Title
Public Hearing to Consider Adoption of the Community Development Block Grant/HOME Investment Partnerships Program Fiscal Year 2024-25 Action Plan; Authorize the City Manager to Use Permanent Local Housing Allocation Funds; and Authorize the City Manager to Negotiate and Execute Related Documents, Agreements, and Modifications at Funding Levels Approved by Congress. (City Manager 20321841, 20121847 & 22221840)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The City of Alameda (City) is an entitlement recipient of Community Development Block Grant (CDBG) funds from the U.S. Department of Housing and Urban Development (HUD). Fiscal Year (FY) 2024-25 represents the fourth year of implementation for the five-year Consolidated Plan, which is a planning document required by HUD to be submitted by all jurisdictions that directly receive HUD funds. The draft Action Plan is attached as Exhibit 1 and a summary of the recommendations for program funding is included as Exhibit 2.
The total FY 2024-25 CDBG program budget is $2,514,965, which includes $1,112,658 in CDBG entitlement funds, of which approximately $175,895 may be spent on public services. As a member of the Alameda County HOME Partnership Investment Program (HOME), the City will be awarded approximately $190,064 in FY 2024-25 HOME funds. The total HOME budget of $906,385 includes $716,325 of carried forward funds. Lastly, the proposed budget also includes allocations of Permanent Local Housing Allocation (PLHA) funds, as shown in Exhibit 2.
This public hearing is an opportunity for the community to provide input on the proposed programs and projects for the upcoming fiscal year that will be funded with CDBG, HOME and PLHA funds.
BACKGROUND
The City is an entitlement recipient of CDBG funds from HUD. CDBG funds programs and activities that benefit low- and moderate-income persons and households as well as projects that prevent or eliminate blight. Each year, entitlement cities must follow a process to receive public input, establish community goals and prepare a budget for the coming year. As a condition of funding, the City is required to submit an annual Action Plan to HUD. The Action Plan details the programs, activities and resources that will be used to address the housing and community development priority needs and goals.
In preparing the FY 2020-25 Consolidated Plan, the City conducted outreach and consulted with various community stakeholders, including community-based service providers, residents, and City departments and boards. The community stakeholders helped establish priority needs and objectives and proposed strategies in the form of projects and activities to further those objectives.
On October 26, 2023, the Social Service Human Relations Board (SSHRB) discussed priority needs and made a recommendation to City Council regarding public service needs for the upcoming fiscal year. SSHRB recommended that all existing CDBG-funded service providers continue to be funded at similar levels for the 2024-25 fiscal year. Since HUD had not yet announced allocations and because CDBG public service funding was already exhausted and supplemented with PLHA, SSHRB also instructed staff to propose that the organizations be funded at pro rata levels based on the FY 2023-24 funding amounts.
On January 18, 2024, staff posted a Notice of Funding Availability (NOFA) and an RFP for projects that could be funded with CDBG, HOME, and/or PLHA funds.
CDBG funding for the upcoming fiscal year is derived from two sources: 1) CDBG entitlement funds that are allocated by HUD and 2) program income that is generated from CDBG loan repayments. HUD had not announced award amounts at that time but the City anticipates approximately $1,112,685 in CDBG entitlement funding for FY 2024-25. Program income for FY 2023-24 is generated from CDBG loans that have been issued through the residential rehabilitation programs. Because this program income will continue to be received through June 30, 2024, the actual amount of program income has yet to be finalized but is estimated to be $60,000. The total FY 2024-25 CDBG program budget is $2,514,965, which includes:
• $1,112,658 in CDBG entitlement funds
• $1,402,307 of carried forward funds for open projects
• $150,000 of available funds from completed projects
• $60,000 of program income from loan repayments projected to be received in FY 24-25
The City is one of eight jurisdictional members of the HOME Consortium through which the County allocates portions of its HOME allocation to participating jurisdictions. Each member of the HOME Consortium must prepare an individual Action Plan. As the lead agency, Alameda County coordinates the timing and final submission of the Action Plan to HUD. On April 18, 2023, City Council approved the City’s continued participation in the HOME Consortium. As a member of the Alameda County HOME Consortium, the City will be awarded approximately $190,064 in FY 2024-25 HOME funding from the County.
The City met the citizen participation requirements for this public hearing, including noticing the public hearing in the April 19, 2024, Alameda Journal newspaper, as well as in Chinese, Spanish, Tagalog, and Vietnamese-language newspapers. While staff has not identified local Arabic or Korean language media, the public notice is also posted on the City web site and can be translated into all six languages. Accommodations are also available for non-English speaking residents and persons with disabilities to participate in the public comment process.
