Merced’s City Council approved a change to the U.S. Department of Housing and Urban Development plan that will salvage some dollars for use on a graffiti project, but the city still must dip into the general fund to make up for failed economic projects.
The council unanimously approved an amendment redirecting $100,833 to graffiti abatement and other services expected to be approved under HUD rules during Monday’s regular meeting.
HUD had found issues with a graffiti-abatement program that required reports on abatement efforts in designated disadvantaged neighborhoods. City staffers eventually were able to generate the necessary reports and keep the HUD money in the program, said Mark Hamilton, a housing specialist with the city.
However, the city will have to cover $230,807 spent on economic development with general fund money.
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Some of the federal dollars were aimed at a Wal-Mart distribution center, plans that have been delayed.
HUD funding and other sources would have helped cover the cost, and would have required local hiring, but that money fell through with the projects. HUD requires “measurable results” in projects funded by the federal money.
In 2005, the retail giant proposed to build a 1.2 million-square-foot distribution center on a 230-acre site at the northwest corner of Gerard Avenue and Tower Road. The corporation announced in December that Merced would not see the facility break ground in 2014.
City Manager John Bramble has said the rules and regulations for HUD funding have changed over the past few years. City staffers have caught up on the training needed to meet those regulations, he said.
General fund money typically pays for public safety and other services. “These (amendments) are painful, coming out of the general fund,” Councilman Mike Murphy said.
In March, the council shuffled around $360,000 it received from HUD to allow the city to put the money toward other efforts in town. Those funds can be used on rehabilitation and reconstruction.
Merced prepares a plan for submission to HUD every year. The framework for the plan is found in the 2010 Consolidated Plan, a five-year planning document that outlines the city’s strategy for pursuing federal, state and local resources to meet housing and community development needs of low- and moderate-income Merced residents.
The last HUD plan was adopted in September.