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Program C: Community Development Block Grant Program

Program Authorization: Title I of the Housing and Community Development Act of 1974 as Amended

 

PROGRAM DESCRIPTION

The mission of the Community Development Block Grant (CDBG) Program is to provide financial assistance to units of general local government in non-entitlement areas of the state for the development of viable communities by providing decent housing and a suitable living environment and expanding opportunities, principally for persons of low-to-moderate income, in accordance with federal statutory requirements and within the framework of the Division of Administration's mission. Non-entitlement areas are municipalities with a population of less than 50,000 and parishes with an unincorporated population of less that 200,000. There are currently 340 local governing bodies in Louisiana that meet this definition.

The goal of the Community Development Block Grant Program is to improve the quality of life of the citizens of the State of Louisiana, principally those of low and moderate income, through the effective administration of the Louisiana Community Development Block Grant Program.

The Community Development Block Grant Program was created in 1974 under Title 1 of the Housing and Community Development Act. Two different programs were created by this act: (1) the entitlement program, which guarantees an annual allocation to metropolitan cities and urban counties, and (2) a non-entitlement program, which is referred to as the small cities program. Both programs were initially administered by the U.S. Department of Housing and Urban Development (HUD). Because of the continuing criticism among small cities that HUD was not being responsive to their needs, President Reagan, as part of the "new federalism" platform, gave the states the option of administering the small cities program. This option was intended to give state and local governments greater flexibility and more discretion in addressing specific needs at the local level. The State of Louisiana assumed the administration of the small cities program in 1982.

Each activity funded under the LCDBG Program must meet one of the following two national objectives: (1) principal benefit (at least 60%) to low and moderate income persons, and (2) elimination or prevention of slums and blight. There are a variety of activities eligible for funding under the LCDBG Program; these include housing rehabilitation, public facilities (infrastructure improvements such as water, sewer, gas, and streets), community centers, parks, social programs, and economic development (assistance to for-profit businesses). Each state was allowed the flexibility of determining its priorities from that range of eligible activities. Since the inception of Louisiana's program, input has been sought from officials with the local governing bodies by means of surveys, public hearings, and written comments on proposed plans. That input has been used in the establishment of program priorities. Selection and rating systems for the review of the LCDBG applications were designed to ensure that the national objectives and goals of the state will be met and that the most severely needed projects are funded.

The distribution of LCDBG funds by program category is evaluated each two-year funding cycle. Through the previously described methods, the Division of Administration's Office of Community Development (the organizational unit responsible for the LCDBG Program) solicited comments and suggestions prior to designing its FY 1996 and FY 1997 programs. As a result, the majority of the state's LCDBG funds were allocated to public facilities (including demonstrated needs projects that fund emergency projects); funds were also allocated for economic development and housing. Beginning with the FY 1996 LCDBG Program and continuing with the FY 1997 LCDBG Program, monies were also allocated for a pilot project (Comprehensive Community Development Fund). In addition to addressing infrastructure, housing, and economic development needs, the pilot program allows for financial assistance to address social service and planning needs.

Street improvements and water and sewer projects were identified as the highest public facilities priorities of the local governing bodies. Therefore, they were identified as the top priorities under the FY 1996 and FY 1997 LCDBG programs. The percentage distribution of funds among the public facilities priorities (subcategories) is based upon the number/percentage of applications received and the amount of funds requested for each priority. Half of the funds are distributed based on the percentage of applications received in each subcategory and half on the basis of amount of funds requested in each subcategory.

The LCDBG Program is very competitive because the amount of funds requested annually always far exceeds the amount of funds available. For example, under the FY 1997 program, there were 205 applications requesting approximately $109.4 million for public facility projects. However, there was only $26 million available to fund approximately 55--or one out of every four--public facility applications. Because of this, the Office of Community Development has designed a rating/point system to target the most severely needed projects. The highest ranked applications are funded to the extent that monies are available.

OBJECTIVES AND PERFORMANCE INDICATORS

1. In FY 1998-99, the Community Development Block Grant Program will complete work elements required to receive annual Community Development Block Grant (CDBG) allocation from the U.S. Department of Housing and Urban Development (HUD).

1 Corresponds to the FY 1998 Louisiana Community Development Block Grant federal allocation/program year (June 1, 1998 - May 31, 1999).

2 Represents action taken during one state fiscal year in order to receive the federal funding allocation for the forthcoming state fiscal year. For example, in 1995, HUD revised the states' application process to include a consolidated planning process involving a five-year strategic plan, annual action plans, and annual performance reporting. If the CDBG Program fails to prepare the documents required by HUD, Louisiana will be denied its federal funding.

Explanatory Note: The CDBG program years do not correspond with the state's fiscal years. For example, the FY 1998 CDBG program year (FY 1998 federal allocation) covers the period of June 1, 1998, through May 31, 1999; therefore the accomplishments for the FY 1998 CDBG allocation will we reported for the state's fiscal year ending June 30, 1999. Also, the CDBG Program will undertake tasks relating to one federal funding allocation during two state fiscal years. For example, the state will submit the documents for the receipt of the FY 1998 federal funding allocation during the state's fiscal year ending June 30, 1998, but the award and administration of those FY 1998 funds will occur primarily during the state's fiscal year ending June 30, 1999.

