PISMO BEACH CITY COUNCIL STAF REPOR
Agenda Item #9.J
Meetin Date: u ust 4, 2026
TITLE:
Cooperation Agreement with the County of San Luis Obispo for Participation in the San Luis Obispo Urban County Community Development Block Grant (CDBG), Home Investment Partnerships Act (HOME) and Emergency Solutions Grant (ESG) Federal Entitlement Programs
RECOMMENDATION:
Adopt a Resolution approving a Cooperation Agreement with the County of San Luis Obispo for continued participation in the San Luis Obispo Urban County for Federal Community Development Block Grant (CDBG) Program, Home Investment Partnership Program (HOME), and Emergency Shelter grant (ESG) Program Federal Entitlement Programs for program years 2027-2029.
DISCUSSION:
The City currently participates with the County of San Luis Obispo in the “Urban County” to receive federal entitlement funding from the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) program. On June 8, 2026, the County invited the City to continue participation with the Urban County for the next three-year cycle: program years 2027 through 2029 (Attachment 2). The City’s current agreement expires June 30, 2027.
The City has participated in the Urban County program since 2014. Funding has previously supported local non-profits such as Five Cities Homeless Coalition and CAPSLO. Annual funding is anticipated to remain consistent with prior years at approximately $35,000 annually, subject to annual Congressional approval.
Consistent with previous years, the CDBG program requires City review and recommendation of draft and final funding application requests for CDBG funding. This review typically occurs every late fall and spring by the City Council with funding recommendations forwarded to the County. The Cooperation Agreement also provides funding potential through the Home Investment Partnerships Program (HOME) and the Emergency Solutions Grant (ESG) Program. Unlike CDBG, a potential HOME and ESG application for a project in Pismo Beach would be submitted for funding decision directly to the County.
To continue in the Urban County Program, all participating jurisdictions must authorize and submit a signed 2027–2029 Cooperation Agreement to meet HUD program timelines.
County staff will also seek approval by the County Board of Supervisors at its meeting on August 4, 2026. All participating jurisdictions and the County’s approval are due and must be submitted to HUD by August 10, 2026. If the City does not act by this date, then the City would be ineligible to continue participating in the Urban County and would no longer receive federal entitlement funding.
Council Agenda 8-4-2026 9.J-1
If the Council approves continued participation in the Urban County program, the resolution (Attachment 1) will adopt the Cooperation Agreement, which would fulfill the County request as noted in the invitation letter. The Agreement as required by HUD is largely the same as the previous Agreement with language as required by the federal program.
Alternatives
If the City declines to participate in the Urban County, it would no longer receive annual federal entitlement funding through the County for the CDBG, HOME, and ESG programs.
While the City would become eligible to apply directly to the State Department of Housing and Community Development (HCD)'s CDBG Small Cities program, funding is awarded through a highly competitive process, which may reduce the City’s ability to successfully obtain funding. CDBG funding must meet one of three national objectives: benefit low- and moderate-income persons, prevent or eliminate slums or blight, or address an urgent community development need. Because the Small Cities program generally prioritizes communities with greater demonstrated need, including higher concentrations of low- income households, the City's demographics have historically made it less competitive for funding.
Conclusion and Recommendation
Continuing participation in the Urban County provides the City with access to federal funding that would otherwise be difficult to obtain on a predictable basis if the City had only the State funding program as an option. The City’s involvement in the Urban County since 2014 has enabled funding opportunities to local applicants to provide a consistent source of funding over the years.
Staff recommends the City Council adopt a resolution (Attachment 1) approving a Cooperation Agreement with the County of San Luis Obispo (Attachment 1.A) for continued participation in the San Luis Obispo Urban County for Program Years 2027- 2029 for the CDBG, HOME, and ESG federal entitlement programs.
FISCAL IMPACT:
During the 2027–2029 program term, any awards made by the City to applicants for funding will be administered by the County, and no program funding will be handled by the City. The fiscal impact of future awards will be analyzed at the time the Council is asked to act on the recommendations.
