11/2/09

Comments regarding the Community Development Block Grant for the 'E' Street Project

Madam Mayor,

On page 3, under Term of Agreement and Expenditure Schedule, which should probably read “Terms”, it says under line 2: “If the City does not secure additional project funding from other sources by February 10, 2010, the County will deobligate the CDBG funds in this Contract”

I would like to remind my fellow council members that this implies several things. One, it implies that we cannot consider this grant “free money” for the sidewalks alone. This grant can only be given to the city if it is a small part of a larger project. By voting for this grant, we would be voting for a $6 million project, not just $300,000 sidewalks.

The grant cannot be given to the city without us finding more money, either from:

  • raising taxes,
  • increasing the debt of the city through a council bond, or
  • from additional grants.

If we begin the project with the assumption that it is only sidewalks, we can get ourselves in a deep mess. This does not pay for only sidewalks. It pays for sidewalks as long as we build the rest of the E Street.

Term number 3 on page 3 states that the funds must be “approximately five percent of the construction funds…” 5% is the max it can cover. Three hundred thousand dollars is %5 of 6 million dollars. This means that 6 million dollars is the minimum that the city will have to spend on the total project.

However, if I understand correctly, the City is allowed to bill $150,000 on the first invoice before any other funds of the project are raised or spent. The language implies that the rest of the funds will only be released once the City can demonstrate that it has secured additional funding, and that the project is truly a $6,000,000 project. “Pay no money now! Six months same as cash!"

Let me be very clear about this. If I understand correctly, if for whatever reason the E Street project ends up dying on the drawing board, we will have to repay all of these funds to Clark County. This is not free money.

That means that the agenda bill is not a $300,000 grant for sidewalks that can stand alone. It is interconnected with the rest of the E Street project, and given the recent revelations at City Hall, I cannot vote in favor of this bill.