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IR 7898
u WFOR'MAL REPORT TO CITY COUNCIL MEMBERS No. 7898 �,,P T C AFO 64foaTyo To the Mayor and Members of the City Council March 16, 1995 V S Yr�xf�. Subject: POTENTIAL IMPACT OF PROPOSED FEDERAL BUDGET CUTS 'a 7 ON THE CITY OF FORT WORTH BACKGROUND: During the past week, the Mayor and City Council Members Webber, Barr, Haskin, Lane and Woods have participated in the National League of Cities (NLC) Annual Congressional City Conference in Washington, D.C. The NLC Congressional City Conference provides an opportunity for the Nation's municipal leaders to come together to take the responsibility for shaping the future by sending a united message to Congress and the President about redefining national priorities. As you are aware, one of the most significant national priorities at this time is the framing of the federal budget. City staff has prepared a paper describing the adverse impact recently recommended budget cuts and rescissions would have on Fort Worth. A copy of that document is attached for your review. In conjunction with the NLC Conference and advice from Bracy Williams & Company, representatives of Fort Worth's leadership are meeting with members of the Texas Congressional delegation to express their concerns about recent legislative recommendations which would � adversely impact Fort Worth. If you have any questions, please let me know. &b_,R .2�� �- Bob Terrell City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS l. IMPACT BALANCED BUDGET AMENDMENT AND FY 95 BUDGET RESCISSIONS CITY OF FORT WORTH Program Name FY 1995 Allocation Amount Program Reduced Status Community Development Block Grant (CDBG) $8,207,900 $531,000 Rescinded Impact - See attachment Community Services Block Grant (CSBG)- $31,106 $31,106 Eliminated homeless Impact - 181 clients will not be provided the following services: first month's rent, bus tokens, water bill payments, food vouchers, gas and electric payments Housing Opportunities for Persons With Aids $521,000 $521,000 Eliminated (HOPWA) Impact - See attachment o r4,,,ow Income Housing Energy Assistance Program $1.577 million $1.577 million Eliminated LIHEAP) (current funding) Impact - 7,454 persons will not be provided energy assistance Stockyards Infrastructure Revitalization Project $7,500,000 $7,500,000 Rescinded Phase 11 Impact - Planned infrastructure revitalization project terminated Section 8 Incremental Rental Assistance $798,000 projected $798,000 Eliminated Impact - 125 units of Section 9 housing cannot be added Public Housing Operating $2,448,233 $393,394 Rescinded Impact - 15% across-the-board for Public Housing Authority Public Housing Modernization and Development $2,103,521 $915,326 Rescinded Impact - no air conditioning added in public housing � Program Name FY 1995 Allocation Amount Program Reduced Status Public Housing Development $1,100,000 projected $1,100,000 Funds almost Impact - cannot use funds to supplement eliminated $3 million in Highway Department funds for 82 Butler replacement units resulting in a deficit of 22 units Summer Lunch Program $463,832 $510,215 Program Impact -No negative impact shown. rescinded Original allocation would serve 4,690 and block children at 48 sites granted with net increase of 10% expected from reduction in accounting and paperwork 0/0 1um_mer PARENTREAD $28,756 $28,756 Eliminated Impact - 300 adults/children would lose benefit of summer family literacy program Youth Fair Chance $2,000,000 $2,000,000 Eliminated Impact - 2,000 youth on East Side of City not served by program to stabilize problems inherent with poverty, low educational levels and unemployment 1995 Summer Youth Program $2,344,763 $2,344,763 Eliminated Impact - 970 youth denied opportunity for summer employment Adult Job Training $2,091,060 $24,579 Rescinded Impact - 5 adults will not receive job training Year Round Youth Programs $1,344,509 $693,945 Rescinded Impact - 281 youth will not be served Displaced Worker Program $2,335,413 $197,303 Rescinded Impact - 57 displaced workers will not be 1,. served IMPACT OF RESCISSION OF COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS Enactment of the proposed 1995 Rescission Bill will not only immediately impact some of Fort Worth's low income citizens, but will also impact the city and its residents over the longer term. A