City Funding Social Service Agencies in the Future?

Wednesday, January 2, 2019, 6:50 pm
Noa Kuszai and Alice Dreger

Above: Helping Hands Respite Care staff and clients in a 2015 photo.

East Lansing Info (ELi) runs a regular service called Ask ELi to Investigate. We take questions from readers and try to get answers. Today’s Ask ELi responds to this recent reader's question:

“I have been scouring the City of EL website to see if the City will be again be making grants to local community service agencies. Most of the money was cut from the budget, but I am curious if any community grant money will be available given the passage of the income tax. Do you have any information?”

The short answer: While City Council recently decided to allow local social service agencies to use a relatively simple process to ask City Council for some funding in the coming budget year, as described below, it looks pretty unlikely that much if any such funding will be granted.

The currently-seated City Council has expressed fairly consistent interest in channeling the federal HUD funding it used in the past to provide such funding to instead work on paying down the debt on the Avondale Square housing project, and using General Fund dollars for other purposes. The same five members of Council will be making decisions on the next annual budget.

Here’s the longer answer.

The income tax proposal did not provide specific funding for social services.

Jill Feldpausch, East Lansing’s Finance Director, confirmed in an email to ELi that funds for social service agencies cannot come from the income tax, which was passed in November.

“Per the charter amendment approved by the voters authorizing the income tax, the net revenue result will be allocated to three distinct items,” Feldpausch explained.

Those three items, specifically named in the income tax ballot proposal approved by voters, are supplemental pension payments, police and fire protection, and public infrastructure, which will be allotted 60%, 20%, and 20% of the new net revenue from the income tax, respectively.

But our reader’s point may be that, with special funding coming for other budget items from the income tax, funding might be freed up for social service agencies? Could that happen?

In the past, Council did indeed provide some funding for social service agencies.

City Council did designate the use of some money from HUD Community Development Block Grant (CDBG) funding and also from the City’s General Fund for social service agencies, like Haven House and Helping Hands Respite Care, for Fiscal Year (FY) 2018, which ran from July 1, 2017 - July 30, 2018.

“The City expended $55,124.14 to social service agencies from General Fund dollars” for FY 2018, Feldpausch said in her email. “In addition, the City expended $69,243.41 to social service agencies from the Community Development Block Grant funds.” (Just to be clear, this is not the only funding these agencies have run on; additional funding for these agencies has come from public and private donors.)

Feldpausch added that the FY 2019 budget, which runs through July 2019, “includes $14,760 to Tri-County for consortium dues from the General Fund and $52,395 from the Community Development Block Grant Fund to various agencies.” As ELi reported back in June, Council voted 4-1 (with Erik Altmann dissenting) to provide that $52,395 in CDBG funding after the City obtained that amount unexpectedly from HUD.

Grants from the City for FY 2019 have already been given. “The Planning Department works with the agencies awarded on the actual disbursement throughout the year.,” Feldpausch said. She added that, “The awards were determined last spring during the budget process.”

So, what’s planned for the FY 2020 budget in terms of social service agencies?

Council will still hear special pleas from social service agencies, but appears likely to use most or all CDBG funds to pay down the debt on Avondale Square.

In the past, local social service agencies went through a pretty labor-intensive process to apply for CDBG funds from the City of East Lansing. Applications asked for a lot of information and a special Community Development Advisory Committee was formed each year to rate applications and to advise City Council, which made the ultimate decision about funding.

Because the City is trying to deal with its debt problems, in the recent past, City staff has advised and City Council has voted to channel its CDBG funds to pay down the Avondale Square debt to HUD. That debt resulted from the Avondale Square housing project costing about $5 million more than originally planned.

With Council pushing the CDBG funds to Avondale Square’s debt, social service agency applicants and the Community Development Advisory Committee were effectively going through a great deal of effort that was likely to have little impact.

Consequently, at a discussion-only meeting of City Council on December 11, 2018, Council heard a proposal for a new process from Amy Schlusler-Schmitt, Community Development and Engagement Manager, regarding the CDBG application process.

Schlusler-Schmitt suggested that a Community Development Advisory Committee not be convened. Staff would make recommendations on what to fund. And there would be two public hearings on the proposals, one in front of the Human Relations Commission, and the second in front of City Council, which makes the ultimate decision.

According to Schlusler-Schmitt, the intent of this proposed amendment was to make the process more efficient and lessen the need for volunteer and staff time.

But Council Members expressed some hesitation when presented with this proposal on December 11.

Most Council Members want unequivocally to use the CDBG money chiefly for the Avondale Square debt, but Council Members don’t want to cut off any chance that a good idea or a critical need could be funded through CDBG dollars, nor do they want to create lots of work for social service agencies that have very little chance of being funded.

So, the plan currently is to allow agencies to apply under a streamlined, simplified application process. City Council will then hold two public hearings on the matter – the minimum “public engagement” required by HUD. In those hearings, anyone can comment on the matter. City Council will then decide how to spend the funds.

If this proposal is adopted, the City will post a notice in local newspapers and the process would start in January to determine the next recipients of the CDBG funds.


You may also be interested in:

Avondale Square Unexpectedly Cost Taxpayers $5 Million

Feds Order City to Repay $134K Over City Attorney's Conflict of Interest

In 4-1 Vote, Council Reverses Decision to De-Fund Human Services Groups

Helping Hands Respite Care Provides Support to Local Families

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