DATE: February 25, 2025
TO: Mayor and City Council
FROM: Assistant City Manager
SUBJECT: Adopt a Resolution Authorizing the City Manager to Amend the Fiscal Year 2024- 25 Agreement with Habitat for Humanity of the East Bay/Silicon Valley, Inc. to Increase the Award by $53,817 for a Not-to-Exceed Amount of $228,817
RECOMMENDATION
That City Council adopt a Resolution (Attachment II) authorizing the City Manager to execute an amendment to the Fiscal Year 2024 -25 agreement Habitat for Humanity of the East Bay/Silicon Valley, Inc. (“Habitat”) to increase the contract by $53,817 for a total not to exceed $228,817 utilizing prior year unspent Community Development Block Grant (CDBG) funds.
SUMMARY
This item amends the City’s existing home rehabilitation program agreement with Habitat for Humanity of the East Bay/Silicon Valley, Inc. (“Habitat”) to assign eligible and previously unspent Community Development Block Grant (CDBG) funds. This amendment would allow Habitat to provide administrative support for upcoming City -funded projects and leverage State funds for home rehabilitation grants to low-income homeowners in Hayward. The additional $53,736 includes $37,081 in unspent balance from Habitat’s FY 2022-23 contract and $16,736 in unallocated FY 2018-19 CDBG entitlement funds set aside for this type of use.
The amendment would increase the FY 2025 agreement to an amount not to exceed $228,817.
Habitat is one of two CDBG -funded providers in the City’s home rehabilitation program administered by the Community Services Division (CSD). Their work encompasses major health and safety repairs for owner-occupied, low-income single-family and mobile homes. The home rehabilitation program is intended to preserve habitability and prevent displacement of low-income homeowners. Habitat’s contract also includes project management and CDBG compliance support to the City for CDBG-funded public facilities and infrastructure projects.
The additional funding added through this amendment would provide Habitat with the administrative support needed to grow its project pipeline for FY 2025-26 and leverage up to $1.6 million in outside funding for the rehabilitation of low-income Hayward homes, while still providing vital project management and CDBG-compliance support to the City.
BACKGROUND AND DISCUSSION
On April 23, 2024, City Council adopted Resolution 24-078, which affirmed the Community Services Commission’s FY 2024-25 Community Agency Funding (CAF) recommendations for the use of the City’s annual CDBG entitlement allocation.1 As part of the recommendations, City Council allocated $175,000 to Habitat. The contract included $150,000 in funding to support Habitat’s home rehabilitation activities, as well as $25,000 to provide project management and CDBG compliance support on the City’s behalf for CDBG-funded public facilities and infrastructure projects. Habitat, along with Rebuilding Together East Bay Network, provides services to low-income homeowners as part of the City’s Home Rehabilitation Program. The program is intended to preserve habitability and prevent the displacement of vulnerable low- income homeowners. The City included home rehabilitation as part of the Housing Program projects outlined in its FY 20 20-21 to FY 20 24-25 Consolidated Plan submitted to the US Department of Housing and Urban Development (HUD). The program also directly aligns with City Council’s Strategic Priority of “Preserve, Protect, and Produce Housing for All ” and is included as an activity in the City’s General Plan.
Habitat’s role within the Home Rehabilitation Program is the provision of major home repairs to eligible low-income Hayward homeowners. Repair services are provided to owners of both single-family and mobile homes, and may include rehabilitation or replacement of roofs, siding, porches, stairs, water heaters, furnaces, swamp coolers, floorin g, and appliances. Common repairs include plumbing and electrical maintenance, window replacement, and installation of accessibility features.
In addition to its Home Rehabilitation Program role, Habitat provides project management support with implementation of other CDBG-funded neighborhood facilities projects. In this capacity, Habitat ensures that awarded projects conform to HUD regulations for procurement, operations, and wages. In FY 20 24-25, Habitat is providing the City with support on facility improvements to emergency shelters operated by The Alliance for Community Wellness/La Familia and South Hayward Parish and to renovations at the Weekes Library branch.
CDBG funding provides Habitat with the flexibility required to cover administrative and personnel costs that enable both home rehabilitation projects directly funded by the City as well as projects funded by outside sources which restrict administrative costs. In FY 2024-25, CDBG funding will directly enable up to $87,500 in repairs to eligible homes but will also enable leveraging of outside funds. The additional $53,817 will increase the total FY 20 24-25 agreement to $228,817. The amended agreement would support the underwriting of seven CDBG-funded home rehabilitation applications for the FY 2025-26 pipeline and provide project management and administration for thirteen additional Hayward projects totaling $1,259,000 enabled by outside loans and grants such as the California Department of Housing and Community Development’s CalHome program.
1 https://hayward.legistar.com/LegislationDetail.aspx?ID=6642372&GUID=69D37BA2-CD84-48C4-8A72- A61D2A38D1FF&Options=&Search=
The amendment to the City’s FY 20 24-25 agreement will be funded by unspent CDBG entitlement balances from prior years. These funding sources include $37,018 from Habitat’s FY 2022-23 contract that was unspent at the end of the fiscal year and not carried forward and $16,736 in unspent FY 2018-19 CDBG entitlement originally allocated to another agency. The unspent balance in Habitat’s FY 20 22-23 contract is the remainder of a $49,500 contract amendment supporting a larger initiative that was completed under budget. The unspent FY 2018-19 CDBG entitlement returned to the City’s balance upon project closure at the end of the fiscal year and is set to expire if not allocated to a program in FY 2024-25.
ECONOMIC IMPACT
The amendment may result in a minor addit ional economic impact due to the repair and construction efforts enabled by the City’s additional funding as well as the leveraged outside funds. Projects executed by Habitat and supported with CDBG funds must use federally authorized local contractors and pay prevailing wages to workers.
STRATEGIC ROADMAP
This agenda item supports the Strategic Priorities of Preserve, Protect, and Produce Housing; Grow the Economy; and Support Quality of Life. It is not specifically related to a project identified in the Strategic Roadmap.
FISCAL IMPACT
All funds allocated in this item are from federal sources and will not impact the City’s General Fund. Through this amendment, the City will allocate $53,817 of its uncommitted CDBG entitlement funds as outlined in the discussion.
Per Office of Management and Budget (OMB) memorandum M-25-13, issued on January 27, 2025, federal agencies are required to temporarily pause activities related to obligation or disbursement of Federal funding. While the memorandum was rescinded on January 29, 2025, and the pause has been challenged in court, it is unclear which programs will or will not be affected and whether it applies to funds that have already been awarded. To date, the City has not experienced interruptions in disbursement of CDBG entitlement funds.
PUBLIC CONTACT
No public contact was necessary for this amendment. Initial funding recommendations are developed through the Community Services Commission, which is designated as the City’s primary public participation body for CDBG through the Co mmunity Services Division's Community Participation Plan. The opportunity to provide public feedback was provided at regular meetings of the Community Services Commission, as well as the annual work session and public hearing for the CAF funding allocations.
NEXT STEPS
Prepared by: Amy Cole-Bloom, Community Services Manager Rick Rivera, Management Analyst
Recommended by: Regina Youngblood, Assistant City Manager
Approved by:
______________________________________
Dr. Ana M. Alvarez, City Manager