Agenda Report
Fullerton City Council
MEETING DATE: MAY 3, 2022
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: JEFFREY W. COLLIER, ACTING CITY MANAGER
PREPARED BY: GREGORY PFOST, INTERIM DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT
KELLEE FRITZAL, DEPUTY DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT SUBJECT: COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM FISCAL YEAR 2022-23 ANNUAL ACTION PLAN
SUMMARY
Jurisdictions receiving U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) Program funding must submit a Consolidated Submission for Community Planning and Development Programs every five years.
RECOMMENDATION
Approve 2022-23 Annual Action Plan and authorize staff to submit documents to HUD for approval by the HUD due date.
Authorize Director of Community and Economic Development, or designee, to execute 2022-23 CDBG agreements with non-profits and City Departments.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Infrastructure and City Assets
Fiscal and Organizational Stability.
FISCAL IMPACT
No fiscal impact to the City’s General Fund, as the activities described in the 2022 Annual Action Plan have 100 percent federal funding. Sources of funding for Fiscal Year (FY) 2022-23 include:
CDBG FUNDS
Annual Allocation: $1,365,553
Reprogrammable Funds: $263,229
Housing Rehabilitation Revolving Funds: $200,000
HOME FUNDS
Annual Allocation: $539,238
Carryover Funds: $2,723,787
Anticipated Income: $120,000.
Staff will program the approved CDBG and HOME allocations in the FY 2022-23 All Funds Budget presented for adoption in June 2022.
DISCUSSION
The Consolidated Plan provides a five-year planning document designed to guide in the creation and implementation of the City’s Housing and Community Development programs using funding available through HUD. The Consolidated Plan coordinates all elements of Community Development including housing, neighborhood improvement, economic development and social services into a single unified plan. The City’s Community Development programs develop and maintain viable urban communities by preserving and developing affordable housing, expanding economic opportunities including job creation and retention and encouraging safe and suitable living environments without discrimination on the basis of race, color, religion, gender, national origin, familial status or disability.
The Annual Action Plan sets goals and objectives in the Consolidated Plan as well as sets performance benchmarks for measuring progress. The Action Plan contains proposed CDBG projects, eligible HOME categories and required narratives.
The Annual Action Plan implements the following activities that meet the goals of the 2020-2024 Consolidated Plan:
Affordable housing development, including housing for special needs and veterans Substandard housing rehabilitation
Assistance to non-profit organizations that provide public services Support Fair Housing Practices
Assist the homeless or those at-risk of becoming homeless Provide public infrastructure including streets, streetscape, flood and sewer improvements.
Staff advised the public of available funding, in compliance with federal regulations and to encourage citizen participation, and solicited proposals for CDBG funds. The City received 21 applications in response to the request for proposals for CDBG funds from non-profit agencies and City departments.
Community Development Block Grant Program (CDBG)
Title I of the Housing and Community Development Act of 1974, as amended, established the CDBG Program and authorizes HUD to provide funding for community development activities. The Program grants CDBG funding to jurisdictions provided each proposed project meets eligibility requirements and, as outlined in the Consolidated Plan and the Action Plan, either:
benefits low- and moderate-income residents
aids in the prevention or elimination of slums or blight, or meets other community development needs having a particular urgency, because existing conditions pose a serious and immediate threat to the health or welfare of the community and other financial resources are not available to meet such needs.
The City expects a $1,365,553 2022 CDBG allocation from HUD (based on the 2021 CDBG entitlement amount as HUD has not released the 2022 funding amounts). As shown on the following Table 1, the recommended CDBG budget for 2022 totals $1,828,782.
TABLE 1 – TOTAL FY 2022 RECOMMENDED CDBG BUDGET
Entitlement Allocation
$1,365,553
Reprogrammable CDBG Funds Unencumbered
$263,229
Housing Rehab Revolving Account
$200,000
CDBG Budget
$1,828,782
Housing Rehab Revolving Account
($200,000)
TOTAL AVAILABLE
$1,628,782
CDBG Proposed Project and Funding Recommendations (Attachment 4) itemizes the 2022 grant amount and limits, the 2021 allocations, the 2022 requests and the 2022 recommendations from the Community Development Citizen Committee (CDCC). As shown in Attachment 4, Housing Administration cannot exceed 20 percent of the annual entitlement ($273,110) and Public Service Activities cannot exceed 15 percent ($204,832). Summary of Proposed Projects and Funding Recommendations (Attachment 3) provides a list and description summaries of the CDBG and HOME projects and programs the CDCC reviewed for funding.
