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Council Communication

Title:	Community Development Block Grant (CDBG) Program Changes
Dept:	Community Development
Date:	January 31, 2002
Submitted By:	John McLaughlin, Director of Community Development Maria Harris, Associate Planner
Reviewed 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.
Recommendation:	No action is necessary at this time
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 two a year, one project 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 have been scheduled on February 5 and March 5 to give interested parties opportunities to comment. The public comment period is February 1 through March 5. An advertisement announcing the proposed changes and comment opportunities will run in the Friday, February 1 Ashland Daily Tidings. A flyer announcing the same information will be 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 are also posted on the City’s web page and a copy is available at the Ashland Public Library. The Housing Commission is in the process of reviewing the proposal. The next steps in the process are the 30-day public comment period and public hearing 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. If the program changes are not approved, the current CDBG grant award procedure using the budget process will be undertaken.

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The following text was used for the advertisement in the Ashland Daily Tidings on Friday, February 1, and in the flyer sent to 55 local social service and housing organizations.

CHANGES PROPOSED TO ASHLAND’S COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM

The City of Ashland is considering changing the allocation of Community Development Block Grant (CDBG) funds and the process for distributing those funds. The proposed CDBG program change requires an amendment to the City of Ashland 2000-2004 CDBG Consolidated Plan.

The proposed CDBG program changes include the following.

Annual grant awards would be limited to one affordable housing project consistent with the highest priorities of the adopted City of Ashland 2000-2004 CDBG Consolidated Plan.

The total number of funded projects per year for the next three years would be limited to two, one affordable housing project and one accessibility improvements to city facilities project.

The process for making the grant awards for the affordable housing project would continue to use a Request for Proposals (RFP). The Housing Commission would review the applications and make a recommendation to the City Council. The City Council would make the final decision on the grant award.

If workable, the affordable housing project may be funded for a two or three year cycle.

In 2003, the CDBG program year would change from the fiscal year to the calendar year.

The draft amendment to the City of Ashland 2000-2004 CDBG Consolidated Plan is available for review and comment. Copies of the draft Plan are available at the City of Ashland, Department of Community Development, 20 East Main Street. The draft Plan may also be reviewed at the Ashland Public Library at 410 Siskiyou Boulevard, and is available on the City of Ashland web site at www.ashland.or.us.

Comments on the draft amendment to the City of Ashland 2000-2004 CDBG Consolidated Plan may be submitted in writing through March 5 to Maria Harris, City of Ashland, Department of Community Development, 20 East Main Street, Ashland, OR 97520. Comments may also be presented orally to the Ashland City Council during the public hearings on the draft amendment on Tuesday, February 5, 2002 and Tuesday March 5, 2002 at 7p.m. at the Ashland Civic Center Council Chambers, 1175 East Main Street.

The City of Ashland receives more than $200,000 annually from the U.S. Department of Housing and Urban Development as CDBG funds. These funds can be used for a variety of housing and community development projects that benefit low- and moderate-income persons in Ashland. Use of the funds in the past has included the remodel of the new Community Health Center, the purchase of three vacant lots to provide housing through the Ashland Community Land Trust, construction of sidewalks in existing, qualified neighborhoods, accessibility improvements to City Hall, the purchase of the site for the Interfaith Care Community of Ashland to operate a homeless resource center, for emergency repairs to homes owned by low-income families through the Housing Authority of Jackson County and the construction of The Grove by Community Works.

Questions or comments? Contact Maria Harris at 552.2045 or harrism@ashland.or.us.

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December 28, 2001

«Grantee»
«ContactName»
«Address»
«City», «State» «PostalCode»

Dear Past CDBG Grant Participant,

The City of Ashland is currently considering changing the process for awarding monies for the Community Development Block Grant. In the past the City has awarded funds annually to multiple agencies through the Budget Committee process. This year the City will consider changing the process and awarding all monies to one applicant for multiple years. This process redesign has the potential for some applicants to not receive money for the coming year(s).

This is being done to simplify the grant process, to be more effective in specific programs with what funds are available and to help the City be compliant with federal reporting requirements.

This letter is intended to alert you to the potential of less funding. You will be updated with further information as it occurs during January and February.

If you have any questions please contact Maria Harris at 552-2045.

Sincerely,

Lee Tuneberg
Finance Director

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