#2 Approve revised state and federal grants budget (File res. #2011-805)
NEIGHBORHOOD SERVICES MEMORANDUM
May 16, 2011
TO: Council President Brunner & City Council
FROM: Jennifer Petruzzello, Neighborhood Services Director
SUBJECT: Action on a Proposed Resolution Approving a Revised 2011 State
and Federal Grants Budget (File Resolution #2011-805)
Summary
Each year, a budget is prepared for the Neighborhood Services Department,
Housing Division, “States and Federal Grants Budget”. The budget is drafted to
address the goals and objectives identified in the Consolidated Plan and Annual
Action Plan for the Community Development Block Grant (CDBG), the HOME
Investment Partnership Program (HOME), and other State and Federal Grants.
The 2011 Adopted Budget emphasized the continued revitalization of Janesville’s
residential and downtown neighborhoods through the implementation of housing
programs, including: home ownership, the rehabilitation of owner-occupied and
rental properties and the elimination of blight. The implementation of the
Neighborhood Stabilization Program (NSP) and Lead Hazard Reduction Grants
was also emphasized in 2011.
Activities funded under these programs benefit low to moderate income
individuals in our community and include: down payment and closing cost
assistance to increase home ownership, owner and renter-occupied rehabilitation
and pro-active property maintenance to maintain safe and affordable housing,
emergency rent assistance (ECHO), neighborhood activities, downtown blight
elimination, and assistance to agencies such as the Boys and Girls Club,
HealthNet, and the Literacy Connection.
With the recent adoption of the 2011 Federal Budget, the City of Janesville will
receive 16.5% less in CDBG funding ($97,000) and 12% less in HOME funding
($26,000) than anticipated when the 2011 budget was prepared, necessitating a
budget amendment. Funding under the NSP program will be unaffected. This
reduction impacts the total amount that may be expended for administrative
activities and public service activities. Funding under the Lead Hazard Reduction
Grants can be expanded in response to local demand.
Department Recommendation
The Neighborhood Services Department recommends that the City Council
approve File Resolution #2011-805 approving a revision to the 2011 State and
Federal Grants Budget. The nature and extent of the federal budget reduction,
requires a revision of the State and Federal Grant’s budget. The proposed
revisions are consistent with the 2011 Annual Action Plan for the use of CDBG
and HOME funding. The recommendation results in a budget reduction of
1
$85,000 for the CDBG program, a reduction of $6,000 for the HOME program,
and an increase of $301,339 in lead hazard reduction programs.
City Manager Recommendation
The City Manager concurs with the staff recommendation. I understand the
amendments that the CDA approved and am generally supportive. One concern
that I have is the elimination of any new funding to DDA for their project may
eliminate the possibility for the property owner to move forward with the approved
project. The City Council will likely need to move some funding back to DDA and
potentially provide additional funding from another source or ask DDA to look at a
different project.
Suggested Motion
I move to approve File Resolution #2011-805 approving a revision to the 2011
State and Federal Grants Budget.
Objectives
The goal of the Neighborhood Services Department, Housing Division, is “to
promote the revitalization of Janesville’s central city neighborhoods and
downtown, resulting in vibrant and healthy residential areas with affordable
housing.” This goal is met through the promotion of the following objectives:
To promote the maintenance and rehabilitation of existing housing through
housing rehabilitation programs and the enforcement of housing and
nuisance codes.
To increase homeownership among low and moderate income families
To assist in the elimination of slums and blight
To facilitate redevelopment projects
To administer the federal and state grant programs in an efficient and cost
effective manner.
In 2009, the Community undertook an extensive evaluation of Janesville’s
Housing and Community Development needs while creating the 2010-2014
Consolidated Plan. Through this process, the following housing priorities were
identified:
Create affordable, quality, housing stock for low to moderate income
families.
Improve the existing housing stock.
Increase homeownership opportunities.
The following community development priorities were identified:
Healthcare
Job training or Employment Services
Rent Assistance
Self-sufficiency programs (medium priority)
Youth services (medium priority)
2
Budget
The State and Federal Grants Budget consists of funding from a variety of
sources, including CDBG, HOME, and Other State and Federal Grants. For the
purpose of this budget revision, I have broken the budget down into these 3
primary areas, while excluding the Neighborhood Stabilization Program which
remains unchanged.
