With much fanfare, President Clinton submitted to Congress the first balanced budget in over 30 years. As promised in his State of the Union address, he submitted a budget that would bar any substantial new spending and tax cuts, and that would provide the first projected budgetary surplus in more than three decades — three years before the 2002 targeted by the balanced budget agreement.

Critics of the President's budget contend that the $1.73 trillion budget contains too much new spending ($65 billion)and that many of the programs targeted for creation or expansion come from an increase in revenues generated from the tobacco settlement which hasn't materialized and violates the tight discretionary spending caps set by the budget agreement. It is also a general feeling among many Republican Congressional leaders that the budget should include a tax cut, which it doesn't.

As the pomp over the historic submission of the balanced budget subsided, community development practitioners clamored to know what was in it for them. The FY 1999 HUD budget contains proposed increases from $24.084 billion in FY 1998 to $25.017 billion for FY 1999.

The President's budget is just the beginning of the appropriations process. The House and the Senate will determine the funding levels for each of the 13 Appropriations Committees.Since the signing of the Balanced Budget Agreement in 1996, each subcommittee has imposed spending caps. It remains to be seen how HUD's request for additional funding will be received. The chart below outlines where the proposed increases will go.

PRESIDENT CLINTON PROPOSES TO INCREASE HUD'S FY 1999 BUDGET BY
$1.8 BILLION

Analysis of HUD's Budget

We encourage NCDA members to look very closely at HUD's budget, particularly at the CDBG and HOME programs. The following chart illustrates a few concerns.

HUD is proposing a new Set-aside under CDBG, $100 million for the Regional Connections Initiative, which will fund competitive grants to help states and localities cooperate regionally.

A new round of 15 Empowerment Zones at $1.5 billion would be funded over 10 years in equal annual amounts of $150 million. The Empowerment Zone program would be a mandatory expenditure under the authority of Title XX, much the same as the existing funding. Under the HUD proposal, no new Enterprise Communities would be funded.

The budgets calls for $50 million to fund cleanup and redevelopment of Brownfields from the HUD budget, as well as additional funding for the Environmental Protection Agency to fund local Brownfields assessments, capitalization for revolving loan funds for cleanup, job training and state voluntary cleanup programs.

Homeless Assistance Grants would be increased from $823 million to $958 million with 34,000 vouchers would be made available for the homeless, this would increase the total homeless assistance to $1.15 billion.

The HUD budget also calls for $400 million for a new Community Empowerment Fund to help economically distressed communities create and retain what HUD estimates to be 280,000 jobs.

The change in HOME set-asides went down by $5 million from FY 1998. Secretary Andrew Cuomo has said that although funding for Section 811 and 202 went down, HUD will offer the same number of vouchers and certificates this year as last. It is unclear exactly how this "administrative" change will be implemented. The HOME program also has $7 million dollars targeted for information management systems that would not, technically, be considered a set-aside. These funds come out of the program's administration budget at the federal level.

Also of note for our HOME program administrators is the proposal to create a HOME Loan Guarantee program (HOMEBank) of $100 million that would operate very similarly to the CDBG Section 108 Loan Guarantee program. Like its CDBG counterpart, the HOMEBank would allow a grantee to leverage five times the amount of their HOME allocation under a loan guarantee. The HOMEBank is designed to fund large rental and homeownership developments.

The HUD budget also allocates $25 million for Homeownership Zones while renewing all expiring Section 8 contracts at a cost of $7.2 billion. The Section 8 Preservation Reserve Account in the amount of $3.7 billion would be used to meet the cost of renewing 2 million units expiring in 1999.

Next Steps:

With an overall favorable response from many inside the Washington Beltway, it will be difficult for Congress to say that this budget is "dead on arrival." With nearly full employment, low inflation, low interest rates, not to mention an anticipated budgetary surplus, Congress will be hard pressed to simply reject the President's budget outright. To garner public support for the HUD budget, senior HUD staff are taking the budget to communities across the country.

The President's budget is just the beginning of the appropriations process. The House of Representatives and the Senate will determine the funding levels for each of the 13 Appropriations Committees. Since the signing of the Balanced Budget Agreement of 1996, each subcommittee has imposed spending caps. It remains to be seen how HUD's request for additional funding will be received.

NCDA is committed to being ever vigilant in following the appropriations process. Given that the President has requested a higher HUD budget, that includes lower set-asides for the CDBG program, does not mean that his request will be honored. Anything can happen during the negotiations process. With support from other public interest groups, we will continue our efforts to maintain funding levels and reduce program set-asides.

