Title
CONSIDERATION OF ACCEPTING THE REPORT REGARDING 2018/2019 FUNDING REQUESTS AND RECOMMENDATIONS FOR THE HOUSING AND URBAN DEVELOPMENT (HUD) FEDERAL GRANT PROGRAMS (COMMUNITY DEVELOPMENT BLOCK GRANT, HOME INVESTMENT PARTNERSHIPS ACT, AND EMERGENCY SOLUTIONS GRANT)
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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 2018/2019 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.
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.
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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 purpose 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 adopt a five-year planning document, entitled the Consolidated Plan (ConPlan) which describes the City's five-year strategy for use of these funds on specific goals and objectives related to its housing and community development priorities.
The City annually selects activities for funding that best meet the needs of the community as identified within the ConPlan, while meeting the national objectives and requirements of the grant funds. The selected activities are then incorporated into a one-year planning document, known as the Annual Action Plan. The Action Plan constitutes the City’s formal funding application to HUD for the corresponding grant year.
The City’s 2015/2019 Five-Year Consolidated Plan identifies a total of five priorities under Housing and Community Development for funding consideration.
2018/2019 Annual Action Plan
Resources
As of the date of this report, HUD has not provided the City’s allocation amounts for 2018/19 since Congress has not yet completed the appropriations process. HUD has instructed cities to continue their normal annual planning process and to submit the Action Plan once the 2018/19 allocations have been announced.
For the purposes of this report and preparation of the Action Plan, staff will be assuming a ten percent (10%) reduction from prior year funding for the CDBG and HOME grant programs. In the event that the City receives a higher allocation of CDBG, the excess funds will be allocated to the Anita Capital Improvement Project (see Attachment 3, Tab 17). Similarly, any additional funding received for the HOME program, will be allocated towards the production of affordable housing project.
In addition to its annual entitlement amount, the City will also allocate prior year unencumbered CDBG and HOME funds. These funds typically become available as projects are completed under budget, loans are repaid or other program income is generated.
For 2018/2019, the following are the anticipated funding amounts available:
|
Program |
Current Year Entitlement |
Prior Year Unencumbered Funds |
Total Available |
|
Community Development Block Grant |
$1,797,160 |
$ 85,729 |
$1,882,889 |
|
Home Investment Partnerships Act |
$ 573,026 |
$ 177,521 |
$ 750,547 |
|
Emergency Solutions Grant |
$ 172,909 |
$ 0 |
$ 172,909 |
|
Total |
$2,543,095 |
$263,250 |
$2,806,345 |
Funding Requests
As part of the annual Action Plan process, the City releases a Notice of Funding Availability (NOFA) for the three grant programs. The NOFA was released in January 2018, with a submittal deadline of February 16, 2018. Housing staff has reviewed all proposals to ensure compliance with the prescribed regulations and consistency with the City’s goals and objectives.
Copies of all the applications received for each of the grant programs are included with this report as Attachment No. 3 (2018/2019 Federal Grant Funding Application Notebook). An executive summary was prepared for each request summarizing the funding application; including, funding level; proposed use of funds; and, benefit to the community.
The federal grant funding recommendations for CDBG, HOME and ESG are presented individually below:
Community Development Block Grant (CDBG)
The City will utilize a total of $1,882,889 of CDBG funds for FY 2018/2019. As stated in the table above, this includes the annual entitlement along with any unencumbered prior year funds. All projects considered for funding must address at least one of the three CDBG National Objectives:
• Benefit primarily low and moderate income families;
• Aid in the prevention or elimination of slums or blight; or,
• Meet community needs due to a major emergency such as a natural disaster.
Projects are then classified into three distinct categories:
1. Public Services;
2. Capital Improvement Projects and Community Development; and,
3. Administration and Planning;
Below is a summary of the funding recommendations under each respective category.
For a complete list of the individual funding requests and recommendations, refer to Attachment No. 2 (Funding Requests and Recommendations).
1. 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. For 2018/19, equates to a cap of $269,574. . Staff’s funding recommendations for public service activities are based on funding priorities established in the ConPlan, along with established ranking criteria consisting of a 3-tier approach which categorizes the programs based on community need.