few examples of the impact of the proposed reduction of $531,000 in FY 1995 Community Development Block Grant funds for selected activities are outlined below: I. HOUSING The proposed rescission will reduce the amount available for housing programs to assist low and very low income citizens of Fort Worth by$275,888. Examples of the impact of this reduction are: *25 low and very low income families will not have the opportunity to become homeowners; and *26 low and very low income homeowners will not have resources available for home improvement assistance, some of which will be emergency in nature. Community wide impact will include a reduction in tax dollars not paid (an estimated $300-$600 annually per household), neighborhoods that will not be revitalized, reductions in crime that may not occur, and the loss of citizen pride in the ownership of decent, affordable housing in safe neighborhoods. 11. PUBLIC SERVICES The proposed rescission will reduce the funding allocated for public services programs by $77,420. Examples of the projected impact resulting from this reduction are: > loss of services designed to provide 150 gang members with services to assist them in leaving gangs and learning alternative, productive behaviors that will benefit them and the community; > loss of day care services to approximately 72 children; > loss of hot noon meals and a caring person to check the daily well-being of 5 elderly clients. Though the long term impact of youth remaining in gangs is difficult to accurately assess, community factors that will probably be impacted include increases in crime with accompanying costs to individuals and the community for loss of property and life; medical costs (many at tax payers'expense); costs to the criminal justice process(e.g., court costs, incarceration); and the loss of local, state and federal tax revenue that would be paid by persons (both reformed gang members and potential victims) who are contributing members of the community. The immediate impact of losing assisted day care services for low and very low income children may mean that an employed parent cannot keep on working, or that a parent involved in an educational or training program may not be able to upgrade their educational or job skills, both of which will ........... result in loss of income in the short and long term. The impact on children will be the loss of care and attention that would improve their developmental skills,with the ultimate result of less academic success and lower paying jobs once they become adults. Older adults who lose what is likely to be their only nutritious meal of the day and have no one to ensure their safety on a daily basis are at high risk for incurring increased medical costs as well as nursing home costs (both often home by tax payers). 111. ECONOMIC DEVELOPMENT One of the uses of CDBG funds in Fort Worth is to provide assistance to small businesses. When CDBG funds are used for economic development activities, the U.S. Department of Housing and Urban Development's(HUD) regulations require that jobs be created or retained, primarily for low and very low income persons. Though it is difficult to estimate the number of jobs that would not be created should CDBG funds be rescinded it is fair to state that examples of the impact on individuals, families, and the community would include lost tax revenue, increased numbers of persons in need of public assistance or of becoming homeless, and increased crime. IMPACT OF ELIMINATION OF HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS (HOPWA) FUNDS Also proposed in the Rescission Bill is elimination of the $521,000 FY 1995 HOPWA grant targeted for Fort Worth. The number of AIDS cases continues to grow, with Tarrant County having experienced a 75% increase during the past two years. As of January, 1995, there have been 2,003 cases of AIDS reported in Tarrant County; it is estimated that between 12,000- 20,000 persons in our community are infected with the HIV virus. Rescission of HOPWA funds will result in an increase in homelessness among persons with HIV/AIDS and their families. The costs to the community associated with this new wave of homelessness will far exceed the cost of providing services to prevent it. 'MAR-12 95 18:48 FRAM:BRAC'YWILLIAh1S8.00 2027835595 T0:8178718966 P94C6:02 FRmiR PUBLIC AFFAIRS—PEWS TO=202" 95 MW 13. 