[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
COMMUNITY DEVELOPMENT BLOCK GRANTS:
THE IMPACT OF CDBG ON OUR COMMUNITIES
=======================================================================
FIELD HEARING
BEFORE THE
SUBCOMMITTEE ON
HOUSING AND COMMUNITY OPPORTUNITY
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
APRIL 12, 2006
__________
Printed for the use of the Committee on Financial Services
Serial No. 109-85
U.S. GOVERNMENT PRINTING OFFICE
30-536 WASHINGTON : 2006
_____________________________________________________________________________
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HOUSE COMMITTEE ON FINANCIAL SERVICES
MICHAEL G. OXLEY, Ohio, Chairman
JAMES A. LEACH, Iowa BARNEY FRANK, Massachusetts
RICHARD H. BAKER, Louisiana PAUL E. KANJORSKI, Pennsylvania
DEBORAH PRYCE, Ohio MAXINE WATERS, California
SPENCER BACHUS, Alabama CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware LUIS V. GUTIERREZ, Illinois
EDWARD R. ROYCE, California NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma MELVIN L. WATT, North Carolina
ROBERT W. NEY, Ohio GARY L. ACKERMAN, New York
SUE W. KELLY, New York, Vice Chair DARLENE HOOLEY, Oregon
RON PAUL, Texas JULIA CARSON, Indiana
PAUL E. GILLMOR, Ohio BRAD SHERMAN, California
JIM RYUN, Kansas GREGORY W. MEEKS, New York
STEVEN C. LaTOURETTE, Ohio BARBARA LEE, California
DONALD A. MANZULLO, Illinois DENNIS MOORE, Kansas
WALTER B. JONES, Jr., North MICHAEL E. CAPUANO, Massachusetts
Carolina HAROLD E. FORD, Jr., Tennessee
JUDY BIGGERT, Illinois RUBEN HINOJOSA, Texas
CHRISTOPHER SHAYS, Connecticut JOSEPH CROWLEY, New York
VITO FOSSELLA, New York WM. LACY CLAY, Missouri
GARY G. MILLER, California STEVE ISRAEL, New York
PATRICK J. TIBERI, Ohio CAROLYN McCARTHY, New York
MARK R. KENNEDY, Minnesota JOE BACA, California
TOM FEENEY, Florida JIM MATHESON, Utah
JEB HENSARLING, Texas STEPHEN F. LYNCH, Massachusetts
SCOTT GARRETT, New Jersey BRAD MILLER, North Carolina
GINNY BROWN-WAITE, Florida DAVID SCOTT, Georgia
J. GRESHAM BARRETT, South Carolina ARTUR DAVIS, Alabama
KATHERINE HARRIS, Florida AL GREEN, Texas
RICK RENZI, Arizona EMANUEL CLEAVER, Missouri
JIM GERLACH, Pennsylvania MELISSA L. BEAN, Illinois
STEVAN PEARCE, New Mexico DEBBIE WASSERMAN SCHULTZ, Florida
RANDY NEUGEBAUER, Texas GWEN MOORE, Wisconsin,
TOM PRICE, Georgia
MICHAEL G. FITZPATRICK, BERNARD SANDERS, Vermont
Pennsylvania
GEOFF DAVIS, Kentucky
PATRICK T. McHENRY, North Carolina
CAMPBELL, JOHN, California
Robert U. Foster, III, Staff Director
Subcommittee on Housing and Community Opportunity
ROBERT W. NEY, Ohio, Chairman
GARY G. MILLER, California, Vice MAXINE WATERS, California
Chairman NYDIA M. VELAZQUEZ, New York
RICHARD H. BAKER, Louisiana JULIA CARSON, Indiana
WALTER B. JONES, Jr., North BARBARA LEE, California
Carolina MICHAEL E. CAPUANO, Massachusetts
CHRISTOPHER SHAYS, Connecticut BERNARD SANDERS, Vermont
PATRICK J. TIBERI, Ohio STEPHEN F. LYNCH, Massachusetts
GINNY BROWN-WAITE, Florida BRAD MILLER, North Carolina
KATHERINE HARRIS, Florida DAVID SCOTT, Georgia
RICK RENZI, Arizona ARTUR DAVIS, Alabama
STEVAN, PEARCE, New Mexico EMANUEL CLEAVER, Missouri
RANDY NEUGEBAUER, Texas AL GREEN, Texas
MICHAEL G. FITZPATRICK, BARNEY FRANK, Massachusetts
Pennsylvania
GEOFF DAVIS, Kentucky
CAMPBELL, JOHN, California
MICHAEL G. OXLEY, Ohio
C O N T E N T S
----------
Page
Hearing held on:
April 12, 2006............................................... 1
Appendix:
April 12, 2006............................................... 57
WITNESSES
Wednesday, April 12, 2006
Battle-Bey, Marva Smith, President and CEO, Vermont Slauson
Economic Development Corporation............................... 40
Burke, Yvonne Brathwaite, District 2, member, Los Angeles County
Board of Supervisors........................................... 27
Dorn, Roosevelt F., Mayor, City of Inglewood, California......... 13
Garcetti, Eric, District 13 President, Los Angeles City Council.. 10
Graves, Clifford, General Manager, Department of Community
Development, City of Los Angeles, California................... 33
Hofmann, Harold, Mayor, City of Lawndale, California............. 15
Jackson, Carlos, Executive Director, Los Angeles County Community
Development Commission and Housing Authority of the County of
Los Angeles.................................................... 36
Jenkins, Alvin, Project Manager, CBA/LA.......................... 38
Montiel, Rudolf, Executive Director, Housing Authority of the
City of Los Angeles............................................ 39
Netburn, Mitchell, Executive Director, Los Angeles Homeless
Services Authority............................................. 43
Ovrum, Robert, Deputy Mayor for Housing and Community/Economic
Development, City of Los Angeles, CA (on behalf of Mayor
Villaraigosa).................................................. 9
Patenaude, Pamela H., Assistant Secretary for the Office of
Community Planning and Development, U.S. Department of Housing
and Urban Development, accompanied by Nelson R. Bregon, General
Deputy Assistant Secretary and Jo Baylor, Assistant Deputy
Secretary for Field Policy and Management...................... 7
Shockley, Brenda, President, Community Build, Inc................ 41
APPENDIX
Prepared statements:
Ney, Hon. Robert............................................. 58
Solis, Hon. Hilda............................................ 60
Battle-Bey, Marva Smith...................................... 111
Burke, Yvonne Brathwaite..................................... 62
Dorn, Roosevelt F............................................ 64
Garcetti, Eric............................................... 68
Graves, Clifford............................................. 71
Hofmann, Harold.............................................. 80
Jackson, Carlos.............................................. 84
Montiel, Rudolf.............................................. 94
Netburn, Mitchell............................................ 97
Ovrum, Robert................................................ 100
Patenaude, Pamela H.......................................... 104
Shockley, Brenda............................................. 109
Additional Material Submitted for the Record
Statements of:
City Council of the City of Los Angeles...................... 113
City of El Monte............................................. 117
City of Monterey Park........................................ 118
City of Rosemead............................................. 119
Los Angeles Housing Department............................... 122
Herb J. Wesson, Jr........................................... 115
COMMUNITY DEVELOPMENT BLOCK
GRANTS: THE IMPACT OF CDBG
ON OUR COMMUNITIES
----------
Wednesday, April 12, 2006
U.S. House of Representatives,
Subcommittee on Housing and
Community Opportunity,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 9:00 a.m., in
Loker Conference Room, California Science Center, Exposition
Park, 700 State Drive, Los Angeles, California, Hon. Robert W.
Ney [chairman of the subcommittee] presiding.
Present: Representatives Ney and Waters.
Chairman Ney. I'd like to welcome everyone this morning to
the Subcommittee on Housing and Community Opportunity's field
hearing on the Department of Housing and Urban Development's
Community Block Grant Program, known as CDBG to the rest of the
country. And today will be an official hearing of the U.S.
House of Representatives, so the transcripts, as well as the
conclusions reached today will be taken back to Washington,
D.C., and will be utilized. I can kind of guess there will be
support of CDBG today to keep it. Then it will be important for
the rest of our colleagues in Washington, D.C., to know what
the attitude was out here.
I want to thank, first of all, our ranking member--
Congresswoman Maxine Waters--who asked for this hearing. I am
so happy that you have asked the subcommittee to come here, and
I thank you for hosting us here in Los Angeles.
And, of course, Congresswoman Waters and her staff have
played an extremely active role in preparing for this hearing.
We want to thank them. Also, Jeff Riley is here today; he works
for Ranking Member Barney Frank of Massachusetts.
And our chairman of the Full Committee, by the way, is
Michael Oxley of Ohio.
The CDBG program, of course, as administered by HUD, is the
Federal Government's largest and most widely available source
of financial assistance to support State and local efforts in
Government related neighborhood revitalizations, housing,
rehab, and economic development activities. It is generally
recognized as the mainstay for targeted community development
of cities, counties, and rural and urban areas to principally
benefit low- and moderate-income persons.
The program has developed its reputation for the past 28
years, and local officials constantly use CDBG funds to take on
new challenges in the areas of housing, neighborhood
development, public facilities, and provisions of social
services.
So this program, CDBG, emphasizes HUD's mission of working
through partnerships with State and local governments. And due
to the flexibility in the uses of the CDBG funds, the program
is used in conjunction with many other HUD programs to assist
communities and to target specific populations.
I do want to let you know that last month I held three
House field hearings in rural Ohio that highlighted many of the
important issues of CDBG that I am sure we are going to hear
about from you today. And back in Ohio, many local mayors and
community development officials testified about how CDBG monies
have been used for a wide variety of projects such as providing
safe drinking water, sewer repair, and purchase of firefighting
trucks and equipment.
To highlight one example, in Knox County, Ohio, CDBG
funding has allowed for the revitalization of several downtown
streets, such as in Mount Vernon. The rehabilitation of the
Mount Vernon streetscape has brought new life to Mount Vernon
and to residents and visitors alike. They can enjoy the
renovated shops and restaurants and that, of course, leads to
more tourists coming, which leads to more money in the
community and, ultimately, to more jobs. At one time there was
a question of well, you know, should CDBG be diverted to the
Department of Commerce? And had that happened, I think you
would not have been able to recognize the program by the time
it got out of the Department of Commerce.
In the areas that I represent, in the 18th District, 20,000
people is considered to be a large city. Most of our towns
consist of 1,400 to 2,000-some people. And in some cases--
ambulance service, for example--it would take you 40 minutes to
get somewhere between communities where there is even a
hospital. So the ambulance service is important. So I think
CDBG is something that is just so important.
Now President Bush's fiscal year 2007 budget proposal
raises some interesting and serious questions about what role
community development should play in helping local State
governments provide safe and affordable housing to its
constituents. In addition to recommending a new formula change
for CDBG, that focus is more on the neediest communities which
was raised, and I hope it is raised here today. That was raised
back in Ohio by some experts--Coalition for Appalachian
Development--people running food banks about some of the change
with CDBG and about the neediest communities and what is
already being done for the neediest and what that would do by
kind of changing the formula. So maybe that will be focused on
today.
But also the funding level for fiscal year 2007 in the
budget is .27 cents below last year's enacted levels. So if you
take the 10 percent cut that actually came out, I think it was
from the Reconciliation bill there was a cut, which I did not
vote for the bill I would note for the record. But from that to
this if you add the 25 if it would go through, and 10 you are
at 35 percent cut for CDBG over the last couple of years.
So, again, I think it is an important program.
Let me just close by saying a couple of things. Now more
than ever before, I have been in Congress for 11 years and I
have been in government for 24 years as a State senator, State
rep, so I have looked at CDBG from the State legislative end of
things, as I know our Congresswoman has, but I think now more
than ever since I have been in Congress, this is a time where,
if you are going to help with CDBG, if it is going to be
effective to save these concepts, it's going to be effective on
having this program continue, that the local CDBG, the local
development entities, the local elected officials have to work
with their Members of Congress more than ever before. You must
have a tighter working relationship than ever before with
Congresswoman Waters and myself, and other Members of the
House. I think it is more critical than in the past to do that.
It has to be a partnership in looking at how the programs are
used.
So, again, there are a lot of other issues our committee
has tackled. I am proud to say that we are the first
subcommittee that went to New Orleans and went down to also
Gulfport, Mississippi. We were the first ones that did it even
before the Katrina Committee. We have been trying to address,
the subcommittee, many many important issuing in housing. And I
know people think we cannot agree on anything, but in this area
I am proud to say that our ranking member, Mr. Frank, and our
chairman, Michael Oxley and other Members, especially on our
subcommittee, have tried to do many things to help a lot of the
neediest people. And there is a lot more work to do, but I am
just proud to say that we have been working on those issues.
So I want to thank again our ranking member, Congresswoman
Waters, who has been a pleasure to work with. It has also been
a pleasure to watch the Congresswoman as a voice for people who
cannot speak out for themselves, not only here sometimes in the
process, but also in Washington, D.C., on a national basis. So
thank you. And I will yield to our ranking member.
Ms. Waters. Thank you very much, Mr. Chairman.
Good morning, ladies and gentlemen. Thank you for coming
out this morning. Your attendance here is very important today,
and I am so pleased to see this room full.
It is important for you to be here today because you have
to understand that we must try to stop the proposed cuts to
this most important program.
Before I continue with my remarks, I would like to thank
Chairman Ney. I would like to thank him for authorizing this
hearing, and for coming to Los Angeles to listen to our City's
leadership, and to our program directors testify about how
important this program is.
Why is it important for me to thank him? It is important
for me to thank him because he could very well be in his
district, doing the work that Members must be doing at this
time to run for reelection. His election is just next month.
And so most times Members do not take time from their districts
to come to somebody else's district to talk about their
problems; they are focused on their own problems. So I am
delighted that he responded to my request and is here.
But more than that, I am delighted that we have been able
to work together, not only on CDBG, but if you recall 3 years
ago he was here on Section 8. These are programs that
oftentimes you only hear from Members on my side of the aisle.
But I want you to know that Congressman Ney and I struck a
relationship because a long time ago we decided that the
problems of the rural community are similar to the problems of
our urban communities. We both have poor people in our
districts. We have people who depend on assistance from the
Government, and because of that, we should be working together.
Now granted, we are not going to agree on everything, and
we know that. But those things that we do not agree on, we just
leave each other alone. But for those that things that we can
work together on, we certainly do; CDBG is one of those
programs.
So, even though this is an official hearing and we do not
entertain applause at official hearings, I am going to ask you
to give him a big round of applause and thank him for coming to
be with us. Let the record show I broke the rules again, Mr.
Chairman.
Okay. Let me just get to my prepared presentation this
morning. I want to get right into the impact of CDBG on our
communities. The Subcommittee on Housing and Community
Opportunity--of which I am ranking member--of the Committee on
Financial Services, is conducting this hearing today. And I
believe, and I am sure the chairman would agree, that whenever
we can bring the Congress to the people of our Congressional
districts, it is well worth the effort.
Today we are here to determine the impact of CDBG spending
and proposed cuts in that spending on Los Angeles City and
County, as well as in the 35th Congressional District, which I
serve. And while I am going to focus on a few of those programs
today because I am working very hard to try and preserve all
kinds of programs, I want you to know that this hearing is
about all of the CDBG funded programs.
CDBG is a major Federal program that I have worked very
hard for since coming to the Congress of the United States. And
I have tried to protect and strengthen CDBG. CDBG has served
the Valley to South Los Angeles since 1974. Every year for at
least 5 years, we have been asked to consider ideas ranging
from substantial cuts in funding for the CDBG program to
changes in the way the program funding is allocated. Other
important community development programs including Section 108,
the Home program, Brownfields Redevelopment Grants, and the
National Community Development Initiative and Urban Empowerment
Zones would be cut or eliminated by this Administration.
However, I believe that it is because of the role of Mr. Ney
and others who are advocates for housing and community
development programs in Congress that our communities have
benefitted right here in Los Angeles County and the City of Los
Angeles.
CDBG forces you to have a role in developing the CDBG plans
for approval by HUD, since the input of the community is the
most important step in the process of moving CDBG to a program
of action.
Just quickly, what is CDBG? I often hear that from people
who are not directly involved. And I basically try to explain
it this way:
It is tied to three basic activities. It is here to
principally benefit 70 percent low- and moderate-income
persons. It aids in eliminating or preventing slums and blight,
or it is here to meet the urgent community development needs
that are caused by certain conditions that pose serious and
immediate threats to the public.
Although many of you have heard of the CDBG program, or you
are involved in it, there are often gaps in information
relating to the President's budget and Congressional action on
programs such as CDBG, as well as many other programs that are
in place to assist the communities that we serve.
Now, I represent the 31st Congressional District, and
included in that district are several cities: the City of
Lawndale, the City of Inglewood, the City of Gardena and the
City of Hawthrone. What you may not know is that the
President's budget proposal for fiscal year 2007, if enacted,
would reduce the CDBG program by more than 20 percent. Every
program supported with CDBG funds would be severely reduced or
eliminated.
As a strong supporter in Congress of the CDBG program, I
have fought and will continue to fight to prevent these cuts.
These unpopular cuts would affect a broad range of housing
revitalization, community and economic development activities,
job creation and public service programs designed to primarily
benefit low- and moderate-income persons in Los Angeles County
and City.
The backdrop for these cuts is simple. In the past 5 years
CDBG has been responsible for the rehabilitation of over 8,500
housing units, created and preserved over 2,060 jobs, removed
over 41 million square feet of graffiti, and provided loans and
technical assistance to over 7,000 small businesses. The
President's proposed reduction in CDBG would deny Los Angeles
County $41.1 million in funding for all kinds of program
activities. The City of Los Angeles, which will receive $74.5
million this fiscal year, would receive only $55.8 million in
fiscal year 2007. This is an inflation adjusted cut of 48
percent.
