City staff told the Neighborhood Investment Committee on July that HUD has issued a timeliness noncompliance letter because the ratio of unspent CDBG funds to the current-year award exceeded HUD’s 1.5-times timeliness threshold at the snapshot date. The committee did not take a formal vote; staff said they will prepare a HUD-required “workout plan” and identify projects that can be accelerated to bring the city back into compliance.

Anissa summarized HUD’s notice: "the ratio of CDBG funds that we had still available to expend was over 1.5 times our, the award that we got this year." She and committee members discussed several projects that affect the city’s spending profile, and staff described potential short-term and administrative responses.

Staff highlighted the city sidewalk contract for Cecil Malone Drive as an example: though the work is under contract, reimbursements to the city must be specific to that contract and the contractor has the ability under its multi-project arrangement to schedule work in the order it chooses; staff said that the city’s Department of Public Works and Engineering has been engaging with the contractor to encourage timely invoicing and completion. Staff estimated the sidewalk allocation to be about $160,000 and said they expect those funds to be spent this year, but they noted engineering staffing constraints and contractor sequencing as complicating factors.

Large local nonprofit projects were also discussed. Ithaca Neighborhood Housing Services (INHS) is working to move several homeowner-rehab projects forward; staff said INHS currently has three homeowners in pipeline review but one may decline, and that some homeowner-rehab activities (for example raising utilities above base flood elevation) could exceed the typical $25,000 per-unit homeowner-rehab limit because of lead/asbestos or other remediation costs. Staff warned that construction projects can be difficult to accelerate unless they are shovel-ready.

Staff explained options for reprogramming unspent CDBG funds: (1) roll unspent balances into the next year’s action plan to be competed alongside standard applications; (2) pursue a substantial amendment and public comment process when reallocating more than $25,000; or (3) identify existing, shovel-ready public-facility or housing projects that can obligate funds quickly. Members discussed whether smaller public-service providers could absorb money faster, but staff noted the CDBG public-service cap (15 percent of the award) limits that pathway.

Habitat for Humanity was discussed as a recent grant recipient: staff said the agency received $70,000 in 2023 for two projects, one on Morris Avenue (completed) and one at 417 South Aurora (which required additional state historic-preservation review due to possible eligibility as a historic property). Staff noted the 417 South Aurora project required state approvals and supplemental funding from other sources to complete, and that the homebuyer contributed substantial volunteer hours during the rehabilitation.

Staff asked committee members for ideas about eligible projects that could be moved forward quickly; members suggested prioritizing city capital projects that are already under contract or scale existing projects rather than launching a new mid-cycle competitive process. Staff emphasized the need to invoice partners promptly and to prioritize activities that do not trigger lengthy environmental review or other federal prerequisites.

No formal action was required at the meeting; staff will prepare the HUD workout plan and return with recommendations and a timeline.