Agenda Report
Fullerton City Council
MEETING DATE: MAY 2, 2023
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: SUNAYANA THOMAS, DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT PREPARED BY: LINDA CORDOVA, HOUSING CONSULTANT
SUBJECT: FISCAL YEAR 2023-24 ANNUAL ACTION PLAN FOR COMMUNITY DEVELOPMENT BLOCK GRANT FUNDING
SUMMARY
All jurisdictions receiving funding under the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant Program must prepare and submit a Consolidated Submission for Community Planning and Development Programs (Consolidated Plan) every five years.
RECOMMENDATION
Approve the 2023-24 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 the 2023-24 CDBG agreements with non-profits and City Departments.
Authorize Director of Community and Economic Development to execute a letter informing Harbor View Terrace Apartments that the condition of awarding CDBG funds to this project is a one-time occurrence and that management is responsible for future maintenance and repairs.
CITY MANAGER REMARKS
Staff is requesting approval of the 2023-24 Annual Action Plan. The recommended funding for agencies and projects are summarized below.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Infrastructure and City Assets
Fiscal and Organizational Stability.
FISCAL IMPACT
This item has no General Fund fiscal impact as the City receives federal funding for the activities described in the 2023 Annual Action Plan.
Sources of funding for 2023-24 include:
CDBG Funds
Annual allocation: $1,388,882
Reprogrammable funds: $504,541
Housing rehabilitation revolving funds: $150,000
HOME Funds
Annual allocation: $546,530
Carryover funds: $2,363,025
Anticipated Income: $120,000.
DISCUSSION
The Consolidated Plan provides a five-year planning document to guide the creation and implementation of the City’s housing and community development programs using HUD funding. The Consolidated Plan coordinates all elements of community development including housing, neighborhood improvement, economic development and social services into a single unified plan. The Community Development programs develop and maintain viable urban communities through preservation and development of affordable housing, expansion of economic opportunities including job creation and retention and encouraging a safe and suitable living environment without discrimination based on 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 performance benchmarks for measuring progress. The Action Plan contains proposed Community Development Block Grant Program (CDBG) projects, eligible HOME categories and required narratives.
The Annual Action Plan implements the following activities that meet the goals of the 2020-24 Consolidated Plan:
affordable housing development, including housing for special needs and veterans substandard housing rehabilitation
assistance to non-profit organizations that provide public services Fair Housing Practices support
assistance to the homeless or those at-risk of becoming homeless provide public infrastructure including streets, streetscape, flood and sewer improvements.
Staff advised the public of the available funding and solicited proposals for CDBG funds in compliance with federal regulations and to encourage citizen participation. The City received 20 applications from non-profit agencies and City departments in response to the request for proposals for CDBG funds.
Community Development Block Grant Program (CDBG)
The Housing and Community Development Act of 1974 Title I, as amended, established the CDBG Program and authorizes HUD to provide funding for community development activities. HUD grants CDBG funding to jurisdictions, provided that each proposed project meets one of the following eligibility requirements outlined in the Consolidated Plan and the Action Plan:
1. Benefits low / moderate-income residents
2. Aids in prevention or elimination of slums or blight
3. 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 total $1,388,882 2023 CDBG allocation from HUD. The recommended CDBG budget for 2023 totals $2,043,423, as shown in Table 1.
TABLE 1 – Total Fiscal Year 2023 Recommended CDBG Budget Entitlement Allocation
$1,388,882
Reprogrammable CDBG Funds unencumbered
$504,541
Housing Rehab Revolving Account
$150,000
CDBG Budget
$2,043,423
Housing Rehab Revolving Account
($150,000)
TOTAL AVAILABLE
$1,893,423
CDBG Proposed Project and Funding Recommendations (Attachment 3) itemizes the 2023 grant amount and limits, the 2022 allocations, the 2023 requests and the 2023 recommendations from the Community Development Citizens’ Committee (CDCC). Housing Administration cannot exceed 20 percent of the annual entitlement ($277,776) and Public Service Activities cannot exceed 15 percent ($208,332). Summary of Proposed Projects and Funding Recommendations (Attachment 2) provides a list and description summaries of the CDBG and HOME projects and programs the CDCC reviewed for funding.
Table 2 summarizes the overall CDCC recommendation for the CDBG program.
TABLE 2 – Summary of 2023-24 Recommended CDBG Budget
Housing Administration (includes Fair Housing Services) $262,461
Public Service Agency Activities
$208,332
Housing Rehabilitation Program (includes housing rehab revolving account, lead hazard paint reduction program, BIG housing rehab program, administration) $767,630
Code Enforcement
$130,000
Infrastructure Improvements (Street Reconstruction and Park Improvements) $675,000
TOTAL
$2,043,423
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. The CDCC reviewed all proposals and requests for CDBG funding and heard presentations from applicants during a series of public meetings. The CDCC based decisions on cost effectiveness, population served (youth, seniors, homeless) and program administration and implementation. The CDCC also considered whether the agencies rely on CDBG funds to continue operating their programs and provide direct benefit to Fullerton residents.
The City can 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 to $208,332.
The application process followed the Citizen Participation Plan guidelines in compliance with the 2020-24 Five-Year Consolidated Plan. Table 3 lists the public service activities recommended for funding and includes the requested amount, the recommended amount and the number of low-income Fullerton residents that would receive assistance (based on the full amount requested).
