The future of CDBG

Here is a note that I had staff send to the City Council.  Rochester gets about $500k annually in Community Development Block Grants (CDBG) funds to use as we see fit.  I don’t think that we waste the dollars, but I do think we could be more effective.

Mayor and Council,

I am not 100% sure that I will be at Monday’s meetings as I have been ill for a couple of days now.  I might have gotten food poisoning from eating too much crow lately.  Everyone knows that I have never been a fan of our current CDBG process.  Here are my 2 cents on the issues and some suggestions.

Issues:

1)   Leveraging investments – Fiscally responsible investors would want to maximize the return on their investment, but we really never consider how many additional dollars will invested in a project.

2)   Public Service Requests – We aren’t qualified to determine relative impact and investment.  Bias toward familiarity and those who contact us is pretty evident.

3)   Leaves politicians in the position of saying “no” to organizations that do great work in our community and have need.

4)   Too many recipients – this limits effectiveness and creates an administrative headache.

Suggestions:

1)            Limit beneficiaries to just a few.

2)            Wait on possible suggestions from Olmsted County Housing Summit.

3)            Focus heavily on rewarding leverage with grants.  For example offer $50 – $100k competitive grants for whoever has the best development including workforce housing.  $100k is better spent to help start a $5 million development than for operational funds in my opinion.

4)            Focus on long-term capital investment and not year-to-year operational items.

5)            If we must give grants to public service requests (this is unusual), do so through the United Way who is far better at measuring need and impact than we are.  See issue #4.

Continue:

1)            Investing in the home rehab fund.  Because we are now charging an interest rate to keep up with inflation, this fund will continue to serve our Community into the future.  Staff had some concerns, none of them ended up being an issue.  We should keep the interest rate s on loans sufficient to cover inflation so we don’t lose value.

2)            I appreciate the discussion, but I would not support taking away funds from any organization that was to receive them in round 1.  I also do not support adding funds to additional organizations given that our number is already too high.

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