Agenda #: 5.4
Meeting Date: June 6, 2023
TO: Honorable Mayor and Members of the City Council
FROM: Daniel Fox, City Manager
TITLE: A THREE-YEAR COOPERATION AGREEMENT WITH THE LOS
ANGELES COUNTY DEVELOPMENT AUTHORITY TO PARTICIPATE
IN THE LOS ANGELES URBAN COUNTY COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM FOR FISCAL
YEARS 24/25 THROUGH 26/27.
STRATEGIC
GOAL: Responsible Stewardship of Public Resources
RECOMMENDATION:
Adopt Resolution No. 2023-14 approving the City's participation in the Los Angeles Urban County CDBG Program and the execution of the 2024-2026 Cooperation Agreement between Los Angeles County and the City of Diamond Bar.
FINANCIAL IMPACT:
The City receives approximately $260,000 in CDBG Funds annually. All expenditures associated with the CDBG Program are funded through the City’s annual CDBG Grant allocation process and approved separately by the City Council.
BACKGROUND:
Diamond Bar has been a participating city in the Los Angeles Urban County Community Development Block Grant (CDBG) Program since July 1991. The Los Angeles County Community Development Authority (LACDA) administers the program and allocates CDBG funds received from HUD to the participating cities. Every three years, the County requires that participating cities enter into a Cooperation Agreement with the County. The current agreement will expire June 30, 2024.
The County is requesting that cities approve a new Cooperation Agreement to continue participation in the next three-year funding cycle. To remain eligible as a participant in the Urban County CDBG Program for the 2024-2026 funding cycle commencing July 1, 2024 and ending June 30, 2027, the City is required to submit a signed Cooperation
Agreement to LACDA no later than July 14, 2023.
The Attached Resolution (Attachment 1) provides the necessary authorization for the Mayor to sign the Cooperation Agreement, and authorization for the City Manager, or designee, to sign other documents necessary to administer the CDBG Program. The draft Cooperation Agreement is included in Attachment 2.
CDBG projects funded by the City of Diamond Bar include an allocation of 20% toward public services programs and 80% toward public works projects and housing programs.
Currently, CDBG funding is provided for senior programs, the Home Improvement Program, and ADA curb ramp improvements.
As a participant in the Los Angeles Urban County CDBG Program, the City retains control over funding decisions for the use of CDBG funds subject to CDBG Program regulations. CDBG program administration is currently provided by City staff with the assistance of a consultant to prepare the annual project descriptions and summaries, quarterly performance reports, County and federal CDBG reports and documents, prevailing wage monitoring, and to ensure compliance with Federal requirements and guidelines.
The County provides staff resources and assistance to the participating cities including preparation of the Consolidated Five-Year and Annual Plans and Consolidated Annual Performance Evaluation Report, oversight of the Integrated Disbursement and Information System (IDIS) and IDIS Reports, support for CDBG/HUD environmental review and clearances, CDBG program training, and assistance with monitoring and audits.
Entitlement Communities
CDBG “entitlement communities” are designated as cities in a metropolitan statistical area, cities with populations of at least 50,000 and qualified urban counties with populations of at least 200,000. The City of Diamond Bar qualifies as an entitlement city, and is eligible to apply for CDBG funds directly from the U.S. Department of Housing and Urban Development (HUD). As an entitlement community, the City would be responsible for all of the HUD planning, reporting and compliance requirements.
DISCUSSION:
The LACDA has invited the City to continue its participation in the Urban County CDBG Program for another three-year period. Although eligible to become an entitlement city, Diamond Bar has thus far opted to remain in the Los Angeles Urban County CDBG Program during each three-year funding renewal cycle so that it could utilize the personnel and technical resources provided by the LACDA.
Should the City of Diamond Bar decide to become an entitlement city, the City would be allowed to use twenty percent (20%) of the CDBG allocation for administration expenses. However, there would be an increase in reporting requirements and regulations that the City would be responsible to administer. The entitlement cities typically hire CDBG staff to administer the day-to-day activities of the program, as well as consultants to assist with the CDBG planning and reporting requirements. In addition, the City would be assigned a HUD Program Manager to monitor the City’s performance and provide training and technical assistance.
If the City were to become an entitlement city, the annual CDBG allocation could increase or decrease based on the national CDBG funding pool. HUD determines the amount of each entitlement grant by a formula using measures of community needs including the extent of poverty, population, housing overcrowding, age of housing, and population growth lag in relationship to other metropolitan areas.
Should the City remain in the Urban County CDBG Program, the City would remain eligible to participate in other programs administered by the LACDA. The City would be eligible to continue its participation in the County’s HOME Program which includes a First Time Homebuyer’s Program. Additionally, the City may participate in the Emergency Solutions Grants (ESG) Program and Mortgage Credit Certificate (MCC) Program. Furthermore, the County often provides additional assistance to the cities by undertaking County-funded or jointly funded community development activities within the local jurisdictions. These services are provided at no additional cost to the City.
It is recommended that the City of Diamond Bar continue its participation with the County CDBG Program. The City’s annual CDBG allocations have ranged from $230,000 to $262,500 over the past three years. If the City becomes an entitlement City, there are no assurances that the annual CDBG allocation would increase significantly. However, it is certain that there are additional responsibilities and requirements for an entitlement city which would necessitate an increase in staff time and costs. In light of these factors, the more fiscally sound option would be for the City would be to continue participating in the County CDBG Program.
LEGAL REVIEW:
The City Attorney has reviewed and approved the Agreement as to form.
PREPARED BY:
REVIEWED BY:
Attachments:
1. 5.4.a Resolution No. 2023-14
2. 5.4.b LACDA Cooperation Agreement for FY 2024-26