For 2011, the City of Janesville will receive $97,000 less than budgeted from the
federal government for the CDBG program, and anticipates receiving $84,000
less in program income (through the re-payment of loans) than budgeted, which
results in a $181,000 shortfall. With $46,000 in unexpended funds from 2010 and
higher than anticipated program income in 2010, $96,000 can be addressed
through a reallocation of revenue from prior years. This leaves a balance of
$85,000 which must be addressed through expenditure reductions within the
CDBG program.
For 2011, the City of Janesville will receive $26,000 less in HOME program
funds, and anticipates receiving $90,000 in program income, which results in a
$26,000 shortfall in the HOME program budget.
Please see attachment for a history of funding allocations. This document
demonstrates that CDBG funding is at its lowest point since 1993 and HOME is
at its lowest point since the Consortium was created in 2002.
In light of these reductions, and in response to public demand, Neighborhood
Services has explored means to bring in additional grant dollars, and to expedite
grant dollars, coming into our community to support Janesville’s housing goals.
The City will be completing our commitment under the Rock County Lead Hazard
Reduction Grant in 2011, which is one year early. This allows us to transfer the
administrative expense associated with lead projects to this grant, and better
positions us for future funding. (Note: Lead grant projects are funded by both the
lead grant and the CDBG program) In addition, the City has secured a
commitment from the State of Wisconsin to provide additional grant dollars under
the Lead Hazard Demonstration Grant Program. With these changes, the City is
positioned to receive an additional $300,000 in funding in 2011, and is better
positioned for continued funding in 2012.
The CDBG program establishes a maximum amount that can be expended for
eligible administrative expenses. This maximum is calculated at 20% of the new
grant amount, plus 20% of the current year’s program income. The original
administrative cap was calculated at $150,000, although it was budgeted at
$119,000. The revised estimated administrative cap is $114,000.
The CDBG program establishes a maximum amount that can be expended for
eligible public service activities. This maximum is calculated at 15% of the new
grant amount, plus 15% of the prior year’s program income. The original public
service cap was estimated at $105,000. The revised public service cap is
$103,000.
The following public service activities are included:
3
Original Revised
2011 Budget 2011 Budget
Boys and Girl’s Club (Lincoln After School $4,000 $3,000
Program)
Emergency Rent Asst (ECHO) $50,500 $46,231
HealthNet $38,000 $34,804
The Literacy Connection $4,000 $3,000
Neighborhood Activities (Neighborhood Action $5,500 $2,625
Teams)
Neighborhood Livability (Camp Scholarships) $3,000 $3,000
Total $105,000 $92,660
Recommendation
Staff recommends a budget reduction of $85,000 for the CDBG program, a
reduction of $6,000 for the HOME program, and an increase of $301,339 in lead
hazard reduction programs.
Attached please find 3 tables further detailing proposed revisions to the CDBG,
HOME and State and Federal Grants Program budgets. The financial impact of
the federal budget on the programs and services that are offered throughout our
community are significant. These tables include the original 2011 adopted
budget, the recommended revised 2011 budget, the dollar and percentage
impact of the change, as well as a brief explanation of the impact of the change.
As staff prepared these recommendations for your consideration, there was an
attempt to maintain those programs that were identified as priority items by our
community through the Consolidated Planning Process. Staff looked at ways to
bring in other sources of revenue to maximize our resources and help our
housing dollars go farther. Unexpended dollars from prior years were reallocated
into the 2011 budget, rather than budgeting them in the following year as we
have done in the past.
The Community Development Authority held a public hearing on the Revised
2011 State and Federal Grant’s Budget on May 11, 2011 and recommends the
City Council approve the proposed revision.
Attachments: History of CDBG, HOME and ADDI funding
2011 Proposed Budget
cc: Eric Levitt, City Manager
Jay Winzenz, Assistant City Manager/Director of Administrative Services
4
RESOLUTION NO. 2011-805
RESOLUTION APPROVING A REVISED 2011 STATE AND FEDERAL GRANTS
BUDGET
WHEREAS
, the City of Janesville is an entitlement community under the Community
Development Block Grant Program and is the lead agency for the Rock County Consortium
under the HOME Investment Partnership (HOME) Program, both of which are administered
by the U. S. Department of Housing and Urban Development; and
WHEREAS
, in preparing the 2011 budget, the City of Janesville anticipated that
$762,000 in Community Development Block Grant (CDBG) funds and $678,000 in
Neighborhood Stabilization funds would be available in 2011, including new grant awards,
program income and the use of prior year’s grants; and
WHEREAS
, in preparing the 2011 budget, the City of Janesville anticipated that
$440,000 in HOME funding would be available in 2011, including new grant awards,
program income and the use of prior year’s grants; and
WHEREAS
, with the recent adoption of the 2011 Federal Budget, the City of
Janesville will receive $120,000 less in new grant dollars through the CDBG and HOME
programs than originally anticipated (16.5% less in CDBG funding-$97,000 and 12% less
in HOME funding-$26,000); and
WHEREAS,
the Community Development Authority (CDA) has held a public hearing
regarding proposed changes to the 2011 State and Federal Grants budget; and
WHEREAS
, the Community Development Authority has recommended to the
Common Council that it approve the revised budget, which is consistent with the 2011
Annual Action Plan; and
WHEREAS
, the budget will be revised as follows:
HOME Investment Partnership Program (HOME)
HOME funds are to be used to provide affordable housing including assistance for new
construction of housing to be occupied by income eligible households, down payment and
closing cost assistance, and owner- and renter-occupied rehabilitation loans.
