Mount Vernon council approves CDBG amendment to pay down Section 108 loan for library
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Summary
After a public hearing, the council approved a substantial amendment reallocating $50,000 in 2024 CDBG funds — constrained by program caps on services — to pay down a Section 108 loan tied to the library; finance staff said approximately $48,750 would be applied to principal.
Mount Vernon councilors approved a substantial amendment to the city’s 2024 Community Development Block Grant (CDBG) annual action plan to reallocate $50,000 to pay down a Section 108 loan associated with the library.
Special Projects Manager Steve Sexton said regulations limit how much of the city’s CDBG allocation may be spent on services, and the city had reached that cap for 2024 awards. Sexton said the city considered capital projects that could spend the money in the available timeframe and concluded paying down the outstanding Section 108 loan was prudent to maintain compliance with federal CDBG rules.
Finance Director Doug Boleski told council the $50,000 reallocation would reduce the loan principal by roughly $48,750. Sexton also said the amendment had been advertised for public comment and that staff received no public comments during the comment period or the hearing.
Council members asked for more documentation and the full amendment language, which staff said would be provided. After the hearing, Council member Andrew moved to approve the amendment; councilors voted in favor and the motion carried.
Sexton said the repayment reduces the city’s outstanding Section 108 variable-rate exposure and could save interest over time by reducing principal. The council did not discuss new program awards using the reallocated funds; staff said they reviewed other in-program options but could not find eligible capital projects that could obligate the funds within program timelines.
