Fremont City Council Meeting: 05/07/24 07:00 PM
3300 Capitol Avenue Div/Dept: Human Services Department Fremont, CA 94538 Category: Agreements and Contracts
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5145) DOC ID: 5145 E
Updated: 5/3/2024 1:42 PM by Dina Lewis E Page 1
FEDERAL ACTION PLANS - Public Hearing (Published Notice) on the Use of Fiscal Year (FY) 2024-26 Federal Community Development Block Grant and Emergency Solutions Grant Funds, and FY 2019/20 Federal CARES Act Funds; Adoption of a Resolution Approving the FY 2024/25 Annual Action Plan, Amending the FY 2019/20 Action Plan; and Authorizing the City Manager to Execute Agreements with the U.S. Department of Housing and Urban Development and Grantees and Making Findings of CEQA Exemption Contact Persons:
Name: Robert Lopez Suzanne Shenfil
Title: CDBG Administrator Director
Div/Dept: Human Services Department Human Services Department Phone: 510-574-2043 510-574-2051
E-Mail: [email protected] [email protected]
Executive Summary: The purpose of this report is to complete regulatory requirements associated with Federal Department of Housing and Urban Development (HUD) funding received by the City, including Community Development Block Grant (CDBG) funds, Emergency Solution Grant (ESG) funds, and Coronavirus Aid, Relief and Economic Security Act (CARES Act) funds.
CDBG and ESG Recommendations: The Citizens Advisory Committee (CAC) and staff completed the FY 2024/25 and 2025/26 CDBG proposal process. Staff estimates a two- year budget of $4,321,277. Staff and the CAC recommend allocating $3,544,022 for projects and holding $777,255 for project contingencies and emerging projects in FY 2024/25 and FY 2025/26.
Staff also recommends allocating $145,693 in ESG Award Year 2024/25 Funding for housing stability and homelessness prevention activities carried out by the Human Services Department staff at the Family Resource Center (FRC).
Staff recommends that the City Council take the following actions:
1. Hold a public hearing on the proposed FY 2024-26 CDBG Program Final Statement of Community Development Objectives and Projected Use of Funds.
2. Approve eligible CDBG funding allocations over the next two fiscal years in the amount of $3,544,022, including:
a. $2,096,574 for capital projects
b. $300,000 for microenterprise projects
c. $494,713 for public services, including $178,661 for housing public services programs and $316,052 for social service programs, and d. $652,735 for administration
3. Approve ESG Award Year 2024/25 funding allocations in the amount of $145,693, including:
a. $134,766 for FRC housing stability and homelessness prevention b. $10,927 for administrative activities.
Council Staff Report (ID # 5145) Meeting of May 7, 2024 Updated: 5/3/2024 1:42 PM by Dina Lewis E Page 2
4. Adopt a resolution approving the FY 2024-26 CDBG Program Final Statement of Community Development Objectives and Projected Use of Funds, and the FY 2024/25 Annual Action Plan and making findings of CEQA exemption;
5. Authorize the City Manager or designee to enter into agreements with HUD and nonprofit grantees.
CARES ACT Recommendations: In addition to the City’s traditional annual entitlements, staff is recommending the City Council adopt a resolution amending the City’s FY 2019/20 CDBG Action Plan to incorporate the actions previously taken by the City with one-time CARES Act funding, Staff recommends that the City Council take the following actions:
1. Adopt a resolution amending the FY 2019/20 Action Plan CDBG Action Plan to reflect the following reallocation of $561,329 in CDBG CARES Act funding to the following projects:
a. $512,344 for Homeless Non-Congregate Shelter – Winter Shelter and other sites
b. $48,985 for BACS Wellness Day Center Hygiene and Dignity Services
BACKGROUND:
CDBG and ESG Entitlement Programs. The City receives annual CDBG entitlement funds via HUD. The primary objectives of the CDBG program are to develop viable urban communities, principally for low- and moderate-income households, through the provision of decent housing, a suitable living environment, and economic opportunity. CDBG funds must be used for activities which:
1. Primarily benefit low- and moderate-income families. Most households receiving benefit from this program cannot earn more than 80% of the median income.
