Item 2D: Approval of Reprogramming of CDBG Funds

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Approval of Reprogramming of Community Development Block Grant Funds Meeting Date: January 26, 2009 Agenda Item Number: 2D Department: Planning & Development Department Staff Contact: Stephanie Jennings www.eugene-or.gov Contact Telephone Number: 682-5529 ISSUE STATEMENT The City Council is asked to approve the reprogramming of Community Development Block Grant (CDBG) funds from the River Rock Glen Project to three other uses. This adjustment reflects changes in the River Rock Glen Project and will enable timely use of CDBG funds. BACKGROUND The City of Eugene established current goals and programs for the use of Federal HOME Investment Partnership Program (HOME) funds and CDBG funds to benefit low-income people through the adopted 2005 Consolidated Plan. Each year, the City Council approves the allocation of federal funds from the U.S. Department of Housing and Urban Development (HUD) through a One-Year Action Plan. From time to time, the City Council also approves reprogramming of federal funds among projects and programs to facilitate timely use of CDBG funds. Each year on May 1, HUD conducts a timeliness test to confirm that the City is expending CDBG funds in accordance with regulations. In 2008, the City Council approved the reprogramming of CDBG funds for use in two affordable housing projects in order to meet the HUD timeliness test. The first project - acquisition of an apartment th complex at 1070 West 6 Avenue by St. Vincent dePaul Society – received up to $400,000 for acquisition and tenant relocation costs. The complex has been successfully acquired and rehabilitation is underway. For the second project, the City approved the use of up to $330,000 to assist low-income residents of the River Rock Glen manufactured home park. Specifically, the CDBG funds would provide $11,000 to each qualified low-income household for the purchase of a cooperative share in the park. Park representatives initially estimated that 33 households would qualify for this assistance, however only 13 households have qualified for assistance following months of outreach. As a result, the project can only utilize a total of $143,000 in CDBG funds at this time. Therefore, $187,000 in CDBG funds is available for reprogramming. Two sources of funds reprogrammed in 2008 included the CDBG Business Development Fund and the CDBG Housing Rehabilitation Fund. Staff recommends: 1) return $95,000 to the Business Development Fund; and 2) return $77,000 to the Housing Rehabilitation Fund. In addition, staff recommends reprogramming the remaining $15,000 to augment previously approved CDBG funding for the Acorn Park Street Sidewalk Project. The City Council originally approved the use of $40,000 in CDBG funds for this project on April 9, 2007. Delays and cost increases in this Z:\CMO\2009 Council Agendas\M090126\S0901262D.doc