When the Board of Aldermen sets to work in the coming months to distribute this year’s Community Block Development Grants, a thin federal budget will be looking them straight in the face — in the form of an almost 6 percent decrease in funding for the second straight year.

In a plan presented to the board’s joint Human Services and Community Development committees Thursday night, the city administration and social services organizations will be hardest hit, shouldering projected grant decreases of nearly nine percent in comparison to last year.

Usually a crucial financial package from the federal department of Housing and Urban Development for both the city and local nonprofits, this year’s $5.2 million overall endowment will be stretched thin in yet another manifestation of the national economic troubles in New Haven’s money management.

“It’s a bleak picture,” Ward 10 Alderman Edward Mattison said. “There just isn’t any money.”

Mattison hinted that the city itself is likely to sacrifice more than any private agency, as indicated in the cutbacks in applied-for money. But Mattison said everyone will suffer to some degree because of budgetary concerns in Hartford.

“We’re going to have to use this money to make up for the loss in state aid,” he said.

The federal government gives the CDBG money to cities every year based on census information, and then the city goes through the process of accepting applications from within — for municipal governmental programs — and from without, from neighborhood revitalization associations, health care providers, and work force development programs.

Once these applications are received in the fall, they are reviewed by the city’s Office of Management and Budget, which makes a preliminary assessment about who is deserving of the limited funding based on a series of broad-based categories laid out by HUD.

The full list of potential beneficiaries then goes to the mayor, who receives input from the Office of City Plan, the Livable City Initiative, and other knowledgeable parties who have vested interest in where the money ends up, said Elizabeth Smith, a project coordinator in the Office of Management and Budget. Smith submitted the plan to the aldermanic committee Thursday night.

The mayoral administration then tweaks the scheme of dispensation and advances this version to the appropriate committee of the board, the stage at which the proposed plan stands now.

The committee has the liberty to make further amendments, shifting money, with certain restrictions, to parties they deem more deserving — an often highly politicized process referred to as “horse-trading.” At this point, money may even be transferred to applicants who had not yet been chosen for grant money, Smith said.

The board then likely approves what the committee has decided and the final proposal returns to HUD by May 15 to get a final rubber stamp. The money becomes available for expenditures by awarded organizations at the beginning of the fiscal year on July 1.

Before the process is over this year, however, some wrangling might occur if individual aldermen start to express support for applicant organizations within their district. One particularly volatile change in this year’s proposal is the wholesale divestment from the Fair Haven Development Corporation, a community improvement organization that was investigated within the last year at the request of the board for alleged misuse of CDBG money.

The organization was allocated $95,000 in last year’s plan, but so far, no one has recommended that they receive funding this year. Ward 16 Alderman Raul Avila, who represents a portion of Fair Haven, could not be reached for comment last night.

“There have been no fireworks yet,” said Mattison, who suggested that aldermen will likely spar over the grants. “But I assume they will.”

Despite the downward trend in funding, certain groups are likely to get an increase in funding — but not as a result of any special merit or any uplifting reason at all.

Housing Opportunities for Persons with AIDS will receive a projected 51 percent increase in grant money, and the Emergency Shelter Grant is up 5 percent from last year.

For HOPWA, this significant raise in budgeting is only a factor of a recent increase in the number of AIDS cases in the area, and this money actually only serves to restore the funding level after it was slashed in half two years ago. The Emergency Shelter Grant comes as a response to the growing need for housing the homeless, especially during the colder months.

Despite the decreased funding overall, Ward 1 Alderman Ben Healey ’04 said he thought the city acted responsibly under the circumstances.

“They did a really good job putting it together,” Healey said.