Council Considers Redirecting Low-Income Funds to Placemaking Projects; Gets Update on Lead Pipes

This week’s City Council meeting was “discussion only,” with two of the four main items being addressed in a closed session in camera: negotiations with the Police Patrol Officers’ Union and continued discussion of City Manager George Lahanas’ job performance.

What the public was allowed to see at the Oct. 11 open session were discussions of the use of U.S. Department of Housing and Urban Development (HUD) funds and the Department of Public Works’ progress in replacing drinking water lines to homes in East Lansing.

The council can redirect funds earmarked to support low-income people to projects aimed at bringing energy to public spaces.

Matt Apostle, the city’s Community & Economic Development Specialist, gave the first presentation. He explained that very soon the City Council will have to decide how to redirect funds provided by the HUD Community Development Block Grant (CDBG) funding.

About $61,000 was expected to be used for down payment support for low- to middle-income people looking to buy homes in East Lansing.

The grants were offered at up to $30,000 per household. But Apostel told the council: “Based on our current market conditions, no one has successfully used these funds since May 2020.”

There are few homes for sale in East Lansing, Apostel said, and those that cost too much for people who qualify for the grants, even with the down payment support.

That means the roughly $61,000 remaining in this category must be “spent or reprogrammed” by November 3, 2022, or it will expire.

Apostle assured the council that if an eligible applicant applies for this down payment assistance after the $61,000 has been reallocated, they could still receive assistance of $237,077 that has not yet been allocated in the city’s home rehabilitation assistance funds.

City of East Lansing

Slide from a presentation to the City Council on October 11, 2022, showing where approximately $485,000 in unused HUD-CDBG grants for East Lansing “sit.”

In fact, Apostel said, the city has so much money left over from CDBG aid that HUD is requiring that a total of $289,242 be spent or forfeited by May 2, 2023.

He recommends that the city take a total of $120,000 (including the $61,000 remaining in the down payment assistance program) and invest in two “placemaking” projects designed to create more exciting public spaces.

If the council agrees to its recommendations, $40,000 of the $120,000 will be used for the “soft costs” (including design and engineering) associated with the new farmers’ market pavilion.

The city has received a $1 million grant from the Michigan Economic Development Corporation for this project, and the city needs to find a way to match that $1 million grant. That $40,000 in expenses would count towards that match obligation.

City officials plan to spend the other $80,000 on “public lighting in eligible census areas (including downtown).”

This problem requires a little explanation:

HUD identifies “eligible census districts” that may benefit from CDBG (low-income) grants by examining where pockets of poverty appear to exist. But HUD doesn’t differentiate between “low-income” college students and the rest of the low-income population.

Because so many students live in downtown East Lansing — including in one-bedroom apartments that cost over $1,000 a month — the HUD consequently treats downtown East Lansing as a low-income (poorer) area.

The City of East Lansing has long taken advantage of downtown being an “eligible area” to use CDBG funds to fund infrastructure in the area, including new sidewalks. (In one well-known case, the city used the funds to pay for a new retaining wall along the city attorney’s private property — a misuse of funds that led to the Justice Department suing the city on HUD’s behalf.)

In this case, city workers want to spend $80,000 to increase downtown “nighttime security,” but they don’t want boring, utilitarian lighting. Instead, they see it as an opportunity for place-making.

They suggest buying special lighting to “create opportunities for increased downtown public space activation” — to try to draw more people downtown and make downtown feel more exciting.

City of East Lansing

These examples of downtown lighting styles were presented at the City Council meeting on Tuesday 11th October.

During City Council discussion, this plan to take low-income housing money and use it to create public spaces didn’t sit well with Councilor Dana Watson, who said it wouldn’t make East Lansing a more affordable place to live. She revealed she received down payment help years ago and said she “wouldn’t be here” (in East Lansing) if it wasn’t for that.

But employees couldn’t think of an easy and quick way to allocate those funds to low-income housing needs. As of this writing, it looks like the funds will be diverted to the proposed projects.

The expectation is a public hearing on the matter at City Council on November 1, 2022, followed by Council approval.

City employees are struggling to meet state requirements for lead pipe replacements.

As ELi previously reported, in response to the Flint Water Crisis, the state of Michigan is requiring all municipalities to complete a “final comprehensive inventory” of drinking water pipelines by January 1, 2025. The goal is to identify lines that could leach lead into drinking water by then and to replace all problematic lines by 2040.

Here, the enormous task of surveying and replacing lines falls to the City of East Lansing employees and the Department of Public Works contractors they hire.

And it hasn’t been easy, DPW Deputy Director Nicole McPherson and Infrastructure Administrator Ron Lacasse told City Council. Poorly maintained records, paving and landscaping obscuring access to the pipes, and property owners either disinterested or reluctant to participate have hampered progress.

City of East Lansing

City officials have been continuously working on the problem for years and have tried many means of getting property owners involved, including door hangers, letters, reporting problems, inserting bills, knocking on doors, and offering evening and weekend appointments. They did surveys and replacements when other jobs opened up opportunities to deal with problems.

But it wasn’t easy or cheap. Lacassse estimates that if the city finds a problematic pipe, the replacement cost to the city is between $4,000 and $7,000 per lot, not counting city staff time.

Councilor George Brookover asked if the staff had an estimate of what the total cost to the city of this government mandate would be. McPherson and Lacasse said it’s difficult to give an estimate when they’re still unsure of how many tubes will need to be replaced and how complicated the replacement will be.

The cost of this work is currently being covered by water bills issued by the East Lansing – Meridian Water & Sewer Authority (ELMWSA) and this is one of the reasons water bills have increased. McPherson told the council she hopes soft loans can be obtained from the Drinking Water State Revolving Fund for this work and that those loans will eventually be forgiven.

Property owners who want to know how to check their plumbing and water can learn more at this city’s dedicated website. You can find slide presentations from this week’s meeting in the published agenda and also view the meeting recording online.

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