Fremont City Council Meeting: 07/08/25 07:00 PM
3300 Capitol Avenue Div/Dept: Human Services Department Fremont, CA 94538 Category: Grants
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5413) DOC ID: 5413
Updated: 7/3/2025 9:18 AM by Dina Lewis Page 1
FEDERAL DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT GRANTS FIVE-YEAR CONSOLIDATED PLAN AND ANNUAL ACTION PLAN - Public Hearing (Published Notice) on the Use of Fiscal Year (FY) 2025/26 Federal Community Development Block Grant and Emergency Solutions Grant Funds; Adoption of a Resolution Approving the FY 2025/26 through FY 2029/30 Consolidated Plan and FY 2025/26 Annual 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 Arquimides Caldera
Title: CDBG Administrator Human Services Director
Div/Dept: Human Services Department Human Services Department Phone: 510-574-2043 510-574-2056
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.
Additionally, the Citizens Advisory Committee (CAC) and staff completed the FY 2025/26 capital project proposal process for CDBG funds. For FY 2025/26, approximately $2,109,647 in CDBG funding is available. The City Council allocated $1,006,678 of the available FY 2025/26 CDBG funds in 2024, which leaves $1,102,969 to be allocated for FY 2025/26.
Staff and the CAC recommend allocating $998,203 of the remaining CDBG funds and reserving $104,766 for project contingencies and emerging projects in FY 2025/26. The City has received $146,207 in Emergency Solultions Grant (ESG) funds from HUD for FY 2025/26.
Staff recommend that the City Council take the following actions:
1. Hold a public hearing on the proposed FY 2025/26 Final Statement of Community Development Block Grant and Emergency Solutions Grant Objectives and Projected Use of Funds (Final Statement).
2. Allocate CDBG and ESG funds for FY 2025/26 for the projects in the amounts stated in the Final Statement.
3. Adopt a resolution approving the following actions:
a. Authorizing the City Manager, or designee, to submit the City’s FY 2025/26 Final Statement and the City’s FY 2025-2029 Consolidated Plan and the City’s FY 2025/29 Consolidated Plan and FY 2025/26 Annual Action Plan, as recommended by staff in the amounts stated herein and finding the action exempt from CEQA.
b. Authorizing the City Manager, or designee, to execute CDBG and ESG Entitlement funding agreements with HUD.
Council Staff Report (ID # 5413) Meeting of July 8, 2025 Updated: 7/3/2025 9:18 AM by Dina Lewis Page 2
c. Authorizing the City Manager, or designee, to execute grant agreements effective retroactive to July 1, 2025, with the CDBG and ESG grantees recommended for funding by staff in the amounts set forth the Final Statement, contingent upon a finding of no significant impact in the corresponding NEPA environmental assessments and completion of the required public comment period.
4. Authorize staff to:
a. Allocate additional CDBG or ESG funds to qualifying projects should the City receive additional program income in FY 2025/26 or greater funding entitlements. b. Reserve any unallocated CDBG or ESG funds to provide gap funding or fund projects that meet emerging needs.
BACKGROUND:
CDBG Entitlement Program. The City receives annual CDBG entitlement funds from 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 benefits from this program cannot earn more than 80% of the area median income.
For example, an eligible family of three cannot earn more than $112,550 in the Bay Area. Most funds, however, based on current CDBG usage, serve families with even lower incomes, which are under 50% of the area median income ($71,950 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 its CDBG funding recommendations.
ESG Entitlement Program. Since 2022, the City has also received annual ESG entitlement funds from HUD. The primary objectives of the ESG program are to address the needs of homeless people in emergency or transitional shelters, and 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 meet HUD’s “homeless” and “at-risk of homelessness” definitions in accordance with applicable Federal Regulations (24 CFR 576).
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; Council Staff Report (ID # 5413) Meeting of July 8, 2025 Updated: 7/3/2025 9:18 AM by Dina Lewis Page 3
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 Council’s funding decisions are submitted to HUD as part of the City’s annual application for CDBG and ESG funds, which includes a Final Statement of Community Development Block Grant and Emergency Solutions Grant Objectives and Projected Use of Funds (Final Statement), as well as an Annual Action Plan.
