Fremont City Council Meeting: 06/18/24 07:00 PM
3300 Capitol Avenue Div/Dept: Human Services Department Fremont, CA 94538 Category: Agreements and Contracts
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5188) DOC ID: 5188
Updated: 6/13/2024 3:28 PM by Dina Lewis Page 1
FY 2024/25 ACTION PLAN AMENDMENT AND FINAL CDBG FUNDING RECOMMENDATIONS - Public Hearing (Published Notice) On the Allocation of Federal Community Development Block Grant FY 2024/25 Funds, Amending the FY 2024/25 Action Plan, and Final Approval of CDBG Funding Recommendations; Adopting a Resolution Approving the FY 2024/25 Annual Action Plan; and Authorizing the City Manager to Execute Agreements with the U.S. Department of Housing and Urban Development and CDBG Grantees and Programs 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 the Federal Department of Housing and Urban Development (HUD) funding received by the City, including Community Development Block Grant (CDBG) funds and Emergency Solution Grant (ESG) funds.
The City has received its final annual allocations for CDBG and ESG Funds from the Department of Housing and Urban Development (HUD), which will affect the final numbers of the 2024/25 Action Plan. The City has also received a repayment of $109,298 from a CDBG single family rehabilitation loan that will need to be programmed into the FY2024/25 Action Plan, which will adjust the City’s CDBG Public Service cap and create additional funds for public services.
Staff recommends that the Council approve the amendments and final CDBG funding recommendations to the FY2024/25 Action Plan to reflect the final CDBG and ESG entitlement allocations and additional program income, and appropriate additional funding to FY 2024/25 CDBG and ESG budgets.
BACKGROUND: On May 7, 2024, the City Council approved the Citizens Advisory Committee (CAC) and staff’s funding recommendations for FY 2024/25 CDBG funded projects. At the time of Council approval of these CDBG funding recommendations, HUD had not released the FY 2024/25 CDBG formula allocations and instead staff relied on a conservative estimate. Staff advised Council should the actual FY 2024/25 CDBG funding allocation be higher or lower than staff’s estimate, staff would return to demonstrate how the allocations have affected the previous CDBG and ESG estimates and seek final approval for any changes.
On May 7, 2024, the U.S. Department of Housing and Urban Development announced the FY 2024 CDBG and ESG allocations. The City’s CDBG allocation is $1,663,572, 0.6% more than anticipated. The City’s ESG allocation is $152,943, 4.73% more than anticipated. Due to the higher than anticipated allocation and unanticipated program income, the City now has additional CDBG and ESG funds available for allocation to eligible projects.
Council Staff Report (ID # 5188) Meeting of June 18, 2024 Updated: 6/13/2024 3:28 PM by Dina Lewis Page 2
DISCUSSION/ANALYSIS:
Community Development Block Grant Program
Staff originally estimated a 5% decrease in CDBG and ESG funding for FY 2024/25 and because of the conservative estimate, changes to the FY 2024/25 Action Plan are very minimal. The higher than anticipated CDBG allocation along with the unanticipated program income changes the Administration and Public Service caps as allowed by HUD.
Staff administration cost is capped by HUD at 20% of the sum of the entitlement grant and projected program income each fiscal year. The new entitlement amount affects the original administration budget cap of $334,633. Staff recommends allocating an additional $2,081, for a total of $336,714 in FY 2024/25.
Public services are capped by HUD at 15% of the sum of the entitlement grant and any program income received in the current (FY 2023/24) fiscal year. The City received $109,298 in unanticipated program income due to the repayment of a CDBG low-income single-family home rehabilitation loan with interest. With the change of the entitlement allocation and addition of unanticipated program income, the City has an additional $17,956 to allocate for public services. Staff recommends allocating the additional funding to the Youth and Family Services Counseling contract, which provides family and individual counseling to help improve family relationships in times of stress or crisis.
Based on this unanticipated program income, staff also recommends allocating an additional $20,000 to the Fremont Family Resource Center Sparkpoint Family Economic Success Program, which provides financial education and technical assistance to clients with goals of developing their own micro-enterprise. A summary of all additional allocations can be found below in Table 1.
Table 1: FY 2024/25 CDBG Proposed Projects Funding Increase Proposed Projects
Previous Funding
Recommendation
Additional
Allocation
Updated Funding
Recommendation
2024/25 2024/25
Administration
$334,633
$2,081 $336,714
Public Services -
Youth and Family
Services Counseling
provided by the City’s
Human Services
Department
$32,029 $17,956 $49,985
Micro-enterprise -
Fremont Family
Resource Center
SparkPoint Family
Economic Success
$50,000 $20,000 $70,000
Council Staff Report (ID # 5188) Meeting of June 18, 2024 Updated: 6/13/2024 3:28 PM by Dina Lewis Page 3
Emergency Solutions Grant Program
Similar to CDBG, the higher than anticipated ESG allocation also changes the amount the City can allocate for administration. HUD allows for 7.5% of the ESG allocation to be allocated for administration. Staff recommends increasing the previously estimated administration allocation of $10,927 by $543 for a total of $11,470 in FY 2024/25. Staff recommends the remaining $6,707 be allocated toward the Fremont Family Resource Center’s Housing Stability/Homelessness Prevention program.
Table 2: FY 2024/25 ESG Proposed Funding Increase
Additional ESG Allocation Previous Funding
Recommendation
2024/25
Additional
Allocation
Updated Funding
Recommendation
2024/25
Administration $10,927 $543 $11,470
Housing Stability –
Homelessness Prevention
(Family Resource Center)
$134,766 $6,707 $141,473
Total $145,693 $7,250 $152,943
All updates will be reflected in the Final FY 2024-25 CDBG and ESG Program Final Statement of Community Development Objectives and Use of Funds (Attachment 1), as well as in the FY 2024-25 Action Plan (Attachment 2).
FISCAL IMPACT: There is no fiscal impact to the General Fund and no match requirement for this funding. On June 11, 2024, the City Council adopted the City’s FY 2024/25 Operating Budget. Staff recommends the City Council appropriate an additional $40,037 to CDBG Fund 105 and an additional $7,250 to ESG Fund 191.
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).
Consistent with NEPA regulations, funding will not be distributed to a project until appropriate NEPA review and clearance is completed for that project.
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.
ATTACHMENTS:
• Draft Resolution FY 24-25 CDBG Funding Recommendations • Exhibit 1 - FY 2024-25 Proposed Final Statement Final Council Staff Report (ID # 5188) Meeting of June 18, 2024 Updated: 6/13/2024 3:28 PM by Dina Lewis Page 4
• Exhibit 2 - Fremont - 2024-2025 Annual Action Plan Draft
RECOMMENDATION: Staff recommends that the City Council:
1. Hold a public hearing on the proposed amendments and final CDBG funding recommendations for the FY 2024/25 Action Plan
2. Adopt a resolution approving the following actions:
a. Approve and authorize the City Manager or designee to amend the FY 2024/25 Action Plans as described in this staff report.
b. Approve the FY 2024-25 CDBG Program Final Statement of Community Development Objectives and Use of Funds, and the FY 2024/25 Annual Action Plan.
c. Authorize the City Manager or her designee to enter into agreements with HUD and nonprofit grantees.
d. Appropriate an additional $40,037 to Fund 105 (CDBG). e. Appropriate an additional $7,250 to Fund 191 (ESG).