Fremont City Council Meeting: 05/12/26 07:00 PM
3300 Capitol Avenue Div/Dept: Human Services Department Fremont, CA 94538 Category: Agreements and Contracts
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5694) DOC ID: 5694
Updated: 5/8/2026 3:08 PM by Dina Lewis Page 1
Fiscal Year 2026/27 Community Development Block Grant (CDBG) Program - Public Hearing (Published Notice) on the Use of Fiscal Year (FY) 2026/27 Federal Community Development Block Grant Funds; Adoption of a Resolution Approving the FY 2026/27 Annual Action Plan; and Authorizing the City Manager to Execute Agreements and Amendments with the U.S. Department of Housing and Urban Development and Grantees
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 Citizens Advisory Committee (CAC) and staff completed the FY 2026/27 Community Development Block Grant (CDBG) proposal process for capital projects, public housing services, and microenterprise assistance services. Staff estimate a two-year budget of $3,979,516 in CDBG funding. Staff and the CAC recommend allocating $2,943,797 of the CDBG funding for projects and reserving $1,035,719 for project contingencies and emerging projects in FY 2026/27 and FY 2027/28.
Staff and the CAC recommend that the City Council take the following actions:
1. Hold a public hearing on the proposed FY 2026/27 and FY 2027/28 Final Statement of CDBG Objectives and Projected Use of Funds.
2. Approve eligible CDBG funding allocations over the next two fiscal years in the amount of $2,943,797, including:
a. $1,521,433 for capital projects
b. $468,192 for public services, including $131,934 for housing public services programs, and $336,258 for social service programs,
c. $340,000 for microenterprise projects, and
d. $614,172 for CDBG Program administration
3. Adopt a resolution approving the FY 2026/27 and FY 2027/28 Final Statement of CDBG Objectives and Projected Use of Funds, and the FY 2026/27 Annual Action Plan.
4. Authorize the City Manager, or designee, to enter into agreements and amendments with HUD and nonprofit grantees selected for funding.
Council Staff Report (ID # 5694) Meeting of May 12, 2026 Updated: 5/8/2026 3:08 PM by Dina Lewis Page 2
Background: The City receives annual CDBG entitlement funds from the U.S. Department of Housing and Urban Development (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 $115,120. Most funds, however, based on current CDBG usage, serve families with even lower incomes, which are under 50% of the 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 funds for capital projects and housing-related public services. The CAC and staff have completed a Request for Proposal (RFP) process and held public hearings to determine the funding recommendations below.
The City allocates CDBG funds in two-year funding cycles. This allows funding recipients 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 for the CDBG Program in the first year and holds the remaining CDBG funds for unforeseen project contingencies and emerging projects in the second year. CDBG funding recommendations in this report are for FY 2026/27 and 2027/28.
The City Council’s funding decisions for CDBG funds are submitted to HUD as part of the City’s annual application, known as the Annual Action Plan (See Attachment 1). The FY 2027/26 Annual Action Plan includes a final Statement of Community Development Block Grant Objectives and Projected Use of Funds for FY 2026/27 and FY 2027/28 (See Attachment 2).
Discussion/Analysis: Table 1 shows the funding sources for the City’s FY 2026/27 and FY 2027/28 CDBG Program.
Council Staff Report (ID # 5694) Meeting of May 12, 2026 Updated: 5/8/2026 3:08 PM by Dina Lewis Page 3
Table 1: FY 2026/27 and 2027/28 CDBG Funding Sources
FY 26/27 FY 27/28* Total
1. CDBG Entitlement $1,549,15
8 $1,471,70
0 $3,020,85
8 2. Estimated Program
Income
$25,000 $25,000 $50,000
3. Project Reserve $642,226 $266,432 $908,658
Total: $2,216,38
4 $1,763,13
2 $3,979,51
6 *Assumes a 5% reduction - actual entitlement to be confirmed March 2027.