DISCUSSION
The City prepares an annual Action Plan that identifies specific objectives and the proposed uses of CDBG funds. The draft FY 2024-25 Action Plan is attached as Exhibit 1. The proposed activities for FY 2024-25 are intended to address the current urgent needs such as rising rents, inflation, and the high cost of living while also preparing the City and its most vulnerable residents for recovery from the pandemic.
On May 7, HUD announced that the City of Alameda would receive a FY 2024-25 CDBG allocation of $1,112,658.
Public Services
Public services funding for FY 2024-25 is derived from two sources: entitlement funds allocated by HUD and program income generated from CDBG loan repayments. HUD requires that public services funding be capped at 15 percent of the total current year’s grant allocation plus program income received in the previous fiscal year.
Therefore, staff proposes the following funding allocations:
|
Funding Type |
Estimated Amount |
15% of Amount |
|
City of Alameda Entitlement |
$1,112,658 |
$166,898 |
|
FY 2023-24 Program Income |
$60,000 |
$9,000 |
|
Total Estimated Funds Available |
$1,172,658 |
$175,898 |
At its October 26, 2023 meeting, SSHRB determined that existing CDBG-funded service providers should continue to be funded in FY 2024-25. The FY 2024-25 Draft Summary of Activities, Exhibit 2, shows the existing public service providers and staff recommendations for funding. To fully fund all service providers at the FY 2023-24 levels and continue providing these critical public services, Eden Information and Referral will be paid $26,000 from CDBG administrative funds, and Building Futures for Women and Children will be funded up to $105,505 through a combination of CDBG and PLHA funds for Midway Shelter. Staff acknowledges that additional funding sources may not be available in the future and all organizations are made aware of this possibility and encouraged to continue raising funds to leverage CDBG funding.
Economic Development
Alameda Point Collaborative currently receives $135,000 in economic development funding as the sole Community Based Development Organization (CBDO). Alameda Point Collaborative will continue to administer a social enterprise designed to create job training and employment opportunities with the goal of serving over 100 Alameda Point Collaborative households. Staff recommends funding Alameda Point Collaborative at the full amount requested.
Public Improvements
Staff proposes that the City of Alameda Public Works Department and Building Futures for Women and Children be funded for non-housing public improvements projects in FY 2024-25. Public Works Department requested $100,000 to supplement funding for the Americans with Disabilities Act (ADA) Transition Plan. This project creates accessibility for persons with disabilities at pre-established facilities throughout the City. Building Futures proposed to replace a transformer, upgrade the sewer lateral and make other eligible improvements at Bessie Coleman Court.
Residential Rehabilitation
Funds for substantial rehabilitation continue to be allocated as required per the 1990 Guyton Judgment and Settlement Agreement (Guyton Agreement), which requires the City to undertake certain activities to further affordable housing production. Specifically, the Guyton Agreement requires that 15.3 percent of the City’s CDBG entitlement be allocated to the Substantial Rehabilitation Program.
In the past, the City had an agreement with Rebuilding Together Oakland/East Bay and Habitat for Humanity to administer the residential rehabilitation program. Rebuilding Together Oakland/East Bay has since closed and Habitat for Humanity will not be renewing its agreement with the City as it focuses its staff on managing the $45 million Measure A-1 funded Alameda County Housing Prevention Loan Program, also known as AC Renew. Staff initiated conversations with Rebuilding Together East Bay Network, formerly known as Rebuilding Together East Bay-North, which is expanding to cover Alameda County.
Administrative Funds
Administrative funds have been included as permitted by HUD guidelines. As was done in FY 2023-24, staff recommends paying for Eden Information & Referral services with CDBG administrative funds, which reduces the number of providers paid from the limited public service funds.
Carry-Forward Funds
Carry-forward funds are for projects that are in progress with appropriated but unexpended funds from the prior year. Per HUD requirements, carry-forward funds are encumbered within the same grant year until a project is completed or a replacement project is identified and funds are reprogrammed to the new project. Based on project balances as of April 16, 2024, the Action Plan includes approximately $1,205,902 of carry-forward funds of which approximately $150,000 are from completed projects and have been made available to fund the proposed projects in the FY 2024-25 Action Plan. See Exhibit 2, page 2 for a list of the open projects for which funds will be carried forward.
HOME
As a member of the HOME Consortium, the City will be awarded approximately $190,064 in FY 2024-25 HOME funds of which approximately $11,051 may be used for administrative purposes. The City received two applications totaling $1,225,000 in HOME funding requests.
