AGENDA ITEM NO. 8
CITY OF HAWTHORNE
City Council
AGENDA BILL
For the meeting of April 23, 2024
Originating Department: Housing
City Manager: __________
Vontray Norris
Dir. of Housing: ___________
Kimberly Mack
SUBJECT:
Public Hearing on the Draft 2024-2025 Action Plan for the Community Development Block Grant (CDBG) and Home Investment Partnerships (HOME) Programs, Draft Substantial Amendment to the 2021-2022 Action Plan for the Home Investment Partnerships – American Rescue Plan (HOME-ARP) Program, and Draft Substantial Amendment to the 2020-2024 Consolidated Plan RECOMMENDED MOTION:
The staff advises that the City Council:
1. Conduct a public hearing and receive comments on the draft 2024-2025 Action Plan for the use of Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME) funds, draft Substantial Amendment to the 2021-2022 Action Plan for the use of HOME Investment Partnerships – American Rescue Plan (HOME-ARP) funds, and draft Substantial Amendment to the 2020-2024 Consolidated Plan.
2. Adopt the 2024-2025 Action Plan, 2021-2022 Action Plan, and 2020-2024 Consolidated Plan and authorize the City Manager, or designee, to submit the plans and any necessary amendments to the plans to the United State Department of Housing and Urban Development (HUD).
3. Provide City staff with a methodology to distribute funds should the City’s 2024-2025 CDBG and HOME allocation increase or decrease.
4. Authorize the City Manager, or designee, to negotiate, execute, and amend contracts with subrecipients or professional service providers as necessary to implement the CDBG and HOME projects identified in the 2024-2025 Action Plan as well as the HOME-ARP projects identified in the 2021-2022 Action Plan.
5. Authorize the City Manager, or designee, to execute, amend, and submit to HUD all plans and documents necessary to administer the 2024-2025 CDBG and HOME programs.
6. Authorize the appropriation of funds for the 2024-2025 CDBG and HOME programs.
DISCUSSION:
The City of Hawthorne City Council adopted the 2020-2024 Consolidated Plan on May 12, 2020, which described the City’s housing and community development needs and strategies to address those needs over five years using HUD entitlement grant funds. The 2024-2025 Action Plan is the fifth and final of five annual plans implementing the 2020-2024 Consolidated Plan Strategic Plan goals to invest annual allocations of CDBG and HOME funds from HUD.
As part of its responsibility in receiving these funds, the City must prepare and submit an annual Action Plan outlining the proposed uses of CDBG and HOME funds to address the priorities in the 2020-2024 Consolidated Plan. To comply with HUD regulations, the 2024-2025 Action Plan must be submitted to HUD on or before May 15, 2024.
For the 2024-2025 program year, the City anticipates it will receive approximately $1,215,028 of CDBG and $635,813 of HOME funds from HUD. The 2024-2025 Action Plan will invest the City’s current year CDBG and HOME allocations and $806,910.13 in prior year unprogrammed CDBG funds and $4,490,956.12 in prior year unprogrammed HOME funds to the following activities to be implemented from July 1, 2024 to June 30, 2025.
2024-2025 CDBG PROGRAM
Public Service Activities
South Bay Workforce Investment Board: Teen Center $96,150.00 New Star Family Justice Center: Domestic Violence Services $22,500.00 Family Promise of the South Bay: Housing Stabilization Services $20,000.00 Catholic Charities of LA: St. Margaret’s Emergency Assistance $22,604.00 The Richstone Family Center: Behavioral Health Services $21,000.00 Sub-Total: $182,254.00
Capital Activities
City of Hawthorne: Section 108 Loan Repayment $355,074.00 City of Hawthorne: Housing Rehabilitation Program $430,000.00 City of Hawthorne: Public Housing Modernization $200,000.00 City of Hawthorne: Acquisition and Rehabilitation $611,605.13 Sub-Total: $1,596,679.13
Program Administration Activities
City of Hawthorne: CDBG Program Administration $213,005.00 Housing Rights Center: Fair Housing Services $30,000.00 Sub-Total: $243,005.00
CDBG TOTAL: $2,021,938.13
2024-2025 HOME PROGRAM
Housing Activities
City of Hawthorne: Acquisition, Rehab, Resale $1,600,000.00 City of Hawthorne: Homebuyer Assistance $350,000.00
City of Hawthorne: Rental Rehabilitation (includes PY23) $2,640,781.12 CHDO: Set-Aside PY20, 21, 22, 23, & 24 $472,407.00
Sub-Total: $5,063,188.12
Program Administration Activities
City of Hawthorne: HOME Program Administration $63,581.00 Sub-Total: $63,581.00
HOME TOTAL: $5,126,769.12
It is important to note that the proposed $1,600,000 of HOME funds for the Acquisition, Rehabilitation, and Resale (ARR) project will be utilized to leverage additional financing, primarily from the Pathways to Removing Obstacles to Housing (PRO Housing) grant. In the event the City is not awarded the PRO Housing grant, a minor amendment will be completed to reprogram $800,000 from the ARR project to the ongoing Rental Rehabilitation project. Under this scenario, the revised ARR budget would be $800,000, and the revised Rental Rehabilitation project budget would be $3,440,781.12. This approach ensures strategic investment of funds in active projects to maximize positive community impacts.