ATTACHMENTS:
1. Resolution
1A. Exhibit A to Resolution: Cooperation Agreement, 2027–2029
2.Participation Invitation Letter dated June 8, 2026 from County of San Luis Obispo Prepared by:
Cindy Jacinth, Planning Manager
Submitted by: Scot Graham, Community Development Director City Manager Approval:
Council Agenda 8-4-2026 9.J-2
RESOLUTION NO. R-2026-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,
CALIFORNIA APPROVING A COOPERATION AGREEMENT WITH THE COUNTY
OF SAN LUIS OBISPO FOR CONTINUED PARTICIPATION IN THE SAN LUIS
OBISPO URBAN COUNTY FOR THE FEDERAL COMMUNITY DEVELOPMENT
BLOCK GRANT (CDBG) PROGRAM, HOME INVESTMENT PARTNERSHIP
PROGRAM (HOME), AND EMERGENCY SHELTER GRANT (ESG) PROGRAM FEDERAL ENTITLEMENT PROGRAMS FOR PROGRAM YEARS 2027-2029 WHEREAS, the County of San Luis Obispo (“County”), a political subdivision of the State of California, and the City of Pismo Beach (“City”), a municipal corporation, desire to participate in the Urban County of San Luis Obispo and the Community Development Block Grant, HOME Investment Partnerships Act, and Emergency Solutions Grant Programs, administered by the U.S. Department of Housing and Urban Development (HUD); and
WHEREAS, said program will promote public health, safety, and welfare by providing grant funds to be used by the City and County (“Parties”) to improve housing opportunities for low- and moderate-income households, to encourage economic reinvestment, to improve community facilities and public services, and to provide other housing-related facilities or services; and
WHEREAS, the County has invited the City to participate jointly with the County in said program in a letter dated June 8, 2026; and
WHEREAS, the City desires to participate jointly with the County in said program and responded via e-mail correspondence dated June 24, 2026 indicating the City’s intent to continue participating in the program with the County; and WHEREAS, HUD requires that the Parties enter into a Cooperation Agreement to define their rights and obligations as a prerequisite of participation in the San Luis Obispo Urban County; and
WHEREAS, the proposed Cooperation Agreement is consistent with the General Plan and with Parties policies encouraging cooperation between agencies on issues of regional significance, such as affordable housing and community development needs; and
WHEREAS, the proposed Cooperation Agreement will promote public health, safety, and welfare by enabling the Parties to participate in said program under an “Urban County” entitlement; thus, making available funds for a variety of housing, economic development, and public services programs not otherwise available; and Council Agenda 8-4-2026 9.J-3
Attachment 1
WHEREAS, the Parties enter into yearly sub-recipient agreements which establish administrative policies and procedures, performance standards, and funding schedules for future specific housing and human services programs; and WHEREAS, the proposed Cooperation Agreement is not a “project” for purposes of compliance with the provisions of the California Environmental Quality Act and is therefore exempt from environmental review.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pismo Beach as follows:
1.The City Council does hereby authorize the City Manager to enter into the 2027– 2029 Cooperation Agreement with the County of San Luis Obispo to enable joint participation in HUD’s CDBG program in substantially the form attached hereto as Exhibit A; and
2.The City Manager or designee is hereby authorized to act on behalf of the City in connection with the implementation of the Agreement, ongoing operation of the CDBG program, and all other activities necessary to carry out the intent of the Cooperation Agreement and amendments thereto.
UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 4th day of August 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
__________________________ __________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
Council Agenda 8-4-2026 9.J-4
Attachment 1
COOPERATION AGREEMENT BETWEEN THE COUNTY OF SAN LUIS OBISPO
AND THE CITY OF PISMO BEACH FOR JOINT PARTICIPATION IN THE
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM, THE HOME
INVESTMENT PARTNERSHIPS PROGRAM, AND THE EMERGENCY
SOLUTIONS GRANT PROGRAM FOR FISCAL YEARS 2027 THROUGH 2029 THIS COOPERATION AGREEMENT is made and entered into on the date and year last written below, by and between the County of San Luis Obispo, a political subdivision of the State of California, hereinafter called “County,” and the City of Pismo Beach, a municipal corporation of the State of California, located in the County of San Luis Obispo, hereinafter called “City;” jointly referred to as “Parties”.
