Fulton County commissioners decided this month to stop taking grants from the U.S. Department of Housing and Urban Development, after the government's failure to spend $5.4 million over five years led the agency to threaten to suspend all awards in 2020.
The decision came after the county also had to shell out nearly $1 million of its own money to repay two cities for projects it thought qualified for the federal grants, but that were rejected.
Without the grants, the county will lose access to millions of dollars available to its cities that went to economic expansion, emergency shelter, home rehabilitation and other community needs. The county received $1.9 million in 2019 and was slated to receive the same amount in 2020.
As of Nov. 2, it had $1.7 million of the 2019 grant available and still had unspent grant funds dating as far back as 2014.
The grants are meant to pay for public facilities or rehabilitate real estate, among other things. They require at least 70% of the money to benefit low- and moderate-income residents.
Dick Anderson, the Fulton County manager, said it was "incredibly difficult" to manage the program. Commissioners' decision, in a 4-3 vote, to relinquish Fulton County's status as an Entitlement Community over the coming years will mean that it will no longer be a source of grant funding for cities, like Palmetto, that use the money for infrastructure and sewer projects.
Eleven Fulton County cities have the ability to apply to the county for the money. County officials said they didn’t yet know the implications of rejecting the grants.
Anderson said the county had trouble finding projects that qualified for the funds. But J. Clark Boddie, the mayor of Palmetto, said his city of about 5,000 people had depended on the money for decades.
“I was kind of shocked by their decision,” Boddie said. “It’s really going to put a hardship on the smaller municipalities.”
Additionally, Boddie said, he was frustrated to learn that Fulton County commissioners made the decision in part because it had to reimburse Palmetto $916,474 when an emergency sewer grant that it had been counting on HUD funds to pay was deemed ineligible. The county also had to cover almost $67,000 in Fairburn because a required environmental study for a park renovation project was not performed.
In both cases, the cities had already spent the money with the expectation that they would be paid back using grant funds.
Boddie said he had assumed the county knew what it was doing.
“We operated in good faith,” he said. “Don’t punish us.”
Bob Ellis, the Fulton County commissioner advocated for the county to halt the grant program, said the cities that are affected will have the ability to go to the state Department of Community Affairs for access to funds. He said as more cities have formed in Fulton County, there’s less of a need for county government to be responsible for something that the state can handle. Many cities throughout Georgia access grant money through the DCA.
And several large cities in Fulton, including Atlanta, can apply for HUD money directly — though Atlanta has also had trouble managing its grants. HUD is investigating $1.8 million in expenditures that went to the Center for Working Families and other groups, and the city failed to spend as much as $41 million in HUD money for the Housing Opportunities for Persons with AIDS program.
Ellis said the money at the county level has been mismanaged and communities would be better off using the state as a pass-through.
“Increasingly, we’re not doing a very good job of administering these programs,” Ellis said. “There’s just a better way to do this.”
The problem with going to the state, Boddie said, is a bigger pool of applicants for limited funds. Until now, he said, Palmetto could always count on getting some grant funds.
“Now, we’ve got no assurance,” he said.
Commissioner Natalie Hall said the county was doing “a disservice” by hastily making a decision.
Pamela Roshell, Fulton’s deputy chief operating officer, said she did not know exactly what the impact of relinquishing the Entitlement Community status would be. Roshell said she had reached out to HUD and the DCA before the Dec. 18 vote, but had not received any answers before the decision was made.
“We do not know the pros and cons,” she said.
Robb Pitts, the Fulton County commission chairman, said it could take as long as two years before the program is unwound. He suggested the county could pay for projects itself during the interim. As it was, he said, the county spent nearly as much on administering the program — $1 million — as it brought in.
The county's administration "has been a failure," he said. He voted to end the program. Commissioner Liz Hausmann, who did as well, said she thought the county had already let the community down.
Anderson said the grants were often small and complicated, and it was no longer worth the county’s effort — especially with the November threat from HUD of eliminating all grants in 2020. The letter also offered the county the opportunity to explain why it was having so much trouble spending Community Development Block Grant funds. This was the second consecutive year the county had a balance that was more than one and a half times its annual grant.
The problem has persisted for several years, Ellis said, and it’s time to move on.
"The fact is, we've been significantly under-spending any allocation we get," he said.
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