The City allocates CDBG and ESG 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. The funding recommendations below are for FY 2025/26.
On June 18, 2024, the City Council allocated $1,006,678 of FY 2025/26 funding based on an estimated FY 2025/26 CDBG budget.
DISCUSSION/ANALYSIS:
Annual CDBG Entitlement Funding
Table 1 shows the funding sources for the FY 2025/26 CDBG Entitlement Program.
Table 1: FY 2025/26 CDBG Entitlement Funding Sources
FY 2025/26
1. CDBG Entitlement $1,579,819
2. Estimated Program Income $121,143
3. Reprogrammed Funds and Project Reserve $408,685
Total FY 2025-26 CDBG Funding: $2,109,647
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 as follows:
1. RFP materials were made available to the public on January 9, 2025.
2. On January 9, 2025, 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. Eight prospective applicants attended the workshop.
3. Proposals for CDBG funding were submitted by the deadline of February 6, 2025.
4. On February 19, 2025, 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:
a. Benefit to low- and moderate-income households;
b. Ability of the project to address the most critical local needs of lower income residents;
c. Feasibility of the project to succeed;
Council Staff Report (ID # 5413) Meeting of July 8, 2025 Updated: 7/3/2025 9:18 AM by Dina Lewis Page 4
d. Cost effectiveness;
e. Impact of funding on the outcome of the proposed activity; f. Management and performance capacity of the project sponsor; and g. Completeness of the proposal.
5. On March 6, 2025, the CAC and staff conducted a public hearing to interview agencies regarding their proposals.
6. On March 27, 2025, the CAC and staff developed funding recommendations for the City Council.
Capital Projects Funding Recommendations: The City received four new proposals for CDBG-funded capital projects, requesting a total of $990,280 over the next fiscal year. Staff had estimated that there was approximately $1,008,291 in funding available for capital projects in FY 2025-26. At their March 27, 2025, meeting, the CAC recommended that CDBG funds be allocated to the projects shown below in Table 2.
A staff analysis, with project summary and the funding recommendation for each proposed project is enclosed (Attachment 1). All the capital projects recommended for funding are designed to address the needs of low- and moderate-income households with incomes under 80% of the Bay Area median income and are consistent with the City’s FY 2025-2029 Consolidated Strategic Plan.
Table 2: FY 2025/26 Capital Project Recommendations
Proposed Capital Projects Amount
Requested
Recommended
Funding
Bay Area Community Health – Mowry III
Health Offices Renovation
$250,000 $250,000
Mid-Pen Housing Corporation – Century
Village Rehabilitation Project
$465,280 $465,280
Ohlone College – Basic Needs Resource
Center Predevelopment Activities
$100,000 $50,000
Fremont Family Resource Center – Flooring
Replacement Project
$175,000 $175,000
Capital Projects Subtotal: $990,280 $940,280
Public Service, Microenterprise, and Administration Funding Recommendations:
As shown in Table 3 below, staff is recommending an additional funding allocation of $15,833 for public service projects, $20,000 for microenterprise projects, and $22,090 for administration of projects, for a total additional allocation of $57,923. These calculations are based on actual FY 2024/25 program income the City received, anticipated FY 2025/26 program income, and the FY 2025/26 CDBG entitlement. Public service projects and administration allocations will be proportionally increased or decreased from the estimated funding levels to match actual allocation percentage amounts. An additional $33,220 will be allocated to Project Sentinel from the Rent Review Program Fund to complete the funding for the Tenant/Landlord and Fair Housing Program.
Council Staff Report (ID # 5413) Meeting of July 8, 2025 Updated: 7/3/2025 9:18 AM by Dina Lewis Page 5
Table 3: Public Service and Administration Recommendations FY 24/25
Allocation
FY 25/26
Recommended
Funding
Recommended
Allocation
Increase
Public Service Projects: The total allocation
for public services projects may be up to 15%
of the City’s entitlement and actual FY 2024/25
program income
$238,576 $254,409 $15,833
Microenterprise Projects: Fremont Family
Resource Center SparkPoint Family Economic
Success
$50,000 $70,000 $20,000
Administration: This total covers staff salary,
overhead and project management costs, and
is consistent with HUD’s administrative cap,
calculated at 20% of the City’s entitlement,
anticipated program income.
