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April 9, 2024
ITEM TITLE
Housing Grant Funding: Receive Recommendations for the Fiscal Year 2024/2025 U.S. Department of Housing and Urban Development Annual Action Plan
Report Number: 24-0049
Location: Third Avenue from West/South Orange Ave. to Anita St., East/South Anita St. to Zenith Street. All other projects are not location specific.
Department: Housing and Homeless Services Department
G.C. § 84308: Yes
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines and Title 24 of the Federal Code of Regulations; therefore, pursuant to State Guidelines Section 15060(c)(3) and Fe deral Guidelines Part 58.34(a)(2) & (3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of CEQA and Part 58.34 (a)(2) & (3) of the National Environmental Policy Act (“NEPA”).
Recommended Action
Conduct the public hearing and receive community input on the Fiscal Year 2024/25 U.S. Department of Housing and Urban Development Annual Action Plan recommendations for Federal Grant funding, including the Community Develop ment Block Grant, Emergency Solutions Grant, and the Home Investment Partnerships Act programs.
SUMMARY
The City of Chula Vista has received and reviewed funding applications for the U.S. Department of Housing and Urban Development grant programs inclu ding: (1) Community Development Block Grant; (2) HOME Investment Partnerships Act; and (3) Emergency Solutions Grant funds. This public hearing will provide the community an opportunity to provide input on the proposed Fiscal Year 2024/2025 funding recommendations for the City’s use of these federal grant programs.
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ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with CEQA and NEPA. The activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because the proposal consists of a reporting action, is n ot for a site-specific project(s), and will not result in a direct or indirect physical change in the environmental. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Under NEPA, the activity is exempt pursuant to Title 24, Part 58.34(a)(2) & (3) of the Code of Federal Regulations and pursuant to the U.S. Department of Housing & Urban Development Environmental Guidelines. Thus, no further environmental review is necessary at this time. Although envi ronmental review is not necessary at this time, once a project(s) has been approved, environmental review will be required and a CEQA/NEPA determination completed prior to initiation of any related project activity.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
As an entitlement community with the U.S. Department of Housing and Urban Development (“HUD”), the City of Chula Vista receives annual funding under three entitlement block grant programs: Community Development Block Grant (“C DBG”), HOME Investment Partnerships Act (“HOME”) , and Emergency Solutions Grant (“ESG”) . The grant amounts allocated to each jurisdiction are determined using a formula based on statistical and demographic data. The purpose of this funding is to provide housing, a suitable living environment, and to expand economic opportunities principally for low- and moderate-income persons. As a recipient of these HUD funds, the City is required to adopt a five -year planning document entitled the Consolidated Plan (the “ConPlan”), which describes the City's five-year strategy for use of these funds based upon the identified goals and objectives related to its housing and community development priorities.
The City annually selects activities for funding that best meet the needs of the community as specified within the ConPlan, while also meeting the national objectives and requirements of the grant funds. The selected activities are then incorporated into a one -year planning document, known as the Annual Action Plan (the “Action Plan”). The Action Plan constitutes the City’s formal funding application to HUD for the corresponding grant year. The Fiscal Year 2024/2025 (“FY 24/25”) Action Plan represents the third year of the ConPlan period.
The City’s 2020-2024 Five-Year ConPlan identifies a total of five priorities under Housing and Community Development for funding consideration as summarized in Table I.
Table I: 2020/2024 Consolidated Plan Funding Priorities
PRIORITY GOAL ACTIVITY TYPE
Homelessness
Assist individuals and families to gain stable
housing after experiencing homelessness or
a housing crisis by providing appropriate
services and housing solutions on a path to
stability.
Shelter Operations
Homeless Prevention
Homeless Outreach
Homeless Supportive Services
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Social Service
Programs
Invest in community social services to
promote equity and serve the most
vulnerable of the community’s population.
