Explanation
BACKGROUND: The Department of Finance and Management, Grants Management Section has received funds from the U.S. Department of Housing and Urban Development (HUD) through the Community Development Block Grant (CDBG) Entitlement Program. It is the goal of the CDBG program to develop viable urban communities by providing decent housing and a suitable living environment and expanding economic opportunities, principally for low- to moderate-income people.
When the City uses these funds to provide loans to businesses or other income-generating activities, the income received by the City is considered Program Income (PI) according to HUD, as defined in 24 CFR 570.500. When income is generated by the use of CDBG in a Revolving Loan Fund (RLF), the specific type of PI received is referred to in HUD's financial systems as RLF. Federal regulations (24 CFR 570.902) require each CDBG grantee to have a combined grant and PI balance no greater than 1.5 times its annual grant remaining in the line of credit 60 days prior to the end of the Program Year. This is commonly referred to as the CDBG timeliness test. Based on the City’s program year of January 1st to December 31st, the timeliness test is conducted annually on November 2nd. In order to meet the 2026 timeliness test, the City must authorize additional spending of CDBG funds and expedite their expenditure. Failure to comply with HUD’s CDBG timeliness test could result in the reduction of the City’s annual CDBG allocation.
The City is allocating funds to projects that are prepared to immediately begin expending these grant dollars, in order to meet the 2026 timeliness test. Four organizations which have successfully implemented CDBG-funded programs in recent years and which have pending CDBG applications for future grant funding were selected to receive these allocations. Because these organizations have previously administered CDBG-funded programs, and because they have continued to operate these program...
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