CDBG

Community Development Block Grant (CDBG)

The Community Development Block Grant Program (CDBG) was created by Title I of the Housing and Community Development Act of 1974 as amended (42 U.S.C. 5301 et seq.) The CDBG Program was the distillation of several former categorical grants that were administered by the U. S. Department of Housing and Urban Development (HUD). Under the Act, the funding was divided into two categories:

Monessen falls under the Small Cities Category. Small Cities are those that are not metropolitan cities, but that meet certain criteria and are not participating in an Urban County CDBG Program. In Pennsylvania, the PA Department of Community and Economic Development (DCED) administers the Small Cities Program. In Westmoreland County, there are five municipalities that have, by HUD definition, “Opted-Out” of the Westmoreland County CDBG Entitlement Program. Monessen is one such community that has opted out, and receives its own CDBG funds, annually.

Typically, Monessen uses the bulk of CDBG funds for road paving and demolition, but the funds can be used for other community development projects, too. These include but are not limited to: youth programming, planning, zoning projects, among others.

The annual CDBG appropriation is allocated to each entitlement predicated upon a formula, which works, basically, as follows: There are three criteria for distribution of funds:

1. Total population of the community (in this case Westmoreland County and the population is based on the participating municipalities; Opt-Out community population is not part of the formula);

2. Total population that has incomes below specified levels;

3. The number of pre-1940 housing units located in the community (the number of housing units constructed prior to the year 1940) and this criteria is a proxy for an indication of poverty. The Westmoreland County Department of Planning and Development (WCDPD) has been distributing CDBG funds to the participating municipalities in the program utilizing the same formula system that HUD uses to distribute funds to entitlements with one exception and that is that each municipality will receive, at a minimum, $15,000 per allocation period or three year cycle. These three year cycles coincide with the HUD three year certification of Urban County Eligibility. According to the statute, Urban Counties must be recertified every three years as to their meeting the criteria for participation in the CDBG Program. In order to determine the activities that the participating municipalities would like to have funded in the three year cycle, the WCDPD staff visits each participating municipality during the summer preceding the beginning of the next three year cycle. These site visits consist of consultation with the elected officials and the appointed staff. An overview of the CDBG Program and the municipality’s prospective projects are reviewed and any changes in the program rules and regulations are discussed.

Each CDBG Entitlement Program has a designated program year. The program year for the Westmoreland County CDBG Entitlement Program begins May 1st and ends April 30th of the following calendar year. The CDBG yearly Annual Plan is submitted in mid-March to HUD. The Annual Plan is a reflection of a yearly program to meet the needs designated in the Five (5) Year Consolidated Plan.

The CDBG Program provides a wide area of local discretion as far as the range of eligible activities is concerned, however, the CDBG Program requires that any activity undertaken with the CDBG assistance, in whole or in part, must meet one of the three statutory national objectives. All projects and activities must:

1. Principally benefit low and moderate income persons;
2. Aid in the prevention or elimination of slums and blight;

3. Meet other community development needs having a particular urgency. Because of local HUD interpretation of number 3 above it is virtually impossible to utilize national objective number 3. The Westmoreland County CDBG Entitlement Program has only done one project under the urgent need national objective since the inception of the program in 1974. A further elaboration on the above material is available if requested.

After the CDBG Annual Plan is submitted to HUD it is subject to examination by HUD to determine whether the activities programmed are appropriate because of the nature and severity of the needs of low and moderate-income persons in relation to the general needs of the community. HUD has placed the responsibility on Westmoreland County for ensuring that each activity carried out with CDBG funds is eligible and meets the required statutory requirements.

Not less than 70 percent of the CDBG assistance expended during a program year shall be used for activities that benefit low and moderate-income persons. This is a statutory requirement and a violation of this requirement could lead HUD to make a determination that the grantee does not have sufficient administrative capacity to operate a CDBG Program. Not more than 20 percent of CDBG assistance received can be utilized for the administrative costs of the program.

On average, Monessen receives between $250,000 and $400,000 annually, for its CDBG program.