Federal Role in Revitalizing Distressed Cities: Interagency Collaboration and Local Partnerships. 2.1.2 Blending CDBG Funds with DOT-FHWA Funds in New Orleans


In New Orleans, HUD and DOT staff worked together to respond to conflicting requirements for handling local hiring preferences in trying to blend the use of CDBG funds with DOT-FHWA funds in order to complete a $4 million roadway project. CDBG funds require a hiring preference for low-income persons residing within the area in which the project is located, but DOT-FHWA funds require that contracts be awarded to the lowest bidder

New Orleans had sought a mechanism to blend the two funding sources for over a year-and-a-half without success and raised the issue with the SC2 team lead. The team lead, who represented HUD, contacted leadership at both HUD and DOT and learned that DOT had already developed a solution to this inconsistency and had been seeking to pilot the solution on the ground for over two years. The SC2 team lead coordinated the implementation of the solution in New Orleans, leading to a cooperative agreement to use a ratio of one CDBG dollar for every nine FHWA dollars under the CDBG regulations. The team member’s understanding of the regulatory issues and connections to leaders within HUD and DOT made identifying and implementing this solution possible.

Because this solution succeeded in New Orleans, other cities have a model for blending the use of CDBG and DOT-FHWA funds into one contract.

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