CHEYENNE, Wyo. — After almost 50 years, Cheyenne will no longer accept federal entitlement grants to fund local housing and community projects.
During the Finance Committee’s Wednesday’s meeting, councilmembers authorized a resolution allowing the city to decline the Community Development Block Grant, or CDBG, Entitlement Grant and phase out of the program after 2024.
Created by the U.S. Department of Housing and Urban Development, or HUD, the CDBG program provides annual grants to cities and counties, assisting them with any housing and community development projects for low- and moderate-income populations.
Cheyenne received its CDBG status in 1975 and has been the only entitlement city in Wyoming since 2017. The funds are administered to Cheyenne through the Wyoming Community Development Authority, or WCDA, and city staff then allocate the money to the community.
Grants are usually used to create affordable housing for low-income households, assist with nonprofit projects and help Cheyenne residents with home repairs such as lead paint removal, according to Renee Smith, the city’s grants manager and CDBG program supervisor.
Citing growing concerns from city staff regarding the federal program’s restrictive eligibility, compliance and reporting requirements, officials announced their intentions to decline the program in a December 2022 resolution.
It was referred to the committee during the city council’s Dec. 27 meeting for recommendation.
On Wednesday, Mayor Patrick Collins and Smith elaborated on these concerns to committee members while Erin LeBlanc from the Laramie County Senior Center — a recipient of the program — urged them to consider the financial strain the declination would have on local organizations.
CDBG Risks and Rules Raise Concerns
Starting off the discussion, Collins said that ironically, the CDBG program puts the city in financially risky situations.
He explained the city can be debarred from all kinds of federal funding if HUD ever disapproved of staff’s handling of project funds.
“When that happens, now [funding for] the fire department, police department any homeland security grants, all those things become at risk,” Collins said. “I just think the risk of that type of a situation is more than I’m comfortable taking.”
In addition to the risk of being debarred, Smith added that if a local project is approved by staff but later deemed ineligible by HUD, the city must use its own funds to reimburse the department.
The situation has happened multiple times in the past.
“In the last two years, we had to use city funds to reimburse HUD on three occasions for determination of ineligible services, a canceled activity and overextending approved program administration dollars,” Smith said. “While these were not high-dollar amounts, the potential risks are very high.”
On the other hand, if the city is unable to spend a majority of its CDBG dollars by a certain deadline, they have to return them to HUD.
Smith said this is looking to be the case for the 2023 cycle, as the city did not receive enough applications for funds to be allocated.
She pointed out how strict federal requirements for projects are deterring local developers and nonprofits in need of funding from applying.
For instance, Smith said CDBG guidelines classify COMEA House Shelter and Safehouse Services as noise hazard areas because of their proximity to traffic and railroads, making them ineligible. Lengthy and costly federal procedures, including environmental reviews which investigate a project’s ecological impact, dissuade some Cheyenne contractors.
Collins and Smith also mentioned how Casper and Douglas County, Colorado, revoked their entitlement status a few years ago after dealing with similar issues.
“A Casper community developer said the time requirements for city staff to complete HUD requirements to quality projects and the increasing quantity of reporting requirements are not balanced with the results that are realized by the city’s low-income citizens,” Smith said.
Next Steps for the Community
Cheyenne city officials plan to decline entitlement grants and status after 2024, providing a target date for staff to finish all projects funded with 2023 entitlement dollars.
Smith said a mini grant cycle might open in the next few months to award out the city’s current CDBG amount of $700,000, which was accumulated from previous years’ grants.
“We would like to award as much as we can rather than give it back,” Smith said.
When asked by Councilmembers Michelle Aldrich and Ken Esquibel about what would happen to leftover funds, Smith said logistics still needed to be worked out with the HUD and WDCA, but city staff would come back to them later with a more thorough answer.
Christopher Volzke, deputy executive director of the WCDA, was present at the meeting and clarified during the public comments portion that if Cheyenne gave up their entitlement money, it would not roll into the state’s allocation.
“The funding model for CDBG, while they share the same name, Cheyenne being an entitlement, and the WCDA running the state program, they are two completely separate formulas and funding models,” Volzke said. “The money we’re talking about here … would effectively be lost.”
Aldrich also asked if local projects would have funding trouble without the entitlement grants.
Smith said organizations would still be able to apply for CDBG money directly through the WCDA. Although there might be more competition, this route could allow funding for larger and more diverse housing and community projects that the city’s program wouldn’t have been able to have approved.
“I think there are some give and take and pros and cons and that’s something we’re willing to navigate with our nonprofit partners,” Smith said. “I think it’s going to take some deeper understanding of how do we apply to WCDA and get funds coming back to Cheyenne … but that’s something we are very committed to.”
Grant Recipient Responds
Erin LeBlanc, the director of senior programs at the Laramie County Senior Center, said during the public comment that the center depends on CDBG funding.
“If we didn’t have CDBG funding, we wouldn’t be able to do half of what we’re able to accomplish over there,” she said.
LeBlanc explained that staff used that money to fund its nutrition vehicle, which provides meal deliveries to the center’s three satellite sites around the county. CDBG is also funding ongoing HVAC repairs in the center’s building.
She appreciates the convenience of getting grants from the city and is afraid the center would struggle to receive future funds if it applied through the state.
“I think going statewide can be very competitive, so it feels like us smaller fish in the pond are going to struggle with reaching out to the state to try to get funding,” LeBlanc said.
Chairman Jeff White asked if center staff experienced any difficulties managing CDBG funds like Smith described. LeBlanc admitted they did, but added that staff receive assistance from the Cheyenne Housing Authority, and that such issues are normal for maintaining any grant.
“We run on grants, federal and state grants,” LeBlanc said. “That’s part of the process that we have to do, jump through hoops sometimes to be able to provide the paperwork and things a grant needs from us. It’s part of the process for us.”
The full discussion can be viewed in the YouTube video below:
The resolution, in full, can be viewed below:
