PILLAR: Fiscally Sound
AGENDA DATE: January 28, 2026
COUNCIL DISTRICT(S): N/A
DEPARTMENT: Budget and Management Services
PRIORITY: N/A
______________________________________________________________________
SUBJECT
Title
Authorize (1) an extension through September 30, 2026 for the obligations or expenditure of Community Development Block Grant (CDBG) Funds in the amount of $6,706,866 for CDBG-funded projects that have not met the City’s twelve-month obligation or twenty-four-month expenditure requirement; (2) preliminary adoption of Reprogramming Budget No. 2 (Substantial Amendment No. 2) to the FY 2025-26 Action Plan to: (a) use unspent prior year CDBG Funds in the amount of $2,566,661 for public improvement projects and (b) use unspent prior year CDBG CARES Act Relief Funds in the amount of $450,000 for the emergency rental and mortgage assistance program; and (3) a public hearing on March 25, 2026, to receive comments on the proposed use of funds for Reprogramming Budget No. 2 (Substantial Amendment No. 2) to the FY 2025-26 Action Plan - Financing: This action has no cost consideration to the City (see Fiscal Information)
*In alignment with HUD Consolidated Plan.
Body
BACKGROUND
On August 18, 1993, Resolution No. 93-3001 established specific timeframes for the obligation and expenditure of CDBG Funds. Funds are to be obligated within 12 months and expended within 24 months of budget adoption. On March 28, 2007, Resolution No. 07-0992 enhanced the City’s existing expenditure policy with additional benchmarks. Additional time to obligate and expend funds may be granted by City Council.
Timely expenditure of CDBG Funds by entitlement cities continues to be a primary concern of the U.S. Department of Housing and Urban Development (HUD). HUD requires that cities expend CDBG Funds so that, at least 60 days prior to the start of a new program year, the unexpended balance of CDBG Funds should be less than 1.5 times the cities’ CDBG allocation amounts for the current year.
For fiscal year (FY) 2025-26, a review of the projects based on the timely expenditure policy (including the benchmarks), identified unspent CDBG Funds remaining in 11 projects recommended for extension for a total of $6,706,866 and unspent funds remaining in 6 projects recommended for reprogramming for a total of $2,566,661.
For FY 2025-26, a review of the projects based on the timely expenditure policy (including the benchmarks), identified unspent CDBG-COVID Funds remaining in remaining in two projects recommended for reprogramming for a total of $450,000.
The City Council has authority to extend the use of funds and allow additional time for projects that are not in compliance with the City’s expenditure policy.
The Community Development Commission (CDC) Financial Monitoring Committee met on December 9, 2025, to review and made recommendations to the City Manager’s proposed extensions and reprogramming of CDBG Funds. Following discussions with staff, no amendments were recommended. The CDC Finance Committee voted to recommend approval to the full CDC.
On January 8, 2026, upon recommendation by the CDC Financial Monitoring Committee, the CDC reviewed and approved the proposed extensions and reprogramming of CDBG Funds.
On January 26, 2026, the City Council’s Finance Committee was briefed on the need to maintain ongoing compliance with HUD’s timely expenditure policy and the FY 2025-26 CDBG extensions and reprogramming recommendations.
A summary of the proposed Reprogramming Budget No. 2 (Substantial Amendment No. 2) to the FY 2025-26 Action Plan will be published in the Dallas Morning News on or about February 22, 2026, to provide an opportunity to submit written comments through March 25, 2026.
Federal regulations require that a public hearing be held on proposed Reprogramming Budget No. 2 (Substantial Amendment No. 2) to the FY 2025-26 Action Plan. Holding a public hearing on March 25, 2026, will satisfy the requirements set forth in HUD regulations and the City’s Citizen Participation Plan.
This item authorizes an extension of funds in designated funded projects, preliminary adoption of proposed Reprogramming Budget No. 2 (Substantial Amendment No. 2) to the FY 2025-26 Action Plan and a public hearing to be held on March 25, 2026.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On August 18, 1993, the City Council authorized establishing specific timeframes for the obligation and expenditure of CDBG Funds by Resolution No. 93-3001.
On March 28, 2007, the City Council authorized enhancing the City’s existing expenditure policy with additional benchmarks by Resolution No. 07-0992.
On April 20, 2020, the City Council authorized final adoption of the FY 2020-21 HUD Consolidated Plan Budget in an estimated amount of $30,899,627, by Resolution No. 20-0655.
On June 9, 2021, the City Council authorized final adoption of the FY 2021-22 HUD Consolidated Plan Budget for the U.S. Department of Housing and Urban Development Grant Funds in an estimated amount of $31,218,434, by Resolution No. 21-0974.
On June 22, 2022, the City Council authorized final adoption of the FY 2022-23 HUD Consolidated Plan Budget in an estimated amount of $32,997,962, by Resolution No. 22-1024.
On June 14, 2023, the City Council authorized final adoption of the FY 2023-24 HUD Consolidated Plan Budget in an estimated amount of $32,788,405, by Resolution No. 23-0765.
On June 12, 2024, the City Council authorized final adoption of the FY 2024-25 HUD Consolidated Plan Budget in an estimated amount of $30,949,109 and the new Five-Year Consolidated Plan covering FY 2024-2025 through FY 2028-29, by Resolution No. 24-0873.
On August 6, 2025, the City Council authorized final adoption of the FY 2025-26 U.S. Department of Housing and Urban Development Consolidated Plan Budget by Resolution No. 25-1185.
On January 8, 2026, the Community Development Commission recommended extending and reprogramming CDBG project funds.
The City Council’s Finance Committee was briefed on the need to maintain ongoing compliance with HUD’s timely expenditure policy and proposed Reprogramming Budget No. 2 (Substantial Amendment No. 2) to the FY 2025-26 Action Plan on January 26, 2026.
FISCAL INFORMATION
This action has no cost consideration to the City.
A March 26, 2026, agenda item will include a request to increase and establish appropriations in departments for Reprogramming Budget No. 2 (Substantial Amendment No. 2).
CDBG - Source of Funds:
Reprogramming Budget No. 2 (Substantial Amendment No. 2)
• Unspent Prior Year CDBG Funds - $2,566,661
CDBG - Use of Funds:
• Public improvements - $2,566,661
CDBG-COVID - Source of Funds:
Reprogramming Budget No. 2 (Substantial Amendment No. 2)
• Unspent Prior Year CDBG-COVID Funds - $450,000
CDBG-COVID - Use of Funds:
• Emergency rental and mortgage assistance program - $450,000