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: 5 Section Name: CONSENT CALENDAR Account Number: 23-3133 File ID: 26-11069 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Community Development Department
MEETING DATE: May 18, 2026
SUBJECT:
2026-27 Community Development Block Grant Annual Action Plan — Adoption RECOMMENDATION:
Adopt the 2026-27 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); and authorize the City Manager to execute the Grant 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 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 Investment Partnerships Program (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 City of South San Francisco to pool HOME funds to provide more efficiency and timeliness in expending those funds. In 2025, the City of Redwood City joined the consortium. The City continues to collect loan payments from loans made prior to 2015 and must re-program those funds into HOME-eligible projects.
Community Relations Commission
The Community Relations Commission (CRC) held a Community Needs Workshop on November 18, 2025, to identify what the community’s priorities are for CDBG funding in the upcoming project year. On February 18, 2026, the CRC reviewed applications submitted to the Notice of Funding Availability (NOFA) for the 2026-27 CDBG program year that the City released in December 2025 and voted on funding recommendations. Staff developed the budget in the Annual Action Plan based on the CRC recommendations. On April 15, 2026, the CRC held a Public Hearing to review the draft Annual Action Plan and voted to recommend that the City Council approve the Plan. 2026-2027 Annual Action Plan
The Annual Action Plan, which is included as Attachment 1, outlines the City’s budget for the upcoming CDBG program year (July 1, 2026-June 30, 2027) with details of the programs and projects that will be undertaken to address the needs identified in the City’s 2023-2027 Consolidated Plan. The Consolidated Plan is the Five-Year Plan that outlines the City’s goals to address community needs and the projects and activities to advance those goals using CDBG funds.
The City received its 2026-27 CDBG allocation letter from HUD on April 6, 2026, which announced the City’s entitlement amount for CDBG funds of $802,758. The following budget is inclusive of the 2026-27 CDBG entitlement amount, program income, and prior year funds. The program income is generated by the repayment of housing rehabilitation loans. Prior year
CITY OF SAN MATEO
funds are a compilation of unspent CDBG funds from previous contracts that will now be repurposed to fund 2026-27 projects.
The major CDBG activities for the upcoming year are:
Administration – A maximum of 20% of the CDBG entitlement is eligible for administrative costs. Funds will primarily be used to cover City staff salaries who administer the grant, plus associated materials and services costs. Also included in this category is one grant to Project Sentinel for fair housing services in the amount of $26,241. Public Services - The annual cap for public services is 15% of the entitlement amount. Seven non-profit agencies were awarded Public Services funding for 2026-27, at $17,200 each. Since the City awards CDBG funds on a two- year cycle, these seven agencies will be eligible for funding in 2027-28 in an amount that will be based on the entitlement amount for that program year.
Economic Development – The City will fund two grants for microenterprise assistance. The two subrecipients, Renaissance and Upwards, will each receive an award of $40,000 for general microbusiness assistance and technical assistance for childcare providers.
Minor Home Repair – The City will award Rebuilding Together Peninsula $107,000 to fund two programs: Safe at Home and National Rebuilding Day. Both programs provide minor home repairs, energy upgrades, and accessibility modifications to eligible households.
Street Improvement Project – The City’s Public Works Department will manage this project, prioritizing sidewalk repair and pedestrian improvements located in the CDBG Priority Target Area, consisting of the North Shoreview and North Central neighborhoods. The project amount for 2026-27 is $461,626.
CDBG Expenditures Program Year 2026-27
Annual Entitlement $802,758
Program Income $8,000
Prior Year Resources $84,509.30
Total $895,267.30
Administration (20% cap)
Recipient Amount
Program Administration (City) $100,000
Project Sentinel (Fair Housing) $26,241
$126,241
Public Services (15% cap)
CORA $17,200
Friends for Youth $17,200
Legal Aid Society $17,200
LifeMoves $17,200
Rape Trauma Services $17,200
Samaritan House – CORE Program $17,200
Samaritan House – Safe Harbor
Shelter
$17,200
$120,400
Economic Development
Renaissance $40,000
Upwards $40,000
$80,000
Minor Home Repair
Rebuilding Together Peninsula $75,000
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Rebuilding Together Peninsula $32,000
$107,000
Public Facilities
Street & Sidewalk Improvements
(Public Works)
$461,626
TOTAL Expenditures $895,267
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. HOME funds have been primarily used for the predevelopment and development of new construction of affordable housing. Progress is reported on annually through the Consolidated Annual Performance Evaluation Report (CAPER), which is submitted to HUD each September.
At the time of publication of this Agenda Report, only one comment was received from a subrecipient, Upwards, who expressed their appreciation for the grant award.
With respect to CDBG funding, last year the federal government sought to impose various grant conditions that differed from prior years and were prompted by directives of the current administration. This led the City to join a lawsuit challenging those conditions and has resulted in the extension of a previously issued court injunction to newly added plaintiffs including the City of San Mateo. Implementation of the injunction is still in process and will likely affect CDBG grant agreements for FY 2025/26 and FY 2026/27.
BUDGET IMPACT:
The CDBG budget, as outlined in the table above, is in the 2026-27 Annual Action Plan, and will be incorporated into the City’s annual budget. This budget does not have an effect on the City’s General Fund. HUD provides CDBG funds to the City on a reimbursement basis.
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. A public notice was published on April 2, 2026, in the San Mateo Daily Journal to announce publication of the draft plan, the public comment period, and the upcoming meetings: the public hearing held by the Community Relations Commission on April 15, 2026 and this City Council Regular Meeting on May 18, 2026.
ATTACHMENTS
Att 1 – 2026-2027 CDBG Annual Action Plan
STAFF CONTACT
Jennifer Mora, Housing Specialist I
[email protected]
(650) 522-7230