CDBG Request for Proposals 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 Request for Proposals (RFP) process was conducted as follows:
• On January 8, 2026, RFP materials were made available to the public, and staff conducted a publicly noticed grant proposal workshop for nine prospective CDBG funding applicants. The workshop covered the entire RFP process, including proposal criteria and the CAC’s role in the process.
• The deadline to submit proposals for CDBG funding was February 5, 2026.
• On February 18, 2026, staff and the CAC held a public meeting to develop supplemental questions for applicants. In reviewing the proposed projects, the CAC and staff evaluated each proposal based on the following criteria:
o Benefit to low- and moderate-income households;
o Ability of the project to address the most critical local needs of lower income residents;
o Feasibility of the project to succeed;
o Cost effectiveness;
o Impact of funding on the outcome of the proposed activity, o Management and performance capacity of the project sponsor; and
o Completeness of the proposal.
• On March 4, 2026, the CAC and staff conducted a public hearing to interview agencies regarding their CDBG funding proposals.
Council Staff Report (ID # 5694) Meeting of May 12, 2026 Updated: 5/8/2026 3:08 PM by Dina Lewis Page 4
• On April 2, 2026, the CAC and staff held a public hearing to develop recommendations for the City Council.
As a member of the Alameda County HOME Consortium (Consortium), the City also participates in the Consortium’s citizen participation process. The Consortium will hold a pre-draft public hearing at a meeting of the County’s Housing and Community Development Advisory Committee that will provide an overview of the Action Plan and seek public input on housing and community development needs.
Capital Projects Funding Recommendations:
The City received five capital projects proposals for a total of $1,521,433.
On April 2, 2026, the CAC recommended that CDBG funds be allocated to the proposed capital projects as shown below in Table 2. This includes a recommendation to reallocate $438,903 in CDBG funding from a previously awarded and cancelled project for the Fremont Family Resource Center (FRC), the non-profit entity, to pay down debt service on its facility. This action will improve the financial sustainability of the FRC and allow more funding to be available for service delivery.
A staff analysis, with project summary and a funding recommendation for each proposed project is enclosed (See Attachment 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 2025-2029 Strategic Plan.
Table 2: Capital Project Recommendations
Proposed Capital Projects
Requested
Amount
Recommended
Amount
Habitat for Humanity East Bay/Silicon
Valley Housing Rehabilitation Program
$600,000 $600,000*
Bay Area Community Health
Mowry III Health Center Renovation Phase III
$327,530 $327,530
City of Fremont - Age Well Center– Lake
Elizabeth
Service Area Renovation for Service
Improvements
$110,000 $110,000
Council Staff Report (ID # 5694) Meeting of May 12, 2026 Updated: 5/8/2026 3:08 PM by Dina Lewis Page 5
Proposed Capital Projects
Requested
Amount
Recommended
Amount
Safe Alternatives to Violent
Environments
Facility Safety and Functional Improvements
$45,000 $45,000
Fremont Family Resource Center
One Year Debt Buydown for FRC Building
$438,903 $438,903
Capital Projects Subtotal: $1,521,433 $1,521,433
*$300,000 for FY 2026/27 and $300,000 for FY 2027/28.
Public Services Funding Recommendations:
Approximately $468,192 will be available over the next two fiscal years for public service programs. The CAC and staff recommend $468,192 in CDBG funding for the public services shown in Table 3 below.
Table 3: Public Services Recommendations
Proposed Projects Requested Funding Recommended
Funding*
2026/27 2027/28 2026/27 2027/28
Project Sentinel, Inc.
Fair Housing and
Landlord/Tenant
Counseling
$121,275 $121,275 $75,558 $56,376
Safe Alternatives to
Violent Environments
(SAVE)
Shelter and assistance for
victims of domestic
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
$103,129 $103,129 $103,129 $103,129
Public Service Projects
Subtotal:
$289,404 $289,404 $243,687 $224,505
Two Year Total: $578,808 $468,192
Council Staff Report (ID # 5694) Meeting of May 12, 2026 Updated: 5/8/2026 3:08 PM by Dina Lewis Page 6
* To complete the full funding request for Project Sentinel’s programs, an additional approximately $110,616 in Rent Review Ordinance funding will be allocated, specifically $45,717 in FY2026/27 and $64,899 in FY2027/28.