2. In FY 1998-99, the Community Development Block Grant Program (CDBG) will obligate 95% of the CDBG federal allocation within 12 months of receipt from the U.S. Department of Housing and Urban Development (HUD), in a cost-effective manner, which results in the greatest number of persons benefiting and/or jobs created per dollar.

1 Corresponds to the FY 1998 Louisiana Community Development Block Grant federal allocation/program year (June 1, 1998 - May 31, 1999).

2 The Community Development Block Grant Program has limited control over these accomplishments, which are determined by actions of local governing bodies.

3 The Community Development Block Grant Program will not fund a grant request if the cost per job exceeds $10,000. This factor is considered with economic development applications are evaluated.

Explanatory Note: The CDBG program years do not correspond with the state's fiscal years. For example, the FY 1998 CDBG program year (FY 1998 federal allocation) covers the period of June 1, 1998, through May 31, 1999; therefore the accomplishments for the FY 1998 CDBG allocation will we reported for the state's fiscal year ending June 30, 1999. Also, the CDBG Program will undertake tasks relating to one federal funding allocation during two state fiscal years. For example, the state will submit the documents for the receipt of the FY 1998 federal funding allocation during the state's fiscal year ending June 30, 1998, but the award and administration of those FY 1998 funds will occur primarily during the state's fiscal year ending June 30, 1999.

3. In FY 1998-99, the Community Development Block Grant Program will administer the CDBG Program in an effective and efficient manner (as measured by the number of audit findings received from HUD and/or Louisiana legislative auditor, and ratio of unexpended funds to previous allocation).

1 Corresponds to the FY 1998 Louisiana Community Development Block Grant federal allocation/program year (June 1, 1998 - May 31, 1999).

2 HUD requests that each state annually drawdown or request funds on its letter of credit in an amount at least equal to its annual grant and to eventually reach a ratio of the unexpended grant balance (just prior to the receipt of the next grant award) to the most recent annual grant amount of not more than 1.5. However, the Community Development Block Grant Program has limited control over this accomplishment, which is determined by actions of local governing bodies.

Explanatory Note: The CDBG program years do not correspond with the state's fiscal years. For example, the FY 1998 CDBG program year (FY 1998 federal allocation) covers the period of June 1, 1998, through May 31, 1999; therefore the accomplishments for the FY 1998 CDBG allocation will we reported for the state's fiscal year ending June 30, 1999. Also, the CDBG Program will undertake tasks relating to one federal funding allocation during two state fiscal years. For example, the state will submit the documents for the receipt of the FY 1998 federal funding allocation during the state's fiscal year ending June 30, 1998, but the award and administration of those FY 1998 funds will occur primarily during the state's Fiscal Year ending June 30,1999.

RESOURCE ALLOCATION FOR THE PROGRAM

SOURCE OF FUNDING

This program is funded with state general fund and federal funds. The federal funds are derived from the U.S. Department of Housing and Urban Development.

ANALYSIS OF RECOMMENDATION

GENERAL FUND

TOTAL

T.O.

 

DESCRIPTION

 

 

 

 

 

$376,657

$77,227,133

17

 

ACT 18 FISCAL YEAR 1997-1998

 

 

 

 

 

 

 

 

 

BA-7 TRANSACTIONS:

$0

$0

0

 

None

 

 

 

 

 

$376,657

$77,227,133

17

 

EXISTING OPERATING BUDGET - December 10, 1997

 

 

 

 

 

($7,927)

($855)

0

 

Equipment/Major Repairs Adjustment(s) (Non-recurring: -$7,927)

$0

$15,224

0

 

Annualization of 1997 -'98 Merit Pay Adjustment(s)

$18,446

$18,446

0

 

1998 -'99 Merit Pay Adjustment(s)

$0

($9,398)

0

 

Attrition Adjustment(s)

($506)

($506)

0

 

Retirement Rate Adjustment(s)

$0

($26,728)

0

 

Reductions in various Expenditure Categories; Including Reductions to fully fund Salaries

$6,214

$11,299

0

 

Risk Management Adjustment(s)

$785

$785

0

 

Training Series/Career Ladder Adjustment(s)

 

 

 

 

 

$393,669

$77,235,400

17

 

TOTAL RECOMMENDED

 

 

 

 

 

$17,012

$8,267

0

 

DIFFERENCE (TOTAL RECOMMENDED AND EXISTING OPERATING BUDGET)

The total means of financing for this program is recommended at 100.0% of the existing operating budget. It represents 99.9% of the total request ($77,270,765) for this program.

PROFESSIONAL SERVICES

$26,000

 

Other Professional Services to facilitate workshops and provide handbooks to sub-recipients

$40,000

 

To provide technical assistance to communities in the state

 

 

 

$66,000

 

TOTAL PROFESSIONAL SERVICES

OTHER CHARGES

$76,170,089

 

Community Development Block Grants for local communities

$45,856

 

Legislative Auditor

 

 

 

$76,215,945

 

TOTAL OTHER CHARGES

 

 

 

 

 

Interagency Transfers:

$1,985

 

Department of Civil Service

 

 

 

$1,985

 

TOTAL INTERAGENCY TRANSFERS

ACQUISITIONS AND MAJOR REPAIRS

$15,000

 

Replacement of 5 personal computers due to age and technology

 

 

 

$15,000

 

TOTAL ACQUISITIONS AND MAJOR REPAIRS


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