Hollister officials are concerned that annual federal grant funding for municipalities throughout the state – prospectively including the city and county – could be in jeopardy after recent questions arose over the lack of a required public comment period for unspecified changes made to the application process.
The California Department of Housing and Community Development received 96 applications – including from the two local municipalities vying for a total of $1.7 million – in its annual application process for the federal funds, totaling about $48.5 million this year.
The City of Hollister received a copy of the letter recently sent to municipalities applying for the program. In it, the state agency indicated that the Office of Administrative Law rejected the housing department’s “regulation changes” made this year due to a lacking, 15-day public comment period required by law. Hollister officials at Monday’s council meeting expressed concern that it could mean none of the statewide applicants will receive funds in 2012.
The federal Department of Housing and Urban Development each year allocates CDBG funds to states for distribution to local municipalities. Those funds are intended to benefit low- and moderate-income residents, curb blight or meet urgent community development needs, according to HUD.
According to the state agency’s letter to Hollister and other jurisdictions: “We have 120 days from the date of the decision to complete this comment period.” It goes on to note: “If the regulation changes can’t be completed, the 2012 NOFA (notification of funding availability) will be canceled, per page 2 of the NOFA.”
That page of the NOFA document reads: “The State CDBG Program is presently going through a significant regulation change process that is necessary for the Department to announce and administer this NOFA. Until the regulation process is fully complete, the Department will not be able to issue award letters/and or Grantee Agreements. The Department reserves the right, at its sole discretion, to suspend or amend the provisions of this NOFA. If such an action occurs, the Department will notify interested parties.”
It remains unclear how much urgency municipalities and the state face for a potential suspension of 2012 funds. The state agency representative listed in the letter who is responsible for answering questions on the matter, Susan Naramore, was not available immediately but said she could respond Friday.
Hollister Councilman Doug Emerson broached the topic at this week’s city council meeting and said in an interview Thursday he is trying to clarify the time frame and the potential probability of a statewide cancellation. His interpretation, though, is that this year’s allocations could be suspended if problems arise in the new public comment period.
“If some comments that come in are difficult to work with, if they can’t get all this process completed in time, they would cancel the NOFA,” he said.
The recent announcement from the department came just weeks after the state informed 16 of the applicants, San Benito County being one of them, that their applications were ineligible because those jurisdictions had not followed procedures updated this year – namely, copying a letter of an audit report to HCD before the April 6 deadline. County supervisors when informed in early May vowed to continue pursuing their $500,000 grant application for funds toward the homeless shelter, Emmaus House for battered women and children, and job training.
Hollister, which appears to have submitted the correct application documents, has remained eligible for its bid to receive $1.2 million in CDBG funds toward housing assistance downpayment assistance, the Community Food Bank, the Youth Alliance and Jovenes de Antano.
Look back for more.
CDBG STATE ALLOCATIONS
Congress amended the Housing and Community Development Act of 1974 (HCD Act) in 1981 to give each State the opportunity to administer CDBG funds for non-entitlement areas. Non-entitlement areas include those units of general local government which do not receive CDBG funds directly from HUD as part of the entitlement program (Entitlement Cities and Urban Counties). Non-entitlement areas are cities with populations of less than 50,000 (except cities that are designated principal cities of Metropolitan Statistical Areas), and counties with populations of less than 200,000.
Source: HUD
LETTER TO LOCAL MUNICIPALITIES
The following is the letter received by Hollister:
“Dear CDBG Interested Parties:
We want to make everyone aware of the current status of the CDBG regulation changes, and what will happen next.
On April 3rd, the Office of Administrative Law (OAL) issued a disapproval decision on the CDBG regulation change package. Pursuant to Government Code 11349.3, the decision lists specific changes needed, and which must be made available for a 15-day public comment. We have 120 days from the date of the decision to complete this comment period. The Department has worked with OAL to make these changes and, in the next couple of weeks, the regulations will be available for public comment. We will announce this opportunity using our Interested Parties List, the same as with this memo. As provided by Government Code 11349.4(b), new public comments to be considered by OAL will be limited to the changes resulting from the decision.
How could this affect the 2012 NOFA?
1. When the regulation amendments are approved and adopted, awards will be made in compliance with the new regulations.
2. If the regulation changes can’t be completed, the 2012 NOFA will be canceled, per page 2 of the NOFA.
We hope this clears up some of the questions we’ve been receiving. If you have further questions, please email Susan Naramore at [email protected] . We’ll try to respond as quickly as possible; please keep in mind, however, that we are headlong into rating and ranking, so response times may be a bit longer than usual.
Thanks for your patience,
Thomas Brandeberry
CDBG Section Chief”