The State of California would lose almost 3 times the above
amount, that would be $119.7 million. The positive statistics
that I just cited would read differently if the State of
California lost $119.7 million.
What the cut will not reveal immediately is that low- and
moderate-income persons and families would suffer the most
because CDBG program is their program.
And while many of you may not be familiar with all of the
CDBG funded programs or the requirement that 70 percent of the
funds be spent on activities to benefit low- and moderate-
income persons, you have to come to rely on these programs in
your day-to-day activities. And let me just mention a few of
the programs throughout our City: Big Brother and Big Sister of
Greater Los Angeles; Mentor Outreach; Junior Blind of America;
Infant Family Project; Los Angeles County Department of
Consumer Affairs; Homeowner's Fraud Prevention Project;
Community Development Commission; Single Family Grant Program;
Gang Membership Vandalism and Illegal Nuisance; Dumping
Reduction Program; Watts Labor Community Action Committee, etc.
Now let us take a look at the impact of cuts on the City of
Lawndale, an important community in my district. The Mayor is
here today and he will talk more about this. They would most
definitely suffer under the proposed cuts for CDBG as well.
The City's graffiti removal efforts would be undermined,
and residential rehabilitation grants to low- and moderate-
income residents for electrical, roofing, and plumbing repairs
would just disappear. And just about everyone in Lawndale knows
about the Lawndale Civic Center Seniors Hot Lunch program.
Well, my friends, the City of Lawndale will have to find
another source of funding for their seniors if these cuts
become law. I do not need to mention every program that would
be affected, but this should give everyone an idea of why we
are here. Youth would be at great risk, seniors would be put at
risk, blight and graffiti would return, and the overall quality
of life for each and every one of us would be challenged.
The City of Hawthorne would lose $321,000 under the
proposed cuts while the City of Gardena would lose $298,000
plus.
Finally, my City of Inglewood would suffer the most with
the disappearance of $1,100,000 in CDBG funds.
And I think today's witnesses will answer the important
mission of this subcommittee. We're here to listen and to learn
about the impact of the CDBG program on their communities and
the people who live in them.
And we thank you very, very much. I want to say to the
elected officials who have come today, I know your time is
valuable, and we thank you so much for showing up.
I want to think HUD for being here today. I know sometimes
it gets a little bit difficult to defend the President's
budget. However, in working with HUD, I have found that
oftentimes there are many ways by which we can get the
information, and hear from you, that will help us to be able to
convince others that perhaps we should certainly not be making
these kinds of cuts.
With that, to the staff who are out here from Washington,
D.C., we thank you for the work that you have done on both
sides of the aisle to help put this together for us today.
You are here at the California Science Center, which is one
of the real gems of the overall greater Los Angeles area, and a
place of which I am very proud. This building, and this
complex, was part of my work when I served in the California
State Assembly and we were able to fund a master fund that has
brought it to the point that it is today. So if you have time,
just spend a little time here after the hearing.
Thank you very much.
And I will yield back my time to the chairman, Mr. Ney.
Chairman Ney. I want to thank the gentlelady. I thank her
also for her fine comments.
I also wanted to let you know before we start that there
are copies of the testimonies over to the left on the table.
And you're more than welcome to get a copy of the testimonies
today.
Also for the record, without objection, we have several
statements for the record from: Congresswoman Hilda Solis; The
City of El Monte, City Manager's Office; The City of Monterey
Park; and the City of Rosemead.
Without objection, these statements will be entered for the
record.
And today we will start with a panel. The Honorable Pamela
H. Patenaude, Assistant Secretary for the Office of Community
Planning and Development, U.S. Department of Housing and Urban
Development, known as HUD.
Of course, Mr. Robert, known as Bud as I understand it,
Ovrum, deputy mayor for Housing and Community/Economic
Development, City of Los Angeles, California on behalf of the
Mayor.
And also the Honorable Eric Garcetti--
Ms. Waters. Garcetti.
Chairman Ney. Garcetti. I think in Italian, so I say
Garcetti. My home city is 85 percent Italian, so if I see a C,
it's a J. But Garcetti. District 13, president of the Los
Angeles City Council.
I think 3 years ago you were a councilman? Okay. That's
good.
And the Honorable Roosevelt F. Dorn, Mayor, City of
Inglewood, California.
And also the Honorable Harold Hofmann, Mayor, and I have
heard a lot about Lawndale and a lot of good things, the City
of Lawndale, as I have many of the smaller towns around here
also.
So I want to welcome all of you. And we will begin with
Assistant Secretary Patenaude.
STATEMENT OF PAMELA H. PATENAUDE, ASSISTANT SECRETARY FOR THE
OFFICE OF COMMUNITY PLANNING AND DEVELOPMENT, U.S. DEPARTMENT
OF HOUSING AND URBAN DEVELOPMENT, ACCOMPANIED BY NELSON R.
BREGON, GENERAL DEPUTY ASSISTANT SECRETARY, AND JO BAYLOR,
ASSISTANT DEPUTY SECRETARY FOR FIELD POLICY AND MANAGEMENT
Assistant Secretary Patenaude. Thank you, Mr. Chairman.
I am pleased to be here in Los Angeles on behalf of
Secretary Alphonso Jackson.
I am joined here today by my General Deputy Assistant
Secretary, Nelson R. Bregon, and Hud's Assistant Deputy
Secretary for Field Policy and Management, Jo Baylor.
Thank you Chairman Ney and Ranking Member Waters for
scheduling this field hearing to discuss the reform of the
Community Development Block Grant program.
The CDBG program has been the Federal Government's primary
vehicle for assisting State and local governments with a wide
range of community development activities aimed at improving
the lives of low- and moderate-income families.
Chairman Ney. If you could yield for a second?
Can you hear the witness in the back? You can. Okay. There
was a question of whether you could or not. I'm sorry. Go
ahead.
Assistant Secretary Patenaude. Thank you. During the past 3
decades over $113 billion has been appropriated for the CDBG
program. These funds are used for housing rehabilitation,
public services, infrastructure, and economic development
activities.
The President's fiscal year 2007 budget retains the CDBG
program at HUD with the recognition that the program's impact
has defused over time. We propose to redirect CDBG's ability to
target community development needs. We have identified a series
of initiatives that, if enacted, will sustain the CDBG program
in the future.
One critical reform is the revision of the CDBG formula
which has been essentially untouched since the 1970's. Over the
past decade, we have witnessed steady erosion in the ability of
the formula to target CDBG funding to community development
needs. Demographic changes, development patterns, and other
factors have created significant distortions in the
distribution of the CDBG funds.
In February of 2005, HUD released a study that identified
two serious deficiencies that result from the current formula.
First, many communities with lesser need for CDBG funds receive
much more per capita than many communities with greater need.
Second, many communities with similar needs receive very
different per capita amounts.
For example, here in California, the Cities of Santa Monica
and Santa Maria have approximately the same population. Under
the current formula, they both receive about $1.3 million
annually. However, in terms of need, they are very different.
Santa Monica has a per capita income of $43,000 and a
relatively low level of distress, while Santa Maria has a per
capita of only $14,000, and significantly more distress.
While Santa Maria's community development needs are much
greater, the current formula does not recognize this. I think
we can all agree that it is critical to restore equity to the
distribution of funds to improve targeting and to preserve the
fairness of the CDBG program.
The second major initiative proposed in the President's
budget is the establishment of a challenge fund. This fund
would enable CDBG grantees to obtain additional funding for
community and economic development activities in distressed
neighborhoods. In order to be considered for a challenge grant,
a grantee will need a strategy that concentrates public and
private investment in distressed neighborhoods.
The reform also proposes to consolidate programs that
duplicate current efforts, such as BEDI, Rural Housing, and
Section 108.
Finally, we are implementing a new performance measurement
framework to establish clear measurable goals and community
progress indicators for our formula programs.
Improvements to HUD's Integrated Disbursement and
Information System, commonly referred to as IDIS, are critical
to the success of this performance measurement. We are working
to transform the current antiquated version of IDIS into a user
friendly web-based system. These enhancements will make the
system easier to use and will expand our ability to collect
data that shows the effectiveness of CDBG.
The Community Development Block Grant program helps
communities across the Nation address a variety of needs.
However, program reforms are necessary to improve and expand
the economic opportunities of the lives of low- and moderate-
income Americans.
I thank you for this opportunity to speak with you today
about the Administration's proposal to reform the CDBG program,
and I look forward to answering your questions.
Thank you.
[The prepared statement of Assistant Secretary Patenaude
can be found on page 104 of the appendix.]
Chairman Ney. Thank you very much.
Mr. Ovrum?
STATEMENT OF ROBERT OVRUM, DEPUTY MAYOR FOR HOUSING AND
COMMUNITY/ECONOMIC DEVELOPMENT, CITY OF LOS ANGELES, CA (ON
BEHALF OF MAYOR VILLARAIGOSA)
Mr. Ovrum. Good morning, Mr. Chairman, and Ranking Member
Waters. I am very pleased to be here today to present testimony
on behalf of Mayor Villaraigosa.
Although the Mayor is very distressed by the President's
fiscal year 2007 budget proposal to consolidate and reformulate
funding for the Community Development Block Grant program, we
are certainly very encouraged by the commitment of Congress to
understand the impact of this proposal on the nation's low- and
moderate-income population. Thus, on behalf of the Mayor and
everyone here, allow me to say how pleased we are that you are
visiting us in Los Angeles for this important discussion.
As you may know, the Mayor was recently appointed to be the
Chair of the United States Conference of Mayors Task Force on
Poverty, Work, and Opportunity. We are very excited to work
with the Mayors around the country to address the important
issue of poverty by developing strategies that will make our
Federal, State, and local dollars stretch further while
enhancing the positive input that we can make on the lives of
the poor. At the same, the Mayor looks forward to working with
Congress to ensure that the critical programs and services
funded by CDBG are preserved for the people who rely on them.
As you will hear in other testimony this morning, CDBG
funding is vital to the City of Los Angeles. For over 30 years,
CDBG has been one of the most effective tools available to the
Government to strengthen local communities. CDBG provides the
flexibility and the funding to address the needs of the poor
and working families who continue to face tremendous quality of
life and opportunity challenges.
Here, in Los Angeles, in the undisputed commercial and
cultural atmosphere of the richest State in the richest Nation
in the history of the world, you see close to 10,000 homeless
children. Thousands of kids arrive in public schools every day
who do not have a bed for the night. Poverty, however, is not
confined just to Los Angeles.
It has been 50 years since Brown v. the Board of Education,
but one-third of African-American children still live in
poverty.
Across the country, 6 million school children are on the
verge of failing out of school.
Eleven million Americans cannot read a bus schedule or fill
out a job application.
Three-and-a-half million sleep in shelters and doorways and
highway underpasses.
These statistics are constant reminders of what level of
work remains to be done in this City and across the country.
That is why the Mayor remains deeply concerned that the
City again continues to face substantial reductions in Federal
funding for programs funded under our Housing and Community
Development Block Grant program, particularly CDBG. Last year,
that reduction amounted to approximately $9 million, or 11
percent of our allocation from the previous year.
While our Federal allocation shrinks, the need for services
and the number of requests for funding continues to grow. For
the 2006/2007 program year the City received a total of 215
applications requesting in excess of $254 million in CDBG
support, of which only approximately $73 million was available
and awarded. It is my hope, and the Mayor's hope, that the
policy leaders in Washington do not confuse the disappearance
of this program with the disappearance of the problem of
poverty.
In a few minutes our general manager of the Community
Development Department, Clifford Graves, and others, will share
with you some of the great program efforts funded in the City
with CDBG dollars. Mr. Graves will provide you with an outline
of how the City historically uses these funds and how any
additional reductions will impact the City and its most needy
residents.
Again, thank you for the opportunity to address you this
morning. And thank you very much for coming to Los Angeles, and
for your interest in Los Angeles.
Thank you very much.
[The prepared statement of Mr. Ovrum can be found on page
100 of the appendix.]
Chairman Ney. Thank you.
Mr. Garcetti?
STATEMENT OF ERIC GARCETTI, DISTRICT 13, PRESIDENT, LOS ANGELES
CITY COUNCIL
Mr. Garcetti. Thank you very much, Mr. Chairman. It's
wonderful to have you back here in Los Angeles. And Ranking
Member Waters, thank you for your extraordinary work on behalf
of not only your own district, but this entire region, and the
United States in this area.
And, Mr. Jones, it is good to have you back in Los Angeles,
as well.
I wanted to thank you for being here and for being so
generous when we come to Washington with all of your time as
well in looking at the context of what we are discussing.
Just as a side note, Mr. Ney, you know Los Angeles was
really settled by midwesterners and we have whole neighborhoods
that in the past were known as, you know, Little Ohio and
Little Indiana and other parts. So that legacy is continuing
the links here. So consider this your second home.
You know, let me change what I was going to be saying. I
have been spending the last 4 weeks editing my fiancee's
doctoral dissertation which is on welfare poverty in America.
And she took a case study from the midwest in Michigan, where
she detailed and interviewed 80 women who were sampled and
their life experiences; what it was that brought them to live
in poverty, and what it is that is keeping them in poverty.
And what was interesting about what she has been looking
at, and that I have been editing for the last few weeks, is
that we have something called the American Dream here in the
United States which says we are all just one lucky break away
from making it. And on the flip side of the American Dream is
something that many people do not talk about, which is what
happens to that one person who has one unlucky break: An
abusive household that a child is raised in; somebody who is
born into a homeless family; somebody who unfortunately does
not have a social network in the neighborhood where they live
in to find the job opportunities, no matter how strongly they
look around each corner for it.
So the ideological context of what we talk about here
today, Republican, Democrat, nonpartisan, as many of us are
here as local officials is the ideology of having the most
basic government outreach to make sure that those who are on
the flip side of the American Dream, in fact, living an
American nightmare, have a way out.
The political context of this you well know. We are a
Nation at war, but we have been a Nation at war for 3 decades
against poverty under Presidents Nixon and Ford, under
President Carter, under President Reagan, the first President
Bush, and President Clinton. We have seen an expansion of that
war on poverty. We have seen the belief across partisan lines
that it is a war that is worth winning.
Unfortunately now the political context at the local scene
has shifted dramatically. And I know that Congresswoman Waters,
Congressman Ney, and so many other Members of Congress meet
each year with the National League of Cities when we come
there, and 95 percent of Congress sits down with local
officials in one day. It is one of the most impressive lobbying
undertakings anywhere in the United States. And we are speaking
with one voice.
And I chair for the Los Angeles County, I am the president
of our National League of Cities Local Cities. So on behalf of
the 88 Cities that are here we are speaking with one voice
across partisan lines about the importance of this.
And then lastly, I want to put into context the need that
we have here in Los Angeles. We recently used block grant
monies to finally take a snapshot of our economy here in Los
Angeles. And there are some wonderful things that showed that
we got out of the recession from the 1990's, retooled and are
very nimble in terms of the economy and the entrepreneurship
that we had. But as you break that down by geography, we have
had some troubling statistics.
In south Los Angeles more than a decade after the riots
here, we lost 8 percent of the jobs. All the rest of the
regions of Los Angeles saw job growth, and yet we saw a decline
there.
I know that you want accountability for these dollars, and
we want that, too. It is already there because of the great
work of HUD. Ask any of these community groups whether it is
easy to get this money, easy to spend it, easy to apply for it.
It is not. It is very stringent. In fact, some people are
scared away because it so stringent, so we know we have the
accountability.
But secondly, if I can leave you with one thing, I want you
to know that we are not here with our hat in hand saying we are
not going to step up, too.
In Los Angeles, we have built the largest affordable
housing trust fund, partially with the block grant dollars, but
with our own general fund monies, too. Every dollar that we
have put out there on affordable housing, we have leveraged
five fold; five fold with State, private, and nonprofit
dollars. This fall, the Mayor and I are putting on the ballot a
$1 billion affordable housing bond here in the City of Los
Angeles, the largest affordable housing bond anywhere in the
country's history locally. So we are not just saying give us
the money; we are doing our part and we are stepping up.
We are asking you to continue to be that partner, and I
know that you all feel that same way.
I want to thank you from the last time that you were here
because it was Congresswoman Waters who first said you know we
always see these signs up saying the council member and the
mayor are rebuilding this area, doing this wonderful project,
but how about the Members of the House? And we passed policy
based on that recommendation here in the City that now when we
spend those block grant dollars, it gives credit to Washington,
too, to our Representatives who are helping to spend that
money, and we have those names up there as a recognition of the
partnership that we have here.
But I will share with you in closing that each dollar of
this funding that we put out there, a dollar of block grant
that goes to the trust fund that brings $5 more dollars in and
builds housing and has created about 200,000 permanent jobs
here just in the construction industry in the last few years,
$1 of Brownfields' money near the port in Wilmington where one-
quarter of all of our City's scrapyards are, where we are able
to take a Brownfields, that has been greatly polluted, that we
finally turn around for a company that makes almost a quarter
of all the AYSO uniforms for our kids throughout this country,
was able to double the jobs that they have there.
$1 that goes into a new shelter in Hollywood and takes a
person off the streets who has never been in a shelter in his
life, and whom I just talked to a couple of weeks ago. And for
the first time in 25 years, he has a job and is cleaned up.
We know that this is accountable money. We know that it is
flexible money and we know that we are your partner in that
money. As we continue to spend, we hope that you will recognize
the taxpayer money that is represented here, but behind us that
goes to Washington, D.C., prioritizes that partnership from the
Federal level as well.
And I want to thank you, Chairman Ney, for being such a
strong voice. And as the National League of Cities moves
forward, you know that there is a bipartisan support for this.
We see a different move from the Administration, but we know
that we have so many allies in Congress across party lines. And
we hope that not only can we beat back the cuts, we hope we can
restore the levels that were there before.
