CC PACKET 04111995 - Laserfiche WebLink

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RecycLed Papff J DATE: March 27, 1995 TO: CDBG Participating Communities FROM: Barbara Hayden, Administrative Manager SUBJECT: 1995 CDBG Program Funding for Public Service Activities Although communities were encouraged to limit funding for public service activities to no more than 20% of their allocation, a number of communities have exceeded this cap. As a result, the 1995 Program is substantially over the 15% cap for public services. The cap is a statutory requirement which HUD reviews on an annual basis. This year, public service funding requests totaled $663,702. In order to comply with federal requirements, CDBG public service funding must be limited to $568,000. Therefore, public service funding requests must be reduced by approximately$95,000. The potential for a reduction in public service funding has been developing over the last few years. Various factors have contributed to it: 1) In the past, not every community funded public services and/or they funded them below the cap. There was remaining "capacity" that allowed Hennepin County to grant communities local flexibility to exceed the limit and still meet the overall program requirement. However, each year more agencies are requesting funds and cities are funding public services at higher levels. 2) Further complicating this balance is fluctuating amounts of program income. This is added to the County's base grant amount to .calculate the 15% cap. 3) The ability to creatively adjust annual commitments and expenditures, which HUD utilizes to monitor the cap, has been exhausted. This resulted in actual public service funding in 1994 at 16.5%. This overage must now be taken into account when calculating 1995 public service expenditures and commitments. Before the 1995 CDBG Program is submitted to HUD, it will be necessary for cities funding public services above the 20% /eve/to reduce their funding. Two attachments are provided to assist you in determining how this may effect your community: Attachment A shows the proposed public service funding and percentage for each city. For cities that proposed funding above 20%, the figure in column E is the amount that public services must be reduced. This amount should then be added to one or more of your other CDBG projects. Attachment B identifies proposed funding by city and agency/program. Not all public service agencies will be effected.