NCDA ANNOUNCES THE PUBLICATION OF ITS DISASTER RELIEF GUIDEBOOK

In 1996, NCDA received a $15,000 grant from the Fannie Mae Foundation to assemble a guidebook that would help community development practitioners take effective steps when dealing with natural disasters. Last week at the 1998 Winter Meeting, Dr. James E. Huger, Sr., who managed the project, presented the publication to Barry Zigas, Executive Director of the National Housing Impact Division at Fannie Mae. A copy of the guidebook, "Natural Disaster Preparedness Guidebook for Community Development Professionals", is enclosed. For additional copies, contact Jim Welfley at NCDA via e-mail (jim@ncdaonline.org) or phone (202.293.7587) or download the guidebook in its entirety from NCDAonline (http://www.ncdaonline.org/disaster.htm). Note: To receive a copy of the handbook referenced on page 57 of the Diaster Guidebook please contact Jim. Supplies are limited.

HUD MAKES AWARDS AFTER HOME NUMBERS ARE RECALCULATED

Due to an error in the number of HOME consortia and entitlement grantees, the CPD Data Systems folks have had to recalculate the allocations for HOME grantees. This situation caused a hold up of release of funds to all grantees. So if you haven't received your allocations yet, now you know why. NCDA has learned that grantees should have or will soon receive their FY'98 allocations and letters of credit.

HUD ANNOUNCES MORE CHANGES TO IDIS

Effective February 9, IDIS will change to become more like the CMIS system in that required set-up data must be entered before funds can be drawn down against an activity. When this new change goes into effect, grantees will no longer be able to draw down against new or existing activities unless all required set-up data has been provided. Grantees can preview this change in the "pseudo" or practice region. If you are uncertain as to whether you have completed the required set-up data on any project, it would be a good idea to review exiting projects for accuracy. The following is a listing of required data necessary for draw down.
 

Homeowner/Rental Assistance:   Screen: CO4MH02  CHDO Loan  Activity Type  Total HOME Funds Requested  Est. Units Completed  Estimated Units Completed  Type of Ownership Code  Loan Guarantee  Tenure Type  Total Est. Costs  County Code (only for states)  Homeownership/Rental Assistance:   Screen: C04MH03   Property owned by individual or firm Owner Address   (only required if a rental unit)  Name  Address  City  State  ZIP Code  Property Address  Address  City  State  ZIP Code

Tenant-based Rental Assistance:   Screen: C04MH06  Name  BDRM Code  Tenant Contribution  Race  Subsidy Amount  Median Income  Head HHLD  Size HHLD  Type HHLD  CNTR Type  Contract End Date  SSN

As mentioned above, these changes take affect on February 9, 1998.

NOTES FROM THE WINTER MEETING

The NCDA 1998 Winter Meeting was a rousing success. Members felt the sessions were timely, and relevant to their every day work realities. This was obvious to NCDA staff, as sessions ran long due energetic discussions and lively question and answer sessions. Members appreciated having HUD staff present during the Committee Meetings as resource folks for programmatic issues that always come up. The following are the highlights of the Committee Meeting discussions.

Community Development Committee
Chaired by Angelito Santos of Quincy, MA

As mentioned above, members felt it was a good idea to have HUD staff included in the Committee Meetings. Discussions that included HUD staff were concerns on IDIS, the Desk Guide to National Objectives and Eligible Activities, when HUD would release guidance on the revisions to the Single Audit Act.

• Committee members wanted to investigate how to contact other communities in their regions who were successfully completing program administration through IDIS. It was suggested that NCDA staff could facilitate coordination between like-sized communities to provide a "best practices" scenario to allow those grantees that have successfully negotiated the IDIS process to help others.

 
• Committee Chair Santos requested NCDA to officially support the U.S. Conference of Mayors in their opposition to the Home Rule provision in HR 2. This provision would allow greater flexibility at the local level in the siting of public housing projects. The Conference of Mayors voted to oppose this provision in the law at its Community Development and Housing Committee meeting on January 28, 1998. NCDA has advocated removal of this provision from HR2 since its inception.

 
• Chair Santos also wanted to revisit the Community Development Staff Survey Form. It was his opinion that Community Development Professionals and their staffs are so diverse that a single survey document would not provide NCDA and its members with useful information. NCDA staff and Chair Cinotti of the Professional Development Committee are working with Chairn Santos to come up with a survey instrument that addresses his concerns.

