Helper Faces Repayment Of Cdbg Funds for Rio Theater
Officials in Helper are expected to make a decision this week regarding the repayment of $107,000 which the city received as a Utah Community Development Block Grant.
At a city council meeting on Jan. 18, Keith Heaton of the Utah Division of Housing and Community Development notified the officials that Helper needed to make a decision regarding how to pay the funds back within 30 days.
Heaton explained that the Utah administers the CDBG grants under the guidelines of the United States Department of Housing and Urban Development.
About 10 years ago, the Utah Division of Housing and Community Development awarded the city a grant to offset the costs of renovating the Rio Theater.
One of the conditions of the grant was that the city would create the equivalent of three full-time jobs which could be directly tied to the theater.
At that time, a theater group was planning on using the Rio for regular performances, said Heaton as he described the circumstances when the grant was awarded. However, the theater group is no longer present in Helper.
In the time since the grant was awarded, the city has worked to complete the theater. And while there is still work to be completed on the theater, Helper officials have worked to bring performances to the venue.
But without a group to make use of the theater, the city has been unable to justify hiring the individuals as required by the terms of the loan.
"We're in a situation there we have a grant that didn't meet the national objective. The federal government requires that money to be paid back," said Heaton. He added that, during the course of more than three years, the state has made an effort to work with Helper to allow the funds to be paid back in a period of time.
Heaton told the Helper officials that the city would need to establish a repayment schedule within the next 30 days.
Heaton explained that the repayment schedule could last as long as 10 years and there would be no interest charged.
Still, if Helper takes the full 10 years to pay back the loan, the city's monthly payments would be slightly less than $900.
For a city which operates on what Helper officials call a very tight budget, finding more than $10,000 every year will only tighten the town's finances.
But there are ways that the Helper can reduce the amount the city needs to repay, according to the state division of housing and community development representative.
Heaton explained that, if the city hired the equivalent of one full-time employee, Helper could reduce the loan repayment amount by $35,000.
He clarified that the equivalent of one full-time job could be met if the city were to hire multiple part time employees who together would do the work and receive the pay of one full time employee.
For example, the city could hire two people to work 20 hours per week to count as one full-time employee.
The only other requirements is that the jobs must be created as permanent positions and the city must hire individuals who had previously been earning what the state considers to be a low wage.
If the city can hire the equivalent of two full-time employees, Heaton said the amount owed by Helper will be reduced by $70,000.
If the city can hire the equivalent of three full time employees, Helper can keep the grant funds and there will be no repayment.
Another consequence of the current status of the grant is that the city cannot receive additional CDBG funds.
Helper will be ineligible to receive more CDBG funding until the city pays back all of the monies awarded for the theater project or meets the terms of the grant.
Heaton also explained that, in the event Helper officials fail to act in the matter in a timely manner, he may be forced to consult with the state attorney general's office to discuss possible legal action.
He added that the state has not reached that point in the past and hopes for a prompt resolution by the city.
The council met for a work meeting on Jan. 24 to discuss how to proceed with the request to refund the grand funds
No decisions were made in the work meeting and the matter is on the agenda for discussion at the council's meeting on Feb. 1.