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City board to consider reallocating $158,164 in CDBG funds to address late/returned projects
Summary
City staff proposed a substantial amendment reallocating $158,164.78 across FY23–FY25 CDBG plans to fund eligible community-development activities where projects completed under budget, returned funds, or were unable to proceed; HUD timeliness tests require expenditure by April 2026.
City funding staff presented a proposed substantial amendment to the city’s Community Development Block Grant (CDBG) annual action plans to reallocate $158,164.78 from completed, returned or stalled activities to other eligible uses.
Funding and Development Director Kathy Selman said the City of Hot Springs is an entitlement community under HUD and that 24 CFR 91.505 requires a substantial amendment when project scope or funding priorities change. Selman said the proposed reallocations will support projects benefiting low- to moderate-income residents and must be expended by April 2026 to satisfy HUD’s timeliness test.
Selman noted a 30-day public comment period ran from Nov. 7 to Dec. 11, 2025, and the Community Development Advisory Committee held an advertised public hearing on Nov. 6 and recommended approval. Directors asked whether the reallocation affects current funded projects; Selman said current projects remain in play and staff expects agreements signed on four projects and environmental work to be underway by the end of the week.
Director Garcia raised concerns about funds tied up when projects cannot proceed; Selman and staff said program changes and improved application practices are being implemented and CDBG administrator Sarah Delosier has worked on best practices to speed utilization. The board will consider Resolution R25226 at its Dec. 16 meeting.
