Item 5: 2012/13 Funding Allocations for CDBG and HOME

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Action: 2012/13 Funding Allocations for Federal Community Development Block Grant and HOME Investment Partnerships Programs Meeting Date: April 23, 2012 Agenda Item Number: 5 Department: Planning & Development Staff Contact: Michael Wisth www.eugene-or.gov Contact Telephone Number: 682-5540 ISSUE STATEMENT The City Council is asked to approve the allocation of funds received through two federal programs administered by the U.S. Department of Housing and Urban Development (HUD). Through the Community Development Block Grant program (CDBG), Eugene may allocate an estimated $1,209,926 in entitlement grant funds as well as $1,500,000 in program income. Through the HOME Investment Partnerships Program (HOME), Eugene may allocate an estimated $688,136 in entitlement grant funds, $85,000 in program income, and $49,000 in HOME funds carried over from FY 2011/12. BACKGROUND Each spring, the City Council approves funding allocations for use of CDBG and HOME funds for the next fiscal year. The proposed uses of funds are described and submitted to HUD each year in a document called the One-Year Action Plan. The Action Plan must be submitted to HUD by May 15, 2012. The proposed uses of funding must align with the local community needs and strategic plan described in the Eugene-Springfield 2010 Consolidated Plan. The CDBG Advisory Committee advises the City on the use of CDBG funds and the intergovernmental Housing Policy Board (HPB) advises the City on the use of HOME funds. Community Development Block Grant (CDBG) The primary purpose of CDBG is to address the needs of low- and moderate-income persons. The City is a CDBG entitlement jurisdiction and has received annual entitlement grants since 1975. Each year, the CDBG Advisory Committee, a departmental advisory committee, reviews requests for CDBG funds, holds a public hearing, and makes a final recommendation to staff for use of CDBG funds for the next fiscal year. Funds available for allocation for FY 2012/13 are described below:  New CDBG Entitlement Grant Funds () $1,209,926 – Each year, Congress appropriates funds for CDBG and HUD distributes funds according to a formula to entitlement jurisdictions. This is an estimate of funds to be allocated to the City of Eugene. The estimated entitlement allocation for FY 2012/2013 is less than the previous year’s grant by $48,674.  CDBG Program Income ($1,500,000) – The City of Eugene expects to receive $1,500,000 in program income through two revolving loans that have been established with CDBG funds. The Business Development Fund will generate an estimated $1,100,000 in FY 2012/2013 and the Housing Rehabilitation Fund will generate an estimated $400,000. In accordance with HUD requirements, program income from revolving loan funds can only be allocated to further the activities of the respective loan funds. S:\CMO\2012 Council Agendas\M120423\S1204235.doc