$318,102 $340,192 $22,090
Public Service, Microenterprise and
Administration Subtotal:
$606,678 $664,601 $57,923
Table 4 below sums Table 2 and 3 to calculate the total additional CDBG funding recommendations for FY 2025/26.
Table 4: FY 2025/26 Total Additional Allocation Recommendations Program Type Additional
Funding
Recommendation
Capital Projects $940,280
Public Service, Microenterprise, and Administration $57,923 Total $998,203
CDBG Contingency Reserve: After taking into consideration the additional funding recommendations found in Table 4, there is a total of $104,766 in remaining CDBG funds.
To ensure that entitlement jurisdictions fulfill their citizen participation obligation in a timely manner, HUD advised jurisdictions to include “contingency provisions” language in their annual 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, 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.
Annual ESG Entitlement Funding
Table 5 shows the funding sources for the FY 2025/26 ESG Entitlement Program.
Council Staff Report (ID # 5413) Meeting of July 8, 2025 Updated: 7/3/2025 9:18 AM by Dina Lewis Page 6
Table 5: FY 2025/26 ESG Entitlement Funding Sources
Amount
1. ESG Entitlement $146,207
2. Estimated Program Income $0
3. Reprogrammed Funds and Project Reserve $0
Total FY 2025-26 ESG Funding: $146,207
Table 6 below outlines the total ESG funding recommendations for FY 2025/26. The Housing Stability and Preventions services are aligned with the City’s Homelessness Response Plan.
Table 6: FY 2025/26 ESG Funding Recommendations
Additional Allocation Recommendation
Administration $10,965
Housing Stability – Homelessness Prevention
(Fremont Family Resource Center)
$135,242
Total $146,207
The FY 2025/26 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 using federal, state, and local funding sources to address 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 and FY 2025-2029 Consolidated Plan and FY 2025/26 Action Plan is detailed below and attached to this staff report (Attachment 2). The City is also required to submit a Proposed Final Statement of Community Development Objectives and Projected Use of Funds, which is attached to this staff report (Attachment 3).
FY 2025-2029 Consolidated Plan
The Consolidated Plan is a five-year strategic planning document required by HUD to guide the City’s annual Action Plans and set Community Development Block Grant, ESG, and HOME funding priorities for needs within affordable housing community development, homelessness, and economic development. The FY 2025/26 Action Plan described above will be the first plan of the next five-year (2025-2029) Consolidated Plan period. The 2025-2029 Consolidated Plan and FY 2025/26 Action Plan are attached (Attachment 2).
As part of developing the Consolidated Plan, the City deployed a Consolidated Plan Community Needs Survey in November 2024. The survey was sent to over 500 grantee Council Staff Report (ID # 5413) Meeting of July 8, 2025 Updated: 7/3/2025 9:18 AM by Dina Lewis Page 7
agencies, individuals, public officials, city staff and community organizations. The survey was also available on the City’s website. Grantee agencies include those that serve low - income individuals/families as well as racial and ethnic minorities.
Two hundred and forty-three agencies, individuals, public officials, City staff and community organizations representing a variety of community interests responded to the survey. The data from these surveys were used to help determine the priority needs stated in the strategic plan.
After substantial review of the Consolidated Plan Community Needs survey results (discussed below), staff is recommending the City Council keep its current funding priorities, as adopted by the City Council in 2020. These broadly worded funding priorities provide substantial flexibility for the City to meet any changing needs over the next five years. These funding priorities are as follows:
1. Strong Public Services
a. Provide funds to various social service agencies serving low and moderate income Fremont residents. Types of services include childcare, health care, senior services, food and other basic needs services, shelter services and youth and family counseling services.
