City Council
Report
City Council Meeting: May 9, 2023
Agenda Item: 5.C
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To: Mayor and City Council
From: Danielle Noble, Acting Director, Community Services Department, Housing and Human Services
Subject: Approval of the Proposed FY 2023-24 One-Year Action Plan Allocating Federal Community Development Block Grant (CDBG) and HOME Investment Partnerships Act Program (HOME) Entitlement Grant Funds Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
2. Approve the Proposed 2023-24 Annual CDBG and HOME Action Plan (Attachment A).
3. Authorize the City Manager to submit all documents required to receive the City’s annual Community Development Block Grant (CDBG) and Home Investment Partnerships Act (HOME) entitlement grant funds to the U.S. Department of Housing and Urban Development (HUD).
Executive Summary
Santa Monica is a longtime recipient of Community Development Block Grant (CDBG) and HOME Investment Partnerships Program (HOME) entitlement funds provided through the United States Department of Housing and Urban Development (HUD). The City must submit a Council-approved Annual Action Plan to HUD to demonstrate that funds will be expended in a manner consistent with the community development strategy outlined in the City-approved 2020-24 Consolidated Plan.
The Proposed FY 2023-24 Annual Action Plan (Attachment A) allocates $2.2 million in CDBG and HOME funds to activities that align with the priority needs identified in the 2020-24 Consolidated Plan (Attachment B) and advances Council’s priorities to Address 2 of 7
Homelessness, promote a Clean and Safe Santa Monica, and Cultivate Economic Recovery & Expand Community & Cultural Offerings. Funds would support a variety of capital improvement projects in the Pico Neighborhood, establishment of a new Small Business Assistance and Tenant Improvement Fund, continued tenant-based rental assistance to qualifying households, and ongoing community-based services to lowincome individuals and people experiencing homelessness.
Discussion
The CDBG program dates to the Ford Administration and is designed to benefit the residents of eligible low- and moderate-income neighborhoods. The HOME Program was enacted in 1990 and is the largest Federal block grant to state and local governments designed exclusively to support low-income households. Activities eligible for funding include community facilities and improvements, preservation of affordable housing, public services, economic development, and program administration.
The City’s current FY 2020-2024 Consolidated Plan, originally approved by Council on June 9, 2020 (Attachment C) and later amended to incorporate an additional onetime allocation of CDBG CARES Act funding (CDBG-CV), identifies high-priority community needs, establishes housing and community development strategies, and institutes a set of objectives to guide Federal funding decisions throughout its five program years. Priority needs were identified through the Consolidated Plan’s Needs Assessment and Market Analysis, which incorporated data from the Census and the American Community Survey; local information from City documents such as the Housing Element, Action Plan to Address Homelessness in Santa Monica, and Assessment of Fair Housing Plan; and input from the public, City commissions, City staff, partner organizations, online survey responses, and interviews with key community stakeholders.
Priority needs identified in the Consolidated Plan are as follows:
• Expand and Improve Public Infrastructure and Facilities • Preserve and Develop Affordable Housing
• Public Services and Quality of Life Improvements • Economic Development Opportunities
• Homelessness Housing and Support Services
• Fair Housing
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The Proposed FY 2023-24 Annual Action Plan represents the fourth year of the City’s FY 2020-24 Consolidated Plan and is part of the City’s broader effort to support its most vulnerable community members through local and regional programs. Activities proposed for funding align with both the priority needs identified in the Consolidated Plan as well as community priorities to Address Homelessness, promote a Clean and Safe Santa Monica, and cultivate Economic Recovery & Expand Community & Cultural Offerings, as established by Council on March 11, 2023. Included among the proposed activities are three CDBG-eligible and previously unfunded projects in the City’s Capital Improvements Program (CIP). All three CIP projects are located in the Pico Neighborhood and serve the dual purpose of advancing Consolidated Plan goals while also reducing potential future demands on the City’s General Fund. The Action Plan also includes funding for additional activities such a new, Council-directed Small Business Assistance and Tenant Improvement Fund (Attachment E), continued funding for tenant-based rental assistance (TBRA), and public service offerings to vulnerable populations and people experiencing homelessness.
Total projected FY 2023-24 CDBG and HOME resources are based on actual allocations as announced by HUD in February 2023 and a full accounting of any unprogrammed prior-year funds and anticipated program income, as detailed below.
FUNDING TYPE CDBG HOME TOTAL
Entitlement $1,144,558 $634,974 $1,779,532
Prior-Year Funds $334,152 $ - $334,152
Program Income $50,000 $40,000 $90,000
$1,528,710 $674,974 $2,203,684
Proposed activities for the FY 2023-24 program year include:
19th Street Parcel Development - Phase I (CDBG)
$ 500,000
Originally purchased using CDBG and General Funds in FY 2019-20, the 2018 19th Street parcel must now be developed into a beneficial community resource informed by engagement with Pico Neighborhood residents within the service area. Phase I development will include grading and preparing the land for general accessibility before installing 4 of 7
a communal garden space in a future Phase II.
