DEPARTMENT: Physical Development Administration
FILE TYPE: Consent Information
TITLE
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Fiscal Year 2025 Countywide Community Development Block Grant Allocation Request
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PURPOSE/ACTION REQUESTED
Review potential Countywide Community Development Block Grant (CDBG) activity requests for Fiscal Year (FY) 2025.
SUMMARY
The CDBG program is a federal entitlement program that provides funds to communities to address community development needs that meet at least one of three National Objectives: benefit to low- and moderate-income persons; prevention or elimination of slums or blight; or meeting an urgent need. Congress determines CDBG program funding, and the Department of Housing and Urban Development (HUD) administers the program. HUD requires a Five-Year Consolidated Plan and subsequent Annual Action Plans. The Dakota County Community Development Agency (the CDA) administers the CDBG program on behalf of Dakota County (the County).
The County’s CDBG allocation for FY 2024 was $1,873,895. Because HUD has not released the grant amount for FY 2025, the FY 2024 allocation is used for planning purposes. Per the approved 2020-2024 Consolidated Plan, CDBG funds are distributed so that approximately 75 percent goes directly to Dakota County cities and townships, and approximately 25 percent goes to the County. The CDA incurs costs to administer the CDBG program, and the costs can be reimbursed by CDBG. These costs include CDA staff time, compliance requirements, and HUD-mandated programmatic responsibilities. The CDA proposes 12.5 percent or $234,237 to cover general grant administration costs, which will be deducted from the total grant amount, and the remaining portion will be distributed using the 75/25 split. Staff believes it is fairer to distribute the general grant administration costs among all CDBG recipients because the CDA must provide significant time overseeing and monitoring the municipal subrecipients. The amount to be split between the cities and the County totals $1,639,658, with $1,229,744 going to the cities and townships and $409,914 going to the County. CDBG funds are allocated to Dakota County cities and townships (including Northfield) based on a HUD formula that uses population, overcrowding (more than one person per room in a residential structure), and poverty levels. Cities with populations over 10,000 receive about 97 percent of the amount allocated to the cities and townships, or $1,199,813. Approximately three percent, or $36,959, is allocated to the smaller cities and townships in a competitive pool. This year only one small community applied for CDBG funding. The remaining funds reserved for small communities have been rolled into the CDA-administered Home Improvement Loan program.
The Countywide requests this year are for existing programs: $255,845 for the Home Improvement Loan program, $110,000 for the CDA-administered housing counseling program, $3,000 for fair housing compliance, and $60,000 for the County’s septic system and replacement program. If the County’s CDBG allocation is decreased, all Countywide activities will be reduced proportionally. If the County’s CDBG allocation is increased, all Countywide activities will be increased proportionally subject to statutory limits.
Staff expects to bring the draft Dakota County 2025-2029 Consolidated Plan and 2025 Action Plan to the County Board for review on March 25, 2025. The Countywide CDBG activities will be included in the Action Plan. A public hearing is anticipated for the County Board meeting on April 22, 2025, with final approval at the County Board meeting on May 6, 2025, if HUD has provided the FY 2025 allocation by that time.
RECOMMENDATION
recommendation
None. Staff is providing information to the Board to use FY 2025 CDBG funds for the following Countywide activities: $255,845 for the existing CDA-administered Home Improvement Loan program, $110,000 for the CDA-administered housing counseling program, $3,000 for fair housing compliance, and $60,000 for the County’s septic system and replacement program.
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EXPLANATION OF FISCAL/FTE IMPACTS
Dakota County’s FY 2025 CDBG allocation has not been released. The final allocations for activities may be modified depending on the final CDBG amount appropriated by Congress. This will be brought to the County Board as part of the review of the Dakota County 2025-2029 Consolidated Plan and 2025 Annual Action Plan.
☐ None ☐ Current budget ☒ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
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Information only; no action requested.
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PREVIOUS BOARD ACTION
None.
ATTACHMENTS
Attachment: Proposed FY 2025 Countywide CDBG Activities
Attachment: Five-Year History of County CDBG Allocations
BOARD GOALS
☒ A Great Place to Live ☐ A Healthy Environment
☐ A Successful Place for Business and Jobs ☐ Excellence in Public Service
CONTACT
Department Head: Erin Stwora
Author: Maggie Dykes