The City is in receipt of $130,436 in HOME Investment Partnership program (HOME) funds which was to be repaid to the U.S. Department of Housing and Urban Development (HUD) due to an unsuccessful affordable housing project. HUD representatives have indicated approval of the City’s request to deposit these funds in the City’s line of credit to be utilized for eligible HOME activities.

In addition, HUD has recently reviewed the City’s FY2013-2014 Comprehensive Annual Performance Evaluation Report and has requested immediate use of program income in both the Community Development Block Grant (CDBG) and HOME programs. In previous years, City staff has allocated actual program income received during a calendar year to the following fiscal year to rely solely on actual income received. HUD is now requiring the City to estimate and allocate program income in advance of receipt to expeditiously utilize funding as it becomes available to the City.

Therefore, staff is proposing amending the FY2014-2015 Annual Action Plan to include the use of any and all revenue received from July 1, 2014 to June 30, 2015 for eligible activities, estimates are as follows:

• $250,000 in HOME program income received to support administration, First Time Homebuyer and Affordable Housing Development programs.
• $150,000 in CDBG program income received to support administration, Housing Rehabilitation, Manufactured Home Repair, First Time Homebuyer, Affordable Housing Development and the Billings Metro VISTA Project.

A substantial amendment to Annual Action Plan / Consolidated Plan requires both a public hearing and action to accept and utilize CDBG and HOME funding as proposed. The amendment will be reviewed at City Council on January 12, 2015 following a 30+ day public comment period beginning on December 5, 2014. The amendment can be viewed online at www.ci.billings.mt.us/CDreports.

City Council may:

• Approve, or;
• Disapprove the proposed amendment.

Amending the Annual Action Plan will allow staff to immediately utilize additional HOME and CDBG funds to benefit low income households through existing core programs. This change in budgeting procedures will also assist City staff in meeting HUD compliance in utilizing revenue received prior to drawing entitlement funding.

Staff recommends the City Council approve the proposed Substantial Amendment to the FY2014-2015 Annual Action Plan to allocate CDBG and HOME revenue to programs as described.