August 12, 2009

TO: Judy Gilleland, City Manager

FROM: Doug Adkins, Director of Community Revitalization

To submit to City Council for legislative action the CDBG 2009 Substantial Amendment, authorize

the City Manager to sign and submit a Substantial Amendment to the PY 2009 Annual Action Plan

and the 2005-2010 Consolidated Plan, thereby amending the CDBG activities and amount of funding

originally stated with the U.S. Department of Housing and Urban Development (HUD).

The City of Middletown has received funding through the CDBG Program since 1975. On a

scheduled basis, the City prepares a Consolidated Plan which lists long term goals and objectives for

CDBG funding within the City. The City is currently operating under the 2005-2010 Consolidated

Plan. Additionally, the City prepares a yearly Action Plan which documents specifically where each

year’s funding is budgeted by activity.

The CDBG 2009 Substantial Amendment must be approved by City Council and signed by the City

Manager prior to submission to HUD.

The purpose of this Amendment is to update various program requirements which have changed

since the passage of the 2009 Action Plan.

Specifically, the Amendment changes the following components:

1) CDBG Target Area: The Consolidated Plan designates a portion of the City as eligible for

Community Development Block Grant projects based on income data from the 2000 census.

Based on data provided by HUD, the entire City of Middletown qualifies as eligible based on

54% of households city-wide qualifying as low-mod income. We are recommending an

amendment of the Consolidated Plan to expand the eligible area to the entire City of

Middletown. The immediate effect of this amendment is that we can use CDBG dollars to

assist homeowners city-wide to gain property maintenance code compliance instead of the

currently limited CDBG eligible target areas.

2) Name Change of CHIP Program. This program has been used to assist with minor rehab and/

or repairs of properties in the CDBG area. The State of Ohio has a similar program with a

very similar name which has confused many people. We are changing the name of the

program from CHIPS (Community Housing Improvements Program) to VIP (Volunteer

Improvements Program) to eliminate any confusion with the State program. Funds to assist

homeowners are being increased to $60,000 for the current budget year with the expanded

eligible city-wide area adopted in # 1.

3) Code Enforcement. Code Enforcement budget will be increased to $192,225 which includes

$26,372 in unliquidated Code Enforcement obligations carried over from program year 2008.

4) Exchanging Budgets. In submitting our plan for CDBG-R, HUD responded and asked us to

switch two activities to make CDBG-R look more “recoveryish” (HUD’s words). The

playground equipment already approved will be moved to the current year Action Plan budget

and we will move the same dollar amount in housing rehab over to CDBG-R. This exchange

moves two activities and dollar amounts already approved by Council to different program

account budgets.

5) Property Disposition. Staff would like to allocate $5,000 in CDBG funds in property

disposition to be applied to temporary carrying costs of CDBG acquired properties under

neighborhood revitalization. These costs were not recouped in prior projects, and this is an

eligible activity to that would allow us to recover more costs associated with revitalization

projects.

6) Cancelled Activity. The Butler County Community Health Consortium did not spend any

2008 CDBG funds due to missing contract paperwork. We are canceling out the 2008

activity. The Consortium is funded for program year 2009 and all paperwork is in place.

7) Demolition. With NSP money available for demolitions, we are canceling demolition as a

2009 activity and moving the money over to code enforcement and VIP activities to assist

more homeowners with property maintenance compliance.

A copy of the CDBG 2009 Substantial Amendment will be available for public viewing in the

Department of Community Revitalization plus the Middletown Public Library and Senior Center

effective Monday August 17, 2009. There will be a 30 day comment period commencing August 17,

2009 and ending at 5pm on September 16, 2009 for comments regarding this substantial amendment.

Subsequent to the public comment period and passage by Council, the CDBG 2009 Substantial

Amendment (including public comments) will be submitted to the Columbus, Ohio office of HUD.

1) Pass the CDBG 2009 Substantial Amendment as recommended by Staff.

