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January 11, 2022
ITEM TITLE
Grant Acceptance: Accept Federal and State Funds Supplemental Emergency Rental Assistance Program Awards and Enter into a Contractor/Service Provider Agreement with SBCS Corporation for the Administration of the Program
Report Number: 22-0025
Location: No specific geographical location.
Department: Development Services
Environmental Notice: This activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines; therefore, pursuant to State Guidelines 15060 (c)(3) no environmental review is required. Pursuant to the National Enviro nmental Policy Act (“NEPA”), the activity qualifies for a Categorical Exclusion not subject to 24 CFR 50.19(b)(3), (11), and (12) of the Code of Federal Regulations.
Recommended Action
Adopt resolutions A) Authorizing the acceptance of a supplemental allocation from the United States Department of Treasury for an Emergency Rental and Utility Assistance Program and appropriating funds for that purpose (4/5 Vote Required); (B) Authorizing participation in the State of California’s Emergency and Rental Assistance Program, authorizing the City Manager or designee to execute a n amendment to the standard agreement with the State of California Department of Housing and Community Development (“HCD”) for the implementation of said program pursuant to Assembly Bill AB-832 and appropriating funds for that purpose (4/5 Vote Required); and C) Waiving competitive bidding requirements pursuant to Chula Vista Municipal Code Section 2.56.070(b)(3) and authorizing the City Manager or designee to enter into an Agreement w ith SBCS Corporation to continue to provide an Emergency and Utility Assistance Program funded by supplemental State and Federal American Rescue Plan Act of 2021 allocations.
SUMMARY
On August 24, 2021, the City Council approved the allocation of funds for the City of Chula Vista ’s second round of the Emergency Rental Assistance Program (“ERAP”) (Resolutions Nos. 2021-160 and 2020 -161, respectively) funded by the United States Department of the Treasury (“Treasury”) and the State of California Department of Housing and Community Development (“HCD ”) in the amount of $17,531,669.66. This item P a g e | 2
seeks approval to accept supplemental funding of $2.0 million from HCD and $409,925.36 directly from the Treasury towards the City of Chula Vista ’s Emergency Rental Assistance Program ; waive the competitive bidding requirements pursuant to the Chula Vista Municipal Code (“CVMC”) Section 2.56.070(B)(3); and approve an amendment to the City of Chula Vista’s standard two-party agreement with an outside provider, SBCS Corporation, to administer the program.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activities for compliance with the CEQA and NEPA. The proposed activities are not considered “Projects” as defined under Section 15378 of the State CEQA Guidelines because the action consists of a governmental funding mechanism or governmental fiscal activity, is not site specific, and will not result in a direct or indirect physical change in the environment.
Pursuant to NEPA, tenant based rental assistance is categorically excluded from any further review.
Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, and NEPA Code of Federal Regulations at 50.19(b)(3), (11), and (12) these activities are not subject to CEQA or NEPA.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
On December 8, 2021, the Housing Advisory Commission was provided with an informational presentation by City staff regarding the supplemental funding.
DISCUSSION
On March 15, 2021, the City of Chula Vista’s Subrecipient , SBCS Corporation, began accepting applications from eligible renters who were seeking emergency rental and utility assistance due to the global pandemic and/or were impacted by COVID -19. The ERAP program was launched using funds from the Treasury and HCD using two funding rounds as follows.
ERA-1 - Consolidated Appropriations Act of 2021
ERA-1 State Federal Total
Allocation $9,662,343.90 $8,161,123.90 $17,823,467.80
ERA-2- American Rescue Plan Act of 2021
ERA-2 State Federal Total
Allocation $7,600,103.26 $9,931,566.40 $17,531,669.66
Total ERA-1 and ERA-2
State & Federal
$35,355,137.46
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Current Funding
As of December 11, 2021, approximately $30.8 million has been expended using ERA-1 and ERA-2 funding.
Table One below summarizes the $16.84 million that has been spent on direct rental assistance and utility assistance using ERA-1 funding. Table Two summarizes the approximately $14.0 million that has been spent on direct rental assistance and utility assistance using ERA-2 funding.
Table One: Total Amount of Funding Disbursed ERA-1 State and Federal* Applications Funding
Rental Arrears 1067 $12,059,650
Utility Arrears 778 $617,446
Prospective Rent 932 $4,170,701
Total $16,847,797
*100% of the funds allocated for rent and utility assistance have been expended Table Two: Total Amount of Funding Disbursed/Pending Disbursement ERA-2 State and Federal
Applications Funding
Rental Arrears 1,193 $8,297,216
Utility Arrears 455 $433,059
Prospective Rent 1,122 $5,236,065
Total $13,966,340
Additional Funding Request
Due to demand for these funds in response to the COVID -19 Pandemic, HCD and the Treasury sent surveys to ERAP Grantees asking for their need for additional funding. In response to this request for data, the City of Chula Vista submitted a request to each respective agency. In November 2021, HCD notified the City of Chula Vista that the City was approved to receive an additional $2.0 million towards our ERAP. However, due to a technicality in our Resolution, HCD is requesting that the City adopt a revised Resolution allowing the flexibility to accept additional funds if they become available, which allows HCD to quickly deploy these funds. HCD recommends that City Council adopt a resolution that authorizes acceptance of up to $20.0 million. The revised Resolution has been drafted to meet HCD’s requirements.
In addition, the City submitted a r equest to the Treasury for an additional $5.0 million in Emergency and Utility Assistance funding. On December 30, 2021, the City was notified that we received an initial allocation of $409,925.36 from the Treasury. While it is unknown if the City will receive additional allocations beyond P a g e | 4
the supplemental funding of $2,409,925.36 (received from HCD and Treasury), the City’s ERAP program will continue to provide assistance until funds are exhausted.
Conclusion
The deployment of these additional funds will have a direct impact in assisting residents with basic living expenses such as housing and provide housing stability during this public health crisis. Staff recommends City Council adopt all Resolutions in anticipation of receiving additional funding from both HCD and the Treasury. This will allow us to quickly deploy these funds without having gaps in services if our additional funding request is approved.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not a site - specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov’t Code §87100, et seq.).
Councilmember McCann may, however, have a conflict of interest given his ownership interest in rental property and property management business. Otherwise, Staff is not independently aware, and has not been informed by any other City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Approval of Resolution A and B will accept a supplemental ERA Award from HCD and the Treasury and authorize the appropriation of said funds in the fiscal year 2021 -2022 budget. This funding will completely offset the project costs resulting in no net fiscal impact to the Housing Authority Fund. There is no fiscal year impact to the General Fund as a result of this action. All costs associated with the preparation of the staff report and administration of ERA supplemental funding are eligible uses of the grant funds.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact to the City’s General Fund or the Housing Authority Fund, as all costs associated with the administration of ERA programs are covered by the respective grants.
ATTACHMENTS
None
Staff Contact: Jose Dorado, Senior Management Analyst, Development Services Tiffany Allen, Director of Development Services