REPORT TO COUNCIL
SUBJECT
Title
Public Hearing: Action on Proposed Update to the City’s Citizen Participation Plan for the Use of Federal Housing and Urban Development (HUD) Grant Funds
Report
COUNCIL PILLAR
Promote and Enhance Economic, Housing and Transportation Development
BACKGROUND
The City of Santa Clara receives entitlement funding from two federal programs administered by the United States Department of Housing and Urban Development (HUD): Community Development Block Grant (CDBG) and Home Investment Partnerships Act (HOME). The purpose of these two programs is to benefit persons of low and moderate incomes by providing decent, affordable housing, public services, and community development.
The City of Santa Clara is an entitlement jurisdiction which means that HUD awards CDBG and HOME funds every year to spend locally. The City does not compete for these funds and the amount awarded each year is based on a population-based formula and the federal budget. In accordance with provisions of 24 CFR Section 91.105, the City is required to adopt a local Citizen Participation Plan (CPP). The purpose of the CPP is to encourage citizen participation, make proposed plans available for public review, conduct public hearings so community members can comment, provide reasonable notice and opportunity to comment, and provide reasonable accommodations so persons with disabilities can present their views and comments. The CPP details what outreach related steps are required when developing or amending the following HUD plans and reports:
• 5-Year Consolidated Plans (5-Year Plan) for Housing & Community Development
• Annual Action Plans (AAPs)
• Consolidated Annual Performance and Evaluation Reports (CAPERs)
• Assessment of Fair Housing (AFH)
• Amendments to the Citizen Participation Plan (CPP)
• Amendments to the 5-Year Plan or AAPs
HUD requires cities to follow their CPP and encourages periodic updates to the plan. HUD allows cities great flexibility in determining what specific outreach is required in specific situations. Once the CPP is adopted, the City must follow the adopted procedures.
The last time the City updated its CPP was in 2017. The 2017 CPP is included as Attachment 1. Staff is proposing changes to the CPP to incorporate new best practices, to streamline for greater efficiency, greater transparency, align with City Council policy on funding allocation decisions, and to make the document easier to read.
DISCUSSION
Earlier this year staff worked with Cloudburst, a HUD technical assistance provider, to draft updates to the City’s CPP. The revised CPP is included as Attachment 2.
The primary change that staff is recommending in the CPP involves the distinction between Minor and Substantial Amendments to an Annual Action Plan (AAP). An AAP is the City’s plan for allocating CDBG and HOME dollars for capital projects and public services. Sometimes staff needs to increase, decrease, or shift funding between projects or programs if a subrecipient is not performing. Staff actively monitors spending to stay in compliance with HUD regulations.
The City’s current CPP requires Substantial Amendments for relatively small changes. Substantial Amendments are costly and labor intensive because they require noticing in a newspaper, a 30-day public comment period, a public hearing, and HUD review and acceptance. This process can take 2-3 months to complete which requires significant staff resources and delay on the City’s ability to pivot to meet HUD expenditure deadlines.
The City’s current 2017 CPP is conservative and sets a low threshold for substantial amendments to the AAP at $25,000. This is much lower than the City’s standard $250,000 threshold for decisions on funding allocations. HUD allows flexibility in how each jurisdiction writes their CPP and the City can update the CPP to align with the above citywide funding allocation policy.
Staff recognizes the need to balance efficiency and transparency. For this reason, staff is recommending a more nuanced set of CPP-related procedures that will reduce the need for time-consuming Substantial Amendments while requiring City Council approval on consent for certain types of minor amendments. The following section summarizes these proposed changes.
Proposed Changes to Requirements for a Substantial Amendment
The criteria that would trigger a Substantial Amendment to the 5-Year Plan or AAP for capital projects and public service programs are as follows:
• Adding a new activity not previously described in the 5-Year Plan or AAP.
• Deleting an activity previously described in the 5-Year Plan or AAP.
• Changing the purpose, scope, location, or beneficiaries of an activity previously
described in the 5-Year Plan or AAP.
• Changing allocation priorities or changing the method of the distribution of funds.
The following section summarizes the procedures that would be required for increases, decreases, or shifts of funds for Capital Improvement Projects. These projects typically range from $200,000 - $800,000. This revised process would allow greater flexibility and would reduce the need for Substantial Amendments while maintaining City Council discretion on more significant changes.
Amendment Process - Capital Improvement Projects
A Capital Improvement Project is defined as physical improvements to a public facility, or a facility owned by a nonprofit and open to the public, or an affordable housing project.
i. Funding changes from one category to a different category greater than $250,000:
Substantial Amendment with City Council approval via Public Hearing.
ii. Funding changes within the same category that are greater than $250,000: Minor Amendment along with City Council approval via Consent.
iii. Funding changes within the same category that are less than $250,000:
Minor Amendment required; no City Council review required.
iv. Funding changes from one category to a different category less than $250,000:
Minor Amendment required; no City Council review required.
The following section summarizes the procedures that would be required for AAP changes relating to Public Services. These contracts are much smaller and range between $30,000 - $100,000. This revised process would allow greater flexibility and would reduce the need for Substantial Amendments while maintaining City Council discretion on more significant changes.
Amendment Process - Public Service Activities
A Public Service Activity is defined as a service that is provided to the public.
i. Funding a new activity NOT previously approved in any plan:
Substantial Amendment along with City Council review via Public Hearing.
ii. Funding changes between previously approved Public Service Activities by the greater of $20,000 or 50% change in the amount(s) originally allocated:
Minor Amendment along with City Council approval on consent.
iii. Funding changes between previously approved activities less than $20,000 or
50% change in the amount originally allocated:
Minor Amendment required; no City Council review required.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
While the proposed changes to the CPP will save staff time, there will be no direct fiscal impacts that result from this action.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov.
The Citizen Participation Plan’s 30-day public comment period is from January 8, - February 11, 2025. The CPP is available for public review and comment. Copies are available on the City’s website, and at public locations including the City Clerk’s Office, and the Housing and Community Services Division. Notification of the availability of the CPP was also emailed to interested parties which include local nonprofit agencies. Noticing of the 30-day public comment period was published on January 8, 2025 in The Santa Clara Weekly.
ALTERNATIVES
1. Approve the updated Citizen Participation Plan
2. Any other Council direction.
RECOMMENDATION
Recommendation
1. Approve the updated Citizen Participation Plan and direct staff to submit the Citizen Participation Plan to HUD for acceptance.
2. Allow the City Attorney to make any minor edits to the Citizen Participation Plan if requested by HUD prior to acceptance of the Plan.
Staff
Reviewed by: Afshan Hamid, Director of Community Development
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Adopted HUD Citizen Participation Plan (2017)
2. Proposed Revision to the HUD Citizen Participation Plan (2025)