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SOLICITATION OF PUBLIC INPUT REGARDING PROPOSED 2016/2017 FUNDING RECOMMENDATIONS FOR U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) FEDERAL GRANT PROGRAMS (COMMUNITY DEVELOPMENT BLOCK GRANT, HOME INVESTMENT PARTNERSHIPS ACT, AND EMERGENCY SOLUTIONS GRANT) AND CONSIDERATION OF ACCEPTANCE OF A REPORT REGARDING 2016/2017 FUNDING REQUESTS AND RECOMMENDATIONS FOR THE AFORMENTIONED HUD FEDERAL GRANT PROGRAMS
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RECOMMENDED ACTION
Recommended Action
Council conduct the public hearing and accept the report.
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SUMMARY
The City has received and reviewed funding applications for the U.S. Department of Housing and Urban Development (HUD) grant programs including: Community Development Block Grant (CDBG), HOME Investment Partnerships Act (HOME) and the Emergency Solutions Grant (ESG) funds. This Public Hearing will provide the community an opportunity to provide input on the proposed 2016/2017 funding recommendations for the City’s use of these federal grant programs.
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
CEQA: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (CEQA) State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required under CEQA.
NEPA: Under the National Environmental Policy Act (NEPA), the activity is exempt per Title 24, Part 58.34(a)(2)(3) of the Code of Federal Regulations and pursuant to the U.S. Department of Housing and Urban Development Environmental Guidelines; therefore, pursuant to NEPA no further environmental review is required.
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Environmental Determination
The Development Services Director has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA). The activity is not a “Project” as defined under Section 15378(b)(5) of the State CEQA Guidelines because the proposal consists of a reporting action, is not for a site specific project(s) and will not result in a direct or indirect physical change in the environmental. Therefore, pursuant to Section15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Under NEPA, the activity is exempt pursuant to Title 24, Part 58.34(a)(2)&(3) of the Code of Federal Regulations and pursuant to the U.S. Department of Housing & Urban Development Environmental Guidelines. Thus, no further environmental review is necessary at this time. Although environmental review is not necessary at this time, once a project(s) has been defined, environmental review will be required and a CEQA/NEPA determination completed prior to initiation of any related project activity.
BOARD/COMMISSION RECOMMENDATION
Not applicable
DISCUSSION
As an entitlement community with the U.S. Department of Housing and Urban Development (HUD), the City receives funds under three block grant programs:
• Community Development Block Grant (CDBG)
• Home Investment Partnerships (HOME)
• Emergency Solutions Grant (ESG)
The grant amounts allocated to each jurisdiction are determined using a formula based on statistical and demographic data. The aim of these funds is to provide decent housing, a suitable living environment, and to expand economic opportunities principally for low- and moderate-income persons.
As a recipient of these HUD funds, the City is required to approve a Five-Year Consolidated Plan (Con Plan) which represents the City's five-year strategy for allocating HUD funds to specific goals, objectives, and housing and community development priorities. The City annually selects activities for funding that best meet the needs of the community as identified within the Consolidated Plan and also meet the national objectives and requirements of the CDBG program for that year. The selected activities are then incorporated into the Annual Action Plan (Action Plan). The Action Plan must be submitted to HUD 45 days prior to the beginning of the fiscal year and constitutes its application for the grant funds.
The City’s 2015/2019 Five-Year Consolidated Plan identifies a total of five funding priorities under Housing and Community Development.
2016/2017 Annual Action Plan
On February 17, 2016, the City received notification of the 2016/17 funding allocations from HUD for the following programs:
• CDBG: $1,920,628
• HOME: $642,150
• ESG: $159,265
As part of the annual Action Plan process, the City solicits requests for grant funding, reviews the submitted proposals, and approves the programs and projects to be funded. For 2016/2017, a Notice of Funding Availability for the three grant programs (CDBG, HOME, ESG) was made available in January 2016, with a submittal deadline of February 10, 2016. Copies of all applications received are included with this report as Attachment No. 1, the 2016/2017 Federal Grant Funding Application Notebook.
Housing staff reviewed the applications received to ensure eligibility and consistency with the City’s goals and objectives and to provide funding recommendations for the 2016/17 program year. The recommendations were publically released on March 10, 2016.
