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Report regarding holding a Public Hearing on the City’s housing, community, and economic development needs for the Fiscal Year 2022-2023 One Year Action Plan and providing direction to the Community Development Block Grant Subcommittee regarding funding priorities. (Heather Ruiz, Management Analyst II)
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RECOMMENDATION
Recommendation
Staff recommends that the City Council hold a public hearing and receive public testimony on the City’s housing, community, and economic development needs for the Fiscal Year 2022-2023 (FY 22-23) Annual Action Plan and provide direction to the Community Development Block Grant (CDBG) Subcommittee regarding funding priorities.
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BACKGROUND/DISCUSSION
The U.S. Department of Housing and Urban Development (HUD) requires local jurisdictions to prepare an Annual Action Plan (Action Plan) for the upcoming FY 22-23, in order to receive funds through the Community Development Block Grant Program. As part of the development of the Action Plan, the City is required to hold two public hearings.
The purpose of the March 9, 2022 public hearing is to obtain citizens’ views on housing, community, and economic development needs which will inform the Action Plan. Additionally, for those non-profit organizations seeking CDBG funds, they may use this public hearing to make brief comments to City Council regarding their programs. The City Council can take this opportunity to ask the non-profit organizations questions regarding their proposed activities and to give direction to the CDBG Subcommittee on funding priorities.
The second public hearing is scheduled for April 27, 2022. At this meeting, Council will consider adopting the FY 2022-23 Action Plan and make final recommendations on CDBG funding allocations.
DISCUSSION
Funds Available for FY 22-23
At present, the City has not been notified of the entitlement allocation for FY 22-23. Typically, staff and Council identify their priorities and draft a budget with the assumption that the City will receive the same amount as the previous year. The City of South San Francisco received $508,064 in FY 21-22; however, with the great shift in budget priorities and regulations at the federal level it has been extremely difficult to anticipate what the FY 22-23 budget will include for entitlement cities.
Usually, at this stage in drafting the Action Plan, the CDBG Subcommittee and Council can provide preliminary funding allocations to public service sub-recipients and programs. Given the extent of uncertainty surrounding the City’s grant entitlement, Program Income (PI) and HUD regulations, Council are requested to provide general feedback to the Subcommittee and staff regarding their priorities.
Pursuant to federal spending limitations, a total of 15% of the entitlement amount plus 15% of prior year Program Income (from FY 21-22) may be allocated to nonprofit organizations for public service activities. The amount available for public service is undetermined at this point, but in the past, has been approximately $80,000 per year.
CDBG administration costs (i.e. the cost of City staff time to administer the grant) also have a mandated spending limitation of 20% of the entitlement amount plus 20% of estimated current year Program Income (from FY 21-22). This line item’s spending limits are mandated by congressional statute and may not be exceeded with CDBG funds.
CDBG Programs
The following is a summary of currently funded activities under the CDBG program.
Public Services
The City issued a Notice of Funding Availability (NOFA) for FY 22-23 CDBG funds for public services, fair housing, minor home repair, housing activities, capital improvements, and public facility projects on December 6, 2021. The applications were made available online from December 6, 2021 to January 13, 2022. Additionally, an invitation to submit proposals was posted on the City’s website, published in the San Mateo Daily Journal, and an email notification was sent to the City’s community service providers list. A Technical Assistance Workshop was also held for any agencies unfamiliar with City Data Services and required training on how to submit an application.
FY 22-23 is the start of a new two-year cycle. Those organizations (or grantees) that are approved for grant funding this first year will need to submit a renewal application the second year. Attachment 1 includes a summary of prior year funding distribution and FY 22-23 funding requests. Attachment 2 includes the applications as submitted.
In FY 20-21, in response to the concerns regarding income verification processes and to fund fewer Public Service grantees at a higher level to maximize their impact, as directed by HUD, several grantees were funded through the City’s Housing fund (Fund 205) instead of CDBG. These grantees included HIP Housing, Legal Aid, United Way Bay Area, and Life Moves in which their programs provided services such as shelters, transitional housing, and housing referrals. United Way Bay Area decided not to apply for grant funding this year.
