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Study Session regarding the Community Development Block Grant (CDBG) Program Year 2026-2027 Applications and Budget Allocation. (Alvina Condon, Management Analyst II)
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RECOMMENDATION
Staff recommends that the Community Development Block Grant (CDBG) Subcommittee provide feedback regarding the Program Year 2026-2027 (PY 26-27) Annual Action Plan (Action Plan) and budget.
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BACKGROUND
This study session seeks CDBG Subcommittee feedback on the PY 26-27 Action Plan and proposed budget.
The U.S. Department of Housing and Urban Development (HUD) requires jurisdictions to adopt an annual Action Plan to receive CDBG funds. The City must hold two public hearings: the first was conducted on February 25, 2026, to gather input on housing and community development needs and to allow nonprofit applicants to comment on their proposals. The second hearing, scheduled for May 27, 2026, will include City Council consideration of the Action Plan and final CDBG funding recommendations.
DISCUSSION
The City has not yet received its PY 26-27 CDBG allocation, therefore, staff recommends a provisional budget of $456,000, consistent with the current year’s entitlement. Funding recommendations for public service subrecipients have been developed based on this estimate and other housing resources. If final allocations differ by 20% or more, staff will return to the Subcommittee and/or City Council to revise the funding proposals.
The budget outlined in Attachment 1 reflects an anticipated CDBG entitlement allocation of $456,000 to support public services, minor home repair, administration, and public improvement activities. When combined with additional funding sources-including the City’s Housing Trust Fund, State Permanent Local Housing Allocation (funds), HOME Administrative funds, and as a last resort, minimal General Fund dollars. Staff estimates a total of $702,200 available to invest in public improvements, social services, and shelter.
South San Francisco Community Impact Budget Allocation
The following is a summary of proposed funding allocations for PY 26-27 based on staff recommendations.
CDBG Public Services (Estimated $25,000)
The City received applications from public service providers as part of the current two-year funding cycle. For PY 2026-27, staff recommends allocating up to $25,000 in CDBG Public Service funds to:
• Rape Trauma Services - Sexual Assault Services for Children and Youth: up to $25,000
The City received an application from Upwards, Inc, but they applied under microenterprise and the City currently does not fund under that category.
CDBG Planning and Administration (Estimated $91,200)
HUD regulations permit up to 20% of the CDBG entitlement for planning and administration. Based on the estimated $456,000 entitlement, staff recommends allocating $91,200 for program administration.
CDBG Public Improvement Activities (Estimated $339,800)
The balance of CDBG funds is recommended for public improvement projects, totaling $339,800. These funds will support eligible capital improvement activities benefiting low- and moderate-income areas. A recent public improvement project completed during the previous program year included the installation and upgrade of 82 curb ramps citywide to improve accessibility, as well as the construction of a new ADA-compliant accessible pathway at Cypress and Pine Park. In addition, the City may have approximately $224,056 in prior-year unspent CDBG funds available for reallocation toward public improvement activities. The City did not request applications for public improvement projects; however, staff are in discussion with other City departments to identify feasible projects that would meet the requirements to utilize CDBG funding.
Housing Trust Fund (Fund 205) - ($100,000)
To supplement limited CDBG public service funds and continue supporting critical housing stability programs, staff recommends allocating $100,000 in Housing Trust Fund resources as follows:
• CORA - Safe House/Emergency Shelter: $20,000
• HIP Housing - Affordable Housing Programs: $10,000
• Legal Aid Society of San Mateo County, Inc. - HomeSavers Program: $15,000
• Life Moves - Shelter Operations/Family Crossroads: $35,000
• Samaritan House - Safe Harbor Shelter: $20,000
This structure allows the City to maintain support for high-performing service providers while preserving CDBG eligibility compliance.
General Fund (Economic & Community Development Operating Budget) - ($38,200)
Staff recommends utilizing General Fund resources to support the following programs because they are not eligible expense of the City’s housing funds:
• Friends for Youth - Youth Mentoring Services: $13,200
• Renaissance Entrepreneurship Center - Economic Development Services: $25,000
Age Up, Inc. applied for funding under this category but is not recommended for funding because they submitted an incomplete application.
Minor Home Repair Programs (PLHA - $100,000)
State Permanent Local Housing Allocation (PLHA) funds are recommended to support:
• Rebuilding Together Peninsula: $100,000
This year, staff proposes shifting Minor Home Repair funding from CDBG to the PLHA program to allow for greater program flexibility and reduced federal administrative requirements. Forty percent of PLHA funds must be spent on home ownership units. The Minor Home Repair Program serves lower income homeowners and thus is an eligible expense from the City’s PLHA grant.
Fair Housing Activities (HOME Administrative Funds - Estimated $13,367)
To meet the City’s obligation to affirmatively further fair housing, staff will be allocating the amount of HOME Administrative funds received from the County of San Mateo to:
• Project Sentinel - Fair Housing Services: $13,367 (Estimated)
Utilizing HOME Administrative funds for fair housing ensures compliance with the City’s requirement to affirmatively further fair housing.
Grand Total Estimated Funding - $702,200
The combined total of CDBG, Housing Trust Fund, General Fund, PLHA, and HOME Administrative resources results in a total recommended funding package of $702,200 for PY 26-27.
FISCAL IMPACT
Holding this study session has no fiscal impact on the General Fund. Funding recommendations made by the CDBG Subcommittee, if approved by the City Council, will have impacts to the CDBG budget, the City’s Housing Funds, and the General Fund as described above.
CONCLUSION
Staff recommends that the CDBG Subcommittee provide feedback regarding the PY 26-27 Annual Action Plan and budget.
Attachments:
1. Community Impact Funding Recommendations PY 2026-27