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The North Bend Eagle


New regulations may force city to return grant money

by Nathan Arneal
Published 8/10/11

The city of North Bend has more than $25,000 sitting in its coffers to spend on housing rehabilitation, but new federal regulations may force the city to send the money back to the state.

About six years ago, North Bend received a $250,000 federal grant to help low-income citizens update and modernize their homes. Ten people in North Bend received grants of between $20,000 and $25,000 for updates such as new shingles and/or windows.

If the person applying for the grant was below a certain income, the money was free. If the applicatn’s income was above a certain point, he or she would be required to make small payments to the city. Eight of the local recipients did not have to pay any money back.

As a requirement for the grants, the applicant had to live in the house for 10 years after it was rehabbed. Since the program started, several of the grant recipients died or have moved into a nursing home. Since they did not meet the 10-year requirement, their family had to repay a percentage of the loan to the city after selling the house.

The city has accumulated payments of $25,931. That money, along with any money paid to the city through this program, is required to be put back into the program and handed out in future loans or grants.

The problem North Bend is facing is that last fall the federal government amended the regulations of the program to stipulate that rehab grants cannot be given to homes sitting in the flood plain.

The entire city of North Bend is in the flood plain.

In Sept. 2009 a letter was sent out telling cities to send any unused grant money back to the state. City clerk Thereasa Busse said this demand came unannounced, and many cities, including North Bend, were caught unaware and had to send money to the state that it could have loaned out. At that time, North Bend sent $21,614.99 back to the state.

This time, Busse is expecting the biennial notice to return unused funds next month, but because of the flood plain rule, North Bend cannot give out any further grants or loans and will likely have to return the $25,931 it has collected in the past two years.

Representatives from the Northeast Economic Development District, through whom the original grants are funneled, attended the Aug. 2 City Council meeting to answer questions, but they gave a pretty bleak outlook on North Bend’s ability to use the money.

One sliver of hope came in a forum in Fremont the mayor and city council attended July 21. There Jamie Arens, the housing supervisor for the NEDD, said North Bend may be able to use the rehab funds to clean up properties or structures deemed a public nuisance.

However, North Bend may not have enough time to put the funds to that use before the state tells the city to send in whatever money it has in the program’s account.

In other news, the city received a “pool cool grant” that it was able to use. Three Rivers Health District gave the city $1,500 to encourage sun protection at the city pool.

With the funds, the city bought 3 gallons of sun screen, had a member of Three Rivers give a program on sun protection and bought six sun umbrellas for use at the pool.

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