Despite a broad list of eligible activities for the money
– such as using it on sewer and street repairs – the City of
Hollister’s inability to spend a long-existent pool of $722,000 in
federal block grant funds has prohibited the municipality from even
applying for annual awards. San Benito County, meanwhile, has
reaped million of dollars through the
years while continuing to regularly seek the allocations.
Despite a broad list of eligible activities for the money – such as using it on sewer and street repairs – the City of Hollister’s inability to spend a long-existent pool of $722,000 in federal block grant funds has prohibited the municipality from even applying for annual awards. San Benito County, meanwhile, has reaped million of dollars through the years while continuing to regularly seek the allocations.
Hollister has the $722,000 remaining from old federal block grants – and repayments the city received from loans given out in the mid-1980s, said Bill Avera, director of the Community Development Department.
City officials have made few attempts through the years to actively take part in the annual CDBG process. The pool of non-allocated funds – which Hollister must spend before the state will allow any new applications – remains from several grants awarded by the federal government in the mid-1980s. They included funding for housing rehabilitation involving loans to homeowners and the renovation of the old Farmers & Merchants building at Fifth and San Benito streets, now Wells Fargo bank, Avera said.
When those loan recipients paid back the city, most recently in 2002 when the Farmers & Merchants building sold, Hollister collected what became an account with about $1 million in it. Throughout the years, particularly in the mid-1990s, city officials made some attempts to receive CDBG funding. Avera mentioned an application for a youth center grant and another for an Alzheimer’s adult daycare, but it wasn’t until 2004 when they approached the state about the pool of money and were told that the funds had to be allocated toward CDBG-eligible activities before applying again.
The state asked the city to develop a “re-use plan” for the funds. Hollister officials did so, designating 25 percent to housing, 25 percent to community organizations and another 50 percent to economic development. Since that time, Avera said, the city did five housing rehabilitation projects and donated about $200,000 to Community Food Bank for promotion – covering two areas in the re-use plan.
Officials have not, though, found a way to spend the remaining amount largely designated toward economic development, even during a severe recession, while struggling with annual deficits and while facing a prospective zero balance in the general fund reserve within two years.
Avera contended that CDBG guidelines from the state – which receives the federal allocation and disburses it each year – are complex and that the applying jurisdictions must “be able to demonstrate that the folks benefiting from the CDBG money are the folks the state wants us to help.”
He was referring to CDBG rules, and accompanying formulas, which target areas affecting a majority of poverty-stricken or lower-income residents.
About 70 percent of the overall CDBG funding each year gets allocated to what are called “entitlement” cities and counties, which are urban or metropolitan areas. Both Hollister and San Benito County are considered “non-entitlement” communities – cities with populations under 50,000 and counties under 200,000 are eligible – and must apply with the others for remaining funds. Avera stressed that the competition is tight for awards, with a limit of $800,000 for each in the state’s latest available CDBG report online.
Still, to get to that application process, the city merely has to spend the money it has had designated toward economic development since 2004.
“It’s not just freebie money,” Avera said. “Even though there is some economic development-type money, that money still has to be loaned to people.”
Avera, however, acknowledged that projects don’t require private-sector partners, how the city can formulate its own ideas – without the use of loans – which may fit the CDBG criteria.
When asked to estimate the number of credible projects officials have discussed since 2004, he responded: “Total legit ideas? We’ve probably only had five or six.”
While the city has been largely inactive in the CDBG process, the list of eligible activities for the money is broad and includes such categories as street maintenance, health care, job training, senior citizen services, transportation services and an array of others, according to the state report for 2010-11 funding.
A federal listing on eligible CDBG activities for use of economic development funds also notes such public infrastructure improvements as work on sewer lines, streets, storm drains and business incubator facilities – as long as they benefit specific business expansion or retention projects.
There is one previously broached expenditure idea for the remaining funds, Avera said. He pointed out how the money currently designated for economic development – with no associated time frame – would “probably, ultimately” go toward a project at the Hollister Municipal Airport.
And although there has been little progress in spending the remaining city funds, San Benito County regularly has received the CDBG funds. Since 1999, the county has obtained federal block grants each year except for two, in 2006 and 2007, according to a county report on the funding provided by Enrique Arreola, deputy director of the health and human services department.
Since 1996, San Benito County has received about $5.9 million in CDBG funds, according to the document. In more recent years, much of the county’s money has gone toward support of community organizations such as the homeless task force, the Emmaus House, the food bank and the YMCA. Other projects in recent years have included job-training vouchers, rental assistance, and work to water lines and fire hydrants at the Southside Road migrant center.
Avera contended that it is easier for the county to document the affected residents as having lower incomes, and that is why San Benito has had more success.
In recent years, Avera said staff officials with the Hollister Redevelopment Agency – which the city has designated to oversee the funding – have updated the council during each budget cycle about the status of the CDBG money. Councilman Doug Emerson has taken a particular interest in the topic and makes a habit at meetings of asking about any progress, Avera said.
Emerson last week noted how the city hopes to become eligible for the next funding cycle, for 2012. He also said the city needs to file financial reports for the last five years.
Emerson hopes the city and county can work together on applications to better the community’s chances of getting money.
“Between the two jurisdictions, we would make sure we are complementing each other and not competing.”
Mayor Pauline Valdivia, who has been on the council since her election in 1998, did not return phone calls seeking comment.
To read a recent CDBG application with guidelines for California, go here.
ELIGIBLE USES FOR CDBG
PROGRAMS: Child care, health care, crime prevention, job training, recreation programs, education programs, fair housing counseling, credit counseling, public safety, services for seniors, services for the homeless, drug and alcohol abuse counseling, transportation, nutrition services, energy conservation counseling, emergency assistance payments, code enforcement
PROJECTS: Public facilities, rehabilitation of multi-family projects, public improvements, public improvements in support of new construction, housing new construction (very limited), property acquisition
