Carryover funds explained at CDBG hearing

By Craig Kelly -

LIMA — When it comes to money for the city of Lima from the Community Development Block Grant, the reserves have been used up.

That was the message from the city’s finance director, Steve Cleaves, during a CDBG public hearing held Monday during the Lima City Council meeting. During his presentation, Cleaves displayed graphs showing that while new grant funds from the CDBG to the city have remained relatively stable during the past five years, staying within a range of about $200,000, the amount of carryover from previous funds have diminished from a high of more than $969,000 in the 2011-12 fiscal year to less than $78,000 this fiscal year.

Much of that drop in carryover funding came this past fiscal year, when there was more than $663,000 of carryover funds available, with much of that funding being used up in two areas.

“Most of the catch up was in streets and curbs,” Cleaves said. “It went from about $262,000 down to just over $2,000. Most of the other amount was in housing demolition that was completed in this last fiscal year.”

The amount of carryover for housing demolition last fiscal year was more than $155,000, with more than $152,000 used up that year.

Cleaves also emphasized that funding from the CDBG comes with much stricter requirements than in years past, using up more administrative costs. Reporting to the U.S. Department of Housing and Urban Development, the agency behind the block grant, has increased from once a year to four times a year since 2002, with more stringent project eligility standards and monitoring requirements.

“The administrative part of this keeps growing and growing, even as the allocations come down,” he said. “Should we fail to either have projects that the applicants are capable of completing or should we not have the capacity to effectively monitor those projects and satisfy the reporting requirements, HUD can call back those funds from our general funds, including the money that we’ve already spent.”

Community Development Director Amy Sackman Odum appreciated Cleaves and the Finance Department bringing this to light and was hopeful this presentation would help foster better public understanding of how carryover funds work.

“It’s a matter of timing,” she said. “The fiscal year runs from Oct. 1 to the end of September, but paving projects aren’t often done until late in the fall. So when it shows they may have this huge carryover, in reality, they may have spent that last year.”

No ordinances were passed by City Council on Monday, as Council President John Nixon and council members Jesse Lowe II and C. Ann Miles were not present.

By Craig Kelly

Reach Craig Kelly at 567-242-0390 or on Twitter @Lima_CKelly.

Reach Craig Kelly at 567-242-0390 or on Twitter @Lima_CKelly.

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