by Leslie Lytle, Messenger Staff Writer

Community Development Block Grants (CDBG) can provide up to $1 million in funding for counties and municipalities to undertake a wide array of projects ranging from playgrounds to fire halls to wastewater treatment plants. At a Jan. 8 public hearing at Monteagle City Hall, Southeast Tennessee Development’s Stacie Willoughby presented an overview of the options available to Monteagle, the caveats, and what might enhance Monteagle’s chances of being among the fortunate grant recipients. Willoughby serves as director of the Project Administration Department which facilitates the grant application process and makes sure grant recipients stay in compliance. She calls herself a “professional problem solver.”

The U.S. Department of Housing and Urban Development awards money for CDBGs to the states, and the states administer the grantee selection and oversight process. Tennessee received $26.6 million from HUD for 2026. A grantee can only have one open grant at a time. Monteagle received the full $1 million in 2023 for fire department equipment, skidders, and two trucks.

“We were very excited about that,” Willoughby said. “We’re closing out that grant, so Monteagle is eligible to apply again in 2026.” The deadline is March 20.

Three of the six grant categories provide funding for water or sewer related projects: water system rehabilitation, sewer system rehabilitation, and water line extension. The other three categories provide funds for fire department and EMA services, such as the grant Tracy City received for a firehall in 2024 (Public Health and Safety); improvements to roads, stormwater mitigation, and construction of public buildings such as libraries or community centers (Community Infrastructure); and rehabilitation of public buildings and downtown revitalization projects such as playgrounds (Community Revitalization). Willoughby pointed out “beautification” projects did not qualify for funding.

Integral to the scoring process and HUD objectives, to qualify for a CDBG an awardee must be able to prove 51 percent of the population who benefits from the project have low to moderate incomes. Monteagle Alderman Dean Lay asked if that would disqualify Monteagle from receiving a grant for sewer system rehabilitation since the primary beneficiaries would be commercial businesses such as restaurants and motels wanting to connect to the sewer system. Willoughby explained, sewer rehabilitation “would be considered a non-direct benefit since if Monteagle is doing well it will effect everybody in the community.” Resident Martha Ann Pilcher observed, “Motels mean jobs and taxes. Sales tax revenue is Monteagle’s only income.”

Lay also asked if serving areas outside the city limits would disqualify Monteagle from applying for a sewer rehabilitation CDBG. Willoughby dismissed the concern — “The city owns the sewer system.”

“Water and sewer rehabilitation projects usually score well, especially if you have a system that struggled in the past,” Willoughby said. “All over Tennessee we have aging infrastructure and growth that can’t keep up.” Willoughby acknowledged Monteagle would be competing against its neighbors for grant awards.

Alderman Grant Fletcher asked if Monteagle could combine several smaller projects from different categories. “You can only apply in one area,” Willoughby said. Citing the costly project underway of mitigating inflow and infiltration of stormwater into the sanitary sewer, Fletcher asked if an applicant could request funding for part of a project. “If it’s one $2.5 million project, we can submit that as the budget with CBDG covering part of that and look at your capital fund for the rest or stacking grants,” Willoughby said. “We stack grants all the time, but it is risky. You may get one grant, but you may not get another.” She also cautioned funding from all the grants sources might not come in at the same time, preventing a project from moving forward.

In addition, since CDBGs require a 15 percent matching contribution from the recipient, applicants must pass a resolution stating they can provide the match. A $1 million award with a 15 percent match of $150,000 would bring the total budget to $1,150,000 so the match would be $172,500. Citing another financial consideration, Willoughby said the project budget needed to include engineering and architectural expenses.

Looking to the timeline, Willoughby stressed if Monteagle decided to apply, once they decided on a project and notified her, procuring professional services such as an engineer or architect typically took up to three weeks, limiting the time she would have left to prepare a cost estimate and application before the March 20 deadline. Tennessee usually announced grant awardees in November or December. The grant contract process took another two months, Willoughby said. Together with other requirements, these factors could push the onset of construction to May. Further stymieing progress, every step of a project from environmental impact assessment to design specs to bid awarding required state approval, Willoughby noted.

“The first step is the public hearing,” Willougby said. “The next step is deciding if you want to apply and what for.”

Monteagle Mayor Greg Maloof thanked Willoughby and praised her for always being available and responsive in his interactions with SETD. Maloof anticipates holding a community meeting in the near future.