Tumwater work session backs Thurston County-led CDBG process; staff recommends 80% to housing-related capital, 15% to public services

Kelly Adams, Tumwater staff, and Thurston County housing officials briefed the city council on the 2026 Community Development Block Grant (CDBG) cycle and asked councilmembers for priorities and a schedule for review.

Alex Persse, affordable housing program manager for Thurston County’s Office of Housing and Homeless Prevention, summarized CDBG’s purpose: “it’s really, a federal grant used to provide housing, capital improvement, community facility improvements, public infrastructure, economic development, support, project support in low to moderate income neighborhoods or communities.” He and county colleagues said the program targets projects that benefit individuals at or below roughly 80% of area median income and carries significant compliance requirements.

Thurston County staff said the county administers the grant under an interlocal agreement (ILA) with Tumwater and typically charges around 20% of the award for administration, citing required audits, consolidated plans, HUD reviews and specialized policies. Troy, a county finance staffer, explained the 20% as covering rate-study-determined overhead and audit and administrative costs.

County presenters described three staff requests to the council: (1) identify funding priorities for the RFP, (2) consent to schedule the Budget & Finance Committee in April for applicant presentations, and (3) schedule a May council meeting (May 5 was discussed) to review recommendations. The county plans to publish the RFP in early February and hold a bidder’s conference and pre-application workshops; staff noted applicant workshops will be recorded and posted online.

On priorities, staff recommended designating 80% of programmatic funds (outside administration) toward capital costs that support low-income housing in Tumwater, with an emphasis on leveraging additional investment, and allowing up to 15% for public services (the federal maximum). County staff clarified that current CDBG regulations do not allow funds to be used for construction of new housing, but may support land acquisition, rehabilitation, mortgage buy-downs or infrastructure that benefits low- and moderate-income households. “As of right now, CDBG funds cannot be used for construction of new housing,” Sharif Hossain, affordable housing program specialist, said.

Councilmembers asked how smaller nonprofits and businesses could compete and whether economic development or chamber-led programs could qualify. County staff said eligibility depends on demonstrating benefit to low- and moderate-income persons and noted the RFP and bidder’s conference are intended to help applicants determine eligibility. Staff also said they will perform eligibility reviews and risk analyses for all applications and provide that information to councilmembers before decisions are made.

No formal votes were taken during the work session. Councilmembers generally signaled support for the recommended process and asked staff to emphasize outreach and technical assistance so smaller organizations are aware of and can apply to the RFP. Staff agreed to provide a communications plan, publish the bidder’s conference (noted on the timeline as Feb. 10) and make pre-application assistance available.

Next steps: county will administer the RFP process, present applicants to the Budget & Finance Committee in April and return a recommendation for council consideration in May; final allocation amounts and the exact award depend on HUD and federal appropriations that will be announced later in the spring.