owned buildings and 20% for program administration. This allocation breakdown will continue to be used for the 2000-2004 time period.

The CDBG funds available for the project funded through the competitive grant process grants (75% 65% of the annual CDBG allocation) will be announced through a Request for Proposals at the beginning of each year. The grants will be awarded through a competitive process. The Request for Proposals may include an option for staging a larger project over a two to three year time frame, using two to three years of CDBG funding. The availability of grant funds will be announced in the Ashland City Source, posted on the City of Ashland web page and advertised in the Ashland Daily Tidings. In addition, the RFP shall be sent to the mailing list of public agencies and non-profit organizations in Jackson County maintained by the Planning Divisions of the City of Ashland Department of Community Development.

The Housing Commission CDBG Budget Subcommittee will review the grant requests and make a recommendation for the grant awards to the City Council full Budget Committee. Subsequently, the City Council will hold a public hearing and make a final decision on the grant award. The grant awards shall be based on the Goals and Strategies on pages 75 - 86, and the Criteria for Awarding Grants on pages 87 - 89. The Budget Committee reviews and finalizes the budget, including the grant awards, in mid-May. In early June, the final budget is presented to the City Council for review and approval.

The City of Ashland CDBG program year is January 1 through December 31. The competitive grant process will take place in late summer/early fall of the previous year. The Annual Action Plan, the document that summarizes Ashland's CDBG activities, is due to the U.S. Department of Housing and Urban Development 45 days before the start of the program year, approximately mid-November. The City Council is required to hold a public hearing on the Annual Action Plan which will take place in October/November, after the competitive grant process.

The Annual Action Plan is due to the U.S. Department of Housing and Urban Development by May 15. Unfortunately, the City's budget process does not coincide with the federal deadline. As a result, a second public hearing must be held by the City Council before the budget document is adopted on the Annual Action Plan and the grant awards made by the CDBG Budget Subcommittee, so that the federal May 15 deadline is satisfied.

Criteria for Awarding Grants

The City of Ashland has a limited amount of CDBG funds to use each year in comparison to the scope of the housing and community development needs of the community. As a result, it is essential that the funding is used in a manner that best meets the City's priorities and is efficient and cost-effective. To this end, the spending priorities have been ranked by importance and a set of award criteria has been established.

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