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McKeesport's allocation of community development block grant money has been received, averting a potential million-dollar shortfall in the city's budget.

Community Development Director Bethany Bauer said the money was released by the federal government on Monday, after she and Mayor Regis McLaughlin made a direct personal appeal to Shaun Donovan, U.S. Secretary of Housing and Urban Development, and Jane Vincent, regional HUD administrator.

In return, the city has promised to better publicize its housing programs, and provide more frequent reports to the agency. "We are expediting the changes," Bauer said.

. . .

Among other improvements, the city has designated Annette James, McLaughlin's assistant, as McKeesport's fair housing officer. James will issue regular reports to HUD officials about housing complaints and their resolutions, and about the city's efforts to make sure that tenants and homeowners are treated fairly and without discrimination, Bauer said.

In addition, the city will use the Internet, In McKeesport magazine, the Daily News and other media to publicize programs for renters, landlords and homeowners offered through McKeesport Housing Authority, McKeesport Housing Corp., McKeesport Neighborhood Initiative and other agencies.

"Our target for everything to become effective is the first quarter of next year," Bauer said.

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Because many residents are living at or below the poverty line, McKeesport is eligible for so-called community development block grants, or CDBG, from the federal government. In the past, the city has used the money to fund police patrols, pave streets, provide educational programs and purchase police, fire and public-works equipment.

This year's promised allocation was about $1.2 million --- later cut to $1.1 million. But HUD officials in Pittsburgh would not release the money, arguing that McKeesport has done too little to address so-called "fair housing" problems. Those include investigating complaints, advising residents of their legal rights, and improving housing conditions in poor neighborhoods.

HUD said the city's existing programs were not specifically targeted at places where the poorest residents live, and that McKeesport should be spending up to 3 percent of its community development grant money on fair housing programs.

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City officials countered that new houses built in the Third and Seventh Wards, and partnerships through agencies such as McKeesport Neighborhood Initiative were addressing fair housing concerns, but in an email, a HUD official criticized the efforts as "half-hearted" and ineffective.

HUD also complained that getting information from McKeesport was "like pulling teeth."

The agency insisted that McKeesport sign a "voluntary compliance agreement" that would allow the agency to dictate the terms under which the city could continue to receive community development grants.

But last week, during a hearing in Harrisburg to discuss community policing, McLaughlin and Bauer asked to speak privately to Donovan and other HUD officials.

. . .

"I said, 'It seems that the punishment isn't fitting the crime here," Bauer said. "I told them I could understand their concerns if we weren't doing anything to further fair housing, but we have all of these existing programs."

After reviewing documentation provided by the city, HUD officials agreed. McLaughlin signed a revised agreement on Monday, Bauer said.

Still, McKeesport and other communities that rely on CDBG money aren't out of the woods.

Republicans in Congress who want to reduce the federal government's debt and deficit spending are demanding massive cuts at HUD, including to the community development program. Federal spending on community development has already been cut by $1 billion, according to a June report from a watchdog group, the Center on Budget and Policy Priorities, and "deeper cuts" are planned in 2012 and beyond.

For now, however, a crisis has been averted. The city's general fund has been paying for community development needs, and Bauer estimates "more than $500,000" needs to be reimbursed.

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