For purposes of this report, the federal grant (CDBG, HOME, and ESG) funding recommendations are presented individually with each corresponding funding category.
Community Development Block Grant (CDBG)
The City will utilize a total $1,920,628 of CDBG funds for FY 2016/2017. Funding is allocated into 3 distinct categories. All projects to be considered for CDBG funding must address at least one of the following CDBG national objectives:
• Benefit primarily low and moderate income families;
• Aid in the prevention or elimination of slums or blight; or,
• Meet other community needs having a major emergency (disasters, etc.)
Refer to Attachment No. 2 for the CDBG funding recommendations.
1. Administration/Planning Recommendation:
Funds under this category cover all costs associated with the management and administration of Chula Vista's CDBG program, including regulatory compliance, contract administration, subrecipient monitoring and fiscal management. This also includes preparation of the required planning documents, such as the Annual Action Plan, the Consolidated Plan, and the Analysis of Impediments to Fair Housing Choice. Federal regulations governing the CDBG program limit the amount that the City spends on administration/planning activities to 20% of the grant funds used in the program year.
2. Public Services Program Recommendation:
Funds for Public Services activities are awarded to local agencies and community organizations to implement projects and programs that improve the lives of low income residents which include elderly, disabled, at-risk and homeless. The amount of funds the City may allocate to public services is limited to fifteen percent (15%) of the annual entitlement. Staff’s funding recommendations for public service activities are based on funding priorities established in the Con Plan, along with established ranking criteria. A total of ten (10) public services applications were received. Staff recommends maintaining prior year funding levels for all applicants for a total recommendation of $242,962.
3. Capital Improvement and Housing Related Activities:
A total of $1,293,540 is available for eligible capital improvement projects, public facility improvements, and other housing/community development related activities. The City has earmarked $759,858 for the City’s Section 108 debt service payment on the Section 108 loan for the Castle Park Infrastructure Improvement Program and $50,000 for Housing Services. The remaining funds in the amount of $483,682 are available for new projects.
To be considered eligible for funding within this category, a project must first meet a HUD National Objective (located in a low and moderate income census tract), not be regional in nature, and be located in a service area that is primarily residential. Funding recommendations for Capital and Housing Related Activities are then prioritized based on the following criteria:
o Eligible projects that address priorities listed in the ConPlan; and
o Effectiveness of activity by meeting the following:
• Leveraging of other funding sources;
• Number of clients to be served;
• Identification on the City of Chula Vista’s Critical Needs List (applicable to infrastructure projects, improvements to park and recreational facilities, and purchase of equipment or improvements to fire stations).
One (1) funding request for capital improvements and one (1) funding request for public facility improvements are being submitted for Council consideration and are summarized below:
Sidewalk Improvements Orange and Palomar $400,000
CDBG funding is requested to complete segments of Palomar Street from Orange Avenue to Fifth Avenue and Orange Avenue from Palomar Street to Fifth Avenue that have missing curb, gutter, sidewalk, and non-American with Disability Act (ADA) compliant pedestrian ramps. The proposed project will provide for the construction of the missing pedestrian and ADA compliant facility on the above segments and a traffic signal upgrade on Palomar Street and Orange Avenue. These segments ranked #1 and #3 in priority in the Chula Vista Pedestrian Master Plan and within the CDBG eligible low/moderate income areas in western Chula Vista. Staff plans to design the project with in-house staff and award the construction contract through the competitive bidding process to the contractor with the lowest responsible bid.
Park Improvements-Western Chula Vista $83,682
CDBG funding is requested for park improvements in Western Chula Vista in the Holiday Estates I and II neighborhood.
Home Investment Partnerships Act (HOME)
The City will receive HOME funds which may be used to provide affordable rental housing and home ownership opportunities through:
• New construction
• Acquisition
• Rehabilitation
• First time homebuyer assistance
• Tenant-based rental assistance
HOME regulations require cities to set aside 15 percent (%) of their annual allocation to assist Community Housing Development Corporations (CHDOs) in the creation of affordable housing units. The City is currently exceeding this requirement in an aggregate amount of 23%. In consultation with HUD, due to its good standing, the City is not required to set aside 15% of its 2016/17 annual entitlement.