Public Services to Low/Moderate
Income including the following
population:
Homeless Veterans; Youth;
Seniors; Victims of Domestic
Violence; Special
Needs/Disabled
Capital
Improvement
and Public
Facilities
Support the development of vibrant,
equitable and accessible neighborhoods by
investing in public facilities and
infrastructure.
ADA improvements
New streets and sidewalks
Public facility improvements
Economic
Development
Enhance the City’s economic stability by
investing in inclusive economic growth
initiatives that develop and strengthen
small businesses, employment and
workforce development programs, and
improving access to jobs.
Business Financial Assistance
Programs
Business Technical Assistance
Job Training and Placement
Affordable
Housing
Increase affordable rental and owner-
occupied housing to improve housing
opportunities that reflect the community’s
needs.
New Construction
Acquisition
Rehabilitation
First-Time Homebuyer
Assistance
Tenant-Based Rental Assistance
2024/2025 ANNUAL ACTION PLAN
As of the date of this report, HUD has not provided the City’s allocation amounts for 202 4/2025 since Congress has not yet completed the appropriations process. HUD has instructed cities to continue their normal annual planning process and to submit the Action Plan once the 202 4/2025 allocations have been announced.
For the purposes of this report and in preparation of the Action Plan, staff will be assuming a slight reduction from prior year funding for the CDBG, HOME , and ESG grant programs for planning purposes. In the event that the City receives a higher allocation, staff has identified projects within the grant programs for increased funding. These projects are identified in the respective program sections below.
Table II: 2024/2025 Anticipated Grant Funding
PROGRAM ENTITLEMENT
AMOUNT
PRIOR YEAR
(UNENCUMBERED)
TOTAL AVAILABLE
FOR 2024/2025
Community Development Block Grant $2,321,225 $0 $2,321,225 Home Investment Partnerships Act $ 894,917 $0 $894,917 Emergency Solutions Grant $ 201,908 $0 $ 201,908
Total $3,418,050 $0 $3,418,050
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Funding Requests
As part of the annual Action Plan process, the City releases a Notice of Funding Availability (“NOFA”) for the three grant programs. City Staff advertised the NOFA at local meetings of the Chula Vista Community Collaborative and also emailed the NOFA to all formerly funded agencies and interested parties. The NOFA was released on February 1, 2024, with a submittal deadline of March 1. Housing staff has reviewed all proposals to ensure compliance with the prescribed regulations and consistency with the City’ s goals and objectives.
An executive summary was prepared for each request which summarizes the requested funding level, proposed use of funds, and benefit to the community in Attachment 1. The federal grant funding recommendations for CDBG, HOME, and ESG are presented below.
Community Development Block Grant (CDBG)
For FY 24/25, the City will utilize an estimated total of $2,321,225 of CDBG funds. All projects considered for funding must address at least one of the three CDBG National Objectives: (1) benefit primarily low/moderate income families; (2) aid in the prevention or elimination of slums or blight; or (3) meet community needs due to a major emergency such as a natural disaster.
Projects are then classified into three distinct categories:
1. Administration and Planning
2. Public Services
3. Capital Improvement Projects (“CIPs”) and Community Development
Below is a summary of the funding recommendations under each respective category.
1. Administration/Planning Recommendations
Funds under this category cover all City staff costs associated with the management and administration of the City of Chula Vista's CDBG program including regulatory compliance, contract administration, subrecipient monitoring and fiscal management. This also includes preparation of the required planning documents, such as the Annual Action Plan, the Consolidated Plan, and the Analysis of Impediments to Fair Housing Choice. As detailed in Table III, Federal regulations governing the CDBG program limit the amount that the City spends on administration/planning activities to 20 percent (20%) of the entitlement amount for the program year (estimated cap of $464,245 in 2024/25).
A portion of the City’s CDBG Administration/Planning allocation is allocated to the City’s Fair Housing Provider. This year, for the first time the City received multiple applications from Fair Housing Providers.
After careful and thorough review of the applications Staff decided to continue to contract with CSA San Diego County.
