CITY OF SALINAS COUNCIL STAFF REPORT
DATE: OCTOBER 24, 2023
DEPARTMENT: COMMUNITY DEVELOPMENT DEPARTMENT
FROM: LISA BRINTON, DIRECTOR
THROUGH: ROD POWELL, ASSISTANT DIRECTOR
BY: MICHAEL GOMEZ, ECONOMIC DEVELOPMENT ANALYST
TITLE: ADMINISTRATIVE JOURNAL FUND TRANSFER OF CALIFORNIA INTERAGENCY COUNCIL ON HOMELESSNESS FAMILY HOMELESS CHALLENGE GRANT FUNDS TO THE AMERICAN RESCUE PLAN ACT AFFORDABLE HOUSING PRODUCTION FUND RECOMMENDED MOTION:
A motion to approve a Resolution authorizing an administrative journal transfer of six hundred and ninety thousand dollars ($690,000) of California Interagency Council on Homelessness (Cal ICH) Family Homeless Challenge (FHC) grant fund to the American Rescue Plan Act Affordable Housing Production (ARPA AHP) fund.
EXECUTIVE SUMMARY:
Staff is seeking Council approval to execute an administrative journal transfer of funds associated with the City’s recent acquisition of 1028 Larkin Circle in the amount of $690,000 with ARPA AHP funds to the FHC grant fund support increasing the level of expenditure of FHC funds necessary to be eligible to receive second-round FHC funds. The City’s FHC Standard Agreement with Cal ICH stipulates the necessary expenditure milestone of 50% of the City’s $2.6 million first round allocation of funds no later than December 31, 2023. In anticipation of this deadline, Cal ICH staff is currently engaging with awarded jurisdictions to address identified shortfalls and to develop appropriate projection of expenditures. Due to the City’s competitive real estate market and ongoing internal organizational change underway with the City’s grant partner, Bay Area Community Services (BACS), successful acquisition of homes as planned has been difficult. In recognition of this complication and to ensure compliant, timely expenditure of FHC funds, the proposed journal transfer of the Larkin Circle acquisition represents the most expedient, compliant path forward.
BACKGROUND:
On April 26, 2022, Council approved a Resolution to allow for the submission of an application and acceptance of an award to Cal ICH for its FHC Request for Applications in partnership with BACS. On June 24, 2022, the City of Salinas received notification of a $5.2 million award to be allocated in two rounds to create affordable, permanent housing options for families experiencing homelessness. The City’s successful application identified primary activities and expenditures including the purchase of single-family home assets, targeted placement of hard-to-place families currently staying at the SHARE Center, and a supportive ongoing post-occupancy tenant support model derived from BACS’ successful experience with similar scattered site models in other Bay Area communities.
On September 12, 2023, Council approved a Purchase and Sales Agreement for 1028 Larkin Circle utilizing ARPA AHP funds in compliance with the intended uses of affordable housing-related projects, including property acquisition. Tenancy and management of this property will be similar to that of the FHC grant and other occupied city housing assets.
FHC funds have previously been used to fund a prior acquisition of 817 Bautista Drive and are also targeted for use on an emerging third residential acquisition. Through the combination of these three transactions, FHC milestone expenditure requirements will be satisfied, and the City will qualify for receipt of an additional $2.6 million in funds to support additional acquisitions and services.
DISCUSSION:
To address the urgent need to meet a fast-approaching FHC grant expenditure deadline and to allow the City to receive an additional $2.6 million in FHC grant funds, staff are proposing the transfer of $690,000 of previously expended FHC funds to the ARPA AHP fund. Funds transferred to the ARPA AHP fund would then be used to support other in-progress, affordable housing acquisitions.
In recognition of obstacles encountered with the expenditure of first-round FHC funds, staff remain actively engaged with BACS regarding their current performance as an active FHC grant partner. In the event that BACS is unable to efficiently and effectively resolve its internal processes and structures to effectively support their continued participation in the FHC grant, staff is prepared to assume full responsibility for all identified deliverables and outcomes, including the future acquisition of additional properties.
With the proposed fund transfer, the City will remain fully compliant with all FHC grant terms, avoid potential negative impacts to future grant applications, and continue its commitment to providing much-needed affordable housing in our community.
CEQA CONSIDERATION:
The recommended action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378). Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Any subsequent discretionary projects resulting from the future development at the will be assessed for CEQA applicability.
STRATEGIC PLAN INITIATIVE:
The proposed journal transfer supports the City of Salinas Strategic Plan 2023-2025 goal of Housing/Affordable Housing as it will allow the City to remain eligible to receive FHC second round funding to create affordable, permanent housing options for families experiencing homelessness.
DEPARTMENTAL COORDINATION:
This item has been coordinated by CDD’s Economic Development and Housing and Community Development divisions in consultation with the City Attorney’s Office and Finance Department.
FISCAL AND SUSTAINABILITY IMPACT:
There are no costs associated with this action however, without approval of this administrative journal transfer, the City would not qualify for the second round of FHC funding. There is no direct impact to the General Fund.
ATTACHMENTS:
Resolution
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