The City received two applications totaling $1,225,000 in HOME funding requests. Island City Development (ICD), a non-profit affiliate of the Alameda Housing Authority, requested $1,000,000 to build forty-six units of permanent supportive housing for formerly homeless individuals or households at North Housing PSH II, known as Estuary II. Mercy Housing California and Alameda Point Collaborative requested $225,000 to develop a wellness-oriented campus that will house formerly homeless seniors.
Staff proposes to equally split the HOME funding, including program income that the County will include in next year’s agreement, between the two projects. Both projects will be subject to Davis Bacon wage monitoring, Build America Buy America (BABA), and any other federal requirements.
Permanent Local Housing Allocation (PLHA)
The State of California established the PLHA program to provide a permanent source of funding to cities and counties to help meet the unmet need for affordable housing and increase the supply of affordable housing units.
As described above, staff proposes to supplement CDBG funding and continue funding Midway Shelter operations. Per the PLHA Five Year Plan approved by City Council in October 2022, the remaining funds may be used to support the construction of affordable housing. Staff received four requests for construction funding: 1) ICD for Estuary II, 2) Mercy Housing California for McKay Senior Housing, and 3) MidPen Housing for Stardust Gardens (also known as RESHAP Phase 1) and for Harbor Village (also known as RESHAP Phase 2). All proposed projects will provide permanent supportive housing to formerly homeless individuals, families or veterans. All of the projects are dependent on receiving construction funding. Because all of the projects are both eligible for PLHA funds and dependent on additional financing to proceed, staff recommends that Council conditionally approve each of the four projects to receive equal allocations of $551,582. Funding commitments will be conditioned on receiving construction financing and funds will be disbursed on a reimbursement basis.
Coronavirus Aid, Relief, and Economic Security (CARES) Act Update
On March 27, 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. The City received $1,280,228 in CARES Act funding (CDBG-CV) funds and used it for programs such as COVID-19 Emergency Rent Relief, Safe Parking and others. At this time, only Family Violence Law Center’s (FVLC) Emergency Shelter program remains open with a balance. Staff anticipates that the CDBG-CV funds will be exhausted in FY 2023-24.
ALTERNATIVES
In connection with the holding of this public hearing to consider adoption of the CDBG/HOME FY 2024-25 Action Plan, City Council will receive public input and may:
• Authorize the City Manager to adopt the CDBG/HOME FY 2024-25 Action Plan and also use PLHA Funds; and authorize the City Manager to negotiate and execute related documents, agreements, and modifications to implement the programs described above.
• Direct staff to consider other new programs for funding as long as those programs are consistent with HUD guidelines (e.g., assistance is limited to low-income residents, funding caps are followed, etc.).
• Modify staff’s recommendations, such as by changing the programs to be funded or revising the funding allocation among the projects as long as those changes are consistent with HUD guidelines.
• Decline to move forward with adopting the proposed CDBG/HOME FY 2024-25 Action Plan at this time, which would result in the loss of CDBG and HOME funding for the upcoming fiscal year.
FINANCIAL IMPACT
There is no impact to the General Fund to approve the FY 2024-25 CDBG/HOME Action Plan. The funds described in this report have been budgeted in the CDBG Fund (203), HOME Fund (201) and Grants Fund (222).
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action supports the City’s Strategic Plan priority to House All Alamedans and End Homelessness, specifically Project HH1 to address housing and human services functions and develop recommendations; Project HH2 to implement the Homelessness Strategic Plan; and Project HH3 to further the preservation, rehabilitation, or construction of affordable housing in Alameda.
ENVIRONMENTAL REVIEW
The execution of related agreements and final funding commitments are subject to the requirements of the National Environmental Policy Act (NEPA) and satisfactory environmental clearance pursuant to 24 CFR Part 58. The City has satisfied all such NEPA requirements applicable to the actions recommended herein. Additionally, these actions does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Conduct a public hearing to consider adoption of the CDBG/HOME Fiscal Year 2024-25 Action Plan; authorize the City Manager to use PLHA funds; and authorize the City Manager to negotiate and execute related documents, agreements, and modifications at funding levels approved by Congress.
Respectfully submitted,
Amy Wooldridge, Assistant City Manager
By,
Lisa Fitts, Housing and Human Services Manager
Andre Fairley, Management Analyst
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. Draft Action Plan
2. Draft Summary of Activities
cc: Social Service Human Relations Board