Lock Haven council warns of possible loss of CDBG funds, preliminarily selects 2025 projects

Lock Haven City Council discussed the potential elimination of the Community Development Block Grant (CDBG) and related federal housing and service grants and made a preliminary selection of candidate projects for the city's 2025 allocation.

City staff told the council that HR 1 (the federal budget bill) had been enacted with changes that could eliminate or terminate federal funding for CDBG, the HOME Investment Partnerships Program (HOME) and Community Services Block Grant (CSBG). Staff said the city's 2025 CDBG allocation is $307,438, with $257,438 available for projects after administrative set-asides. The council heard a list of candidate projects and cost estimates and then voted on how to allocate the available funds.

Why it matters: council members and presenters cautioned that a loss of CDBG, HOME or CSBG dollars would reduce funding the city typically uses for streets, stormwater, park improvements and social services. Staff said the CDBG program has returned roughly $300,000 a year in federal funds to Lock Haven in recent years and that those dollars have supported long-standing local investments in water, sewer, parks and neighborhood infrastructure.

Staff reviewed six candidate projects proposed for CDBG support: Camden (Hannah) Park improvements (probable construction cost $150,000; with environmental review and Davis-Bacon compliance charges brought the project estimate to $159,500), Fourth Street improvements (estimated total $152,444), repairs to the fire company bay floor (total project cost $27,740), an EMS generator (project cost $39,310), North Third Street reconstruction (total $116,113) and Race Street rehabilitation (total $60,075). Staff noted that some projects require additional demographic surveys to meet CDBG low-to-moderate-income (LMI) benefit rules, and that Davis-Bacon prevailing-wage compliance and NEPA environmental review fees affect smaller and larger projects differently.

Council deliberations focused on immediacy and feasibility. Several council members and staff said projects that address urgent safety or operational needs (for example, the EMS generator and the fire company bay floor) could be funded faster if the city used local capital or liquid-fuel funds rather than waiting on CDBG funding cycles. Staff also explained that some street projects might be bundled to reduce repeated mobilization and Davis-Bacon compliance charges.

After discussion, council approved a motion directing staff to allocate available CDBG funds so that Race Street would receive $60,075 and the balance of the city's available CDBG allocation would be moved into the Hannah Park project as a holding allocation while the city seeks matching funds (for example, the Department of Conservation and Natural Resources grant) and considers using liquid fuels or capital funds to advance other street and emergency-service projects more quickly. Council members and staff emphasized that final project awards and the precise funding split would be confirmed before the application is submitted; the city's final public hearing on projects was scheduled as part of the CDBG timetable described by staff.

Council members also discussed fallback options should the CDBG program be reduced or eliminated: using liquid-fuel allocations for street paving, reallocating capital-project funds to the EMS and fire-company repairs, and seeking DCNR (Department of Conservation and Natural Resources) or other matching grants for park work. Staff noted that if the Race Street project primarily benefits a small apartment complex, a demographic survey may be required and could determine eligibility under the 51% LMI test.

Council members asked staff to refine Davis-Bacon compliance estimates for the fire company and EMS projects and to explore bundling nearby paving projects to reduce duplication of certain flat fees. Several members urged prioritizing projects that provide demonstrable citywide LMI benefit or that address immediate safety and operational needs.

The vote: a motion to proceed with the approach described above (allocate Race Street and place the remaining CDBG balance into Hannah Park as discussed, while pursuing alternative funding for other prioritized projects) carried in an open roll call vote.

Next steps: staff will finalize CDBG project applications, run the required public-notice schedule and the final public hearing in advance of the application submission date; staff will also provide refined cost and Davis-Bacon calculations and identify which projects, if any, should be advanced by local capital or liquid-fuel funds if federal CDBG funding is reduced or discontinued.