Thank you.
[The prepared statement of Mr. Garcetti can be found on
page 68 of the appendix.]
Chairman Ney. I want to thank you for your testimony. And
we're going to suspend the regular order for a second.
There are people standing in the back, and I think in the
hallway, there are some extra chairs that have been set up. So
please have a seat. I was told there was some people in the
hallway. So, please feel free to have a seat.
And also, we are here for a lot of people today in
communities of all ages, but the younger generation is what
everybody is about, and I think I see some younger generation
friends in the audience. And I know the Congresswoman wanted to
give some recognition.
Ms. Waters. Well, I certainly do. One of the things we
tried very hard to do, and I think we accomplished it, was to
make sure that all of the CDBG funded program recipients
received a notice about this hearing. We are going to need you
to help us in this fight and in this struggle to try and keep
these cuts from becoming reality.
For those young people who came today, you are welcome. For
those young people who are identifying us by way of your
banner, thank you very much. And for those young people who
want to sit down, we have some extra chairs. Welcome. Thank you
for being here today.
Mr. Garcetti. Mr. Chairman, if you will excuse me, we have
a Council meeting at 10:00 that I have to preside over.
Chairman Ney. Yes. You are excused.
Ms. Waters. Thank you very much.
Mr. Garcetti. My apologies.
Chairman Ney. And to the young people again, welcome. They
range in all ages, but I think I see a 2-month old also over
there, who is probably the youngest visitor in the history of
House hearings.
So, again, welcome to all you great young people. And I
think we can give them a round of applause. Thank you.
Mayor, Mayor Dorn?
STATEMENT OF ROOSEVELT F. DORN, MAYOR, CITY OF INGLEWOOD,
CALIFORNIA
Mr. Dorn. Good morning.
I would like to begin by thanking Chairman Ney for
conducting these hearings today.
I want to especially thank Inglewood's Congressional
Representative, Congresswoman Maxine Waters, for her constant
efforts on behalf of the City of Inglewood and the other
communities and the United States that she so admirably
represents.
The City of Inglewood has participated in the Community
Development Block Grant program since its inception. Our
residents and businesses have benefitted greatly from the
crucial Federal funding provided through the CDBG program.
The CDBG program has provided more than $25 million in
assistance to low-income families, individuals, and businesses.
Indeed, the CDBG program has been vitally important to the City
of Inglewood and to our ability to enhance safety, prosperity,
and increased livability within our community.
Inglewood utilized CDBG funds to educate and protect low-
income individuals with regard to housing discrimination. In an
effort to ensure fairness and eliminate housing discrimination,
over 10,000 low-income individuals have benefitted from fair
housing counseling. These monies have funded legal assistance
to individuals who are victimized by unfair housing practices.
The CDBG funds help us in our overall effort to maintain a
suitable living environment in our community. Inglewood uses
over $1.3 million annually in CDBG funds to build and improve
the public infrastructure system in CDBG-eligible portions of
the City.
These infrastructure improvement projects include:
Redesigning streets for increased traffic safety around local
parks and schools; increasing pedestrian mobility for persons
with physical and developmental disabilities through an
aggressive program of installing pedestrian wheelchair ramps in
over 350 locations throughout Inglewood, and; increasing
neighborhood safety through improved property maintenance and
correction of building violation deficiencies. These efforts
have resulted in achievement of an 80 percent correction rate
of over 8.000 residential and commercial property maintenance/
code enforcement violations. Additionally, CDBG funds are used
to eradicate over 18,000 annual incidences of graffiti. This
funding allows our City to enhance our community beautification
efforts, which in turn encourages home ownership, community
pride, and investment in our City.
CDBG funds are a powerful community-based crime prevention
tool. Our City has leveraged CDBG public service funds to
assist several local nonprofit organizations to assist our
police department to combat gang-related crime. This effort
resulted in the development of vital game and intervention
programs that divert at-risk youth from becoming involved in
gang activity. As a result of our community-based crime
prevention efforts, gang activity in the City was reduced by 18
percent over the past 3 years. We need CDBG funds to continue
our efforts in this regard.
CDBG helped spark an economic development boom in
Inglewood. The City of Inglewood suffered from an increasing
blighted downtown area after the relocation of our major
retailers from the City: Sears Department Store; J.C. Penny;
and Boston stores. Inglewood leveraged $1.2 million in CDBG
Section 108 loan funds, with $700,000 in Redevelopment Funding,
and $500,000 in Department of Commerce Economic Development
funds, to rebuild the infrastructure in the downtown area and
provided over $250,000 in small business loans, and created 10
full-time jobs.
As a result of the economic development and beautification
of the City's central business district, major retail and
restaurant chains have decided to open stores in our City.
These businesses include: Home Depot; Target; Bed, Bath and
Beyond; Chili's; Marshall's; Michael's; Ross Dress for Less;
Staples Office Supplies; Bally's Total Fitness; Red Lobster;
and In-N-Out Restaurant. These new developments have resulted
in hundreds of additional jobs being created in the City. We
fully anticipate that the other prominent national chains will
follow now that the City of Inglewood is viewed as an
economically viable place to conduct business.
Inglewood, like most other cities throughout the Nation,
depends on CDBG funds to provide services and improvements that
are vital to maintaining the vitality of our community. The
changes proposed within the President's fiscal year 2007 budget
would adversely affect the residents of Inglewood and our
businesses. In fact, our budgeted CDBG revenues for the current
fiscal year represent a 23 percent decrease in funding from the
previous year. Our overall budgeted revenues from the
Department of Housing and Urban Development represent a 27
percent decrease from last year. The proposed ``reform'' of the
CDBG program would undermine our ability to help low-income
families at a time when they need our help most.
I want to take this opportunity to respectfully urge the
members of this committee to take steps to protect a crucial
source of funding for communities across the Nation. As the
President of the National Conference of Black Mayors, I
represent over 600 mayors across this country, and to reduce
CDBG would hurt their cities significantly. In many instances,
CDBG is the life blood of those cities. So I urge you to do
everything you can to prevent the loss of these funds.
America is a generous Nation that is constantly giving to
others around the world. Now, I humbly ask that you do what is
right and extend the same spirit of generosity to the citizens
of America right here at home.
Again, thank you very much for extending me an opportunity
to testify before you today.
[The prepared statement of Mayor Dorn can be found on page
64 of the appendix.]
Chairman Ney. Thank you, Mayor.
Mayor Hofmann?
STATEMENT OF HAROLD HOFMANN, MAYOR, CITY OF LAWNDALE,
CALIFORNIA
Mr. Hofmann. Good morning. My name is Mayor Harold Hofmann,
and I am starting my 17th year this morning as Mayor of the
City of Lawndale.
It is my pleasure to be here representing the community of
Lawndale. I am here to discuss what CDBG funds do for Lawndale,
how those funds are used to support and enhance our City, and
what it would mean if those funds were to be cut, or worse,
eliminated.
I hope that this testimony will allow the subcommittee to
see the great things the CDBG does for this community and allow
you to discern why it is necessary to stop cuts in CDBG
funding.
Lawndale is a community of approximately 31,000 people, but
it is strategically located in what we affectionately call the
``Heart of the South Bay.'' As is the case in many California
cities, Lawndale's financial resources are severely limited.
This is shown in the two largest areas for generating revenue:
Property tax and sales tax. In 1978, when California's
Proposition 13 was passed, Lawndale was a City that had no
property tax. Today the City receives a very small percentage
of what the residents pay in property tax, and much less than
the average California city's portion.
Additionally, with the small size of approximately 1.9
square miles, Lawndale does not have a great deal of retail
development, and therefore does not receive much sales tax.
Because of these factors, the City of Lawndale must rely on
other funding sources, including CDBG, to pay for many of the
programs we operate.
Lawndale is a community that has been participating in CDBG
since its inception 32 years ago. This funding has been
benefiting the community in many ways. However, in recent
years, due to funding decreases, City staff has not had the
ability to fund or implement any new projects. In the past, to
determine what programs the City was able to provide, the staff
generally recommended continuing existing CDBG funded program
that provided the most benefit to the qualified residents. When
a CDBG project was completed, or additional CDBG funds were
made available, staff recommended the implementation of new
projects. This was accomplished through the request for
proposals to implement new projects. This has not happened in
some time, and the City has been using it's dwindling CDBG
funds to support the same programs year in and year out.
Most recently, funding has gone to an item that is
considered extremely important, and has become a necessity. The
previously noted strategic location of Lawndale in the heart of
the South Bay has caused, and will continue to cause, a
significant number of vehicles and large amounts of traffic
which are generated by Lawndale's larger surrounding neighbors.
Because of this, large portions of Lawndale's CDBG money goes
to improve and maintain our 22 miles of streets and to make our
sidewalks A.D.A. compliant and more accessible to residents and
visitors alike. In recent years, CDBG funding has been also
used for procurement and advances for the Lawndale senior
citizen population with goals of creating a new senior
facility. These funds are currently used to support these
seniors with a nutrition program, providing daily meals at
reduced, and often, no cost. And other programs currently
funded through the CDBG include residential rehabilitation and,
of course, graffiti removal. These programs allow for the
community of Lawndale to continue to appeal to and attract
families, and move away from blighted conditions.
As you may be aware, the Federal Government has been
cutting funding to CDBG over the year with funding for CDBG
decreasing significantly over the past 3 years. If funding is
cut further for Lawndale's CDBG's program, its residents will
be affected in immeasurable ways. Cuts in this type of funding
will harm the City's continued success in the programs it
currently provides. The City would need to seek other funding
for programs, but would likely be forced to eliminate a great
deal of those programs.
I would like to take this opportunity to thank the
subcommittee for allowing me to speak today on behalf of the
community of Lawndale. I urge you to use what you have heard
today and do all you can to stop any reduction or elimination
funding for the current and future CDBG programs.
Thank you.
[The prepared statement of Mayor Hofmann can be found on
page 80 of the appendix.]
Chairman Ney. I want to thank all of the witnesses. And I
think by what you are doing today will be a great tool to help
us for those of us who do not want the cuts, it will be a great
tool to help us with this hearing and your voice today.
I have a couple of questions. And I am basing some of these
off of the hearings in Ohio, and frankly probably one of the
questions I am going to ask about the formula and the neediest,
might better be answered by the second panel when I realized
because they work with, you know, sometimes a little bit more
intricate details.
But in the Administration's proposal, putting aside the
dollar figure in the cut, but in the proposal is to have a
shift to help the neediest of the needy. And do you have any
comments on that change within the formula to do that or do you
have any thoughts on it?
Mr. Ovrum. Let me just say quickly, and again I think, Mr.
Ney, you are correct; the second panel might be better equipped
to deal with that. There have been a number of formula
proposals that we have looked at. We do not see any one of them
at this point becoming the leading option in our mind. The
thing that we want to urge upon you most is to fully fund the
program and then we would be happy to work with you on an
equitable funding formula.
Chairman Ney. If fully funded? Okay.
Mayor?
Mr. Dorn. I do not agree with the formula that has been
proposed; I think needy is needy. And I think we need to have
the CDBG fund fully funded so that those individuals can be
helped.
I mean, of course, if an individual is out on the streets,
that individual is needy. If an individual is hungry, living in
a shelter, that individual is needy. All of them need to be
helped. I mean in a country this rich, why would we even
consider saying well, this needy person we are not going to
help, but this needy person over here we are going to help?
The formula does not work. Let us fully fund CDBG.
Chairman Ney. Mayor?
Mr. Hofmann. Who are we to determine who is really in need?
I mean, if you are in need, you are in need. And we, as a City,
we look at that and we try to help everybody that we can help.
Chairman Ney. Well, the response back, and I asked this
question because back in Ohio when we went to the rural areas
like the Coalition for Appalachian Development, they felt that
if the formula is altered, that they already try to take care
of the neediest. And if the formula is actually altered, you
would kind of restrict, maybe somebody is put in a category of
poor, but they would not be in the neediest, and all of a
sudden you cannot help them. They thought the flexibility--
basically they are saying what you have said. And so I was just
curious if the same feeling was out here on that.
I want to ask a question about micromini loans. Let me tell
you where I am coming from on this. We have asked this question
also back in Ohio, and again maybe the second panel deals with
it more. But has anybody has embarked on the use of micromini
loans?
After the United States went into Afghanistan, there was a
whole ``big picture'' attempt to fund certain things through
the United States Department of Commerce. And we found out that
micromini loans were helping, especially in the areas of
helping the women who weren't allowed to read all these years
or to own a business. And it is something that maybe surprised
people when they heard about it, the theory being used in
Afghanistan. We have been using it for years back home because
the micromini loans are sometimes $100, $200--under $1,000. So
back home some of the groups have been using these micromini
loans in Ohio. And I was just wondering if any of you have any
familiarity with them with them or the use of them, or have
they been used here or not?
Mr. Dorn. We have used micromini loans for small businesses
that need money for a short period of time. Micromini loans
have been very vital to some businesses just getting started.
And we have used those, yes.
Mr. Ovrum. And Mr. Graves will speak to what we have done
in Los Angeles on that during his portion.
Chairman Ney. Yes. One question I had, I want to ask of
HUD, but one of the things about assessing the program is the
argument we hear out there that HUD is still using COBALT as
the process. And I guess information to be transmitted to CDBG
participants by computer somehow, but HUD uses COBALT. And I
did not think this was accurate. Believe me, I am the last
person to be a computer whiz. I am a history teacher by degree,
so I am not into it. But we do hear comments, well, HUD is
using COBALT, so it is an old, old system in the process of
electronics, and therefore it is not an accurate gauge of the
effectiveness of CDBG,
Assistant Secretary Patenaude. Thank you, Mr. Chairman.
HUD is currently revising the IDIS system. And by the fall
of 2006, we will move to a web-based program or platform, if
you will. And I am not a computer tech, but I understand it is
currently a COBALT mainframe.
Chairman Ney. Yes. Because if I can remember, I hope I have
my years right, but I think in 1999, Rick Lazio, I think, was
head of the Housing Subcommittee. But HUD was revising it back
in 1999. So that is my institutional history. And I am not
trying to get you here. I am just saying I think I heard that
back in 1999.
Assistant Secretary Patenaude. Mr. Chairman, if I may, the
Secretary of HUD recruited a top talent. We have a new Chief
Information Officer, Lisa Schlosser. She is personally
committed to this. We have biweekly meetings with the
contractor that is handling the revisions to IDIS. And I can
assure you that this time HUD will get it taken care of.
And as I said, by the fall of 2006, it will move to the
web-based platform.
Chairman Ney. By the fall of 2006?
Assistant Secretary Patenaude. This fall.
Chairman Ney. Okay. Well then, what about some of the
comments people have made that the system is not as up-to-date
as it should be, and it is not accurately portraying the use of
CDBG or its effectiveness; either way, I mean, you could argue
it.
Assistant Secretary Patenaude. We can currently tell you
what CDBG is being spent on. But with the implementation of the
performance measurement framework, we will be able to
accurately gauge the successes the CDBG program is having.
Chairman Ney. Yes.
Assistant Secretary Patenaude. And we will fully implement
the performance measurement system in fiscal year 2007, but we
will begin workshops this May. And the workshops will continue
through the fall so that we can successfully implement this new
system.
Chairman Ney. And I appreciate that. And I do not want to
be putting you on the spot, because you are not OMB, but OMB is
saying that CDBG is not effective. So if OMB is saying that,
are they getting that from HUD, or has OMB just made that
statement and not utilized the uses in the right way? What do
you think about OMB's statements?
Assistant Secretary Patenaude. As you know, the program was
PARTed, which is an OMB tool to rate the effectiveness of the
CDBG program 2-plus years ago. And, unfortunately, the program
was rated not effective under the current part system.
The Office of Management and Budget was instrumental in the
development of the performance measurement framework, so I
believe that this is one step in the direction that OMB
supports.
Chairman Ney. So OMB thinks it is not effective, then does
HUD think the program is effective?
Assistant Secretary Patenaude. We are implementing the
performance measurement framework so we can accurately gauge
what the program's effectiveness is. And OMB was a partner in
that. The stakeholders were involved.
Chairman Ney. Yes.
Assistant Secretary Patenaude. And it was a 2-year process
developing this. And I believe the performance measurement
framework was developed in response to the PART on the program.
Chairman Ney. So actually it is kind of up in the air then
if HUD has not determined whether it is effective or not, and
people would tend to judge, I think, a little bit more HUD's
determination of the program than OMB. I am talking as a Member
of Congress. OMB says a lot of things. But it is hard for me
and other people dealing with this to visualize how OMB can say
that it is not effective when HUD itself really is not in the
assured position yet of determining how effective it is because
you are trying to upgrade the systems to make that
determination. And so I just wonder how OMB could have decided
it. It just seems that OMB would be flawed in coming out and
saying that this is not an effective program.
Assistant Secretary Patenaude. Well, as you know, the PART
is a tool that they used, and it is obviously not a perfect
tool to gauge the effectiveness of a program. And the same PART
is used to evaluate every Federal program. And as a result of
that score, OMB engaged in dialogue with HUD to develop this
performance measurement framework so that we can accurately
gauge.
Chairman Ney. Yes.
Assistant Secretary Patenaude. Again, we have seen many,
many successes with the program, but we do not currently have a
system in place. We are implementing it right now so that we
can assure the taxpayers that the money is being used wisely.
Chairman Ney. It just seems that OMB has jumped the gun to
say it is not effective when they are trying to communicate
with HUD to see if it is effective.
Just to go back in a little history with OMB, they had
deemed that we could severely cut back the black lung clinics
because we have less coal miners now. And, of course, black
lung is something people got 25 years ago. We fought that when
President Clinton was in office, and when President Bush was in
office, so we fought under two Presidents. We argued with OMB
because they kind of just talked to somebody and deemed well,
there are less coal miners, without talking to Health and Human
Services to find out the long term effects of pneumoconiosis,
which is black lung.
