Planning commission recommends Charlottesville's draft 2025-26 CDBG and HOME plan to City Council amid large public-services funding gap

The Charlottesville Planning Commission voted to approve the draft program year 2025-26 Community Development Block Grant and HOME annual action plan and recommended staff present the plan to City Council for public review. The recommendation followed a staff presentation that described HUD rules, application sorting and a substantial gap between requests and available public-service funding.

Anthony Warren of the City of Charlottesville Office of Community Solutions told the commission that as an "entitlement community" the city receives CDBG funds directly and participates in a consortium with surrounding counties managed by the Thomas Jefferson Planning District Commission. "By statute, it's supposed to be 70% or more of the benefits accrue directly to persons of low and moderate income," Warren said, and he emphasized that HUD regulations also limit spending on public services.

The point that framed the task force's deliberations was the HUD cap on public-services spending: Warren explained the Code of Federal Regulations limits spending more than 15% of an annual CDBG allocation on public services. Using last year's allocation of $438,617 as a modeling figure, Warren calculated a 15% cap of $65,792 while public-service requests totaled $368,236, producing a large shortfall that the task force had to address in its recommendations.

Warren described the application process and eligibility checks: applicants attend a mandatory pre-application workshop where they identify the HUD matrix category they believe applies to their activity; staff then reviews submissions against HUD guidance. He gave the example of an eviction-diversion application initially grouped as affordable housing but reclassified as a public-service activity after reviewing HUD definitions. "Eviction diversion even though it's about housing... HUD is very clear that it is a public service activity," Warren said.

Commissioners asked how to maximize the small pot of funds and whether applications could be broken into eligible parts. Warren said staff and the task force try to "figure out where to take a very small pot of money so that we can maximize the benefit for the people of Charlottesville who need it most." He noted some activities previously funded through CDBG-CV (COVID relief) were exempt from the public-service cap; those funds have been spent, and the cap now applies to ongoing allocations.

The task force recommended funding a small set of economic development and public-facility projects and partially funded three public-service activities; none of the three recommended public-service awardees received their full requested amounts. The commission's motion approved the task force's recommendations and asked staff to present the plan to City Council as scheduled.

What happens next: The Planning Commission's recommendation will be provided to City Council for public review on the posted schedule; any change in the HUD allocation will be handled by staff's prorating method or, if the award increases substantially, by returning to Council for further direction, Warren said.