Title
Public Hearing to Consider Approving the Housing and Community Development Needs Statement for the Community Development Block Grant Annual Plan for Fiscal Year 2023-24.
The proposed action is statutorily exempt from the California Environmental Quality Act (CEQA) under section 15262 (feasibility and planning study) of the CEQA Guidelines. (Community Development 20361840)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The purpose of the public hearing is to consider approving the housing and community development needs for the Fiscal Year (FY) 2023-24 Community Development Block Grant (CDBG) Annual Action Plan, which will be presented to City Council in May 2023. As an entitlement recipient of CDBG funds, the City of Alameda (City) receives approximately $1,150,000 per year from the U.S. Department of Housing and Urban Development (HUD).
CDBG regulations require that an annual public hearing be held to obtain views on current housing and community development needs relating to the Action Plan (Action Plan) described below. In 2020, the City prepared its Five-Year Consolidated Plan (Consolidated Plan), a planning document required by HUD, which is designed to assist the City with assessing its affordable housing and community development needs and market conditions so that it may make data-driven, place-based investment decisions. The Consolidated Plan identified the following priorities: affordable housing, preventing and addressing homelessness, reducing housing discrimination, and non-housing community development (public services, economic development, and public facilities).
BACKGROUND
The City is an entitlement recipient of CDBG funds from HUD. Each year the City receives an entitlement allocation of approximately $1,150,000 of CDBG funding. CDBG funds finance programs and activities that benefit low- and moderate-income persons and households while helping prevent or eliminate slums and blight. To receive CDBG funding, the City has to submit to HUD an Action Plan detailing the programs, activities, and resources to address the housing and community development needs identified in the Consolidated Plan.
CDBG regulations require that an annual public hearing be held to obtain views on current housing and community development needs relating to the Action Plan. This hearing provides an opportunity for public input for FY 2023-24. The Action Plan will identify local priorities and uses for two sources of federal funds: CDBG and HOME Investment Partnership Program (HOME) funds. Eligible activities include housing development, property acquisition and rehabilitation, public facility capital improvements, public services, accessibility improvements, economic development, as well as planning and administrative activities. At least 70 percent of CDBG funds must benefit low- and moderate-income residents or neighborhoods. In addition, the total amount of CDBG funds obligated for public services activities must not exceed 15 percent of the annual entitlement allocation and prior year’s program income.
All citizen participation requirements have been met for the public hearing, with publication of the notice on our city website and in the December 1, 2022 Alameda Sun as well as in Chinese, Vietnamese, Tagalog and Spanish-language newspapers. Accommodations are available for non-English speaking residents and persons with disabilities to participate in the public comment process.
DISCUSSION
Overview of the Community Development Block Grant Process
As an entitlement jurisdiction, the City receives CDBG funds from HUD. CDBG regulations require that an annual public hearing be held to obtain community input on current housing and community development needs. The Consolidated Plan contains the Five-Year Strategic Plan, which is the foundation for identifying the priority housing and community development needs of the community and is used to guide the development of annual Action Plans during the five-year period covering FY 2020-21 through FY 2024-25. Priority needs in the Consolidated Plan included the following:
• Preserving and increasing affordable housing and supportive services;
• Reducing housing discrimination;
• Preventing and addressing homelessness; and
• Addressing non-housing community development needs such as neighborhood improvements, public services, accessibility improvements and economic development.
The City’s FY 2023-24 Action Plan will identify local priorities and uses of CDBG funds to address needs in eligible categories. Exhibit 3 includes the program goals designed to meet the following priorities: affordable housing, preventing and addressing homelessness, reducing housing discrimination, other special needs, and non-housing community development, which includes public services, economic development, and public facilities and infrastructure.
Identification of Public Service Needs of the Community
To support the City’s effort to identify the public service needs of the community, the Social Service Human Relations Board (SSHRB) held a meeting on December 1, 2022, and prepared a recommendation for the FY 2023-24 Needs Statement, which identifies the City’s priority public service needs (Needs Statement) for approval by City Council (Exhibit 1). To identify public service providers, staff will issue a CDBG/HOME FY 2023-24 and 2024-25 Notice of Funding Availability (NOFA)/Request for Proposals (RFP). The approved Needs Statement will be included in the upcoming NOFA/RFP. Last year, SSHRB had recommended the return to 2-year service provider agreements for FY 2023-24 and 2024-25, pending the results from the community needs assessment. Since SSHRB will complete its community wide needs assessment in spring 2023, staff has recommended that the service provider agreements signed with selected providers from the NOFA/RFP process be for single-year agreements with a one-year option to extend. Since the needs communicated at the December 1, 2022 SSHRB meeting are consistent with past years’ needs, this approach will allow staff to extend agreements without publishing a new NOFA/RFP in January 2024. Alternatively, if the final community needs assessment contains newly identified needs, this approach will give staff the flexibility to return to SSHRB for an updated needs statement and to incorporate any newly identified needs into an NOFA/RFP in January 2024.