And so you look back on some of their history and how they
make decisions. Now, sometimes they will have a more precise
model. But I think this is another case where OMB, if you do
not have a system kind of perfected it as HUD to determine the
effectiveness, I just do not know how they could have had a 2-
year kind of sit down on this, OMB, and deemed that the program
is not effective. It seems like they should maybe listen more
to what you all developed by 2006, I would assume.
Assistant Secretary Patenaude. Well, they were a partner at
the table. And I do believe that they, by being a partner at
the table, they were at all of the public interest group
meetings. I think they do support the reform of the CDBG
program, and part of that reform is the implementation of the
performance measurement system.
Chairman Ney. I should explain, I am sorry, to the
audience. I apologize because of words we use in Washington,
D.C., a lot. But OMB is Office of Management and Budget. So I
should explain. I am sorry for not explaining that in the first
place.
I will stop because I do want to get to our ranking member.
But one other question I had, do you have any comment on the
neediest of the needy and the formula, any comment on it?
Assistant Secretary Patenaude. The current formula is
flawed. As you know, the demographics have changed and it has
been 30 years since the formula was developed. And we can use
the examples of St. Louis, Detroit, and Miami, where we have an
aging housing stock. Communities actually benefit from that. I
am a native from New England and we all know that in New
England, the pre-1940 housing is very, very valuable, but yet
New England benefits from the pre-1940 housing.
We look to Detroit, that has demolished much of the pre-
1940 housing. The pre-1940 housing, when it is demolished,
works against them because the need is not there.
Chairman Ney. Okay. Just for the record, explain the 1940,
what it is.
Assistant Secretary Patenaude. Housing that was developed
prior to 1940 is part of the current formula, and that is what
is creating this distortion. And, obviously, you know the older
cities benefit from this when indeed, many of the pre-1940
housing in Boston and even in Washington, D.C., are very high-
end housing now. It is very expensive to rehab that housing. So
that is part of the distortion.
So we look at communities, the example I cited in my
opening remarks. We have communities with very different needs
receiving the same amount. So when we talk about targeting to
the most needy, the formula that we propose would fix the
current distortions.
Chairman Ney. Thank you.
Ms. Waters.
Ms. Waters. Thank you very much, Mr. Chairman.
Let us continue with trying to understand how you make
decisions. First of all, let us recognize that last year's
budget eliminated CDBG. Was that decision based on performance
studies?
Assistant Secretary Patenaude. I was not in this position
last year. As you know, I was confirmed on April 15th of last
year.
Ms. Waters. But surely they told you what they were doing.
No?
Assistant Secretary Patenaude. I was not involved in the
budget process for fiscal year 2006.
Ms. Waters. All right. Then I will not pursue that line of
questioning. I am trying to find out how decisions are made.
So the budget that we are dealing with proposes a
substantial cut, 20 percent cut. But tell me how that relates
to performance criteria measurements that you entered into the
Federal Register on March 7th. Did you enter--
Assistant Secretary Patenaude. We did. We published the
final notice of the performance measurement framework.
Ms. Waters. The final notice of the performance measurement
framework--what?
Assistant Secretary Patenaude. The performance measurement
framework.
Ms. Waters. Framework.
Assistant Secretary Patenaude. That is the system that we
will work with our grantees.
Ms. Waters. This is where HUD will be conducting these 15
workshops?
Assistant Secretary Patenaude. We will be.
Ms. Waters. Tell me about those.
Assistant Secretary Patenaude. The workshops will be for
our grantees. They will be throughout the country. We will have
one here in LA in August and we will work with the grantees to
successfully implement this program. Many, many grantees
already have performance measurements in place, but this is to
put a uniform system in place and it will be required to enter
this information into the system.
Ms. Waters. Well, give me an example of what you will do
when you come to Los Angeles?
Assistant Secretary Patenaude. The workshops that will be
conducted, they will be technical workshops, I think, on how to
enter the--
Ms. Waters. Are you going to invite all of the grantees to
a workshop?
Assistant Secretary Patenaude. I believe that all grantees
will be invited to these workshops.
Ms. Waters. There will be a number of workshops or one
workshop?
Assistant Secretary Patenaude. We will be conducting 15
workshops for this.
Ms. Waters. One of them will be in L.A.?
Assistant Secretary Patenaude. I believe just one is
scheduled for L.A. at this time. If I can check with my General
Deputy--
Ms. Waters. Okay. All right. Let us see. You will have one
here.
You will be inviting some grantees or all grantees?
General Deputy Bregon. All grantees.
Ms. Waters. Okay. What will happen when all of the grantees
come to this workshop? Tell me how it works.
Assistant Secretary Patenaude. We are working with the
contractor right now to develop the curriculum, the training
curriculum. Part of this will be technical on the revisions to
the IDIS system, which are very much welcomed. The IT system
will be much easier to use for the grantees who will be part of
it.
The performance framework, how to enter the activities into
the system. And we also will be training all of our CDBG
directors. As you know, we have 40 CDBG directors located
throughout the country so that the technical assistance will be
available from HUD as well as our technical assistant
providers.
Ms. Waters. The information that you will be entering into
the system, is that information that you will use then to
evaluate particular programs?
Assistant Secretary Patenaude. That's correct. When a
grantee puts together their plan and submits their annual
performance plan, we will be able to actually look to see were
the results achieved that they set out in their annual plan.
Ms. Waters. All right. So that I am very clear about this,
and I may be mixing up some of the terminology, when you talk
about the grantee, are you talking about the City of Los
Angeles, the County of Los Angeles, or all of the programs that
are involved with the City and the counties?
Assistant Secretary Patenaude. The grantees are the
entitlement communities that receive the grants directly from
HUD. And then the States are also grantees.
Ms. Waters. Okay. So, the City of Los Angeles and the
County of Los Angeles will be the grantees receiving this
information. Now, the information that they are inputting into
the system is going to be evaluated in some way. Can you
explain that to me a little bit?
Assistant Secretary Patenaude. Obviously, it will take a
year for this to accumulate the information. But the grantee
submits a plan to HUD, what they intend to do, with their CDBG
dollars. At the end of that year they submit another plan. And
by looking at what is now in the new IDIS system we were able
to compare what they set out to do and whether or not they
actually achieved the results.
Ms. Waters. Let me ask if our staffs from Congress have
been involved or will be involved in any way in this training,
or will be trained on what you are doing?
Assistant Secretary Patenaude. I do not think we have plans
for that, but I think it is a wonderful idea. And we can reach
out to the Congressional staffers and include them. We have
1,100 entitlement communities that will be trained, so we can
certainly reach out to the staffers.
Ms. Waters. We need to know what you are doing at HUD.
Mr. Chairman, do you think it would be possible that we
could send a letter to the Secretary requesting that our staffs
be brought up to date and trained on what is going on with this
evaluation process, this performance measurement criteria?
Chairman Ney. We can do that without objection. And then it
will be transmitted to the members of the subcommittee.
Ms. Waters. All right. I think that is going to be very
important.
Now let me understand a little bit more the example that
you provided at the beginning of your testimony, where you
compared Santa Monica to Santa Maria, was it?
Assistant Secretary Patenaude. Correct.
Ms. Waters. You talked about the income of Santa Monica
compared to Santa Maria. Are you trying to say to us that if
there are enclaves, support people in Santa Monica, that
somehow they will not count because Santa Maria should have
much more money because they have many more poor people?
Assistant Secretary Patenaude. The new formula does have as
a basis poverty. We are looking at a better distribution of the
funding. So the communities that have less distress would
receive less CDBG dollars, the communities with greater
distress would receive a greater amount of money.
Ms. Waters. In this evaluation process, is it possible that
there would be communities that are now receiving money that
would not receive funds because HUD would consider the
population of the poor not poor enough, or too small a
population to be considered?
Assistant Secretary Patenaude. Currently, we have over
1,100 entitlement grantees. And it is possible, and again we
would need to finalize this piece of legislation, but it is
possible that grantees would no longer be eligible as an
entitlement community but would be eligible to compete for
funds through their State.
Ms. Waters. This is with your challenge grant?
Assistant Secretary Patenaude. No. The challenge grant is
separate. The challenge grant would be another opportunity for
distressed communities to receive additional CDBG funding. But
communities currently in Chairman Ney's District, his
communities, he does not have any entitlement communities; his
communities receive their CDBG dollars directly from the State.
Ms. Waters. Discuss the challenge grant a little bit more
so that I can understand it.
Assistant Secretary Patenaude. The challenge grant is
introducing a competitive, not competitive in the traditional
sense where you would submit an application, but competitive in
the sense that communities that have made tremendous progress,
you know, leveraging private dollars, concentrating CDBG
dollars would be eligible for a challenge grant which could be
up to $200 million is what is proposed in the President's
budget. Certainly one community would not be eligible for that,
but many communities.
Ms. Waters. When you talk about leveraging private
resources are you talking about poor communities such as Santa
Maria trying to have access to private capital, private
resources by which to be eligible for a challenge grant?
Assistant Secretary Patenaude. That would be one factor.
But we would be looking at a community to see how well they
used all Federal resources concentrating in a distressed
neighborhood.
Ms. Waters. So what if Santa Maria, this very poor
community with $13,000 incomes, did not use it as well, what
would happen?
Assistant Secretary Patenaude. They would not be eligible
for the challenge grant.
Ms. Waters. But they would still be eligible for a CDBG?
Assistant Secretary Patenaude. That's correct.
Ms. Waters. So those communities who have relationships
with the private sector who are able to attract private
capital, who are able to be involved in economic development
activities where there's private participation would be
eligible for challenge grants?
Assistant Secretary Patenaude. They would. But leveraging
the dollars is not the only criteria. We currently have
neighborhood revitalization strategy areas, we have over 250 of
them. They are designated by our CDBG offices. Those
neighborhood revitalization strategy areas, CDBG are being
concentrated in that area. And that is what we would be looking
for in the challenge grant. So they would need to have a plan,
and at some point an established track record of concentrating
dollars for the greatest impact.
Ms. Waters. Finally, given what you propose to do in
examining a community's performance or ability to leverage,
etc., how did you come up with the 20 percent cut for the 2007
budget year?
Assistant Secretary Patenaude. Secretary Jackson said in
the hearing 2 weeks ago, the Secretary made that recommendation
throughout the budget process. And the $3 billion CDBG number
was not stand alone. When they developed the budget it was with
the consideration that there would be reform to the program. So
by targeting the dollars the Administration believes that the
$3 billion in CDBG funding is sufficient to meet the community
development needs.
Ms. Waters. So what you are basically saying is you did not
have any real criteria? You did not have any real way by which
you evaluated this? The Secretary pulled it out of the air?
Assistant Secretary Patenaude. I think the Secretary puts a
great deal of thought into the preparation--
Ms. Waters. Oh, I am sorry. I did not mean to ask you that.
I know you cannot agree that the Secretary pulled it out of the
air, but the real question is you did not have any way by which
to evaluate the grantees or their programs that could lead you
to that kind of conclusion at this time?
Assistant Secretary Patenaude. I do believe a lot of
thought went into developing the budget--
Ms. Waters. No. I thought you were not involved in the
budget. I mean, I want to know what the criteria was for the
evaluation. How did you do performance evaluation that would
lead you to the conclusion that 20 percent of the CDBG funds
should be cut?
Assistant Secretary Patenaude. I do not believe it was
based on performance. When we proposed the fiscal year 2007
budget for CDBG we were talking about a formula revision. And
that was the number that the Secretary submitted to the Office
of Management and Budget--
Ms. Waters. Well, tell me about the performance, the
revision of the formula, how did that work? How did that lead
you to a 20 percent reduction? Describe to me how you revised
the formula that led you to the conclusion that CDBG should be
cut by 20 percent?
Assistant Secretary Patenaude. I am not sure there is a
direct correlation between the 20 percent--
Ms. Waters. I am not either, that is why I am asking you. I
am not either. Twenty-seven percent I am being told. I do not
know how you got to that.
Assistant Secretary Patenaude. It is a 20 percent
reduction. The 27 percent, you have to take the earmarks and
the setasides out of it. So for the formula portion of the
program it is a 20 percent reduction from fiscal year 2006.
Ms. Waters. Well, let me just ask this: If in fact we
really did not have the kind of evaluation or the kind of
criteria for evaluation to make that determination, is it
possible at all that we could not come up with a 20 percent cut
for 2007 year? And let us look at performance criteria and even
formula revisions to see what we come up for the next budget
year. Is it possible not to move for 2007 and is there anything
that we could do here today that would help you to say to the
Secretary that these cuts will be extremely harmful, unexpected
at this time and detrimental to our communities and we would
ask that they would not be pursued? With the performance
criteria and CDBG formula revision you must show what kind of
changes you would like to make.
Maybe after you do the real work you may go in the opposite
direction. Do you think that would be reasonable to request of
the Secretary?
Assistant Secretary Patenaude. Well, as you know, Secretary
Jackson worked very, very hard to keep the CDBG at HUD, we're
very, very pleased that it is in our fiscal year 2007 budget.
He fully supports the program. And as he said in a hearing
before your committee, you know the funding level is up to the
Congress. This is the proposed amount for CDBG that the
Administration has put forth.
Ms. Waters. Well, we know that. What we would like to do is
work with you and not have to fight with HUD. As you know, we
have significant bipartisan support for full funding for CDBG.
And some of our strongest advocacy is coming is coming from the
Republican side of the aisle, where Members have little towns
and cities that depend on CDBG money for their infrastructure.
I brought attention to Lawndale as one of the smallest
cities in my district, because they depend heavily on CDBG for
infrastructure. He talked about the traffic problems that they
have and how they are able to deal with those, using CDBG just
as my Mayor from Inglewood.
So I will just leave you with this; I think what we are
going to hear today, and what the people in this room want to
hear is:
(1) We cannot afford the cuts; and
(2) We understand when Departments, Agencies, or this
Administration would like to evaluate what is going on. But we
really do understand the difference between some reasonable or
credible evaluation and just some kind of speculation about
whether or not programs are meeting the needs or whether or not
the formula is correct.
So, I would like to say to you that one of the things you
can do that would be very helpful for all of us on both sides
of the aisle is to say, you know I really do think before we do
any cuts we ought to be able to justify them. Otherwise, we're
just not believable. Okay?
Assistant Secretary Patenaude. The fiscal year 2007 budget
has an increase for the Home program, the Continuum Care, those
are our homeless programs. The SHOP program, which funds the
self-help such as Habitat for Humanities. So we did see
increases in other programs in the Office of Community Planning
and Development for fiscal year 2007 that will also serve the
communities in need.
Ms. Waters. Okay. I understand. And while we appreciate the
other programs, we need those, plus we need CDBG. And while you
identify that you have those programs that are continuing, you
are cutting other programs. Are you not cutting Brownfields
also?
Assistant Secretary Patenaude. We are consolidating the
Brownfields program. It is an eligible use right now under the
CDBG program.
Ms. Waters. Would you like to tell me what other programs
you are cutting?
Assistant Secretary Patenaude. The Section 108 loan
guarantee program was consolidated into the CDBG program.
Ms. Waters. Consolidated? But do you understand Section 108
is extremely important to economic development? My City of
Inglewood was able to expand its business community by
reconfiguring the median in its main thoroughfare of Market
Street, which helped to bring more businesses onto that
community. And it has just been booming. Section 108 is really
important. And do you know why I really like it. It was my
first big accomplishment as a Member of Congress to keep it
from being scored so that it could be used for cities. And so I
am very partial to the Section 108 Loan Guarantee. And it is a
very special program for me and I think for the cities.
So what else did you cut?
Assistant Secretary Patenaude. The rural housing program is
also being consolidated into the CDBG programs.
Ms. Waters. Where you use ``consolidated'', I use ``cut.''
Now where are we differing?
Did you know the rural program was being consolidated, Mr.
Chairman?
Chairman Ney. Clinton, did we know the rural program was
being consolidated?
Our counsel tells me we that knew it was being
consolidated.
Ms. Waters. Okay. So what else are you consolidating?
Assistant Secretary Patenaude. Those are the three programs
that will be consolidated with the CDBG reform.
Ms. Waters. Okay. So thank you very much. And I am going to
move on.
Assistant Secretary Patenaude. Thank you.
Ms. Waters. Let me just thank our Mayors. I see that
Supervisor Yvonne Burke has come in, Mr. Chairman. And we would
like to have an opportunity for her to give her statement.
I just want to say to my Mayors, because I know that they
probably have to leave, that it is very important for you to
work very closely with your Members of Congress. I know you do.
We work very closely together. But if we are to engage the
Members of Congress in the struggle, they have to be aware of
the importance of these programs to their districts.
Many Members will go along and they will say yes, they
should be refunded. But they do not have the experience of
really knowing what these programs are doing. We do because
they are in our jurisdiction. This is the subcommittee of the
Financial Services Committee that has the responsibility for
oversight. But when you have members who do not serve on this
committee, it is important for you to do several things.
(1) It is important for you to get together with the
Members of Congress and to tell them what your ideas are about
funding programs and developments ahead of time. Let us not
wait until you need gap funding and then you are coming for an
earmark to try to keep something going that you started. Let us
not wait until there are problems with some of these funding
ideas to get to the member.
In the City of Los Angeles, Mr. Ovrum, there was some talk
today about the affordable housing trust fund. We like the
idea, but if you are going to use CDBG or Home monies with
their programs and you are announcing the program, the Members
of Congress should know about it. We do not want to read about
it in the newspaper. We want to know about it, because this is
money we fight for and we work very hard for.
In Los Angeles, for example, you have this huge delegation.
Some of them sit on the Appropriations Committee, like Lucille
Roybal-Allard, you want her involved in this housing trust
fund. We do not want to see that a housing trust fund is being
announced and we are hearing about it for the first time.
