HomeMy WebLinkAbout19 - PH-1 - FY 2014-15 Funding Priorities - 5/6/2014CITY COUNCIL AGENDA REPORT
MEETING DATE: MAY 6, 2014 ITEM NUMBER:
SUBJECT: PUBLIC HEARING FOR FISCAL YEAR 2014-2015 FUNDING PRIORITIES
FOR COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) AND HOME
INVESTMENT PARTNERSHIP PROGRAM (HOME)
DATE: APRIL 21, 2014
FROM: DEVELOPMENT SERVICES DEPARTMENT/HOUSING AND COMMUNITY
DEVELOPMENT
PRESENTATION BY: WILLA BOUWENS-KILLEEN, PRINCIPAL PLANNER
SILVIA KENNERSON, MANAGEMENT ANALYST
MIKE LINARES, CDBG/HOME COORDINATOR
FOR FURTHER INFORMATION SILVIA KENNERSON, MANAGEMENT ANALYST
CONTACT: 714. 754.5023 silvia.kennerson@costamesaca.gov
WILLA BOUWENS-KILLEEN, PRINCIPAL PLANNER
714. 754.5153 willa.bouwens-killeen@costamesaca.gov
RECOMMENDATIONS
1. Approve recommended allocation of $1,031,757 for the Fiscal Year 2014-2015
Community Development Block Grant (CDBG) Application.
2. Approve recommended allocation of $353,421 for the Fiscal Year 2014-2015
HOME Investment Partnership Grant.
3. Approve resolution (Exhibit A) to authorize the following:
o City's Chief Executive Officer (CEO) to act as the official representative of the
City in order to submit the Annual Action Plan (Exhibit B) and all certifications
and assurances contained therein;
o CEO to act in connection with the submission of the Annual Action Plan;
o CEO to approve minor changes and provide additional information as may be
required.
BACKGROUND
Costa Mesa is a Housing and Urban Development (HUD) entitlement City which is
automatically eligible to receive Community Development Block Grant (CDBG) and
HOME Partnership Program Grant (HOME) funds. These two HUD programs annually
provide approximately $1.3 million to the City and can be used for an array of services
that either assist low and moderate income persons and/or arrest blight in deteriorated
neighborhoods.
The Housing and Community Development Division (HCD) of the Development
Services Department is responsible for administration of the City's CDBG and HOME
Grants. CDBG and HOME programs and projects must reflect the needs outlined in the
City's Consolidated Plan.
In April of 2010, the City Council approved the 2010-2014 Consolidated Plan. The
Consolidated Plan is a five year planning document required by HUD for all
communities receiving entitlement community development funds. It was approved via
a collaborative process with the local community whereby a unified vision for
community development actions was established. The Consolidated Plan offers local
jurisdictions the opportunity to integrate the various housing and community
development programs into effective neighborhood strategies thereby creating a
platform for strategic planning designed to reduce duplication of effort at the local level.
The Plan must include the following elements: a projection of housing needs for a five-
year period; a discussion of specific housing problems including cost burdened
households; substandard housing and overcrowding; community development and
infrastructure needs; and a homeless needs analysis. Finally, the Plan provides priority
needs and objectives and a one year Action Plan. The priorities in the 2010-2014
Consolidated Plan were utilized to determine the proposed programs and projects
presented in the 2014-2015 Budget. HCD staff has also conferred with the Chief
Executive Officer's office and has developed the 2014-2015 Annual Action Plan to take
Council direction into consideration.
ANALYSIS
CDBG funds must be utilized to achieve one of three national objectives: Elimination of
slum and blight, benefit to low and moderate persons, and/or meet an urgent need.
HOME funds must be used to preserve or increase housing opportunities for low-
income residents living in Costa Mesa.
Outlined below are the programmatic recommendations by staff to address the
Consolidated Plan's priorities and City Council input. Proposed budgets for the use of
2014-2015 CDBG and HOME funds are listed below:
Public Services
The City is allowed to allocate up to 15 percent of its annual CDBG allocation for public
service grants. As authorized by the City Council, HCD staff solicited proposals from
nonprofit agencies that serve Costa Mesa residents. Because HUD had not notified the
City of its 2014-2015 CDBG grant allocation, HCD staff estimated that $142,500 would be
available for public service grant funding. In March 2014, the City's Ad-hoc Housing and
Public Service Grants Committee (H&PSG Committee) interviewed grant applicants,
rated and ranked applications, and developed public service grant recommendations for
FY 2014-2015. The H&PSG Committee recommended funding eight grants for a total
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of $139,000. The Committee further recommended that remaining funds ($3,500) be
left uncommitted so the City Council could allocate these funds at their discretion.