HUD staff in attendance included Paul Webster, Barbara Neill, Fred Eggars, Stan Gimont and Michael Friedburg. Most of the discussion at this meeting focused on HUD's attempts to address grantees concerns about the 108 program being less useful since the implementation of the Credit Reform Act. HUD is implementing a new program that will spread the risk of using the Section 108 Loan Guarantee Program through a securitization scenario. This program would be optional, and only those loan portfolios that are well managed would qualify for participation. HUD is looking at designing this program so that localities can make better use of Section 108.

One benefit of this program is that the risk is reduced because a portion of the portfolio's income stream is held to create a loan loss reserve fund. Many questions remain about the overall structure of this program.

• Members were concerned about the administration of this program by HUD. It was felt that HUD may not have the capacity and staff to administer the program effectively. This program would be in addition to the Section 108 program.

 
• Is $400 million enough to capitalize such a fund and how will the criteria of participants be generated?

 
• The Committee recommended that NCDA staff follow this program closely and advise HUD that its members want to be involved and included on the progress of this program.

 

Much of the Professional Development Committee's discussion focused on developing or expanding the participation of the NCDA regional affiliations. John Sasso, NCDA Executive Secretary, informed the committee that funds are available to provide meetings and workshops that would be designed to get more participation in the regions. His intent is to link the small cities and the entitlement communities as a way to share information, broaden our political base and support for CDBG and HOME, and increase regional participation and membership. Ideas include:

• Offer training grants through the National Affordable Housing Training Institute (NAHTI) to conduct joint training sessions with entitlements and small cities on the HOME and CDBG programs.

 
Also discussed were the possible sites in the more inactive regions to conduct workshops or initial visits to determine interest in the region becoming more active in NCDA.

Housing Committee
Chaired by Acting Chairperson, Emily Nottingham, Tucson, AZ

• The committee was interested to know why HUD had withdrawn its support for H.R. 217 — the "Homeless Housing Programs Consolidation and Flexibility Act" — a measure which would consolidate the seven homelessness programs established by the McKinney Act. NCDA staff has since learned that HUD believes the measure is too restrictive on the cities, as it mandates caps on spending for supportive services and section 8 housing. HUD reports that it has given up on working toward compromise and that it has withdrawn its version of the measure in both the House (H.R. 2307) and Senate (S. 1071). In the House, H.R. 217 was passed out of the Committee on Banking and Financial Services by a vote of 35-5 and the Chairman of the Committee, Rick Lazio (R-NY), will continue his push to have it brought to the House floor. In the Senate, efforts are underway to replace the withdrawn S. 1071 with another bill.

 
• The committee voiced their hope for a change in the HOME regulations relative to matching funds. The desired change, through legislation or regulatory changes, would bring HOME regulations more in line with CDBG regulations, which are less stringent in their definition of match.

 
• Peter Bell, Executive Director of the National Rehabilitation Lenders Association, presented the committee with a proposal that would remove the moratorium on loans to investors through the FHA 203(k) program. The program, which gives purchasers and existing owners of older residential properties access to improvement capital, currently bars for-profit ventures from borrowing through the program and reselling a newly "rehabbed" unit. The committee believes the 203(k) program is too important of a tool to withhold from those who want to improve housing units and, therefore, supports removing this moratorium. The committee further recommended that NCDA distribute the materials presented by Mr. Bell. As such, the materials are enclosed.

 
• The committee recommends the membership work toward uniform interpretations of HOME regulations. As an example, the committee cited differences between the way HUD field offices have interpreted the regulations relative to homeownership counseling. Some states have categorized it under the social services cap, others under the administration cap, and still others have not categorized it at all. The committee urges an end to this uncertainty.

• The committee agreed NCDA should distribute the NCDA Washington Report primarily through NCDAonline, phasing out the paper and mail version within 2 years. Such a phase out would benefit the members in two ways: 1) members could access the Report at least three days faster than they can through the conventional method and 2) the subsequent savings in overhead and mailing costs would lead to savings for the members, either through decreased annual fees or through decreased conference fees.

• The committee seconded the Board's recommendation to provide individualized passwords to members who wish to access NCDAonline. By doing so, the online activity of visitors to the "Members Only" section of the site can be more closely monitored. The section contains valuable NCDA information such as the NCDA Washington Report and, soon, the PAL database.
• The committee resolved to have online conference registration available through NCDAonline for the 1998 Annual Conference in Miami, FL.

