Wisconsin Suburb Attempts to Scalp Grant Funds

It seems River Hills, Wisconsin gets more in grant funds from HUD than it needs, so it gives some away, and it attempting to find a way to "sell" off some of it's excess:

River Hills, Milwaukee County's richest suburb, has found little use for what has become an annual allocation of about $20,000 in federal community development block grant money.

So village leaders instead have cut deals with other suburbs to lend or transfer the grant money and have even sought unsuccessfully to sell the River Hills block grant allocation to another community.

Those practices have drawn increased scrutiny by the county and the U.S. Department of Housing and Urban Development, the agency in charge of the block grant program.

HUD spokesman Brian Sullivan said this week that the agency would review the River Hills practice "to see if it violates any rule or law. . . . It just strikes us as a bad idea." Sullivan, based in Washington, D.C., questioned why the county wouldn't simply transfer the money earmarked for River Hills to some other suburb or allowable use if River Hills itself had no need for the funds.

Sometimes the suburbs cut side deals, in effect borrowing from another suburb's HUD allocation.

The block grant program provides money for a range of uses, including building new sewers and streets, fixing homes and making public buildings accessible to people with disabilities. The program is aimed at helping families with low to moderate incomes.

Assistant Corporation Counsel John Jorgensen said selling the HUD allocation wouldn't break any rules or laws, as long as the grant money is used for allowable projects. In a memo to county supervisors, Jorgensen said his opinion matched advice he'd gotten from local HUD officials.

Why would you sell money to another municipality (presumably at a loss).  Well, because then you could use the money for something you think you needed, instead of what HUD thinks you need.

Because of River Hills' high average income, the village is allocated relatively little from the county's HUD pot and has had few eligible uses, said River Hills Village President Bob Brunner.

In 2009, median family income in River Hills was $220,000, almost four times the county's $55,244, according to U.S. Census figures.