For example, an eligible family of three cannot earn more than $88,700. Most funds, however, based on current CDBG usage, serve families with even lower incomes, which are under 50% of the median income ($55,800 for a family of three);
2. Aid in the elimination of slum or blight; or
3. Other activities designed to meet urgent community needs when conditions may pose an immediate threat to the health or welfare of the community.
Federal rules allow each community to tailor its program to address specific local needs.
The CAC is responsible for advising City staff on the use of CDBG capital and housing public service funds. The CAC and staff have completed a Request for Proposal (RFP) process and held public hearings to determine these funding recommendations.
Since 2022, the City has also received annual ESG entitlement funding via HUD. The primary objectives of the ESG program are to address the needs of homeless people in emergency or transitional shelters to assist people to quickly regain stability in permanent housing after experiencing a housing crisis and/or homelessness. ESG funds must be used for activities which primarily benefit individuals and families that meets HUD’s “homeless” and “at-risk of homelessness” definitions in accordance with the Code of Federal Regulations (24 CFR 576).
Council Staff Report (ID # 5145) Meeting of May 7, 2024 Updated: 5/3/2024 1:42 PM by Dina Lewis E Page 3
The ESG program may fund five program components that the City may select from:
1. Emergency Shelter: Improve the number and quality of emergency shelters for homeless individuals and families, help operate these shelters, and provide essential services to shelter residents;
2. Rapid Re-housing Assistance: Rapidly re-house homeless individuals and families;
3. Homelessness Prevention: Prevent families and individuals from becoming homeless; and
4. Homeless Management Information System: Support the operation of the local information technology system used to collect client-level data County-wide.
The City allocates CDBG funds in two-year funding cycles. This allows agencies to better budget their resources and reduces the amount of paperwork they need to complete each year. The City commits a portion of its estimated funding sources in the first year and holds the remaining funds for unforeseen project contingencies and emerging projects in the second year. CDBG funding recommendations are for FY 2024/25 and 2025/26.
ESG funds are allocated annually due to the limited funding that is allocated to the City. The ESG funding recommendations are for FY2024/25. The City Council’s funding decisions are submitted to HUD as part of the City’s annual application (Annual Action Plan) for CDBG and ESG funds, which includes a final Statement of Community Development Objectives and Projected Use of Funds (see Exhibit 2), as well as an Action Plan.
CARES Act Funding. In addition to the annual entitlement funds described above, during national economic or social emergencies, the Federal government sometimes utilizes the CDBG program to quickly distribute funding to local entitlement jurisdictions, for the purpose of supporting low and moderate-income residents.
In 2020, the City received two rounds of a special allocation of CDBG funds totaling $2,357,604, authorized by the Coronavirus Aid, Relief and Economic Security Act (CARES Act) for the purpose of preventing, preparing for and responding to the COVID-19 pandemic.
The CARES Act also allowed cities to amend their FY 2019/20 Action Plans to utilize the funding immediately. Under normal circumstances, this influx of funding would constitute a substantial amendment, which would require a 30-day public comment period as outlined in the City’s Participation Plan (CPP). However, due to the emergency nature of these funds, HUD issued a CDBG COVID-19 emergency waiver to exempt CPP requirements and allows for an expedited 5-day public comment period.
DISCUSSION/ANALYSIS:
Annual CDBG Entitlement Funding
At the time of the funding recommendation meeting on March 28,2024, HUD had not released the FY 2024/25 formula allocations. To ensure that the City fulfills its citizens participation obligation in a timely manner, staff included “contingency provision” language Council Staff Report (ID # 5145) Meeting of May 7, 2024 Updated: 5/3/2024 1:42 PM by Dina Lewis E Page 4
in the draft Action Plan, which explains how the City will adjust its proposed plan to match its actual CDBG entitlement allocation amount. Staff is assuming a 5% cut to its annual allocation in case HUD reduces annual awards. Staff will return to the City Council if the entitlement funding award is significantly higher to allocate the additional funding.
Table 1 shows the funding sources for the FY 2024/25 and FY 2025/26 CDBG Entitlement Program.
