This week, @CLECityCouncil is holding committee meetings about federal Community Development Block Grants (CDBG). CDBG is complicated and it’s hard to know how it impacts our City, so I thought I might share some background and how I interact with CDBG on the regular.

CDBG is designed to do a handful of things, but primarily it’s intended to fund activities that will improve living environments, expand economic opportunity, and provide decent housing. Funds are intended to serve low- and moderate-income residents and areas.

Cleveland, unlike most other cities, uses a portion of its CDBG funds to provide operating support to community development corporations (CDCs) – CDCs subcontract with the City to obtain CDBG funds.

The amount of funding any given CDC can receive is based on a few things – (1) each City Council person is given a portion of CDBG funds to allocate for HUD-approved purposes, which they can direct to one or more CDCs and

(2) Community Development has a competitive pool of funds they contribute to CDCs. Both sources of funds are combined and reflect the maximum amount of funds each CDC could receive.

A CDC gets CDBG funds based on the number of “accomplishments” the CDC can report in any given year. CDCs can only draw down on funds if they report accomplishments in CDBG eligible activities.

For this current fiscal year, there are 16 categories CDCs can draw down on – broadly, they are eligible housing development or improvement activities, business assistance, blight abatement, and public services.

First, a CDC prepares a contract where the CDC tells the City the type and number of accomplishments it can do, how much funding it needs to get those accomplishments done, and what exactly it will use the CDBG money for (usually, mostly, staff salaries).

Once the contract is approved, the CDC makes ongoing reports to the City and the City disburses the funds to the CDC. CDCs have to declare how many households, businesses, parcels, and people they intend to help in each category. If they fall short the City can withhold funding.

Because these are federal dollars, accomplishments aren’t easy to get and there are strings attached. If a CDC wants to claim a rehabbed home for an accomplishment, they have to make sure that there was a federally-compliant environmental review before the house was rehabbed.

Or if a CDC wants to provide assistance to a resident, they need to collect an income verification form from that resident or else they can’t claim the accomplishment and can’t draw down on their funds.

Over time, the reporting requirements are getting tighter and tighter. My understanding is that HUD doesn’t like that the City is using these funds to provide operating support to CDCs, as funding CDCs is not necessarily what CDBG was designed to do.

(I would also argue that these accomplishments are not necessarily what CDCs are designed to do. Instead of identifying and responding to community needs, CDCs must focus on getting enough accomplishments to satisfy their contracts or else risk not receiving operational funding).

Not all CDCs use CDBG, and many CDCs have other sources of funding beyond CDBG. But CDBG is still a major source of operating support for most CDCs, which means CDCs need to make sure they are focusing on getting their accomplishments.

Here is what all of this looks like in my day-to-day work life. From July 2020-June 2021, I need to provide General Technical Assistance to 121 unique businesses (like helping businesses think through a marketing strategy, or addressing a safety issue)

I also have to provide direct technical assistance to 41 business (like helping a business get financing to expand or finding a space for a new business open) and help 20 businesses navigate the building design review process.

These are my combined accomplishments for both the Detroit Shoreway and Cudell Improvement services areas (my situation is unique because I work for two CDCs).

I can only count each business once, and I have to report to the City when I start a project, if and when I refer the business to another agency or entity, once the project is underway, and then a final report when it’s completed (that’s the accomplishment).

It’s very hard to track because, like I said, I can only mention each business once in each category. So even though I might interact with a business dozens of times each year, I can only “count” one of those interactions.

All of this goes into a clunky portal that the City reviews. Each accomplishment requires a decent amount of information (see the photos). Not all the categories are relevant to the accomplishment, so it’s taken me some time to figure out what information the City actually needs.

I also have to write a narrative statement explaining the work I did in each category (what the surveying work was, who was referred where, what projects are underway, and what the accomplishment was when it was finally complete).

I have to do this 180+ times in the course of a year. Reporting takes me at least two full workdays each month, but usually takes longer.

Recently I public record requested all the CDBG contracts between the City and all the CDCs that receive CDBG funds and realized that the City is paying CDCs wildly different amounts per accomplishment.

For example, the CDCs I work for earn under $500 for each business I assist. In other parts of the City, CDCs are earning $10,000+ for each business assisted.

I don’t think there’s a single person who works in community development in Cleveland and deals with CDBG funds who thinks it’s a good system, and many CDCs aspire to abandon CDBG entirely (some already have).

The City uses funding from HUD in a way it wasn’t designed to be used to compensate CDCs for work that might not even be the most important work CDCs should be doing. I have to focus on making sure I work with a large enough quantity of businesses to meet my CDBG requirements.

I can’t spend as much time as I want on important things, like strategizing a plan to get underutilized parcels on Lorain reactivated, because those projects will take a ton of my time and won’t be an “accomplishment” I can claim any time soon.

This is a long thread and only scratches the surface of CDBG. I’m sure CDC Executive Directors can tell you horror stories about delayed payments, decertified funds, environmental review hell, and more.

And I’m sure the CDBG hearings will cover a lot of ground, but will barely mention the actual, day-to-day effect CDBG has on the way your community-based organizations serve your community. @cledocumenters