Title
Public Hearing to Consider Adoption of the Community Development Block Grant (CDBG)/HOME Partnership Investment Program (HOME) Fiscal Year (FY) 2021-22 Action Plan and Authorize the City Manager to Negotiate and Execute Related Documents, Agreements, and Modifications at Funding Levels Approved by Congress. (Community Development 236 & 235)
Body
To: Honorable Mayor and Members of the City Council
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) 2021-22 represents the second 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. In FY 2021-22, the City anticipates receiving $1,141,479 in CDBG funds. As a member of the Alameda County HOME Partnership Investment Program (HOME) Consortium, the City expects to receive $224,884 in FY 2021-22 HOME Program funds. This public hearing is an opportunity for the community to provide input on the proposed programs and projects that will be funded with CDBG and HOME monies in the upcoming fiscal year.
BACKGROUND
The City is an entitlement recipient of CDBG funds from HUD. CDBG funds support programs and activities that benefit low- and moderate-income persons and households and which help 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 consulted with community-based service providers, residents, and City departments and boards. The community stakeholders helped to establish priority needs and objectives and proposed strategies in the form of projects and activities to further those objectives. On January 28, 2021, the Social Service Human Relations Board (SSHRB) discussed priority needs and made a recommendation to the City Council regarding public service needs for the upcoming fiscal year. A public hearing regarding public service needs was held at the City Council’s February 16, 2021 meeting. No written comments were received and the City Council adopted the needs statement as recommended by the SSHRB.
On February 25, 2021, HUD announced CDBG allocations for the FY 2021-22 Action Plan period. The City will receive $1,141,479 in CDBG funds and $80,400 in program income from CDBG loan repayments in FY 2021-22. Program income is generated from CDBG loans that have been issued through the residential rehabilitation programs. In addition, as a member of the Alameda County HOME Partnership Investment Program (HOME) Consortium, the County has allocated $224,884 to the City in FY 2021-22 HOME Program funds.
The citizen participation requirements have been met for the public hearing, with publication of the notice in the April 1, 2021 Alameda Sun newspaper, as well as in Chinese, Spanish, Tagalog, and Vietnamese-language newspapers. Accommodations are available for non-English speaking residents and persons with disabilities to participate in the public comment process.
DISCUSSION
The City is one of eight jurisdictional members of the Alameda County HOME Consortium (HOME Consortium) through which participating jurisdictions may receive HOME funding from HUD. Each member of the HOME Consortium must prepare its individual Action Plan. As the lead agency, Alameda County coordinates the timing and final submission of the Action Plan to HUD.
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:
• Alameda County report on Analysis of Impediments to Fair Housing
• Alameda County EveryOne Home reports
• City of Alameda Community Needs Assessment 2017
• City of Alameda Homelessness Report 2018
• Consultation with community-based organizations
• Domestic Violence Task Force
• SSHRB meeting on public services needs
• City Council Annual Public Needs Hearing
The draft FY 2021-22 Action Plan is attached as Exhibit 1. The proposed activities for FY 2021-22 are intended to address both the current urgent needs that arose from the coronavirus and subsequent shelter-in-place orders while also preparing the City and its most vulnerable residents for recovery. As the public service providers are in the last year of their multiyear contracts, SSHRB will review and approve recommendations for CDBG public service funding at its April 22, 2021 meeting. The letter from SSHRB is included as Exhibit 2.
There are three public improvement programs proposed:
1. Design, planning and permitting for the Resource Center at McKay.
2. Health, safety and energy efficiency improvements at Midway Shelter, including replacing dilapidated windows and unsafe decking that provides access to each of the trailers.
3. Site preparation and other improvements for the Community Cabins.
In addition, staff received an application for a residential rehabilitation loan to renovate eleven (11) vacant units. Exhibit 3 contains a summary of the activities that are recommended for funding in FY 2021-22.
Funding sources for the proposed activities include FY 2021-22 entitlement funds ($1,141,479), program income ($80,400), and carry-forward funds. The carry-forward funds (i.e., appropriated but unexpended funds) from the prior year are encumbered within the same grant year until a project is completed or a project is identified and funds are reprogrammed to the new project. This Action Plan includes approximately $1,642,796 of carry-forward funds, based on the balance as of April 1, 2021. It should be noted that the current fiscal year is unusual in that HUD released the entitlement funds to the City on March 23, 2021 whereas the funds normally would have been received last September. Consequently, staff has anticipated that the City will carry forward funds for all of the public improvement and residential rehabilitation projects that were approved for the current fiscal year (Alameda Boys & Girls Club, Community Cabins, Midway Shelter and the Woodstock Park Public Improvement project). On the other hand, all of the projects that were awarded funds for demolition of structures to prepare for future development of affordable housing have completed demolition, and the remaining funds will now be reprogrammed for other uses.
HOME Funding Allocation and Activities
As a member of the Alameda County HOME Consortium, the City expects to receive $224,884 in FY 2021-22 HOME funds of which $12,918 may be used for administrative purposes. Staff received one application for HOME funds for the preservation and rehabilitation of naturally occurring affordable housing at 434 Central Avenue. Staff recommends allocating the available project funds of $211,966 plus any program income (the County will confirm the amount after June 30) for a total of approximately $215,000 to this project. Currently, the City is carrying forward $332,330 of HOME funds that have been allocated to 1245 McKay. To comply with HUD requirements, staff will first use the oldest funds available.
ALTERNATIVES
City Council could:
• Hold a public hearing to consider adoption of the CDBG/HOME FY 2021-22 Action Plan and authorize the City Manager to negotiate and execute related documents, agreements, and modifications to implement the programs described above.
• While CDBG regulations require that a public hearing be held to adopt the annual Action Plan, City Council could 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 the recommendations prior to acceptance. Such modifications could include making changes to the programs to be funded or revising the proposed funding allocation among the proposed projects.
• Decline to move forward with adopting the proposed CDBG/HOME FY 2021-22 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 2021-22 CDBG/HOME Action Plan. CDBG/HOME funds received will be budgeted in the CDBG Fund 236 and HOME Fund 235. This Action Plan will appropriate an estimated $1,141,479 in CDBG Entitlement funds. Other CDBG funds noted in the Action Plan include an estimated $80,400 in program income from loan repayments in FY 2021-22 from the Substantial Rehabilitation and Residential Rehabilitation programs. The Action Plan proposes to appropriate approximately $224,884 of HOME funds for affordable housing administration, construction, and rehabilitation projects. In addition, staff proposes to appropriate and carry forward approximately $1,642,796 of CDBG funds and $332,330 of HOME funds from prior years’ allocations. The CDBG and HOME appropriations for FY 2021-22 will be subject to City Council appropriation approval as part of the adoption of the proposed FY 2021-23 biennial budget in June 2021.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The proposed Action Plan is consistent with the City’s CDBG Five-Year Strategic 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.
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 FY 2021-22 Action Plan and authorize the City Manager to negotiate and execute related documents, agreements, and modifications at funding levels approved by Congress.
CITY MANAGER RECOMMENDATION
The City Manager recommends approval.
Respectfully submitted,
Lisa Nelson Maxwell, Community Development Director
By,
Lisa Fitts, Community Development Program Manager
Financial Impact section reviewed,
Annie To, Finance Director
Exhibits:
1. Draft FY 2021-22 Action Plan
2. SSHRB FY 2021-22 Public Services Support Letter
3. Draft FY 2021-22 Action Plan Summary of Activities Recommended for Funding
cc: Eric Levitt, City Manager
Social Service Human Relations Board