TO: HONORABLE MAYOR AND FROM: Jacky Morales-Ferrand
CITY COUNCIL
SUBJECT: SEE BELOW DATE: August 9, 2022
Approved Date
8/9/2022
SUPPLEMENTAL
SUBJECT: FINAL PUBLIC HEARING ON THE FISCAL YEAR 2022-23 ANNUAL
ACTION PLAN FOR THE US DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT
REASON FOR SUPPLEMENTAL
This supplemental memorandum provides an update on the proposed funding amounts for programs in the Community Development Block Grant (CDBG) public service category.
BACKGROUND
On April 26, 2022, the City Council held a public hearing and approved the proposed draft Fiscal Year 2022-23 Annual Action Plan. The draft also included a contingency plan on how staff would adjust amounts to be awarded pursuant to receiving the final U.S. Department of Urban Development (HUD) allocations, specifically staff proposed that increases or decreases would be spread proportionally across the board per source.
1 On May 13, 2022, the City received notice of
its final formula allocation amounts for FY 2022-23. The City will receive approximately $14.4 million in CDBG, HOME, HOPWA, and ESG entitlement grants. While the total is only approximately $9,517 less than the total of last year’s allocations, not all entitlement grants received a funding cut. The HOME funds increased by 10.6% and HOPWA allocation increased by 6.3%. The CDBG allocation decreased by 4.9% and ESG allocation decreased by 2%. The Housing Department proposed to reduce the CDBG Public Service funding contracts by 4.9% and there are no proposed reductions to the ESG contracts. CDBG only allows a maximum of 15% of the total grant to be used for public service activities. The proposed Action Plan funded Public Service activities at the maximum level allowed by HUD.
1 Report to Council April 26, 2022 item 8.3:
https://www.sanjoseca.gov/home/showpublisheddocument/85226/637870921289700000 COUNCIL AGENDA: 8/9/22
FILE: 22-1141
ITEM: 8.3
HONORABLE MAYOR AND CITY COUNCIL
August 9, 2022
Subject: Supplemental Memorandum: Final Public Hearing on the Fiscal Year 2022- 2023 Annual Action Plan for the U.S. Department of Housing and Urban Development
ANALYSIS
The Housing Department has identified a funding source to restore the CDBG Public Service programs to FY2021-22 levels. The Department is in process of closing out another federally funded program called the Neighborhood Stabilization Program (NSP). It was established for the purpose of providing emergency assistance to stabilize communities with high rates of foreclosed homes. Congress has not allocated any funding to the program for years and most cities are in process of closing out their programs. San José will have approximately $584,000 in leftover funds from NSP and proposes to use these funds to make up the reduction in CDBG funds for FY22-23. Table 1 below identifies the contracts that were originally reduced (in the memorandum dated July 26, 2022) and the proposed new amounts.
Table 1: CDBG Public Service Proposed Amounts
Activity Agency Program Previously
Proposed
Amount
NEW Proposed
Amount
Legal Services SJ Housing Rights
Consortium
Legal services for
low-income
tenants and
landlords
$454,730 $475,115
Neighborhood
Engagement
SOMOS Mayfair Home Grown
Talent Project
$118,875* $150,000
Neighborhood
Engagement
CommUniversity Community
Leadership
Development
$71,325 $75,000
Services for
Homeless
HomeFirst Citywide Street
Outreach
$380,385 $399,983
Fair Housing Law Foundation
Silicon Valley
Fair Housing
Services
$190,200 $200,000
Total $1,215,515 $1,300,098**
*There was a mathematical error in the staff report dated July 26, 2022, resulting in a larger decrease than 4.9% for SOMOS Mayfair.
**Final total will be brought forward to Council in a substantial amendment to the annual action plan.
The Housing Department must finish closing the NSP program with HUD, it’s anticipated that will be complete in the next month. Finally, the Department will have to conduct a substantial amendment to its FY2022-23 Annual Action Plan to recognize and allocate the $584,000 in leftover funds. The final totals may adjust as the Department plans to work with each agency to negotiate an additional increase to adjust for inflation. The Department will return to Council with the needed budget actions to for approval by the end of the calendar year.
HONORABLE MAYOR AND CITY COUNCIL
August 9, 2022
Subject: Supplemental Memorandum: Final Public Hearing on the Fiscal Year 2022- 2023 Annual Action Plan for the U.S. Department of Housing and Urban Development
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office and the City Manager’s Budget Office.
/s/
JACKY MORALES-FERRAND
Director, Housing Department
The primary author of this memorandum is Ragan Henninger, Deputy Director, for questions please contact her at [email protected]
.