Despite Less Federal Funding, Union City's Community Development Block Grants Program Remains Steady

For the last two decades, Union City has received funding from the federal government to address a variety of  housing and community development needs for low and moderate income households. This year, however, the City will receive about 16 percent less money than it did last year.

The exact amount hasn't been finalized yet, according to Vern Smith, housing and community development coordinator, but he estimates the figure at $588,259 in entitlement funding for the Community Development Block Grant (CBDG) Program.

The CDBG funding comes directly to Union City each year from the U.S. Department of Housing and Urban Development (HUD).

HUD determines the amount through a formula which considers individual community needs, including population size and growth, the extent of poverty, housing overcrowding and age of housing stock.

Smith said the decrease has to do with across-the-board cuts to HUD programming for the upcoming fiscal year, but also because more and more cities are qualifying for the program, which means less money for each participating town.

But he said funding always fluctuates somewhat. Last year, for instance, Union City received an 8 percent increase over the previous year.

"It's always been a popular program with Congress," he said, so they try not to trim funding from it too much.

Union City's CDBG Program budget for 2011-12 won't experience any cuts overall because it also includes $24,000 in projected program income from rehabilitation loan payments and $141,041 from prior CDBG year funds that went unspent.

The City will have even more CDBG money to put toward low income and fair housing programs once its loan from HUD is paid off in 2017. The loan helped the City to construct the senior center.

"Then we'll have quite a lot more money to play with," Smith said. The loan currently accounts for the largest chunk of funding.

Smith said that for future years he is also considering getting rid of money dedicated to economic development. He said the $20,000 currently allocated to economic development activities in the Old Alvarado neighborhood will probably be the last.

"[$20,000] doesn't go too far these days," he said. "There are other soruces of funds that go a lot farther and have fewer regulations tied to them."

City Council approved the 2011-12 action plan for how the funds will be spent at is April 26 meeting. The plan includes funding for:

• Senior Project ($370,000): Repayment of Section 108 loan utilized for the development of the . The loan was given out in 1997 and will be paid off to HUD in 2017.

• Housing rehabilitation program($135,200): Rehabilitation of owner-occupied units for low-income households, available to residents city-wide, though the majority of participants in the program live in the Alvarado and Decoto neighborhoods. The program, which works in partnership with Alameda County, is divided into small grants for minor repairs, low-interest loans for major repairs and grants to mobile home units.

• Program administration ($122,400): Overall administration for the CDBG program, including monitoring project requirement and managing other eligible programs. It does not include staffing required to implement the plan.

• Public services ($95,700): Funding for Centro de Servicios, the oldest Hispanic social service agency in Southern Alameda County.  The agency provides translation, transportation for the elderly, Social Security screening, distribution of food and clothing, and other social services for low-income residents.

• Economic Development ($20,000): Economic assistance for targeted, blighted areas. The City has adopted an Economic Development Implementation Plan for the Old Alvarado area, including public improvement projects, architectural assistance and small business technical assistance "in an effort to stabilize and encourage the economy of the Alvarado neighborhood."

• Fair Housing/Housing Counseling Services ($10,000): Funding for Eden Council for Hope and Opportunity (ECHO), which provides tenant/ landlord counseling and mediation, information and referral, fair housing education, discrimination testing, housing counseling and a revolving loan fund for short-term financial assistance to low and moderate income households.

The plan must be submitted to HUD by May 15.  Though already approved by City Council, the public has until May 3 to comment on the plan.

This will be Union City's 24th year receiving CDBG grant funding. HUD has recognized the town as an entitlement city, which allows it to receive funding directly given its population and level of urbanity.

Read the action plan in full in the attached City Council Agenda. It begins on page 50.