FY26 Proposed Budget

COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUND

Community Development Block Grant (CDBG) funds are provided to the City of Iowa City on an annual basis from the U.S. Department of Housing and Urban Development (HUD). CDBG funds are used throughout the community to address the needs of lower income citizens. CDBG funds may be used for a variety of activities (e.g. public services, public facilities, housing, economic development, fair housing, and job training). Iowa City is an entitlement city (over 50,000 in population), and receives an annual allocation from HUD based on a formula that looks at information such as poverty rates, age of housing stock, etc. Congress approves the program budgets annually so the City’s allocation may change from year to year. As part of Neighborhood Services, the Community Development office is responsible for administering and coordinating activities relating to federal, state, and local community development programs. This includes Community Development Block Grant (CDBG) programs. CDBG funds are used to acquire property, construct new buildings, rehabilitate existing buildings and owner-occupied homes, operate service agencies, and encourage micro-enterprise development. Community Development staff coordinate with local service agencies, small businesses, and lenders in the administration of these programs. The City created a citizen advisory group, the Housing and Community Development Commission (HCDC), in 1995 to assess Iowa City’s community development needs for housing, jobs and services for low- and moderate-income residents, and to promote public and private efforts to meet such needs. HCDC leads the CDBG/HOME allocation process to determine what projects will be awarded funds based on priorities established in CITY STEPS, Iowa City’s Consolidated Plan for Housing, Jobs, and Services for Low ‐ Income Residents. Fund Balance: The CDBG fund has a budgeted ending fund balance of $10,793 in fiscal year 2026 versus an estimated ending fund balance of $10,793 in fiscal year 2025. Revenues: 96.4% of revenue comes from Federal grants, with most of the remainder from loan repayments. Federal grant revenue is budgeted to decrease from $1,089,215 in fiscal year 2025 to an estimated $716,200 in fiscal year 2026, a decrease of 34.2%. This is primarily due to carried over funding in fiscal year 2024 revised budget.

Expenditures: Fiscal year 2026 expenditures represent a 28.5% decline from fiscal year 2025. This reduction is primarily due to a reduction in aid to agencies due to decreased funding.

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