Finally, the Committee recommended that should the City's final grant allow for
additional funding for public services, those funds should also be left to be allocated at
the Council's discretion.
On March 18, 2014, the City was notified by HUD as to the amount of its 2014-2015
CDBG grant, which was slightly higher than had been anticipated. Based on the actual
grant, a total of $154,764 (or $15,764 more than was recommended by the H&PSG
Committee) is available for public service grants. On March 27, HCD was notified by
the CEO's staff that this unallocated amount ($15,764) should be allocated for the
Costa Mesa Senior Center Social Services Program; an application that had been
recommended for zero funding by the H&PSG Committee because the applicant had
withdrawn the application. The H&PSG Committee's recommendations have been
incorporated into the CEO recommendation. The Committee's recommendation will be
presented to the City Council as part of a separate Agenda Report; however, the CEO's
funding recommendations are included in the draft 2014-2015 Action Plan.
Housing Rehabilitation
In addition to its annual allocation of HOME funds by HUD, HCD also receives income
when prior funded housing rehabilitation loans are repaid. Program income may be
used for any HOME eligible activity. The City is also allowed to keep up to 10% of
program income funds for HOME administration expenditures. Based on Finance
Department records, the City received $247,050 in program income during FY 2013-
2014. HUD requires these funds be spent prior to the commitment/expenditure of
regular HOME funds. While this income is of great value to the City, as the City spends
program income, the commitment of regular HOME funds is delayed. A delay in
committing funds can result in the recapture of HOME funds for failing to meet the 24
month commitment deadline.
At the time HCD prepared the FY 2013-2014 Action Plan/Budget, HOME program
income was not recognized as revenue. On February 18, 2014 Council recognized and
allocated HOME program income funds.
The Action Plan recommends continued funding for both HOME -funded Single Family
Housing Rehabilitation Loan and Neighborhood Improvement Grant programs;
however, due to an increase in HOME funds, annual goals have been increased from
last year.
Administration
Both CDBG and HOME grants are awarded to the City on a formula basis. Grant
amounts vary from year to year depending on the approval of an annual federal budget.
For FY 2014-2015, the City will receive $1,031,757 in CDBG funds and $353,421 from
HOME funds. The City is allowed to utilize up to 20 percent of CDBG funds and 10
percent of HOME funds for administration.
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The overall expenditure plans for both CDBG and HOME funds are outlined below.
A. CDBG FUNDS
The City of Costa Mesa has been notified by HUD that it's FY 2014-2015 CDBG Grant
appropriation of $1,031,757 a reduction of, approximately 2.3% ($24,337) from the prior
year. An additional $450,000 in prior year's funds is also available. Of the grant
amount, a maximum of 15 percent may be utilized for Public Service Grants and a
maximum of 20 percent may be allocated for administration. HCD is proposing
allocation of these funds as follows:
Total Funds Available: $ 1,481,757
FY 14-15 Grant $ 1,031,757
Reprogrammed Funds Avail. Ending 06/30/14
(carry over funds) $ 450,000
Administration
20% Administration $ 206,351
(includes staff salaries, CDBG consultant
contract and maintenance and operations for Division)
Existina Proarams
Public Service Grants (15% max) $ 154,764
Code Enforcement $ 321,080
(includes salaries for 2 full time officers, 1
clerical, and maintenance and operations
for Program)
Total Budgeted for Existing Programs $ 475,844
Available for New Projects and Programs $ 799,562
New Proiects and Programs
Staff solicited project requests from Department Heads, Division Managers, and the
City Council. The CEO reviewed all proposals and recommended the following
projects for funding:
1) Beach St from Arnold Ave to Meyer PI, Cove St from
Arnold Ave to Meyer PI; Seal St from Arnold Ave to
Meyer PI; Surf St from Arnold Ave to Meyer PI; and
Arnold Ave from Cove St to Beach St: $ 549,562
2) Capital Improvements at the Senior Center: $ 200,000
3) Smallwood Park Improvements: $ 50,000
Budgeted for New Projects and Programs $ 799,562
Total Unappropriated Funds $ -0-
0
B. HOME FUNDS
The City of Costa Mesa has been notified by HUD that it's FY2014-2015 HOME
Program Grant appropriation of $353,421 an increase of approximately 4.6% ($15,586).
