REPORT TO COUNCIL
SUBJECT
Title
FY 2018-2019 Annual Action Plan for the Use of Federal Housing and Urban Development Funds
Report
BACKGROUND
The City of Santa Clara receives annual funding from the United States Department of Housing and Urban Development (HUD) in the form of Community Development Block Grant (CDBG) and Home Investment Partnerships Program (HOME) funds. On May 1, 2018, the federal government announced HUD’s funding awards and allocations for the 2018-2019 Fiscal Year. The City of Santa Clara will receive $968,933 in CDBG funds and $444,587 in HOME funds, which are both higher than initial estimates.
As a recipient agency, the City is required to maintain a Five-Year Consolidated Plan and to prepare Annual Action Plans (AAP) that document how the City will use HUD funding (Attachment 1). Both documents must be reviewed and approved by HUD in order for the City to receive funds. The AAP is required to be submitted to HUD by May 15, 2018 or by August 16, 2018 depending upon the date of Congressional appropriations for HUD funding. City staff intends to submit the AAP by May 15, 2018.
At the March 20, 2018 Council Meeting (Report 18-102) staff presented recommendations for the funding of public service agencies in the upcoming fiscal year based upon an application process, community input, and presentations made by the agencies at the February 26, 2018 Community Advisory Committee meeting. The City Council supported the proposed allocation and distribution of$176,500 of CDBG funds for public service agency grants. In addition, the City Council voted to consider as part on the annual budget process, additional City support for public service agencies through an allocation of $45,000 from the City’s General Fund.
DISCUSSION
Based on HUD’s funding awards and allocations for the 2018-2019 fiscal year, the City is able to allocate an additional $15,000 of CDBG funds towards its public service grants and reduce the request from the City’s General Fund from $45,000 to $30,000. An updated summary of the Final HUD Budget is included as Attachment 2.
To complete the next step in the HUD entitlement process, staff is asking the City Council to take action to approve the 2018-2019 Annual Action Plan at the May 8, 2018 City Council hearing. The AAP incorporates the proposed allocation of public service grants as reviewed by the City Council on March 20th. The AAP further describes other programs and activities, such as the City’s Neighborhood Conservation Program (NCIP) and Tenant Based Rental Assistance (TBRA) Program, and how they will be funded.
Although funding amounts are official, HUD instructs local jurisdictions to include contingency language in its AAP to address any minor fluctuations to allocations:
Contingency Provision for CDBG:
1. If HUD’s final grant allocation is more than the announced amount (due to minor, last minute calculations), the difference shall go to fund the Neighborhood Conservative & Improvement Program (NCIP).
2. If HUD’s final grant allocation is less than the announced amount (due to minor, last minute calculations), funding for the NCIP program would be reduced.
3. Two public service agencies are proposed to be funded from the City’s General Fund in the amount of $30,000. If these funds are not approved for public service agencies in the City’s budget process, funding for all programs and agencies will be reassessed and funded in accordance to the Public Service Cap. An amendment to the Annual Action Plan would be submitted to HUD.
Contingency Provision for HOME:
1. If HUD’s final grant allocation is more than the announced amount (due to minor, last minute calculations), the difference - after the CHDO set-aside and Program Administration are recalculated - will go to fund Affordable Housing Multi-Family Acquisition/Rehabilitation/New Construction.
2. If HUD’s final grant allocation be less than the announced amount (due to minor, last minute calculations), the difference - after the CHDO set-aside and Program Administration are recalculated - will reduce funding for Affordable Housing Multi-Family Acquisition/Rehabilitation/New Construction.
FISCAL IMPACT
The estimated entitlement amounts for Fiscal Year 2018-2019 are $968,933 of entitlement dollars, $58,092 of prior year’s unused funds, and $300,000 in program income for CDBG, and $444,587 of entitlement dollars, $286,763 of prior year’s unused funds, and $198,081 of program income for HOME. These funds will provide the community with a total of $2,256,456 to assist persons of low and moderate income.
In addition, the FY 2018/19 Recommended Operating Budget will include a $30,000 one-time General Fund allocation.
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.
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 <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
Preparation of the draft AAP follows a procedure determined by HUD and has included two public hearings to identify community needs and objectives, and to review priorities for the City’s HUD funding allocations. The first public hearing was the February 26, 2018 Citizen Advisory Committee, and the second was at the March 20, 2018 City Council meeting. Comments made at the two public hearings are noted in the draft AAP.
The AAP must also be made available for public review and comment for a 30 day period. Noticing of the 30-day public comment period was published on April 4, 2018 in The Santa Clara Weekly. The draft AAP was also made available on the City’s website on April 4, 2018, and made available at public locations including the City Clerk’s Office, the Housing and Community Services Division, and City libraries. Notification of the availability of the draft AAP was sent to the public contact list created during the development of the Consolidated Plan, and to local nonprofit agencies. As of the date of this report, no comments have been received since the draft AAP became available for public review.
ALTERNATIVES
1. Approve the 2018-2019 Annual Action Plan for the Use of Federal Community Development Block Grant (CDBG) and Home Investment Partnerships Act (HOME) Entitlement Funds (Attachment 1).
2. Authorize the City Manager, or her designee, to execute the documents for submission to the U.S. Department of Housing and Urban Development (HUD) by May 15, 2018 unless otherwise directed by HUD.
3. Any other Council direction.
RECOMMENDATION
Recommendation
Alternatives 1 and 2:
1. Approve the 2018-2019 Annual Action Plan for the Use of Federal Community Development Block Grant (CDBG) and Home Investment Partnerships Act (HOME) Entitlement Funds (Attachment 1).
2. Authorize the City Manager, or her designee, to execute the documents for submission to the U.S. Department of Housing and Urban Development (HUD) by May 15, 2018 unless otherwise directed by HUD.
Staff
Reviewed by: Andrew Crabtree, Director of Community Development Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Fiscal Year 2018-19 Annual Plan for the use of HUD Funds
2. 5-08-18 PH Final HUD Budget (Revised)