Agenda Item
City Council
Item #: 10.4. 6/14/2022 File #: 22-0343
TO: Honorable Mayor and Members of the City Council
THRU: Rob Houston, City Manager
FROM: Susan Galvan, Interim Community Development Director
1. SUBJECT
Public Hearing to consider the Fiscal Year 2022-2023 Community Development and Block Grant and HOME Investment Partnerships Programs Annual Action Plan.
2. SUMMARY
Request to approve funding for proposed projects, services, and non-profit agency programs under the Community Development Block Grant and HOME Investment Partnerships Programs.
3. RECOMMENDED ACTION
1. Approve the draft Fiscal Year 2022-2023 Annual Action Plan and authorize the City Manager or his designee to execute the Fiscal Year 2022-2023 Memorandum of Understanding with City departments, subrecipient agreements with non-profit agencies, and all related U.S. Department of Housing and Urban Development (HUD) documents.
2. If the Department of Housing and Community Development adjusts the entitlement amount during the Fiscal Year by less than 10% of original entitlement, authorize the following:
a. City Staff to make adjustments to funding amounts for city departments and sub- recipients based on the recommendations of the CDBG Committee. b. City Manager to execute all amended related documents required by the adjustment in the entitlement amount, including those with City departments, non-profits, and all related HUD documents;
c. Authorize the Finance Department to make adjustments to the funding amounts for each City department and sub-recipient based on the amended allocations.
3. Approve transfer of $4,453 from 317.9660.56510.11210 HOME CHDO Allocation to 317.9660.56510.11250 HOME Developer Projects.
4. FISCAL IMPACT
All projects, services, programs, and administration will be fully funded by the Community Development Block Grant Fund (310) and HOME Investment Partnerships Programs (317).
5. STRATEGIC PLAN GOALS
Goal 3: Enhance and promote quality of life in the community e: Develop and strengthen collaborative partnerships to enhance and promote quality of life programs, projects, and services.
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Item #: 10.4. 6/14/2022 File #: 22-0343
6. DISCUSSION AND BACKGROUND
The City receives annual federal funds from U.S. Department of Housing and Urban Development (HUD) under the Community Development Block Grant (CDBG) and the HOME Investment Partnerships (HOME) programs for the benefit of primarily low- and moderate-income residents. The funds are allocated to projects and programs that include street improvements, handicap accessibility improvements, after-school programs, transitional housing, and supportive services.
Citizen Participation Plan Process
The City advertised the availability of CDBG funds on February 3, 2022 in the Orange City News.
Two Public Hearings and two Public Meetings were held to solicit input from nonprofit organizations and encourage residents to participate in the Fiscal Year (FY) 2022-23 Action Plan. The Action Plan is required annually by HUD and outlines the City’s plan for the use of the funds.
The first Public Hearing was held on February 17, 2022 with the CDBG Committee (Committee) to hear eligible applicant presentations. Tonight’s second Public Hearing is for the City Council to consider adopting the funding recommendations made by the Committee. Two Public Meetings were held: one on March 17, 2022 and the second on April 12, 2022. The first was held with the Committee to deliberate on the proposed funding recommendations to be presented to the City Council. The second was held at the City Council meeting in which the City Council approved the Committee’sFY 2022-23 funding recommendations of the estimated entitlements of $1,163,162 for CDBG and $457,125 for HOME. On May 15, 2022, HUD made the final determination of the City’s entitlement amounts of $1,119,937 for CDBG and $486,812 for HOME. The final amounts are different from what was originally anticipated, with CDBG receiving $43,225 less, and HOME receiving $29,687 more. This report reflects the amended amounts and is consistent with the Committee’s recommendations.
CDBG
The allocations for the CDBG categories are based on caps set by HUD and the final adjusted amounts are as follows:
· 20% or $223,987 for administration
· 15% or $167,990 for public service activities
· 65% or $727,960 for public facilities projects
The initial recommendation of the CDBG Committee estimated funding based on entitlement amounts in Fiscal Year 2021-2022. Attachment 2 of this report is a summary of the adjusted funding amounts based on the actual entitlement as recommended by the CDBG Committee. The Fair Housing Foundation is paid using administrative funds and is not impacted by the reduced entitlement.
Staff notified the CDBG Committee and subrecipients of the change in the recommended funding amount on May 16, 2022.
HOME
Allocations originally made to the three categories under HOME and the final adjusted amounts, according to the cap established by HUD, are as follows:
· 10% or $48,681 for administration
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Item #: 10.4. 6/14/2022 File #: 22-0343
· 15% or $73,021 for CHDO
· 75% or $365,110 for developer projects
On May 10, 2022, City Council approved the allocation of $68,568 in FY2022-2023 CHDO funds to the Katella Terrace senior affordable housing project. Historically, CHDO funds are difficult to use because a project must obtain the CHDO (Community Housing Development Organization) designation to qualify for these funds. As such, staff is recommending increasing the FY2022-2023 CHDO allocation for Katella Terrace to $73,021 to ensure timely expenditure of the entitlement and avoid recapture of the funds by HUD.
Staff is requesting approval of the adjusted funding recommendations to be incorporated into the City’s Fiscal Year 2022-2023 Annual Action Plan.
7. ATTACHMENTS
· 2022-2023 Draft Annual Action Plan
· 2022-2023 Adjusted Funding Recommendations
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