 
• The committee resolved to have an e-mail list of both general members and whips in order to quickly alert members of breaking information posted to NCDAonline. The committee also recommends that another list of the two groups be compiled for fax broadcasts to accommodate members who do not have access to e-mail.

 
• The committee recommends having an NCDAonline "kiosk" available at meetings and conferences. The kiosk will consist of a PC with NCDAonline up and running. An attendee can then use the kiosk to become familiar with NCDAonline and ask the staff any questions they may have regarding its use.

 
• The committee recommends "outsourcing" NCDAonline to an outside contractor, thus saving staff time and ensuring that the site is a sound, full-featured and updated service for NCDA members.

NCDA Legislative Counsel to Fly the Coop
NCDA bids farewell to Jim Welfley, who will go on to become the New Media Manager for the Camber Corporation in Arlington, VA. In his new position, Jim will develop and enhance web sites for a variety of clients and market the many internet and related services offered by Camber to governmental, for-profit and non-profit organizations.

In his 10 months with NCDA, Jim covered housing issues, published HOMEWORKS and was the project director for NAHTI. He also edited and designed several publications, including the recently unveiled "Natural Disaster Preparedness Guidebook for Community Development Professionals". In addition, Jim developed NCDAonline, which he and the Camber Corporation will continue to maintain and enhance after he leaves NCDA at the end of February.

We wish him well in his new career, and are pleased he will continue to serve our membership as the web master of NCDAonline.

Posting Job Announcements
NCDA staff is ever willing to include position vacancies of member communities in the NCDA Washington Report. To better assist members as well as staff, we ask member communities to e-mail position vacancies to Karen Means, karen@ncdaonline.org, whenever possible. If you are not set up for e-mail, please fax them to Karen. An electronic copy makes it easier to post the position on NCDAonline.

• The NCDA Washington Report is now available on the internet! Just point your browser to http://www.ncdaonline.org

• NCDA's new e-mail address is karen@ncdaonline.org — DO WE HAVE YOURS???

NATIONAL COMMUNITY DEVELOPMENT WEEK ACTIVITIES

April 6-12, 1998 is National Community Development Week. Please forward a schedule of your community's CD Week activities. If you need additional promotional materials, please contact NCDA staff as soon as possilbe.

FEDERAL REGISTER NOTICES

Notice of Annual Factors for Determining Public Housing Agency Administrative Fees for the Section 8 Rental Voucher, Rental Certificate and Moderated Rehabilitation Programs. [Docket No. FR-4290-N-01] Pages 4089-4146. January 27, 1998 (Volume 63, Number 17) Department of Housing and Urban Development, Office of Public and Indian Housing.

Notice of Solicitation for Proposals: "Building Safer Public Housing Communities through Locally Initiated Research Partnerships, 1998." Department of Justice, Office of Justice Programs, National Institute of Justice. This action is authorized under the Omnibus Crime Control and Safe Streets Act of 1968, Sec. 201-03, as amended, 42 U.S.C. Eight to 12 awards for the total expenditure of up to $975,000 will be awarded to proposal that include specific areas of research. For more information please contact the Department of Justice at 1-800-851-3420.

Announcement of Funding Awards, Federally Assisted Low-Income Housing Drug Elimination Grants Fiscal Year 1997. Announcement of funding awards. FR January 30, 1998, page 4656-4663. [Docket No. FR -4191-N-04] For further information contact Michael Diggs, Office of Multifamily Housing Asset Management and Disposition, Department of Housing and Urban Development, 202-708-0558.

Announcement of Awards for the Economic Development and Supposrtive Services Program - Fiscal Year 1997. [Docket No. FR-4196-N-06] Sixty million dollars in fundng will be awarded. For more information contact Maria-Lana Queen, Office of Community Relations and Involvement, 202-708-4214.

Announcement of Funding Awards: Emergency Shelter Grants Set-aside for Indian Tribes and Alaskan Native Villages, for Fiscal Year 1997. [Docket No. FR-4163-N-63] Page 4655-4656. Department of Housing and Urban Development, Office of Public and Indian Housing. This notice announces the funding of $1,265,000 to be used to help improve the quality of existing emergency shelters, meet the costs of operating emergency shelters, make available additional emergency shelters, meet the costs of operating shelters and help prevent homelessness. For more information please contact Robert Barth, Office of Native American Programs, Office of Public and Indian Housing, the Department of Housing and Urban Development, at 415-436-8122.

JOB OPPORTUNITY — Abilene, TX

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