For 2016/17 the City will utilize the HOME entitlement of $577,935 for Housing Priorities of the 2016/2019 Consolidated Plan. Staff recommends funding administration and planning activities at the maximum funding amount of $64,215 (10% of entitlement). Administration and planning funds under this category cover the costs associated with the management and administration of Chula Vista's HOME program, including regulatory compliance, contract administration, and portfolio and fiscal management. No project has been identified at this time for the remaining $513,720. Once a project is identified staff will return to Council.
Emergency Solutions Grant (ESG)
Chula Vista will receive ESG entitlement funds in the amount of $159,265 for FY 2016/17. ESG funds may be used to provide homeless services through:
• Homeless Prevention
• Rapid Re-Housing
• Street Outreach
• Emergency Shelter
• Homeless Management Information Systems (HMIS)
The City received one proposal from South Bay Community Services, a local homeless service provider, for their emergency shelter. The remaining funds will be earmarked for Homeless Prevention and Rapid Re-Housing Services ($75,880), Planning and Administration Costs ($11,945), and towards the HUD mandated HMIS services ($7,663).
Refer to Attachment No. 2 for the ESG funding recommendations.
Conclusion
Staff recommends that the City Council conduct the public hearing to solicit input from the community on the 2016/17 funding recommendations presented. The 2016/2017 Annual Action Plan will be released for a 30-day review and comment period on March 18, 2016 and will close April 18, 2016. Staff will incorporate all public comments into the final Annual Action Plan, to be brought forward for Council consideration in May 2016. The final plan is due to the U.S. Department and Housing and Urban Development by May 15, 2016.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found no property holdings within 500 feet of the boundaries of the Orange Avenue and Palomar Street Sidewalk Project and the Holiday Estates I&II Neighborhood Park Improvement Project. Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. The activities funded through the federal grant programs are directed towards the revitalization of neighborhoods, economic development opportunities, and improved facilities and services. The nature of these activities is consistent with the Goals, Strategies and Initiatives in Goal 5: Connected Community.
Strategy 5.1: Encourage Residents to Engage in Civic Activities
Initiative 5.1.2 Fosters an Environment of Community Involvement
The City has developed a detailed Citizen Participation Plan (CPP) which requires the participation of the community. The CPP requires the City to provide citizens with reasonable and timely access to meetings, information, and records related to the grantee's proposed and actual use of funds. A minimum of two public hearings are held annually to obtain citizen participation at all stages of the Five-Year Consolidated Plan and Annual Action Plan. This includes the identification of priorities, review of proposed activities, and review of program performance.
Strategy 5.2: Provide Opportunities that Enrich the Community’s Quality of Life
Initiative 5.2.1 Provide Services and Programs Responsive to Residents Priorities
Consistent with the funding priorities established in the 2015-2019 Consolidated Plan, the CDBG, HOME and ESG activities selected are aimed at providing decent affordable housing opportunities and a suitable living environment with adequate public facilities, infrastructure and services. Services that support the elderly, disabled, homeless, and youth all contribute to community’s quality of life. For a detailed list of services provided please refer to the Application Notebook.
CURRENT YEAR FISCAL IMPACT
At this time, Council is reviewing the funding requests for CDBG, HOME, and ESG funds. This action does not include appropriations. Appropriations for the proposed CDBG, HOME and ESG programs will be included as part of the City Manager's FY 2016/17 proposed budget. There is no fiscal impact to the General Fund as a result of this action. In the remote event that HUD should withdraw the City's CDBG, ESG, and HOME funding; the Agreements/Memorandum of Understandings provide that the City is not obligated to compensate subrecipients or City Departments for program expenditures.
Recommended funding allocations are summarized in the table below.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact to the City's General Fund as all costs associated with the administration of the CDBG, HOME and ESG programs are covered by the respective grants.
ATTACHMENTS
Attachment 1: 2016/2017 Federal Grant Funding Application Notebook
Attachment 2: 2016/2017 Spending Plan
Staff Contact: Angelica Davis or Jose Dorado-Development Services-Housing Division