Item Number: {{item.number}}
City Council / Board of Directors
Public Hearing(s)
Meeting of: May 7, 2024
Submitted By:
Scott Webb, City Planner
Subject:
Required public hearing for amendments to the Annual Action Plans for Fiscal Years 2017-2018, 2018-2019, 2019-2020, 2021-2022, 2022-2023, and 2023-2024 to reallocate HOME Investment Partnership (HOME) funding to a Community Housing Development Organization (CHDO) project in accordance with United States Department of Housing and Urban Development (HUD) guidelines and the City’s Citizen Participation Plan.
Recommendation:
That the Honorable City Council:
(1) Conduct a public hearing to receive citizen, public and agency comments regarding the Substantial Amendments to the Annual Action Plans for Fiscal Years 2017-2018, 2018-2019, 2019-2020, 2021-2022, 2022-2023, and 2023-2024; (2) Approve Resolution No. 24-034 - Adopting a Substantial Amendment to the Annual Action Plans for Fiscal Years 2017-2018, 2018-2019, 2019-2020, 2021-2022, 2022- 2023, and 2023-2024 to reallocate Community Housing Development Organization funding, and amending the City of Victorville’s annual budget for Fiscal Year 2023- 2024 to reflect additional revenue and expenditures in the amount of $491,759; and (3) Authorize the City Manager to execute all necessary documents for submittal to United States Department of Housing and Urban Development.
Fiscal Impact:
Taking action in accordance with the staff recommendation will reallocate the subject Victorville HOME funding for the following Fiscal Years:
Victorville HOME - CHDO Reallocations
Fiscal Year Reallocation Amount
2017-2018 $50,648
2018-2019 $74,303
2019-2020 $70,244
2021-2022 $80,845
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2022-2023 $87,255
Total $363,295
Additionally, as discussed in this Staff Report, in order to ensure the timely expenditure of funds, the Town of Apple Valley has committed to reallocate their share of CHDO funding to the City of Victorville from the following Fiscal Years:
Apple Valley HOME – CHDO Reallocation to Victorville
Fiscal Year Reallocation Amount
2021-2022 $39,756
2022-2023 $42,907
2023-2024 $45,801
Total $128,464
The subject funding has no matching requirement, as that requirement has been previously waived by HUD due to the Apple Valley/Victorville Consortium being considered in fiscal distress (based upon poverty rate and per capita income). Therefore, except for HOME administration costs not covered in full by limited grant allowances (e.g. portions of City staff time, facilities use, etc.), the subject funding will not utilize City monetary assets.
In summary, the City of Victorville’s annual budget for Fiscal Year 2023-2024 shall reflect additional revenue and expenditures in the amount of $491,759 (HOME – City Org. 2823027) in reallocated HOME funding from Fiscal Years 2017-2018, 2018-2019, 2019- 2020, 2021-2022, 2022-2023, and 2023-2024, which does not include existing 2023-2024 funding allocated to the City of Victorville that has been previously accounted for in the subject Fiscal Year.
Strategic Plan Goal:
Approval of the proposed Substantial Amendments to the Annual Action Plans for Fiscal Years 2017-2018, 2018-2019, 2019-2020, 2021-2022, 2022-2023, and 2023-2024 will formally reallocate available HOME funds to a housing rehabilitation project, which will enable the City to further fulfill the following Goals outlined in the 2024-2026 Strategic Plan:
• Goal A (Financial Sustainability) – HOME Investment Partnership (HOME) funds represent funding opportunities that require limited financial commitments while ensuring greater availability of general fund resources. • Goal D (Reduce Homelessness) – Housing projects that benefit affordable housing projects are eligible projects that are aimed to directly benefit the homeless population or those at risk of homelessness, providing the City an opportunity to expand the availability of housing projects for all income levels.
Executive Summary:
The purpose of the request for approval of a Substantial Amendment to the 2017-2018, 2018-2019, 2019-2020, 2021-2022, 2022-2023, and 2023-2024 Annual Action Plans (Attachment A) is to reallocate $491,759 in HOME funding from multiple years in order to consolidate funding sources and provide additional funding to a Community Housing 3 6
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Development Organization (CHDO) project that was recommended for partial funding in conjunction with the 2024-2025 Annual Action Plan recently reviewed by the City Council.
Although the reallocation of funds originally designated for a CHDO project to an eligible CHDO project is permitted by the United States Department of Housing and Urban Development (HUD) guidelines, the adjustment of funding from specific years and the consolidation of those funds into Fiscal Year 2023-2024 necessitates a “Substantial Amendment” as defined by the City’s adopted Citizen Participation Plan (Attachment B).
Subsequently, the adopted Citizen Participation Plan requires review and approval by the City Council in a public hearing.
Background:
The City of Victorville is a recipient of U.S. Department of Housing and Urban Development (HUD) funds, which include Community Development Block Grant (CDBG) and HOME Investment Partnerships Grant (HOME) that are allocated by HUD’s Office of Community Planning and Development (CPD).