2. Address Homelessness
a. Maintain, improve and expand (as needed) the capacity of housing, shelter and services for individuals and families experiencing homelessness including integrated healthcare, employment services and other services. b. Maintain and expand activities designed to prevent those currently housed from becoming homeless.
c. Build on inter-jurisdictional cooperation to achieve housing and homelessness needs.
3. Economic Development/Microenterprise Assistance
a. Increase economic opportunities and support economic activities benefiting low and moderate-income households to the extent possible.
b. Assist microenterprise development and expansion of self-sufficiency opportunities.
4. Promote Affordable Housing
a. Assist low- and moderate-income first-time homebuyers. b. Preserve existing affordable rental and ownership housing for low and moderate income households.
c. Increase the availability of affordable rental housing for low and moderate income households.
5. Non-Housing Community Development
a. Public Facilities and Improvements - provide funds to assist nonprofit agencies providing critical services to the community to meet their capital improvement needs in order to increase or enhance service delivery. Types of projects include childcare centers, emergency shelters, vocational and rehabilitation centers for the disabled and frail elderly, food distribution centers, and health clinics.
Council Staff Report (ID # 5413) Meeting of July 8, 2025 Updated: 7/3/2025 9:18 AM by Dina Lewis Page 8
6. Administration and Fair Housing
a. Administration of CDBG and ESG Programs
b. Reduce housing discrimination
FISCAL IMPACT: There is no local funding match requirement for CDBG, but ESG does have a 100% match requirement, which is satisfied by the City’s non-federally funded housing stability services. As part of the FY 2025/26 Adopted Operating Budget, the City Council appropriated sufficient funds in the CDBG Fund (Fund 105) and the 2025 ESG account of the Federal Operating Grants Fund (Fund 191) to support the recommended programs.
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 categorically exempt from review under the California Environmental Quality Act (CEQA) because the projects consist of repair, maintenance or minor alteration of existing facilities involving negligible or no expansion of use pursuant to CEQA Guidelines Section 15301, and/or the 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. Each of the foregoing provides a separate and independent basis for CEQA exemption.
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 - FY2025-26 CDBG Staff Analysis
• Exhibit 2 - 2025-2029 Fremont Consolidated & Action Plan Draft • Exhibit 4 - Resolution FY 25-26 CDBG Funding Recommendations Draft • Exhibit 3 - FY2025-26 Proposed Final Statement
RECOMMENDATIONS: Staff recommend that the City Council do the following related to CDBG and ESG entitlements:
1. Hold a public hearing on the proposed FY 2025/26 CDBG Program Final Statement of Community Block Grant and Emergency Solution Grant Development Objectives and Projected Use of Funds (Final Statement) and the City’s FY 2025-2029 Consolidated Plan and the FY 2025/26 Annual Action Plan (Action Plans).
2. Adopt a resolution approving the following actions:
a. Authorizing the City Manager, or designee, to submit the FY 2025/26 Final Statement and Action Plans to HUD, as recommended by staff in the amounts stated herein, and finding the action exempt from CEQA, as specified.
b. Authorizing the City Manager, or designee, to execute CDBG and ESG Entitlement funding agreements with HUD.
c. Authorizing the City Manager, or designee, to execute agreements effective retroactive to July 1, 2025, with the CDBG and ESG grantees recommended for funding by staff in the amounts set forth in the Final Statement, contingent upon a finding of no significant impact in the corresponding environmental assessments and completion of the required public comment period.
Council Staff Report (ID # 5413) Meeting of July 8, 2025 Updated: 7/3/2025 9:18 AM by Dina Lewis Page 9
3. Allocate an additional $998,203 in CDBG funds for FY 20265/26 to projects, as detailed herein and in the Final Statement.
4. Allocate an additional $146,207 in ESG funds for FY 2025/26 to projects, as detailed herein and in the Final Statement.
5. Authorize staff to:
a. Allocate additional funds to public service projects should the City receive additional CDBG or ESG program income in FY 2025/26 or a greater entitlement. b. Reserve unallocated funds to provide gap funding or fund projects that meet emerging needs.