CITY OF POMONA
COUNCIL REPORT
April 15, 2024
To: Honorable Mayor and Members of the City Council
From: Anita D. Gutierrez, City Manager
Submitted By: Beverly Johnson, Acting Neighborhood Services Director SUBJECT: APPROVING THE DRAFT FY 2024-2025 ANNUAL ACTION PLAN WITH PRELIMINARY FUNDING RECOMMENDATIONS RECOMMENDATION:
It is recommended that the City Council take the following actions:
Adopt the following resolution:
RESOLUTION NO. 2024-47 – A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA, APPROVING THE DRAFT FY 2024-2025 ANNUAL ACTION PLAN WITH PROPOSED FUNDING FOR COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG), HOME INVESTMENT PARTNERSHIPS (HOME), AND EMERGENCY SOLUTIONS GRANT (ESG) FEDERAL ENTITLEMENT PROGRAMS Approve draft funding awards for the FY 2024-2025 Community Development Block Grant and Emergency Solutions Grant Programs; Approve funding recommendations for the FY 2024-2025 Home Investment Partnerships Program; Approve the inclusion of funding awards in the FY 2024-2025 Annual Action Plan.
EXECUTIVE SUMMARY:
Annually, the City receives entitlement funds from the U.S. Department of Housing and Urban Development (HUD) to address housing, homelessness, community and economic development needs under the following programs: Community Development Block Grant (CDBG), Home Investment Partnerships (HOME) and Emergency Solutions Grant (ESG) Programs. As a condition of receipt of these funds, an Annual Action Plan must be submitted to HUD. The Annual Action Plan focuses primarily on the specific activities that the City will undertake and fund for FY 2024-2025 to meet priority needs.
SB1439/GOVERNMENT CODE §84308 APPLICABILITY:
☒ When this box is checked, it indicates the agenda item is subject to the Levine Act SB1439 requirements. Councilmembers are reminded to check their campaign contributions and determine whether they have received a campaign contribution of $250 or more that would require disclosure and/or recusal from discussing or acting on this agenda item. Campaign contributions of $250 or more made 1) by any person or entity who is identified in the agenda report as the applicant or proposer or 2) on behalf of the applicant or participant, including a parent, subsidiary or otherwise related business entity, or 3) by any person who has a financial interest in the agenda item requires a councilmember to comply with SB1439.
FISCAL IMPACT:
The Fiscal Year 2024-25 Entitlement Allocations for CDBG, HOME and ESG have not been released by HUD. The anticipated funding is $2,835,902 and is based on prior year funding levels. As these are entitlement funds, they are included as revenue estimates, with corresponding expenditures in the FY 2024-25 Proposed Budget as Special Funds.
Staff expects to return to Council on May 20, 2024, with the revised funding recommendations, that will proportionately increase or decrease estimating funding levels to match actual amounts awarded by HUD.
PUBLIC NOTICING REQUIREMENTS:
Notice was published on April 4, 2024, in the Inland Valley Daily Bulletin for the April 15, 2024 and May 20, 2024 Public Hearings (Attachment 6).
PREVIOUS RELATED ACTION:
The City Council adopted the 2023-2028 Consolidated Plan and the 2023-2024 Annual Action Plan on June 5, 2023.
DISCUSSION:
Based on prior funding levels, the City of Pomona is estimated to receive the following allocations: CDBG: $1,771,564; HOME: $905,134; and ESG: $159,204. The total anticipated funding is $2,835,902. The FY 2024-2025 Annual Action Plan provides a 1-year roadmap for spending these funds on activities that benefit low- to moderate- income persons.
Citizen Participation
On September 28, 2023, a Community Needs Survey was made available to Pomona residents to solicit community input. The survey was placed on the City’s website for online completion, and hard copies were delivered to thirteen community service centers. In addition, the survey was made available at nine community meetings. Outreach efforts to promote the online survey included: mailing postcards to over 43,500 households, informing residents of community meetings/forums and requesting their input via the Community Needs Survey. Additional notifications regarding the availability of the survey was posted on the City’s Facebook, Twitter, La Nueva Voz Newspaper and the Inland Valley Daily Bulletin Newspaper. Survey responses were accepted through January 31, 2024. As a result of the outreach efforts, 366 surveys were received (Attachment 5).
Annual Fund Amounts
The City anticipates receiving the following entitlement allocations for FY 2024-25:
2023-24 ENTITLEMENT ALLOCATIONS FUNDS
AMOUNT
Community Development Block Grant (CDBG)
$1,771,564
HOME Investment Partnership Program (HOME)
$905,134
Emergency Solutions Grant (ESG)
$159,204
ENTITLEMENT ALLOCATIONS TOTAL
$2,835,902
The Annual Action Plan is due to HUD forty-five days prior to the start of the fiscal year or no later than August 16, 2024 for this application cycle. The draft Annual Action Plan is available for public review beginning April 15, 2024 through May 20, 2024. This public hearing is the first of two meetings required to approve the Annual Action Plan for submission.
