If the City Council approves a proposal to apply for a Community Development Block Grant from the U.S. Department of Housing and Urban Development (HUD), federal money could help revitalize certain areas and spark economic development in some of Fairhope’s low-to-moderate-income neighborhoods. The grant would provide $64,000 per year for five years, with no city match.

According to 2010 U.S. Census data, Fairhope’s median household income is $57,917 — $15,000 above the state average — while its $243,400 median home value is $120,000 higher than the state average. But the data shows the city’s 2013 population estimate includes 8.3 percent of residents living below the federal poverty level.

“Fairhope has always been seen as having an above-average income and because of that we are way down on the list of getting those funds from [the Alabama Department of Economic and Community Affairs],” Mayor Tim Kant said. “So now, since our population has increased to a certain level, we can get the money directly from HUD.”

The HUD Community Development Block Grant (CDBG) entitlement program provides annual grants intended to revitalize neighborhoods, spur economic development and revamp community facilities and services. According to HUD, grantees must give priority to activities that benefit low-to-moderate income residents and target the prevention or elimination of slums or blight.

Fairhope is eligible to receive $64,000 in 2016 and throughout the next five years, for a total of $320,000. CDBG funding from HUD does not require a city match.

At the Fairhope City Council’s June 22 work session, Planning and Zoning Director Jonathan Smith said the city must submit a consolidated plan and analysis of impediments to fair housing before HUD will release federal money.

The consolidated plan must detail a five-year outline of projects, including a citizen participation plan, continuum of care process, a housing and homeless needs assessment, a housing market analysis and a strategic plan. The strategic plan must include priorities and rationale for investment and obstacles for meeting underserved areas.

The city must also submit an action plan on a yearly basis, which will be reviewed and approved by HUD before annual funds are distributed. The initial consolidated plan will cost approximately $30,000 and the analysis of impediments to fair housing would cost an additional $10,000 to $15,000, according to Smith.

“There is quite a bit of work that has to go into a consolidated plan that will have to be prepared prior to receiving these funds,” Smith said. “We have to have a well-defined, laid-out plan as far as what we might use the money for.”

The CDBG funds must be spent inside the city’s corporate limits, which could make it more difficult for Fairhope to find ways to spend it.

“In Fairhope there are no hard boundaries for low-to-moderate-income areas, so a neighborhood survey will have to be conducted to determine where this money can actually be spent,” South Alabama Regional Planning Commission Director of Governmental Planning Services Diane Burnett said.

City Council President Jack Burrell said many of the city’s needs lie just beyond its corporate limits.

“A very large portion of the needs we have are just beyond our city limits,” he said. “Not that we don’t have needs inside our city limits, but we have lots of needs right outside them.”

One way the city could use the funds to help those low-to-moderate-income residents on both sides of its borders is through stormwater management projects. HUD funds can be used for the construction of public facilities and improvements to water and sewer facilities, streets and neighborhood centers and the conversion of school buildings. Smith said stormwater and drainage is the issue most residents had expressed interest in during meetings about the possibility of receiving the grant.

“Stormwater does affect people who live outside the city limits, too,” Councilwoman Diana Brewer said June 22. “There is a lot of work that can be done inside the city limits that would really help some people outside the limits. We have real issues with stormwater all over the city.”

Some of the affected areas could eventually be annexed into the city limits, according to Smith.

“This is a long-term commitment, but if we get all these things in place, then in 10 to 15 years we will be in good shape to accept more funding as our city grows to the south and the east,” he said.

Burnett stressed that the block grant funding is intended for capital projects and should not be spent on administrative or “soft costs,” but funding stormwater and drainage projects could help people on both sides of the city’s limits.

“You are allowed to spend 10 percent for administration and 6 percent for nonprofits, but the money is intended for capital expenditures,” she said. “It is intended to be something you can see when you drive through a community. It is not intended for soft costs.”

Kant said the city may host a community meeting, preferably in one of the proposed areas, as part of its required Citizen Participation Plan, which also requires a 30-day comment period.

“We will need to have a community meeting so that we can know what people say their needs are,” the mayor said. “We don’t want it to just be the mayor, or Jack Burrell or whoever, deciding what to spend the money on. The community will have to speak up.”

Smith said it would take a community-wide effort to secure the funds.

“We will have to have ‘buy-in’ from the community, the council and the mayor if we are going to go after these funds,” Smith said. “We are looking at getting around $320,000 over five years. That could really benefit some of the areas around town that need some attention.”