1995 f►:30PM 33132 P.02 D tM 0"WV "i1 Iiaalinp ow lkt�a O�rrlaywNrwl Of im of Nkft Aft" oi r News Release HUD No. 95-+66 FOR itKBASE: jadoe Brantford (817) 985-5401 Wednesday, HUD Pros Offim (202) 708-0685 March Z, 1995 TEXAS COMMUNITIES WILL LOSE MILLIONS IF CONGRESS "TAKES BACK" HOUSING FUNDS Texas communities, Including Dallas, Houston. and Sap Antonio, will lose MWions of dollars in federal housing and community development funds and 3,890 units of affordable housing if Congress adopts the cuts approval Feb. 23 by a:House Appropriations Subr�omtnit'toe: The Subc4nv itteze voted to cut about $7.2 billion from the budget of the U.S. Department of Housing and Urban Develoyaw t(HUD). Tbese proposed cuts -called "rescissions" .. would in effect take back money prevloasly approved by Congmis that communities throughout Texas have bow counting on for this year. "Ibe,loss of these funds In midstream of the budget y m -- withow any warning and without any chance to pUn for alternative rcvatwc sourm to undenake a variety of projem - - will be dcvamdug to dwwanda of low-ftmrna people in Texas and elacwhom around the nation," according to HUD Sectetaty Henry O. Clsneroa. The eswrmed impact on Texas communities 1netudes: PUBLIC HOUSING HOPE 6 grants recently awarded to San Antonio and EI Paso b laVrove screrdy distressed public housing woWd be eliminated. San Antonio is scheduled to receive $51 n-ation and M Paso $36.1 tnillion under this proptam. The two cities won thm grants in a national cvmpcaition,. MAR-12 95 18:48 FRpM:BRACYWILLIAMS8. t7 2027835595 M-817871e%6 PAGE.03 rf"IRM;RM PUB- AFFAtRS4&S M:2027E[15595 MAR 13, 1995 6131PM tt132 P.Q34 HUD No. 95-" -2- C:onxnunities throughout the state would receive significantly lees in funds for truxWnlzation of public housinj dmloprnents, leading to increased detottmation of projects, and a loss of operating subsidies, meaning less maintcaancc and potential lsy-offs of public housing employees. • Statewldc: Texas communities would lose morn than $117 million in public housing funds, for much n4o" modemitzation and operating subsidies. • San Antonio atone would lose$7 n-illion In modernlizadon fonds, and $2.3 minion in operating subsidies; • Houston would lose$3.8 million in modernization funds, and $1.1 million in operating subsidies; • 1l Paso would lose $4.5 million In rt Wernization funds, and $1.1 million in operating stfsldlee; RENTAL ASSISTANCE • Texas communities would lose$160 million for additional housing subsidies. winch would deny housing to at Yeast 3,400 low income fanrllles, now on a waiting list for low cost housing. • Houston would lose$24.3 million and Harris C=Ay S13 tmlllon. San Antonio would lose$8.8 million. El Paso would lose $7.1 million. AFFORDABLIR HOUSING Under than proposed rescissions, 2,900 housing units would no longer be available for purchaso by low-iitrcomo tenants at an affordable price. Under the r© dWon, these units would bo subject to purchase by 'the highest bidder, denying low-bmmt3 tarnilies a decant and affordable hwne, the HUD Soowtary said. The following projects would be affected: Houston Sotftm 224 units Houston Northline tit. 200 units Houston Aristocrat ,Aipts. 272 units Houston Patter square 175 units Houston Yorkshim WhW 248 units Beaumont Waahington Arno 150 units San Antonio Apt% Northwest 140 units h1AR-12 95 10:40 FROM:8FJ1C`fWILLIAMS= 202TB35595 T0:0170 710'366 rR3M-H_Q) PUBLIC AFFAIRS—WAS TOs2027335595 MAR 13. 1995 6:31F" #132 P.04 HUD No. 9546 -3- Son Antonio West Avenue 130 units San Antonia San lose 220 units San Antonio L.a Lucina Arms 128 units San Antonio Austin Arms 100 units Laredo redo Laredo Manor 100 units 81 Paso Transmountin8 138 units El Paso Sun Crest 100 units Odessa W oodcrest $o units COMMUNITY DEVELOPMENT Community Development Block Grant (CDBG) Niids, used sines 1973 to Wp low and rnoderato Income perrons and create new.econornic developrner opportunities, would also be reduced to both large and small Texat communities. • Statewide, communities would lose$20 million In ConunUnity Development Block Cent funds, including 52 million for Tom's smallest communities. • Houston alone would lose $2.4 million in ConunUrfty Development Block Chant funds. Harris County would lose another $800,000. • Dallas would lose $1,3 million. • San Antotdo would lose $1.4 million, I