Hillsborough County staff outline plan to use about $700 million in CDBG disaster-recovery funds, stress HUD rules and LMI requirement

Hillsborough County staff briefed commissioners April 23 on the newly announced Community Development Block Grant–Disaster Recovery (CDBG-DR) allocation the county is preparing to administer, describing a fast-moving timetable, federal rules that limit use of funds, and staff recommendations to prioritize large infrastructure projects.

Tom Fessler, chief financial administrator, said the county received notice from the U.S. Department of Housing and Urban Development that it would receive what his presentation discussed as roughly $700,000,000 in CDBG-DR funds. Fessler said the county did not apply for the funds but that HUD awarded the allocation; staff hired a consultant (Indelible Solutions) to draft the action plan the county must submit to HUD. “Based on the federal requirement, the funding must be spent in the following categories: housing, economic revitalization, infrastructure, mitigation planning, public service, and administration,” Fessler said.

Fessler described key federal constraints that will steer programming: at least 70% of expenditures must benefit low-to-moderate-income (LMI) individuals or areas tied to the disasters; all expenditures must be tied to the disaster event except mitigation, and the action plan must document an unmet-needs assessment. He said HUD allows up to 6 years to spend approved funds and that the county will need to use competitive processes and strict program controls. Fessler said staff expects to seek flexibility in the action plan but warned that plans typically evolve over time as needs and projects are refined.

On program design, Fessler said the consultant and staff believe much of the allocation will best be spent on infrastructure — particularly stormwater and road-related projects that reduce future flood risk — rather than direct business reimbursements or large-scale home elevations. “They're recommending to not cross the threshold of businesses,” Fessler said, summarizing consultant guidance that favors infrastructure and cautions that direct-assistance programs can carry long monitoring and reporting obligations beyond the six-year spending window.

Fessler also said the county has already obtained HUD approval to draw 5% of the grant (about $35 million) for administration up front; those funds will support plan development, compliance and reporting. He said the board will be asked to approve a draft action plan for public comment on June 4 and a final action plan on July 16 (staff requested and was granted an extension so the plan is due to HUD by July 20). He noted cities were invited to participate and that implementation will likely be a mix of county-run programs, subrecipients and competitively awarded projects.

Commissioners sought clarity on how consultant work and other studies would be integrated into the action plan. Commissioner Cohen urged staff to coordinate Black & Veatch’s infrastructure recommendations with the CDBG-DR action plan so the two efforts align before the July deadline. “I want to make sure that Black and Veatch's recommendations are integrated into what we adopt on July 20,” Cohen said. Commissioner Whitstell asked who decides the allocation percentages across housing, economic revitalization and infrastructure; Fessler replied that the consultant-derived unmet-needs assessment proposes percentages but the board will approve the final allocation in the action plan.

Other points staff and commissioners raised: the plan must document unmet needs in LMI areas and HUD will require some homeless-related services in the plan; selected projects cannot supplant existing, previously committed funding; and technical assistance from HUD and outside consultants will be used to limit compliance risk. Fessler recommended the board consider large, shovel-ready infrastructure projects tied to disaster impacts and warned that certain housing-elevation strategies may pose long-term monitoring burdens or uncertain return on investment.

Staff said the draft action plan will open a 30-day public comment period when it is presented (a draft was scheduled to be brought back to the board in early June), with the board expected to act on a final plan in mid-July. Fessler and staff committed to include cities in outreach and to return to the board with implementation details, allocation choices and any proposed memoranda of understanding if the board elects to allocate funds to municipal partners. Commissioners requested timely notification of public engagement dates and more opportunities to review consultant findings before finalizing the county’s submission to HUD.