The agency approved a workout plan and directed staff to submit it to HUD after staff reported the jurisdiction had not met HUD’s CDBG spend‑down ratio and faced a timeline to correct the shortfall. The resolution to approve the workout plan was moved and seconded and carried unanimously.

Agency staff explained that HUD’s current policy requires communities that miss the 1.5 spend‑down ratio to bring their account back into compliance within 12 months or face a reduction in future CDBG allocations. Staff said the agency’s grant summary showed the community was roughly $70,000 short of meeting the ratio at the most recent snapshot and recommended more explicit monthly tracking and earlier contingency planning.

Staff told the agency that CDBG expenditures are "lumpy" and that some larger capital projects can spend in one payment. As an example, staff described the Cecil Malone sidewalk project: the city bundled that work into a citywide contract in order to attract bidders, then deferred the Cecil Malone portion to later in the contractor’s schedule, which delayed the expected spend‑down timing. Staff said that project should complete this summer and produce eligible expenditures for reimbursement.

Staff also identified candidate backup projects to meet spend‑down needs if necessary. One identified option is a change order to add missing Cherry Street sidewalk components to an existing contract; staff estimated that Cherry Street work at roughly $75,000 could qualify as an eligible public‑facilities expenditure if the contractor agrees to the change order. Staff said the INHS homeowner rehab program still has more than $200,000 remaining to disburse and that the economic development (ED) revolving loan fund has accumulated program income (roughly $275,000 by staff’s account) that HUD now treats as part of the available drawdown and thus can affect the spend‑down calculation.

Staff recommended the agency develop a backup project or reprogram funds sooner rather than later and review the agency’s portfolio by November to decide on reprogramming or other measures. Staff noted that reprogramming amounts above $25,000 generally require a formal amendment and a council public hearing. Committee members asked whether substantial amendments would require public components; staff replied that a formal public hearing before common council is required for substantial amendments and that a shorter (approximately 15‑day) public comment period is typical for amendments.

Committee members and staff also discussed programmatic constraints: the agency is capped on public‑service spending, so any backup project would need to fall into housing, public facilities or economic development categories. Staff said they had begun outreach with city partners and project sponsors to identify feasible, eligible projects that could spend down in time.

The agency moved the resolution to approve the CDBG workout plan, Siobhan seconded, and the motion carried unanimously. Staff said they will add monthly tracking lines to grant summaries to show deviations from schedule and will return to the agency and relevant committees as candidate projects are identified for reprogramming if needed.