Committee approves 2025 CDBG allocations after 1% federal award shortfall

The Financial Affairs Committee voted 8-0 on June 3 to approve recommended Community Development Block Grant funding levels for program year 2025 after staff adjusted awards downward to match the final HUD allocation.

The grant award matters because CDBG funds support local projects for low- and moderate-income residents that the city cannot pay for with property taxes. Staff said the final U.S. Department of Housing and Urban Development award of $988,733 was about $11,267, or roughly 1%, below the committee'estimated $1,000,000; staff applied an approximately 1% across-the-board reduction to the community committee'recommended amounts to balance the budget.

Carl (staff member) told the committee that the CDBG awards are grouped into three categories ' administration, public services, and public facilities/economic development ' and that two categories have statutory or program caps the city must respect. He stressed that subrecipients that operate regionally must use CDBG funds only for activities located in Wauwatosa.

Committee members questioned the distribution of increases and decreases across recipients. Alder Arnie and Alder McClough pushed staff on whether any eligible applicants were denied; Carl said one application was denied because it failed the CDBG requirement that at least 51% of beneficiaries be low- or moderate-income. Carl said every eligible applicant that met program criteria received at least a partial award.

Several alderpersons discussed specific recipients. Carl said the recreation department'run senior center award helps pay staff who run the senior center; he identified the proposed award at about $79,000. He also said the Community Development Authority (CDA) award funds housing rehabilitation operations and affordable-housing activities and will fluctuate year to year as the program transitions from prior ARPA capitalization to CDBG. Alders raised concerns that increases to the CDA award might squeeze other public-service applicants; proponents said affordable housing and senior services were repeatedly prioritized in public outreach and the annual plan.

Alder Arnie moved to approve the package as presented, with a Level 3 fund transfer; Alder Lewis seconded. The motion, described by staff as the committee recommendation incorporating the 1% adjustment, passed 8-0. The committee'approved allocations will be forwarded to the Common Council for final approval.

Committee members and staff emphasized three procedural points: CDBG funds are federal pass-through dollars and not levied city tax revenue; awards must be spent on activities located in Wauwatosa; and some recipients receive only supplemental funding from CDBG and must combine other funding sources to complete projects.

The committee did not amend the staff recommendation. The Common Council will consider the finalized allocations and the related Level 3 fund transfer at a later meeting.