The following Table 2 summarizes the overall CDCC recommendation for the CDBG program.
TABLE 2 – SUMMARY OF 2022-23 RECOMMENDED CDBG BUDGET
Housing Administration (includes Fair Housing Services) $273,110
Public Service Agency Activities
$204,832
Housing Rehabilitation Program (includes housing rehab revolving account, lead hazard paint reduction program, BIG housing rehab program, administration) $545,840
Code Enforcement
$130,000
Infrastructure Improvements (ADA Transition Plan, Fullerton Transportation Center, Street and Alley reconstruction) $675,000
TOTAL
$1,828,782
Public Service Activities
Public Service Activities include, but are not limited to, services for the elderly and homeless, childcare, health, drug abuse, education, employment and social services. During a series of public meetings, the CDCC reviewed all proposals and requests for CDBG funding and heard presentations by the applicants. The CDCC based decisions on cost effectiveness, population served (youth, seniors, homeless), program administration and implementation. The CDCC also considers whether the agencies rely on CDBG funds to continue the operations of their programs and provide direct benefit to Fullerton residents.
Entities may use a portion of the CDBG entitlement for Public Service Activities but cannot exceed 15 percent of the annual entitlement. Therefore, the CDCC limited the public service activities allocation at $204,832.
The application process followed the guidelines of the Citizen Participation Plan in compliance with the 2020-24 Five-Year Consolidated Plan. The following Table 3 includes the requested amount, the recommended amount for public service programs, and the number of low-income Fullerton residents proposed to receive assistance (based on receiving the full amount requested).
TABLE 3 – FY 2022 RECOMMENDED PUBLIC SERVICES PROGRAM
Agency - Public Service Programs
Amount
Requested
CDCC Recommendation
Proposed # to Assist
Boys & Girls Club of Fullerton - After-School Care
$50,000
$36,000
250
Community Senior Serv – Lunch Café Program
$25,000
$15,000
110
Lutheran Social Services of Southern California – Victims Intervention Project $20,000
$15,000
60 Meals on Wheels of Fullerton – Meals and Supportive Services $25,870
$20,832
90 Mercy House Living Centers, Inc. – Bridges at Kraemer Place $15,000
$15,000
150
Pathways of Hope – Reginal Homeless Service Coordination $50,000
$35,000
250
Wound Walk – Fullerton Street Medic Program
$28,300
$15,000
85 YMCA of Orange County – Richman Center Youth Achievers $15,000
$13,000
30 Community/Economic Development Dept. – Homeless Case Management Services $55,000
$40,000
100
TOTAL PUBLIC SERVICE FUNDING
$284,170
$204,832
The CDCC did not recommend funding for the following two eligible activities for various reasons:
Easterseals Southern California – Autism Services Health Disparities Giving Children Hope – We’ve Got Your Back Program.
Housing Rehabilitation Program
The City's Housing Rehabilitation Program includes both CDBG and HOME funding and provides loans and grants. The City established a Loan Committee in the late 1970s to review and approve applications for CDBG and HOME funded loans and to award contracts for housing rehabilitation loans. The type of loans and grants offered by the City include the following:
1. Single-family units (owner-occupied)
2. Mobile home loans
3. Emergency loans and grants (provides grants to residents below 50% of the median-income to address emergency health and safety issues).
Although the Housing Rehabilitation Program provides housing rehabilitation loans and grants to residents of all ages that meet the income requirements, seniors comprise the majority of recipients. The City offers housing rehabilitation loans for owner-occupied single-family and mobile home units and include roof, plumbing and handicap accessibility improvements and repairs. The City also offers emergency grants, limited to the repair or replacement of items that make the home unlivable if not corrected immediately (i.e., broken gas line, plumbing, water heater, etc.).
Fair Housing
The City must provide a Fair Housing program that includes a landlord / tenant program as a requirement to receive CDBG funds. This can prove very costly to the City as it not only entails staff to provide information and recommendations but would also include legal assistance. The City has contracted for this service as it is cost effective to hire a non-profit that can provide the necessary services at a reduced price to the City. Two non-profits submitted applications to provide these services to Fullerton. The CDCC has recommended funding the Fair Housing Foundation.