That also goes for the development projects in our
districts. If you are working with developers on projects, you
and CRA, do not let us find out about it through the back door.
We want to hear about it upfront so that we will understand not
only how the dollars are being spent, but, in many cases, how
we can be very helpful, in other cases how we can add funds.
Now, I have a request from the City of L.A. for some gap
funding for a project at Vermont Manchester--no Manchester. You
did not do that. Broadway Manchester. It was to build a parking
facility. I did not even know you were developing the parking
facilities. And I am not going to add that to my earmark
requests to assist you with that because you are coming at it
too late, and I have other earmarked requests that are in line
that I have to pay attention to.
So the message is this, mayors: Include your Members of
Congress early on and particularly those who, again, do not
have a lot of detail about these programs. Otherwise, those of
us who are sitting here working for CDBG and Section 108 and
home programs, etc., we are going to start to get more involved
in writing into the appropriations legislation what can and
cannot happen; so we would appreciate that.
And if you would take that back. I see that your CDBG
Director is here. We would appreciate it very much.
Thank you very much.
Yes, sir?
Chairman Ney. And any of the Mayors, of course, who have to
leave, but we have Ms. Burke.
I do have, without objection, a statement for the record
from Jan Perry, council member, City of Los Angeles
Chairman Ney. And we welcome, we actually met you before
out here, a former colleague of the U.S. House, the Honorable
Ms. Burke.
STATEMENT OF YVONNE BRATHWAITE BURKE, DISTRICT 2, MEMBER, LOS
ANGELES COUNTY BOARD OF SUPERVISORS
Ms. Burke. Well, thank you very much to Chairman Ney and
also to our Congresswoman Maxine Waters.
We are certainly pleased to have you here. It is my
pleasure to have a chance to share with you some of my
concerns.
My remarks will discuss the importance of the Community
Development Block Grant, and maybe I should say, you are in our
2nd District here, Exposition Park, it is in the 2nd District.
We have both of our Mayors here are part of the 2nd District.
And we are very pleased to have you here because these are
issues that are of vital concern to us.
And today you will also hear from Carlos Jackson, the
executive director of the County's Community Development
Commission which administers our CDBG program on behalf of Los
Angeles Urban County.
Although you are receiving testimony on several aspects of
CDBG, I am going to comment specifically only on the formula
program.
CDBG programs play a key role in improving the quality of
life for low- and moderate-income residents of Los Angeles
County. I am deeply concerned about the proposed cut for
Federal fiscal year 2007. The proposed 25 percent reduction in
funding will be a loss of $7.7 million to the Los Angeles Urban
County program. As you know, we have already been reduced
annually since 2001. In 2001, our entitlement was $39 million,
and with the 24 percent proposed cut for next year, our
entitlement will be reduced to $23.1 million. That is a loss of
$16 million in a 6-year period. It is vital that Congress
maintain formula funding for the CDBG program at the $4.3
billion to improve the quality of life of our citizens.
I want to acknowledge the past support of Congresswoman
Waters for our programs and for this large urban program. And
in its 32 years the program has been used constructively to
provide housing, community and economic development, and public
service projects. Our funds are normally leveraged with funding
from other sources to develop affordable housing. We have been
able to bring in tax credits, we are able to bring in banks.
The only way we are able to utilize the funds that we have is
because anyone who comes in to move forward with one of those
programs, they know that we are leveraging other funds and they
are going to have to leverage other funds to make it viable in
Los Angeles County where land is expensive, construction is
expensive, and where it is necessary to have affordable
housing. Our biggest problem, we have 90,000 homeless and it is
basically a housing problem, affordable housing.
So we have to do this kind of development. And we also
support business.
And I would like to give you one example. I believe this is
right outside of your District, but Martin Luther King
Hospital, where we have the Los Angeles Eye Institute, which
has been involved with $21 million multi-discipline health care
facility that will be adjacent to Martin Luther King Hospital.
And this eye institute will provide, not only is it an eye
institute, this is going to meet the requirement of Martin
Luther King to have a place for doctors to hold their offices.
And what has happened in our other hospitals, there is the
opportunity for a practice plan. Martin Luther King Hospital
did not have a practice plan. This will institute a practice
plan with a facility adjacent to the hospital where those
doctors will be able to have their practice and they will not
have to go miles away from the hospital in order to carry that
out and to make it competitive with other hospitals.
Now this money is a combination of 108 Loan Guarantees and
Economic Development Initiative Funds. And $3 million in
private funding to construct a facility that will provide
health services to low- and moderate-income people.
In addition, CDBG funds are allocated for important
``public service'' activities. Our residents benefit from
public service activities: Meals on Wheels for seniors; after
school programs for youth; drug intervention; homeless
assistance; and domestic violence counseling. The Los Angeles
County Board of Supervisors values CDBG in that it provides the
flexibility for us to prioritize the allocation of funds to
address our local needs. And just like you said, we want to
know about what's going on.
I believe that we provided to you a list of all of those
funds that we are allocating, but I just want to talk about a
couple. UJIMA. UJIMA came to the County for $1 from HUD when
HUD no longer--when they had received it back in a foreclosure.
We now have a proposal out to totally redo the UJIMA project.
And there are proposals that have been accepted and that is
moving forward.
The Salinas property that we acquired from Compton High
School, the school district when they no longer wanted that
land. We have proposals out. We have not been able to arrive at
those. But these are some of the things. We purchased the land
from Compton and now we are moving forward for a major housing
project there and the proposals have not been accepted totally,
but it is in outreach to the community. And I am sure you will
be hearing from some of the members of the community. Ninety-
seven units of condo projects there.
So I want to thank you for conducting this field hearing
and to restate this is a vital program to Los Angeles County.
It has been successful, it has been effective in providing
services to low income people. And I am confident in the course
of this hearing that you will realize how important CDBG is to
the County and also some of the other programs that you
discussed with HUD. We cannot afford to suffer the loss of any
more in terms of drastic cuts.
And I join all members of the Board of Supervisors in
looking forward to continuing to work with your committee to
assist in anyway we can to move forward where we can continue
to have this funding that is vital.
Thank you.
[The prepared statement of Ms. Brathwaite Burke can be
found on page 62 of the appendix.]
Ms. Waters. Thank you.
Chairman Ney. I really did not have any questions. I want
to thank you for coming.
I did want to follow up on something, though, that the
Congresswoman has mentioned, I think it is important and
actually it was raised during the hearings in Ohio, and it is
earmarks. A lot of members are afraid to say the word
``earmark'' today. It is a thing you're not supposed to say.
And as I made clear, we have a cancer center being
constructed in Knox County and that is because we talked with
local officials, they communicated to our office, and I put it
in. In fact, you can put my name next to any earmark and piece
of legislation that you want. Not you, but the government. But
I always make it clear that I do not think the U.S. Government
would have said wow, I really think the people in Knox County
who are pretty isolated need a cancer center, let us just do
one. No. It is because the local officials, or I could name you
places you have never heard of that $20,000, $40,000 helps to
bring water. Because I have areas that do not have potable
water. There is no water in people's houses. They get it out of
wells, and maybe the wells were destroyed. They now go down the
road and they get it out of a spring. We have places like that.
And again, you know, I do not think the Federal Government is
going to say we giveth water today to Ohio or other places.
And so I am mentioning earmarks, and I will put my name on
them. I mentioned earmarks, I know the Congresswoman will. But
I think the Congresswoman raises a really good point, too. The
communication is a turning point. And with the attack on the
funds and the cuts on the funds and what we are trying to do to
help people back in the districts, the communication at the
local level to the Member of Congress is absolutely more
critical than it has ever, ever been. Because we are not going
to hear what people are doing. And I have said this to our
local government officials on both sides of the aisle. We are
not going to hear it out of the Federal Government. They are
not going to call us up and say guess what is going on down in
the district.
So I just wanted to dovetail in there. I think it is more
critical, again, then ever before. Right now we are battling
the money, but it is again the process of it, too.
Ms. Waters. Well, no, I hear about Ohio. My husband was
born in Zansville.
Chairman Ney. Well, I live 30 miles from Zansville. Do you
have any relatives back there?
Ms. Waters. He has. They are not mine. So I hear plenty
about Zansville.
Chairman Ney. By the way, well we have learned a new term,
too. If things do not go right in November, I think that the
line all of us in elected office ought to use is I did not
lose, I was consolidated.
Ms. Waters. We learn something new everyday.
I want to thank Supervisor Burke for coming today. I know
how busy she is. And I do know about a lot of the programs, and
I will talk with you a little bit more about the Martin Luther
King project. We certainly cannot talk too much about it today,
because it would take us all day to do that.
But I want to ask you something. I think I read that L.A.
County has come up with a very ambitious program for the
homeless.
Ms. Burke. Yes.
Ms. Waters. And that you are spending County revenue to
help deal with this problem. And I suppose you may be putting
together money from wherever you can pull it from to deal with
this problem. And as I understand it, you're trying to do
something to get rid of the concentration of the homeless in
the downtown area and to ask communities to accept their share
of responsibility in dealing with the homeless. Any of these
dollars Federal dollars?
Ms. Burke. For the most part, these are our general revenue
dollars. We took out of our $80 million that we're taking out
of--this housing trust fund is a motion that Supervisor Molina
and I introduced some time ago saying that we need to have a
housing fund that is separate. However, we will call on Federal
dollars. Because first of all, if we have family assistance and
we have stabilization, we are going to have to have some of the
mental health dollars, we are going to have to have some of
those dollars that go for general-- well, our general relief is
local, but we will be calling upon--we have to use Federal
dollars to provide many of the services that will be provided.
This housing fund is a commitment from our general fund, a
$15 million ongoing commitment, not 80 million every year. $15
million ongoing from our general fund. Now, of course, you may
immediately say well, will that take away from some of your
health dollars that you use from the general fund? We feel that
in a sense many of the people we are talking about go in and
out of our hospitals everyday. These are the people that when
someone wants to get rid of them, they call for an ambulance to
take them to the hospital.
So there are Federal dollars. But basically this is a
general fund revenue source.
Ms. Waters. So what we are looking at, we have the City
that has put together or extended or a housing trust fund. The
County will have its own housing trust fund. And the two of you
will work with each other.
Ms. Waters. Well, that is what I was wondering. The two
would be working together.
Ms. Burke. Right.
Ms. Waters. And have they bought into your plan and you
bought into their plan about how you are going to disperse from
downtown?
Ms. Burke. Well, there is a very strong feeling, I think,
from the City and--well, let me say this. The City, part of
their program is a facility that is in the 2nd District but is
really close to Skid Row. And that is controversial because
there is a difference on the Board on terms of whether some
people believe there should be any kind of additional facility
there. But I suspect that will all be worked out.
I have committed to support the facility. I understand that
we do need to disperse, but you also have to have services
where the people are. You know, all of the people are not going
to leave. And it is a very difficult thing to say we are going
to have all the services far away when you have the people
right there. But I support the idea of having facilities in
every district, all five districts. But at the same time we do
have the people who are right there.
Ms. Waters. One of the things that I am going to ask of the
Mayor and of the County Board is that you include us in those
discussions.
Ms. Burke. Certainly, yes.
Ms. Waters. Because I was involved about a year ago, and
after the fact in a plan that Ms. Tobacca was trying to
advance.
Ms. Burke. Oh, yes.
Ms. Waters. And all of a sudden the resident councils were
up in arms. And we ended up in a meeting one night with over
1,000 people at Crenshaw Christian Center where the community
was opposed to the plan that Ms. Tobacca was advancing.
I think that if we have an opportunity to get involved with
the discussions early on, we can help come to some conclusions
about where facilities could be or should be located, or ways
that we could at least communicate with the communities rather
than hearing about it on the tail end. Because normally what
happens if we are not involved and we hear about it at the last
minute, we just go along with the people, whatever they say.
You know that is the easy way out. But if we are involved in
planning and development, we can defend a good decision. So I
am going to ask the Mayor that we be involved.
Ms. Burke. Right.
Ms. Waters. And I would like to ask you that you be sure
and get our staffs involved.
Ms. Burke. Right.
Ms. Waters. So that we can help in the development of the
plans.
Ms. Burke. We certainly will do that. But it is not going
to be easy. There are not going to be very many communities
opening their arms. But I do want to say one community, we had
a lot of problems when there were homeless people coming to Ted
Watkins Park during the day.
Ms. Waters. Yes.
Ms. Burke. The church, Grant AME, came forward and has
provided a facility for people there so that the homeless can
go there rather than going into the park. And the community
there is very happy with that, they are accepting it.
So it is not going to be easy to find a facility location,
but at the same time we would like to work with you.
Ms. Waters. Okay.
Ms. Burke. As we move forward to try to identify a
location.
Now, a location that the Mayor is suggesting is not in the
1st District, it is in the 2nd District, but it is close to
Skid Row and that is highly controversial.
Ms. Waters. I am sure.
Ms. Burke. Yes.
Ms. Waters. Okay. Thank you very much. Thank you.
Mr. Mayor, did you have a last word you would like to leave
with us before you leave?
Mr. Hofmann. No, other than thank you very much for coming
in.
Ms. Waters. You are welcome.
Mr. Hofmann. And letting us be part of this discussion.
Ms. Waters. Thank you very much.
A round of applause for our first panel.
Chairman Ney. We will take a very, very short recess as the
second panel sets up. And it'll be Mr. Clifford Graves, Mr.
Carlos Jackson, Mr. Al Jenkins, Mr. Rudolf Montiel, Mr.
Mitchell Netburn, Ms. Brenda Shockley, and Ms. Marva Smith
Battle-Bey. And then we will go into our second panel.
And I want to thank the audience.
We will be right back.
[Recess]
Chairman Ney. The committee will come back to order. The
short recess turned into a little bit longer one, but that is
okay.
And we will go straight to the panel. We have:
Mr. Clifford Graves, general manager, Department of
Community Development, City of Los Angeles, California;
Mr. Carlos Jackson, executive director, Los Angeles County
Community Development Commission and Housing Authority of the
County of Los Angeles;
Mr. Al Jenkins, project manager, CRA/LA;
Mr. Rudolf Montiel, executive director, Housing Authority
of the City of Los Angeles;
Mr. Mitchell Netburn, executive director, Los Angeles
Homeless Services Authority;
Ms. Brenda Shockley, president, Community Build,
Incorporated; and
Ms. Marva Smith Battle-Bey, president and CEO, Vermont
Slauson Economic Development Corporation.
Thank you. And we will start with Mr. Graves.
STATEMENT OF CLIFFORD GRAVES, GENERAL MANAGER, DEPARTMENT OF
COMMUNITY DEVELOPMENT, CITY OF LOS ANGELES, CALIFORNIA
Mr. Graves. Thank you, Mr. Chairman, and Congresswoman
Waters. My name is Clifford Graves and I am the general manager
of the Community Development Department for the City of Los
Angeles. And thank you very much for taking the time to hold
this hearing here in Los Angeles. I think the turnout today,
from the veterans to the kids, indicates the level of interest
there is in this very important program.
And I am especially pleased that you came out now; I have
been with the City about 3 years, long enough to develop a
genuine sense of pride about what the City has been able to do
with the block grant program over the years, and also to be
extremely disturbed about what the future for the program might
hold.
As you all know, the secret to the block grant success has
been that while it targets a certain population, the most
challenged part of our population, it basically it leaves it to
local officials to tailor programs and set priorities that are
best suited to their particular community, whether it is a town
in your district, Mr. Chairman, whether it is the City of Los
Angeles, the City of Lawndale, or whatever. And it is that
ability to respond, to have the officials closest to the issue
respond in an appropriate way. It is what frankly separates
this program from most other Federal programs and it was the
reason for the program being formed back in the 1970's.
Now, Mr. Chairman, you have talked about the typical city
in your District. Obviously, Los Angeles would have a hard time
fitting in your District, but we have not only a lot of people,
some 4 million, but we have over a million people in this City
who are under the age of 18. We have 100,000 young people
between the ages of 16 and 24 who are out of school and out of
work. And it goes without saying, that is more than most of the
cities in this country, so we are dealing with a problem of
great magnitude. And when you add the complexity of this being
probably the most ethnically diverse city in the country--41
percent of the population is foreign born, and 140 languages
and dialects are spoken in the schools--it gives you an
indication that the programs that the City puts into place to
address the issues are going to be different here than anywhere
else.
And the flexibility of the program allows it to adapt over
time. It is not necessary to go back to Congress every few
years to amend the program to deal with some new issue that has
come to the forefront. Local officials can adapt things as
needed.
For example, in Los Angeles, early in the program's life,
as I understand it, the bulk of the funds were spent on capital
projects, neighborhood facilities, and things like that. After
the riots of the early 1990's, the City shifted its focus
toward public services, trying to rebuild the social
infrastructure of our most challenged areas. And that continues
to be a priority today, but it has been recognized here that
there is a growing gap in the economy between the kinds of jobs
that are being created here, that Mr. Ovrum was referring to,
and the skills of the workforce who should be meeting that
need. It is hurting our economic development, and it also
means, as Mr. Ovrum pointed out, that a large part of our
population is not benefitting from this economic growth.
Therefore, the Mayor and City Council have begun to shift parts
of the block grant program toward economic development and
marrying our economic development work with the work we are
doing in workforce development through, among other things, the
Workforce Investment Act.
The irony is that you know full well what is happening with
the proposals for funding of the block grant; the same thing is
happening in the Workforce Investment Act. Whereas in 1995, the
City's allocation under the block grant was nearly $100
million, it is now down to $74 million this year, and it will
go down even further. And if you add the effect of inflation,
the City has about half as much purchasing power and half the
level of services available to deliver now than it had 10 years
ago, whereas the issues are getting more complex.
