Jim Harbison - Beware of Gov't Agencies Bearing Grants

Jim Harbison

At the most recent City Council meeting the Council passed several resolutions accepting various government grants from both Federal and State agencies. Now on the surface this seems like a great deal for the City because after all it is free money. Right? Well not exactly.

Many of these government grants contain conditions or restriction such as matching funds or other constraints on how the money can be used. Not all of these conditions are necessarily consistent with the policies of the City Council. This money is used by the Federal and State governments to implement policies or programs that may or may not match the needs or priorities of the City or more importantly the needs or desires of the citizenry.

One of the resolutions that passed concerned a Federal HUD grant of approximately $1 million which required the City to provide $500,000 in matching funds of to the Affordable Housing Land Bank. Another was a $758,000 grant from NMDOT to construct the 6-mile Outfall Channel multi-modal trail from I-25 to the Rio Grande and requires the City to provide $252,000 in matching funds. Unfortunately, the City has not identified where these matching funds will come from. In the case of the HUD grant the City may identify them in the 2011-2012 budget year. Bottom line is that acceptance of this grant obligates a half a million dollars from next year’s budget and gives it a priority over other City projects without consideration of the actual needs of the City.

Sharon Thomas

The Outfall Channel Trail was number 4 on the City’s list of unfunded projects. Accepting this grant now moves it to the top of the list and circumvents the priority list established by the Council and City staff. Councilor Sharon Thomas is the City’s advocate for walking paths and bicycled trails. Obviously she was very excited about this grant and voted for its acceptance.

There are several questions that should be answered before the City accepts these “gifts”. First, what is the impact of the loss of the $252,000 from the current budgeted projects to suddenly fund an unfunded project? Second, if there are other funding sources for the existing City projects, why weren’t they included in the creation of the original City budget? Third, what is the impact on those projects that had a higher priority on the project list?

The various City departments will frequently state that matching funds do not need to be actual dollars but can be “in kind contributions.” What are “in-kind contributions?” As I understand it, it is where the actual value of work performed on the project by City staff can be considered as payment toward the matching fund amount. Examples would include design work done by the Engineering Department or preparatory work performed by the Public Works Department or the Utilities Department.

Sounds simple, right? Well consider that this is work effort that is diverted from currently approved and funded City projects. This may force the previously funded project to be delayed or even moved into the following budget year. Ever wonder why your road isn’t repaired, or why your neighborhood continues to have drainage problems? Perhaps it is because the City staff is working on in-kind projects because the City didn’t have the budget to fund these grant driven projects.

Remember, there is no free lunch and acceptance of grants can have consequences. Let’s hope our City Council realizes this and does not jeopardize other projects. They must not allow the Federal and State governments to divert the direction of the City Council by the offer of “free money”.

Jim Harbison - Beware of Gov't Agencies Bearing Grants