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<br />SECTION II <br /> <br />During the Community Development Block Grant (CDBG) fund program year 1998/99, the <br />U.S. Department of Housing and Urban Development (HUD) ruled that activities funded <br />under "Assistance to Institutes of Higher Education" were Public Service activities subject to <br />the 15% maximum spending cap for Public Service activities. The City granted $135,807 to <br />Canada College under this provision. This expenditure caused the City to exceed the 15% <br />statutory spending limit for Public Service activities. As a result, the CDBG fund is required <br />to return the money to U.S. Treasury; the same amount of money will be added to the <br />existing entitlement (1998/99) to be used for other activities. The CDBG fund does not <br />currently have sufficient cash to return the funds. It is recommended that the general fund <br />transfer the cash to the CDBG fund to be returned to the U.S. treasury. CDBG will <br />reprogram the entitlement to add expenditures for the Hoover Pool Renovation project that <br />were previously supported by the general fund. <br /> <br />GENERAL FUND <br /> <br />1. <br /> <br />Operating Transfers <br />A. Unappropriated Fund Balance - Authorize an operating transfer of $135,807 from the <br />general fund to the CDBG fund so that funds expended in error (and subsequently <br />reimbursed by HUD) can be returned to the U.S. treasury. <br /> <br />B. <br /> <br />Decrease the budgeted transfer from the general fund to the capital projects fund. The <br />CDBG fund will now provide an additional $135,807 of the cost of the Hoover Pool <br />Renovation project. The two operating transfer changes offset each other for a net cost to <br />the general fund of zero. <br /> <br />COMMUNITY DEVELOPMENT BLOCK GRANT FUND <br /> <br />1. <br /> <br />Operating Transfers <br />A. Authorize an operating transfer of $135,807 to the Community Development Block Grant <br />fund from the general fund so funds expended in error and subsequently reimbursed by <br />HUD can be returned to the U.S. Treasury. <br /> <br />2. <br /> <br />Capital Projects Appropriation <br />A. Increase the budget for the Hoover Pool Renovation project in CDBG fund by $135,807. <br />The HUD entitlement will be increased by the funds retumed to the U.S. Treasury, and the <br />Hoover Pool Renovation project budget will be increased by this amount. Expenditures <br />equal to this amount charged to the CDBG fund will subsequently be reimbursed by HUD. <br /> <br />CAPITAL PROJECTS FUND <br /> <br />1. <br /> <br />Operating Transfers <br />A. Decrease the operating transfer from the general fund by $135,807. The CDBG will be <br />paying for a larger portion of the Hoover Pool Renovation project, so these funds will not be <br />required. <br /> <br />2. <br /> <br />Capital Project Appropriation <br />A. Decrease the budget for the Hoover Pool Renovation project to reflect the fact that the <br />CDBG fund will be paying for a larger portion of the project. <br /> <br />GRAND TOTAL <br /> <br />q P-S <br /> <br />135,807 <br /> <br />(135,807) <br /> <br />135,807 <br /> <br />135,807 <br /> <br />(135,807) <br /> <br />(135,807) <br /> <br />816,230 <br /> <br />..~. "'T <br />