STAFF REPORT
City of Lancaster
PH 2
4/28/2026
TN
Date:April 28, 2026
To: Mayor Parris and City Council Members
From: George N. Harris II, Senior Director/Treasurer – Administrative Services Subject:Public Hearing and Adoption of the City of Lancaster’s Community Development Block Grant Program (CDBG) and HOME Investment Partnership Program (HOME) 2026-2027 Program Year (PY) Annual Action Plan (AAP) and Substantial Amendment to the 2025-2026 PY AAP
Recommendation:
a. Approve and adopt the CDBG and HOME Annual Action Plan (AAP) for the 2026-2027 PY and Substantial Amendment to the AAP for the 2025-2026 PY to be submitted to the United States Department of Housing and Urban Development (HUD); b. Approve the proposed methodology for distributing funds should the City’s 2026-2027 CDBG and HOME annual allocations increase or decrease; and
c. Authorize the City Manager or designee to execute all contracts and associated documents, including subrecipient agreements, subject to City Attorney approval.
G.C. Section 84308: No
Fiscal Impact:
There will be no negative impact to the General Fund. As an entitlement grantee, the City is eligible to receive CDBG and HOME funds annually from HUD. 2026-2027 AAP allocates approximately $1,587,698 in current and prior year CDBG funds and $718,551.46 in current and prior year HOME funds in furtherance of the City’s Consolidated Plan Strategic Plan Goals. Please note, the FY2026-27 budget will be appropriately allocated into the CDBG revenue and expense accounts 31022000.4998 and 31022000.5656 based on the final amounts approved by HUD. 2 3
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Background:
The City has been a CDBG entitlement community since 1986 and started receiving HOME funds in 2020. The City receives annual grants for developing viable urban communities that encompass decent housing, provide suitable living environments, and expand economic opportunities, primarily for the benefit of low- and moderate-income persons. The proposed AAP is intended to provide a summary of proposed program activities, eligibility criteria, and funding levels for the 2026-2027 PY. All programs and/or projects submitted in the AAP are compliant with the HUD guidelines for eligible activities.
In accordance with Title 24 CFR part 91, this AAP lists the activities the City will undertake to address priorities and objectives with anticipated CDBG and HOME funding received during the 2026-2027 PY. A new AAP is developed and submitted for each program year within the five- year planning period of the 2025-2029 Consolidated Plan.
To proceed with the City's AAP, which serves as the formal document to HUD for CDBG and HOME funding, it is necessary for the City Council to take public testimony on proposed projects.
In compliance with federal requirements and in accordance with the City’s Citizen Participation Plan, the City published its proposed AAP on March 27, 2026, providing a 30-day public review and comment period. Comments received during the review period, spanning March 27, 2026, through April 28, 2026, will be attached to the AAP and incorporated into the plan where appropriate.
The AAP will be brought to the Council on April 28, 2026, for approval. The document will be submitted to HUD to ensure the availability of CDBG and HOME funds. Approval of the AAP will enable CDBG and HOME funding availability as of July 1, 2026, the start of the 2026-2027 PY.
Analysis:
As of today HUD released new allocations for CDBG ($1,379,105) and HOME ($548,606.39).
However, these final amounts were released after the public notice was made available for public review and comments and can still change for another 60 days. For this reason, we propose keeping the same amounts as last year, until these amounts are final. It is projected that during the 2026- 2027 PY, the City will receive approximately $1,506,698 in CDBG funds and $609,859.81 in HOME funds to be allocated to eligible activities. In addition, the City will repurpose $81,000 and $108,691.65 in prior year CDBG and HOME funds during 2026-2027 PY. The program activities listed below will be implemented from July 1, 2026, to June 30, 2027. 2026-2027 CDBG Activities
Public Service
Lancaster Homeless Group dba Street Company: Coffee
Manufacturing Homeless Employment Program $42,000
Lost Angels Career Center: The Work Program $109,005
Antelope Valley Partners for Health: Feed the Need $75,000 Antelope Valley Foster Friends: Foster Youth Support $81,000 Sub-Total: $307,005
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Capital
City of Lancaster: Sgt. Steve Owne Memorial Park Stanley Kleiner Building Re-Roof Improvement Project $979,354
Sub-Total: $979,354
Administration
City of Lancaster: CDBG Administration $261,339
Fair Housing Foundation: Fair Housing Services (Admin CAP) $40,000 Sub-Total: $301,339
TOTAL 2026-2027 CDBG PROGRAM $1,587,698
2026-2027 HOME Activities
Housing
CHDO Set Aside $91,479
Homebuyer Assistance Program $566,087.46
Sub-Total: $657,566.46
Administration
Program Administration $60,985
Sub-Total: $60,985
TOTAL 2026-2027 HOME PROGRAM $718,551.46
Due to the uncertainty in the City’s 2026-2027 annual allocations, 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 when the final allocations are released by HUD. It is recommended that City Council adopt the following language for adjusting activity budgets for the CDBG and HOME programs:
CDBG
Should the CDBG allocation be higher than $1,506,698:
oAdmin – Fair Housing will remain funded at $40,000 and the CDBG Administration budget will be increased to maximize the 20% cap for administrative activities.
oPublic Service – The City will not award any additional activities but will increase the award of those agencies allocated funds in the 2026-2027 AAP, proportionately, up to the 15% public service cap.
oCapital – Balance of funds will be allocated to the City’s Sergeant Owen Memorial Park Stanely Kleiner Building Re-Roof Improvement Project. oFunding levels for all outstanding activities will remain the same as proposed in the 2026-2027 AAP.
Should the CDBG allocation be lower than $1,506,698:
oAdmin – Fair Housing will remain funded at $40,000 and the CDBG Administration budget will be decreased to be compliant with the 20% cap for administrative activities.
oPublic Service – Decrease the award of those agencies allocated funds in the 2026- 2027 AAP, proportionately, to be compliant with the 15% cap for public service activities.
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oCapital – Balance of funds will be deducted from the City’s Sergeant Owen Memorial Park Stanely Kleiner Building Re-Roof Improvement Project. oFunding levels for all outstanding activities will remain the same as proposed in the 2026-2027 AAP.
HOME
Should the HOME allocation be higher than $609,859.81:
oAdmin – Increase HOME Administration budget to maximize the 10% cap for Administrative activities.
oCHDO – Increase CHDO set-aside to the minimum 15% required for CHDO activities.
oHousing – Balance of funds shall be awarded to the Homebuyer Assistance Program.
Should the HOME allocation be lower than $609,859.81:
oAdmin – Decrease HOME Administration budget to be compliant with the 10% cap for Administrative activities.
oCHDO – Decrease CHDO set-aside to the minimum 15% requirement for CHDO activities.
oHousing – Balance of funds shall be deducted from the Homebuyer Assistance Program.
Attachment:
1. City of Lancaster Draft 2026-2027 AAP