While the City of Victorville Planning Department is responsible for the administration of the City’s CDBG grant, the City and the Town of Apple Valley formed a consortium in 2003 that provides an annual allocation of HOME funds to both communities via the Apple Valley/Victorville Consortium (the “Consortium”). Pursuant to the the Consortiums agreement (Attachment C), the Town of Apple Valley acts as the lead agency and ensures compliance with the HOME guidelines; however, both consortium members independently allocate available HOME funding to project types identified in the Consortium agreement. Additionally, while the Town of Apple Valley acts as the lead agency and ensure compliance, the Consortium is collectively responsible for the timely use of HOME funding regardless of which jurisdiction originally allocated the available funds.
Inasmuch as both Consortium members have had difficulty spending CHDO designated funds in the past due to limited allocations, and strict CHDO designation measures, funds are typically banked for multiple years until a single project can utilize that accumulation of funds in a meaningful and impactful manner.
•For reference, a CHDO or Community Housing Development Organization is generally defined by Code of Federal Regulations (Attachment D) as a private nonprofit, community-based service organization that has staff with the capacity to develop or provide decent affordable housing for the community.
Currently, the City of Victorville maintains $454,173 in available CHDO set-aside funding while the Town of Apple Valley has $128,464 that can be used to fund an eligible CHDO project. Inasmuch as the total available $582,637 from previous years allocations, an eligible project was proposed for partial funding in the 2024-2025 Annual Action Plan recently reviewed by the City Council, and the available CHDO funds can be used to close the gap between the requested amount of $1,165,623 and the proposed 2024-2025 Annual Action Plan allocation of $136,679 ($90,878 in Victorville allocations + $45,801 in 3 6
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Apple Valley allocation = $136,679). This methodology to reallocate the subject CHDO funding was also reviewed and approved for City Council consideration at their March 26, 2024, meeting.
Discussion:
Available Funding
As noted in the “Background” section of this Staff Report, the City of Victorville and the Town of Apple Valley have $582,637 in available funding that can be utilized for a CHDO project, which was originally allocated as follows:
HOME - CHDO Reallocations
Fiscal Year Victorville Reallocation Apple Valley Reallocation 2017-2018 $50,648 N/A
2018-2019 $74,303 N/A
2019-2020 $70,244 N/A
2021-2022 $80,845 $39,756
2022-2023 $87,255 $42,907
2023-2024 $90,878 $45,801
City/Town Total $454,173 $128,464
Combined Total $582,637
The available CHDO funds noted above are available due to their original project not moving forward or there being no qualified CHDO project at the time of the HUD required allocations, which mandates that 15% of annual HOME funds be reserved for a CHDO project.
Project Eligibility
The 2024-2025 Annual Action Plan included the allocation of $136,679 ($90,878 in Victorville allocations + $45,801 in Apple Valley allocation = $136,679) to a CHDO project for National Community Renaissance of California for a residential rehabilitation project located at 17251 Dante Street in the City of Victorville.
While the inclusion of $136,679 towards the National Community Renaissance of California CHDO project in the 2024-2025 Annual Action Plan provides a starting point to the project, it falls well short of the $1,165,623 requested and needed to complete the rehabilitation project that includes:
•Roof replacement as well as heating, ventilation, and air conditioning (HVAC) replacement for two multi-unit buildings;
•The replacement of 16 water heaters throughout the site; •Balcony beam replacement throughout the site;
•Exterior painting and wood rot repair; and
•The replacement of sliding glass doors throughout the site. 3 6
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As proposed in the attached Substantial Amendment to the 2023-2024 Annual Action Plan, the available $582,637 would be allocated to the National Community Renaissance of California CHDO project at 17251 Dante Street in the City of Victorville, and would bring their total allocation to $719,316. While this total allocation would still not match the total request, it is anticipated that major life and safety improvements can be addressed such as roof replacement, HVAC replacement, and structural rehabilitation, as needed.
Project Selection
During the preparation of the 2024-2025 Annual Action Plan, the City of Victorville received one application for a qualified CHDO project, and in recent funding cycles has received limited to zero interest from projects that would qualify as a CHDO. This position is shared by the Town of Apple Valley as they have received similar results and support their willingness to share available CHDO funds. Additionally, the current National Community Renaissance of California CHDO project is essentially a “Phase II” of a previous project that was completed in 2017 and included an allocation of $811,977, replacing the roof of 8 buildings on-site. Based on the City’s history in working with National Community Renaissance of California, they have shown to be quality subrecipient who is capable of expending CHDO funding in accordance with all HUD regulations. Lastly, failure to reallocate the funds to a CHDO project may result in the recapture of funds by HUD and their removal from the Consortiums line of credit.
Therefore, City staff recommends that the City Council proceed with staff’s recommendation in order to provide a benefit to an affordable housing development within the City of Victorville and maintain compliance with HUD standards that regulate the timely expenditure of funds.
Attachments: A. Resolution No. 24-034 – 2023-2024 Annual Action Plan Substantial Amendment
B. Citizen Participation Plan
C. Apple Valley/Victorville Consortium Agreement - 2010 D. 24 CFR §92.2 Definition - Community Development Housing Organization (CHDO)