COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Chenin Dow, Community Development Director
DATE: September 16, 2025
SUBJECT: Adoption of Resolution Approving Community Development Block Grant Priorities Funding for Fiscal Year 2026-2027
Description:
The City Council will conduct a public hearing to receive comments on the priorities for Fiscal Year 2026-2027 funding.
Environmental Notice: This 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.
RECOMMENDATIONS:
1. Adopt a Resolution approving the Community Development Block Grant priorities for Fiscal Year 2026-27 funding process; and
2. Approve the use of Fiscal Year 2026 -27 CDBG Capital funding for two City projects.
BACKGROUND:
On an annual basis, the Block Grants Advisory Committee (BGAC) reviews the priorities outlined in the City’s Five -Year Consolidated Plan and decides whether they should be modified based on community needs. The priorities are one of the tools used by the BGAC and the City Council in determining what activities and projects should receive funding to maximize the impact the City’s Community Development Block Grant (CDBG) funds will have on City residents. This is a required process under the U.S. Housing and Urban Development’s (HUD’s) adopted Citizen Participation Plan.
DISCUSSION:
As part of the required CDBG funding process, staff conducted a Community Needs Workshop on Monday, July 14, 2025. The workshop is designed to obtain information from residents and non -profit agencies concerning the unmet needs in the community.
Participants spoke about the need for affordab le housing, at-risk youth, elderly/seniors, and services for the unhoused. The needs expressed are reflected in the existing CDBG funding priorities; therefore, the BGAC recommends no changes be made to the current priorities.
2 These funding priorities are one of several tools used by the BGAC and the City Council to determine how the funding is distributed. The City also has discretion as to how the funding should be allocated based on other factors such as the immediate need of a project, the project’s tim eliness, the administrative capacity of the agency applying for funding, the applicant’s capacity to financially sustain the project long after the funding is utilized, and long-term goals imposed by the City in its five-year CDBG Consolidated Plan.
The a doption of these funding priorities by the City Council will kick off the Notice of Funding Availability (NOFA), which is scheduled to be released on Thursday, September 18, 2025. This will inform potential applicants that the application process for Fiscal Year 2026-27 has begun. During this funding cycle, staff recommends that the application process only be offered to non -profits under public services. Due to pressing needs involving the City’s public facilities, staff recommends that CDBG Capital fundin g be set aside for City -related projects that will benefit the entire community, primarily low - to moderate-income people and areas per CDBG regulations. These proposed projects include the Santa Maria Sports Complex and the City’s Tenant -Based Rental Depo sit Assistance (TBRA) Program.
The Sports Complex will enhance public recreational facilities for low - and moderate - income residents. The project currently holds $1.5 million in CDBG funding and over $6 million in State grants, both with expiration deadlines. An additional CDBG allocation would help complete critical amenities and keep the project on track for timely completion.
The TBRA program provides rental deposit assistance for low -income residents. While funded through the HOME Investment Par tnership Program, the City must use CDBG funds to cover administrative costs due to HOME Consortium rules. It is proposed that $20,000 of CDBG Capital funding be set aside to cover staff time to manage this program.
Alternative(s)
The City Council can ame nd the priorities with the understanding that it differs from the BGAC’s recommendation, the City’s adopted five-year CDBG Consolidated Plan, and that the changes may not accurately reflect the overall needs expressed of the community.
Delaying the adoption of the funding priorities will also delay the CDBG funding process for FY 2026-27.
The City Council can also choose not to set aside all the CDBG Capital funding for City projects or set aside a portion solely for non -profit projects like the minor home repair program. In doing so, the Capital funding for City-related projects would be impacted.
Fiscal Considerations
HUD has not yet released official figures, but staff anticipates approximately $1 million will be available for Capital funding in FY 2026 -27. Allocating this funding to the Sports Complex and TBRA administration would prevent the need for General Fund contributions.
3 Impact to the Community
The proposed action will have a positive impact on the community by providing the BGAC and potential sub-recipients with a decisive outline of the priorities for the upcoming funding cycle.
ATTACHMENT(S):
A. Resolution
B. Proposed FY 2026-27 Priorities