Cuts in federal block grants could hit home in Dakota County

What do a historic bank, a senior housing development and a food shelf have in common?

They have all benefitted from a nearly 30-year-old county program financed by the federal government, which is now considering making drastic cuts to the funding.

During its decades of activity in Dakota County, the Community Development Block Grant (CDBG) program has allocated millions to help cities and townships fund projects that benefit low- and moderate-income people and eliminate slum and blight conditions.

Since 1984, when the county became a block grant recipient, local government agencies have used the money in a variety of ways including revitalizing and preserving a historic downtown and providing loans for people to fix up their homes.

"Basically, it's one of the few federal programs available to local governments to address housing needs," said Tom Link, community development director for Inver Grove Heights.

This week, Burnsville Mayor Elizabeth Kautz is leading a delegation of mayors from across the country to Washington D.C.; on thing on their agenda is to appeal to lawmakers to support CDBG funding.

In Inver Grove Heights, some of the CDBG funds have been used by the city to acquire property in the Doffing Avenue neighborhood, which lies in the Mississippi River floodplain. The program is important because homes in the floodplain can create environmental and public safety issues, Link said.

Last week, President Obama announced a budget plan for fiscal year 2012 full of cuts to funding for domestic programs, including a trim of $300 million for the CDBG. There are other plans in Capitol Hill to cut funding to CDBG for fiscal year 2011 by 60 percent or more.

"Over the years, we've come to rely on it quite heavily," said Jim Hartshorn, community development director for West St. Paul. "It's a good program, especially in a town like this where there is a lot redevelopment."

In the 2010 fiscal year, the county received about $1.9 million through CDBG. Most of the funds are used for housing rehabilitation programs. Rehab programs such as the one in West St. Paul help low-income residents get loans to improve their homes. The program in West St. Paul helps give out about 16 loans per year, Hartshorn said.

Without the program, home values could go down, he said.

In Burnsville, CDBG funding has been used for senior services and maintaining the Garage, the city's teen center, among other projects, said Julie Dorshak, community services manager for the city.

The Garage would probably have to reduce its after-school and summer programming if its CDBG funding were cut by half or more, said Eric Billiet, recreation supervisor at the Garage.

The Garage provides after-school programs such as arts and nutrition classes, as well as a tutoring program, with the help of a full-time staff person paid in part by CDBG funds. That staff position would probably have to be cut if there were a drastic reduction in funding, Billiet said.

"A lot of them just didn't do their homework before they came here. They would probably go back to not doing their homework," Billiet said.

Since 2001, the county's allocation of CDBG funds has decreased by more than 12 percent. In the past, the county has tried to fill the void by getting grant money from other sources, said Dan Rogness, director of community revitalization for the county's Community Development Agency.

"The problem is that if the gap is significant ... it's very difficult if not impossible to find some other source to fill that," Rogness said.