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Public Services, and Administration (Attachment C); and 3. The implementation of <br />a two-year and three-year funding cycle for CDBG Public Services allocations to <br />align with the five-year Consolidated Plan period <br /> <br />BACKGROUND <br /> <br />2025-2026 CDBG Funding Allocations <br />On May 14, 2025, the City received notification from HUD regarding its FY 2025- <br />2026 CDBG allocation. The City anticipates receiving $765,834 in FY 2025-2026 <br />CDBG entitlement funds and plans to utilize an additional $408,959.35 in prior year <br />unexpended funds. In total, the City expects to have approximately $1,174,793.35 <br />in CDBG funds available for eligible activities. <br /> <br />The FY 2025-2026 CDBG funding allocations are based on HUD’s final allocation <br />formula and are subject to City Council approval. In addition, the City has adopted <br />a CDBG Contingency Plan (Attachment D) to address any potential increases or <br />decreases in HUD funding. A detailed funding breakdown is provided in the table <br />below. <br /> <br />General Fund Reserve <br />On March 17, 2025, the City Council adopted Resolution No. 2025-028, which set <br />aside 20% of the unallocated FY 2023-2024 unspent General Fund- totaling <br />$183,187- in a separate reserve account. This reserve was established as a <br />safeguard if CDBG Public Services funding was withheld from the City. Based on <br />the current HUD allocation for FY 2025-2026, it now appears that use of these <br />designated General Fund reserves will not be necessary. The City anticipates <br />releasing these reserve funds at the close of FY 2025-2026. <br /> <br />ANALYSIS <br />2025-2029 CDBG Consolidated Plan <br />Every five years, the City is required to undertake a planning process to determine <br />how future CDBG entitlement funds will be invested. As part of this effort, the City <br />conducted a comprehensive community outreach process that included <br />distribution of a Priority Needs Survey to both stakeholders and the general public, <br />promotional email blasts, website postings, social media outreach, a public <br />FY 2025-2026 CDBG Budget (est.) <br />Entitlement Amount $765,834 <br />Prior Year Unexpended Funds (FY 23-24 & FY 24-25) $408,959.35 <br />Total $1,174,793.35 <br />Administration (20%) $153,166.80 <br />Public Services (15%) $114,875.10 <br />Public Facilities & Improvements (65% + unexpended <br />funds) <br />$906,751.45 <br />Total $1,174,793.35