DATE: MAY 24, 2022
DEPARTMENT: COMMUNITY DEVELOPMENT
FROM: MEGAN HUNTER, COMMUNITY DEVELOPMENT DIRECTOR
BY: ROD POWELL, PLANNING MANAGER
TITLE: SUBSTANTIAL AMENDMENTS TO UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FISCAL YEAR 2020-2021 ANNUAL ACTION PLAN AND FISCAL YEAR 2021-2022 ANNUAL ACTION PLAN FOR THE HEBBRON FAMILY CENTER CDBG PROJECT RECOMMENDED MOTION:
A motion of the City Council to approve a Resolution:
authorizing the submission of a Second Substantial Amendment to the United States Department of Housing and Urban Development (HUD) Fiscal Year (FY) 2020-2021 Annual Action Plan (AAP) and a First Substantial Amendment to the United States Department of Housing and Urban Development Fiscal Year 2021-2022 Annual Action Plan. authorizing the allocation of $798,633 in FY 2020-2021 Community Development Block Grant (CDBG) funds and $607,980 in FY 2021-2022 CDBG funds to the Hebbron Family Center project.
RECOMMENDATION:
The Community Development Department recommends that City Council conduct a public hearing and approve a Second Substantial Amendment to the HUD FY 2020-2021 AAP, a First Substantial Amendment to HUD FY 2021-2022 AAP, and allocate CDBG funds to a new Hebbron Family Center project.
EXECUTIVE SUMMARY:
The City received a State grant award of $8.1 for the reconstruction of the Hebbron Family Center. To initiate the process, Library and Community Services and Public Works Departments identified a consultant to assist with construction and program management in an amount just under $1.3 million. The departments requested CDBG funding from the Community Development Department (CDD) to offset these pre-development costs. CDD staff have reviewed the request in consultation with HUD and deemed the project as an eligible activity to receive CDBG funds as it is located within the City’s Alisal Neighborhood Revitalization Strategy Area and satisfies the National Objective of benefiting a Low Mod Area where 51% of the residents fall within the low- and moderate-income categories.
The emergence of a new, priority project for CDBG, the Hebbron Family Center, requires the execution of a second amendment to the FY 2020-2021 AAP and a first amendment to FY 2021-2022 AAP. In accordance with the City’s Citizen Participation Plan, a formal Substantial Amendment process is required as the City is proposing to de-obligate and reallocate more than 25% of its CDBG funds from the Sherwood Recreation Center Phase IV (FY 2020-2021) and Chinatown Improvements (FY 2021-2022) projects towards the new Hebbron Family Center project. Funds for Sherwood and Chinatown are proposed to be restored in the FY 2022-2023 Annual Action Plan.
BACKGROUND:
The City of Salinas is an Entitlement City in the U.S. Department of Housing and Urban Development's Community Development Block Grant Program, Emergency Solutions Grants (ESG) Program, and HOME Investment Partnerships Program (HOME). The City previously adopted its Annual Action Plan for Fiscal Year 2020-2021 through its Consolidated Plan process on August 4, 2020, and subsequently adopted its AAP for FY 2021-2022 on May 11, 2021. Each AAP has been reviewed and approved by HUD.
DISCUSSION:
The City received a CDBG Entitlement allocation in the amount of $2,023,911 for FY 2020-2021 and $2,128,725 for FY 2021-2022. Through its Annual Action Plan process for FY 2020-2021, the City committed $728,633 of CDBG Entitlement funds towards the renovation activities of the Sherwood Recreation Center Phase IV and $70,000 towards the Activity Delivery of this project. Through its AAP for FY 2021-2022, the City committed $577,980 of CDBG Entitlement funds towards Chinatown Improvements and $30,000 towards the Activity Delivery of this project.
In April 2022, following a State grant award of $8.1 for the reconstruction of the Hebbron Family Center, the City’s Community Development Department received a funding request for CDBG funds from its Library and Community Services and Public Works Departments to support the project’s pre-development ‘soft costs’. CDD staff have reviewed the request in consultation with HUD and deemed the project as an eligible activity to receive CDBG funds as it is located within the City’s Alisal Neighborhood Revitalization Strategy Area and satisfies the National Objective of benefiting a Low Mod Area where 51% of the residents fall within the low- and moderate-income categories.
In compliance with the City’s Citizen Participation Plan, a Notice of Public Hearing and a 30-day public comment period was published in The Californian and El Sol newspapers and posted on the City’s webpage, at City Hall, and at the Community Development Department on Saturday, April 23, 2022. The end of the 30-day comment period corresponds with the scheduled Council public hearing on May 24, 2022. Through the Public Hearings and public comment period, the public is encouraged to review and comment on the proposed Amendment.
In recognition of the proposed reprioritization of CDBG funding to support the Hebbron Family Center project and the importance of completing both the Sherwood Recreation Center Phase IV and Chinatown Improvements projects, CDD staff plan to recommend a full restoral of prior funding to each project through the upcoming FY 2022-2023 AAP allocation process. The funding swap will also assist the City in achieving its HUD expenditure deadline because most of the expenditures for Hebbron will occur upfront as pre-development costs, whereas both Sherwood and Chinatown involve construction projects, which will take more time to spend down. Committing pre-development funds to Hebbron is critical now because state funding for construction of the community center also has a short timeline. In order to achieve the schedule for construction of Hebbron, the City needs to execute a contract with its selected professional services contractor to initiate design and construction plans following approval of these substantial amendments.
DEPARMENT COORDINATION:
The Community Development Department Housing Division coordinated with other City departments including Finance, Legal, Library and Community Services, and Public Works departments. The Housing Division also coordinated with HUD regarding this agenda item.
CEQA CONSIDERATION:
The City of Salinas has determined that the project is exempt from the California Environmental Quality Act (CEQA) Guidelines Section 15302 et al., Class 2 because the project proposes the replacement and reconstruction of an existing structure.
STRATEGIC PLAN INITIATIVE:
Approval of the Second Substantial Amendment to the FY 2020-2021 AAP and First Substantial Amendment to the FY 2021-2022 AAP addresses City Council 2022-2023 Strategic Plan Goals and Strategies including: Infrastructure and Environmental Sustainability, Public Safety, Youth and Seniors, and Effective and Culturally Responsive Government.
FISCAL AND SUSTAINABILITY IMPACT:
There is no General Fund impact associated with this agenda item. CDD intends to fund all CDBG projects identified in this staff report through the execution of the proposed Substantial Amendments and the future allocation of FY 2022-23 AAP CDBG funds.
ATTACHMENTS:
Resolution
City of Salinas Summary of Second Substantial Amendment to FY 2020-2021 AAP and First Substantial Amendment to FY 2021-2022 AAP - Draft Page | 4
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