CDBG Service Provider Past Performance
Listed below are the current, CDBG-funded public service providers, their service offerings, annual goal of people served, and number of persons who benefited from the program in FY 2020-21 and FY 2021-22:
|
Service Provider |
Service Offering |
Annual Goal of People Served |
FY 2020-21 Persons |
FY 2021-22 Persons |
|
Alameda Family Services |
Mental Health Counseling |
45 |
55 |
32 |
|
Alameda Food Bank |
Emergency Food Distribution |
2,200 |
10,537 |
11,731 |
|
Building Futures |
Shelter & Counseling |
85 |
120 |
62 |
|
Eden Council for Hope & Opportunity (ECHO) |
Fair Housing & Housing Counseling |
65 |
69 |
67 |
|
Eden Information & Referral |
Information & Referral |
350 |
397 |
402 |
|
Family Violence Law Center |
Family Violence Prevention |
25 |
43 |
62 |
|
Legal Assistance for Seniors |
Legal Assistance for Alameda Seniors |
333 |
50 |
294 |
While all of the service providers were impacted by the COVID-19 pandemic in some way, most exceeded the two-year contract goals. Like many nonprofits, Legal Assistance for Seniors, which provides legal assistance as well as health insurance counseling and advocacy on behalf of seniors, transitioned from in person workshops to online classes during the pandemic. The return to in person meetings led to greater attendance in FY 2021-22.
Growing Needs for Services, Decreased Funding
Community stakeholders presented to the board at the December 1, 2022 SSHRB meeting. Exhibit 4 contains a list of the service providers, a description of their organization and the needs which they identified. Following is a high level summary:
• Access and Connection to Resources
• Access to Affordable Pre-K Education / Childcare
• Affordable Housing / Rental Assistance
• Food Programs
• Legal Services, including Fair Housing
• Mental Health Services
• Senior Connections
• Unrestricted Funding
Many of the needs that SSHRB identified during the preparation of the Consolidated Plan continue to exist today. Access to affordable pre-K education/childcare and the need for unrestricted funding are newly added.
While the initial spike in demand related to the pandemic has decreased, nonprofits are reporting higher demand for services across the board. By contrast, the CDBG funding available for the services is gradually decreasing. While some of the current year contracts have been supplemented with newly available funding sources (i.e., Permanent Local Housing Allocation), it is possible staff may seek additional funds in the future should this pattern of growing needs and decreasing funds continue.
Proposed Service Provider NOFA/RFP Schedule and Timeline
The NOFA/RFP is tentatively scheduled to be released in January 2023. The proposed Action Plan schedule is included as Exhibit 2 for reference.
In the past few years, the NOFA has been published prior to HUD’s announcement of the funding allocations for the upcoming fiscal year. Based on past funding allocations, staff estimates the total HUD funding allocation will be approximately $1,150,000. Based on the current CDBG monthly loan payments made to the City, staff estimates the City will receive additional program income (generated from repayments of principal and interest on outstanding CDBG loans) of approximately $80,000 in the current fiscal year. Therefore, the total HUD funds to the City in FY 2023-24 are anticipated to total $1,230,000. HUD limits the funding for public services to 15% of next year’s entitlement funds and 15% of this year’s program income. Consequently, the portion available for CDBG public services in FY 2023-24 will be approximately $184,500, down 14.5% from the current fiscal year.
The proposed NOFA/RFP schedule is attached as Exhibit 2. Depending on the number of applications received, staff may again recommend that either fair housing or information and referral services be classified as an administrative expense. By removing one of these services from the public services category, a portion of the CDBG public service funds, which are capped at 15%, are freed up to use for other service needs. SSHRB members will be asked to review and score all other public service applications. Assuming that the NOFA/RFP is due on February 9, 2023, then the members of the Board will be asked to submit their scoring for the public service applicants by February 27, 2023 at 9:00 am so that staff may present recommendations at the board’s March 23, 2023 public meeting in time to be published by March 31, 2023.
ALTERNATIVES
• Staff recommends that City Council approve at this annual public hearing the Needs Statement (Exhibit 1) in support of the Consolidated Plan Priorities & Goals (Exhibit 3).
• The City Council may modify the Needs Statement to include additional priorities or remove proposed priorities prior to acceptance as this complies with the CDBG regulation to discuss these view during an annual public hearing.
• City Council may decline to accept the Needs Statement, which may cause the City to be out of compliance with HUD requirements, potentially jeopardizing the City’s ability to receive these funds.
FINANCIAL IMPACT
There is no financial impact from conducting a public hearing to determine FY 2023-24 housing and community development needs. Although HUD has not yet published the CDBG entitlement allocations for FY 2023-24, staff anticipates receiving approximately $1,150,000 in entitlement funds and $80,000 of program income for a total of $1,230,000. Program income is generated from repayments of principal and interest on outstanding CDBG loans. CDBG entitlement allocations for FY 2023-24 will be subject to future appropriations approval.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This project is consistent with the Housing and Community Development HUD CDBG/HOME 24 CFR Part 91 Five-Year Consolidated Plan requirement.
ENVIRONMENTAL REVIEW
Execution of related agreements and final funding commitments are subject to the requirements of the National Environmental Policy Act (NEPA) and satisfactory environmental clearance under 24 CFR Part 58. Additionally, the proposed action is statutorily exempt from the California Environmental Quality Act (CEQA) under section 15262 (feasibility and planning study) of the CEQA Guidelines.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Conduct a public hearing and, following the public hearing, approve the Housing and Community Development Needs Statement and Priority Needs and Objectives for the Community Development Block Grant Annual Plan for fiscal year 2023-24.
Respectfully submitted,
Lisa Maxwell, Community Development Director
By,
Lisa Fitts, Community Development Program Manager
Amanda Olson, Community Development Program Manager
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. Needs Statement
2. Action Plan FY 2023-24 Schedule
3. Consolidated Plan Priorities and Goals
4. Stakeholder Identified Needs
cc: Jennifer Ott, City Manager
Social Service Human Relations Board