Strategies to Improve Timeliness of Expenditure of Federal Grant Funds

Housing and Neighborhood Services CommitteeJune 2, 2020

Presented by Barbara Asbury, Compliance and Planning Manager, Neighborhood Services Dept.

Why is a Proactive Timeliness Policy Needed?

• Delay in implementation of some projects and activities

• Unexpended funds create HUD compliance and reporting challenges

• Meeting HUD’s timeliness guidelines requires that all projects “keep moving”

• Make most effective use of limited resources

2

1. Prevent issues with Timeliness of Expenditure of funds• No more than 1.5 X CDBG grant award can

be in City’s line of credit, 60 days before next program year

• HOME funds must be spent within 5 years of receipt from HUD

2. Align use of “old” funds with most recent City Council and Consolidated Plan priorities

3. Ensure accountability of entities that were awarded funds in prior years

4. Prevent HUD reporting and compliance issues that arise as a result of recent IDIS software enhancements

3

Purpose and Goals

Previous Timeliness Issues • HOME and CDBG Programs

• Frequent “last minute” meeting of HUD deadlines

• HUD Warning letters - 120, 90, 60, 30 days prior to deadline• 2019 – Met CDBG deadline 40 days in advance• 2018 – Met CDBG deadline 10 days in advance

4

Examples of “Old” Projects/Activities

5

Project/Activity Name Year of Award

Amount of Funds Status Notes

Historic Carver Heights Model Block 2007 $172,000: CDBG Resolved Reprogrammed to Habitat Preserve A Home in 2019-20

Carver Heights East Model Block 2003 $ 23,000 CDBG Resolved Reprogrammed to Habitat Preserve a Home in 2019-20

Fire Station No. 10 Rehabilitation 2014 $400,000: CDBG Resolved Reprogrammed to Capps Park & Cantey Street Improvements in 2019

Stop Six Reads & Rights, Tutoring 2019 $45,000 (CDBG PSA) Resolved Funds not spent as of January 2020, Reprogrammed to AB Christian Learning Center in February 2020

Unexpended HOPWA Funds 2018 $97,108 ResolvedUnexpended balances; Reprogrammed to AIDS Outreach Center STRMU and City Community Action Partners TBRA in March 2020

Stop Six Model Block, Single FamilyInfill New Construction 2006 $740,000: HOME Pending

Delays due to: Neighborhood Design Preferences; SF Const. Cost concerns; Internal org. & Staff changes; Current Status:NSD seeking private developer partner.

Samaritan House PSH 2018 $500,000 HOME Postponed Funds “swap” with New Leaf PSH project, moving forward commitment to 2021 Action Plan

Atlantic Housing/ Manitoba Apts. Rehabilitation 2018 $556,000 HOME Pending Developer sold property; proposed move of

funds to different location but no action taken

Current Process for Reallocation of “Old” Funds

Informal -- non-standard

Inconsistent (depending on neighborhood or project type)

Moves slowly

Public services (15% set-aside): May underutilize scarce social services funding

6Fire Station 10

Proposed Reprogramming Process

•Identify “Old” Projects

•Assessment of:•Project Priority•Status of City Expenditure

•Project Status

January•Consult CMO•Notify Partner Entity of Intent to Reprogram funding

•Present Options to CDC

February

CDC Recommendation:•Include funds in new Action Plan; OR

•Immediately Reprogram to new activity

March/April

7

Assessment Process / Definition of “Old” Funds

8

CDBG Public Services “Old” FundsNo funds expended in

first 3 months of contract

Major Projects “Old” FundsProject not initiated

within 12 months of awardInformation not

submitted for Environmental Review

De-obligation of Public Services Funds Funds “lost” for Social Service

purpose if not used timely Requires termination of PSA

Contract Urgent need for human

services funding Lengthy process (at least 60

days) Transfer funds in order to

increase services from alternate high performing agency

9

SummaryReprogramming / Timeliness Policy

CDC Approval

Standard annual review of projects

Ensures timely use of limited PSA funds

Creates additional transparency around reprogramming of HUD grant funds

Next Steps• Brief partner entities

• Finalize written policy/procedure for internal training purposes

11

Questions?