Table 1: FY 2024/25 and 2025/26 CDBG Entitlement Funding Sources FY 2024/25 FY 2025/26
1. CDBG Entitlement $1,653,166* $1,570,508**
2. Estimated Program Income $20,000 $20,000
3. Reprogrammed Funds and Project Reserve $1,057,603 $0 Total FY 2024/25 – 25/26 CDBG Funding $2,730,769 $1,590,508 *the actual FY 2024/25 entitlement amount will not be confirmed until May/June 2024, but does assume a 5% reduction in case HUD reduces annual awards. **the actual entitlement amount will not be confirmed until March 2025, but does assume a 5% reduction in case HUD reduces annual awards.
CDBG RFP Process: The availability of CDBG funds was advertised through the newspaper, the City’s web page, the City’s cable channel, and an extensive mailing to social services agencies. The RFP process was conducted in coordination with the CAC as follows:
* RFP materials were made available to the public on January 11, 2024. * On January 11, 2024, staff conducted a publicly noticed grant proposal workshop for prospective CDBG applicants. The workshop gave new agencies the opportunity to understand the proposal process, including proposal criteria and the CAC’s role in the process. The CAC is a committee which is advisory to City staff in the review of CDBG funding requests. Nine (9) prospective applicants attended the workshop.
* Proposals for CDBG funding were submitted by the deadline of February 8, 2024 * On February 21, 2024, staff and the CAC held a public meeting to develop supplemental questions for applicants to answer. In reviewing the projects, the CAC and staff evaluated each proposal based on the following criteria:
• Benefit to low- and moderate-income households;
• Ability of the project to address the most critical local needs of lower income residents;
• Feasibility of the project to succeed;
• Cost effectiveness;
• Impact of funding on the outcome of the proposed activity; • Management and performance capacity of the project sponsor; and • Completeness of the proposal.
* On March 7, 2024, the CAC and staff conducted a public hearing to interview agencies regarding their proposals.
* On March 28, 2024, the CAC and staff held a public hearing to develop recommendations for the City Council.
Council Staff Report (ID # 5145) Meeting of May 7, 2024 Updated: 5/3/2024 1:42 PM by Dina Lewis E Page 5
As a member of the Alameda County HOME Consortium, the City also participates in the Consortium’s citizen participation process. The Consortium will hold a pre-draft public hearing at HCD’s Housing and Community Development Advisory Committee Meeting and will consist of an overview of the Action Plan and request for input on housing and community development needs.
Capital Projects Funding Recommendation:
The City received six new proposals for CDBG-funded capital projects, requesting $2,096,574 over the next two fiscal years. Staff had estimated that there was approximately $2,253,499 in funding available for capital projects in FY 2024-25.
At its April 13th meeting, the CAC recommended that CDBG funds be allocated to the projects shown below in Table 3.
The CAC and staff do not recommend funding in FY 2024-2025 for the Mental Health Transition Center Project as the organization has not yet identified a property they wish to purchase, and their proposed service delivery plan appears incomplete. Staff and the CAC encourages the Mental Health Association for Chinese Communities to refine their application, develop an acquisition and program delivery plan.
Additionally, the CAC and staff are recommending $547,000 in CDBG funding be used to prepay debt service for the Fremont Family Resource Center. By paying ahead of schedule, the FRC will save an average of $124,000 in debt service expenditures in each of the next four years, and end the debt service obligation one year early. This will allow more funding to be available for direct service delivery.
A staff analysis, with project summary and funding recommendation for each proposed project is enclosed (Exhibit 3). All the capital projects recommended for funding in Table 2 are designed to address the needs of low- and moderate-income households with incomes under 80% of the area median income and are consistent with the City’s FY 2020-2024 Strategic Plan.
Habitat for Humanity applied to continue their Housing Rehabilitation Program. The CAC and staff recommend $600,000 to fund Habitat for Humanity over the next two fiscal years.