Microenterprise Funding Recommendations:
Approximately $340,000 is available over the next two fiscal years for Micro-enterprise activities. Of this amount, the CAC and staff recommend the allocations shown in Table 4 below.
The CAC and staff do not recommend funding in FY 2026-/2027 for the Upwards Care, Inc.’s - The Boost Program, which is designed to support and grow family childcare microenterprises. The CAC and staff do not recommend funding as the organization is new to the area and does not have an established relationship with residents or partners. There were also concerns about whether recently awarded state funding would duplicate efforts in the area. Staff and the CAC encourage Upwards Care, Inc. to refine their application as they establish services in the Fremont area.
Table 4: Microenterprise Funding Recommendations
Proposed Projects
Requested Funding Recommended
Funding
2026/27 2027/28 2026/27 2027/28
Afghan Coalition
Microenterprise Program
$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
Family Resource Center
SparkPoint Family
Economic Success
$70,000 $70,000 $70,000 $70,000
Upwards Care, Inc.
The Boost Program
$100,000 $100,00
0 $0 $0
Microenterprise Subtotal: $270,000 $270,00
0 $170,00
0 $170,000
Two-Year Total: $540,000 $340,000
Administration Recommendations:
City administration costs are capped by HUD at 20% of the sum of entitlement grant and projected program income each fiscal year. As shown Council Staff Report (ID # 5694) Meeting of May 12, 2026 Updated: 5/8/2026 3:08 PM by Dina Lewis Page 7
in Table 5 below, staff recommend that $614,172 be allocated to administration of the City’s CDBG Program over the next two fiscal years, including $314,832 in FY 2026/27 and $299,340 in FY 2027/28. Staff also recommend that the City Council authorize the City Manager ,or designee, to increase the CDBG funding for administration in FY 2026/27 and FY 2027/28 if additional funds are available.
Table 5: Administration Recommendations
Activity FY 2026/27 FY 2027/28 Total
Administration
(20% of Entitlement + PI)
$314,832 $299,340 $614,712
CDBG Contingency Reserve:
After taking into consideration the recommendations outlined in Tables 2-5 above, there is a total of $1,035,719 in remaining CDBG 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 action 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.
Fiscal Impact: The recommended CDBG funding allocations have no impact on the General Fund. There is no match requirement for CDBG funding. The appropriation of the CDBG funds will be included in the proposed FY 2026/27 City Budget.
Environmental Review: All CDBG 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 Council Staff Report (ID # 5694) Meeting of May 12, 2026 Updated: 5/8/2026 3:08 PM by Dina Lewis Page 8
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:
• Attachment 4 - Resolution FY 26-27 CDBG Funding Recommendations • Attachment 2 - FY 2026/27 and FY 2027/28 Proposed Final Statement Final
• Attachment 3 - Staff Analyses FY 2026-2028
• Attachment 1 - Fremont - 2026-2027 Annual Action Plan Draft
Recommendation: Staff and the CAC recommend that the City Council take the following actions:
1. Hold a public hearing on the proposed FY 2026-28 CDBG Program Final Statement of Community Development Objectives and Projected Use of Funds.
2. Approve CDBG funding allocations for the next two fiscal years as recommended in this report, in the amount of $2,943,797, including:
a. $1,521,433 for capital projects;
b. $340,000 for microenterprise projects;
c. $468,192 for public services; and
d. $614,172 for CDBG Program administration.
3. Adopt a resolution approving and authorizing the submittal of the City’s FY 2026/27 and 2027/28 Final Statement of Community Development Block Grant Objectives and Projected Use of Funds, and the FY 2026/27 Annual Action Plan; authorizing the City Manager, or designee, to execute all required agreements and any necessary amendments related to the CDBG Program with HUD and approved grantees; and making findings of CEQA exemption.