In order to address this, the City has sought to basically
intertwine the block grant with the other things it does with
its own funds, and with other outside funds. I would like to
use just a few examples this morning.
In the community facilities area, the City passed a library
bond issue some years ago which resulted in a renaissance in
the public library system throughout the City. In the most
needy areas, services and facilities a little above the
standard were considered to be important, but could not be
afforded under the bond issue, so many of the libraries in the
most needy areas got special features and special facilities
using Community Development Block Grant funds.
They were also used because, in many of our challenge
areas, land acquisition was especially complicated and the
block grant was just able to supplement a much larger amount of
funds.
Similarly, there was one area of south Los Angeles that was
very much lacking a facility suitable for supporting a major
community center. So block grant funds were used to build the
Rita Walters Learning Center in south Los Angeles, which
includes an alternative high school, a community center, and a
number of other outreach services. Many of those services are
funded by other programs, City funds, school district funds,
and others. The block grant also funds some of them, but it was
the block grant which made that facility possible, which, in
turn, makes available a whole range of services that the
community needs.
I mentioned the importance of rebuilding and strengthening
the social infrastructure of the City. The City of Los Angeles
has partnered with hundreds of nonprofit agencies around the
City to deliver a wide range of human services, some of which
you'll be hearing about from other panelists, but the block
grant is the glue that holds these systems together.
We have molded many of these organizations into what we
call family development networks, which are essentially
consortia with common databases, and common client management,
and we have 12 of them around the City. Their base funding is
the block grant. But to use an example, we are using funding we
get from the State of California's Office of Traffic Safety to
use these agencies to promote traffic safety. And last year, we
were able to give out 6,000 free child safety seats to needy
families, and over 13,000 bicycle helmets to increase the
safety of young people. Again, if it weren't for the block
grant providing the infrastructure, these specialized programs
could not work.
In the economic development area, it is very interesting.
The money is used as either a stimulus or as gap financing to
make projects that are badly needed become feasible. Probably
the biggest success story we have had in recent years is that,
as you probably know, there is an area adjacent to Skid Row and
the modern downtown on the other side known as the Old Bank
District. It's the former financial district of the City which
includes a lot of multi-story, obsolete office buildings.
The neighborhood was unsavory, to say the least. CDD used
to be located there until about a year ago. But the City was
trying to figure out what could be done to stimulate
development there. So two things were done. First the City
passed what it called an adaptive reuse ordinance which eased
certain requirements for residential developmental that were
making the projects unfeasible. There still weren't many takers
for that. Then one developer came forward with a proposal. The
City provided a $5 million Section 108 loan to go against a $37
million project. That project was so successful that it is
largely credited with kicking off what now some people are
saying is about a $10 billion building boom in that part of Los
Angeles. And we have not been asked to provide any more 108
funding after that first one.
We are using block grant in that same area in another way.
While housing has taken off there, there is a shortage of
commercial services. And so we are using what we call the L.A.
Business Assistance program, which is a technical assistance
program for small and emerging businesses to provide special
marketing, business planning, and site selection services to
retailers who want to locate in that area but run into
problems--
Chairman Ney. I'm sorry. I have to note we do have a 5-
minute rule for--
Mr. Graves. Oh, I'm sorry.
Chairman Ney. Literally, I could listen to you for another
half hour because I think you are going down the right path
and, actually, you provided me some food for thought on just a
few things you said already.
Mr. Graves. Okay.
Chairman Ney. But we do have the 5-minute rule so we can
get everybody in. But if you would like to just summarize what
you were saying, the rest of your statement will be entered for
the record.
Mr. Graves. Fine. There is a fuller statement that has
already been provided for the record.
I would like to just conclude by saying again the important
thing about the block grant program is its flexibility and
ability to adapt over time. And you have had an interest in
formulas and performance measures and so forth like that, and
there are always ways to tinker with the program. But the
important thing is keep targeted on who you want to serve and
allow local officials the discretion to figure out how best to
do it.
[The prepared statement of Mr. Graves can be found on page
71 of the appendix.]
Chairman Ney. Thank you.
Mr. Jackson?
STATEMENT OF CARLOS JACKSON, EXECUTIVE DIRECTOR, LOS ANGELES
COUNTY COMMUNITY DEVELOPMENT COMMISSION AND HOUSING AUTHORITY
OF THE COUNTY OF LOS ANGELES
Mr. Jackson. Thank you. Good morning, Chairman Ney and
Ranking Member Waters.
I would also like to express our appreciation on behalf of
the County for your leadership, Mr. Chairman and Congresswoman
Waters, and also Congressman Miller in your continuous support
of the CDBG program.
I have also submitted written testimony regarding the
concerns that we have on CDBG and the Administration's
proposals. But I would like to go on with some spontaneous
remarks after listening to the Assistant Secretary of HUD
regarding their perception, their determination as to why they
perceive a necessity to change the program as well the
reduction.
One of the comments made by the Assistant Secretary was
about success. All you have to do is look in this room and see
the results of people who have been assisted or as well as
prevention with the young people by putting them into positive
programs.
I have been affiliated with the program for over 15 years,
and there have been various challenges to the program over the
years. But I sincerely believe, in my professional experience,
that CDBG has been as Mr. Graves had indicated, really the glue
in a lot of economic and community development activities.
There is sufficient regulatory compliance for those
entities or entitlements that are not fulfilling their role. I
wish they had stayed to hear some of the successes, because
this is really about people and human beings. And by them
leaving, I think they are missing a major dimension as to why
we are concerned about what is happening.
Chairman Ney. I just wanted to let you know, I will assure
you that we will make sure that portions of this record will be
provided to HUD.
Mr. Jackson. No, I appreciate that.
Chairman Ney. But I understand your point; had they been
here, it would have been better.
Mr. Jackson. You know, we brought some charts to indicate
the overall impact of our program. I mean, in 6 years we will
be losing $16 million. Our program is different from an
entitlement jurisdiction in that we are the Urban County
Program. Not only are we concerned about the unincorporated
areas of the County where we have approximately a million
people, but also 49 cities like the City of Lawndale that
received funding through us. These cities really do not have a
lot of opportunities through the State to get funded, and so
they rely on this type of funding to do housing, community
development, commercial development, etc. It is very important
to them, as well as to us.
HUD talks about performance. For every dollar we put into
housing, there is a leverage of 3 other dollars. It's one to
three. And that has been historically our pattern.
CDBG has to be leveraged to make it very positive and very
productive.
L.A. County, our program, as I indicated we are going to
suffer almost a 41 percent reduction in 6 years, as Supervisor
Burke indicated. That is very hard to swallow in times of the
demographic changes, the tremendous need on human services,
social services, and more so, affordable housing.
I do not need to say much about affordable housing, but our
median price of a house here is $565,000. We calculate that it
takes about $140,000 annual income to afford the purchase of a
home, and that really is beyond many of us at this point.
Eleven percent of the residents of L.A. County can afford to
buy a home. And so block grant is used for that purpose.
We have exceeded the performance measures of HUD in terms
of their requirements. Almost 95 percent of our funds are spent
on low-income residents. There is not an issue about our draw
down rate; we are .81 percent, and the requirement is 1.5.
And, again, there are many entities like us who are very
successful at implementing the program. I just do not
understand how they arrive at these programmatic changes.
We support the 108 program. We hate to see it consolidated.
But more so as you indicated, Congresswoman Waters, it is a
cut. It is a consolidation into the block grant allocation. I
also think that the BEDI is very important.
But on the 108, the cities that we work with, we have 11
participating cities who have used a total value of $56 million
in 108's. And these are small cities that don't have the
opportunity to accumulate a lot of funds at one time. So this
becomes an incentive for them to get involved with
revitalization efforts.
Because of time, I am just moving through the different
things.
But I would like to say that we have not taken a position
on the four alternatives in the formula. We are waiting for the
actual proposal from the Secretary to determine what the impact
would be. But if there is any negative impact in terms of
reduction in funding, we would oppose that. I think this area
of Los Angeles County cannot endure any further cuts, cannot
endure a 25 percent cut.
As to the wealthy communities, well, there are poor people
throughout the County. And I think Mayor Dorn really made a
very strong point. We are splitting hairs about who is poor. If
you are poor, you are poor. And I think that is where we have
concerns that we do have communities who could be perceived as
being rich, however they do have a substantial number of
seniors who are in need of services. Like, for example, the
City of Santa Monica, which is not one of our cities, they are
one of the concentrations of homeless and they are trying to
address that.
So in conclusion, we support that the funding should be
restored to the $4.3 billion nationwide. And we will hold back
on our opinion yet to see what the formula will bring out by
the Secretary. But it is very unfortunate to sit here in front
of you to say we are going to suffer another $7.7 million
reduction when our population is increasing, our poor
population is increasing, as well as the homeless population.
So many different needs and we are losing the ability to
address those needs.
Thank you.
[The prepared statement of Mr. Jackson can be found on page
84 of the appendix.]
Chairman Ney. Thank you.
Mr. Jenkins?
STATEMENT OF ALVIN JENKINS, PROJECT MANAGER, CBA/LA
Mr. Jenkins. Thank you. And good morning.
I would like to thank Chairman Ney and Ranking Member
Waters for inviting me to be here to represent the
Redevelopment Agency.
The primary goal of the Redevelopment Agency for the City
of L.A. is really to eliminate blight and create economic
development and to assist in providing affordable housing
within the area.
The CDBG funds have proven to be vital for the efforts that
we have within the south L.A. area. Each of the 9 redevelopment
project areas within south L.A. has relied heavily on the
availability of these CDBG funds. As you know, most of the
southern L.A. redevelopment project areas are unable to sustain
themselves with the provision of increment funds or with
program income, and that is really the nature of the project
areas. And if the areas were able to sustain themselves, then
there would be no reason to have redevelopment out there in
those particular areas.
In many cases, redevelopment within south L.A. would not be
possible at all without having these particular funds from
CDBG.
I oversee three different redevelopment projects areas in
the south L.A. area being the Crenshaw/Slauson and western/
Slauson areas. And these HUD funds not only provide a direct
source of funding, but also enable the leveraging of a great
deal of private funding for these different projects in order
to take place as well.
Improvements that are a direct result of CDBG funding
include a variety of different types of benefits for the
community. One, for instance, is providing commercial facade
grant programs for those areas such as Merk Park Village,
Western Avenue, Crenshaw Boulevard, and Slauson Avenue. Those
funds have been critical in providing improvements so that
those small businesses which cannot afford it to make
improvements on their buildings that they can take place which,
of course, overall helps to beautify the South L.A. area.
Street scape programs within the area also have a direct
benefit to the community with new street plannings, street
furniture, and other types of improvements.
Another reason that we use the block grant funds are public
improvements which are, again, throughout the south L.A. area.
Besides these community benefits, other major developments
would not even be close to be able to be provided without use
of these funds, including the recently built Chesterfield
Square Retail Shopping Center on the corner of Western and
Slauson where funds were used for that. The Marlton Square
project which is just beginning and is under construction under
the very first phases and relies heavily on those funds. And
other major catalytic projects within the south L.A. area as
well.
These projects and improvements rely on the use of CDBG,
BEDI funds, Section 108 funds, and T&I. And the Agency has over
the years experienced a significant decline in the amount of
funds that are available. And these have been called out and
mentioned by Cliff Graves and other speakers that we've had
this morning.
Therefore, I would urge the committee to assist the
improvement programs for South L.A. by resisting these budget
cuts for fiscal year 2007 of the block grant funds.
Chairman Ney. Thank you.
Mr. Montiel?
STATEMENT OF RUDOLF MONTIEL, EXECUTIVE DIRECTOR, HOUSING
AUTHORITY OF THE CITY OF LOS ANGELES
Mr. Montiel. Good morning Chairman Ney and Ranking Member
Waters. I represent the Housing Authority of the City of Los
Angeles, one of the largest in the Nation. And I appreciate
this opportunity to discuss with you the importance that CDBG
funding represents to the services we provide our public
housing clients that number nearly 25,000 in our City.
The Housing Authority receives its funding through the
City's allocation of CDBG. And just as communities are not just
bricks and mortar, these dollars that we receive from CDBG are
instrumental in allowing us to really improve the lives of the
clients that we serve.
We have raised the percentage of AMI of our families from
17 to 24 percent, primarily because our families have developed
to the point that they can become working families and move on
through that continuum in the housing arena.
CDBG funding from the City helps us fulfill those
responsibilities to our clients in the areas of safe, healthy
communities, family self-sufficiency and most importantly, it
even helps to support the Administration's ownership society;
moving families into an ownership scenario.
Over the last 4 years, the City has reduced the level of
CDBG funding for the Housing Authority by nearly 57 percent.
They have had to do this because of the cuts that the City has
received. Today we receive just over $600,000 a year. And in
2002, we were receiving nearly a million and a half dollars.
The further reduction of CDBG funds proposed for the 2007
budget would inflict mortal wounds to already weakened client
service programs in public housing. The competition for the
shrinking services will affect educational programs such as
tutoring after school in computer learning centers, employment
programs such as job training and job fairs and family
development in everything from anti-violence to parenting
classes to events that we hold for seniors.
We are working very closely with the LAPD to address
violence issues in our communities. But, again, just as
communities are not made up of just bricks and mortar, safety
in our communities is not policing alone. And it is the
interaction with services and opportunities for the youth that
will lead our communities to be safer and more liveable.
Given the extreme challenges Los Angeles faces from
organized gangs, low levels of educational attainment, and the
City's rank as the homeless capital of the Nation, funding to
provide affordable housing services and to support healthy
communities is as important to the City as it ever has been.
And we urge you to help us restore full funding to the CDBG
program.
Thank you.
[The prepared statement of Mr. Montiel can be found on page
94 of the appendix.]
Chairman Ney. Ms. Battle-Bey?
STATEMENT OF MARVA SMITH BATTLE-BEY, PRESIDENT AND CEO, VERMONT
SLAUSON ECONOMIC DEVELOPMENT CORPORATION
Ms. Battle-Bey. Good morning. I want to say welcome to
Chairman Ney, and to our very own Congresswoman Waters. I am
Marva Smith Battle-Bey, the president of Vermont Slauson
Economic Development Corporation. We are located in south Los
Angeles, and have been there for about 25 years.
Every year I make a trip back to Washington to save CDBG
``again.'' And I say, ``again,'' because we come every year.
I also chair the National Congress for Community Economic
Development in Washington, D.C., that is made up of about 600
or so CDC's across the country and the California Community
Economic Development Association here in the State of
California. We represent over 200 CDC's.
I want to talk specifically about some of the work we have
done over the years, and how that work has involved Community
Development Block Grant dollars. Because I think that you have
heard a lot about the uses that the City and the County have
for CDBG, but I want to put our perspective in very personal
terms as it relates to people who reside in our neighborhood
and people who do business in our neighborhood.
We have built five supermarket-based centers of various
sizes in south Los Angeles, all of them coming after the 1965
riots. Our first property at Vermont and Slauson was the first
shopping center that was built in 1981 after the 1965 Watts
riots. So it took almost 20 years before there was a main
commercial development in South Los Angeles. And that was done
because of CDBG dollars.
There was a tremendous gap in our funding request. Working
with a private developer, we ended up needing CDBG dollars. And
those dollars came through an Urban Development Action Grant
(UDAG) funds as well as through general CDBG funds.
We built that center in 1981 when interest rates were 22
percent. That was the regular interest rate for borrowing.
Thank goodness there was some CRA legislation that passed in
1977 and we were able to borrow $2.5 million from a local bank
at 10 percent. Okay. That was still expensive money. Now people
talk about interest rates of about 7 percent, 8 percent. We
were talking about 22 percent money when we built that shopping
center. We could not have done it had it not been for CDBG
dollars.
That shopping center brought major businesses to our
neighborhood and provided over 500 jobs. We also put in a
number of small businesses; like our McDonald's which was
African-American owned. We have a Post Office there. Some of
these amenities that typically weren't in shopping centers in
our neighborhood, we were able to bring to that location
because we had block grant dollars.
We are tremendously under-retailed in south Los Angeles.
There is not one major project in the 25 years I have been
involved in economic development that has not involved CDBG
dollars. The private sector comes because we can leverage block
grant money, and we do so at three to one, four to one, five to
one ratio. So it is well worth saving the Block programs.
One last comment. It is not particularly related to
economic development, but it is related to the Section 202
Housing program. That program is supposed to have a very
significant cut as well. As the baby boomer population
continues to age, many of whom are sitting across this panel
today, there will be an increased demand on senior housing. So
if we do not continue to build senior housing, we are going to
have tremendous problems with the baby boomer population and
finding adequate housing.
Thank you.
[The prepared statement of Ms. Battle-Bey can be found on
page 111 of the appendix.]
Chairman Ney. Thank you very much.
Ms. Shockley?
STATEMENT OF BRENDA SHOCKLEY, PRESIDENT, COMMUNITY BUILD, INC.
Ms. Shockley. Thank you. Thank you, Chairman Ney and
Ranking Member Waters for the opportunity to testify on the
impact of Community Development Block Grant, CDBG, programs on
communities in south Los Angeles.
My top and general comments would certainly echo that of
all my colleagues from the community development advocacy
organizations as well as from local government.
I am here today to put a face and a voice on the type of
organizations, programs, and communities that have
significantly benefitted from both direct and indirect CDBG
funding. Community Build's initial funding in 1993 was a $3
million CDBG emergency assistance grant in the aftermath of the
civil unrest. That funding was matched by $1.5 million in State
funding and was used to provide employment training to youth
and young adults who had actually been disenfrancished and were
actually a part of the conditions that led to the civil unrest
of 1992.
With that funding, not only did we provide employment
training services to youth and young adults, we partially
financed the development of 24,000 square feet of commercial
development on a site that had been destroyed during the
unrest. That development has spurred further development in
that are and revitalized the surrounding community.