Table 2: Capital Project Recommendations
Proposed Capital Projects Amount
Requested
Recommended
Funding
Habitat for Humanity East Bay/Silicon Valley
Housing Rehabilitation Program
$600,000 $600,000*
Fremont Family Resource Center – Enhancing
Directional Signage and Wayfinding in the
Facility Project
$130,000 $130,000
Mental Health Association for Chinese
Communities – Mental Health Transition Center
$300,000 Not
Recommended
MidPen Housing Corporation – Pickering
Oroysom Resyndication and Facility
Rehabilitation
$697,859 $697,859
Safe Alternatives to Violent Environments - $121,715 $121,715 Council Staff Report (ID # 5145) Meeting of May 7, 2024 Updated: 5/3/2024 1:42 PM by Dina Lewis E Page 6
Playground Renovation
Fremont Family Resource One Year Debt
Buydown
$547,000 $547,000
Capital Projects Subtotal: $2,396,574 $2,096,574
*$300,000 for FY 2024/25 and $300,000 for FY 2025/26
Public Services Funding Recommendation:
Approximately $494,713 will be available over the next two fiscal years for public service programs. The CAC and staff recommend $494,713 in funding as follows:
• $178,661 to be allocated to Project Sentinel to carry out the Fair Housing and landlord/tenant counseling programs over the next two fiscal years.
• $316,052 to be allocated to fund a combination of social services provided by the City’s Human Services Department, as well as social service grant agencies recommended by the Human Relations Commission.
Additionally, city staff administration cost is capped by HUD at 20% of the sum of entitlement grant and projected program income each fiscal year. Staff recommends that $334,633 be allocated to administration in FY 2024/25 and $318,102 in FY 2025/26.
Staff is requesting that the City Council authorize the City Manager or designee to increase the CDBG funding for the approved public service projects and administration in FY 2024/25 and FY 2025/26 if additional funds are available.
Table 3: Public Service and Recommendations
Proposed Projects Funding
Requested
Recommended
Funding
2024/25 2025/26 2024/25 2025/26
Project Sentinel, Inc. – Fair
Housing and Landlord/Tenant
Counseling
$121,275 $121,275 $98,111 $80,550
Safe Alternatives to Violent
Environments (SAVE) – Shelter
and assistance for victims of
domestics violence
$65,000 $65,000 $65,000 $65,000
Public Service Projects –Provided
by the City’s Human Services
Department and non-profit social
service grantees
$93,026 $93,026 $93,026 $93,026
Public Service Projects Subtotal: $279,301 $279,301 $256,137 $238,576 Two Year Total: $558,602 $494,713
Microenterprise Recommendations: Approximately $300,000 is available over the next two fiscal years for this funding category. Of this amount, the CAC and staff recommend the following allocations:
• $100,000 to be allocated to Afghan Coalition Microenterprise over the next Council Staff Report (ID # 5145) Meeting of May 7, 2024 Updated: 5/3/2024 1:42 PM by Dina Lewis E Page 7
two fiscal years.
• $100,000 to be allocated to the Community Child Care Council of Alameda County (4C’s) over the next two fiscal years.
• $100,000 to be allocated to the Fremont Family Resource Center SparkPoint Family Economic Success Program over the next two fiscal years.
Table 4: Microenterprise Project Recommendations:
Proposed Projects Funding Requested Recommended
Funding
2024/25 2025/26 2024/25 2025/26
Afghan Coalition $50,000 $50,000 $50,000 $50,000
Community Child Care Council of
Alameda County (4C’s)
$50,000 $50,000 $50,000 $50,000
Fremont Family Resource Center
SparkPoint Family Economic Success
$50,000 $50,000 $50,000 $50,000
Public Service Projects Subtotal: $150,000 $150,000 $150,000 $150,000 Two Year Total: $300,000 $300,000
CDBG Contingency Reserve:
After taking into consideration the additional allocation recommendations found in Table 4, there is a total of $777,255 in remaining funds.
To ensure that entitlement jurisdictions fulfill their citizen participation obligation in a timely manner, HUD advised that jurisdictions include “contingency provisions” language in their action plans, which explains how the jurisdictions will adjust their proposed plan to match their actual CDBG entitlement allocation amounts. At the funding recommendations meeting, the CAC and staff agreed on the following contingency plan: if additional CDBG funds are available, the funds will be kept in reserve to be used for gap funding for current capital projects and for emerging needs projects.
Emergency Solutions Grant Program
Table 5 shows the funding sources for the FY 2024/25 ESG Entitlement Program.