WITNESSETH
WHEREAS, in 1974, the U.S. Congress enacted, and the President signed a law entitled, The Housing and Community Development Act of 1974, herein called the “Act.” The Act is omnibus legislation relating to federal involvement in a wide range of housing and community development activities and contains eight separate titles; and
WHEREAS, Title I of the Act is entitled “Community Development” and governs programs for housing and community development within metropolitan cities and urban counties or communities by providing financial assistance annually for area-wide plans and for housing, public services, and public works programs; and
WHEREAS, the Community Development Block Grant Program
(hereinafter referred to as “CDBG”), the HOME Investment Partnerships Act Program (hereinafter referred to as “HOME”), and the Emergency Solutions Grant Program (hereinafter referred to as “ESG”) are consolidated under Title I of the Act; and
WHEREAS, the County has requested of the federal Department of Housing and Urban Development, hereinafter referred to as “HUD,” designate the County as an “Urban County;” and
WHEREAS, the County needs to requalify as an urban county and will be eligible to receive CDBG funds provided that the County’s entitled cities
defer their entitlement to the County to enable both the County and the entitlement cities to jointly participate in the program; and WHEREAS, the City desires to participate jointly with the County in the Urban County as authorized by signing this Cooperation Agreement; and WHEREAS, if HUD redesignates the County as an urban county, then the County may also be eligible to receive funds from the HOME Program and the ESG Program; and
WHEREAS, the CDBG Regulations issued pursuant to the Act provide qualified urban counties must submit an application to HUD for funds, and cities and smaller communities within the metropolitan area not qualifying as metropolitan cities may join the County in said application and thereby become a part of a more comprehensive County effort; and WHEREAS, as the urban county applicant, the County must take responsibility and assume all obligations of an applicant under federal statues, including: the analysis of needs, the setting of objectives, the development of community development and housing assistance plans, the consolidated plan, and the assurances of certifications; and
WHEREAS, by executing this Agreement, the Parties hereby give notice of their intention to participate in the urban county CDBG, HOME, and ESG Programs; and
WHEREAS, the City Manager of the City of Pismo Beach is authorized to execute this Agreement on behalf of the City; and
WHEREAS, the Chairperson of the Board of Supervisors or the Chief Executive Officer of the County of San Luis Obispo is authorized to execute this Agreement on behalf of the County
NOW THEREFORE, in consideration of the mutual promises, recitals and other provisions hereof, the Parties agree as follows:
Council Agenda 8-4-2026 9.J-5
Attachment 1.A
SECTION I. General.
A.Full Cooperation. The County and the City agree to cooperate to undertake, or assist in undertaking, essential community development and housing assistance activities, as approved and authorized between the Parties in the CDBG Agreements, including the Consolidated Plan.
B.Term of Agreement. This Agreement shall remain in effect for the three-year program period of Federal Fiscal Years 2027, 2028, and 2029, and until funds granted and program income received during the three- year period are expended and the funded activities are completed.
Neither the County nor the City may terminate, withdraw, or be removed from the program during the three-year program period. The three (3) year period commences on October 1, 2027, through September 30, 2030.
a.The County shall, by the date in the Urban County Qualification Deadlines published on the HUD Exchange Urban Counties
website for the next qualification period, notify the Participating Jurisdictions by letter of their right not to participate in the Urban County.
C.Scope of Agreement. This Agreement covers the following formula funding programs administered by HUD where the County is awarded and accepts funding directly from HUD: the CDBG Program, the HOME Program, and the ESG Program.
a.The participating City understands and agrees that it may receive a formula allocation under the HOME and ESG Programs only through the Urban County. This does not preclude the Urban County or City from applying for HOME or ESG funds from the State, if the State allows.
b.The participating City understands and agrees that it may not apply for grants under the State CDBG Program for the fiscal years during the period in which the Municipality participates in the Urban County’s CDBG Program.
