Agenda Item No. 11
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: May 23, 2022 FROM: Matthew Bronson, City Manager
PREPARED BY: Bruce Buckingham, Community Development Director Janet Reese, Associate Planner
SUBJECT: 2022 State Community Development Block Grant Application
RECOMMENDATION
Conduct a public hearing to consider adoption of a Resolution authorizing the submission of a 2022 Community Development Block Grant (CDBG) Public Service application for a NonCongregate Emergency Shelter Operations Program.
BACKGROUND
The U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) program authorizes the use of funds to assist low- and moderate-income families or aid in the prevention or elimination of slums or blight. There are two types of CDBG programs:
“entitlement” and “non-entitlement”. Metropolitan cities and urban counties are entitled to receive annual grants under the “entitlement” program direct from HUD. Metropolitan cities are principal cities or Metropolitan Areas (MAs) or other cities within MAs that have populations of at least 50,000. Urban Counties are within MAs that have population of 200,000 or more excluding the population of metropolitan cities within their boundaries. The “non-entitlement” program is administered by the State Department of Housing and Community Development (HCD) and the City can apply for funding under a competitive application process. The City has previously received a total of $5.8 million of CDBG funding in 2013, 2017, and 2020 for water line improvements and $1.2 million in funding for Eviction Prevention and Security Deposit programs through successful applications for the non-entitlement program. An additional $417,000 in CDBG-CV (CDBG-Coronavirus) funds was also received in 2021 for Warming Shelter Operations, a Childcare Training Program, and a Homeless Services Program.
The 2022 State Notice of Funding Availability (NOFA) involving approximately $30 million in FY 2021-22 CDBG funds was recently released. Eligible jurisdictions may apply for a maximum of three applications, with one project or program per application and total funding not to exceed $1,500,000. Applications for Public Improvements and Public Facilities projects are not being accepted under this NOFA and are not included in the list of eligible activity categories.
The City is required to conduct a public hearing to discuss potential application(s) and allow for public input. Therefore, staff requests that the Council review potential CDBG programs/activities and provide direction on the projects/activities that staff should include in the application(s).
Project/Activity Selection
In order to be considered eligible, a suggested project/activity must meet one or more of the three National Objectives listed in CDBG Federal Statutes:
Staff Report: Potential Projects for 2022 CDBG Program Page 2 June 13, 2022
• Benefit to low- and moderate-income persons;
• Prevention or elimination of slums and blight; or
• Meeting an urgent community need which poses an immediate threat to the health and welfare of the community (State designates when the “urgent need” objective is allowed for a NOFA).
The benefit to low- and moderate-income persons is the most predominately used National Objective. In order to benefit low- or moderate-income persons, the project/activity must either benefit an area that is comprised of at least 51% low- or moderate-income households, or the program benefits individually qualified households (i.e., each participating household is income certified). In addition to meeting one of the three National Objectives, the project/activity must also fall under one of the activity categories listed below. • Public Service (maximum grant of $500,000). Examples include subsistence payments, security deposits, childcare, health care, recreation programs, fair housing counseling, drug and alcohol abuse counseling and testing, homeless services, senior services, and nutrition services benefitting low- and moderate-income persons. • Planning and Technical Assistance (maximum grant of $250,000). The product must show a connection to assisting with an eligible CDBG activity that, if implemented, meets a National Objective. Product(s) are submitted to the State at the time of completion.
Examples include studies, analysis, and data gathering. • Housing Activities:
• Homeownership Assistance Program (maximum grant of $500,000): assistance with loans for down-payment or closing costs.
• Housing Rehabilitation Program for Single Family Homes (maximum grant of $500,000): loans for repairs and improvements of owner-occupied units • Business Assistance (maximum grant of $750,000. Examples include financing of working capital, furniture, equipment, and property repairs/improvements. CDBG regulations allow up to $35,000 of assistance per job retained/created, due to underwriting requirements for business/microenterprise assistance programs, a business would generally receive about $25,000 of the $35,000. Based on the maximum award, approximately 25 jobs could be retained/created.
