City of Poulsbo wants its fair share from Urbanized County agreement

City seeking to have grant funds set aside

Writing up and administering grants at any level is a complicated process, as Mayor Becky Erickson found out while trying to explain a grant process that the City of Poulsbo has been a part of for the last 35 years, and the changes she would like to make to the process.

Backtracking: The City of Poulsbo received a letter from Kitsap County Block Grant (KCBG) program manager on June 3. The letter stated that KCBG had received a note from the U.S. Department of Housing and Urban Development (HUD), informing them that the time had come for Kitsap County to re-qualify for entitlement status as an Urbanized County for the 2020-2023 term.

Being classified as part of an Urbanized County means that Poulsbo, Port Orchard, Bainbridge Island and other parts of unincorporated Kitsap County can receive federal and state funds to address homelessness and housing affordability (up to $1.7 million annually).

Bremerton already receives these housing grants due to the presence of the Naval Base.

In order for a county to become an Urbanized County it must have a population of at least 200,000. Poulsbo, Port Orchard, Bainbridge Island and unincorporated Kitsap County, just barely make the threshold with 215,373 residents.

Cities within an Urbanized County have to re-qualify every three years in order to continue to receive funds. The City of Poulsbo responded to the letter from KCBG June 5, requesting an extension so the city council could discuss some potential changes to the interlocal agreement between the cities and Kitsap County.

“This is one of the most complicated processes I’ve been involved with,” Erickson said.

The funding for the Urbanized County comes from two federal and three state funding programs:

Community Development Block Grants (CDBG), and the Home Investment Partnership Program — which are federally funded grant programs supported by the HUD.

The Affordable Housing Grant Program (AHGP), Homeless Housing Grant Program (HHGP), Consolidated Homeless Grant (CHG) and House Bill 1406 are state grant programs supported by the Washington State Department of Commerce.

House Bill 1406, passed this last legislative session and was signed by Governor Jay Inslee in May and will go into effect in July.

The bill encourages investments in affordable and supportive housing and could add $4 million to these housing programs annually.

“It allows for sales taxes to be retained by the city rather than being sent to Olympia. Basically the state doesn’t take all of its share and there is no increase to the sales tax because that money stays local,” said Erickson.

All of these programs make up the social service funding that comes into Kitsap County and have some of the strictest criteria that a county or city must meet in order to be considered for Urbanized County designation.

While cities have to re-qualify every three years, Kitsap County has to come up with a plan every five years to address homelessness and housing affordability. That plan has to be approved by the Washington State Department of Commerce and HUD. Once that plan is approved, projects receiving federal funds from CDBG and HOME will need to go through state or national environmental policy act processes (SEPA/NEPA).

Projects receiving state funding require a document recording fee, which can range from $20-$110.

“These state and federal monies are consolidated by the Urbanized County into a singular grant process,” said Erickson.

Erickson presented an excel spreadsheet during a Poulsbo City Council meeting recently which showed the allocation of funds through the Urbanized County from 2000-2011. Roughly $26 million in federal dollars have been distributed between 2000 and 2011, and it is estimated that the total distributed between 2012 and 2019 is close to $35 million.

The excel spreadsheet also showed the amounts dolled out to each city over the years. All are less than $50,000, with the exception of some capital projects that range from $150,000 to $500,000.

“I have been complaining about the size of these grants for years. You can’t do anything with $10,000, not anything effective.” Erickson said.

“We are getting nickel-and-dimed to the point where its not effective and we (Poulsbo) are not getting our fair share,” she added.

Erickson did note that the Urban County is beginning to take note of the situation and has changed its system for distributing these grants. Instead of a normal grant project, it is conducting a series of Requests for Proposals (RFP’s).

“It’s a step in the right direction, but the system isn’t working very well,” Erickson said.

In an effort to obtain more control about how grant funds from the Urban County are spent in Poulsbo, Erickson proposed to the council that it asks to remain in the Urban County, but would like to change the language in the interlocal agreement as well as ask for $300,000 to be set aside. The money set aside would be used within the parameters required by the Urbanized County but would also allow Poulsbo to manage Projects within its city limits more effectively.

“I don’t know if they will let us do this, but we can ask. Frankly I think we could use the money more effectively,” Erickson said.

The City of Poulsbo’s comprehensive plan supports the idea, the mayor said, adding that staff was also available to do the administration of it as well.

Councilmember David Musgrove asked how it would all work if the funds were able to be set aside for Poulsbo.

“Funding would come locally. We would have to notify the county, state department and HUD about what we would like to do with that money and then administer it,” Erickson explained.

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