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City to cover $40,000 personnel cost after HUD rules block grant reimbursement
Summary
Community Development Director Matt Sullivan told aldermen that HUD guidance prevents drawing down federal lead/CDBG funds for two employees’ paid administrative leave, and the city is seeking a $40,000 local appropriation to cover those costs so federal drawdowns are not used for non-reimbursable leave.
Matt Sullivan, the city’s community development director, explained at the July 27 hearing that two employees who were on paid administrative leave during fiscal year 2026 cannot have that leave reimbursed from HUD-funded lead or CDBG draws. Sullivan said the city worked with HUD and was told those particular administrative leave periods are not eligible for reimbursement, so the city is proposing to appropriate $40,000 in local funds to backfill those payroll costs rather than draw federal funds.
Sullivan said the amounts cover two employees’ paid leave (one for roughly two weeks and one for several weeks) and some additional nonreimbursable expenses. Aldermen asked whether the leave was disciplinary (Sullivan said it was not disciplinary) and requested paperwork documenting the HUD determinations; the director said he would provide additional details to the committee.