In addition to CDBG funding, the City received CDBG-CV funds in 2020 to prevent, prepare for, and respond to the spread of COVID-19 pandemic. These funds have since been used for programs such as economic development, digital divide, public service and facilities upgrade. Two of the 18 applicants for public services received CDBG-CV grant funding, Peninsula Volunteers and Renaissance Entrepreneurship Center.
All other non-profits that received CDBG funding from the City in FY 20-21 submitted applications for FY 22-23 funding. The non-profits that submitted applications this year for CDBG funding are listed below:
• CORA
• Friends for Youth
• Health Mobile
• HIP Housing
• Legal Aid Society of San Mateo County
• Life Moves
• Ombudsman Services of San Mateo County
• Peninsula Family Service
• Peninsula Volunteers (Meals on Wheels)
• Rape Trauma Services Center
• Samaritan House
• Star Vista
• Life Moves
• Renaissance Entrepreneurship Center
• CID
• El Concilio of San Mateo County
• Rebuilding Together Peninsula
• Project Sentinel*
*HOME Administrative Funds applicant
The City received two new public service applications from Health Mobile and Peninsula Family service. Health Mobile was CDBG funded from 2004 to 2017.
Fair Housing
The City has targeted the HOME Administrative funds it receives from the County for fair housing activities since the CDBG regulations require the City to affirmatively further fair housing. Fair housing activities may only be funded from administration or public service type funds. In FY 20-21, the HOME Administrative funds were allocated to Project Sentinel, a non-profit fair housing provider. Project Sentinel has submitted an application for this cycle.
City Sponsored Housing Rehabilitation Loan Program
The Housing Rehabilitation Loan Program assists low and moderate-income homeowners with housing loans and/or grants to rehabilitate their homes. This program demonstrates the City’s commitment to maintaining affordable housing and anti-blight and anti-displacement efforts. The Housing Rehabilitation Loan Program is being modified to improve efficiency and to reduce administrative cost. Staff is currently working with other members of the CDBG cohort of entitlement cities to improve this process.
Debris Box Vouchers
Debris Box Vouchers are issued to clear code violations and for emergencies. Debris box vouchers are targeted for the cleanup of conditions that affect the health, safety, or appearance of properties.
Emergency Home Repair Vouchers
Emergency Home Repair Vouchers are provided as grants of up to $5,500 for qualifying homeowners. These vouchers apply to minor home repairs and minor code violations, such as broken sewer lines, water heater replacement, roof repairs, broken windows, etc. These grants have no fees or charges except any required permit fees. The homeowner is responsible for any costs beyond the grant amount.
Public Improvement Programs
For the Public Improvements, for FY 21-22, approximately $223,000 of CDBG funding is being used to expand public Wi-Fi on Linden Avenue and make improvements to the Downtown Breezeway, which support safety improvements, ADA accessibility, and improves existing public facilities that serve the CDBG Service Areas. Such additional projects could include updating and improving lighting to address safety concerns in the public right of way; improving public pathway improvements, or ADA access improvements.
FISCAL IMPACT
There is no fiscal impact on the General Fund to hold this Public Hearing. For the City to allocate federal funds, two Public Hearings must be held. This is the first of two hearings. At a subsequent City Council meeting, Council will be asked to consider adopting the Annual Action Plan following the second Public Hearing.
RELATIONSHIP TO STRATEGIC PLAN
By completing the HUD-mandated public process, including the required Annual Action Plan, the City will be able to secure its allocation of CDBG funds for the coming year. This, in turn will advance several components of the City’s Strategic Plan, in particular:
• Provide funding for social services and public projects to support residents (Strategic Plan Priority #2 Quality of Life)
• Help fund non-profits that work to address various affordable housing-related issues (Initiative 2.3 - Promote a balanced mix of housing options)
• Shift the financial burden away from the City’s General Fund by securing Federal grant funds (Priority Area 3 Financial Stability)
• Partner with non-profits that provide information to local residents and help strengthen community relationship (Priority Area 6 Community Connections)
CONCLUSION
It is recommended that the City Council conduct a public hearing, receive testimony on the City’s housing, community, and economic development needs for the Annual Action Plan, and provide direction to the CDBG Subcommittee regarding funding priorities.
Attachments:
1. FY 22-23 Grant Allocation Requests
2. FY 22-23 Sub-recipient Applications