Additionally, the City is requesting up to $5,740,140 in Section 108 Loan Guarantee funds to assist with various public facility improvements. To facilitate a more streamlined process, the City is including the anticipated use of funds as part of this Action Plan. However, it should be noted that the following activities will only be carried out upon approval of the City’s Section 108 Loan application by HUD.
2024-2025 SECTION 108 LOAN PROGRAM
Capital Activities
City of Hawthorne: Senior Center $3,300,000.00
City of Hawthorne: Ramona Park $700,000.00
City of Hawthorne: Jim Thorpe Baseball Field $500,000.00 City of Hawthorne: Eucalyptus Park $1,240,140.00
Sub-Total: $5,740,140.00
In the event the City’s 2024-2025 annual allocation should change, a request of the City Council is being made to provide staff and the public with a methodology for which activity budgets would be adjusted. It is recommended that the City Council adopt the following language for adjusting activity budgets for the CDBG and HOME programs should the City’s 2024-2025 annual allocation change:
• Should the CDBG allocation be greater than $1,215,028:
o Fair Housing Services will remain at $30,000 but the CDBG Administration budget will be increased to be compliant with the 20% cap for administrative activities. o All public service activities will receive an equitable increase to be compliant with the 15% cap for public services activities.
o Balance of funds will be added to the City’s Acquisition and Rehabilitation activity. o Funding levels for all outstanding activities will remain the same as proposed in the 2024-2025 Action Plan
• Should the CDBG allocation be less than $1,215,028:
o Fair Housing Services will remain at $30,000 but the CDBG Administration budget will be reduced to be compliant with the 20% cap for administrative activities. o All public service activities will receive an equitable reduction to be compliant with the 15% cap for public services activities.
o Balance of funds will be deducted from the City’s Acquisition and Rehabilitation activity.
o Funding levels for all outstanding activities will remain the same as proposed in the 2024-2025 Action Plan.
• Should the HOME allocation be greater than $635,813:
o The HOME Administration budget will be increased to be compliant with the 10% cap for administrative activities.
o The CHDO activity budget will be increased to be compliant with the 15% set-aside requirement.
o Balance of funds will be added to the City’s Homebuyer Assistance program. • Should the HOME allocation be less than $635,813:
o The HOME Administration budget will be reduced to be compliant with the 10% cap for administrative activities.
o The CHDO activity budget will be reduced to be compliant with the 15% set-aside requirement.
o Balance of funds will be added to the City’s Homebuyer Assistance program.
Furthermore, the City has proposed a substantial amendment to the 2021-2022 Action Plan for the use of HOME-ARP funds. The proposed amendment was informed by the recent Notice of Funding Availability (NOFA) process, which had the aim of identifying capable subrecipients to implement the TBRA program and provide supportive services to qualifying populations within the City. Regrettably, the response to the NOFA did not yield any subrecipients interested in delivering the TBRA program. However, it attracted a surplus of applicants willing to provide supportive services, surpassing the funding allocation.
In light of these outcomes, the City decided to reevaluate its allocation strategy for the HOMEARP program. Consequently, the revised allocation will now prioritize funding for supportive services alongside administration and planning activities for the HOME-ARP program. This adjustment ensures that the City’s resources are efficiently allocated to meet the pressing needs of the community, focusing on providing essential supportive services to those in need while
streamlining administrative efforts for effective program implementation. As a result, the Allocation Plan was amended to reflect the following:
2021-2022 HOME-ARP PROGRAM
Capital Activities
Supportive Services $1,841,694.00
City of Hawthorne: Administration $325,004.00
Sub-Total: $2,166,698.00
For purposes of the National Environmental Policy Act and the California Environmental Quality Act, approval of the draft 2024-2025 Action Plan, draft Substantial Amendment to the 2021-2022 Action Plan, and draft Substantial Amendment to the 2020-2024 Consolidated Plan is categorically exempt from environmental review. Before the commitment or release of funds for each of the proposed projects, HUD requires that the environmental impact of all activities outlined in the Action Plans be assessed and documented according to applicable program regulations. An appropriate environmental review will be prepared for each approved activity prior to entering into an agreement with any entity to receive CDBG or HOME funds.
ECONOMIC DEVELOPMENT STRATEGIC PLAN:
None
FISCAL IMPACT:
The City’s anticipated FY2024-2025 federal entitlement program budget is $1,215,028 in CDBG and $635,813 in HOME funds. Approval of the draft 2024-2025 Action Plan will not impact the General Fund as such costs, including staff and legal counsel costs related to preparation and review of contractual agreements with funding recipients, will be covered by CDBG and HOME administrative allocations. Approval of the draft substantial amendment to the 2021-2022 Action Plan will not impact the General Fund as such costs will be covered by the HOME-ARP allocation.
NOTICING PROCEDURES:
In compliance with federal regulations, a Notice of Public Hearing was published on March 21, 2024, in the Hawthorne Press-Tribune, informing the public of the availability of the draft 2024- 2025 Action Plan, draft Substantial Amendment to the 2021-2022 Action Plan, and draft Substantial Amendment to the 2020-2024 Consolidated Plan. A copy of the draft documents was made available at City Hall, the Hawthorne Public Library, and on the City’s website for public review and comment from March 21, 2024, through and including April 23, 2024.
ATTACHMENT(S):
1. Draft 2024-2025 Action Plan
2. Draft Substantial Amendment to 2021-2022 HOME ARP Allocation Plan
3. Draft Substantial Amendment to 2020-2024 Consolidated Plan and 2020-2021 Action Plan
4. 24-25 AP Public Hearing PowerPoint