D.Amendments. The Parties agree to adopt amendment(s) to this Agreement as may be required by HUD to meet any new Urban County Qualification requirement(s), when applicable. Failure by either Party to adopt any such amendment, and to submit such amendment to HUD, will void the agreement for such qualification period.
SECTION II. Program Administration.
A.City Agreements. Pursuant to 24 CFR 570.501(b), the City is subject to the same requirements applicable to subrecipients, including the requirement of executing a written agreement with the County as set forth in 24 CFR 570.503.
B.Use of Program Income. The County may transfer the program income to the City, upon its termination of Urban County participation, provided that the City begins participating as an independent CDBG Entitlement grantee and agrees to use the program income in its own CDBG Entitlement program.
C.Fair Housing Implementation. The Parties agree that no Urban County funding shall be allocated or expended for activities in or in support of any cooperating unit of general local government that does not affirmatively further fair housing within its own jurisdiction or that impedes the County’s actions to comply with its fair housing certification.
D.Consolidated and Further Continuing Appropriations Act. The Parties to this Agreement understand and agree that they may not sell, trade, or otherwise transfer all or any portion of CDBG funds to a Metropolitan City, Urban County, unit of general local government, or insular area that directly or indirectly receives CDBG funds in exchange for any funds, credits, or non-Federal considerations, but must use such funds for activities eligible under Title I of the Housing and Community Development Act of 1974, as amended.
E.Special Provisions for the Urban County. The Urban County is prohibited from funding activities in, or in support of, any Participating Jurisdiction that impedes the County’s actions to comply with the County’s Fair Housing Certification. Noncompliance Council Agenda 8-4-2026 9.J-6
Attachment 1.A
with the duty to affirmatively further fair housing by a Participating Jurisdiction may constitute noncompliance by the Urban County.
SECTION III. Compliance with Federal Statutes and Regulations.
A.General. The County and the City shall take all actions necessary to assure compliance with the County’s certification under Section 104(b) of Title I of the Housing and Community Development Act of 1974, as amended, that the grant will be conducted and administered in conformity with:
a.Title VI of the Civil Rights Act of 1964 (and the implementing regulations at 24 CFR Part 1);
b.The Fair Housing Act, and the implementing regulations at 24 CFR Part 100, and will comply with the obligation to duty to affirmatively further fair housing; and
c.Section 109 of Title 1 of the Housing and Community
Development Act of 1974, and the implementing regulations at 24 CFR Part 6, which incorporates:
i.Section 504 of the Rehabilitation Act of 1973, and the implementing regulations at 24 CFR Part 8;
ii.Title II of the Americans with Disabilities Act, and the implementing regulations at 28 CFR Part 35;
iii.The Age Discrimination Act of 1975, and the implementing regulations at 24 CFR Part 146;
iv.Section 3 of the Housing and Urban Development Act of 1968;
v.Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970, and the implementing
regulations at 49 CFR Part 24;
vi.Section 104(d) of Housing and Community Development
Act of 1974, and the implementing regulations at 24 CFR Part 42; and
d.Other applicable laws
B.Certification Regarding Policies Prohibiting Use of Excessive Force and Regarding Enforcement of State and Local Laws Barring Entrances.
The County and the City each have adopted and are enforcing:
a.A policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction against any individuals engaged in non-violent civil rights demonstrations; and
b.A policy of enforcing applicable State and local laws against physically barring entrance to or exit from a facility or location which is the subject of such non-violent civil rights
demonstrations within its jurisdiction.
NOW, THEREFORE, it is agreed between the parties hereto that:
Agreement Signatures. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which, when taken together, shall constitute one and the same agreement. This Agreement may be executed and delivered by facsimile or scanned signature by any of the Parties and the receiving Party may rely on the receipt of such document so executed and delivered by facsimile or email as if the original had been received.
The Parties hereto have caused this Agreement to be executed and attested by their proper officer thereunder duly authorized.
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Attachment 1.A
IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and the year set forth below.