Table 5: FY 2024/25 ESG Entitlement Funding Sources
FY 2024/25
1. ESG Entitlement $145,693
2. Estimated Program Income $0
3. Reprogrammed Funds and Project Reserve $0
Total FY 2024-25 ESG Funding: $145,693
Council Staff Report (ID # 5145) Meeting of May 7, 2024 Updated: 5/3/2024 1:42 PM by Dina Lewis E Page 8
Table 6 below outlines the total allocation recommendation for FY 2024/25.
Table 6: FY 2024/25 ESG Allocation Recommendations
Additional Allocation Recommendation
Administration $10,927
Housing Stability – Homelessness Prevention
(Fremont Family Resource Center)
$134,766
Total $145,693
The FY 2024/25 Action Plan, Proposed Final Statement of Community Development Objectives and Projected Use of Funds:
Under the 1990 National Affordable Housing Act, localities eligible to receive federal funding for housing and community development programs (CDBG, ESG, HOME, etc.) administered by HUD are required to prepare an annual Action Plan to report on the programs and activities that address community development information on federal, state and local funding sources for community development and affordable housing activities, a description of activities to be undertaken using federal funding sources, a description of other actions the City will be taking to reduce barriers to affordable housing, lead-based paint hazards, and poverty, as well as a description of efforts to improve institutional structure, public/private coordination, and public housing resident initiatives. The City’s Draft FY 2024/25 Action Plan is enclosed (Exhibit 2). The City is also required to submit a Proposed Final Statement of Community Development Objectives and Projected Use of Funds (Exhibit 3).
CDBG CARES ACT Funding
Eligible CARES Act Projects: The City may use its CDBG CARES Act allocation to prevent and respond to the coronavirus. Eligible activities must also be consistent with the Housing and Community Development Act of 1974, including a focus on benefiting households earning 80% of area median income ($88,700 for a family of three) or below.
On December 15, 2020, The City Council approved an Amendment to the FY 2019/20 Action Plan to utilize CARES Act funding including the following projects and activities in Table 7A:
Table 7A: CDBG CARES Projects
#1. Fremont Cares Rent Relief and Utilities Program
Up to 3 consecutive months of rent relief for at least 85 households. Up to 3 consecutive months of utility relief for at least 80 households.
#2. Small Business Relief Program
One-time $5,000 grants to approximately 57 Fremont
businesses.
#3. Homeless Non-Congregate Sheltering
Rental subsidies at Islander motel and/or set-up and
operation of alternate non-congregate shelters, including Safe Parking program.
#4. Public Service Assistant
Council Staff Report (ID # 5145) Meeting of May 7, 2024 Updated: 5/3/2024 1:42 PM by Dina Lewis E Page 9
Staff to assist residents experiencing homelessness at non- congregate shelter sites and in the community to mitigate the spread of COVID-19.
#5. Crisis Intervention Specialist
Joint Fremont Police Department – Human Services effort to outreach to residents experiencing homelessness and
COVID-19 related crisis.
#6. Clean Start Mobile Hygiene and Dignity Services
Program
Mobile hygiene and dignity services program augmentation.
In alignment with CDBG program requirements, HUD requires that funding be programmed to individual activities in its Integrated Disbursement and Information System (IDIS) system in order for the City to be reimbursed for program expenditures made during the COVID epidemic. Human Services staff recommends reallocating $561,329 in CARES Act Funding, from previously allocated programs, listed above in Table 8A above, that had cost savings, to the following programs in Table 8B.
Table 7B: Proposed CARES Budget Reallocation Amount
#2. Homeless Non-Congregate Sheltering
Rental subsidies at Islander motel and other motels and/or set-up and operation of alternate non-congregate shelters to prevent the spread of COVID in a vulnerable population. $512,344
#6. BACS Wellness Day Center Hygiene and Dignity
Services
Expansion of day-access center to be open on weekends to provide showers, laundry, and hygiene/dignity services to prevent the spread of coronavirus.
$48,985
Project #2 – Homeless Non-Congregate Sheltering:
The City has been providing a valuable resource to the community in the form of temporary non-congregate shelter Fremont residents experiencing homelessness both during COVID but also now during the time of inclement/cold weather when illness poses the most risk.
The non-congregate winter shelter provided by individual rooms with adjoining restrooms, allows at-risk homeless residents to socially isolate themselves, and practice good hygiene.
