CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 18 Section Name: {{section.name}} Account Number: 23-3133 File ID: {{item.tracking_number}} TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Community Development Department
MEETING DATE: May 19, 2025
SUBJECT:
2025-26 Community Development Block Grant Annual Action Plan – Adoption RECOMMENDATION:
Adopt the 2025-26 Community Development Block Grant (CDBG) Annual Action Plan and direct staff to submit the plan to the U.S. Department of Housing and Urban Development (HUD); authorize the City Manager to execute the Funding Agreement with HUD for CDBG funds.
BACKGROUND:
The Community Development Block Grant (CDBG) Program provides flexible funding for community development projects and programs to assist individuals and families from extremely low- to moderate-income households, as defined by the U.S. Department of Housing and Urban Development (HUD). The City receives an entitlement grant based on a national formula and has participated in this program since 1977.
The City also received an entitlement amount of HOME funds from 1994 to 2015 that was used to assist housing programs and projects for very low-income households. In 2016, the City joined a consortium with the County of San Mateo and the City of South San Francisco to pool our HOME funds to provide more efficiency and timeliness in expending those funds.
The City of Redwood City recently joined the consortium in 2025. The City still collects loan payments from loans made prior to 2016 and must re-program those funds into HOME-eligible projects. 2025-26 Annual Action Plan
The Draft Annual Action Plan, included as Attachment 1, outlines the City’s budget for the coming year with details of the programs and projects that will be undertaken to address the needs identified in the Consolidated Plan. The Consolidated Plan is a Five-Year Plan which outlines the City’s goals to address the needs of low-income households using HUD funding.
The City has not yet received an award letter from HUD detailing the exact amount of funding it will receive for the coming year. However, the CDBG entitlement amount is estimated to be $753,586 for the 2025-26 program year using the prior (2024-25) program year. The remaining funds for the budget will come from program income ($8,000) and prior year resources ($271,266). The program income is generated by repayment on housing rehabilitation loans, and prior year resources are compiled from unspent funds in various contracts. The Annual Action Plan also includes programs to address affordable housing and other community needs.
The CDBG funding categories are summarized below. At its Regular Meeting on February 19, 2025, the Community Relations Commission (CRC) identified twelve non-profit agencies to receive CDBG funds in the areas of Public Services, Economic Development, and Minor Home Repair, in addition to allocating funds to Administration and Public Facilities.
Please note that the Public Services, Economic Development, and Minor Home Repair funding categories run on a two-
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year cycle, meaning that eligible applicants for the 2025-26 Program Year are current subrecipients from the 2024-25 Program Year. Using the estimated entitlement amount of $753,586, the CRC recommended maintaining the levels of funding in 2025-26 that subrecipients received in 2024-25 in those funding categories. Administration – A maximum of 20 percent of the CDBG grant is eligible for administrative costs ($85,000). Funds will be mainly used to cover City staff salaries who administer the grant, plus materials and service costs. The administrative budget for staff was reduced to $60,000 to allocate additional funds to other CDBG activities. Also included in this category is one grant to Project Sentinel for the provision of fair housing services in the amount of $25,000.
Public Services – The cap for public services is 15 percent of the grant and prior year program income ($113,000).
The Community Relations Commission (CRC) recommended to award each applicant the same amount as the prior year ($14,100). However, since there are fewer agencies who will receive funding this year, the amount will increase slightly ($16,100 per organization).
Economic Development – The City will fund two grants for microenterprise assistance ($80,000). The two subrecipients, Renaissance and Upwards, will receive a grant of $40,000 each for general microbusiness and childcare microbusiness assistance.
Minor Home Repair – The City will fund Rebuilding Together Peninsula to administer two programs for home repair, rehabilitation, and energy updates for lower income homeowners in the amounts of $32,000 and $75,000. Public Facilities – The City will fund two non-profit agencies to make improvements to their facilities. CORA will receive $50,000 and HIP Housing will receive $150,000.
Street Improvement Project – The Department of Public Works will manage this project to increase walkability within CDBG neighborhoods, specifically focusing on pedestrian improvements near senior housing and points of interest identified in the Age-Friendly San Mateo Action Plan ($447,850). oThis activity is related to the City’s 2023-2031 Housing Element Policy H.2.4 to annually allocate and use available CDBG funds to make capital improvement project (CIP) improvements in identified Equity Priority Neighborhoods (including North Shoreview and North Central neighborhoods). Potential improvements may include: street work, crosswalk improvements, ADA ramp installation, striping, sidewalk improvements, traffic signal replacement, and other pedestrian/bicycle enhancements.
While the City does not directly manage HOME funds, for the purposes of the Annual Action Plan, the City tracks progress towards meeting its housing and Affirmatively Furthering Fair Housing (AFFH) goals through annual HOME activities undertaken by the County of San Mateo. The City also reports on any planned uses of HOME program income. In recent program years, this has included the Kiku Crossing affordable housing project on City-owned land at 480 E. 4th Avenue.
The recommended subgrantees, funding amounts, and activities for the 2025-26 Program Year are summarized in Table 1.
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Table 1 – CDBG Funding Breakdown
Table 1. CDBG Expenditures Program Year 2025-26
Annual Entitlement $753,586 (estimate)
Program Income $8,000
Prior Year Resources $271,266
Total Available Funding $1,032,852
Administration (20% cap)
Recipient Amount
City Staff Administration $60,000
Project Sentinel (Fair Housing) $25,000
$85,000
Public Services (15% cap)
CALL Primrose - Drop-in food pantry program providing free grocery services.
$16,100
CORA - Provides survivors of domestic violence and their children with legal services.
$16,100
Friends for Youth - Provides mentoring relationships and support services to underserved, vulnerable youth.