Community Development Block Grant (CDBG) Program
The primary purposes of (CDBG) Program funds are to: 1) provide decent housing; 2) provide a suitable living environment; and 3) expand economic opportunities, principally for low-to-moderate income persons. In accordance with the CDBG national objectives, an activity must meet one of three objectives: 1) serve low-moderate income persons; 2) aid in the elimination of slum and blight; or 3) address recent, urgent health or welfare needs (e.g., natural disaster). An activity may be eligible because it either benefits an area (activity serves a census tract which has 51% or more low-moderate income persons) or a limited clientele (persons and families with low-to-moderate income). More than 70% of all funds must be expended to assist low-to-moderate income persons and families. The City plans to expend 100% of CDBG funds to benefit low-to-moderate income persons and families.
Community Development Block Grant Low and Moderate Income Area Benefit The Low and Moderate Income Area (LMA) benefit category is the most commonly used national objective for activities that benefit a residential neighborhood. An area benefit activity benefits all residents in a particular area where at least 51% of the residents are Low to Moderate Income (LMI) persons. The LMA is determined by the block group level census data, a smaller subset of the census tract. By City Council policy, funding is distributed to each Council District based on the percentage of LMA within the City of Pomona. This district allocation is based on the 2022 Council District map and LMA census data. The new Council District LMA percentage and formula calculations based on the re-districting are underway and tentatively scheduled to be ready by May 2024.
LMA percentages for each Council District are attached and staff will be utilizing funding percentages for CDBG district allocations (Attachment 1 - Exhibits A & B and Attachment 2). Regardless of District allocations or percentage, project expenditures can only be made within the current HUD recognized LMA (Attachment 3) or on projects related to eligible LMI residents.
Community Development Block Grant Eligible Activities
Eligible activities fall into five general categories: Administration/Planning, Housing, Economic Development, Public Service, or Capital Improvement. Certain activities are not eligible, including single event functions, contingency funds, on-going clean-up activities, or improvements to buildings and areas for the general conduct of government (except in the case of improvements designed to assist the disabled in public areas as required by the Americans with Disabilities Act).
Listed below is the breakdown of proposed CDBG funding allocations for FY 2024-2025, based on HUD requirements. The amounts provided under “capped” categories are rounded to the nearest dollar amount to ensure that these regulatory caps are not exceeded.
CDBG CATEGORY
AMOUNT
CAP
Administration
$ 354,313
(20% cap)
Public Service
$ 265,735
(15% cap)
Non-Public Service Activities
$ 1,151,516
(No cap)
Total Available Funding: $1,771,564
Citywide
Based on input from the Community Needs Survey Results (Attachment 5) and from City departments, there is a need for CDBG-funded citywide activities that otherwise could not be provided. These include projects that have been funded previously such as parks and recreation services, infrastructure projects, anti-crime programs and code enforcement. However, addressing public infrastructure is now ranked as the highest priority per residents. As such, the fiscal impact of a reduction or loss of CDBG funding would require the City to fund these activities from the General Fund or to significantly reduce and/or eliminate many of these services that principally benefit low-to-moderate income residents of the City. Staff is proposing additional service programs designed to meet high priority needs. Citywide needs were given a priority in funding recommendations and include:
Code Enforcement
Infrastructure – ADA Path of Travel
Community Oriented Policing Program
Fair Housing Services
Housing Services
Public Service Programs
Homeless Services Programs
Housing Improvement Programs
Request for Proposal submittals, Late Requests, and Rejections:
This year, the City received 23 applications for CDBG funds, excluding Administration. Of the 23 applications, 12 were from Community-Based Organizations (CBOs), and 11 were from City Departments. All applications were reviewed, and 21 of the 23 were recommended for funding by the Grants Administration Committee. Also, CBO applications were reviewed by the Community Life Commission (CLC). The CLC was provided a list of the 10 CBO agencies that were deemed eligible, along with performance information for agencies previously funded. One CBO applicant withdrew their application from the program. The CLC recommended the remaining 9 proposals for funding consideration (Attachment 4).
CDBG Program Administration
A total of $354,313, or twenty percent of the total anticipated CDBG funding allocation, is available in FY 2024-2025 for Administration of the CDBG program, including general management, oversight, and coordination and monitoring of programs. HUD requires that municipalities cap administration costs at 20 percent of the total funding allocation.
Public Service Category
The City has received a number of public service requests from City departments, as well as from community agencies. Based on community input, there is a continuing need for youth, homeless and senior services. There is also an ongoing need for activities focused on safety and security. Staff is proposing a continuation of CDBG funding for the Police Department's Community Problem Oriented Policing (CPOP) Program. This program provides one officer for community policing and ombudsmen services in the City's residential low-to-moderate income neighborhoods. Under CDBG regulations, this program is considered to be a public service activity.
