DATE:
April 2, 2024
TO:
Mayor and City Council Members
FROM:
Rachel Molina, City Manager
BY:
Nathan R. Freeman, Director of Development Services
Victor Knight, Economic Development Manager
SUBJECT:
Community Development Block Grant (CDBG) 2024-2025 Annual Action Plan
RECOMMENDED ACTION
It is recommended that the City Council conduct a public hearing and upon accepting public testimony: (1) Adopt Resolution No. 2024-04 approving the 2024-2025 Annual Action Plan (AAP); (2) Authorize staff to modify the AAP based upon the City Council’s direction; (3) Provide City staff with a methodology to distribute funds should the City’s 2024-2025 annual allocation increase or decrease; and (4) Authorize the City Manager, or designee, to execute and transmit all necessary documents, including the adopted Community Development Block Grant (CDBG) 2024-2025 AAP and any amendments, to the U.S. Department of Housing and Urban Development (HUD) to assure the City’s timely receipt of CDBG funding.
BACKGROUND
HUD mandates that all entitlement communities receiving CDBG funds prepare and submit a Consolidated Plan every five years to establish a unified, strategic vision for economic development, housing, and community development actions. The City’s current Consolidated Plan, which was reviewed and approved by the City Council on April 21, 2020, includes an analysis of community needs and coordinates appropriate responses to those needs and priorities.
AAP
To ensure compliance with the Consolidated Plan, the City is required to submit an AAP which outlines the planned activities and budgets for the upcoming program year. In addition, each year the City is required to evaluate progress toward meeting the goals identified in the Consolidated Plan. The AAP will appropriate CDBG funds to specific programs and projects for the 2024-2025 program year.
In preparation of the AAP, applications for Administration and Non-Administration/Non-Public Service (Capital) activities were provided to the Economic Development division of the Development Services Department. Secondly, an application was sent to Inland Fair Housing and Mediation Board (IFHMB) to comply with the CDBG requirements of funding activities that address fair housing. Lastly, hard copies of the applications were made available at City Hall and on the City’s website. Applications were due on February 12, 2024, at 5:30 p.m. and no late applications were accepted.
ISSUES/ANALYSIS
AAP
Based on the information received from the applications, and in consideration of the City’s five-year goals, the proposed 2024-2025 AAP Administration (including Fair Housing activities) and Non-Administration/Non-Public Service funding recommendations for the City Council's consideration is attached hereto as Exhibit “A.” The recommended funding allocations address high priority activities including funding for the City’s continuing Street Improvement Project. In accordance with CDBG Program National Objectives, the goal of the AAP is to serve the City’s low- and moderate-income residents, eliminate blight, and meet other urgent community needs. Moreover, the recommendations are consistent with the City’s 2020-2024 Consolidated Plan and any amendments to the plan. Notwithstanding the foregoing, the City Council retains complete discretion to modify the CDBG funding recommendations as presented and may propose alternative funding allocations.
As of the date of this notice, the City’s 2024-2025 CDBG annual allocation is $899,363. HUD regulations allow a maximum of 20% ($179,872) of grant funds for eligible Administration/Planning activities (including fair housing initiatives). However, City staff have elected to only allocate $162,000 for Administration/Planning activities. In addition, HUD regulations allow a maximum of 15% of the annual allocation to be allocated for Public Service activities. Under City Council advisement, and to reduce the administrative burden on City staff, public service agencies will continue to be funded with less restrictive City funds under its Community Assistance Program (CAP). Therefore, the remaining balance of $737,363 will be allocated pursuant to the 2024-2025 AAP.
Due to the possibility of changes in the City’s 2024-2025 annual allocation, a request of the City Council is being made to provide staff and the public with a methodology for which activity budgets will be adjusted if the allocation is increased or decreased by HUD. It is recommended that City Council adopt the following language for adjusting activity budgets for the CDBG program:
Should the CDBG allocation be higher than $899,363:
Balance of additional funds will be allocated to the 2024-2025 Street Improvement Project.
Funding levels for all outstanding activities will remain the same as proposed in the 2024-2025 AAP.
Should the CDBG allocation be lower than $899,363:
Balance of reduced funds will be deducted from the 2024-2025 Street Improvement Project.
Funding levels for all outstanding activities will remain the same as proposed in the 2024-2025 Action Plan.
Department Recommendations
Exhibit A contains Recommendations for 2024-2025 funded Administration and Non-Administration/Non-Public Service (Capital) activities. To ensure compliance with meeting the City’s five-year goals, recommendations for funding of all applications are being proposed at varying funding levels to stay within the budget set aside for Non-Administration/Non-Public Service activities. Each activity that is recommended for funding has received CDBG funds in prior program years and is monitored by the Economic Development division to ensure overall compliance with the CDBG program. However, as previously noted, the Council retains complete discretion to modify the CDBG funding recommendations as presented by staff and may propose alternative allocations.
Due to certain public noticing and 30-day review period requirements, the City Council is encouraged to adopt funding allocations, whether they be as recommended by staff or as preferred alternatives from City Council, for the 2024-2025 AAP at its April 2, 2024, City Council meeting. The 30-day public review period commenced on Friday, March 1, 2024, and concluded thereafter on Tuesday, April 2, 2024. Upon conclusion of the public comment period, all written documents received will be incorporated into the final document submitted to HUD. In addition, staff will adjust activity budgets in accordance with the Council’s direction prior to submittal to HUD.
FISCAL IMPACT
The City’s 2024-2025 CDBG entitlement is $899,363. City Council’s approval of the recommended action adopts the 2024-2025 Action Plan allocating those resources to the programs and activities outlined therein which will be incorporated into the Economic Development division’s 2024-2025 CDBG budget as required to meet the mandates of the plan. CDBG funds may only be utilized for certain eligible expenses and the 2024-2025 Action Plan satisfies this requirement.
ALTERNATIVE(S)
Provide alternative direction to staff.
ATTACHMENT(S)
1. Resolution No. 2024-04
2. Application Notebooks (Binders provided under separate cover)
3. Exhibit A: Department Action Plan Budget Recommendation
4. Exhibit B: Application Summary Matrix
5. A copy of the 2024-2025 Action Plan is on file with the City Clerk and is available on the City’s website City of Hesperia STAFF REPORT City of Hesperia STAFF REPORT City of Hesperia
STAFF REPORT
City of Hesperia
STAFF REPORT
Staff Report to the Mayor and Council Members
CDBG 2024-2025 AAP
April 2, 2024