TABLE 3 – FY 2023 Recommended Public Services Program
Agency - Public Service Programs
Amount
Requested
CDCC Recommendation
Proposed Number to Assist
Boys & Girls Club of Fullerton - After-School Care
$50,000
$33,000
250
CARE Housing Services – Fullerton City Lights Social Services $20,000
$15,000
161
Hart Community Homes – Monkey Business Café
$45,000
$15,000
8 Lutheran Social Services of Southern California – Victims Intervention Project $15,000
$10,000
60 Meals on Wheels of Fullerton – Meals and Supportive Services $20,000
$15,000
87 Mercy House Living Centers, Inc. – Bridges at Kraemer Place $15,000
$10,000
150
MOMS Orange County – Healthy Beginnings Home Visitation Program $15,000
$10,000
90 Pathways of Hope – Regional Homeless Service Coordination $50,000
$20,000
310
St. Jude Neighborhood Health Centers – A Healthier Fullerton: Access to Healthcare $40,000
$20,000
100
YMCA of Orange County – Richman Center Youth Achievers
$15,000
$15,000
25 Community/Economic Development Dept. – Homeless Case Management Services $84,660
$45,332
100
TOTAL PUBLIC SERVICE FUNDING
$369,660
$208,332
The CDCC did not recommend the following activities for funding:
Action Alliance Foundation / Project Hope - ineligible activity as the request asked to pay rent in a shelter program Community SeniorServ (MOWOC) / Lunch Café Program – an eligible activity but would have exceeded the 15 percent public service limit.
Housing Rehabilitation Program
The City's Housing Rehabilitation Program 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 includes the following:
1. Single-family unit loans (owner-occupied)
2. Mobile home loans
3. Emergency loans and grants (provides grants to residents below 50 percent of the median-income to address emergency health and safety issues).
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. Owner-occupied single-family and mobile home units may quality for housing rehabilitation loans for roof, plumbing and handicap accessibility improvements and repairs. The Program also offers emergency grants limited to repair or replacement of items that make the home unlivable without immediate correction (i.e., broken gas line, plumbing, water heater, etc.).
The CDCC recommends funding for roof replacement at Harbor View Terrace with the condition that this is a one-time assistance and that management maintain the property in good condition as it is their legal obligation under the City’s Affordability Covenant Agreement.
Fair Housing
The City must provide a fair housing program that includes a landlord / tenant program as a requirement to receive CDBG funds. The program requires staff to provide information, recommendations and legal assistance which poses a financial burden to the City. The City has found it cost effective to contract with a non-profit to provide the necessary services at a reduced price to the City.
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 available to them.
Infrastructure Improvements
The Public Works Department requested $675,000 in CDBG funding for street reconstruction and park improvements. The Capital Improvement Program includes the proposed infrastructure projects identified by Public Works TABLE 4 – FY 2023 RECOMMENDED PUBLIC WORKS PROJECTS
Program
Amount Requested
CDCC Recommendation
Street Reconstruction (Sudene / Santa Fe)
$325,000
$325,000
Park Improvements (Valencia Park)
$350,000
$350,000
TOTAL PUBLIC WORKS FUNDING
$675,000
$675,000
HOME Program
The 1990 Cranston-Gonzalez National Affordable Housing Act Title II (the HOME Investment Partnerships Act) created the HOME Program. The HOME Program expands 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 / rehabilitation new construction
Community Housing Development Organizations (CHDO) funds Tenant-Based Rental Assistance (TBRA). The 2023-24 HOME allocation totals $546,530. HOME administration cannot exceed ten percent of the annual allocation ($54,653) and the City must allocate fifteen percent of the HOME dollars ($81,980) to a CHDO for an eligible HOME project.
The City may combine CHDO funds with acquisition / rehabilitation / new construction and 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 require the City approve eligible HOME-funded affordable housing activities in the Action Plan before the receiving funds. 2020-24 Five-Year Consolidated Plan May 19, 2020 - Page 7: Action Plan approval does not obligate the City to fund only the activities listed, as the City may amend the Action Plan at a later date. Staff will identify an active, reliable CHDO to partner with to develop an acquisition / rehabilitation project that will provide additional affordable housing as needed. Staff will present the project City Council for consideration when staff has identified a specific project.
TABLE 5 – Total FY 2022 HOME Program Budget
2023-24 Entitlement Allocation (Anticipated New Funds)
$ 546,530
Carryover HOME Funds (Prior Year Funds)
$2,363,025
Anticipated Program Income HOME Funds
$ 120,000
TOTAL AVAILABLE
$3,383,025
The following lists the proposed HOME activities for 2023-24:
Administration: The City will allocate the maximum $54,653 to administration of the HOME Program.
TBRA: The current mobile home rental assistance program for seniors is in the second and final year of the program. The City will develop a new two-year program for seniors (62+) or veterans meeting the income guidelines living in mobile homes for the 2023-24 Program Year. ($300,000).
Staff will develop and implement a second two-year Citywide program for renters meeting the income guidelines and paying more than 30 percent of their income into housing costs in 2023. ($500,000). .
1600 West Commonwealth: City Council authorized negotiations of an Exclusive Negotiation Agreement (ENA) with Meta Housing Corporation for the City-owned property located at 1600 West Commonwealth Avenue on October 19, 2021. The project will have 100 percent affordable providing 50 – 65 units. The City will allocate a maximum one million HOME dollars to this project. The final agreement will come before City Council for final approval.
Attachments:
Attachment 1 – Draft 2023 Annual Action Plan
Attachment 2 – Summary of Proposed CDBG/HOME Projects
Attachment 3 – CDBG Proposed Projects and Funding Recommendations cc: City Manager Eric J. Levitt
Fiscal Year 2023-24 Annual Action Plan
May 2, 2023 - Page PAGE \* MERGEFORMAT 6