Item #11
Date: March 17, 2026
To: Mayor and City Council
From: Jeramy Chapdelaine, Public Works Director/Chief Building Official Subject: 2025 Application to the Community Development Block Grant Program Recommendation:
Receive staff report, open public hearing, receive comments, close public hearing and direct staff to proceed with the submission of a 2025 CDBG application for the East Marysville Streets Rehabilitation Project.
Background:
The California Department of Housing and Community Development recently announced the availability of grant funds for the 2025 Community Development Block Grant (CDBG) Program.
Under this program, applicants are eligible to apply for a maximum of $3.6 million for up to three eligible activities. Staff conducted a community meeting on February 19th in preparation for this announcement. Staff is now recommending an application be submitted for the East Marysville Streets Rehabilitation Project.
Discussion & Analysis:
The State Department of Housing and Community Development (HCD) published a Notice of Funding Availability (NOFA) for the 2025 Non-Entitlement CDBG funds on September 30, 2025.
HCD released an amendment in December that delayed the application opening until April 2026.
For the current NOFA, jurisdictions are eligible to apply for a combination of 3 activities for a maximum amount of $3.6 million. A description of eligible activities is further described below.
In order to be considered eligible, an 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 pose an immediate threat to the health and welfare of the community (State designates when the “urgent need” objective is allowed for a NOFA).
Item #11
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 must either benefit an area that is comprised of at least 51% low- or moderate-income households, or benefits individually qualified households (i.e., each household is income certified). Sixty-four percent of the City’s households qualify as low- or moderate income households, based on the most recent Census data published in the current NOFA.
Eligible activities in the NOFA consist of the follow: public improvements, public facilities, homeownership assistance, housing rehabilitation, business assistance and microenterprise activities, planning studies and public service programs. Each jurisdiction may submit up to three (3) applications during this NOFA cycle with the following combinations permitted:
i. 1 Project + 1 Program + 1 Public service or Planning -ORii. 1 Project + 2 Public Service or Planning -ORiii. 1 Program + 2 Public Services or Planning. • Public Service (maximum grant of $300,000), for one service. Examples include childcare, health care, recreation programs, fair housing counseling, drug and alcohol abuse counseling and testing, homeless services, food bank, senior services, and nutrition services benefiting low- and moderate-income persons. • Planning and Technical Assistance (maximum grant of $300,000 for one study/plan). The product must show a connection to assisting with an eligible CDBG activity that, if implemented, meets a National Objective. Completed planning documents are submitted to the State at the time of completion. The grants may require match; in the past a $5,000 cash match to be expended prior to expenditure of CDBG funds – the NOFA will outline this final amount. Examples include studies, analysis, data gathering, preparation of plans, and identification of action that will implement plans, NEPA and environmental plans. • Housing Programs (maximum grant of $1,500,000):
➢ Homeownership Assistance Program: assistance with downpayment or closing costs. ➢ Housing Rehabilitation Program for Single Family Homes: include repairs and improvements of owner-occupied units.
• Business Assistance or Microenterprise Assistance (maximum grant of $1,500,000 for either Business Assistance or Microenterprise Assistance). Examples of Business Assistance include financing of working capital, furniture, equipment, and property repairs/improvements.
Examples of Microenterprise include business training, financing of working capital, furniture, equipment, and property repairs/improvements. • Public Infrastructure (1 project, maximum grant of $3,300,000). Provides funding for all construction, project implementation, design, federal compliance and overlay requirements, environmental and other soft costs related to the project. Projects may include water, sewer, storm drain, sidewalks, roadways, wells, water storage tanks and other public infrastructure systems.
Item #11
• Public Facility (1 project, maximum grant of $3,300,000). Provides funding for project equipment, construction of community/senior centers, homeless facilities, park and recreation facilities, fire stations, fire equipment, health facilities, and other public facilities that meet the national objective of the program.
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)
• Projects must be ready to bid or implement the program within 90 days of contract execution
• Single audit must be completed and submitted, and in good standing • Housing Element must be up to date with HCD
• Sam.Gov registration must be active
• In order to apply for an activity, any open grant must at least be 50% expended at the time of application – which the City has now met. •
Based on staff’s internal discussion and initial outreach, it is recommended the City Council consider submittal of an application for up to $3.3 million for the East Marysville Streets Rehabilitation project. Proposed project areas has been attached to this staff report.
Alternatives
1. Direct staff to proceed with the application process with a different proposed scope;
2. Direct staff not to submit a CDBG grant application; or
3. Provide other direction to staff.
Alignment with City Council Goal(s):
This action directly supports City Council goals related to:
• Goal #3 – Improve Infrastructure
Fiscal Analysis:
The City’s grant consultant for CDBG, Adams Ashby Group, will be preparing the application at a cost of $7,500 not including environmental and engineering costs associated with the project. If the application is awarded, grant administration will be funded by the grant funds. The cost of the application will be paid for from the current open CDBG grant and is an eligible expense.
Attachment(s):
1) Resolution 2026-XX
2) Project Location Map