City staff and the Community Development Board recommend the City Council conduct a public hearing to garner public comment on the drafted five-year FY2025-2029 Consolidated Plan, the FY2025-2026 Annual Action Plan, and recommended FY26 budget allocations for the Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) program.

The City of Billings has been a recipient of U.S. Department of Housing and Urban Development (HUD) CDBG funds since the mid-1970s and HOME funds since the early 1990s (over $50 million).

Funding Source and Intent: Investments in CDBG and HOME have generated over $11 million in loan repayments since 2001. Projects, programs, and activities funded through CDBG and HOME are regulated and monitored by the federal government and must be primarily targeted to address community affordable housing for low-income citizens and poverty-impact needs in Billings.

Guidance & Recommendations Process: The Community Development Board provides staff guidance and recommendations to the City Council relative to assessment, planning, allocation, monitoring, and reporting processes for HUD federal funding. The Board is comprised of six low-income neighborhood representatives and three at-large members. This structure complies with a federal regulation to ensure decision-making processes include involvement from residents of low-income neighborhoods. The Board is responsible for making funding recommendations to the City Council for their review and approval.

Planning Process: The drafted Consolidated Plan is the primary planning document directing the City's CDBG and HOME investments and it covers a five-year period from July 1, 2025 through June 30, 2029 (Attachment A). The Annual Action Plan for FY2025-2026 is included in the Consolidated Plan.

Allocation Process: To allocate CDBG and HOME resources via the Consolidated Plan, the Community Development Division staff and Board members facilitated an extensive process to gather public input on the use of federal funds. Applications were available at the beginning of December and due in mid-January. The CD staff brings proposed programs from the staff and any outside agency applications to the CD Board all as applications. No outside applications were submitted, but staff did provide the various proposed program activities to the CD Board and recommendations were prepared for City Council consideration. Staff facilitated a 30-day public comment period, the City Council will take action, and the Annual Action Plan will be submitted to HUD by May 15.

Stakeholders for CDBG and HOME programs include:

• Program Recipients - The City serves low-income households through a variety of affordable housing programs such as housing development, home buyer, and foreclosure acquisition / rehabilitation programs. Full descriptions of available programs can be found online at www.BillingsMT.gov/comdev.
• The Community Development Board - As an advisory body to the City Council, the Board provides detailed oversight to both the CDBG and HOME programs throughout the year. The Board also facilitates a public input process to prepare recommendations for the City Council's consideration. Six of nine total Community Development Board members are representatives of low-income neighborhoods, ensuring low-income citizen involvement of planning and allocation processes.
• Non-Profit Organizations - Community organizations serving those experiencing poverty are supported by the Billings Metro VISTA Project. AmeriCorps VISTA members assist in the provision of social services to those in need.

City Council may:

• Hold a public hearing for the Consolidated and Annual Action Plans. 
• Not hold a public hearing on the plans. 

Anticipated Revenues: Although HUD has not released allocation numbers to date, the City of Billings will receive approximately $645,000 in new CDBG and $350,000 in HOME funding for use in affordable housing and other projects benefiting low-income residents for FY2025-2026. The Corporation for National and Community Service (CNCS) has also awarded the City of Billings $460,042 in federal funds to support the Billings Metro VISTA Project.
 

• Administration at maximum caps, 20% of CDBG (estimated $129,000) and 10% of HOME (estimated $35,000). Funding is reserved for administrative costs including technology and phone charges, duplication, publication of notices, motor vehicle costs, liability insurance, staff time; etc.
• Affordable Housing Development at $1,545,000 for the LB Lofts affordable housing project. The total amount includes: entitlement funding from next fiscal year and prior years; older CHDO funding the staff was able to release from the restricted set-aside; and uncommitted loan repayment revenue. Additionally, the City must reserve 15% of new HOME funding for a future Community Housing Development Organization (CHDO) restricted set-aside (estimated $52,500).
• Billings Metro VISTA Project would only be allocated $25,000 in repayment revenue, if received during next fiscal year. CNCS is changing the City's cost-share requirement to reduce financial strain in managing the program. Rollover funding, in addition to a small amount of repayment revenue, should be sufficient for the next fiscal year.
• Lead Water Line Replacement Program would be allocated $200,000 in CDBG funding to assist up to 20 low-income households. The City must facilitate the replacement of 100 residential water lines over the next five years. Many of the homes are located in low-income neighborhoods.
• $50,000 would be allocated to the Foreclosure Acquisition / Rehabilitation program as a timeliness placeholder. If the City may not meet its timeliness goal in May 2026, and no other applications or programs are expected to assist in meeting timeliness, City staff may purchase a foreclosed home to renovate and sell to a low-income household. This program is the City's most effective tool in managing timely expenditures and is highly rated by participants (Attachments C and D).
• The First Time Home Buyer would be allocated $121,229 in CDBG funding and $125,000 in HOME and CDBG repayment funding, if received. This program is a top-rated program as per the City's Consolidated Plan survey (Attachment C) and the Community Development Board strongly supports homeownership initiatives.
• $50,000 in CDBG funding would be allocated to make improvements in low-income neighborhood parks utilizing Crime Prevention Through Environmental Design concepts. Public safety is a high priority for the City Council. An additional $25,000 in loan repayment revenue would also be allocated to the program, if received.

The City Council is asked to hold a public hearing to garner input on the drafted Consolidated Plan for FY2025-2029, the FY2025-2026 Annual Action Plan, and recommended funding allocations for CDBG and HOME. The Council will take action on these items at its April 28 meeting so that the Consolidated Plan, Annual Action Plan, and recommended funding allocations may be sent to HUD in advance of the May HUD deadline.