Federal Government Provides City of East Lansing $289K in Emergency Funds

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Gary Caldwell for ELi

East Lansing’s downtown statue of Cassiopeia by Nancy Leiserowitz, dressed for the emergency.

While many East Lansing residents are waiting to receive individual stimulus checks from the IRS and unemployment compensation, the City of East Lansing also is set to receive $289,484 in federal funds to respond to the coronavirus.

This funding to the City was authorized by the CARES Act adopted by Congress and then signed into law by President Donald Trump on March 27.

This federal funding to cities and states is being provided through Community Development Block Grants (CDBG), which are administered by the U.S. Department of Housing and Urban Development (HUD). This supplemental funding program is being referred to as “CDBG-CV grants” to designate them as coming in relation to the coronavirus called COVID-19.

HUD has provided examples of eligible activities “to support coronavirus and other infectious disease response” for which the CDBG-CV funds allocated to East Lansing can be used. The list includes:

  • Acquisition, construction, or rehabilitating buildings (including school buildings and other public facilities as well as motel or hotel buildings and other private properties) for patient care for COVID-19. Activities in these buildings could include testing, diagnosis, or treatment; ”group living facilities that may be used to centralize patients undergoing treatment”; rehab (such as changes to the ventilation system) for infectious disease treatment; “expanding hospital capacity to accommodate isolation of patients during recovery”; and temporary quarantining of individual patients in private properties.
  • Assistance to businesses, including Special Economic Development Assistance. These activities could include grants or loans to “avoid job loss caused by business closures related to social distancing by providing short-term working capital assistance to small businesses to enable retention of jobs held by low- and moderate-income persons”; “support new businesses or business expansion to create jobs and manufacture medical supplies” needed to respond to COVID-19; and technical and financial assistance to microenterprises to “provide medical, food delivery, cleaning, and other services to support home health and quarantine.”
  • New and expanding public services. These services may include “job training to expand the pool of health care workers and technicians”; “testing, diagnosis or other services at a fixed or mobile location”; increasing capacity for targeted health services within existing health facilities; and deliver meals on wheels to people who are quarantined or who “need to maintain social distancing due to medical vulnerabilities.”

The CARES Act (Coronavirus Aid, Relief, and Economic Security Act) authorized a total of $5 billion for CDBG-CV funds to go to states and cities. East Lansing’s allocation of about $290,000 comes from the first $2 billion of this supplemental CDBG funding.

The amount East Lansing is getting now is in proportion to what the City regularly receives each year in CDBG funds from HUD. Using this existing formula allowed HUD to quickly allocate the first tranche of CDBG-CV funds. Another $1 billion will be sent to jurisdictions that do not receive regular CDBG funds.

The remaining $2 billion in CDBG funds will be distributed to states and local governments “on a rolling basis, at the discretion of the Secretary [of HUD], with formula factors to be defined by HUD,” according to a summary by the Congressional Research Service (CRS). So it is possible that East Lansing could receive additional CDBG-CV funding.

HUD is waiving some CDBG guidelines in order to expedite local governments’ decisions about the CBBG-CV money. HUD will still require that local governments have a period of no less than five days to receive comments from the public about proposals for spending these funds.

We have not yet received answers from City staff to our questions about when and how the City Council will allocate this almost $290,000 in funding.

Meanwhile, East Lansing also has been allocated regular CDBG funding in the amount of $492,096.

Recipients of these supplemental CDBG-CV funds may have the option of reprogramming some of their normal CDBG funds to eligible activities for responding to the coronavirus emergency, according to the CRS.

The City’s normal process for allocating CDBG funds calls for staff to prepare a recommendation by the end of March which the Council then considers during April and May. We do not yet know how this schedule might be affected by the Council not holding regular meetings during March and most of April.

In 2019, East Lansing reported the use of CDBG regular funds in its “Action Plan” to accomplish the following goals, described in terms of uses allowable by HUD:

“5,450 residents will receive access to improvements to the public sidewalks and installation of ADA accessible curb-cuts within their neighborhood; 2 households will receive homebuyer or code-compliance rehabilitation assistance; over 5,000 neighborhood residents will enjoy access to a park improvement project; and the City will make a substantial payment towards a section 108 loan provided by [HUD] 12 years ago.”  

Use of the usual CDBG funding in East Lansing has sparked controversies over many years, including over the use of funds to pay for the retaining wall on Abbot Road along the private property where the City Attorney’s firm has its office, the unexpectedly high costs of financing Avondale Square with a section 108 loan from HUD, ending grants to local social service agencies from CDBG funds, and terminating the Community Development Advisory Committee. The City’s current citizen participation plan no longer has a role for a citizens’ advisory committee.

We will continue to report on how the CDBG supplemental funds will be allocated.

See all of ELi’s COVID-19 reporting here.

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