Title
Public Hearing to Consider Adoption of the Fiscal Year (FY) 2017-18 Community Development Block Grant (CDBG)/HOME Partnership Investment Program Action Plan; and Authorize the City Manager to Negotiate and Execute Related Documents, Agreements, and Modifications at Funding Levels Approved by Congress. (Housing 266)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Public Hearing to Consider Adoption of the Fiscal Year (FY) 2017-18 Community Development Block Grant/HOME Partnership Investment Program Action Plan and Authorize the City Manager to Negotiate and Execute Related Documents, Agreements, and Modifications at Funding Levels Approved by Congress
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). CDBG funds support programs and activities that benefit low-and moderate-income persons and households and help prevent or eliminate slums and blight. Each year, entitlement cities must follow a process to receive public input, establish community goals and prepare a budget for the coming year. Each city must also prepare and submit an Action Plan to HUD for formal approval.
In the FY 2017-18 Action Plan period, the City will receive approximately $1,059,118 in CDBG Entitlement funds. In addition, as a member of the Alameda County HOME Partnership Investment Program (HOME) Consortium, the City of Alameda expects to receive approximately $156,659 in FY 2017-18 HOME funds. To receive CDBG/HOME 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 Five-Year Consolidated Plan. By May 15, 2017, the FY 2017-18 CDBG/HOME Action Plan, describing the proposed use of CDBG/HOME funds in the coming year, must be approved by the City Council and submitted to Alameda County to transmit to HUD. All grant funds are subject to federal budget appropriations.
The citizen participation requirements with respect to the public hearing have been met by publication of the notice in the March 31, 2017 Alameda Journal, as well as in Chinese, Tagalog, Vietnamese, and Spanish-language newspapers. Provisions for non-English speaking residents and persons with disabilities have been made available and the FY 2017-18 Action Plan is attached as Exhibit 1.
DISCUSSION
CDBG Funding Allocation
The City prepares an annual Action Plan that identifies specific objectives and the proposed uses of CDBG funds. The Action Plan funding recommendations are based on needs identified through a number of community meetings and reports, including the Alameda County report on Analysis of Impediments to Fair Housing, the County Everyone Home reports, consultation with community-based organizations, and results received from a periodic online community needs survey, the City Council annual Public Needs Hearing and the Social Services and Human Relations Board (SSHRB) public meeting on public services needs held on December 1, 2016. In addition to the Action Plan, staff has prepared an Action Plan Summary (Exhibit 2).
The summary lists activities recommended for funding in FY 2017-18 and carry-forward funds. Public Services funding is capped at 15% of the annual appropriation. As an entitlement jurisdiction that receives federal funds, the City is required to comply with HUD Fair Housing requirements. Therefore, staff recommends $15,000 to fund the City’s Fair Housing Program through a contract with ECHO Housing. These funds are included in the total recommendation for funding for ECHO Housing counseling services. In addition, $18,556 is proposed to fund the Eden I&R 211 Information and Referral Program. This amount reflects the City’s portion of a County-wide social services referral service. The funding for ECHO and Eden I&R is subtracted from the Public Services cap. The SSHRB reviews and makes recommendations regarding the remaining funds for Public Services. Exhibit 2 reflects SSHRB’s public services funding recommendations from its March 24, 2016 public meeting. SSHRB provided a letter supporting staff recommendations attached as Exhibit 3. The Public Services funding is for two consecutive years (FY 2016-17 and 2017-18), and is subject to federal budget appropriations.
Each annual Action Plan also includes estimated carry-forward funds (i.e. appropriated but unexpended funds) from the prior year and those remaining funds are encumbered within the same grant year until a project is complete or a project is identified and funds are reprogrammed to the new project. Staff will return to the City Council to request appropriation of the carry-forward funds after the close of the City’s Fiscal Year 2016-17.
HOME Funding Allocation and Activities
As a member of the Alameda County HOME Consortium, the City of Alameda expects to receive approximately $156,659, FY17-18 HOME funds. It is recommended that the City use its HOME allocation for the construction and/or rehabilitation of affordable housing. These funds are also subject to federal budget appropriations.
Potential Federal Budget Variance
As of the preparation date of this staff report, Congress has not approved a federal budget for the current Fiscal Year (FY 2016-17). The federal budget for FY 2016-17 is the source of funds for the CDBG/HOME program during City’s FY 2017-18. HUD issued written guidance to all entitlement jurisdictions regarding the preparation of Action Plans for the coming year. The guidance states that jurisdictions may follow the ordinary public hearing process and assume level funding from the prior year, but the approval must acknowledge a potential budget decrease in CDBG/HOME funding and a statement of how a reduced funding amount will be budgeted. Therefore, staff is recommending that all activities funded through CDBG/HOME be proportionally increased or decreased from the estimated funding levels to match the actual CDBG/HOME grant amounts once appropriated by Congress.
In the unlikely event that the federal budget has not been adopted by the start of the City Fiscal Year (July 1, 2017), no CDBG funds would be available until a federal budget is adopted. Staff has, therefore, notified the recommended sub-recipients/grantees regarding the possibility of not having CDBG/HOME funds available at the start of the July 1, 2017 program year. Sub-recipients are expected to have a contingency plan in place.
FINANCIAL IMPACT
The CDBG/HOME funds will be budgeted in the separate special revenue funds as part of the Housing Program (CDBG Fund 236 and HOME Fund 235). This Action Plan will allocate $1,059,118 in CDBG Entitlement funds. Other CDBG funds noted in the Action Plan include an estimated $150,000 in program income from loan repayments in FY 2016-17 from the Substantial Rehab and Residential Rehab programs. The Action Plan will allocate approximately $156,659 of HOME funds for administration, construction, and rehabilitation projects. There is no impact on the General Fund.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The proposed Action Plan is consistent with the City’s CDBG Five-Year Consolidated Plan and citizen participation requirements.
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.
RECOMMENDATION
Adopt the FY17-18 CDBG/HOME Action Plan and authorize the City Manager to negotiate and execute grant agreements, grant modifications, and other related documents at funding levels approved by Congress.
Respectfully submitted,
Debbie Potter, Community Development Director
By,
Claudia Young, Director of Rent & Community Programs
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. CDBG FY17-18 Action Plan
2. CDBG FY17-18 Action Plan Summary of Activities Recommended for Funding
3. SSHRB Recommendation for FY16-17 & FY17-18 Non-Housing Public Service Allocations