Mesa council reviews FY2025–26 funding recommendations for CDBG, HOME, ESG and local human services

Mesa — City staff on March 17 presented councilmembers with recommended allocations for federal Community Development Block Grant (CDBG), HOME Investment Partnerships (HOME) and Emergency Solutions Grant (ESG) monies for fiscal year 2025–26, along with proposed local human-services funding and administrative process changes.

The presentation, led by Michelle Pillsbury of the city’s housing and community development staff, outlined how the city scored applications, the timeline for public comment and HUD submission, and contingency plans if federal funding levels change. “For our programs, we have already been allocated those dollars to get us through the rest of the fiscal year,” Pillsbury said, noting that Congress had approved a continuing resolution that keeps the government funded through Sept. 30 but did not set new program amounts.

The nut graf: the city is proceeding with its nine-month funding cycle to meet HUD timelines while building contingency options if federal allocations fall. Staff recommended funding mixes that prioritize timely expenditure, regulatory capacity and Council strategic priorities.

Key details: Pillsbury said the funding process includes a staff eligibility review, scoring by the Housing and Community Development Advisory Board (30 points) and staff scoring (70 points), with deductions for late or missing follow-up. She described the three federal programs as distinct: CDBG supports both public services and capital projects (with a 15 percent cap on public-service spending), HOME targets housing development and tenant-based rental assistance, and ESG funds homelessness response such as rapid rehousing and shelter operations. Human services and the city’s ABC utility-donation fund use separate criteria and fewer federal reporting requirements.

Staff proposed specific program amounts based on last year’s allocations (subject to change when HUD announces final FY2026 amounts). Among the recommendations Pillsbury described: roughly $2.5 million recommended for an emergency repair program that provides up to $25,000 per household for repairs (air conditioning, roofing, ADA ramps, mobile-home repairs), $400,000 for small-scale tenant-based rental deposit assistance, and targeted HOME funding as gap financing for affordable housing projects such as New Leaf La Masita Phase 4 and a Copa Health family project — both contingent on successful low-income housing tax-credit awards from the Arizona Department of Housing. Pillsbury said such HOME contributions act as local leverage to score higher on state applications.

Council members asked about program specifics and capacity. City treasurer Mark Hoot and staff emphasized the need to award funds to agencies that can both comply with federal reporting and expend funds promptly; HUD enforces timeliness-of-expenditure rules, and the city may need to reprogram funds if agencies cannot spend them. Pillsbury said the city will prioritize agencies with demonstrated capacity for federal compliance but keep smaller agencies eligible for local human-services dollars where reporting is less onerous.

The presentation also noted a set-aside of roughly $301,000 for navigation services within the city’s homeless-response funding and recommended funding three shelter-service providers from ESG for a combined total of $329,000 (shelter and rapid rehousing categories). Staff said applications were ranked by score and that this year the city would require more specific criteria for navigators.

Next steps and deadlines: the city will open a 30-day public comment period beginning March 30, return to council for formal approval of the funding recommendations and consolidated plan on May 12, and tentatively submit the annual action plan to HUD around mid‑May, pending final allocations. Contracts with agencies will follow HUD approval. Pillsbury stressed that if funding is reduced “significantly” the city will return to council; otherwise small adjustments (about 10 percent) may be made administratively.

Council discussion also covered fairness concerns. Several council members praised staff and the advisory board for an extensive review process while acknowledging that many worthy applicants will not be funded because requests exceed available dollars. Councilmembers and staff discussed strategies for helping smaller organizations build capacity and suggested future council conversations about strategic priorities and potential adjustments to funding pools.

The presentation closed with staff offering follow-up workshops for agencies and a reminder that the city’s five-year consolidated plan will be presented on Thursday, March 20, with the May 12 council meeting set for formal action.

Ending: The council did not take a formal vote on the recommendations at the study session; staff will return with the formal funding ordinance and the draft consolidated plan at future meetings.