City Council
Report
City Council Meeting: April 23, 2024
Agenda Item: 5.D
1 of 8
To: Mayor and City Council
From: Heather Averick, Director, Housing and Human Services Department Subject: Approval of the Proposed FY 2024-25 Annual 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 2024-25 Annual Community Development Block Grant (CDBG) and HOME Action Plan (Attachment A).
3. Authorize the City Manager to submit all documents required to receive the City’s annual 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 CDBG and HOME entitlement funds provided through 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 2024-25 Annual Action Plan (Attachment A) allocates a projected $2.15 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 including Addressing Homelessness, Clean and Safe Santa Monica, and Economic Growth and Cultural Vitality. Funds would support a pair of capital improvement projects in the Pico Neighborhood, provide continued funding to the City’s 2 of 8
Small Business Assistance and Tenant Improvement Fund, ongoing tenant-based rental assistance to qualifying households, and community-based services for people experiencing homelessness.
Discussion
The CDBG program is designed to benefit the residents of eligible low- and moderateincome neighborhoods. The HOME Program was enacted in 1990 and is the largest Federal block grant to state and local governments designed exclusively to support lowincome 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
3 of 8
The Proposed FY 2024-25 Annual Action Plan represents the fifth and final 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 two CDBG-eligible and previously unfunded projects in the City’s Capital Improvements Program (CIP). Both 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 Proposed Action Plan also includes continued funding for the Small Business Assistance and Tenant Improvement Fund, ongoing funding for tenant-based rental assistance, and public service offerings for people experiencing homelessness.
As this FY 2024-25 Annual Action Plan is being developed prior to the release of 2024 CDBG/HOME allocations, the figures shown in the tables below reflect estimated CDBG and HOME allocations for FY 2024-25. Current Estimates assume that FY 2024-25 CDBG/HOME funding will remain consistent with FY 2023-24 funding. Total projected FY 2024-25 CDBG and HOME resources are based on estimated allocations, 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 $284,152 $ - $284,152
Program Income $50,000 $40,000 $90,000
$1,478,710 $674,974 $2,153,684
Proposed CDBG/HOME-funded activities for the FY 2024-25 program year include:
4 of 8
19th Street Parcel Development - Phase II (CDBG)
$ 500,000
The vacant 2018 19th Street land parcel was originally purchased using CDBG and General Funds in FY 2019-20 in order to develop the land into a beneficial community resource. Following continued engagement of Pico Neighborhood residents within the service area, the City awarded FY 2023-24 CDBG funds for Phase I development, which includes grading and preparing the land for general accessibility. Phase II development will include the necessary infrastructure to support a community garden, including raised garden beds, seating, and lighting.
With the completion of Phase II, the parcel will be transformed into a valuable amenity serving the Pico Neighborhood community while also adding an additional garden to the City's Community Garden program.
Virginia Avenue Park Playground Replacement – Phase I (CDBG) $ 500,000
The Virginia Avenue Park (VAP) Playground is in need of a renovation, specifically focused on equipment replacement, reducing sand, and providing shade. VAP is home to the only City playground in the Pico Neighborhood, and one which is heavily used by families, camps, and farmers market visitors. At present, the playground equipment is aging and in need of replacement. The sand surface prevents accessible use of the playground, and community members regularly request shade to be added to this site to provide relief from direct sunlight. The VAP Playground Replacement project will use a phased, multi-year approach to update playground equipment and install a more accessible surface and shade covering in order to create a safe, enjoyable playground experience for the community.
Small Business Assistance and Tenant Improvement Fund: (CDBG) $50,000 Fund the City’s Small Business Assistance and Tenant Improvement Program to continue supporting an equitable economic recovery for eligible Santa Monica small businesses.
Tenant-Based Rental Assistance (HOME)
Rental subsidies for qualifying low-income households who may be at $ 512,231 risk of losing housing.
Public Services (CDBG)
$ 189,800
Provides funding to CLARE|MATRIX for the operation of an outreach team for people experiencing homelessness, including substance abuse treatment services that increase the City's capacity to effectively address substance use and overdose among Santa Monica's homeless populations.
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
5 of 8
TOTAL $2,153,684
The following contingencies apply to FY 2024-25 activities proposed for funding. Should actual allocations differ from estimates, funding adjustments will be allocated to activities as follows:
• HUD has intermittently waived the 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 2024-25 program year, these funds would be used to increase funding for Tenant-Based Rental Assistance and/or HOME Administration.
• CDBG funding adjustments will be allocated first to Administration and Public Services to ensure those activities remain resourced in alignment with allowable thresholds of 20% and 15%, respectively. Thereafter, any CDBG funding adjustment will be allocated proportionally to the proposed Public Infrastructure projects. • HOME funding adjustments will be allocated first to Administration to ensure alignment with the allowable threshold of 10%, and then to the Community Housing Development Organization Reserve to ensure the required 15% set-aside.
Thereafter, any HOME funding adjustments would be allocated to Tenant-Based Rental Assistance.
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 2024-25 Annual Action Plan, which was held during the March 21, 2024 meeting of the Recreation and Parks Commission. The Proposed FY 2024-25 Annual Action Plan was also made available for a 30-day public review period beginning on March 22, 2024. Both the public hearing and the public review period were advertised in the Santa Monica Daily Press and on the City’s CDBG/HOME page. Invitations to participate also went out via email to local service providers, neighborhood associations, and Housing and Human Services boards, commissions, and workgroups. The public review period was also announced in the 6 of 8
March 21, 2024 SaMoNews mass emailing to over 40,000 Santa Monica community members. Notices invited participation from Spanish speakers and offered accommodations for people with disabilities upon request. Taken together, these outreach and engagement strategies are part of a concerted effort to obtain significant public input during preparation of the plan. All public comments received to-date are included in the Proposed FY 2024-25 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 submittal to HUD.
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
May 9, 2023 (Attachment D) Approval of FY 2023-24 Annual Action Plan 7 of 8
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 administrative programs (i.e., Small Business Assistance and Tenant Improvement Fund, Tenant-Based Rental Assistance (HOME), Funding for Public Services, Community Housing Development Organization Reserve) which would not result in a significant adverse physical impact on the environment. Furthermore, both 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 2024-25 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
CDBG-CV: CDBG Coronavirus Aid, Relief, and Economic Security (CARES) Act CIP: Capital Improvements Program
VAP: Virginia Avenue Park
CHDO: Community Development Housing Organization
CEQA: California Environmental Quality Act
8 of 8
Prepared By: Marc Amaral, Administrator
Approved Forwarded to Council
Attachments:
A. Attachment A: Proposed 2024-25 Action Plan - Public Review (Web Link) B. Attachment B: 2020-24 Consolidated Plan (Web Link)
C. Attachment C: June 9, 2020 Staff Report (Web Link)
D. Attachment D: May 9, 2023 Staff Report (Web Link)