ACTION REQUESTED:
Title
Communication from the City Manager and the Finance Director/Comptroller and Community Development Director with a Request to ADOPT an ORDINANCE AMENDING the City of Peoria Budget for Fiscal Year 2014 Relating to the 2014 CDBG, HOME and ESG BUDGETS to Reflect the Actual 2014 Allocation from the United States Department of Housing and Urban Development and the Reallocation of remaining funds from completed projects and the allocation of program income.
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BACKGROUND:
The City of Peoria is considered an entitlement jurisdiction by the U.S. Department of Housing & Urban Development (HUD). As such, funds from the federal government, through HUD, are allocated to the City of Peoria on an annual basis by the use of a formula. Unlike many grants, there is no competitive application for these funds. Each entitlement jurisdiction receives a set amount based upon Congressional funding and adjustments to the allocation formula.
The amount of funding received by the City of Peoria has steadily declined over the past decade (Attachment 1 - Historic HUD Funding Levels) from a high of almost $3.8 million in 2001 to the current level of slightly more than $2 million. This reduction in funding has created significant pressure on programming and services that have historically been funded with the HUD allocation.
Although the Federal fiscal year begins on October 1, the award notice of funding levels and subsequent grant agreements from HUD are generally delayed. This year, grant agreements were not received by the City until late July. As such, the program budget approved by the City Council as part of the City's 2014/2015 Biennial Budget must be amended to reflect the actual funding level. Further, as is usually the case, there are balances available from prior year projects that were not fully expended that need to be re-allocated to active uses. Finally, CDBG and HOME formula grants generated program income by investing these funds into projects that generate repayment back to the City. As such, the receipt and uses of the program income funds needs to be allocated to eligible activities.
Requested Action #1 (programming with 2014 HUD funds)
The first action requested is to approve the program line-up as indicated on Attachment 2 - 2014 HUD Entitlement Budget. This document lists the recommended programs that will be provided using new funds from HUD.
Requested Action #2 (re-allocation of prior year funds)
The second action requested is to re-allocate funds from projects that have closed to new projects as listed below:
· Unused 2013 CDBG Administration funds - $16,250
· Unused 2013 CDBG Project Delivery (staff costs) - $10,851
o Re-allocate $27,101 to Roof Repair Program (Project - 13RR00)
Requested Action #3 (allocation of CDBG and HOME program income)
Federal regulations define CDBG program income as - Any income received in a single program year by the recipient and all its subrecipients if the total amount exceeds $25,000. Therefore, income received in a single program year that is less than $25,000 is not considered to be CDBG program income. When the total amount is less than $25,000 the City can decide to either receipt the funds received as CDBG program income in IDIS (the Federal Accounting System) or allocate the funds to a local account. Once funds are receipted as program income in IDIS, the regulations governing the CDBG program now apply to those funds. However, allocating the funds to a local account provides the City with funds that are less restrictive than Federal regulations, but are still required to be used for specific purposes.
The total income received by the City per program year for 2011, 2012 and 2013 did not exceed $25,000. Below is a breakdown for each program year:
· 2011: Income received $21,551 of which $11,670 was receipted as CDBG program income in IDIS leaving $9,881 to be transferred.
· 2012: Income received $11,988
· 2013: Income received $11,023
o Allocate $32,892 (remaining 2011, 2012 and 2013 funds) to Capital Fund. These funds are to be used for any of the following activities:
§ Funds for match or program leveraging for future grants or Community Development programs
§ Temporary Code Enforcement Aides
§ Equipment purchases for Community Development Field Staff
A different set of Federal regulations govern the HOME grant program. As such, HOME regulations define program income as - Any gross income received by the recipient or its subrecipients which is directly generated from the use of HOME funds. This can also include repayment of funds to the City by program beneficiaries. Therefore, all funds received by the City are considered HOME program income and the must be receipted in IDIS and used for only HOME eligible activities.
o Allocate $24,387 to the Focus Area Housing Program Leverage (Project - 14FAHL)
Continuation of Existing Program
Staff is also recommending that the following programs that were already approved by Council continue into the future unchanged. The programs listed are provided for informational purposes and to complete the picture of all available programming that will not receive new funding allocations in 2014.
· Emergency Repair Program - $47,872
· PCCEO Down Payment - $100,000
· City Down Payment Assistance - $110,705
FINANCIAL IMPACT: HUD grant funds will be adjusted to the actual 2014 allocation from the United States Department of Housing and Urban Development.
NEIGHBORHOOD CONCERNS: Public hearings and public comment periods are held per program requirements prior to each fiscal year. Program recommendations align with the comments received.
IMPACT IF APPROVED: HUD grant funds will continue to be made available to the community through a variety of programs and services as described in Attachment 2.
IMPACT IF DENIED: HUD grant funds will not be used for purposes defined in Attachment 2.
ALTERNATIVES: There are numerous uses for HUD grant funds and the listing included under Attachment 2 is not exhaustive in terms of regulatory uses allowed. Different programs and/or services could be brought back to Council for further discussion.
EEO CERTIFICATION NUMBER: N/A
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL'S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Financially Sound City Government, Effective City Organization
2. Grow Peoria: Businesses, Jobs, and Population
3. Attractive Neighborhoods with Character: Safe and Livable
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Reinvest in neighborhoods.
2. Grow employers and jobs.
3. Keep taxes and fees competitive.
DEPARTMENT: Finance