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3. Opening an administrative cost review should include CDC and the NIP e neighborhood. He asked if there is any room for negotiation left from the NIP alternative. Ms. Hofmann stated that staff went through with the HUD regulation and they had to do it the way they did. Those activities that were eligible but did not fit under the 20% administration limit are being reprogrammed into physical development. Mr. Lindberg asked what is allowed. Ms. Hofmann stated the budget allows only 20 percent to go into adminstrative cost and planning. Mr. Lindberg asked what our current costs are. Ms. Hofmann responded that with neighborhood staffing, costs are 36 percent. Additional discussion continued regarding the administrative costs. Mr. Gleason stated that the City will go from a pre-audit to post-audit monitoring system with HUD. Eligibility becomes an important issue. If the city can come to agreement with CDC and neighborhoods, then staff can check to make sure that costs are eligible and program-related. Other administrative costs would have to fall within the 20 percent. Anything in excess of 20 percent should be directly program-related. Mr. Obie asked if reprogramming of the $190,000 was necessary. Ms. Hofmann stated that it was. Mr. Obie stated that he finds what the Federal govern- ment is doing to be exciting and refreshing because it limits soft costs to 20 percent. He appreciates what is going on and thinks the council should have done it earlier. Mr. Gleason added that administrative expenses include programs that have fixed costs, software, and administrative costs. These must be separated out and distinguished from those that are program-related. They are e asking for specifics as to why soft costs are necessary to make a hardware program work. He suggested that this might be a good work session topic. The City is making a course correction and adjustment, not a 180-degree change. It is a change in focus. Ms. Miller stated that there are lots of kinds of programs the City cannot fund from Community Development money so perhaps those dollars could be used to help with the infilling situation. It is a misleading topic. Charlotte Lemon, West University Neighbors, stated that they are having problems with their crime prevention program. The definition is that there must be something physical such as dead bolt locks but this does not enable them to provide information on how not to be a victim of rape or assault. Neighborhoods need to be told why they can no longer have these services provided, not simply told that these projects are unworthy. She would suggest that the council review this process and make a decision soon to see if there is opportunity for council review and input as well as agreeing with the schedule for the process. She would like to see the council consider a process they are comfortable with. Mr. Lindberg noted that the City is going through a similar situation with the wastewater funding situation. The Federal government established a mandate and required the project and now they are taking the money away. However, the project still must be finished. There needs to be a balance developed between administrative expenses and what occurs in a neighborhood community development projects. Soft services such as crime prevention need to be linked with brick- and-mortar projects. It is not the council IS intent to focus on the projects but rather to focus on the product and to use the leverage of City resources to - MINUTES--Eugene City Council September 16, 1981 Page 11