City Council and Concurrent Authorities
October 17, 2023

Annual Action PlanAmendments City Council MeetingAgenda Item 16.1October 17, 2023•2023-2024 Annual Action Plan--Substantial Amendment #1•2020-2021 Annual Action Plan--Substantial Amendment #3

BACKGROUND
As a HUD Entitlement Community, the City of Stockton is a recipient of:Community Development Block Grant (CDBG)Emergency Solutions Grant (ESG)HOME Investment Partnerships Program (HOME)Consolidated Plan (Con Plan)Annual Action Plan (AAP)CAPER• Describes & Prioritizes Community Needs• Identifies and outlines resources to meet Community Needs• Provides a “Consolidated” Strategic City’s HUD grant program funding• Serves as the City’s application for HUD’s formula block grant programs.• Allocates fiscal year funds for specific projects to address Needs identified in the Con Plan• Reports to the public and HUD/Congress of the accomplishments of activities identified in the AAP• Helps measure 5-year Con Plan performance Annual Action Plan (AAP)Serves as the City’s annual application for CDBG, HOME, & ESGIdentifies the projects the City will fund in Program YearHUD allows the City to modify a previously approved action plan, as needed.When modifying a previously approved AAP, HUD requires the City to follow its Citizen Participation Plan process if it meets the definition of a substantial amendment (e.g. re-allocation of funding in excess of 5% of its annual entitlement amount)BACKGROUND

2023-2024 AAP approved by City Council on April 18, 2023No Previous amendments2020-2021 AAP approved by City Council on April 28, 2020Previously amended twice to add CDBG-CV funds (for small business support, access to healthy food, and artist grants)AAP AMENDMENTS &TIMELINE Events DatesPublic Hearing Notice Publications September 3, 2023 – Stockton RecordSeptember 8, 2023 – Latino TimesCommunity Development Committee Public Hearing to Review the Amendments September 13, 202330-day Public Comment PeriodSept 17, 2023 - October 17, 2023City Council Public HearingOctober 17, 2023 2023-2024 Annual Action PlanSubstantial Amendment #1
CDBG Timeliness Expenditure RuleEach program year (PY) HUD imposes a 1.5 timeliness expenditure rule.60 days prior to the end of the PY (May 1), the City’s CDBG balance can’t exceed one-and-one half (1.5 or 150%) times its annual allocation.Need for an AAP AmendmentApproximately $1.5 million of CDBG was originally allocated to public infrastructure improvements.Environmental Clearance: After a close analysis, it was found that the City would not be able to conduct the required environmental clearance on time to meet the expenditure deadline for any infrastructure projects.To be able to meet the 1.5 timeliness standard, the following amendment is recommended:
2023-2024 AAP Amendment #1

Amendment Recommendation:Reallocate $1,510,261 from Public Infrastructure Improvements to eligible Affordable Housing activitiesAffordable Housing was one of the top Consolidated Plan Priorities and there is a high demand for affordable housing.CDBG funds to be awarded to housing developers for eligible activities (e.g. property acquisition).2023-2024 AAP Amendment #1 Funding SourceApproved Activity Proposed ChangeOriginally Approved AmountAllocation ChangeNewFunding LevelCDBGPublic Infrastructure ImprovementsReallocate funds to Affordable Housing$1,510,261 - $1,510,261 $0.00Funding SourceNew Proposed Activity or AllocationProposed ChangeOriginally Approved AmountProposed AllocationNew Funding LevelCDBGAffordable HousingAllocate from Public Infrastructure Improvements$0.00 + $1,510,261 $1,510,261

Additional Recommendation:In addition to the reallocation of CDBG funds, staff recommends amending the project description for the Blight Abatement activity to include additional eligible matrix codes related to other real property improvementsThis will allow the City to expand the use of CDBG funds within the Blight Abatement category including but not limited to:Cleanup of contaminated sitesClearance and demolitionResidential Historic PreservationNon-Residential Historic Preservation 2023-2024 AAP Amendment #1

2020-2021 Annual Action PlanSubstantial Amendment #3
In 2020, City of Stockton received $3.87m in CARES Act CDBG funds (“CDBG-CV”):Small business support grantsHealthy Stockton InitiativeBusiness development assistance & entrepreneurship supportAccess to healthy foodsArtist grantsAnnual Action Plan (AAP)Amended in 2020 and again in 2021 to incorporate the two rounds of CDBG-CV fundsMost funding was disbursed successfully, with $426,229 remainingAmendment #3 would reallocate funds to Urban Agriculture & Food Insecurity 2020-2021 AAP Amendment #3

2020-2021 Annual Action Plan Substantial Amendment #3Funding Source Approved Activity Proposed ChangeOriginally Approved AmountAllocation ChangeNew Funding LevelCDBG-CV (R1) Venue PreparednessReallocate funds from this activity to Urban Agriculture & Food Insecurity$100,000 - $100,000$0.00CDBG-CV (R1)Business Development AssistanceReallocate funds from this activity to Urban Agriculture & Food Insecurity$93,429 - $29$93,420CDBG-CV (R3)Small Business Grant ProgramReallocate funds from this activity to Urban Agriculture & Food Insecurity$500,000 - $133,550$366,450CDBG-CV (R3)Outdoor Dining/Retail Support Grant ProgramReallocate funds from this activity to Urban Agriculture & Food Insecurity$100,000 - $100,000$0.00CDBG-CV (R3)Urban Farmers & Cottage Food Grant ProgramReallocate funds from this activity to Urban Agriculture & Food Insecurity$107,650 - $92,650$15,000Funding SourceNew Proposed Activity or AllocationProposed ChangeOriginally Approved AmountProposed AllocationNew Funding LevelCDBG-CV (R3) Urban Agriculture & Food InsecurityReallocate from Above Activities $400,000 + $426,229 $826,229 RecommendationsAdopt a resolution to:1. Approve the Third Amendment to the 2020-2021 Annual Action Plan (attached as Exhibit 1 to the Resolution);2. Approve a First Amendment to the 2023-2024 Annual Action Plan (attached as Exhibit 2 to the Resolution);3. Authorize the City Manager to reallocate funds among approved activities and partners as needed to maximize impact and benefit to the Stockton community; and4. Authorize the City Manager, or designee, to execute and submit all documents to the U.S. Department of Housing and Urban Development, execute contracts with sub-recipients, and to take actions necessary and appropriate to carry out the purpose and intent of the resolution.