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Schumer Says Federal Community Development Funding is One of the Most Important Programs Helping To Turn City of Troy Around But a New Plan Being Considered by HUD Could Pull Funding Away From Cities Whose Population Has Fallen Below 50K, Like Troy

Troy Is Currently Developing Five-Year Plan For How To Spend CDBG Funds, But It Is Difficult For City To Plan Without Certainty It Will Continue To Receive Same Level of Funding HUD is Slated to Propose a Series of Changes to These P

Today, while standing at the intersection of 3 rd and 4 th Streets in Troy, U.S. Senator Charles E. Schumer launched his campaign to prevent the Department of Housing and Urban Development (HUD) from reforming the Community Development Block Grant Program (CDBG) in a way that would remove Troy from eligibility and deprive the City of approximately $2.5 million per year in funds it relies on. Currently, cities must have a population of at least 50,000 to be eligible for these community development programs, and cities like Troy - whose population recently slipped to 49,946 people - have been allowed to maintain their eligibility through a "grandfathering" provision. HUD is currently considering ending the practice of grandfathering cities that have slipped below 50,000, and is slated to present a legislative package of reforms to Congress later this year. Schumer said that any proposal to strip Troy of CDBG eligibility is dead on arrival in the Senate, and he will do everything in his power to oppose it and prevent it from being included in HUD's recommendations to Congress. The CDBG Program is a highlyflexible federal grant program that provides communities with resources to address a wide range of unique community development needs, like essential youth programs, blight removal efforts, crime prevention initiatives, and much more.

"Federal community development block grant dollars have helped turn Troy around in a big way, helping the city leverage private financing and complete a number of hugely beneficial community projects," said Schumer. "But just as the resurgence of Troy is picking up steam, HUD is considering reforming the grant program to deny cities like Troy these crucial funds. It makes absolutely no sense to take away the very funding that is driving the rebirth of Troy just because the population dipped slightly below 50,000 people. So, I'm putting HUD on high alert right now that I will staunchly oppose any proposal to remove Troy's eligibility for yearly CDBG funds."

Schumer stood at the intersection of 3rd and 4th Streets in Troy,  at the center of a neighborhood which has just undertaken over $2 million in improvements with the help of CDBG funds. He detailed a number of local projects in Troy that have received CDBG funds and how they have helped turn around areas of the City. He was joined by Troy Mayor Lou Rosamilia, members of the City Council and residents of South Troy.

In order to be eligible for an automatic annual allotment of CDBG funds as an "entitlement city," a city must have a population of at least 50,000 people. Recently, Troy slipped just below the minimum threshold with a population of 49,946. Previously, in 2011, Troy's population was 50,072. Under current eligibility rules, Troy can continue to receive CDBG funds directly from HUD due to the "grandfather" provision. However, the Department of Housing and Urban Development is considering ending the practice of grandfathering cities, instead making the 50,000person population threshold a hard cap. This change was proposed in the Administration's FY2014 budget but was never enacted. This year, the Administration is directing HUD to propose a package of legislative reforms to the CDBG program to Congress, and HUD is again considering removing the grandfathering provision for entitlement cities. Cities or towns under 50,000 can still receive CDBG dollars, but they must compete for funds from the overall allocation to the state, and typically receive much smaller awards. Entitlement cities like Troy currently receive an annual allotment directly from HUD; ending such an arrangement would make it much more difficult for Troy to secure CDBG funds.

Schumer said that such a hard cap would be unfair to cities like Troy, which makes great use of the CDBG funds and only just slipped below the minimum population requirement. In fact, Troy is currently in the process of finalizing its fiveyear plan for how to spend its allotment of CDBG funds, and it is difficult for the city to plan without having certainty regarding their "entitlement" status. In addition, any change made after Troy has already developed its plan would make it difficult for Troy to execute its proposed programs.

Schumer highlighted that the funds are playing a critical role in supporting Troy's economic growth, and cutting the city off from the funds now could stunt the progress that is being made. Therefore, Schumer launched a campaign to fight the elimination of Troy from the program, saying to HUD that he would staunchly oppose any proposal to Congress to reform CDBG that includes the end of the grandfathering provision for cities like Troy. Schumer sits on the Banking Committee, which would likely have jurisdiction over any proposed changes to the CDBG eligibility rules. Schumer also noted that the Senate is currently considering whether to confirm President Obama's nominee for Secretary of HUD, current Mayor of San Antonio Julian Castro, and Schumer has encouraged Castro to preserve the current "entitlement" program for cities like Troy as part of the ongoing confirmation process.

Schumer gave examples of past projects that Troy was able to undertake thanks to CDBG funds, including the following in South Troy:

·          Rehabbed six vacant buildings

·          Painted twelve derelict building facades

·          Constructed fourteen new single family homes

·          Repaved various streets and sidewalks. 

Schumer noted that Troy is currently in the process of developing a fiveyear plan for how to spend its CDBG funds. Troy's previous fiveyear plan aimed to tackle issues like homelessness, aging infrastructure and lack of affordable housing. The current fiveyear plan is being developed under the assumption that Troy will continue to be an "entitlement" city and not need to compete with other cities for CDBG funding.

A copy of Schumer's letter to current HUD Secretary Shaun Donovan is below:

Dear Secretary Donovan,

I write to you to share my concern about the U.S. Department of Housing and Urban Development's (HUD) forthcoming legislative package to reform the Community Development Block Grant Program (CDBG).  HUD's planning documents for "Moving CDBG Forward," as well as the Administration's FY2014 budget, included proposals for ending the practice of grandfathering cities in the CDBG Entitlement Communities program. Grandfathering has allowed cities that have held a population above 50,000 for two consecutive years, but have since dropped below a population of 50,000, to keep their annual CDBG allocation from HUD. One of the cities that would be most impacted by this proposal to end grandfathering would be Troy.

Last year, the population of Troy dropped to 49,946 - just 54 under the minimum threshold of 50,000 to qualify for the Entitlement Communities program. If Troy were to be removed from the program, it would lose approximately $2.5 million in federal investment per year.

In Troy, CDBG dollars have helped fuel the city's redevelopment efforts. For example, over the past few years, CDBG funding has helped Troy rehabilitate over 20 vacant buildings, paint twelve derelict building facades, construct fourteen new single family homes, and repave streets and sidewalks. Troy is currently formulating their next five year plan, but it is difficult to plan with the uncertainty around their future CDBG eligibility. Were Troy to be made ineligible for an annual CDBG allocation, they would have to compete with an everdecreasing pot of state funding, rather than receiving a predictable annual amount directly from HUD.

CDBG is an invaluable resource to our communities across New York State. I look forward to engaging in a dialogue about making CDBG a strong program for future generations, but I will be unable to support a proposal that would eliminate the grandfathering of cities like Troy from the Entitlement Communities program. 

Thank you for your time and consideration. If you have any questions or concerns please feel free to contact me or my staff in my Washington, D.C. office. 


Charles E. Schumer

U.S. Senator