$16,100
Legal Aid Society - Legal services to households in danger of eviction and/or living in substandard conditions.
$16,100
LifeMoves - Provides shelter and supportive services to assist homeless individuals to return to self- sufficiency at the First Step for Families facility which includes 117 beds.
$16,100
Rape Trauma Services - Provides mental health services to address the multiple healing needs of child survivors of sexual violence.
$16,100
Samaritan House - Provides a broad spectrum of assistance, including case management, emergency assistance - food, clothing, shelter, healthcare - as well as financial assistance and empowerment services.
$16,100
$113,000
Economic Development
Renaissance Entrepreneurship Center - Deliver customized small business training, one-on-one consulting, and access to capital, resources, markets, and networks to assist lower- income and under-resourced residents who are starting and growing sustainable small businesses.
$40,000
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Upwards - Equip LMI microenterprise in-home childcare
providers with personalized coaching and digital tools to optimize operations and revenue, enabling them to
efficiently manage and grow their business, create local teaching assistant jobs, and expand access to affordable care quality for working families in the community.
$40,000
$80,000
Minor Home Repair
Rebuilding Together Peninsula - Safe at Home program
provides minor home repairs including health and safety measures, emergency electrical and plumbing.
$75,000
Rebuilding Together Peninsula - National Rebuilding Day provides larger scale rehabilitation of homes in conjunction with volunteers and many other funding sources.
$32,000
$107,000
Public Facilities
Street & Sidewalk Improvements (San Mateo Public Works) $447,850 CORA - A one-time grant to make repairs to their community office in San Mateo.
$50,000
HIP Housing - A one-time grant to replace an elevator at their newly acquired administrative and programs office in San Mateo.
$150,000
TOTAL Expenditures $1,032,850
Contingency Plan
The delay in CDBG funding allocations takes place at the federal level and is therefore outside the City’s control. Until the City receives confirmation from HUD on the entitlement amount for Program Year 2025-26, grant amounts are provided as estimates subject to a future adjustment. In the case that the entitlement amount is less than the previous year, the City must determine how to allocate this reduced funding to the applicants. Likewise, the City must account for how a higher entitlement amount will be distributed among subrecipients (while maintaining the 15 percent public service and 20 percent administration caps). The contingency language, which is included in the Draft Annual Action Plan, is as follows:
If the City receives more funds from HUD than what is estimated above:
Increase the amount awarded to public service applications equally while remaining under the 15 percent public service cap.
Maintain the same award amount for minor home repair, economic development, and fair housing programs. Increase CDBG administration while remaining under the regulatory cap of 20 percent. Any remaining additional funds will be used for Public Facilities Improvements and the City-led Street and Sidewalk Improvements Program.
If the City receives less funds from HUD than what is estimated above:
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Reduce the amount awarded for all public service applications equally to remain under the 15 percent cap. If the amount awarded per application is below $10,000, award fewer public service programs. Consult with applicants first if the equal distribution is below $10,000.
Retain the amounts for minor home repair, economic development, and fair housing awards. Reduce the amount allocated to the City-led public facilities Street & Sidewalk Improvements project. Reduce CDBG administration to remain under the regulatory cap of 20 percent.
Public Comments
The City is accepting comments on the CDBG 2025-26 Annual Action Plan from April 15 – May 19. As of the publication of this report, one comment was received from a resident on Street and Sidewalks Improvements:
Sidewalk repairs and green pedestrian streetlights are needed at the north side of 5 th Avenue and the south side of 4th Avenue and cross streets from South Amphlett to South Delaware.
Staff will continue accepting comments from the public through 5:00pm on May 19, 2025, and incorporate these into the Annual Action Plan and the staff presentation for this item.
Next Steps
If City Council adopts the 2025-26 CDBG Annual Action Plan, staff will submit the Annual Action Plan to HUD for approval.
HUD will inform the City of its final 2025-26 CDBG allocation via an award letter. In 2024, the City received this letter in mid-May. The final distribution of CDBG Funds will be updated into the final draft of the Annual Action Plan before submittal to HUD. The City then executes a Funding Agreement with HUD. The timing of receipt of this agreement varies but generally occurs in late summer.
BUDGET IMPACT:
The CDBG budget included in this report is outlined in the Draft 2025-26 Annual Action Plan. This budget has no impact on the City’s General Fund, as the funds are awarded by HUD to be used for program administration and sub-granted by the City to the organizations identified in Table 1.
The confirmed amount will be updated into the budget in the final Annual Action Plan, when HUD releases the exact CDBG allocation later this year.
At the April 21, 2025 City Council Study Session on implementation of the City’s Housing Element policies related to tenant protections and anti-displacement, several questions were raised regarding the use of CDBG funds for tenant/landlord education, legal assistance, and rental assistance. While CDBG funds may be used for programs related to housing, it should be noted that CDBG funds must 1) primarily serve lower-income households, 2) serve one of the goals in the City’s Consolidated Plan, and 3) not exceed the 15 percent cap for Public Services and 20 percent cap for Administration.
The City’s current (2023-2027) Consolidated Plan determined the funding categories described above. CDBG funds within Public Services and Fair Housing (included under the Administration cap) could potentially be used for new activities related to tenant protections/anti-displacement. However, due to the funding cap in both categories, additional organizations or increases in funding for any of the activities included in Table 1 would require a reduction in one of the other activities.
ENVIRONMENTAL DETERMINATION:
This plan is not a project subject to CEQA, because it can be seen with certainty that it will not cause a physical change in the environment. (Public Resources Code Section 21065.)
NOTICE PROVIDED
All meeting noticing requirements were met.
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ATTACHMENTS
Att 1 – Draft 2025-2026 CDBG Annual Action Plan
STAFF CONTACT
Rachel Horst, Housing Manager
[email protected]