• Microenterprise Assistance (maximum grant of $250,000). Examples include business training, financing of working capital, furniture, equipment, and property repairs/improvements. CDBG regulations allow up to $35,000 of assistance per job retained/created, due to underwriting requirements for business/microenterprise assistance programs, a business would generally receive about $25,000 of the $35,000.
Based on the maximum award, approximately 7 jobs could be retained/created.
Potential CDBG Projects
In order to provide Council with a list of potential projects, staff has reviewed Council-adopted policies to propose the following list of potential projects. The Council may want to discuss additional activities including those that may be received during the public hearing.
Staff Report: Potential Projects for 2022 CDBG Program Page 3 June 13, 2022
Public Service
• Non-Congregate Emergency Shelter Operations Program: 5Cities Homeless Coalition (5CHC) will be operating a non-congregate emergency shelter that is under construction on a County-owned site at South 16th Street and Long Branch Avenue. While the project has funding for construction and operations through December 2022, future operations are unfunded. Therefore, 5CHC are requesting $467,300 in funding (an additional $32,700 in general administration would be included in the maximum allowable request of $500,000 for a public services activity) to continue this program. (Reference Attachment 2).
Planning and Technical Assistance
• Staff are not aware of a need for an eligible study.
Housing
• Housing Rehabilitation for sites with less than four units: The Housing Element includes goals for seeking financing for housing rehabilitation. This program can provide loans for repairs and improvements to owner- or renter-occupied units at a low interest rate, typically between 0-3%. Due to a significant sum of funds benefitting a relatively low number of beneficiaries, staff does not recommend applying for this program.
• Homeownership Assistance: The Housing Element includes goals for seeking financing for first time homebuyers. This program provides a grant to the City which loans the funds to firsttime homebuyers for down-payment or closing costs. Due to a significant sum of funds benefitting a relatively low number of beneficiaries, staff does not recommend applying for this program.
Business Assistance & Microenterprise Assistance
• This program provides a grant to the City which loans the funds to eligible businesses. The loans are typically for businesses that do not have access to conventional lending sources.
Staff is not aware of any businesses that are seeking such loans.
In conclusion, staff is requesting the Council review potential CDBG programs/activities, provide direction on the projects/activities that staff should include in the application(s), and adopt the Resolution authorizing the submission of a 2022 CDBG application.
ALTERNATIVES
1. Conduct a public hearing to consider adopting a Resolution authorizing the submission of a 2022 CDBG Public Service application for a Non-Congregate Emergency Shelter Operations Program; or
2. Provide alternative direction to staff.
FISCAL IMPACT
Adams Ashby Group, the City’s general administration consultant, estimates the cost to prepare an application to be approximately $2,500. The costs associated with the preparation of applications are an eligible expenditure of CDBG General Administration funds. Approximately 26 percent of the City’s portion of the 2020 CDBG General Administration funds have been expended, with two years remaining in the three-year State contract; therefore, there are sufficient funds to prepare the 2022 CDBG application utilizing 2020 CDBG funds. If awarded, an approved CDBG application is 100% grant funded, including the costs to administer the grant.
Staff Report: Potential Projects for 2022 CDBG Program Page 4 June 13, 2022
PUBLIC NOTIFICATION
The public hearing notice was published in New Times on June 2, 2022 and a copy of this staff report was sent to the 5Cities Homeless Coalition. The agenda was posted in accordance with the Brown Act.
Attachments
1. Resolution
2. 5Cities Homeless Coalition Request Letter
Attachment 1
Department of Housing and Community Development
Revised 10/15/21 2022 CDBG NOFA
RESOLUTION NO.__
A RESOLUTION APPROVING AN APPLICATION FOR FUNDING AND
THE EXECUTION OF A GRANT AGREEMENT AND ANY
AMENDMENTS THERETO FROM THE 2021-2022 FUNDING YEAR OF
THE STATE CDBG PROGRAM
BE IT RESOLVED by the City Council of the City of Grover Beach as follows:
SECTION 1:
The City Council has reviewed and hereby approves the submission to the State of California of one or more application(s) in the aggregate amount, not to exceed, of $500,000 for the following CDBG activities, pursuant to the April 2022 CDBG NOFA:
List activities and amounts
Activity (i.e. Public Services, Housing
Rehabilitation)
Dollar Amount Being Requested for
the Activity
Public Services $500,000
$
$
$
SECTION 2:
The City hereby approves the use of Program Income in an amount not to exceed $0 for the CDBG activities described in Section 1.
