COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Chenin Dow, Community Development Director
DATE: April 1, 2025
SUBJECT: Fiscal Year 2025 -26 Community Development Block Grant Program Drafted Action Plan and Five-Year Drafted Consolidated Plan
Description:
The City Council will receive comments from the public and review and approve the overall allocations and contingencies of the drafted F iscal Year 2025-26 Community Development Block Grant Action Plan and the drafted five-year Community Development Block Grant Consolidated Plan.
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
RECOMMENDATION:
1. Conduct a public hearing to receive comments from the public as part of the drafted Fiscal Year 2025-26 Community Development Block Grant Action Plan 30 -day public review period;
2. Consider the Block Grants Advisory Committee’s recommendation for the allocation of Fiscal Year 2025-26 Community Development Block Grant Program Public Services and Capital funds;
3. Allocate its $37,500 to Public Services programs;
4. Review and approve the overall allocations and contingencies of the drafted Fiscal Year 2025-26 Community Development Block Grant Action Plan; and
5. Review of the drafted five-year Community Development Block Grant Consolidated Plan.
BACKGROUND:
The Community Development Block Grant (CDBG) Program is the primary federal program that provides state and local governments with grant funds for local programs and projects that address complex physical and social needs within the community. The objective is to develop viable urban communities by providing decent housing and a suitable living environment.
2 The program is administered by the U.S. Department of Housing and Urban Development (HUD). These Federal grant funds may be used at the discretion of the City, provided that the City’s activities comply with Federal regulations and meet one of the three national objectives: (1) benefit primarily low - and moderate -income persons, (2) prevent or eliminate slums or blight, or (3) meet an urgent community-wide need caused by a major catastrophic event (e.g., flood, earthquake).
The City has participated as an entitlement community in the CDBG Program for 51 years.
As an entitlement community, the City automatically receives annual funding based on a HUD formula that considers factors such as population growth, poverty levels, age of housing, and overcrowding.
The annual allocation process involves the required development of an Annual Action Plan. The City Council-appointed a Block Grant Advisory Committee (BGAC) to oversee this process, including assessing community needs, establishing funding priorities, reviewing applications, conducting site visits, and making allocation recommendations.
Every five years, HUD requires CDBG grantees to conduct a detailed analysis of the City’s community needs and fair housing opportunities. Following nearly a year of community outreach and research, the findings are reflected in the drafted F iscal Year (FY) 2025-30 CDBG Consolidated Plan.
Application Process Overview
The BGAC conducted a community needs assessment on Monday, July 22, 2024, to receive public input and discuss community needs and priorities. The expressed needs align with the existing CDBG funding priorities; therefore, the BGAC recommends no changes to the priorities outlined in the City’s Five-Year Consolidated Plan. The FY 2025- 26 priorities were adopted by the City Council during the August 20, 2024, meeting.
A Notice of Funding Availability (NOFA) was issued on Thursday, August 22, 2024, and a mandatory pre -application workshop was conducted on Thursday, October 10, 2024.
Applications for both Public Services and Capital projects were due by Sunday, November 24, 2024. Staff received 17 applications for Public Services and one application for Capital funding. Additionally, the Community Programs Division requested Capital funding to assist with administrative costs associated with its Tenant -Based Rental Assistance (TBRA) security deposit program.
The BGAC formed five teams to conduct site visits and in-depth application reviews. Each team examined financial statements, tax returns, and audit reports. Before deliberations, teams gathered additional background information from applicants a nd compiled written reports, which were shared with the full committee.
The deliberation process included two public meetings. The first meeting, held on Monday, February 10, 2025, allowed applicants to address additional questions. The second meeting, on Wednesday, February 12, 2025, resulted in the committee’s funding recommendations (Attachments D and E).
3 DISCUSSION:
The BGAC evaluated and ranked proposals based on the adopted priorities for FY 2025- 26 (Attachment B), the Federal Guidelines for Eligib ility, and the Additional City Criteria for CDBG Public Service and Capital Projects. Staff also conducted a separate analysis of applicants’ CDBG administrative performance (Attachment C) to document their ability to manage CDBG funds.
Public Hearing
The purpose of this public hearing is to receive testimony regarding the BGAC’s FY 2025- 26 CDBG funding recommendations. This year marks the sixth time $37,500 of Public Service funds is set aside for City Council allocation ($7,500 per Councilmember). Council members may allocate their share to a recommended Public Service agency or combine their allocations with another Councilmember to fund an agency that was not recommended, provided the minimum allocation remains $15,000. The maximum funding for any activity is capped at $20,924 (10% of overall Public Service funding).
