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What every resident should know about grant funding for cities

Sentinel staff report–
Grant funding, often called “free money,” is an important part of every city’s budget. But unlike a typical donation or gift, grant funding comes with strings attached.

In Citrus Heights, the city’s current 2.9-mile “Electric Greenway” trail project is funded almost entirely by grants, with a total of $6.2 million coming from a state “Active Transportation Grant,” and another $231,000 in funding coming from a “Per Capita Grant.” In all, about $6.4 million of the $6.8 million project is to be funded by grants, according to the latest financial data provided by the city manager’s office.

Related: Planning phase for new 2.9-mile trail in Citrus Heights nears $1M cost

Grants are outside funding that the city actively applies for each year, with most funding coming from federal, state and regional sources. The funds do not need to be repaid, which helps boost the city’s coffers. (The city’s General Fund budget expenditures last year were about $32 million.)

“These outside funds help us provide important services for our residents, while operating on a very lean city budget,” Casey Kempenaar, the city’s planning manager, told The Sentinel, when asked about the grant funding process.

‘Free money,’ with strings
Though often referred to as “free money,” grants have “very specific restrictions on the types of projects they can be used for,” Kempenaar said.

Grants also often require matching local funds, and have restrictions that prevent the city from using funds on popular projects residents want, like repaving residential streets.

The $6.2 million ATP grant came with a restriction that funds only be used on “projects that result in increases in walking and biking,” Kempenaar said in an email. He said funds can’t be used on repaving roads.

“In fact, the funding is so restrictive that if we were to install a street light as part of our trail project, the ATP grant would only pay for the portion of the light that illuminates the ‘active’ portion of the project,” he said. “So if the street light illuminates the sidewalk, it would covered by the grant, but if it lights the roadway it is not.”

According to the California Transportation Commission’s website, the Active Transportation Program came about in 2013 to encourage biking, walking and other vehicle alternatives. With the passage of the controversial SB 1 “gas tax” in 2017, the ATP began receiving an additional $100 million in funding per year from gas tax revenues.

Competition
As would be expected with free money, Kempenaar said the grant funding process is “highly competitive” and often difficult to obtain.

In 2016, the year Citrus Heights applied for grant funding for the trail project, Kempenaar said the city had to compete with more than 450 other applications that requested a total of nearly $1 billion in funds, when only $350 million in funds were available.

The grant process
For the trail project’s ATP grant, Kempenaar said city staff drafted a grant application, brought together several agencies, worked on preliminary designs, and leveraged other funding sources in the process of submitting a grant application.

In general, Kempenaar said funding agencies will “develop scoring methodologies to determine how to fund projects based on the measures they are trying to achieve.” Projects with the best scores are then awarded grants.

ATP grant funding criteria for the trail project included the following:

  • Will the project serve schools or other community destinations?
  • Does the project have preliminary designs that meet best practices for the mode of transportation?
  • Is the project within a disadvantaged community (as determined by the funder)?
  • Is the local agency providing a match? (The match can take place in various forms, cash, employee time, or similar metric.)
  • Will the project resolve an ongoing safety concern that impacts active transportation users?
  • Does the local jurisdiction have local land use policies that support active users?

Ultimately, Kempenaar said the project was selected primarily because of it being a partnership between multiple agencies, providing a safe and convenient connection between key destinations, and its potential for regional connectivity to Roseville and Folsom Lake.

Local control
Restrictions attached to government funds are commonplace, as money trickles down to counties and cities from federal and state sources with strings attached.

The Citrus Heights Police Department receives annual six-figure grants to go towards DUI enforcement and checkpoints. The department also received a $606,000 grant this year to go towards curbing youth tobacco use over three years. Those funds could not be used for other purposes.

From April: CHPD awarded $600k grant for new anti-tobacco cop, wrapped vehicle

In Sacramento County, Supervisor Sue Frost’s office reports that only 13% of the county’s total appropriations budget is discretionary funding that is “not legally restricted to some purpose.” The percentage of discretionary funding is higher in Citrus Heights, but millions of dollars in grants and other funds still come to the city annually with restricted uses.

Local control of funding is an aspect being highlighted by proponents of Measure M, which would impose a 1-cent-per-dollar sales tax increase in Citrus Heights. If passed by voters in November, the tax would bring in an estimated additional $12 million to the city’s General Fund, which could go towards “any lawful municipal purpose,” according to the city attorney’s analysis.

Proponents say Measure M’s locally controlled funding is needed to ensure “every dollar stays in Citrus Heights and cannot be diverted by the state or federal government,” while opponents argue the unrestricted nature of the tax measure would allow funds to go towards “anything,” including salary increases for city staff.

The issue of local control remains a battle in the halls of government, with tension between different levels of government seeking to exercise more control. Debates about control range from funding issues to broader issues like mask mandates and zoning.

The League of California Cities, of which the City of Citrus Heights is a member, has the express mission to “expand and protect local control.” The League is known for regularly advocating for and against legislation at the state level on behalf of cities.

Supervisor Frost, who formerly served on the Citrus Heights City Council, told The Sentinel in an email this week that local control is “a fond memory from decades back when politicians had cash and used to make things happen fast.”

“Now, the frustrating reality is that State and Federal Government have eroded our control and it is only getting worse as the years go on,” she said.

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