SECTION 3:
The City acknowledges compliance with all state and federal public participation requirements in the development of its application(s).
SECTION 4:
The City hereby authorizes and directs the (title of designated official) City Manager, or designee, to execute and deliver all applications and act on the City's behalf in all matters pertaining to all such applications.
SECTION 5:
If an application is approved, the City Manager, or designee, is authorized to enter into, execute and deliver the grant agreement (i.e., Standard Agreement) and any and all Department of Housing and Community Development
Revised 10/15/21 2022 CDBG NOFA
subsequent amendments thereto with the State of California for the purposes of the grant.
SECTION 6:
If an application is approved, the City Manager, or designee, is authorized to sign and submit Funds Requests and all required reporting forms and other documentation as may be required by the State of California from time to time in connection with the grant.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Grover Beach held on June 13, 2022 by the following vote:
AYES: _____ NOES: _____
ABSENT: _____ ABSTAIN: _____
__________________________________
Jeff Lee, Mayor
City Council
STATE OF CALIFORNIA
City of Grover Beach
I, Wendi Sims, City Clerk of the City of Grover Beach, State of California, hereby certify the above and foregoing to be a full, true and correct copy of a resolution adopted by said City Council on this 13th day of June, 2022.
Wendi Sims, City Clerk of the City of Grover Beach,
State of California
By: _____________________________________
**DRAFT**
GROVER BEACH CDBG 22
PROPOSAL - 5CITIES HOMELESS COALITION
DESCRIPTION OF COMMUNITY SERVICES PROVIDED BY 5CHC:
5Cities Homeless Coalition is transforming the lives of those who are homeless or facing homelessness in Southern San Luis Obispo County, with a special focus on the southern region from Avila to Nipomo. Our work goes beyond the immediate, to ensure that clients have the plan, skill sets, education and financial means to be successful and self- sufficient. We are proud to share that more than 90% of the households that we have helped to house (or prevented from eviction) remain in their home. We do this by providing intensive case management and supportive services. We work with clients to develop their own unique plans as well as the resources and skills needed for them to be successfully housed and remain housed. Programs include coordinated assessment; information and referral; pre and post case management with medical respite clients in partnership with Arroyo Grande Community Hospital and Community Action Partnership San Luis Obispo; benefits advocacy (SSI, Medicare, etc.); transitional-age homeless youth outreach and case management; winter warming shelter during inclement weather (18 clients avg); rapid re-housing search and stabilization services and homeless prevention (including budget counseling and financial literacy), and direct financial assistance for immediate needs, rents and deposits. A complete list of services provided by 5CHC is attached and described in our full-year 2020 program report.
The Coalition works closely with local government, business, community agencies and organizations to assess current homeless services and opportunities for collaboration to provide for immediate needs and to maximize our efforts without duplication to cooperatively assist those in need. With the onset of the COVID pandemic requests for assistance have increased to about 600 calls per month.
The Coalition recognizes the impact of homelessness not only to those who are displaced but the community as a whole. Our efforts are focused on preventing homelessness in addition to assisting those who have lost their homes. The cost of living here on the Central Coast for those “living on the edge” is extremely challenging.
Rental rates have increased over 50% since 2013 in San Luis Obispo County; this is the highest increase in the State – and leaves our region among the least affordable in the country.
A recent report by the National Low-Income Housing Coalition, (Out of Reach 2019) noted that a minimum wage earner would have to work 99 hours per week to afford a 2- bedroom apartment in San Luis Obispo County. This challenge has a direct effect on the City’s strategic economic development efforts to encourage development for maintaining a vibrant tourist-based economy, which is dependent on service industry workers whose wages are not keeping up with housing cost increases. These are among the community members who are seeking our assistance almost daily.
Attachment 2
HOMELESS PROGRAMS: Non-Congregate Emergency Shelter
The solution to ending homelessness lies with having sufficient housing availability.