On November 14, 2023, the City Council approved the 2023 Winter Relief Program, which provides non-congregate shelter to unhoused residents during the winter months.
Project #6 – BACS Wellness Day Center Hygiene and Dignity Services
Due to the on-going COVID-19 pandemic, the Wellness Center operated by Bay Area Community Services (BACS) has become an important resource for unhoused individuals.
Because of COVID-19, hygiene (including showers) and dignity services were of utmost importance to mitigate the spread of the disease.
On July 20, 2021, the City Council authorized the City Manager to enter into annual agreements with Bay Area Community Services to operate the Wellness Center for unhoused residents, in an amount not to exceed $449,956 per year, for up to 3 years (FY Council Staff Report (ID # 5145) Meeting of May 7, 2024 Updated: 5/3/2024 1:42 PM by Dina Lewis E Page 10
2021/22, FY 2022/23 and FY 2023/24). The FY 2023/24 Amendment, executed in January 2024, included $48,985 in CARES Act funding, for a pilot project to expand operating hours to weekends.
FISCAL IMPACT: There is no match requirement for this funding. The appropriation of the funds will be included in the proposed FY 2024/25 City Budget.
ENVIRONMENTAL REVIEW: All CDBG and ESG -funded projects listed in this staff report are subject to environmental review procedures pursuant to the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA).
All of the projects being recommended are exempt from review under the California Environmental Quality Act (CEQA) as the repair, maintenance or minor alteration of existing facilities involving negligible or no expansion of use pursuant to CEQA Guidelines Section 15301, and as replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site and have substantially the same purpose and capacity as the replaced structure pursuant to CEQA Guidelines Section 15302.
Consistent with NEPA regulations, funding will not be distributed to a project until appropriate NEPA review and clearance is completed for that project.
ATTACHMENTS:
• Exhibit 1 - Staff Analyses FY 2024-2026
• Exhibit 2 - FY 2024-26 Proposed Final Statement Final • Exhibit 3 - Fremont - 2024-2025 Annual Action Plan Draft • Exhibit 4 - Resolution FY 24-25 CDBG Funding Recommendations Clean v2 • Exhibit 5 - CDBG CARES 19-20 Amendment Resolution v2
RECOMMENDATION: Staff recommends that the City Council:
1. Hold a public hearing on the proposed FY 2024-26 Federal Funding Program Final Statement of Community Development Objectives and projected Use of Funds and FY 2024/25 Action Plan.
2. Allocate CDBG funds for FY 2024/25 and FY 2025/26 in the amounts stated herein, and contingent upon adoption of the FY 2024/25 budget by the City Council.
3. Allocate ESG funds for FY 2024/25 in the amounts stated herein, and contingent upon adoption of the FY 2024/25 budget by the City Council.
4. As required by CDBG regulations, approve the reallocation of $561,329 in CDBG CARES Act funding to the following projects:
a. $512,344 for Homeless Non-Congregate Shelter
b. $48,985 for BACS Wellness Day Center Hygiene and Dignity Services
5. Authorize staff to:
a. Allocate additional funds to public service projects should the City receive additional program income in FY 2024/25 or a greater entitlement in FY 2025/26 b. Reserve unallocated funds to provide gap funding or fund projects that meet emerging needs.
6. Adopt a resolution:
Council Staff Report (ID # 5145) Meeting of May 7, 2024 Updated: 5/3/2024 1:42 PM by Dina Lewis E Page 11
a. Amending the City’s FY 2019/20 CDBG Action Plan as recommended by staff in the amounts stated herein.
b. Approving and authorizing the City Manager or her designee to submit the FY 2024-26 CDBG Program Final Statement of Community Development Objectives and Projected Use of Funds, and the City’s CDBG FY 2024-25 Annual Action Plan, as recommended by staff in the amounts stated herein.
c. Authorizing the City Manager or her designee to execute CDBG and ESG Entitlement and funding agreements with HUD.
d. Authorizing the City Manager or her designee to execute agreements effective July 1, 2024, with the grantees recommended for funding by staff in the amounts set forth herein, contingent upon a finding of no significant impact in the corresponding environmental assessments and completion of the required public comment period.
e. Making findings of CEQA exemption