City Council Staff Report Page 1 of 6 May 26, 2026
Staff Report
Agenda Item No. 5.1
DATE: May 26, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Joan Malloy, City Manager
SUBJECT: Public Hearing and Adopt Two Resolutions:
1) Approving and Authorizing the Submittal of the FY 2026-2027 Community Development Block Grant (CDBG) Annual Action Plan and Authorizing the City Manager, or their Designee, to submit the FY 2026-2027 CDBG Annual Action Plan to the U.S. Department of Housing and Urban Development (HUD) and to Execute All
Documents Necessary to Secure and Award Funding for the City; and
2) Approving the Appropriation of $4,215 in Rent Mediation/Eviction Projection Funds to Support ECHO Housing as Part of the FY 2026- 2027 Public Service Grant Process and Updating the FY 2026-2027 City Budget to Align with the FY 2026-2027 CDBG Allocation
EXECUTIVE SUMMARY
Staff recommends that the City Council conduct a public hearing and adopt two resolutions. The first resolution (Attachment 1) is to approve the FY 2026-2027 Community Development Block Grant Annual Action Plan (“Action Plan”) (Exhibit A) and authorize the City Manager to submit the Plan to the U.S. Department of Housing and Urban Development (HUD) and execute all documents and certifications necessary to secure and award funding. Staff also recommends that the City Council adopt a second resolution (Attachment 2) approving the appropriation of $4,215 in Rent Mediation/Eviction Projection Funds for the agreement with ECHO Housing to provide support necessary to maintain the administrative systems of the City’s Residential Landlord and Tenant Relations Ordinance as part of the FY 2026-2027 Public Service Grant Process and updating the FY 2026-2027 City Budget to align with the FY 2026- 2027 CDBG Allocation.
STRATEGIC PLAN ALIGNMENT
This agenda item does not align with a specific goal or strategy but is required to receive Federal Block Grant funds and to allocate public service grants, both of which support the City’s overall mission to create and provide effective, high-quality services that foster a Agenda Item No. 5.1
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high quality of life and economic vitality.
BACKGROUND
The City of Union City receives Community Development Block Grant (“CDBG”) funding annually from HUD. As part of the requirements for receiving this funding, the City must prepare and submit a Consolidated Plan (“Con Plan”) to HUD every five years and an Action Plan to HUD every year. The Con Plan and Action Plan assess the City’s housing, community, and economic development needs, identify available resources, and outline a strategy for addressing those needs. The Action Plan also identifies specific programs/non-profits that will be funded in the upcoming year. FY 2026-2027 will be the second year of the City’s current Con Plan.
Typically, the City is required to submit its Action Plan forty-five (45) days prior to the start of the program year on July 1 (i.e., May 15th submission deadline). However, HUD delayed announcing allocations due to the delayed 2026 federal budget appropriation.
Due to this delay, HUD has allowed submission of the FY 2026-2027 Action Plan 60 days from the date HUD announces the allocation amounts, which occurred on April 3, 2026.
The updated deadline date for submission of the Action Plan is June 3, 2026. HUD’s final review and submission deadline for the Action Plan is August 16, 2026.
Due to this delay, the City will be in the program year before executing its funding agreement with HUD. To minimize disruption to grantees and duplication of effort, HUD allows a City to implement a proposed Action Plan prior to executing a funding agreement with HUD to ensure there are no gaps in services for Union City residents.
DISCUSSION
Funding Availability
With HUD's delayed announcement, the City will receive only $438,567 for FY 2026-2027, $36,313 less than originally projected. Staff updated the original estimates in the updated Action Plan (Exhibit A) and proportionally decreased the estimated funding levels based on the new CDBG allocation. Please note that HUD provides an electronic template for jurisdictions to fill in, so please excuse any formatting issues.
Additionally, the City receives an annual allocation of HOME funding from Alameda County as part of its membership in the Alameda County HOME Consortium. The HOME allocation for the upcoming year is $124,703. The City also receives approximately $6,563 in HOME Administrative funds, which can be spent on staffing and supplies to support the program. Alameda County, as the HOME Consortium lead, also receives $6,563 in Administrative funds to support the program. These funds are not counted as a portion of the City’s administrative funds.
The City allocates public service grant funding in two-year cycles. This is to coincide with the City’s two-year budget cycle. The current two-year allocation cycle is FY 2025-2026 through FY 2026-2027. This plan reflects the second year of that budget cycle.