Helping those experiencing homelessness to find permanent housing remains the core mission of 5Cities Homeless Coalition. However, there is a need to provide interim shelter and services both for the well-being of those living on the streets and for the health and safety of the broader community.
The lack of shelter in San Luis Obispo County for those experiencing homelessness is severe. San Luis Obispo County ranks 3rd in the nation for the highest unsheltered percentage (79%) of those who are homeless for a largely suburban area, per the 2019 Annual Homeless Assessment Report presented to Congress. In the southern portion of the county, there are no shelters.
In 2018 the County Board of Supervisors recognized the challenge, by declaring a homeless shelter crisis, that would enable the County to begin receiving state and federal funding to address this challenge. This crisis continues to increase. In the time since, no permanent shelter location has been identified in the south county, and housing scarcity continues to worsen due to rising rents and limited wages.
Unsheltered homelessness in San Luis Obispo County has been trending upwards since 2016, growing by 22 percent over the last five years. With the onset of the COVID-19 pandemic, providing shelter became even more challenging, as health and safety procedures required those providing congregate shelters in the county to reduce the number who could be served, and for some periods to close their doors completely due to a COVID outbreak.
Recognizing these challenges, our community is resolved to take steps to address this growing challenge with the creation and operation of a non-congregate emergency shelter in Grover Beach. Planned to open in summer of 2022, the shelter will provide temporary housing for approximately 30 participants seeking to find housing stability.
This project is a demonstration of these partnerships, involving the County of San Luis Obispo, City of Grover Beach, and 5Cities Homeless Coalition as the service provider. 5Cities Homeless Coalition has a long-standing footprint in our community providing outreach, winter shelter (warming center) and housing services.
The funds provided through this grant will enable continued operation in 2023-24, as other funding sources sunset.
How Will This Project Make A Difference?
Health and Safety: First and foremost, the project will provide a safe place for those experiencing homelessness. Those who are currently living in their car or on the street, will have a clean, safe place to sleep – enabling them to change their focus from that of living on the street to looking forward. With the stability of these temporary cabins, guests will be able to engage with services to help them to ready for permanent longterm housing and self-sufficiency.
Housing and Income: Those who are homeless experience multiple barriers to securing permanent housing, including limited or no income. Working with 5Cities Homeless Coalition and other community partners, guests will work on their individualized housing stability plan to address the individual’s barriers to permanent housing and identify opportunities. Envisioned to be a 90-day program, guests will meet regularly with their case manager and attend educational sessions to develop life-skills, money management, job training, etc. With the support of 5CHC and other service providers, guests will be connected to other community resources and benefits to help them bridge the gap of high housing costs and little or no income.
Co-location at this site with the Courts, County Drug and Alcohol, and County Public Health affords an opportunity to work more closely potentially piloting specialized services for this population.
The location of the shelter is currently unused, and therefore will not displace any other service or activity. The modular design of the project will ensure that is has limited impact to the site, with minimal change. Also, the co-location at this site with the Courts, County Drug and Alcohol, and County Public Health affords an opportunity to work more closely, potentially with pilot services specific to this program. The County of San Luis Obispo has issued a use permit to the Coalition for the site, which is currently being developed.
23-24 Non-Congregate Shelter Budget Total GB Request
Income:
County of San Luis Obispo ARPA $650,000
County of San Luis Obispo ESG $300,000
City of Arroyo Grande $300,000
City Of Pismo Beach (not- secured) $300,000
City of Grover Beach CDBG $465,000 $465,000
Private Contributions $54,909
TOTAL INCOME $2,069,909
Laundry - bedding and Towels $104,000 $28,080
Laundry - per client per week $62,400 $16,848
Utilities Per Person Estimate $72,000 $19,440
Sanitation/Cleaning $10,400 $2,808
WiFi Monthly Fee $6,000 $1,620
Food $438,000 $122,000
Outreach & Shelter Program Manager $69,000 $19,000
Shelter Supervisor $116,480 $32,000
Case Manager $104,000 $29,050
Non-Congregate Emergency Shelter Staff $898,560 $189,675 HMIS $16,000 $4,479
Insurance & Worker's Comp $5,000
Shared Indirect Expenses@ 10% $168,069 $2,300
TOTAL EXPENSE $2,069,909 $465,000