Table III: 2024/2025 CDBG Administration Funding
Applicant Program Recommended
1 Housing and Homeless
Services Department
CDBG Administration/Planning $399,245
2 CSA San Diego County Fair Housing and Tenant/Landlord Services $65,000 Total $464,245
2. Public Services Program Recommendation
Funds for Public Services activities are awarded to local agencies and community organizations to implement projects and programs that improve the lives of low-income residents, including the elderly, P a g e | 5
disabled, at-risk, and persons living in homelessness. The amount of funds the City may allocate to public services is limited to fifteen percent (15%) of the annual entitlement ( estimated cap of $ 348,184 in 2024/25). Staff’s funding recommendations for public service activities are based on funding priorities established in the ConPlan, along with application scoring and an established ranking criterion which categorizes the programs by community need (Tier I-III, with Tier I being the highest).
Public Services Community Need Ranking
Tier I
(highest) Tier II Tier III
Emergency Needs:
Programs that address basic,
fundamental needs
including shelter, food, and
other commodities.
Special Needs/Disabled:
Programs that provide services to
persons with disabilities, special
needs, and who are at high-risk.
Other General Services:
All other services which do not
fall within Tier I or II and provide
general public services to
low/moderate income persons.
A total of fourteen public service applications were received and all fourteen are being recommended for funding. All recommended funding requests are previous grant recipients and are in good standing with the City of Chula Vista and HUD.
Summarized in Table IV are the list of applicants, program name , requested funding, and amount of recommended funding by staff.
Table IV: 2024/2025 CDBG Public Services
Applicant Program Requested Recommended
3 Chula Vista Elementary
School District
Family Resource Center
Emergency & Basic Services1
$50,000
$25,000
4 Chula Vista Housing and
Homeless Services
Department
Hotel/Motel Voucher Program2 $25,000
$11,184
5 City of Chula Vista Parks
and Rec
Norman Park Senior Center
$30,000
$30,000
6 City of Chula Vista Parks
and Rec
Therapeutic Recreation Programs
for Adults with Severe Disabilities
$20,100
$20,000
7 Family Health Centers of
San Diego
Family Health Centers of San
Diego Mobile Medical Services
$30,000 $30,000
8 Jacobs & Cushman San
Diego Food Bank
Food for Kids Backpack Program
$15,000 $15,000
9 Mama's Kitchen Home-Delivered Meal Service $10,000 $10,000
10 McAlister Institute Work for Hope1 $363,524 $60,000
11 Meals-on-Wheels Greater
San Diego
Senior Meal Delivery &
Accompanying Services1
$30,000 $25,000
12 SBCS Corporation Family Violence Support Services $44,802 $40,000
13 SBCS Corporation Homeless Services1 $50,120 $40,000
14 SBCS Corporation South Bay Food Program1 $20,000 $11,000
15 Voices for Children Court Appointed Special Advocate (CASA) Program1
$20,000 $15,000
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16 Interfaith Shelter
Network of San Diego
Rotational Shelter Program
$17,000 $16,000
Total
$348,184
1The amount of funding recommended reflects previous allocations to this project. 2Should the City receive a greater or lower CDBG entitlement amount than that anticipated, funding will be allocated to or unallocated from this project.
3. CIPs and Community Development
After the Public Services and Administration activities are funded, a n estimated total of $1, 508,796 remains for eligible capital improvement projects, public facility improvements, and other housing/community/economic development-related activities. The City has earmarked $682,450 for the annual Castle Park Infrastructure Section 108 debt service payment, with four years remaining on the 20-year loan term. This leaves a balance of $826,346 for new projects.
To be considered eligible for funding within the CIP category, the project must be located in a primarily residential area designated as low/moderate income by the U.S. Census and cannot be regional in nature (serving the entire City or county region). Priority is given to those projects with the most effectiveness and the greatest feasibility by demonstrating leveraging of additional funding sources, benefit and impact to the community, and relevance to the City of Chula Vista’s Critical Needs List and/or Pedestrian Master Plan.