As part of this process, the City also approved a budget allocation of $245,000 (per fiscal year) from the General Fund for public service grants to supplement the CDBG funds Agenda Item No. 5.1
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going towards supporting public services. This amount is consistent with what the City has allocated in previous years.
Proposed Activities
CDBG funds can be used for an array of activities, including public/social services, housing rehabilitation, capital projects, microenterprise programs, and administration.
HOME funds can only be used for affordable housing-related activities such as new construction, rehabilitation, and tenant-based rental assistance. See below for an overview of how the funds are proposed to be spent. Included as Attachment 3 is a chart summarizing the proposed activities for FY 2026-2027.
• Administration (Staffing and Supplies) - The City is allowed to use up to 20% of its CDBG allocation plus 20% of FY 2026-2027 program income to pay for administration expenses, which includes staff costs. The City will allocate $87,713 (the maximum allowable amount) in CDBG funds for administrative expenses. The City will also allocate $6,563 of its HOME allocation, as allowed by the HOME Consortium, for HOME administration expenses. Both funds support Housing Division staffing, who administer the CDBG and HOME Programs, and supplies for the Division.
• Public Facilities Improvement Projects – Housing Division staff worked with Public Works staff to identify two public facilities projects that were the best fit with all of the various requirements around CDBG eligibility for public facilities projects.
Staff also wanted to prioritize projects on both the east and west sides of the City to ensure geographic equity in how funds are spent. Previously, CDBG allocations have gone towards park projects on the west side of the City, including upgrades to Old Alvarado and Contempo Parks, and on the east side, with upgrades to Fred Castro Park and Charles F. Kennedy Park.
To utilize CDBG funding for a public facility improvement project, the facility must be located in or adjacent to an area where at least 50 percent of residents are lowincome, or the facility has income-eligibility requirements that serve individuals who meet the low-income requirements. The only exception to this is if the project addresses accessibility issues. Additionally, the related reporting for a CDBGfunded project is more involved than for a typical capital project, and Public Works staff recommended that all funding be allocated to one or two projects to minimize staff time spent on reporting tasks. Lastly, to meet CDBG timely expenditure requirements, it was important to select two projects that could be completed within a year or less, or phased over 2 years, to ensure the City could meet its timely expenditure requirements.
The City will allocate $130,069 toward the Mark Green Sports Center Emergency HVAC repair. This project is eligible to use CDBG funds because it is adjacent to two Low/Moderate Area Benefit (LMA) census tracts. The project will use CDBG funds to undertake emergency rehabilitation of the HVAC system at the Mark Green Sports Center. The HVAC system is in immediate need of replacement, and the funds will cover a portion of the installation costs for the new HVAC system at the Mark Green Sports Center (31224 Union City Boulevard).
Agenda Item No. 5.1
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Staff also identified the rehabilitation of the Teen Bike Workshop (33623 Mission Boulevard), located in the Decoto neighborhood, and is proposing to allocate $85,000 in CDBG funds for the project. The workshop project is eligible to use CDBG funds because it is located in a Low/Moderate Area Benefit (LMA)- eligible census tract. The funds will be used for the first phase of the project, which includes remediating the building structure to remove asbestos and lead-based paint, on both the inside and outside. Future phases include replacement of the roof and windows; repainting of the building, including renovation of the exterior mural (where needed); electrical, plumbing, and mechanical updates within the facility; IT improvements; and ADA improvements.
Program Income (“PI”) is defined as gross income that is generated from a CDBGFunded activity. Examples of activities that can generate PI are payments of principal and interest on loans made using CDBG funds, proceeds from the sale or lease of property purchased or improved with CDBG funds, or proceeds from the sale of obligations secured by loans made with CDBG funds. This funding source is not received consistently every program year, so it cannot be assumed that PI will be received in the upcoming program year. Should the City receive any PI during the Program Period of FY 2026-2027, those funds will be applied to the two public facilities projects equitably unless one of the projects is more in need of funding, in which case all PI funds can be applied to a singular project. For ease of allocation, the PI should be directed toward Public Facilities projects, since there are no administrative program caps on the amount of CDBG funds that a Public Facilities project can receive. Staff will review and discuss any additional PI funding received during the program year with the Public Works Department and City Manager prior to its allocation to a specific project.
