Council committee debates reallocation of remaining 2021 ESG funds; members seek HUD guidance before vote

Councilwoman Davis, chair of the Building & Housing Committee, introduced Resolution 1-2025, described in the packet as allocating the remaining Emergency Solutions Grants (ESG) program funds from the U.S. Department of Housing and Urban Development (HUD) for fiscal year 2021, ratifying grant administration costs, and extending subrecipient agreements through March 31, 2025.

Sam Zukoskie, the city’s business administrator, told council the ESG funds for FY2020–2021 began with a balance the packet displays as $334,833 and that a remaining unappropriated balance was reported in the resolution as $55,529; Councilwoman Davis noted her independent calculation produced $55,539 and asked staff to reconcile the discrepancy. Zukoskie described the resolution as appropriating the leftover funds to administrative costs ($10,461, described in the presentation as administrative fees) and to three prior subrecipients: Christian Churches United (CCU), Shalom House and the YWCA.

Council members pressed for additional documentation. Councilwoman Daniels requested the HUD regulation or the HUD extension letter that permits the spending timeframe beyond two years; Zukoskie said the March 31, 2025 date came from HUD via an extension or a “workout plan” and that he would provide the regulation and the HUD response. Solicitor Grover explained that one portion of the ESG pot was a pass-through to a designated entity (the Capital Area Coalition on Homelessness, CATCH) that would not have required competitive application and therefore would not appear among the subrecipient reallocations being proposed. Several council members asked whether subrecipients would need to reapply and whether matching funds were required; staff said the entities had been qualified for that fiscal year and would not need to reapply to receive the unallocated remainder for FY2021, but confirmed they would need to reapply for future fiscal years.

Several council members and staff warned of the March 31, 2025 drawdown deadline and said a competitive re‑solicitation would likely take longer than the available spend-down window. Councilwoman Raul and others urged that, given the time constraint, awarding the remaining money to previously vetted subrecipients who already have contracts was the most practical course. Council members asked for a timeline and the record of when the unappropriated funds were discovered and who discovered them.

Councilwoman Davis said staff would provide the requested HUD rules, extension letter, procurement/award trail and related documents “for next Tuesday.” After discussion, the chair agreed to move the resolution to the next legislative session, with the understanding council members would receive the requested materials in advance of any formal vote. Several council members also asked staff to invite the subrecipient organizations and, where helpful, the interim DBHD director to a follow-up meeting so members can hear how the funds will be used and whether additional capacity or performance questions exist.