Columbus Consolidated Government
Council Memorandum
TO: Mayor and Councilors DATE: April 9, 200
THROUGH: Carmen Cavezza, City Manager SUBJECT: CDBG Update
FROM: Rick Jones, AICP,
Director of Community and
Economic Development
Attached please find the material for the CDBG Update briefing to take place
prior to the beginning of the Council meeting. The briefing is intended to
bring Council members up to date with activities of this program, while
reviewing the proposed draft budget for the next fiscal year. Also enclosed is
a timetable which indicates when the CDBG/HOME budget must be submitted to the
Department of Housing and Urban Development for their approval.
CDBG/HOME Issues to Discuss
I. Community Development Block Grant
Expecting $ 4,325,000 in entitlement grant funds (CDBG + HOME + ESG)
Estimated CDBG funds for next year $2,763,000
Estimated ESG funds for next year is $96,000
Payback of the Section 108 Loan
Pay back of the 108 loan takes approximately half of $2.8 M CDBG Grant
Payment this year will be $1,477,238
Future Payments will continue to be smaller
The remaining CDBG funds will be put toward the improvement of the Second
Avenue/Bibb City area as part of the city?s neighborhood improvement efforts
II. HOME Program
Match Requirements
Estimated HOME funds for next year is $1,466,000
Match this year $183,250 (12.5% requirement this year)
This year?s match was made through UDAG funds and bonds.
Source of HOME Match must be found for the next year. (Cash, Bonds, Value of
donated land, non-profit activities
Direct Homeownership Assistance (1st Time Homebuyers)
This program offers $5,000 for down payments and is operating well
109 applications were funded as stated in this year?s budget.
Owner-Occupied Rehab Program
Program now allows for a maximum cost of $20,000 per owner occupied unit.
Results of the City?s rehab efforts during the past year combined with
consultation with other City?s CDBG/HOME personnel indicate costs of truly
bringing homes up to code are apt to be much higher than the current $20,000
forgivable loan made to owners. This raises an important question of whether
it is good public policy or even eligible under HUD regulations to invest
$40,000 repairing a house that is valued at 25,000 and may not be worth $40,000
when it is completed. (See staffing issues below also as owner rehab seems to
be a very staff intensive activity.)
The cost of Lead Based Paint compliance has the potential for adding
significant costs to both owner and rental rehab projects. Estimated costs
could range from $8,000 to $15,000.
The City may want to consider new construction as an alternative. Many cities
use this approach and most that have been polled say that owner rehab is not a
good approach under HOME.
Potential here to partner with other local organizations for new construction
projects. This kind of partnership might also allow them to provide some or
all of the match.
Rental Rehab Program
One rental rehab loan (Country Village) is under reconstruction. Problems
exist between the owner and contractor concerning payment to the
subcontractors. Staff has been monitoring the situation to insure compliance
with HUD, and encouraging the parties involved to resolve this issue. No
payments are being made by staff until the necessary inspection reports have
been completed, showing that all work has been completed and review by all
parties.
Rental Rehab was stopped last year but may be a more feasible approach than
owner rehab given constraints of the HOME Program. It appears that this
program is not as staff intensive as owner rehab.
Tracking of rental units with regard to rents charged, income of tenants and
condition of structure has been a monitoring issue during the past year. It
has been addressed for now, but a system needs to be in place to assure that
information comes in regularly. Training on this subject is necessary before a
system can be established.
III. Accounting Issues
City has funds that need to be reprogrammed from previous years in the form of
CDBG monies.
Concerns about the future of the SBA/SBLP programs that UPtown Columbus
administers must be addressed:
- Funding for the loan pool need for the SBLP program will have to come from
another source other than CDBG. Efforts are underway to explore the possible
use of SBA?s Microloan Program as a funding source.
- Project Care funds are almost gone.
- This program needs to be reviewed and possibly reprogrammed. There is a
potential to use this for some program contingencies.
Old UDAG funds are almost depleted due to use as a match for HOME funds.
- These funds were set aside to assist middle-income families to purchase
first time homes. Staff needs the ability to track these funds better.
IV. Staffing
It appears that additional staffing is certainly needed to manage the
programs. Due to the transition of programs from the Housing Authority to the
City, information appears to have been misplaced or never completely turned
in. This has required additional staff time to sort, file and sometime
recreate needed information. In addition, there has been a turnover of over
half of the staff in the past 2 to 3 years. There have been two changes in ED
Chiefs with the position going unfilled for about 5 months, a change in
accountants, a change in chief clerical, three housing techs have filled the
position in two years, and there has been the absence of a Housing Manager for
last three and a half months. These changes have caused the loss or
misplacement of much physical information and have left an important absence of
certain knowledge among staff members. It will take time to track down
physical information and training to establish staff knowledge and awareness of
program information.
A more precise definition of what staff is needed would depend somewhat on the
mix of programs the City chooses, but listed below is a notion of what is
needed.
Financial Technician (Proposed) ? Assists the Financial Manager in maintaining
the IDIS and the LGFS systems. Also would assist in maintaining and monitoring
loan portfolios, program incomes, annual grantee reports, contractual
agreements, establishment of demolition liens, assisting with bid developments,
and the development of budgetary compliances. Currently there is no backup
personnel to insure that cash flow is continued from HUD or in the absence of
the Financial Manager.
Housing Technician-(Proposed) Primarily day to day operations of
Rehab/Construction Programs and IDIS Data entry 1-2 days a week, continual
updating of Excel Spreadsheets relative to programs worked on. (Cross training
to handle other HOME activities when other HT is absent.)
Combined Timelines:
Columbus Consolidated Government Budget
Date Documents are due at HUD?s Atlanta
Community Planning and Development Office
02/14/2002 ? (CITY) Submit Budget to Columbus Consolidated Government Financial
Planning
03/11/2002 ? (CITY) Departmental Review by the Columbus Consolidated Government
City Manager?s Office thru 03/29/2002
04/08/2002 ? (HUD) Draft Columbus Consolidated Government?s Consolidated Plan
a/k/a Annual Action Plan and Columbus Consolidated Government?s Five Year
Consolidated Plan update
04/10/2002 ? (HUD) Columbus Consolidated Government, Consolidated Plan, a/k/a
Annual Action Plan - Citizen participation component advertised prominently in
local newspapers
04/30/2002 - (CITY) Columbus Consolidated Government Recommended Budget to the
Columbus Council
05/15/2002 ? (HUD) Columbus Consolidated Government?s Consolidated Plan, a/k/a
Annual Action Plan due in HUD?s Atlanta Community Planning and Development
Office
06/11/2002 - (CITY) Columbus Consolidated Government First Reading of the
Budget for Columbus Ordinance
08/10/2002 - (CITY) Columbus Consolidated Government Newspaper advertising for
Citizen Participation solicited for Consolidated Annual Performance and
Evaluation Report a/k/a C.A.P.E.R.
09/30/2002 - (HUD) C.A.P.E.R. due in HUD?s Atlanta Community Planning and
Development Office