COUNTY OF SAN LUIS OBISPO, A Political Subdivision of the State of California
Jimmy Paulding
Chairperson of the Board of Supervisors
ATTEST:
Matthew P. Pontes
Ex-Officio Clerk of the Board of Supervisors
BY:
Deputy Clerk
(SEAL)
APPROVED AS TO FORM AND LEGAL EFFECT:
Jon Ansolabehere
County Counsel
By:
Deputy County Counsel
Dated:
CITY OF PISMO BEACH, a California Municipal Corporation BY:
Jorge E. Garcia
City Manager
Date:
APPROVED AS TO FORM AND LEGAL EFFECT:
By:
Dean Pucci
City Attorney
Dated:
Council Agenda 8-4-2026 9.J-8
Attachment 1.A
COUNTY OF SAN LUIS OBISPO
DEPARTMENT OF SOCIAL SERVICES
Homeless Services Division
Devin Drake
Linda Belch
____________________________________________________________________________________________________________________ __________________________________________________________________________________ County of San Luis Obispo Department of Social Services P.O. BOX 8119, San Luis Obispo, CA 93403-8119
| (P) 1-805-788-9491 | (F) 805-788-2457 | slocounty.ca.gov/dss June 8, 2026
Jorge Garcia, City Manager
City of Pismo Beach
760 Mattie Road
Pismo Beach, CA 93449
Subject: Urban County Participation Decision Letter
Dear Mr. Garcia,
Thank you for the City of Pismo Beach’s continued participation in the Urban County of San Luis Obispo (“Urban County”) and for your partnership in delivering critical community development and housing programs. We are writing to invite the City to participate in the Urban County for the upcoming 2027– 2029 Cooperation Agreement term.
Under the City’s current 2024–2026 Cooperation Agreement, participation will continue through June 30, 2027. To ensure uninterrupted eligibility for U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) entitlement funds, participating jurisdictions must execute a new Cooperation Agreement for the next three-year cycle.
Participation Requirements for the 2027–2029 Term
To confirm the City’s participation in the Urban County for fiscal years 2027–2028, 2028–2029, and 2029– 2030, please complete the following steps:
1.Submit an official letter to the County stating the City’s intent to participate. • Email to Marge Castle at [email protected] by July 8, 2026.
Council Agenda 8-4-2026 9.J-9
Attachment 2
___________________________________________________________________________________________________________________________________ County of San Luis Obispo Department of Social Services P.O. BOX 8119, San Luis Obispo, CA 93403-8119
| (P) 1-805-788-9491 | (F) 805-788-2457 | slocounty.ca.gov/dss Eligibility and Funding Implications
If the City elects to participate in the Urban County:
• The City will be eligible for HUD CDBG entitlement funding through the Urban County for all three fiscal years.
• Participation does not preclude the Urban County from applying for HOME, State CDBG, or State ESG funds.
• Consistent with HUD requirements, participating jurisdictions are not eligible to apply directly to the State CDBG Program for the duration of the Cooperation Agreement.
Next Steps:
The County is currently drafting the 2027–2029 Cooperation Agreement and will submit to HUD for review prior to ratification. We anticipate providing this to the cities to review within the next week.
The County will need to receive a signed copy of the 2027–2029 Cooperation Agreement no later than Friday, July 17th.
The County will take the 2027–2029 Cooperation Agreements to the County Board of Supervisors for ratification on Tuesday, August 4th.
The County must submit the Urban County qualification package to HUD no later than Monday, August 10th.
If the City chooses not to participate, it must notify both the County and the HUD Los Angeles Field Office by July 8, 2026.
We value our partnership with the City of Pismo Beach and look forward to continuing to work together to support community development and housing needs across the region. Please feel free to contact us with any questions or if you need assistance preparing your council resolution.
If you have any questions or concerns regarding this process or the County’s HUD programs, please contact Marge Castle, Program Manager, at (805) 788-9491.
Best regards,
Marge Castle
Program Manager
Council Agenda 8-4-2026 9.J-10
Attachment 2