2) Do not adopt the CDBG 2009 Substantial Amendment. Failure to pass the Amendment limits

the areas we can use CDBG dollars, limits the activities we can perform with those monies,

and limits the assistance we can provide to homeowners for property maintenance compliance

assistance.

Some of these changes are simple housekeeping. Others have been proposed to increase services

city-wide and to redistribute CDBG money based on changing needs and priorities within the

community.

The budgets for all HUD programs has already been passed and approved by Council. There is no

additional impact to redistribute the monies already approved.

Staff recommends the approval of the ordinance authorizing the City Manager to submit the proposed

CDBG 2009 Substantial Amendment to the PY 2009 Annual Action and the 2005-2010 Consolidated

Plan to HUD to amend the Grant Agreement with HUD.

The proposed changes do not require Emergency Legislation.

CDBG 2009 Substantial Amendment

This notice is being published to amend certain activities in the City of Middletown’s 2009 Annual

Action Plan and 2005-2010 Consolidated plan. The activities are being amended due to priorities of

City operations changing due to local economic factors such as vacancy rates, foreclosures, citywide

job layoffs, and new HUD funding.

CDBG Target Area: Currently the Consolidated Plan states that the City does qualify as a CDBG

low-mod target area on a citywide basis, but code enforcement, demolition & clearance, property

enhancement program, and priority in the housing rehabilitation program will only take place in lowmod

census tracts.

area and have the ability to operate programs on a citywide basis while still adhering to the

LMA national objective when applicable. 54% of the City’s households have incomes less

than 80% of Area Median Income as confirmed by:

CHIP Program Name Change

similar name, the City of Middletown will be changing the name of the Community Housing

Improvements Program (CHIP) to: Volunteer Improvements Program (VIP).

VIP (formerly CHIP) Program/Budget Change: This program was originally set up for volunteers to

perform minor housing rehab on properties in CDBG Target areas.

CDBG target area. The project will allow for work to be completed on a residential property

under the LMH national objective or a neighborhood facility under the LMA national

objective if set up as a separate activity. In addition, the funds budgeted to VIP under LMH

will be increased to $60,000.

Code Enforcement Budget Change

$26,372 in unliquidated Code Enforcement obligations for PY 2008.

New Activity: Playground Equipment

toward the replacement of deteriorated playground equipment. This activity qualifies under

the LMA national objective per 24 CFR 570.208(a)(1) and is an eligible activity under 24

CFR 570.201(c). The activity will be set up under the Neighborhood Revitalization Project.

Each playground that services a different area of the City will be set up as a separate activity

in IDIS.

New Activity: Property Disposition

toward temporary costs of managing CDBG acquired properties as eligible under 24 CFR

570.201(b). This activity will be set up under the Neighborhood Revitalization Project.

PY 2008 Activity Cancellation: Due to contracts not getting finalized, the Butler County Community

Health Consortium did not spend any CDBG funds from its PY2008 contract.

They are funded for PY2009 and contracts are in place.

Demolition and Clearance Budget Change

now become available, CDBG funded demolition will be cancelled as a program year 2009

activity and the funds will be reallocated to the VIP program, new playground equipment, and

Code Enforcement per the attached budget.

Amended Budget

changed. New activities (mentioned above) have also been added and budgeted for. In

addition, just for informational purposes, the revolving loan fund budget for PY2009 has been

lowered as well.

The Amended PY2009 budget is attached.

The City placed a legal in the Middletown Journal on XXXX, 2009 and had copies of this

amendment available at the public library and senior center. The 30 day comment period was from

July 31, 2009 to August 30, 2009. Written comments may be sent by mail or dropped of to:

City of Middletown

Community Revitalization Dept

One Donham Plaza

Middletown, OH 45042

Citizen Comments received:

TBD

Approved By:

X__________________________________________ Date:_________________

Judy Gilleland – City Manager