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Council commits to plan to use $5.1 million in stimulus funds

Friday, May 15, 2009 by Austin Monitor

The City Council on Thursday voted unanimously to direct several million dollars of federal stimulus funds towards the construction of two buildings and homeless prevention programs—assuming the city gets the money—and committed several more millions from general obligation bonds for home repairs.


After hearing from several members of the Community Development Commission, who urged that the money be spent entirely on home repairs, council decided to go with staff’s recommendation citing the dual concerns of unemployment and housing in the lower income neighborhoods of the city.


Austin could receive $5.1 million through two federal grants. The city would spend $3.1 million on homeless prevention and $2 million would be directed toward the reconfigured community development block grant – called the CDBG-R. Council had to act quick as the HUD deadline is May 18.


Council learned that the Homeless Prevention and Rapid Rehousing Program, (HPRP) has three goals: homeless prevention; diversion; rapid rehousing. Director of the City of Austin’s Neighborhood Housing and Community Development Office Margaret Shaw told council members, “this stimulus funding is specially targeted for those individuals who are impacted by the recent economic conditions.”  


Shaw also told Council that after nearly two years of questions, they had finally come to the conclusion, after consulting the IRS, that the city could use $2 million in General Obligation bond money for programs that would provide repairs and construction of the homes of low-income elderly residents. She said currently the city spends nearly $6 million a year on such measures.


Karen Paup, the vice-chair of the Community Development Commission, told Council the corporation had “serious concerns” about the plans for the CDBG-R funds. She said the city already had a priority plan in place that recommended spending money on home repairs, and urged that the city allocate $1.75 million on housing rehab activities rather than sidewalks or buildings. Sabino Renteria, Chair of the CDC, also testified in favor of spending more on fixing the homes that East Austin’s elderly.


Council Member Mike Martinez called staff’s recommendation “a fair proposal and a balanced proposal,” while acknowledging that the community needed assistance with job creation and housing.


There were several conditions that also made it more favorable to use the GO money for home repair – the stimulus fund allotment favors capital infrastructure, such as sidewalks and buildings, and also comes with burdensome ‘Buy American’ clauses which Shaw said would make it very difficult to conduct smaller $2-3,000 plumbing jobs. The GO money is much more flexible.


The $3.1 million would be broken down this way: $480,000 for specialists to identify potential clients, $240,000 for housing locators and inspectors and $120,000 for mediation and legal services. Direct financial assistance for rental and utilities would use $1.97 million and $102,000 would go toward a homeless management information system, which is needed to track people and evaluate the success of the program. Another $153,000 would go toward administrative costs. All of the money would be spent over a two-year period.


The CBDG-R money would be meted out as follows: $500,000 for a Lifeworks East Austin Youth and Family Resource Center, a “green” building that would host literacy training and financial education; $500,000 toward a center for economic opportunity which would provide affordable office space and resources for small businesses; $550,000 for an African American cultural and Heritage facility; $250,000 for new sidewalks in central east Austin; and $200,000 for administrative costs.


Council Member Sheryl Cole made the motion to adopt staff’s recommendations with Council Member Laura Morrison offering a second.

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