Gene Thompson, volunteer for Nokomis Healthy Seniors, gives Joanne Bondy a hand. The care Bondy receives from Nokomis is in peril after federal cutbacks.

Jeff Wheeler, Star Tribune

Nationwide, cities are trying to cope with shrinking federal allocations for community-oriented programs.

Jeff Wheeler, Star Tribune


• Development Block Grants has shrunk from more than $17 million a decade ago to $10.7 million this year.

• Another federal program known as HOME Investment Partnerships, a substantial source of money for the city's affordable housing trust fund, was cut by more than a third for 2012.

• $20,000 yearly contribution from the federal government to Nokomis Healthy Seniors will soon expire.

Minneapolis copes with a smaller slice of federal funding

  • Article by: MAYA RAO
  • Star Tribune
  • March 12, 2012 - 8:55 PM

Joanne Bondy has lost most of the feeling in her feet. So every six weeks, a nurse stops by her Minneapolis home to check and treat them for infections she is at risk for developing as a 63-year-old diabetic. Other days, volunteers drive her to doctor's appointments.

But the $20,000 yearly contribution from the federal government to Nokomis Healthy Seniors, the nonprofit that aids Bondy and 500 other elderly citizens, will soon expire. It's one of the small but varied ways that Washington's pullback of community development funds is playing out in Minneapolis.

Despite a big-city president and a boost from the 2009 stimulus bill, cities across the nation are coping with shrinking federal allocations for community development -- a flow of money cities can tailor to their own needs, from affordable housing to job training to programs that allow people like Bondy to stay in their homes.

Those at Nokomis, one of three nursing nonprofits receiving similar aid in Minneapolis, fear the end of that money -- from a program called Community Development Block Grants (CDBG) -- will strain their ability to help seniors cope with arthritis, visit them at home and hold exercise classes.

The city's share of Community Development Block Grants has shrunk from more than $17 million a decade ago to $10.7 million this year. Another federal program known as HOME Investment Partnerships, a substantial source of money for the city's affordable housing trust fund, was cut by more than a third for 2012.

The 2013 budget released last month by President Obama kept funding for both programs at the same reduced levels.

Obama has made efforts to aid cities struggling with the effects of the economic downturn, but there is little financial ability or political will in Washington to advance large programs, according to Mark Muro, a senior fellow at the Brookings Institution. The administration's budget proposals for programs like the community block grants have declined in anticipation of backlash from Congress, while "there is a bipartisan assumption that budgets must be trimmed," he said.

Whose fault?

Some of the federal government's well-received efforts to boost cities include the Sustainable Communities Initiative, which has awarded a $5 million grant to the Twin Cities to foster smarter regional planning. A program aimed at helping cities recover from the foreclosure crisis has pumped $30 million into Minneapolis.

Cuts in other areas have prompted concern, though, as cities cope with the added pressure of reduced state aid. In Minneapolis, several municipal reports said block grant cuts could hurt disadvantaged residents, as well as hamper efforts to create jobs, develop housing and decrease blight.

In a statement, DFL Mayor R.T. Rybak, a supporter of the president, blamed the Republican Congress.

"I strongly disagree with the dramatic cuts ... made to CDBG and other valuable federal programs, which stand in sharp contrast to the dramatic benefits that Minneapolis reaped from President Obama's Recovery Act," he said. "But we're not letting these cuts keep us from serving our city."

Some have criticized the program, created in 1974, for not living up to its mission and lacking in accountability.

"The criticism that's been leveled at the program is, when the money is used, does it actually have this positive effect? If these are truly local projects, is it better that they be funded at the local level?" said Eileen Norcross, who authored a 2006 report calling for reforms as a senior researcher at George Mason University's Mercatus Center.

In Minneapolis, documents show cuts to the program have resulted in about one-quarter less money since 2010 for "Great Streets," a program to help spur economic development along commercial corridors. The city is also distributing fewer block grant funds to buy up "problem properties," train disadvantaged youth for jobs, and fund community crime prevention specialists, records show.

St. Paul is facing similar cuts. Officials there say the city is figuring out how to continue funding a youth jobs program, and can no longer rehab aging properties at the same pace.

In Minneapolis, Bondy said she doesn't know who would give her rides if it weren't for Nokomis Healthy Seniors -- she can no longer drive, and her relatives live far away. Cabs are too expensive. And Executive Director Kristen Whittenbaugh said Medicare doesn't cover the foot-care services provided to Bondy.

"I have a feeling that the government is not as receptive to vulnerable people right now, and I find it frustrating," Bondy said.

Some see conflicting messages from Capitol Hill.

For example, Minneapolis and other cities have seen a large uptick in federal emergency shelter grants that aim to move people out of homeless shelters more quickly, while cuts to the HOME program have hurt the city's ability to fund affordable homes for low-income residents.

Affordable-housing money

The decline in funds for that program, which pays for the construction and rehab of affordable rental housing, has lowered the amount in the city's affordable housing trust fund balance to about $7 million this year, according to Wes Butler, manager of multifamily housing in Minneapolis. The city typically aims to keep $10 million in the fund.

Developer Steve Minn said a 91-unit apartment development he is proposing at 520 2nd St. SE was delayed for a year while awaiting money from the account.

"It is inconsistent with the spoken aspirations of our political leaders in Washington that they want to provide assistance for housing and they want to cut these funds back," he said.

The city's housing authority, like many around the country, has also received less to fund day-to-day operations and modernize public housing.

Meanwhile, city officials say the cuts in community block grants have led to a decrease in the amount of money Minneapolis pays organizations for foreclosure prevention counseling, though the federal government has awarded Minneapolis $30 million through a program to acquire properties for renovation and resale or demolition.

Muro, of the Brookings Institution, said such federal spending has not kept pace with the magnitude of challenges cities face -- nor will it.

Cities, he added, "should assume they are largely on their own in dealing with the changed reality they face."

Maya Rao • 612-673-4210

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