Another high priority need this year will be for Homeless Services. There is a public service request for a CDBG Homeless Services Program to provide an increase in services to the homeless. The City also recommends funding after school recreation and youth programs. Public agency requests include youth services, leadership development, homeless services, counseling, food programs, education and services to victims of domestic violence.
The following table is a breakdown of available FY 2024-23 public service funds, including Federally-mandated Fair Housing Services in the amount of $35,000, which is included in the HUD-required 15 percent public services cap.
CATEGORY
AMOUNT
Fair Housing Services
$ 35,000
Other Public Service Activities
$ 230,735
Total Available Funding: $265,735
Non-Public Service Category
Non-public services include capital improvements, housing programs and Code Enforcement. In the Code Enforcement Division, the cost of operations and personnel are shared with the City’s General Fund. This is based on the percentage of time spent in CDBG-eligible areas versus time spent in non-CDBG eligible areas. In accordance with Federal requirements, staff has identified target areas in which to concentrate CDBG-funded Code Enforcement activities. These activities target areas that are based on a variety of factors, including the number of police reports, the number of code complaints filed, the number of abatements performed and the existence of Neighborhood Watch organizations within the area and those areas that are considered deteriorated. Areas must also be designated as slum and blighted areas.
In addition, staff is proposing to fund Housing Services in an effort to maintain current housing programs and staff to provide loan processing, housing counseling, preparation of work specifications in housing related projects, and housing inspections. Staff is also proposing continued infrastructure improvements based on Council direction, specifically ADA curb ramp improvements as proposed in consultation with the Public Works Department.
Home Investment Partnership Program (HOME)
HOME funds are used for the preservation and creation of affordable housing. Eligible activities include Single-Family Housing Rehabilitation, Multi-Family Housing Rehabilitation, First-Time Home Buyer Programs and Tenant-Based Rental Assistance. Below is a listing of eligible categories for the HOME Program and estimated funding levels.
CATEGORY
AMOUNT
CAP
Community Housing Development Organizations
$135,770
(15% cap)
Administration
$90,513
(10% cap)
Tenant Based Rental Assistance (TBRA)
$0
(no cap)
First-Time Homebuyer Program
$500,000
(no cap)
Single-Family Housing Rehabilitation
$178,851
(no cap)
Total Available Funding: $905,134
Emergency Solutions Grant Program (ESG)
Emergency Solutions Grant (ESG) program activities place emphasis on moving homeless persons from tentative, unstable living situations to more permanent, stable housing, and self-sufficiency.
These activities fall under six basic funding categories as listed below, pursuant to the Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009 (HEARTH Act), enacted into law on May 20, 2009. Each category requires a mandated 100% match for funds expended, except for Administration. To meet this obligation, each agency receiving ESG funds from the City is required to identify the source of its matching funds as part of the application process. The City operated programs provide match through the salaries of non-ESG funded staff that assist in administering the ESG grant. Any amounts funded for Street Outreach, Emergency Shelter and Administration cannot exceed the statutory caps as regulated by HUD. The categories and suggested funding amounts for FY 2024-25 appear below:
ESG CATEGORY
AMOUNT
CAP
Administration
$11,940
(7.5% cap)
Homeless Prevention
$0
(No cap)
Street Outreach
$0
(60%cap)
Emergency Shelter
$95,552
(60% cap)
Rapid Re-Housing
$0
(No cap)
HMIS
$51,712
(No cap)
Total Available Funding: $159,204
The City did not solicit a Request for Funding Proposals for Homeless Services using ESG funds for FY 2024-25 because funds will be directed to the City’s Hope for Home Services Center. ESG funds will be utilized primarily for shelter operations. The total funding anticipated for ESG activities is $159,204.
Preliminary Funding Recommendations
Preliminary funding recommendations, as submitted by staff, are based on priorities as established by prior year funding, Councilmember input, resident survey data and the good standing of agencies as established through annual performance evaluations. Under the direction of the Council, staff is authorized to bring the applications for funding to the City Council for a public hearing on April 15, 2024. The final meeting for adoption of the Annual Action Plan is scheduled for May 20, 2024. The Consolidated and Annual Action Plans are due to HUD no later than August 16, 2024.
COUNCIL PRIORITIES & GOALS:
This item supports the 2021-2022 City Council Priority #1: Fiscal and Operational Responsibility - Goal C: Obtain additional grant funding and other revenues to help achieve City goals.
Prepared by:
Vivian Bravo
Housing Analyst
ATTACHMENT(S):
Attachment 1 - Resolution No. 2024-47
Exhibit “A” - 2024-2025 CDBG Funding Options
Exhibit “B” - 2024-2025 ESG Funding Options
Attachment 2 - CDBG District Formula Allocations
Attachment 3 - CDBG Eligible Areas Map
Attachment 4 - CDBG RFP Eligibility, Performance & Requests Attachment 5 - 2024-2025 Community Needs Survey Results Attachment 6 - Public Hearing Notice
Adopting the Draft FY 2024-2025 Annual Action Plan