Code Enforcement
The City established a special Code Enforcement program to provide proactive services in designated areas of the City. The assigned Code Enforcement officer works with the housing rehabilitation division and provides information to the residents regarding home rehabilitation assistance options available to them.
Infrastructure Improvements
Public Works Department requested $675,000 CDBG funding for street reconstruction and park improvements. The Capital Improvement Program (CIP) includes the proposed infrastructure projects identified by Public Works.
TABLE 4 – FY 2022 RECOMMENDED PUBLIC WORKS PROJECTS
Program
Amount Requested
CDCC Recommendation
Street Reconstruction (Brookdale Place)
$250,000
$250,000
Park Improvements (Gilbert Park)
$425,000
$425,000
TOTAL PUBLIC WORKS FUNDING
$675,000
$675,000
Actual CDBG Entitlement
Staff anticipates that the CDBG entitlement will increase slightly and recommends the following increases to the budget upon release of the actual entitlement amount:
Increase public services to the 15% maximum by providing more funding to the Homeless Case Management Program.
Increase administration to the 20% maximum by providing more funding to Housing Administration.
Allocate any additional funds to the Gilbert Park Improvement project.
If HUD announces an unexpected decrease, staff recommends the following decreases:
Decrease public services to the maximum 15% by decreasing all non-profits across the board.
Decrease administration to the 20% maximum by reducing funding to Housing Administration.
Delete funds to the Street Reconstruction – Brookdale Place project.
HOME PROGRAM
Title II (the HOME Investment Partnerships Act) of the 1990 Cranston-Gonzalez National Affordable Housing Act created the HOME Program. The HOME Program expands the supply of affordable housing. The HOME Program is not a categorical grant, in that it allows eligible jurisdictions to establish the type and mix of housing assistance programs to meet their local housing needs. Eligible activities include first-time homebuyer, tenant-based rental assistance, acquisition, rehabilitation and new construction programs.
The City will utilize HOME funding in one or more of five categories:
Administration
Affordable housing through acquisition and rehabilitation New construction
Community Housing Development Organizations (CHDO) funds Housing rehabilitation for owner occupied residences. HOME administration cannot exceed ten percent of the annual allocation ($53,923) and the City must allocate fifteen percent of the HOME dollars ($80,886) to a CHDO for an eligible HOME project.
The City may combine CHDO funds with acquisition / rehabilitation / new construction and the Program will allocate through a separate process. Like the CHDO funds, the funds allotted to acquisition / rehabilitation / new development are not attached to a specific project. However, HUD regulations requires approval of eligible HOME funded affordable housing activities in the Action Plan before receiving the funds. 2020-24 Five-Year Consolidated Plan May 19, 2020 - Page 7: Approval of the Action Plan does not obligate the City to fund only the activities listed, as the City may amend the Action Plan at a later date. Staff seeks an active, reliable CHDO to partner with to develop an acquisition / rehabilitation project that will provide additional affordable housing. When the City has identified a specific project, staff will present the project to City Council for consideration.
HUD has not announced the 2022 HOME allocation. The City anticipates that the allocation will equal or exceed the 2021 allocation. Staff recommends transferring $200,000 to the City’s Housing Rehabilitation Program. This funding, along with CDBG funds, will carry the program for two years. HOME funds differ from CDBG funds in that the City cannot use HOME funds for the grant programs that the City offers (Block Improvement Grant, Lead Based Paint Grant, Emergency Grant) because HOME funds must address all deficiencies and cannot limit funds to only specific issues.
TABLE 5 – TOTAL FY 2022 HOME PROGRAM BUDGET
2022-23 Entitlement Allocation (Anticipated New Funds)
$ 539,238
Carryover HOME Funds (Prior Year Funds)
$ 2,723,787
Anticipated Program Income HOME Funds
$120,000
TOTAL AVAILABLE
$3,383,025
Attachments:
Attachment 1 – PowerPoint Presentation
Attachment 2 – Draft 2022 Annual Action Plan
Attachment 3 – Summary of Proposed CDBG / HOME Projects Attachment 4 – CDBG Proposed Projects and Funding Recommendations CDBG Annual Action Plan
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