Lacey commission selects CDBG Option 1: start with city capital projects and modest admin allocation

The Human Services Commission on April 3 recommended the city proceed with an initial, conservative approach to its newly received Community Development Block Grant (CDBG) entitlement funds: prioritize small city capital projects in qualified low- and moderate-income census tracts and designate a modest portion of funds for administration.

City staff explained Lacey is now an entitlement community and estimated an initial annual allocation of approximately $304,850 from the U.S. Department of Housing and Urban Development (HUD), subject to congressional appropriation. Michelle Chavez reviewed federal program rules including the three national objectives (benefit to low- and moderate-income persons, prevention/abatement of blight and urgent need) and statutory limits: a 15% cap on public service spending and up to 20% for administrative costs (staff proposed using about 10% initially).

"We anticipate getting 304,000 approximately dollars from the federal government as an entitlement community," Chavez said, and cautioned the figure is an estimate until Congress finalizes appropriations and HUD issues official allocations.

Staff recommended starting with smaller, scalable capital projects that fall within the city's two qualified census-tract areas while the city builds administrative capacity and compliance processes (environmental reviews, federal reporting, community participation plan). Examples discussed included:

- Hunter Moore Park: playground equipment replacement and sidewalk repairs (staff estimate listed approximately $515,000 for design and equipment; sidewalks separately estimated), - Rainier Vista Community Park: new playground, pickleball courts and safety improvements (estimate shown about $988,200), - Brooks Park: small-park activation and additional amenities (Brooks Park is roughly 1.1 acres at 1813 College Street), - Virgil Clark Senior Center: long-term expansion and parking improvements (estimated $4.3 million for expansion; parking improvements estimated at $620,000), - Lacey Museum and Cultural Center: a longer-term, higher-cost project.

Chavez said staff plan to file an annual action plan and other HUD-required documents and to use the first one-to-two years to run capital projects while building the administrative systems needed to run competitive public-service grants in future years. Staff also emphasized that capital-project eligibility depends on meeting HUD's area-benefit or presumed-benefit rules and, for some projects, individual low-income verification.

Commission discussion covered program timing, administrative burden and benefits of being a direct entitlement community (including potential access to emergency or supplemental federal allocations). Commissioners also noted the city already operates a Human Services Grant Program, which can complement CDBG work while the city scales up HUD compliance.

A motion to adopt Option 1—allocating CDBG funds to city capital projects initially and using approximately 10% for administration—was made and seconded; the motion carried by voice vote. The commission recorded its recommendation for Council consideration and staff will incorporate the choice into the city's HUD action plan and submit required federal documents by the program deadlines.

The commission discussed that because Lacey had previously participated in a Thurston County consortium, it will now be responsible for HUD reporting and plan submissions as an independent entitlement community.