Direct CDBG funding was received by Community Build again,
and in that opportunity we were able to acquire, renovate, and
expand to a 9,000 square foot youth center that I must tell you
is located in the 35th Congressional District and it has served
over 12,000 youth and young adults since 1994, and annually
serves a minimum of 1,200 youth and their families.
Community Build has also received CDBG funding indirectly
through the budget of the City of Los Angeles. Community Build
is a one-stop environment for youth and their families. As a
result, we access CDBG funds each and every day, whether it is
a referral to a homeless shelter, housing rehabilitation, home
ownership assistance, nuisance abatement, or the Targeted
Neighborhood Initiative. By way of example, Community Build
provides safe passage to the youth in our gang prevention
middle school program, L.A. Bridges. Through L.A. Bridges, too,
which is funded by CDBG through the CDD Department of the City.
We are slated to provide gang prevention and intervention
in an expanded geographic area using CDBG funding.
We partner with Jennesse Center, a domestic violence
prevention organization that is funded by CDBG.
Our youth participating programs at the Youth Technology
Training Program, that is also funded by CDBG.
Community Build refers students and their families to the
Rita Walters Learning complex that Mr. Graves mentioned on
Manchester and Vermont, and to the youth and family centers,
family development networks in our community. All of these
programs are funded by CDBG.
But as Ms. Smith Battle-Bey said, one of the most critical
aspects is the 108 loan fund, which is glue for some projects
and critical leverage for others. The flexibility of the
funding allows organizations like Community Build to access
conventional bank financing by blending rates to make debt
service manageable.
The Brownfields program is also very, very important
because in a community such as ours that has experienced long
term disinvestments there are many potential development sites
in need of toxic remediation.
Community development and revitalization requires as many
tools as possible. CDBG funding is one of the most effective
tools for turning around neighborhoods and turning around
lives. For organizations such as Community Build, decreasing
these resources and eliminating important programs such as
Brownfields would not only be crippling, but in many cases
devastating.
Thank you for the opportunity to offer testimony, and I
urge you to restore the CDBG program and funding.
If time permits, I just have two brief observations and
comments regarding issues that have been raised during the
course of this hearing.
The first has to do with the discussion with the
representative from HUD, whom I wish, too, was still here,
regarding the evaluation of the program. And I would just
submit to the subcommittee that the nature, the very unique
nature of CDBG resources is that it is catalytic funding and it
doesn't necessarily lend itself to a one size fits all
evaluation tool. That really the idea of looking at how the
impact and the outcomes relate, it may be more a function of
the tool than the reality. Because we can all tell you how much
a small amount of CDBG money will be able to make a big project
happen. So I raise questions with the tool and would hope that
the committee would as well.
Finally, on this issue of the formula and this language
regarding the neediest of the needy. And what I think some are
missing is that one of the very critical and important aspects
of CDBG is to help families and neighborhoods from slipping
into the ranks of the neediest of the needy as well as serving
the neediest of the needy. And that is a critical aspect that
often, to sort of paraphrase, allows us by investing CDBG
dollars you're offering a hand before someone needs a handout.
Thank you.
[The prepared statement of Ms. Shockley can be found on
page 109 of the appendix.]
Chairman Ney. Thank you.
And the last witness. Before we do, without objection, I
have a letter from Herb J. Wesson, Jr., council member from the
10th District, signed also by Jan Perry and Bernard Parks.
Without objection, it will be part of the record.
Chairman Ney. Thank you.
STATEMENT OF MITCHELL NETBURN, EXECUTIVE DIRECTOR, LOS ANGELES
HOMELESS SERVICES AUTHORITY
Mr. Netburn. Thank you. Good morning, Mr. Chairman and
Ranking Member Waters. My name is Mitchell Netburn and I am the
Executive Director of the Los Angeles Homeless Services
Authority known as LAHSA.
I am honored that you have invited LAHSA to testify on the
value of the Community Development Block Grant program as a
vital tool to help end homelessness. I would also like to thank
you for holding this hearing in Los Angeles and for your
ongoing leadership in support of homeless programs.
LAHSA is a joint powers authority of the City and County of
Los Angeles. Founded in 1993, LAHSA is governed by a 10 member
commission appointed by the City and County of Los Angeles. We
have been the lead coordinator for the second largest continuum
of care services in the country since the inception of HUD's
continuum of care funding. This has enabled LAHSA to vigorously
pursue a regional approach to addressing homelessness. This is
critical to successfully addressing homelessness, especially
given the geography covered by our continuum: 4,000 square
miles and extreme differences in infrastructure and needs
across the County. Moreover, Los Angeles County encompasses 88
jurisdictions, including 34 entitlement cities.
Based on recent statistics, the City of Los Angeles has now
been titled the homeless capital of the United States. And
according to Philip Mangano, Executive Director of the U.S.
Interagency Council on Homelessness, one in nine people who are
homeless in America resides in Los Angeles County. A truly
astounding statistic.
Mr. Mangano's statistic was based on the Greater Los
Angeles Homeless Count conducted in January of 2005 by LAHSA.
This involved a point in time enumeration and survey. The
findings estimated that in the course of a year, close to a
quarter of a million people, 250,000 men, women, and children
experience homelessness, and on any given night there are
approximately 88,000 homeless people throughout the City and
County of Los Angeles. And tragically, the vast majority--88
percent--are living on the streets or other places not meant
for human habitation.
The Community Development Block Grant provides critical
funding to address acute problems of communities such as
poverty and homelessness. Because of its flexibility, LAHSA
utilizes CDBG funds for a wide range of homeless services and
housing, including overnight emergency shelters, a respite
center for families and model programs which target homeless
people living on the streets and providing them with shelter.
These programs enable homeless people to live as
independently as possible and become productive members of
society. Permanent housing with services is the key to ending
homelessness, and CDBG funds are critical to developing
housing. For example, just last week the Bring Los Angeles Home
Blue Ribbon Panel held a press conference to launch a 10-year
campaign to end homelessness in Los Angeles County, which is in
keeping with President Bush's initiative to end chronic
homelessness.
A key strategy of the Bring LA Home plan is to create
50,000 units of affordable housing targeted to people who are
homeless. Community Development Block Grant funding is proposed
to comprise 20 percent of the money necessary to achieve the
50,000 unit goal.
Contributing to LA County's homeless problem is the
County's affordable housing crisis. For example, within the
City of Los Angeles there is a 3 percent rental housing vacancy
rate based on recent reports. Not only does this mean a tighter
market for low income renters, but those fortunate enough to
have a Section 8 voucher are finding it harder and harder to
find landlords willing to rent to them. To address this
situation, in November of 2005, Mayor Antonio Villaraigosa
announced a commitment to add $50 million, including CDBG
funds, to the City's housing trust fund for permanent
supportive housing for Los Angeles' neediest residents.
The CDBG funding that LAHSA receives on an annual basis has
been an invaluable resource for the agency and its service
providers who are working in the trenches to end homelessness.
Currently LAHSA receives about 19 percent of its overall budget
from CDBG funding. Therefore, a proposed reduction of more than
20 percent to the CDBG program would be devastating to Los
Angeles.
To cite just one example, CDBG-funded programs provided
203,188 bed nights for people who are homeless in the Los
Angeles area in the last program year. Assuming a cut of even
just 20 percent, that would be reduced by over 30,000 bed
nights. These reductions would severely cripple efforts to
address homelessness, especially in Skid Row, South Central,
and Hollywood.
CDBG funding provides a major foundation for homeless
service providers as well as a major resource for Los Angeles
as it seeks to implement strategies to end homelessness. The
City and County of Los Angeles have made significant
commitments of resources to end homelessness and collectively
are moving in the same direction. Any overall reduction in CDBG
funding or changes to the allocation formula which will reduce
Los Angeles' share of CDBG fund will force people back on the
streets and significantly impact our ability to end
homelessness.
On behalf of the homeless community in Los Angeles, I thank
you for this opportunity to provide testimony. We unequivocally
support continuing the current level of CDBG so that we will
have the critical resources and Federal leadership necessary to
reach our mutual goal of ending homelessness in the richest
Nation in the world.
Thank you.
[The prepared statement of Mr. Netburn can be found on page
97 of the appendix.]
Chairman Ney. I want to thank the panel.
I have just a couple of questions and a statement and then
we will go on to our ranking member who will have some
questions, I am sure, and the final word since we are in her
home area. But if she was in D.C., she would probably still
have the final word, and I mean that flatteringly.
I wanted to go back, Mr. Graves, because I think you hit
on--and I am sorry to have cut you off. It was just due to
time. I think you also touched on something that sparked a
thought when you talked about the helmets and you talked about
different ways CDBG has been used. And so I am not sure that
HUD has taken items like this into account in their
calculations or the Office of Management and Budget has taken
these items into account.
Again, if you look at an ambulance that is purchased for a
fire department, for example, where I am from, or a nearby area
Monroe County, Woodsville, Ohio. If you get into a car, the
quickest you can get to a hospital is technically a 30-mile
trip, which is going to be 48 minutes speeding, you know,
between there and the hospital, for example. So you might as
well say an hour to get somebody there. So if a community like
that does not use an ambulance, CDBG monies, then there may not
even be medical care.
So my whole point to that is that may not be calculated by
the bureaucracy as a benefit job wise, but it is a quality of
life and necessity.
Mr. Graves. Yes.
Chairman Ney. So I think by your example, just for the
example the helmets and the seats that were provided, is a good
local flexibility that does help a community or it helps to
save somebody's life or going to the emergency room or costing
more in medical care. I think there are a lot of ways that I am
not sure that that's calculated in. I don't know.
Were you ever requested by the Office of Management and
Budget or HUD to provide these types of items to them as part
of the wholeness of CDBG?
Mr. Graves. In formal communications with HUD, they do ask
for success stories and examples. I am not sure what they do
with them. I mean, in terms of, I do not know how they're sent
up the line. But we try to keep HUD apprised, the local office
here, of what we are doing with the funds.
Chairman Ney. Yes.
Mr. Graves. And, frankly, the local office is very
cooperative in terms of understanding what we are doing,
interpreting the regulations really in a way that allows the
City to fulfill its priorities.
But the answer to your basic question is as far as the
national level goes we provide that information often to our
Congressional delegation, to our interest groups, but I do not
know how they are used.
Chairman Ney. Mr. Jackson, what was the .81 percent you
were talking about? You had to be at a certain level of 1.
something, but it was .81 percent?
Mr. Jackson. One of the indicators if you run an effective
program is the draw down rate, that you have spent it over a
period of time. Usually the cut-off period is April 30th of the
year. And the requirement is that you cannot have more than 1.5
of your entitlement unspent. And we have spent way below that
amount. Basically we are spending our dollars is what it comes
down to. And we have exceeded that requirement of HUD.
Chairman Ney. Okay. The question on providing the monies
for, I think maybe it was Mr. Jenkins, the monies provided for
money to be able to get into housing, CDBG is used for that to
be able to get housing for people. Does it provide for down
payments or--somebody had mentioned about providing money for
people, the high cost of housing here and try to provide some
CDBG funds to help people. I am assuming that is helping with
down payments or--
Mr. Jackson. Well, also on the subsidy of the development,
bringing it down so it is affordable and they use other
resources, lending resources for that purpose. But it is really
to buy down the land costs maybe the construction site.
Chairman Ney. Yes.
Mr. Jackson. But, again, it is only 11 percent of the L.A.
County residents can afford housing now. To purchase a home.
Chairman Ney. Is there any shared appreciation where
somebody gets some benefits and then the money is put back if
they sell house, they put some money back in?
Ms. Shockley. CRA does.
Chairman Ney. And I am referring to, for example, revolving
loans in small towns--a company gets the revolving loan and
then they use some of it as sort of a grant but they put it
back into another revolving loan fund so somebody else coming
down the road it creates a job. I just wondered if there was
share appreciation where you are helping people get into the
house or housing and then they sell at some point in time if
the price goes up, and then they go back into a program? A
shared appreciation. You do?
Mr. Jenkins. Yes. And there have been situations where
because of the subsidy that goes into, let us say, a home
ownership program once the house does sell, then the money or
the appreciation is shared back with the agency. And that is
being used to help the other homeowners as the new program
continues on.
Chairman Ney. Yes. Ms. Shockley, did you have something
that you wanted to say?
Ms. Shockley. Well, Mr. Jenkins answered it. The CRA, the
Community Redevelopment Agency, has--and I believe the Los
Angeles Housing Department also has programs that allow for the
revolving loan as well as a shared appreciation. And you have
to hold the property a certain amount of time and if you sell
after a certain amount of time, the appreciation is one thing.
If you get in and you are trying to flip it and you sell it
sooner, it is more.
Chairman Ney. Yes. I just think the issue of housing has
been touched on. And I think housing is just, in a lot of ways
around the country, at a crisis point. And in particular, for
example out in the cities. Now I have been in Congress and I
have served with colleagues, but being on the Housing
Subcommittee and being with our ranking member who is from
here, you know, I found out more and more. You can still
acquire a place, for example, in areas where I am from, you can
still acquire a 1956 home. 1956 was built with maybe an acre of
ground for $62,000. I did not get to the 5,000 square foot
homes yet where it is $320,000 for them.
Now one of the problems we have, on the other hand however,
is we had such a downturn of the loss of our coal mines, our
steel mills our glass houses, you know, all the things that
have happened. So for people even though, thank goodness it is
at that price and not everything's cheap, but it is decent
price, but because of the loss of the jobs people could not
afford it or they lost their jobs and then they lost their
credit, and now they have bad credit.
The other problem we have, we have some space but then
again, some people do not have water and sewer. And you have
water and sewer out here, but you do not have the space.
So I just think that it is dramatic. I mean, the prices and
the wages are so much higher out here than they would be back
in rural parts. I mean, I think it's a huge, huge problem that
the Congress has to continue to come to terms on.
We went down to New Orleans and the question was posed down
there. In fact, there was a restaurant owner who said he had, I
think, 157 jobs open but he could not fill them, because there
was no place for people to live. And so I think when you are
looking at poverty and jobs and, you know the whole nine yards,
it is so difficult.
And actually some things were pointed out to me today by a
guest in our audience, I will give her credit for it. We were
talking about, you know, people say well why would people go to
a high priced store or a 24 hour store and buy things? Well,
because they do not have a house, they do not have a microwave.
And so they go there to get the prepared meals when it would be
cheaper if they had a house with a kitchen area. I mean there
is just a whole--I could just go on and on. But I just think
that the CDBG money has to be critical for that and for the
housing.
And so I am just going to wrap up my part of this just
trying to say that it is important to understand. Being out
here today, I want to thank again Congresswoman Maxine Waters
for speaking up, speaking out on these issues, for inviting us
here. In my opinion being here in Los Angeles and listening to
the testimony and being able to go back to the U.S. House helps
my area, helps the entire country. And what we are hearing from
the rural areas from the hearings, although different
circumstances, different needs, dovetails the critical nature
of the timing.
I am also going to give a pre-warning. This is not just so
easy that this money is going to go back. Because last time the
money went back, but it was still was a 10 percent cut. So this
time we are having a 25 percent cut and we sit there and say oh
wow, you know instead of 25 percent saying we're going to be
cut five. Well you take the 5 and the 10, no, that is 15.
And we are doing a lot of other things, too. I wanted to
mention, too, with Congresswoman Waters, Chairman Oxley, and
Ranking Member Frank, we did a GSC bill for affordable housing,
and I hope the Senate moves on it. We did CDBG budget
resolution. So we are trying to do some of these things.
But I want to warn you, you know, speaking to the Senate if
we can get this restored in the House, it is going to be
critical in this whole process to get these funds. And in times
where if the communities are healthy, let us not rip them down
if they are healthy. But a lot of communities are not healthy
and they need help. And this is the contrary time to go against
the job creation and the quality of life elements, which I
think is obviously CDBG. This is like the worst time I think
philosophically that the Administration could do this type of
thing.
And there are a lot of ways, and I know we have a budget
out of balance, we could all talk about 100 ways to do it. But
what I will tell you is, and I have looked at this, you know,
if we just do not plan a mission right now to Mars, we can save
$32 billion. You know, I saw things throughout the budget where
we are giving another $200 million to some program, frankly, I
have never heard of, and we still cannot find anything out
about it.
So going in to just specifically attack CDBG, I think, is a
contrary way to go. But I just do not want to give you the
false sense this is so easily restored. We have been down these
roads and these battles. But today what you did helps us out.
And I want to again thank our ranking member for something
that is important, I think, to everybody in the country to try
to help them. So thank you for your participation.
I will yield to our ranking member.
Ms. Waters. Thank you very much, Mr. Chairman.
And I would like to thank all of the panelists who came
today to share with us their concerns and to help us to be able
to have the information by which to defend CDBG and try to
avoid these cuts.
I do have a few questions I would like to ask. And a few
other concerns that I would like to share with you.
Well, first of all, for all of our participants, know that
I and others believe very strongly in CDBG and we are going to
be fighting for all of the money that we can get for CDBG. I am
very concerned that the 20 percent or so cut that the
Administration is advancing is going to pit economic
development against community programs. I really do not want to
see that happen.
And I am also concerned, and I have always believed that to
the degree that we could get Section 108 that could relieve
CDBG somewhat so that the Section 108 for economic development
would help to do some of what CDBG monies may have been used
for, and that way we would have more CDBG monies for some of
the social programs and programs that we have not even
mentioned here today.
First, let me say to all of those who are in the audience
today who have programs that you would love to tell us about,
we are going to spend some time learning more about many of the
programs that have not been mentioned. Someone came to me a
little bit earlier to show me a program that had to do with
helping the blind, the adult blind in the Valley. And they
reminded us that there are many folks who do not necessarily
know Braille and they just sit all day long. And so we are
aware that there are many programs that are being assisted that
we really do need to have even more money for, and we are going
to fight for them. And we thank you all for being here today.