Additional HOME funds being budgeted include $295,295 in prior year's funds for a
total HOME budget of $648,716. Of the grant amount, a required 15 percent must be
utilized for an eligible CHDO Project and a maximum of 10 percent may be allocated for
administration. HCD is proposing allocation of these funds as follows:
Total Funds Available: $ 648,716
FY 14-15 Grant $ 353,421
Carry over (Non-CHDO and Non -Admin) $ 295,295
Administration (Less 10%) $ 35,342
Community Housing Development Organization (CHDO)
(Less 15%) Reserve (HUD mandated) $ 53,013
Available for Projects and Programs $ 560,361
Existing Programs
Single Family Rehab Loan and Grant
Programs (maximum) $ 498,859
Salaries (maximum) $ 61,502
Total Budgeted for Existing Programs $ 560,361
Available for New Projects and Programs $ -0—
C.
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C. HOUSING PROJECTS
In 2013, the City Council authorized staff to enter into a pre -development agreement
with Mercy House/Wakeland Housing Development Corp, to commit $585,257 in 2010
and 2011 HOME funds for the development of permanent supportive housing. In
addition to these HOME funds, CHDO reservation funds from 2012, 2013, and now
2014 may be committed to the project at a later date.
The pre -development agreement allowed staff to negotiate with the development team
and legally commit HOME funds as required by federal regulations. CEO staff will
return to the City Council at a future for approval of the project as it comes to fruition.
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2014-2015 ACTION PLAN
The 2014-2015 Fiscal Year is the fifth year of the current Consolidated Plan cycle. The
Action Plan is the link between the goals and objectives listed in the Consolidated Plan
with actual projects and activities to be carried out during a 12 -month period or fiscal
year. The specific time frame covered by the 2014-2015 Action Plan begins July 1,
2014 and ends June 30, 2015. The Action Plan includes several HUD required
components including:
• A list of federal, non-federal and private funds expected to be available to address
priority needs and objectives.
• A description of the activities the City will undertake in 2014-2015 to meet priority
needs.
• A description of the geographic distribution of federal assistance.
• An outline of the activities that will be undertaken to address the needs of the City's
households at -risk of homelessness, those currently homeless, and persons that are
not homeless but have special needs
• An evaluation of how the additional strategies outlined in the Consolidated Plan will
be addressed during 2014-2015.
• A discussion regarding certain program requirements for the CDBG and HOME
programs.
• A description of the standards and procedures used to monitor activities carried out
in furtherance of the Consolidated Plan and the Action Plan.
• Various certifications related to the implementation of the Consolidated/Annual
Action Plan, and the CDBG and HOME programs.
The existing programs listed in the respective budgets represent City Council priorities
as expressed at the 2010-2014 HUD Consolidated Plan and Community Objectives and
subsequent City Council meetings. The 2014-2015 Action Plan is attached to this
Agenda Report as Exhibit B.
NOTICING REQUIREMENTS
As required by HUD, a notice was published on April 5, 2014 inviting the public to
comment during the thirty -day (30) comment period. The comment period began April
6, 2014 and concludes May 5, 2014.
FISCAL IMPACT
No financial impacts are anticipated because in both cases, budgets will be carefully
monitored so expenditures do not exceed these amounts.
For fiscal year 2014-2015, HCD will receive $1,031,757 in CDBG funds. An additional
$450,000 in prior year funds is also available; therefore, $1,481,757 in CDBG funds is
available in the 2014-2015 fiscal year.
T
For fiscal year 2014-2015, HCD will receive $353,421 in HOME funds. An additional
$295,295 in prior year administration funding is also available; therefore, $648,716 in
HOME funds is available in the 2014-2015 fiscal year.
ALTERNATIVES CONSIDERED
City Council can choose not to fund the proposed programs and projects as
recommended by staff and reallocate CDBG or HOME funds to other eligible activities.
Council could also direct staff to not submit the Action Plan. However, if the City does
not submit an Action Plan by mid May, HOME funds will most likely be returned to the
U.S. Treasury and the City's CDBG funds will be distributed proportionally among all
other Orange County jurisdictions that receive CDBG funds.
LEGAL IMPACT
There is no adverse legal impact anticipated by the Council's taking the recommended
action(s), based upon the documents and information provided to this office.
CONCLUSION
The programs listed in the respective CDBG and HOME budgets represent City Council
priorities as expressed in the HUD Consolidated Plan and Community Objectives and
subsequent City Council directives.
GARY ARMSTRONG
Economic and Development Services
Director
SILVIA KENNERSON
Management Analyst
Attachments: Exhibit A — Resolution
Exhibit B — Annual Action Plan
WILLA BOUWENS-KILLEEN
Principal Planner
MIKE LINARES
CDBG/HOME Coordinator
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