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<br />D. EXCLUSIVE USE OF FUNDS FOR THREE NATIONAL OBJECTIVES <br /> <br />CDBG funds may be used to meet one of three national objectives: 1) eliminate <br />conditions of slums and blight; 2) benefit low- and moderate-income persons; 3) meet <br />an urgent need. During the 2004-2005 report period, the City utilized CDBG funds to <br />exclusively benefit low- and moderate-income households. <br /> <br />During the 2004-2005 report period the City was required to use non-federal funds to <br />"offset" the ineligible use of CDBG funds that was identified by HUD during a grantee <br />monitoring. It was determined that the City had expended over $400,000 of CDSG <br />resources for the City's PREP program, which was deemed ineligible for CDSG <br />funding.14 To offset this ineligible CDBG expense, the City committed over $500,000 in <br />non-federal revenue (i.e" land sale proceeds) to fund an additional street improvement <br />project in a CDBG-eligible neighborhood. Additionally, through the City's on-going <br />quarterly and on-site monitoring program, it was discovered that the vast majority of <br />clients served by a CDBG-funded activity did not qualify as low-/moderate-income. City <br />staff has initiated discussions with this agency to verify this finding, and if necessary, to <br />recoup CDBG fund that have already been paid to the agency for services rendered, <br /> <br />E. ACTIVITIES INVOLYING ACQUISITION, REHABILITATION OR DEMOLITION OF OCCUPIED REAL <br />PROPERTY <br /> <br />No activities were undertaken during the 2004-2005 report period that necessitated the <br />relocation of households, businesses and/or non profits. If any of these types of <br />activities would have been undertaken, then as required by HUD the following factors <br />would have been evaluated as part of this CAPER. <br /> <br />1, Steps to minimize displacement resulting from CDBG assisted activities. <br /> <br />2. Steps taken to identify households, businesses or nonprofits who occupy CDSG <br />assisted projects subject to the URA. <br /> <br />3. Steps taken to ensure the timely issuance of information notices to displaced <br />households, businesses and nonprofits. <br /> <br />14 PREP is a proactive rental housing inspection program funded by a per unit inspection fee. If a <br />landlord maintains their property at a certain standard the fee is waived. HUD determined that since the <br />program was initially approved by the City Council as a self-funding program, and in fact had generated <br />sufficient fees to maintain the activity, the program did not qualify for CDBG funding. <br /> <br />34 <br /> <br />9/7/05 <br /> <br />190-38 <br />