A total of five applications are presented under this category: the City’s Section 108 Loan pa yment, the City’s Community Housing Improvement Program (CHIP), the City’s Housing Services Program, one CIP (3rd Avenue), and the BOOST program offered by Upwards, formerly WeeCare Inc. A funding request for an additional CIP, Alpine Avenue, was not funded.
Table V: 2024/2025 CDBG Community Development Projects Applicant Program Recommended
17 Chula Vista Engineering Department
3rd Avenue
$410,000
18 Upwards BOOST (Business Operations &
Optimization Tools)
$240,000
19 Chula Vista Housing and Homeless
Services Department
Community Housing Improvement
Program3
$101,346
20 Chula Vista Housing and Homeless
Services Department
Housing Services
$75,000
21 Chula Vista Housing Homeless
Services Department
Section 108 Loan $682,450
TOTAL $1,508,796
3Should the City receive a greater or lower CDBG entitlement amount than that anticipated, funding will be allocated to or unallocated from this project.
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The 3rd Avenue project is for sidewalk gap
improvements along Third Avenue West/South
Orange Ave. to Anita St., East/South Anita St. to Zenith Street. The project will include installation of missing curb, gutter , and sidewalk in various locations . Per
CDBG regulations, CIP projects must serve an area
where at least 51% of residents are low and moderate
income. Provided with a description of the project is a map illustrating the location and HUD -designated
Low/Moderate Income Census Tract (shaded in
Yellow).
The BOOST Program offered by Upwards assists micro-enterprise in-home daycares through personalized coaching and technical assistance. Low-income business owners in Chula Vista will be assisted, increasing both the strength and income of these microenterprise daycares, while also increasing childcare options for Chula Vista residents. This program’s goals align with the City’s 2020-2024 ConPlan economic development goals of business technical assistance and job creation. Upwards demonstrates thorough knowledge of CDBG regulations, is in good standing with HUD, and Staff are fully confident in their ability to execute the programming.
Home Investment Partnerships Act (HOME)
HOME funds may be used to provide affordable rental housing and home ownership opportunities through:
1. New construction
2. Acquisition
3. Rehabilitation
4. First-time homebuyer assistance
5. Tenant-based rental assistance
For 2024/25, the City of Chula Vista will utilize the HOME entitlement to address the City’s housing priorities of the 2020/2024 ConPlan ( estimated a llocation amount of $894,917) per Table VI . Per the HOME regulations fifteen percent (15%) of the annual allocation must be set aside to assist Community Housing Development Corporations (CHDOs) for the creation of affordable housing units ( estimated minimum of $134,237.55 in 202 4/25). Should these funds not be utilized in a timely manner for this specific purpose, these funds would be recaptured by HUD and would be unavailable to the City. The City will allocate this year’s 15% towards “Production of Affor dable Housing”, with the intend to award funds to an affordable housing developer identified through an open RFP process . City Staff closed an RFP today and will review bids over the coming weeks.
The City received one application eligible for HOME funds from SBCS to provide tenant -based rental assistance for general low- and moderate-income residents. The remainder of funds will be utilized for the City’s own tenant-based rental assistance.
Table VI: 2024/2025 HOME Projects
Applicant Program Recommended
25 Chula Vista Housing and Homeless
Services Department
HOME Planning and Administration
$89,492
3rd Avenue Improvement
Project Limits
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26 Chula Vista Housing and Homeless
Services Department
Production of Affordable Housing4 $134,238
27 Chula Vista Housing and Homeless
Services Department
Tenant-Based Rental Assistance5 $271,187
28 SBCS Corporation Tenant-Based Rental Assistance $400,000 TOTAL $894,917
4CHDO funding set-aside.
5Should the City receive a greater or lower HOME entitlement amount than that anticipated, funding will be allocated to or unallocated from this project.
