Title
Adoption of Resolution Amending Fiscal Year (FY) 2016-17 Community Development Block Grant (CDBG) and HOME Investment Partnership Program (HOME) Funds Budget for Prior Fiscal Year Unspent Entitlement and Program Income Allocations. (Housing 236 and 235)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Adoption of Resolution Amending Fiscal Year 2016-17 Community Development Block Grant (CDBG) and HOME Investment Partnership Program (HOME) Funds Budget for Prior Fiscal Year Unspent Entitlement and Program Income Allocations
BACKGROUND
The City of Alameda is an entitlement recipient of Community Development Block Grant (CDBG) funds from the Federal Department of Housing and Urban Development (HUD). Each year, the City receives an allocation of approximately $1 million of CDBG funding. CDBG funds can be used to finance programs and activities that benefit low- and moderate-income households, and to help prevent or eliminate blight. To receive CDBG funding, the City has to submit to HUD an annual Action Plan detailing the programs and activities that address the needs identified in the City’s approved Five-Year Consolidated Plan. The Action Plan must be approved by the City Council and includes programs, activities, and the associated funding amounts for the fiscal year. A public hearing is required for any amendment to the annual Action Plan if the City cancels an activity, adds an activity, or substantially changes the purpose, scope, location, or beneficiaries of an activity.
At any given time, funds are likely to remain unexpended because a given activity takes more than one year to identify an eligible project, to complete a project, or there is a lag time between approval and expenditure. The funding for the FY 2016-17 Action Plan currently anticipates CDBG entitlement allocation, County HOME entitlement allocation and Residential Rehabilitation Program Income, for a total of $1,365,777. However, the Action Plan should also reflect all carry-forward funds from prior years, for a total of $2,429,270. As a result, all committed funds needs to be carried forward with the annual Action Plan.
DISCUSSION
Each year staff receives approval from Council regarding recommendations for activities to be funded with the annual allocation of CDBG and HOME funds. In May 2015, Council approved the Five-Year (FY 2015-20) Consolidated Plan and first year of the Five-Year Action Plan and in May 2016, the second year Action Plan was approved. Each annual Action Plan includes carry forward funds (i.e., unexpended funds) from the prior year and those remaining funds are allocated within the same grant year until a project is complete or a project is identified and funds are reprogrammed to the new project.
The City benefits from its use of CDBG and HOME funds. By reauthorizing the funding for activities, the City is assisted in accomplishing its community development and affordable housing objectives. The federal government also requires the City to expend its CDBG and HOME funds in a timely manner; if the City fails to do so, these funds are recaptured by HUD. The City has met all time lines for expenditures to date.
In order to be available for spending for an approved activity, the unspent FY 2015-16 allocations need to be carried forward and the FY 2016-17 CDBG and HOME Funds Budget needs to be amended to provide the Department with the spending authority to accomplish objectives set forth in the annual Action Plan.
FINANCIAL IMPACT
The effect of the proposed action is to reauthorize FY 2015-16 unspent allocation in FY 2016-17 for CDBG and HOME Program activities that are in progress, or are not yet underway, and to amend the FY 2016-17 CDBG and HOME Funds Budget as presented in Exhibit 1. There is no impact on the General Fund from this action.
ENVIRONMENTAL REVIEW
This administrative action does not require environmental clearance. Execution of related agreements and final funding commitments are subject to satisfactory environmental clearance under 24 CFR Part 58.
RECOMMENDATION
Adopt Resolution amending Fiscal Year 2016-17 Community Development Block Grant (CDBG) and HOME Investment Partnership Program (HOME) funds Budget for prior Fiscal Year unspent entitlement and program income allocations
Respectfully submitted,
Debbie Potter, Community Development Director
By,
Claudia Young, Housing Authority Director of Rent and Community Programs
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibit:
1. FY 15-16 CDBG and HOME Carryforward