Insufficient Capacity: The Buck Stops Here - TribPapers
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Insufficient Capacity: The Buck Stops Here

Councilwoman Kim Roney opened a discussion to find out why $1.4 million in CDBG funds the city had disbursed for disaster recovery had not yet been spent. Screenshot.

Asheville – On October 30, HUD informed the City of Asheville that it would receive an additional $1,748,141 from their Community Development Block Grant’s (CDBG’s) Designated Disaster Recovery Fund. Before receiving any funds, however, the appurtenant staff report said, “City Council will need to authorize the submission to HUD of amendments to the FY 2024-2025 Annual Action Plan and new goals for disaster recovery in the 2020-2024 Consolidated Plan, which will provide a concise summary of the actions and activities that will be used to address the disaster recovery.”

CDBG funds typically pay for affordable housing, public services, economic development, and community improvement. The original plan for spending $1,003,034 was submitted three weeks before a state of emergency was declared in Asheville. The new funds would pay for rental assistance ($624,000), business grants ($624,000), emergency shelters for the homeless ($250,000), and administration ($250,141). Asheville’s Community Development Division Manager James Shelton explained to Asheville City Council that the high administrative burden was needed for expedition and oversight of disbursements.

Shelton clarified that the new funds the city was to receive were not CDBG-DR (Disaster Recovery) funds. The $1,748,141, he said, “came from existing HUD dollars that they were able to move out of HUD headquarters to the city.” CDBG-DR funds are only available through an act of Congress. Their disbursements will likely be much larger, but Congress has not gotten around to making any appropriations.

After apologizing for unavoidable limitations to data acquisition, Shelton said Helene cost the Asheville Metropolitan Area an estimated 8,200 jobs, or 4% of the labor force, which would raise the unemployment rate to 10.6%. To help, the City of Asheville contributed $704,070 from CDBG funds on hand to the $3 million Mountain BizWorks Asheville-Buncombe Rebuilding Together Grant Fund.

To council’s surprise, no funds had been drawn down from the $704,070 grant. Shelton said Mountain BizWorks, which was the pass-through agency for the funds, was currently reviewing and scoring applications, and interviews would begin this month.

Shelton next told how FEMA had been providing rental assistance to people whose homes were damaged by the storm. It is doing nothing for people who can’t pay rent because they lost their jobs, and shelters are only temporary, with precarious timelines. As of October 30, Eblen Charities had disbursed $219,117 in rental assistance for 219 families; Grace Covenant Presbyterian Church, $1.1 million in housing assistance for 727.

A line of questioning begun by Councilwoman Kim Roney established that neither Eblen nor Grace had spent a dime of the funds the city had given them, either. Councilwoman Sage Turner said she loved Eblen, and they were a great community partner, but more suffering people could be lifted out of despair sooner if their funding could be “clawed back” for redistribution to organizations that could put it to use now. Turner said she had heard that Eblen would not be able to spend city funds until February.

Eblen was in the process of staffing up for federal compliance administration, and Community and Economic Development Director Nikki Reid said Grace was spending resources from other donors while it was planning how it would spend city dollars. Mayor Esther Manheimer said the county’s funds were already being put to work because they, as the body charged with managing social services, “have the structure to do so.” She and Turner asked if it would be more productive for the city to disburse funds to the county.

Shelton said no formal decisions had been made, but discussions were ongoing about either directing DDRF funds to the county or other organizations that had capacity adequate to the demands of federal compliance. “Capacity is an issue across the board,” he said. Shelton added it would be appropriate for the city to “stay in its lane” and just handle rental assistance, as “a new package of amendments” would need to go through another process with planning and public hearing components before the city could handle mortgage and utility assistance as the county is doing.

When Turner asked staff if they heard that council was “alarmed,” City Manager Debra Campbell replied, “We hear you loud and clear, and I hope that you hear our message that there are capacity issues with the organizations that we are relying upon to distribute these dollars.” Campbell apologized for “sounding conservative,” but said, “We are going to turn over every rock that we can” to find a partner organization set up to properly manage federal funding.