Virginia Avenue Park (VAP) Basketball Court Replacement (CDBG) $ 400,000
The VAP basketball courts are a popular and well-utilized resource for Santa Monica youth and families in the Pico Neighborhood. The courts are currently suffering from increasing surface damage due to the elements and normal wear and tear and will soon result in safety hazards for basketball players. If the courts cannot be not resurfaced and repaired, they may face imminent closure.
Virginia Avenue Park Community Kitchen (Supplemental): (CDBG) $ 150,000
Due to significant increases in construction costs, additional funding is required to complete conversion of the existing kitchen in the Thelma Terry Building at Virginia Avenue Park (VAP) into a licensed commercial kitchen. The kitchen will be used to cater park events generating greater engagement among the Pico Neighborhood community as well as residents citywide. The kitchen will also generate economic growth within the park's service area by acting as a small business incubator for low-moderate income entrepreneurs. Funding for this activity was originally allocated in the FY 2021-22 Annual Action Plan.
Small Business Assistance and Tenant Improvement Fund: (CDBG) $50,000 Launch a Small Business Assistance and Tenant Improvement Program to help expedite an equitable post-pandemic recovery for eligible Santa Monica small businesses
Tenant-Based Rental Assistance/TBRA (HOME)
Rental subsidies for qualifying low-income households who may be at $ 512,231 risk of losing housing.
Public Services (CDBG)
$ 189,800 Funding for Public Services for eligible low-income individuals and/or people experiencing homelessness. To be administered by an agency(s) awarded funding for the 2023-27 Human Services Grants Program (HSGP).
Administration & Planning (CDBG, HOME)
Up to 20% of CDBG and 10% of HOME funds are allocated to staff time and resources to administer programs in compliance with federal regulations.
$ 306,407
CHDO Reserve (HOME)
15% set-aside for Community Development
Housing Organization activities (regulatory requirement) $ 95,246
TOTAL $2,203,684
The following contingency applies to FY 2023-24 activities proposed for funding:
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• Since 2017, HUD has periodically waived the regulatory requirement that entitlement jurisdictions set aside 15% of their annual HOME allocation for Community Housing Development Organization activities. Should the waiver be announced for the FY 2023-24 program year, the funds would be used to increase funding for Tenant-Based Rental Assistance (TBRA) and/or HOME Administration.
Public Participation
Pursuant to Municipal Code Section 2.68.050, and in alignment with HUD regulations, the City is required to hold a public hearing prior to Council approval of an Annual Action Plan. To meet the requirement, staff advertised a public hearing to inform development of the Proposed FY 2023-24 Annual Action Plan, which was held during the March 16, 2023 meeting of the Recreation and Parks Commission.
The Proposed FY 2023-24 Annual Action Plan was also made available for a 30-day public review period beginning on April 5, 2023. All public comments received to-date are included in the Proposed FY 2023-24 Annual Action Plan. Any input received through the public review process and public hearings will be incorporated into the final version of the Annual Action Plan prior to HUD submittal.
Past Council Actions
Meeting Date Description
June 9, 2020 (Attachment C) Approval of FY 2020-24 Consolidated Plan and FY 2020-21 Annual Action Plan
April 26, 2022 (Attachment D) Approval of FY 2022-23 Annual Action Plan February 14, 2023 (Attachment E) Expediting an Equitable Post-Pandemic Recovery for Santa Monica’s Small Businesses
Environmental Review
Adoption of the annual action plan is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines, which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. Many of the funding recommendations are for 6 of 7
administrative programs (i.e., Small Business Assistance and Tenant Improvement Fund, Tenant-Based Rental Assistance/TBRA (HOME), Funding for Public Services, CHDO Reserve) which would not result in a significant adverse physical impact on the environment. Furthermore, all three CIP projects identified for the awards are subject to City Council approval, and environmental review would be conducted at the time they are approved.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended action. The funding recommendations for the awards will be included in the City’s Proposed FY 2023-24 Budget and are subject to City Council approval.
HUD’s submission requirements for the CDBG and HOME Consolidated Plan and Annual Action Plan precede the City Council’s adoption of the City’s Budget.
Acronym Glossary
HUD: United States Department of Housing and Urban Development CDBG: Community Development Block Grant
HOME: Home Investment Partnerships Program
TBRA: Tenant-Based Rental Assistance
CHDO: Community Housing Development Organization
Prepared By: Marc Amaral, Administrator
Approved Forwarded to Council
Attachments:
A. Attachment A: Proposed 2023-24 Action Plan - Public Review B. Attachment B: 2020-24 Consolidated Plan
C. Attachment C: June 9, 2020 Staff Report (Web Link)
D. Attachment D: April 26, 2022 Staff Report (Web Link) E. Attachment E: February 14, 2023 Staff Report (Web Link) 7 of 7
F. ITEM.5.C.Written Comments