For example: City X does not have a CDBG activity planned on which to use its FY 2016 CDBG funding from the county. City Y, located next to City X, has an important project that will cost much more than it received from the county. Can City X trade its CDBG funds with City Y in exchange for City Y giving an equivalent amount of local fund money to City X?
Date Published: March 2019
No. Pursuant to the Consolidated and Further Continuing Appropriations Act, 2016, Pub. L. 114-113, a unit of general local government may not sell, trade, or otherwise transfer all or any portion of such funds to a metropolitan city, urban county, unit of general local government, or Indian tribe, or insular area that directly or indirectly receives CDBG funds in exchange for any other funds, credits or non-Federal considerations, but must use such funds for activities eligible under Title I of the Housing and Community Development Act of 1974, as amended. Congress prohibited this practice, beginning with the Consolidated Appropriations Act, 2014. This provision must be incorporated into cooperation agreements by revision or amendment.
In addition, the decision on appropriating CDBG funds in the urban county is not made by any of the participating UGLGs; it is made solely by the urban county.