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Council hears HUD guidance: unspent CDBG funds to be allocated citywide; staff outline Section 108 loan uses
Summary
City staff told the council HUD guidance requires unspent CDBG funds from 2018–2024 be treated citywide rather than ward‑specific; council discussed a forthcoming substantial amendment and the possibility of a Section 108 loan to gap‑finance larger projects once the city demonstrates prior expenditures.
CDBG and community development staff briefed the council on the status of previously unspent CDBG and HOME entitlement funds covering 2018–2024. Staff said HUD directed that these dollars must be treated on a citywide basis rather than targeted to specific wards, and that a 30‑day public comment period for a substantial amendment is open with the plan expected to return to council for consideration on July 22.
Staff also described Section 108 as a potential gap‑financing tool for larger public works or housing projects, stressing that a Section 108 loan requires committed other funding sources and an established expenditure track record before an application is likely to be competitive. "You have to have other sources of funding committed and be able to plug them in to make that project actually viable," CDBG staff said. Councilmembers supported exploring the loan but urged caution: Section 108 is a loan instrument with legal, acquisition and closing costs and typically should be used as last‑resort gap financing.
Council members also discussed distribution mechanics for HOME tenant‑based rental assistance grants and other awards made at the meeting (Back Bay Mission, South Mississippi Housing Authority and CLIMB CDC were among applicants discussed). Staff said awards were scored on capacity and performance criteria and that HUD rules restrict how certain HOME funds may be used by housing authorities.
Next steps: staff to finalize the substantial amendment for public hearings and return the amendment for council action on the scheduled date; staff to continue exploring Section 108 only when suitable projects and matching funds are in hand.