Emergency Solutions Grant (ESG)
Chula Vista will receive an estimated $201,908 in ESG entitlement funds for FY 2024/25. ESG funds may be used to provide homeless services through:
1. Homeless Prevention
2. Rapid Re-Housing (rental assistance)
3. Street Outreach
4. Emergency Shelter
5. Homeless Management Information Systems (“HMIS”)
The City received one proposal for ESG ; an application from SBCS Corporation for operations of the Casa Nueva Vida shelter. SBCS is a previous grant recipient and is in good standing with the City of Chula Vista and HUD. The remaining funds will be earmarked for Planning and Administration Costs (7.5% of the entitlement, or an est imated $15,143 in 202 4/25), and Homeless Prevention Services, as detailed in Table VII . The Homeless Prevention program will be administered by Housing staff.
Table VII: 2024/2025 ESG Projects
Applicant Program Recommended
22 Housing and Homeless Services
Department
ESG Planning and Administration $15,143
23 Housing and Homeless Services
Department
Homeless Prevention Program6 $116,765
24 SBCS Corporation ESG - Casa Nueva Vida $70,000
TOTAL $201,908
6Should the City receive a greater or lower ESG entitlement amount than that anticipated, funding will be allocated to or unallocated from this project.
Conclusion
While the ESG and the HOME programs were designed to meet very specific objectives, the CDBG program allows flexibility in the type of activities it funds. This allows the City to leverage its CDBG funds with ESG and HOME funds to maximize the impact of the grant funding to meet the housing needs of the lower income community. As the cost of hous ing has increased year after year, far outpacing income growth, housing has become increasingly unaffordable to more members of the community. The City’s Housing and Homeless Services Department continues to pursue funding opportunities to leverage with av ailable Housing funds, including HOME, to develop affordable housing projects and programs.
Staff recommends that the City Council conduct the public hearing to solicit input from the community on the 2024/25 funding recommendations presented. The 2024/2025 Annual Action Plan was released on the P a g e | 9
City’s federal grant webpage for the required 30-day review, the comment period began on April 3, 2024 and will close May 3, 2024.
Staff will incorporate all public comments into the final Annual Action Plan, to be brought forward for City Council consideration on May 7, 2024.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the 3rd Avenue CIP which is the subject of this action. It was determined that Mayor John McCann has real property holdings within 500 feet of the boundaries of the property located at 31 4th Avenue which is also subject of this action. Consequently, pursuant to California Code of Regulations Title 2, sections 18700 and 18702.2(a)(7), this item presents a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.) for the above-identified member.
Staff is not independently aware, and has not been informed by any 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
There are no current year fiscal impacts to the General Fund as a result of this action. At this time, Council is reviewing the funding allocation requests for CDBG, HOME, and ESG funds. Appropriations for the proposed CDBG, HOME and ESG programs will be requested at a later date.
In the remote event that HUD should withdraw the City's CDBG, HOME, and ESG funding, the Agreements/Memorandum of Understandings provide that the City is not obligated to compensate subrecipients or City Departments for program expenditures. Recommended funding allocations are summarized below.
Community Development Block Grant (CDBG)
Public Services $348,184
CDBG Administration and Planning $464,245
Section 108 Loan Payment $682,450
Capital Improvement and Housing $1,508,796
Subtotal $ 2,321,225
Home Investment Partnerships Act (HOME)
HOME Planning and Administration $89,492
Affordable Housing Projects/Programs $805,425
Subtotal $894,917
Emergency Solutions Grant (ESG)
ESG Administration and Planning $15,143
Shelter Services $70,000
Homeless Prevention and Rapid Re-Housing $116,765
Subtotal $201,908
TOTAL CDBG, HOME and ESG $3,418,050
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ONGOING FISCAL IMPACT
There is no ongoing fiscal impact to the City's General Fund as a result of this action. All costs associated with the administration of the CDBG, HOME and ESG programs are covered by the respective grants.
ATTACHMENTS
1. 2024/2025 Federal Grant Funding Recommendations
Staff Contact: Dania Gonzalez, Principal Management Analyst Mark Barnard, Management Analyst II