• Housing Rehabilitation Program– The Housing Rehabilitation Program provides home repair grants to extremely-low, very-low-, and low-income homeowners to ensure they can remain living safely in their homes. The City plans to continue to contract with the Alameda County Healthy Homes Department to administer this program. The City will allocate $50,000 in CDBG funding for minor home repair and accessibility grants, the same allocation as the prior-year award. • Public Service Grants - As discussed above, the City issues two-year public service grants, and FY 2026-2027 marks the second year of the grant cycle. The amount of CDBG funds that can be allocated to public services is limited to 15 percent of the program year allocation and any program income received. Due to the decrease in the overall CDBG award, the public service spending limit was reduced to $65,785 to comply with regulatory spending limits for public service providers. This is a $4,215 reduction in available CDBG funds from Year 1 of their award, when the public service spending limit for service providers was set at $70,000.
To maintain the City’s contract with ECHO Housing at the same level for FY 2026- 2027, staff recommend using the Rent Mediation/Eviction Projection fund balance and appropriating $4,215 to account 23442011-54118 [Rent Mediation/Eviction Projection Fund, ECHO Housing Program, Subgrants]. The use of these funds is Agenda Item No. 5.1
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appropriate as ECHO Housing provides services necessary to maintain systems of the Residential Landlord and Tenant Relations Ordinance.
The $4,215 from the Rent Mediation/Eviction Fund plus the $245,000 in the General Fund brings the total non-CDBG funding for public services for FY 2026-2027 to $249,215, as presented in Attachment 3.
Per feedback received from the City Council regarding the City’s Public Service Grant process in 2025, ECD staff will be presenting an overview of the current Grant process for review by the City Council in July. The feedback received will inform updates to the Grant process for implementation for the next grant cycle (FY 2027-2028 and FY 2028-2029).
• Microenterprise Assistance Programs – Similar to the last grant cycle, the City has set aside $20,000 in CDBG funds for microenterprise assistance programs (i.e., programs that assist small businesses). Please note that microenterprise assistance programs are not subject to the public service funding cap. The recipient of these funds is the Community Child Care Council (4Cs) of Alameda County, a microenterprise assistance program that helps low-income residents start or maintain in-home childcare programs.
• HOME Programs – The City’s HOME allocation is $118,140 for the FY 2026-2027.
The City is proposing to allocate $88,605 from its HOME allocation to support the multi-jurisdictional State Homekey project with the City of Hayward and non-profit partner Bay Area Community Services (BACS). This program resulted in the purchase and conversion of a single-family residence into supportive housing for people experiencing homelessness. The funding will be used to facilitate tenants' transition from this temporary housing to permanent housing, including funds for rent, security deposit assistance, and utilities. In addition, the City is allocating $29,535 of its HOME funds to support tenant-based rental assistance for Union City residents. Staff is currently talking with various vendors to provide this service.
FISCAL IMPACT
CDBG funding for FY 2026-2027 will be $438,567, which is $36,312 less than the $474,879 originally approved by the City Council for the City’s budget.
Staff is recommending the City Council $4,215 to account 23442011-54118 [Rent Mediation/Eviction Projection Fund, ECHO Housing Program, Subgrants] to fully fund ECHO Housing at their prior year grant allocation for FY 2026-2027. In addition, staff is recommending that the City’s FY 2026-2027 CDBG Budget be updated to match HUD’s CDBG allocations.
There is no additional impact to the General Fund from the recommended actions in this staff report. The FY 2025-2026 and 2026-2027 City Budget allocated $245,000 of General fund monies each year to support the City’s Public Service Grant Program.
RECOMMENDATION
Staff recommends that the City Council hold a public hearing and adopt the attached Agenda Item No. 5.1
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Resolution (Attachment 1) approving the 2026-2027 CDBG Action Plan and authorizing the City Manager to submit the Action Plan to HUD and to execute to execute all documents and certifications necessary to secure and award funding for the City and adopt a second Resolution (Attachment 2) approving the allocation of $4,215 in Eviction & Harassment Protection Funds to Support ECHO Housing as part of the FY 2026-2027 Public Service Grant Process and updating the FY 2026-2027 City Budget to align with the FY 2026-2027 CDBG Allocation.
Prepared by: Francisco Gomez, Housing and Community Development Manager Submitted by: Carmela Campbell, Economic and Community Development Director Attachments
1. Attachment 1 – Draft Resolution Approving FY 26-27 CDBG Action Plan a. Exhibit A – FY 26-27 CDBG Annual Action Plan
2. Attachment 2 – Draft Resolution Authorizing a Transfer of Eviction & Harassment Program Funds to FY 2026-2027 Public Service Grant Program and Updating the FY 2026-2027 City Budget to Align with the FY 2026-2027 CDBG Allocation
3. Attachment 3 - Budget Allocation Summary for FY 26-27 CDBG Action Plan