For the City of Los Angeles, the challenges are many. I
think you spoke about the Ted Watkins Park and the fact that
people from some of the programs, the drug rehab programs were
being dropped during the wee hours of the morning into Ted
Watkins Park. Somebody spoke about that issue. And that is true
because at a Town Hall Meeting I was just besieged with folks
who said, what are you going to do about it. You know, it could
have been easy for me to say well, it is not my problem, I mean
you know I go to the City. But we just do not operate our
office that way.
So we got up in the wee hours of the morning and we went to
the park. And sure enough, there they were. And then we tracked
down the buses that dropped them off. And then we went to the
program of the people who were dropping folks off in the park
to find out what was going on. Well, the fact of the matter is
we need housing for people who may be in rehab programs, but
those programs do not provide day care for them during the day.
They do not know what to do with them, so they drop them off in
the park and they have their little blankets there. They sleep
in the park, and then they may go back to the program for a few
hours a day to do what they do.
Now, let me just say to our representative here from the
Homeless Authority. I listened to your testimony about
permanent housing. But I want to ask you what have we come up
with to deal with the homeless who do not want permanent
housing, cannot keep up permanent housing, and will never be
able to work another day in their lives. They have mental
problems and on and on and on? Permanent housing will not solve
their problems. What do we have and who is advancing the idea
that we need communities that are developed for people who need
a bedroom, toilet facilities, and communal meals to be taken
care of in a humane way? We do not need a two bedroom house or
not the kind of permanent facility that we always think about.
This other kind of solution could be a permanent facility, but
it seems as if we are not developing models for the people that
we really find on Skid Row who really are not going to be able
to manage the permanent home that we always talk about. Who is
dealing with that issue. What are you coming up with to solve
this problem in the homeless community?
Mr. Netburn. Yes. You know, to some degree my agency is
working certainly with the City and the County, as well as HUD.
And while we do focus on permanent housing, we do try to create
a range of housing options because, as you pointed out,
homeless people are different and have different abilities. So
while permanent supportive housing may always be the end goal,
many people may not be ready for that for periods of time.
So one of the programs that we started in Los Angeles a few
years ago, originally spearheaded by Councilwoman Perry, was
converting our winter shelter program, which only operated a
few months of the year, by converting many of those beds to
year round beds. It is a very minimal program, People are there
just at night, but they do get a meal, clean showering, etc.
And for many of the people in the program it has become, to
some degree, de facto permanent housing.
We try to move as many of those people as we can into more
stable housing. It is really the lowest level of housing that
we provide. But certainly in the few years that it has been
operating, that is where, right now, they are comfortable
staying. They need those ongoing supports, meals provided for
them in a communal setting.
Sometimes you will see after 6 months they will move on,
sometimes a few years. There are certainly some people who have
been there since those programs started. And that is quite a
large number. Currently we are funding about 820 of those beds
in the City of Los Angeles.
Ms. Waters. Does anyone have a Rolls-Royce style program
that will deal with the various needs of the homeless from the
single person with mental disabilities to the person who, with
a little bit more educational opportunities, could be trained
for a job, to the family that needs a two bedroom house? Where
is the Rolls-Royce idea to deal with the various needs of
homeless?
Mr. Netburn. Right.
Ms. Waters. Does anybody have that?
Mr. Netburn. There are certainly, I do not know if I would
want to call them Rolls-Royces, but certainly there are some
model programs throughout both the City and the County. They
tend to be separate for families and for singles. There is
certainly a movement toward integrating homeless families along
with other populations so you don't create sort of mini ghettos
of buildings where it is only homeless people. But certainly we
have some.
And talking about the population you referred to earlier,
in a relatively short period of time, there is going to be a
model facility opening in Santa Monica. It's right there on
Cloverfield. It is for people who you were talking about who
really have failed in all the other programs. It is a model
that the Federal Government funds, and it's called A Safe
Haven. And the idea is that people can come and go at different
hours. There are not the regular rules that have to be
followed, and a tremendous amount of services are provided on
site.
Ms. Waters. So they have the health services, both mental
health services and other kinds of services, associated with
the program. And these people are engaged in some way during
the day?
Mr. Netburn. Exactly. Because particularly for that
population, and given the transportation issues in Los Angeles,
it is very hard for somebody, you know, especially without a
car or especially for a family, if you have two or three kids
with you, to make an appointment across town to be there at
1:00 and then to get to another one by 3:00, and you show up a
little bit late, and either your appointment is canceled or it
is seen as a negative that you got there.
Ms. Waters. Yes, but see the Rolls-Royce program that I am
alluding to would take into consideration those people who are
job ready, almost job ready who have appointment to keep and we
could provide the transportation for them.
Mr. Netburn. Right.
Ms. Waters. We could provide the child care for them.
Mr. Netburn. Right.
Ms. Waters. And let me just say this and then I will be
saying this to the Mayor and others; while we are moving toward
a time when it appears that there is going to be a focus on
poverty and homelessness and the Mayor is making this
tremendous effort with his housing trust fund and the County is
doing that, and the Mayor is now designed by the Conference of
Mayors to lead the Nation in leading with poverty issues, we
need to develop something for the Congress of the United States
to fight for and to be challenged for along with CDBG and these
other programs. We need a comprehensive approach to dealing
with poverty. And the centerpiece of that is homelessness.
And so I think what I am asking you for is temporary
overnight facilities are needed, but we have to get out of
that.
Mr. Netburn. Right.
Ms. Waters. We have to get down to what we are going to
fight for to get rid of homelessness in America, and
particularly in Los Angeles with the concentration that we have
in our City area. So I will be asking my staff to work and to
get to know all of the programs a lot better. We will be asking
for those who want to work on the Rolls-Royce idea, the vision,
you know, for America to deal with homelessness and poverty.
So I thank you for being here today.
Mr. Netburn. Right.
Ms. Waters. And let me just raise a few other questions and
I will be ready to close.
For the City of Los Angeles and CRA you mentioned, for
example, Mr. Graves, that with this problem out at the Ted
Watkins Park where the people were being left, that Grant AME
helped out.
Mr. Graves. That was Supervisor Burke.
Ms. Waters. Oh, Supervisor Burke.
Mr. Graves. Yes.
Ms. Waters. Okay. Now Grant is involved with some extensive
development in that area where they bought up, acquired land of
the old Social Security building and those houses that have
been boarded up on the opposite side of Grant on Central for
some time, etc. But I do not see them mentioned in your Section
108 program for the participation in the $50 million that I
thought we had targeted to do something in that overall area.
Is there some reason why they are not mentioned?
Mr. Graves. Congresswoman Waters, they have not been
discussing 108 funding with us. I believe they are working with
CRA on a broad project. And what typically happens in things
like that, as they begin to reach an agreement with CRA, if
there are extra financing needs, they bring us into the
package. We have not been working with Grant AME.
Ms. Waters. Mr. Jenkins, this is not your area. You said
you were a little west of the area that I am talking about?
Mr. Jenkins. That is correct.
Ms. Waters. I see.
Mr. Jenkins. I do not have the specifics about the Watts
project.
Ms. Waters. Okay. I would like my staff to get together
with CRA and with the Community Development Department to talk
about some of these projects and to try and understand from the
point that CRA gets involved with some of these projects, how
it works with the City for a Section 108 or other CDBG or other
funding so that we can not only understand how you cooperate
and how you work together, but how you set your priorities. And
I want to know more about the development projects. Ms. Battle-
Bey talked about some projects that I am very much aware of.
But as I look in the south, so-called central L.A. area, I want
to know more about Broadway Manchester, Vermont Manchester, and
Grant AME projects. I want to understand exactly what kind of
resources are being dedicated to these projects and what role
everybody is playing in them.
Yes, Ms. Battle-Bey?
Ms. Battle-Bey. Congresswoman, the Grant AME project came
before CRA prior to October of 2005.
Ms. Waters. Okay.
Ms. Battle-Bey. So there are dollars from CRA involved in
their project, but I understand that they are not yet fully
developed and over to the CDC side. So that may be something
that Brenda can look into as well. Because you have to bring
those projects back up. You have to keep going back.
Ms. Shockley. And the Grant AME project has not come to the
CRA since I have been on that Board.
Ms. Waters. It has not?
Ms. Shockley. Our Board. But I will call it out.
Ms. Waters. Okay. That would be good.
Mr. Montiel, I cannot let you go because without saying
something about public housing. We are all very concerned about
public housing.
Mr. Montiel. Yes, ma'am.
Ms. Waters. And I know you have some particular concerns
that you would like to see targeted revitalization of some of
the areas that include east L.A. and south central L.A. But
while you are looking at that issue and working on getting some
feedback on that, I want to know about what funds you are using
to deal with drug elimination which HUD wiped out of the
budget? I understand, and I just talked with the Attorney
General who was before the House Judiciary Committee about the
recent efforts at the Jordan Downs Housing Project. For
example, where evidently there was some cooperation between the
Housing Authority, the City of L.A., and the Attorney General's
office to come into Jordan. I think some surveillance cameras
are being installed and you are doing some other things.
You are my friend, I am not going to tell you the same way
I told Mr. Gonzalez. Do not ever come to my District and do
that anymore without me understanding, at least having an idea
of what you are doing. We had just been there with you where we
did a job fair and we held a Black History Month celebration
trying to make sure that we include public housing in the same
kind of cultural activities that go on in other parts of the
City. You were very cooperative. It was very successful. As a
matter of fact, I had dinner with four participants who got
jobs and the company that supplied them with the jobs.
Mr. Montiel. Wonderful.
Ms. Waters. We had dinner the night before last, not only
to encourage them to continue to do well, but to serve as role
models for others who we will be trying to connect with jobs.
So I want to know when you all come up with the ideas about
crime prevention on the one hand; we think we have some ideas.
We are working with you, but we are surprised by some of the
other ideas. How do we create the kind of communication that
will help us to work together a little bit better so that
people will not say to me, well, why did you not tell me you
all were bringing some more FBI, some more ATF and others out
here when you came, and we looked pretty stupid. We said we did
not know. Oh, you did not know they were going to put some
cameras up out there? Did the Feds do this? No, I did not know.
And my good friend at the Housing Authority did not call
me, the Attorney General did not call me. So what should we do?
Mr. Montiel. Ranking Member Waters, you are absolutely
correct in that regard. But let me explain from the perspective
of the cameras at Jordan Downs, the lead agency is LAPD. And
initially the cameras were always slatted to go on the public
right-of-way, essentially to provide safe passage for the
students to get back and forth between the schools.
What has happened is that LAPD has moved the initiative
forward to try and also place some of the 12 cameras within the
development. And what we have gotten from LAPD is an agreement
working with Chief Bratton and Commander Beck that as they
place anything within the right-of-way that is within the
community, that they will have to meet the residents and
understand the resident concerns and figure out how the cameras
could be positioned so as not to violate their privacy, etc.
But essentially this program began as a right-of-way program on
the public streets.
What has happened also is that, I think, the Mayor's office
has been very successful in working with the Department of
Justice to try and expand that program. And the Attorney
General issued additional money grants to Los Angeles. And this
program may be expanded to other areas now on the east side of
Los Angeles as well, and perhaps more communities surrounding
our public housing communities in the south side.
All this is in flux now, but I can give you a commitment
that as we go forward we are now working a lot closer with some
of these efforts and we will certainly ensure that your staff
is the table understanding what is taking place, etc. But on
this initial initiative at Jordan Downs, it is LAPD that is
driving that initiative.
Ms. Waters. Well, I appreciate that, and let me just say
that we have sent a very clear message to the Attorney General,
and we will do that with the Mayor and with the Police Chief,
Mr. Bratton. I do not know what is going on, but I think there
may be some constitutional issues here. And I am not pleased
that the Attorney General came here to get tough on crime and
only brought $1 million dollars with him. If you want to get
tough on crime prevention, you have to bring money with you to
talk about how to provide some opportunities for our young
people.
So I know that this is your jurisdiction, the Housing
Authority. You are the top dog. So when they come to you to
tell you what they are going to do on your territory, I wish
that you would at least let us know so that we could be
involved in some dialogue to talk about what we can do on the
one hand to involve the residents, as well as talking about
crime prevention and the ways that they would like to proceed,
or things they would like to do. And also, we must always raise
the question about what to do about real prevention rather than
so-called just get tough so that we can provide some more
opportunities here.
For example, I do not know--I know that HUD eliminated the
drug elimination program. I do not know if anything replaced
that program. I do not know if programs are really being made
available or coordination is being done to help people get
GED's. I do not know if we have any job developers who are
really trying to connect people with jobs, ready to cooperate
with people on the ground. So we are going to have to get back
on this. I spent many years working in public housing
developments. It seems, you know, since that time, things have
gotten a little bit worse. And so we need to talk about what we
can do to change the situation.
Mr. Montiel. Yes, ma'am.
Ms. Waters. I know we need more money, and I am always
going to fight for that. But you have this great
responsibility. Others will come to you and foster their ideas
on things that will only make your jobs a lot harder.
Mr. Montiel. Yes.
Ms. Waters. So I want to stay in close communications with
you about some of that.
Mr. Montiel. Okay. And if I could comment, Congresswoman
Waters. That is the issue that we are before this hearing
today. We really do not have monies for programmatic aspects
other than running the public housing. And we are losing
funding in the capital fund, we are losing funding in public
housing. We do not get enough money just to run the house, the
brick and mortar, much less provide what is really needed in
our communities which is jobs, training, family self-
sufficiency, day care, transportation. Because quite frankly
most families that could get a job and move their life forward,
would prefer to live in their house than to live in public
housing. And if we are not engendering that, then we are
creating legions of people that will require public housing for
decades instead of serving as that stepping stone for moving
families onto better lives.
Ms. Waters. Well, I appreciate that. And I think one of the
things we are going to have to do is we are going to have to
activate some advocacy in our public housing projects to
confront every level of government about their role in dealing
with these very real problems. I think these problems are only
being dealt with in a way that says put some cameras up to
catch somebody or break down some doors to apprehend someone.
We have to be about advocating for the resources for the
investment in these human beings that can help change some
lives.
So I just wanted to have a little bit of a talk with you
about that.
Mr. Montiel. Okay.
Ms. Waters. And I hope the message today that goes out from
here is one about communication with all levels of government
and with each other. And I am going to talk with the Mayor
about how do we get the Members of Congress and the members of
the Board of Supervisors, the Housing Authority, CRA, and CDC;
how do we get together so that we can start to talk about what
we are doing and how we are doing it in ways that will
strengthen us to become even better fighters for these
resources? Right now I think we are a little bit too
fragmented. I think that we work in ways that we are dealing
with what we think is the most needed program or our favorite
program, or the one that showed up at the most meetings, etc. I
think we can do better than that. And that is what I would like
that message to be to every entity today that we have to
communicate.
And for Members of Congress, I have made a commitment to
the California delegation that we are going to create this
communication, or I am going to have to develop legislation
that will mandate certain kinds of cooperation and interaction
so that it will give us more input and more direction. Okay.
Now, let me close by saying that I would like to thank my
colleague, Congressman Ney, for taking time from his very busy
schedule to be here with us in California. This is the second
time he has honored me with having a hearing.
As you know, the Republicans are in charge, and they do not
have to hold hearings at the request of a Democrat. But
fortunately, we have developed a good relationship working on
those issues that we can work on together. His interest in
housing, CDBG, Section 8, home program, 108, and Loan Guarantee
is absolutely extraordinary. He is concerned about the same
things that I am concerned about. And his desire to save these
programs is quite unusual.
So we hope to be able to use your input and our advocacy to
bring back these cuts. This will be very, very detrimental to
our area and that has been spoken to very well here today.
So again, even though my chairman has often been defensive
and supportive of me when I break the rules, he is the first
one to say that I probably break them all the time; whether we
are here in Los Angeles or in New Orleans, he does a fabulous
job--I want to tell you, he did a fabulous job. And I cannot
tell everybody everything that he did publicly because they
would begin to question his credentials as a good Republican.
But I want to tell you, he was absolutely extraordinary in New
Orleans. And because of his work we have been able to do some
things. And we certainly were able to take some of the CDBG
money that the Administration thought that we did not need to
direct toward New Orleans and give them an opportunity to use
these monies to do some rebuilding. We are also concerned about
the public housing developments. But, again, I just want to say
that I am very appreciative to him for the attention that he
has given to all these issues.
And I would break the rules and ask you to give him another
round of applause.
Chairman Ney. You know, I want to thank the gentlelady for
her kind comments. And she gives me the other perspective and
the other side of the aisle, and combined with my 82 year old
parents who are lifetime Democrats from Ohio, I get another
perspective from them, too.
It has been a pleasure to be here. This is productive. This
helps, like I said, the entire country. Helps our people, helps
people around this country and it was so important. So thanks
again for hosting us.
The hearing record will remain open for 30 days for members
to submit additional questions, possibly, to you, and we can
get a response.
And also, sitting here today we have Nat Thomas, Jeff
Riley, Clinton Jones, and Tom Johnson. And also Michale was
here.
Ms. Waters. And all of our Washington and Los Angeles
staff.
Chairman Ney. Yes. I want everyone to stand up from the
staff and give them a round of applause. There we go.
And we will submit all their names for the record.
Ms. Waters. A big round of applause for the staff for
having done a very, very good job today.
Chairman Ney. And also one of the staffers, Dana, has his
new bride here, so that is how dedicated he is.
Ms. Waters. Oh, okay.
Chairman Ney. Is that correct? Thank you.
With that, the hearing is concluded. Thank you very much.
Ms. Waters. Thank you.
Chairman Ney. And thank you again.
The hearing is concluded.
[Whereupon, at 12:51 p.m. the hearing was concluded.]
A P P E N D I X
April 12, 2006
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