CDBG Administrative Costs

Dear Management Doctor:

I was wondering if you could recommend some reading material regarding performance benchmarks for the allocation of CDBG funds as well as something on the guidelines for developing a good formula for determining how much of the entitlement gets spent on administration (salary, benefits, rent, legal and financial services, etc.) versus programmatic functions (actually producing affordable housing and jobs).

This is also for the Binghamton research as it relates to assisting the Mayor identify new budget priorities for producing verifiable community development results. My initial budget review highlighted an imbalance between CDBG and General Fund allotments to administrative staff and operational expenses verses the money spent on implementing identifiable CDBG programs. The General Fund only pays for the equivalent of a single staff person in the Planning and Development Departments combined. I intend to compare the current situation with historical budgets and staff levels (every five years) going back 15/20 years to see if there has been a decline in the General Fund contribution for staffing and administrative expenses and in increased reliance upon CDBG. I know that public services, within certain limits, are allowable under the program, but it was also my understanding that the CDBG program is not designed to pay for the basic staffing of government services.

I'd appreciate any comments or reading recommendations anyone might have.


J. Justin Woods
Binghamton, NY

Dear J. Justin,

The Doctor doesn't know, but hopes his readers can give you some help. In my experience, each community handles CDBG funds somewhat differently. Some will try to load as much staff as they can get away with; others will try to reduce the staff and administrative charges as much as possible. I favor the latter.

The Management Doctor

Reader Responses

Strongly support the concept of integrating Planning with Economic Development if you can swing it. If ED is a separate department (unless Director is professional planner), there will be constant rangling. ED will always concentrate on short-term projects and the hell with long-range planning; future opportunities will be lost. Yes, try and include an economic development in the General Plan. I added an ED element to the Los Angeles County Plan back in 1981 and it was well received. Form an advisory committee of prominent businessmen.

Good Luck,
Norman Murdoch, FAICP

This is one area where planning and city administration run askew. When the two disciplines (planning and economic development) function in vacuums, the EconDev folks may sometimes give commitments that are not consistent with plans, codes, or policy. Then when the project finally comes to planning, "the damned planners are screwing up our economic development potential with their bureaucracy." The planners are turned into "roadblocks" or delays. I've found that some EconDev directors, mayors, and council members become enthusiastic about a project and make commitments forgetting that some of the "planning department delays" are caused by ordinances they enacted.

The most successful setup I saw was a town with a separate Economic Development/Redevelopment department that had a mayoral policy for a weekly meeting. The meeting was attended by the City Manager, Planning Director, Public Works Director, and Utilities Manager, or reps with responsibility and authority. They went over all the prospects the EconDev Director spoke with during the prior week, and his potential contacts in the coming week. If a project was large, the EconDev Director included planning, public works, and utilities in client meetings.

The worst situation of which I'm aware is one where everything EconDev did was "confidential" and couldn't be shared until publicly announced. This resulted in more than one economically desirable project being proposed for controversial or impossible locations. Planning was, of course, the bad guys because they insisted on an EIR (even though it was clearly required by law). The Planning Director was ultimately fired because his "strict interpretations" (following the code and CEQA) were adversely impacting economic development.

The moral — either combine or mandate early communications — make sure the missions of the EconDev Dept and Planning Dept mesh. And planners have a responsibility to alert the mayor and council when existing plans or codes could run contrary to the city's economic development policies. The alert should come long before a project is submitted.

Eric Toll
Phoenix, AZ