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Thursday, Jan. 17, 2008 | The Fox Canyon Neighborhood Association is one of dozens of grassroots organizations and community groups that received a check this year from the city of San Diego’s Community Development Block Grant program, which allocates federal funds for programs to benefit low- and moderate-income citizens.

The association has been receiving such grants from the city for projects like tree planting, graffiti cleanups and putting up street signs since it first applied for the federal CDBG funds in 2001. The group’s modest website features a photograph from that year of a smiling Councilman Jim Madaffer presenting the association president, Jose Lopez, with a giant check for $15,000 — the largest grant the organization ever received.

Blocked

  • The Issue: The city of San Diego is retooling its program for doling out federal Community Development Block Grants. In the process, some small community groups could see their funding disappear.
  • What It Means: Among the measures being proposed to clean up the city’s CDBG program is the introduction of a minimum amount for grants. Because some organizations are too small to qualify for the larger grants, they could see their funding squeezed out.
  • The Bigger Picture: Last year, the U.S. Department of Housing and Urban Development’s local field office audited San Diego and found several issues of concern. City officials said they’re taking the criticism and are working to fix the program.

But last year the city received a stern slap on the wrist from the U.S. Department of Housing and Urban Development, the federal overseer of CDBG funding. After conducting an audit of San Diego’s CDBG program, HUD officials concluded that the city had inadequate management systems to ensure the grants were reaching eligible organizations, and that the city was understaffed to properly manage the program.

In response, city officials have promised to comprehensively retool the CDBG program, but doing so could spell an end to the checks organizations like Lopez’s have been counting on for years.

One of the criticisms leveled at San Diego is that the city has been handing out too many grants, for too small amounts, to too many organizations. A $3,000 grant usually costs the same amount to administer as a $30,000 grant, the HUD audit concluded. So city officials are considering a $25,000 minimum grant amount that would likely squeeze out organizations like Lopez’s, which are too small to secure the larger grants.

“That means more blight and more decay,” Lopez said. “Those little bits of money have helped us to not feel so abandoned from city services.”

The minimum grant amount is just one of the reforms on the table, said Bill Anderson, the city’s top land-use official, who oversees the city’s CDBG program. He said he welcomes HUD’s criticism, which includes concerns about the city’s recordkeeping and the methods by which the city ensures the funds are going to the correct causes.

He said the concerns about CDBG surfaced before HUD’s audit, and that Mayor Jerry Sanders has long targeted the program for reform. When he campaigned for office, the mayor criticized the way the City Council distributed the funds.

One city department, the City Planning and Community Investments Department, now has full responsibility for the program, Anderson said, and for months a team of city staffers has been looking at how other cities run their CDBG programs. Anderson said that team has established a number of ways they can make the system more effective.

Anderson said the city is also looking at possibly lending grant money to grantees, rather than simply awarding it. That will allow the city to “recycle” its CDBG funding as it gets re-paid the grants, Anderson said. Another idea, and one Anderson said has been used to good effect in other cities, is to take a large chunk of the funding each year and use it to revitalize one part of the city at a time.

But there’s a lot to fix, acknowledged Fred Sainz, Sanders spokesman.

“The problems we’ve inherited go back more than a decade. They’re unraveling, and making them right is a top priority for the city,” he said.

Overall, Anderson said, the HUD audit has clearly identified problems that city staff and the mayor already knew existed. The task now is to use the findings of the audit to shape the future of the CDBG program, he said.

“If we don’t welcome some of these reforms, that could be cause for concern, but we in the mayor’s office welcome the recommendations because they’re in line with what we wanted to do with that program,” Anderson said.

Anderson said his department will be working on the redesign of the CDBG program over the summer and will present their ideas to the City Council later this year.

Please contact Will Carless directly with your thoughts, ideas, personal stories or tips. Or send a letter to the editor.

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