IURA warns of CDBG spend‑down shortfalls; staff readies reprogramming options and flags new HUD compliance rules

Ithaca Urban Renewal Agency staff told the board the agency is behind schedule on several CDBG projects and is preparing options to reprogram funds where projects will not meet federal timeliness requirements.

Anise, a staff member responsible for grants, told the board that current analysis indicates a little more than $100,000 could become available for reprogramming from prior grants; up to $30,000 of that amount could be used for public‑service activities but the public‑services cap constrains allocations to that category. "Currently, without homeowner rehab, we expect a little more than a $100,000 to be available for reprogramming," Anise said. She outlined the key criteria for reprogramming: projects must be sufficiently "shovel ready" to be implemented quickly so expenses can be billed before the May 31 timeliness deadline, must meet low‑ and moderate‑income benefit tests, and must clear any NEPA environmental review within a tight timeframe.

Staff reported completed expenditures that will help the timeliness measure: Cecil Malone sidewalks ($160,000) and Cherry Street missing segments ($70,000), which together will add about $230,000 in billable expense once invoices are submitted.

Board members asked for clarity about how the agency will treat projects approved in the 2025 action plan. Staff said projects funded in this year’s action plan will be asked whether they can implement on a roughly 12–18 month schedule; projects approved in prior years (2022–2023) that remain incomplete are the primary candidates for reprogramming now. Reprogramming amounts of $25,000 or more or moves to new purposes require a substantial amendment process (public hearing, comment period, and common‑council adoption), which adds time.

Staff also warned of new HUD requirements in the 2025 grant award language that may impose identification/verification obligations for individual beneficiaries as a result of recent executive orders. "It appears it may have a chill on some of our applicants going forward," Nels said. Staff noted HUD guidance was incomplete at the time of the meeting; the agency must comply if it accepts 2025 grant funds, but the operational details and thresholds (which activities or beneficiaries trigger identification checks) remain unclear. Board members raised concerns about how the requirement would apply to area‑wide or neighborhood projects where individual beneficiary identification is impractical.

Next steps: staff will continue outreach to grantees, compile alternatives for reprogramming (including projects that can meet timeliness requirements), and bring options to the board in November for committee review and possible action. The agency will coordinate with HUD as guidance becomes available to limit unintended compliance burdens on grantees.