Item #01
Date: July 23, 2024
To: Mayor and City Council
From: Jennifer Styczynski, Finance Director
Vincenzo S. Corazza, Public Works Director
Jim Schaad, City Manager
Subject: 2024 Community Development Block Grant Program, Potential Applications and Recommendations, and Direction to Staff
Recommendation:
Pass a Motion to 1) open the public hearing and receive public comment regarding the Community Development Block Grant (CDBG) Program and possible activities and projects to be considered for funding under the 2024 Notice of Funding Availability (NOFA) process; and 2) discuss potential applications, consider recommendation, and provide direction for staff to prepare an application.
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 HCD and where the City can apply for funding under a competitive application process.
The 2024 State NOFA involving approximately $44 million in CDBG funds is anticipated to be released this summer. It is anticipated that applicants will be allowed to apply for one project up to approximately $3.3 million and up to two competitive applications, one program and one planning grant, each up to approximately $300,000.
The City, as required by the State and HUD regulations and procedures, has conducted a public hearing to discuss the funding and potential application(s) and allow for public input. This is now the time for the staff to provide recommendations for Council consideration and request Council Item #01
review of 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:
• 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: 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: 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. The grant requires a five percent cash match to be expended prior to expenditure of CDBG funds. Examples include studies, analysis, and data gathering.
• Housing Activities:
• Homeownership Assistance Program: assistance with loans for down-payment or closing costs.
• Housing Rehabilitation Program for Single Family Homes: loans for repairs and improvements of owner-occupied units.
• Business Assistance: Examples include financing of working capital, furniture, equipment, and property repairs/improvements.
• Microenterprise Assistance: Examples include business training, financing of working capital, furniture, equipment, and property repairs/improvements.
Discussion & Analysis:
The purpose of this public hearing is to solicit ideas from the general public, discuss staff recommendations and provide direction to City staff on potential programs to include in both of the City’s CDBG applications. In the past year the City and departments created a priority list that Item #01
can be reviewed and discussed, and other considerations may be considered, please see attached:
The application may include the following:
Possible Applications Combinations (Maximum award amount):
1 OTC Project (up to $3.3 million) + 1 OTC Program (up to $1.5 Million) + 1 Competitive (up to $300,000) (Total for all three cannot exceed $3.6 Million) -OR1 OTC Project (up to $3.3 million) + 2 Competitive (up to $300,000 each) (Total for all three cannot exceed $3.6 million)
-OR1 OTC Program ($1.5 Million) + 2 Competitive (up to $300,000 each) (Total for all three cannot exceed $3.6 million)
Over the Counter (OTC) projects would be streets, sewer, water, etc. An OTC program would be programs such as Owner-Occupied Rehabilitation/Reconstruction or Economic Development.
Competitive awards would cover Public Services and Planning Grants.
Other grant requirements include:
• Activities should address serious health & safety needs • Activities should primarily benefit lower income households (defined as at or below 80% of the median income)
• Applicants must demonstrate capacity to complete the project within the grant term (36 months)
• OTC projects and programs must be ready to bid or implement the program within 90 days of contract execution
• Single audit must be completed and submitted
• Housing Element must be up to date with HCD
• Sam.Gov registration must be active
Based on review of prior priority lists and analysis of options available, we came up with the following considerations:
Over The Counter (OTC) Projects:
• Road Project Construction
Alignment with City Council Goals:
This Agenda Item helps support Goal #2: Expand Economic Development.
Fiscal Analysis:
The City’s grant consultant for CDBG, Adams Ashby Group, will be preparing application for the 2024 NOFA. The estimated application cost to prepare and infrastructure application is $7,500 not including environmental or engineering costs required to complete the application. The costs associated with the preparation of applications are an eligible expenditure of CDBG General Item #01
Administration funds under the current grant contract. If awarded, CDBG funds are a 100% grant with no matching funds.
Public Notification:
The public hearing notices were published in and made available at the following locations:
• City Hall
• City of Marysville Facebook page
• City of Marysville website
• Marysville Post Office
Attachments:
1) Public Hearing Presentation
2) City Priority List
3) Proposed Pavement Rehabilitation Project Map