Reduce HOME funded activities from $440,000 to $434,000. Revisions to HOME funded
activities include:
1. Reduce Home Ownership Down Payment Assistance Program by $26,000.
2. Increase HOME Administration by $20,000.
Resolution No. 2011-805
Page
2
Community Development Block Grant (CDBG)
CDBG funds are to be used to provide a variety of housing and community development
activities to support low to moderate income individuals, including: housing, neighborhood
stabilization, local home ownership, neighborhood, downtown, public service, and
administration.
Reduce CDBG funded activities from $762,000 to $677,000. Revisions to CDBG funded
activities include:
1. Reduce CDBG Program Administration by $10,076.
2. Reduce Rehabilitation Services Delivery by $10,870.
3. Reduce Neighborhood Action Teams by $2,875.
4. Reduce Downtown Improvement Programs by $18,000.
5. Reduce Housing Owner- Rehabilitation by $72,500.
6. Increase Housing Rental – Rehabilitation by $35,000.
7. Reduce CDA Owned Houses by $1,014.
8. Reduce Emergency Rent Assistance by $4,269.
9. Increase Home Ownership Down Payment Assistance Program by $4,800.
10. Decrease HealthNet by $3,196.
11. Decrease Boys and Girls Club by $1,000.
12. Decrease Literacy Connection by $1,000.
Other State and Federal Grants
Other State and Federal Grants include those which support the housing and community
development goals of the Neighborhood Services Department. This includes funding under
the Lead Hazard Control Grant, the Lead Hazard Demonstration Grant, and other inactive
grants where we continue to receive loan repayments. Other State and Federal Grant
funds must be used in accordance with the terms of the grant agreement.
Increase other state and federal grants from $158,400 to $459,799. Revisions to Other
State and Federal Grant funded activities include:
1. Increase Lead Hazard Reduction Control Grant by $211,399.
2. Increase Lead Hazard Reduction Demonstration Grant by $50,000.
3. Increase Wisconsin Rental Rehabilitation Grant by $40,000.
WHEREAS
, the Common Council finds that it is in the community's best interest to
revise the 2011 State and Federal Grants budget to reflect the reduction in federal funding;
Resolution No. 2011-805
Page
3
NOW, THEREFORE, BE IT RESOLVED,
by the Common Council of the City of
Janesville, that it authorizes and directs the City Manager to administer the 2011 State and
Federal Grants Budget as recommended;
BE IT FURTHER RESOLVED,
that the City Manager, and his designees, are hereby
authorized to negotiate, draft, prepare, execute, file and modify such other documents,
papers and agreements ancillary and/or pertaining thereto and, from time to time, to take
and/or make whatever other minor actions and/or minor modifications to the above
described agreements as the City Manager and/or his designee may deem necessary
and/or desirable to effectuate the purposes of such agreements and the intent of this
resolution. The City Manager is also hereby authorized to revise the FY2011 budget
document to reflect the receipt of the FY2011 Community Development Block Grant
Program and HOME program funds and the expenditures as reflected in this resolution.
ADOPTED:
Motion by:
Second by:
APPROVED:
Councilmember Aye Nay Pass Absent
Brunner
Dongarra-Adams
Eric J. Levitt, City Manager
Liebert
McDonald
ATTEST:
Rashkin
Steeber
Voskuil
Jean Ann Wulf, City Clerk-Treasurer
APPROVED AS TO FORM:
Wald Klimczyk, City Attorney
Proposed by: Community Development Authority
Prepared by: Neighborhood Services Director