Anoka County’s CDBG funding allocations hit a snag

Allocations of funds from the federal Community Development Block Grant and HOME affordable housing programs are normally smooth sailing for the Anoka County Housing and Redevelopment Authority.

But not this year – at least in the public service category.

The problem was outlined by Karen Skepper, HRA executive director, and Kate Thunstrom, community development manager, at a work session of the HRA’s Management Committee, which other HRA members attended Feb. 11.

While CDBG funding 2014 has not yet been set at the federal level, it is projected to be “relatively flat” so staff has used the 2013 figure, $1,294,233, as the basis for 2014 allocations, according to Thunstrom.

Of that, $662,463 was placed in a competitive pool for project applications, $210,751 automatically goes to the city of Coon Rapids as an entitlement community because of its population under U.S. Department of Housing and Urban Development guidelines, $233,019 is earmarked for administration and $3,000 for fair housing activities.

That leaves $185,000, the maximum 15 percent of the grant allowed by HUD for public service programs.

The county received 13 applications totaling $403,188.35, but not one of them met the score threshold set by county staff for funding, according to Skepper.

In a report to the HRA Management Committee, Thunstrom wrote that there were two factors that contributed to the low scores.

• Applications did not address the HUD regulation that CDBG funding for public services can only be used for new programs or for a quantifiable expansion of services.

• Funding requests were received from public service agencies that will be serving persons that should be covered by the federal Affordable Care Act.

The need for applications to have new or expanded programs is stressed every year in the review process, according to Skepper.

But Becky Fink, executive director of Nucleus Clinic, one of the applicants, told the HRA that her interpretation after reading the HUD training manual and speaking with HUD officials differed from county staff on the issue of what new or expanding services meant.

In her view, the expansion of the program requirement can be met by the number of new people that are served by the agency’s programs each year; that is a question that is included in the reports agencies receiving CDBG dollars have to file with the county on a regular basis.

What Skepper and Thunstrom recommended and the management committee included in its action to forward the proposals to the full housing authority for a public hearing at its Tuesday, Feb. 25 meeting was to reject all public service applications, but leave the $185,000 as a placeholder that will allow staff to work with the applicants to address the concerns.

The county has until July to inform HUD to which agencies the $185,000 will be allocated, Skepper said.

In the meantime, supplemental questions will be developed to allow the public service organizations to provide more information that would raise their score and a mandatory meeting will be held with the agencies, according to Skepper.

The final recommendations for the public service funding will have to be presented to the HRA and then the Anoka County Board for action before July.

Funding recommendations for projects from the competitive pool include $65,168 for the Van Buren Street accessible home rehabilitation project in Blaine; $300,000 for Anoka County’s single-family home rehabilitation program, which is available countywide; and $200,000 for the city of East Bethel’s septic system update or replacement program in the Coon Lake Beach area.

For the HOME affordable housing program, the county is anticipating receiving a similar amount to last year, $365,383, of which 10 percent is allocated for administration. Three applications were received and one was recommended for funding.

Schuett Development LLC would receive $300,000 for a project to convert five floors of office space at 3989 Central Ave. NE, Columbia Heights, into 60 affordable senior apartments. The developer has to provide a 25 percent match, according to Thunstrom.

“That project was chosen because Schuett has site control, a HUD requirement for funding,” Skepper said. “That’s not the case with the two other two applicants.”

But there would be funding available from unused HOME funds allocated in prior years and returned to the county for the first applicant that provides documentation of site control, she said.

One is an Anoka County Community Action Program project to acquire land, demolish the current structures and build 30 rental units of affordable housing near 109th and University avenues in Blaine, while the other is from Twin Cities Habitat for Humanity to construct two building of five single-family townhomes each in the Huset Park neighborhood of Columbia Heights.

Following HRA approval Feb. 25, there is a 30-day comment period before consideration and action by the county board in April. The seven-member HRA comprises six members of the county board.

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