• Tier I: Emergency Needs: Programs that address basic, fundamental needs including shelter, food, and other commodities.
• Tier II: Special Needs/Disabled: Programs that provide services to persons with disabilities, special needs, and are at high-risk.
• Tier III: Other General Services: All other services which do not fall within Tier I or II and provide general public services to low/moderate income persons.
A total of twelve (12) public services applications were received. All applicants are prior year grant recipients and are in good standing with the City and HUD.
2. Administration/Planning Recommendations:
Funds under this category cover all City staff 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. For 2018/19, funds totaling $359,432 are recommended for administration and planning activities, which include Fair Housing Services.
3. Capital Improvement Projects (CIPs) and Community Development:
After the Public Services and Administration activities are funded, a total of $1,253,884 remains for eligible capital improvement projects, public facility improvements, and other housing/community development related activities. Under this category, the City has earmarked $763,126 for the debt service payment on the Section 108 loan utilized for the Castle Park Infrastructure Improvement Program. This leaves a balance of $490,370 for new are available for new projects.
To be considered eligible for funding within the CIP category, the project must be located in a primarily residential area designated as low/moderate income by the U.S. Census and cannot be regional in nature (serving the entire City or county region). Priority is given to those projects with the most effectiveness and the greatest feasibility by demonstrating leveraging of additional funding sources; benefit and impact to the community; and relevance to the City of Chula Vista’s Critical Needs List and/or Pedestrian Master Plan.
A total of four applications are presented under this category: the City’s Section 108 Loan payment; two street/sidewalk CIPs; and, one neighborhood park improvement project.
Emergency Solutions Grant (ESG)
Chula Vista is estimating that it will receive approximately $172,909 in ESG entitlement funds for FY 2018/19. ESG funds may be used to provide homeless services through:
• Homeless Prevention;
• Rapid Re-Housing (rental assistance);
• Street Outreach;
• Emergency Shelter; and
• 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, Planning and Administration Costs (7.5% of the entitlement), and the HUD mandated Homeless Management Information System.
Home Investment Partnerships Act (HOME)
HOME funds 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
For 2018/19, the City will utilize the HOME entitlement and prior year unencumbered funds to address the City’s housing priorities of the 2015/2019 Consolidated Plan (approximately $750,547). HOME regulations also require cities to set aside fifteen percent (15%) of their annual allocation to assist Community Housing Development Corporations (CHDOs) for the creation of affordable housing units. The City has approximately $180,000 of CHDO funds available from the prior year and 2018/19 funds to be used by a certified CHDO. Should these funds not be utilized for this specific purpose, these funds would be recaptured by HUD.
Additionally, staff recommends funding administration and planning activities at the maximum funding amount of $57,303 (10% of current year 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.
Conclusion
While the ESG and the HOME programs were designed to meet very specific objectives, the CDBG program allows flexibility in the type of activities it funds. This allows the City to leverage its CDBG funds with ESG and HOME to maximize the impact of the grant funds to meet the housing needs of the lower income community. Since the end of redevelopment in California in 2012, the City has lost $10 million that would have been generated from redevelopment for affordable housing related activities. As the cost of housing has increased year after year, far outpacing income growth, housing has become increasingly unaffordable to more members of the community.
Summarized below is the percentage of funds allocated to each specific service. Staff recommends that the City Council conduct the public hearing to solicit input from the community on the 2018/19 funding recommendations presented. The 2018/2019 Annual Action Plan will be released for the required 30-day review and comment period on March 16, 2018 and will close April 17, 2018.
Staff will incorporate all public comments into the final Annual Action Plan, to be brought forward for Council consideration in May 2018.
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 Anita Street and “D” Street sidewalk projects as well as the Norman 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 2018/19 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 and further detailed in Attachment 2.
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: 2018/2019 Funding Available
Attachment 2: 2018/2019 Funding Recommendations
Attachment 3: 2018/2019 Federal Grant Funding Application Notebook
Staff Contact:
Angelica Davis, Senior Management Analyst - Development Services Department