Once the City Council finalizes its recommendations and approves the BGAC and staff recommendations, staff will present the final allocations for City Council approval on Tuesday, May 6, 2025. If HUD delays the release of final CDBG allocation figures, final approval will be rescheduled accordingly. Upon approval, the drafted Action Plan and Consolidated Plan will be submitted to HUD.
Public Services
The BGAC prioritized funding for pr ograms addressing basic human needs, critical emergencies, senior assistance, and homelessness prevention (Attachment D). Of the 17 Public Services applicants, 11 are recommended for funding. Although all applicants provide valuable community services, lim ited funding necessitates careful allocation.
Agencies’ overall program budgets were considered to ensure that services could continue even without CDBG funding. CDBG funds should be used to enhance and expand services rather than sustain or fully support them.
4 The BGAC adopted contingencies for Public Services funding as follows:
Increase in funding: Should the City receive more CDBG funding than anticipated, and it is between $0 and $14,999, the funding will be distributed evenly to each agency with a recommendation under $20,000 (up to the funding cap). If the City receives more than $15,000 and under $30,000, the additional funding will be allocated to the next on the list ($15,000) and then evenly distributed to agencies receiving under $20,000 (up to the funding cap). If more than $30,000 is received, funding will be allocated to the next agencies on the list, and the rest will be distributed evenly to all the agencies up to the funding cap. Decrease in funding : Evenly reduce agencies (up to the minimum amount of $15,000). If there is a decrease of more than $15,000, start cutting from the bottom and evenly distribute to the rest.
CDBG Capital
During the City Council meeting on Tuesday, October 1, 2024, the Council directed that most CDBG Capital funding be allocated to the Recreation and Parks Department’s Sports Complex (Attachment E).
Contingencies were adopted for Capital funding as well. They are as follows:
Increase in funding: Should the City receive more CDBG funding than anticipated, it will be allocated to the City’s Community Sports Park. Decrease in funding: Should the City receive less CDBG funding than anticipated, funding will be reduced from the City’s Community Sports Park.
The City’s TBRA Administration allocation of $15,000 will not be affected.
Five-Year Consolidated Plan
The Consolidated Plan is designed to assist local jurisdictions in assessing their affordable housing and community development needs and market conditions and to make data-driven, place-based investment decisions. The consolidated planning process serves as the framework for a community -wide dialogue to identify housing and community development priorities that align with the community’s needs.
To achieve this goal, quantitative data and qualitative input were obtained through robust community engagement efforts. For example, a survey was conducted in collaboration with members of the CDBG Urban County Partnership and HOME Consortium to complement quantitative data with community input. The survey, available online in English and Spanish, was distributed through email and social media channels. 437 residents and 45 organizations participated, providing valuable insights into priority needs across public facilities, infrastructure improvements, housing, public services, and economic development. These results are integrated throughout the Needs Assessment and Market Analysis of the Consolidated Plan to ensure alignment w ith community priorities.
5 An in-person needs assessment workshop took place on Wednesday, October 23, 2024, for City of Santa Maria residents. It was offered in English, Spanish, and Mixtec.
Approximately two dozen people attended the workshop and shared their thoughts on the unmet needs in the community.
Alternative(s)
The City Council can choose to amend the allocations, adopt new allocation amounts, and/or propose different agencies to receive funding if the changes stay within the parameters adopted by the City Council and HUD.
Fiscal Considerations
The proposed action will provide an estimated $1.4 million annually in Federal funds for social services, affordable housing opportunities, and public facilities that will help relieve pressures on the City’s General Fund.
Impact to the Community
The proposed action will positively impact the community by funding essential services, facilities, and infrastructure improvements. It will address key community issues, including emergency assistance for homele ss and special needs populations, expanded services for at-risk youth, increased access to affordable housing, neighborhood revitalization, and public facility enhancements. These recommendations are included in the drafted Annual Action Plan for FY 2025 -26, currently available for public review from Saturday, March 28, to Tuesday, April 28, 2025. The drafted FY 2025 -26 Action Plan and the drafted FY 2025-30 Consolidated Plan can be accessed at www.cityofsantamaria.org.
ATTACHMENTS
A. Available Funding
B. Priorities for Fiscal Year 2025-26
C. Staff Analysis
D. Public Service Recommendations
E. Capital Recommendations