San Diego can not both hold on to unspent Community Development Block Grant funds and take its annual funds from HUD, and spend the money. City councilmembers decided to use the unspent funds left over from project balances, and projects not done, to pay for outstanding HUD loans.
A 2.67 million dollar payment on the HUD loans gets the city out of an unwholesome financial situation. Unused project funds had added up to amount above the one and a half times the current annual funds the federal government agency allows.
The payment money comes from projects the council funded between 2009 and 2012.
The funds had to get lowered by a date HUD sets. The federal housing agency will review the fund balance 60 days before the end of the year for using program funds come on April 30th.
On the upside, the decision to use unspent fund relives the city of the need to use CDBG funds that can be used to fund projects in the current program. City councilmembers had previously relied on the funds to pay down the HUD loans.
This is a Center Line Policy Alert.
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