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Community Development Block Grant Overview

Community Development Block Grant (CDBG) Overview

The Community Development Block Grant (CDBG) is a federal program administered by the US Department of Housing and Urban Development (HUD). The CDBG Program has become the most important single resource for projects benefiting low-and moderate-income (LMI) households. CDBG investment into housing rehabilitation, energy conservation, job retention and creation, commercial and industrial development, assistance to public service organizations and neighborhood revitalization have dwarfed all other sources of funds. Formula communities, such as Provo, must develop their own locally targeted objectives (LTO's) and funding priorities.

CDBG-funded activities often include, but are not limited to: acquisition of real property, relocation and demolition, rehabilitation of residential and nonresidential structures, construction of public facilities and improvements (such as water and sewer facilities, storm drain improvements, street and sidewalk repair/replacement), economic development projects, parking structures, removal of architectural barriers, park improvements and equipment, child care, health care, education, job training, public safety, fair-housing counseling, recreation activities, drug-abuse counseling and treatment and the overall administration of the grant. In addition, fifteen percent (15%) of the total funds a city receives may be used to pay for public services within certain limits and for activities relating to energy conservation and renewable energy sources. CDBG funds may also provide assistance to profit-motivated businesses to carry out economic development activities.

After determining an activity is eligible and meets local objectives, the second step for an organization to be eligible for CDBG funding is verification that the total household income of those participating or receiving services is at or below a set income level. At least 70% of a community's overall expenditures must be used for activities that benefit LMI persons. HUD specifies how income benefit is to be measured for each type of activity.

As stated before, CDBG recipient communities are required to determine and establish their own LTOs and priorities in a five (5) year Consolidated Plan. Each year, HUD reviews all projects to determine whether the activities, services or projects funded are in harmony with this five-year Consolidated Plan. Currently Provo uses the following LTO's:
  • Provide economic and residential development opportunities in highly visible commercial and residential areas that are vulnerable to instability
  • Provide economic development opportunities in Provo's CBD that will create and retain jobs, relieve/prevent slums and blighting conditions while maintaining the historic character of the CBD. Encourage a mixture of uses including residential, retail, professional office, entertainment/hospitality and restaurants
  • Provide a range of programs that prevent or eliminate the negative effects of disinvestment in Provo's low-moderate income neighborhoods and provide opportunities for neighborhood-driven planning and improvements
  • Provide economic development opportunities for low-moderate income individuals in Provo City through job creation and retention
  • Provide a range of supportive social services programs that directly address the needs of the most under-served populations including the homeless, the elderly, the abused and persons with disabilities

Public service organizations must demonstrate that their use of CDBG funding will either provide a new service or provide a quantifiable increase in the present level of service above that which has been provided with state or federal funds in the previous twelve months. Activities, services or projects that can meet more than one of these local objectives and priorities can be given higher consideration.

Each year the Provo Municipal Council establishes a CDBG Citizens Committee to review public services proposals. Provo receives project proposals each fall. Committee members are predominately chosen from the established neighborhood representatives. LMI census tracts are represented. Members are then given the task of reviewing all applications, individually and collectively, to determine the activities, services and projects that can provide Provo residents the best possible benefit and biggest impact to the LMI residents of Provo. After the committee completes its review, the committee presents their funding recommendations to the Provo City Council. The CDBG Committee Members generally meet once a week for several hours over a period of 10 to 12 weeks in late fall/winter. Time is spent each week exchanging information, reviewing applications and meeting with all applicants. Each applicant is required to make a short 15-minute presentation and answer program-specific questions the citizens committee may have.

Some of the specific criteria used by the CDBG Citizens Committee to screen each potential applicant, as suggested by HUD, are as follows:

Objectives:
  • Principally benefits LMI persons
  • Prevents or eliminates slums and blight
  • Addresses an urgent need or problem in the community
  • Does the applicant’s request meet at least one of the local objectives and priorities established in the Consolidated Plan provided to HUD
  • Is this a duplication of services offered by another applicant
  • Does the applicant have experience with CDBG related activities and or subsequent experience with other grant programs and a proven record in providing similar activities within the community
  • Does the applicant have financial capacity as indicated by audited financial statements and banking/credit references
  • Does the applicant have the financial stability (not total dependence on CDBG Funds) as indicated by funding sources and amounts over time. Activity or service will not require on-going or continued CDBG funding
  • Does the applicant have the necessary trained or adequate staffing to deliver the proposed service or activity (number and qualifications)
  • Does the applicant have the overall organizational strength, including such items as:
    • established record keeping methods
    • filing system
    • financial systems
    • existence of written procedure manuals for financial management and personnel
    • has the applicant become too dependent on CDBG funding through the continued seeking and/or receiving of CDBG funds as a major funding source for the operation of the program
    • has the applicant specifically listed how funds will be used (line-item budget) and how the National Objective will be met
    • how did, or will, the organization determine LMI compliance
    • has the organization realistically estimated the number of LMI individuals benefiting from their service or project
    • is a special clientele or minority group served
    • has the Public Service Organization detailed how CDBG funding will provide a quantifiable increase in service or a new service, potential benefit and impact to the City and residents, especially LMI individuals and families
Activities, services or projects that provide a higher level of potential benefit and impact to Provo residents are usually given higher consideration.

After receiving committee funding recommendations and holding public hearings, the Municipal Council makes the final decision on which activities to fund in the coming fiscal year (i.e., beginning July 1).

Public Service Organizations and Activities (maximum allowed 15% of total grant)
GOAL: To improve and maintain the quality of social services, projects and programs available to low and moderate-income residents of Provo. Eligible activities include, but are not limited to, the following:
  • Child care - Job and employment training
  • Recreational programs
  • Educational programs
  • Public safety services
  • Fair housing activities
  • Services for senior citizens
  • Energy conservation
  • Programs to address gangs - Crime prevention
  • Drug abuse and counseling programs
  • NeighborWorks Provo (NWP)
  • Services to abused (physically or sexually) children and spouses
  • Services for homeless families or individuals time-consuming process