Richardson council weighs joining federal CDBG program, staff to return with legal and cost details

City staff recommended that Richardson pursue participation in the federal Community Development Block Grant (CDBG) program, a move that would position the city to receive an estimated $750,000–$798,000 per year and could fund home repairs, targeted infrastructure and nonprofit services for low- and moderate-income residents.

The briefing by Maureen Milligan, who identified herself as director of Grow America and a DART board representative, explained program limits and trade-offs and asked the council for direction to begin the steps needed to be positioned as an entitlement jurisdiction. "With CDBG your low and moderate income activities have to benefit the 80% AMI or below," Milligan said, noting HUD sets income thresholds and that 70% of expenditures must benefit low- and moderate-income persons.

Why it matters: CDBG is a flexible federal funding source but comes with programmatic limits and administrative obligations. Milligan told the council that allowable activities range from single-family home repair and multi-family rehab to public facilities, streets and sidewalks, but that only 15% of an annual allocation can go to public-service subrecipients and only 20% can be used for administration and planning.

Details from the briefing: Milligan walked council through three common program models—housing-focused, infrastructure-focused and mixed—and cautioned that Richardson’s local demographics and the size of its low- and moderate-income population will determine how robust a CDBG program the city can operate. She also noted program risks tied to federal appropriations timing and HUD timeliness tests requiring cities not to accumulate excessive unspent balances at year-end.

Council concerns and follow-up: Council members asked whether pending federal bills could change CDBG eligibility—especially proposals that would allow new construction to be funded—and sought clarity on whether acceptance of CDBG dollars would expose Richardson to executive orders or other federal compliance obligations. Mayor Pro Tem asked staff to "go back one slide" and elaborate on the note that "several bills are pending in Congress that may alter CDBG eligible activities." Milligan said some bills would permit new construction in limited circumstances and that other bills aim to streamline environmental review.

Councilmember Justice pressed for more detail on the operational commitment implied by the steps staff outlined: "I would like to ask that we have before we make a decision tonight, we get a briefing on exactly what step 4 would mean for us," she said, referencing the staff timeline. Justice also flagged a line in the packet that estimated up-front planning work could cost roughly $300,000; Milligan characterized that as a high but plausible outlier and said much of the up-front planning could be covered by the 20% administration/planning allowance but that some city general funds might be required in year one.

Next steps: Staff asked for a directional "thumbs up" to proceed with the RFQ/initial planning steps but agreed to return with a focused follow-up that examines (1) potential executive-order and cross-cutting federal funding obligations, (2) realistic estimates of planning/consulting costs and which portion could be charged to CDBG administration, and (3) the public-participation timeline. If the council directs staff to proceed, staff would notify HUD, start citizen participation in early 2027, submit the consolidated/annual action plans in August 2027 and would aim to roll out programs by October 2027.

No formal vote was taken; staff did not commit to obligating funds beyond planned outreach and analysis pending the requested follow-up materials.