CITY COUNCIL STAFF REPORT
DATE: April 22, 2026 PUBLIC HEARING
SUBJECT: COMMUNITY DEVELOPMENT BLOCK GRANT 2026-2027 ANNUAL
ACTION PLAN AND BUDGET ADOPTION PUBLIC HEARING
FROM: Scott C. Stiles, City Manager
BY: Housing and Community Development
SUMMARY:
This is the second of two public hearings for approval of the 2026-2027 Annual Action Plan (AAP, Attachment A). The Community Development Block Grant (CDBG) AAP and Budget is prepared by the City every year pursuant to requirements set forth by the U.S.
Department of Housing & Urban Development (HUD), which mandates that units of government receiving federal housing and community development assistance must prepare an AAP as part of the implementation of the Five-Year Consolidated Plan (ConPlan) which serves as the blueprint for CDBG funded community development activity in the City. This action adopts a resolution to approve the 2026-2027 AAP. The resolution (Attachment B) also authorizes the City Manager or designee to execute all agreements with U.S. Department of Housing & Urban Development (HUD) as well as the Community Development Block Grant (CDBG) program’s subrecipients, including City Departments.
RECOMMENDATION:
1. Open the Public Hearing for public testimony.
2. Adopt Resolution entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING THE 2026-2027
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ANNUAL ACTION
PLAN; APPROVING THE COMMUNITY DEVELOPMENT BLOCK GRANT
BUDGET FOR FISCAL YEAR 2026-2027 IN THE AMOUNT OF $337,285;
AUTHORIZING THE SUBMITTAL OF THE PLAN AND BUDGET TO THE
UNITED STATES DEPARTMENT OF HOUSING & URBAN DEVELOPMENT (HUD); AUTHORIZING THE CITY MANAGER OR DESIGNEE TO EXECUTE THE FUNDING APPROVAL/AGREEMENT WITH HUD – GRANT # B-26-MC- 06-0561 IN THE AMOUNT OF $337,285; AND TO EXECUTE THE
SUBRECIPIENT AGREEMENTS AND ALL NECESSARY DOCUMENTS IN A FORM ACCEPTABLE TO THE CITY ATTORNEY.”
City Council Staff Report
April 22, 2026 -- Page 2
CDBG 2026–2027 Annual Action Plan
3. Approve the revised CDBG Owner Occupied Home Rehabilitation Program Guidelines.
4. Authorize the City Manager or designee to make minor non-substantive changes and to execute all necessary documents.
BACKGROUND:
Palm Springs is an “entitlement city”, meaning that it is a direct recipient of CDBG funds from the federal government. The CDBG Program was adopted by Congress in 1974 to provide a flexible funding source for local governments to meet the community development needs of their low and moderate-income (Low/Mod) residents and was the first federal block grant. A map showing the City’s Low/Mod areas is provided in Attachment C. This direct grant from HUD enables entitlement units of governments to fund three National Objectives: benefiting Low/Mod persons; preventing or eliminating slums or blight; and meeting urgent need.
On March 11, 2026, the City Council held a public meeting to discuss potential uses for the 2026-2027 CDBG Funds. At this meeting, the City Council was presented with potential Public Service and Residential Rehabilitation projects which meet HUD’s National Objectives. One public comment was received during the public hearing at the March 11th City Council Meeting, stating concerns regarding state and federal sanctuary status, and federal grants data for US citizens and non-citizens.
A draft AAP was made available for public review from March 12, 2026, through April 13, 2026, as required by HUD.
STAFF ANALYSIS:
The Federal statute requires that at least 70% of the expenditures benefit Low/Mod persons. As an entitlement grantee, the City has and will continue to utilize these funds for neighborhood revitalization, preserving decent housing, expanding economic opportunities, and/or improving community facilities and services, principally to benefit Low/Mod persons.
Based on the CDBG allocation of $337,285, and given the statutory limitations on the percentage of CDBG funds that may be utilized for Administration (20%) and Public Services (15%), with the remaining funds to be utilized for Public Facilities and Capital Improvements (including Housing Rehabilitation), the total CDBG resources for 2026- 2027 by eligibility category are proposed as follows (assuming the maximum allowable allocations are applied):
City Council Staff Report
April 22, 2026 -- Page 3
CDBG 2026–2027 Annual Action Plan
PROPOSED CDBG 2026–2027 ALLOCATION Percentage Total
Administration 20% $67,457.00
Programmatic Funds:
Public Services (Legal Assistance): $50,592.75
Public Facilities/Residential Rehab.: $219,235.25
80% $269,828.00
Total: 100% $337,285.00
In recent years, the City Council has requested that staff not allocate CDBG funds for Administration and to increase the Programmatic Funds accordingly. For this fiscal year, staff is requesting to allocate 20% of the funding for Administration in accordance with program guidelines to cover administrative overhead due to a reduced departmental budget for the current fiscal year.
Program Guidelines
The Department of Housing and Urban Development (HUD) requires that municipalities have program guidelines for federally funded programs such as the Community Development Block Grant program. The City’s updated Owner-Occupied Home Rehabilitation Program written guidelines (Attachment D) describe implementation specifications and responsibilities that have been utilized historically and conform to the federal requirements specified by HUD.
The 2026-2027 Annual Action Plan program recommendations are as follows:
1.Public Services:
Legal Assistance: The City currently provides a legal assistance program to qualifying residents. Staff recommends working with a local non-profit organization to assist with tenant/landlord issues. These include anti-discrimination investigations, landlord/tenant mediation services, training and technical assistance, workshops and seminars.
The goals for this activity are to provide fair housing services to 500 Palm Springs households citywide. Of those, 500 will be Low- or Moderate-Income Households.
The recommended amount of CDBG funding for this activity is $50,592.75, which is the maximum amount allowed (15%) per federal requirements.
2. Residential Rehabilitation:
Major Home Repair: Under this program, the City would provide grants to qualified low- to moderate-income homeowners to make needed home improvements.
Grants would be available to address code deficiencies, eliminate blight, and improve handicapped accessibility. The maximum grant amount is $35,000 per household. The Major Home Repair Program will be provided on a first come/first- served basis to qualified applicants. To participate, the property must be located City Council Staff Report
April 22, 2026 -- Page 4
CDBG 2026–2027 Annual Action Plan
within the City of Palm Springs, must be owner-occupied, and owners must meet income requirements. Grant funds may only be used for costs of services and materials necessary to carry out City approved repair work.
The goals for this activity are to serve approximately 6 Palm Springs households Citywide. Of those, 6 will be Low- or Moderate-Income Households. The recommended amount of CDBG funding for this activity is $219,235.25. A copy of the updated program guidelines is included as Attachment D to this report.
ENVIRONMENTAL ASSESSMENT:
The recommended action does not result in a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a Project means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
FISCAL IMPACT:
There is no direct fiscal impact to the General Fund. These dollars are the City’s allocated federal annual entitlement funds from the U.S. Department of Housing & Urban Development Community Development Block Grant program.
REVIEWED BY:
Department Director: Jay Virata
Assistant City Manager: Flinn Fagg
City Manager: Scott Stiles
ATTACHMENTS:
A. Draft 2026-2027 Annual Action Plan
B. Annual Action Plan Resolution
C. Map of CDBG Low/Mod Areas
D. Updated Owner-Occupied Home Rehabilitation Program Guidelines