Title
Report regarding holding a Public Hearing on the City of South San Francisco’s Fiscal Year 2022-23 Annual Action Plan for the Community Development Block Grant Program and consideration of adopting a resolution: 1) approving the FY 2022-23 Annual Action Plan; 2) authorizing its submittal and all other required documents to the U.S. Department of Housing and Urban Development; 3) accepting funds from all sources and approving appropriation of CDBG and HOME Administrative fund expenditures as detailed in Attachment 1 for the FY 2022-23 CDBG operating budget ; 4) authorizing the City Manager to execute all documents and certifications necessary to secure and award the CDBG and HOME Administrative Funds for the City; and 5) approving an appropriation of $101,050 from the Housing Trust Fund for the FY 2022-23 operating budget to support non-profit organizations that provide homeless prevention programs for South San Francisco residents. (Heather Ruiz, Management Analyst II)
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RECOMMENDATION
Recommendation
Staff recommends that the City Council hold a Public Hearing to receive public testimony on the FY 2022-23 (FY 22-23) Annual Action Plan (Action Plan) for the Community Development Block Grant (CDBG) Program and adopt a resolution:
• Approving the FY 22-23 Action Plan;
• Authorizing submittal of the FY 22-23 Action Plan and all other required documents to the U.S. Department of Housing and Urban Development (HUD);
• Accepting funds from all sources and approving appropriation of CDBG and HOME Administrative fund expenditures as detailed in Attachment 1 for the FY 22-23 CDBG operating budget;
• Authorizing the City Manager to execute all documents and certifications necessary to secure and award CDBG and HOME Administrative Funds (HOME) for the City; and
• Approving an appropriation of $101,050 from the Housing Trust Fund for the FY 22-23 operating budget to support non-profit organizations that provide homeless prevention programs for South San Francisco residents.
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BACKGROUND/DISCUSSION
The purpose of this public hearing is to hear public comments on the City’s draft FY 22-23 Action Plan for the City’s CDBG Program. The Action Plan assesses the City’s housing, community and economic development needs and available resources, and outlines a strategy to address them. The Action Plan includes the CDBG and HOME administrative funded grant allocations to non-profit agencies for FY 22-23.
Federal legislation requires citizen participation in all phases of the development of an action plan; accordingly, two public hearing were scheduled. The first public hearing was on March 9, 2022, to obtain the views of citizens on housing, community, and economic development needs.
The April 27, 2022, hearing is the second and final hearing to receive public comments on the Action Plan. This is also the final public hearing regarding CDBG funding allocations for FY 22-23. The Action Plan was made available on March 28, 2022, for the 30-day public comment period and public notice of the Action Plan’s availability for comment was published in the San Mateo County Times on March 28, 2022.
DISCUSSION
Funding Recommendations
The City Council reviewed all funding requests and heard public testimonies at the March 9, 2022, Needs Assessment Hearing. During the hearing, 18 non-profit organizations made public comments. All these non-profits were seeking CDBG or HOME Administrative Funds; they provided information on their programs and thanked City Council for their support.
On March 14, 2022, the CDBG Subcommittee of the City Council (Subcommittee) met to provide staff with direction on funding priorities, which were incorporated in the Action Plan. 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.
Attachment 1 provides the estimated CDBG budget for FY 22-23. These funding allocations are estimates and will be adjusted once the notice of entitlement has been received from HUD. Should the final funding allocation be 20% higher or lower than anticipated, staff will return to the Subcommittee and/or City Council to revise the funding proposals, in accordance with HUD guidelines.
Pursuant to federal spending limitations, a total of 15% of the entitlement amount plus 15% of prior year Program Income may be allocated to non-profit organizations for public service activities. The amount available for public service is currently undetermined, however in the past it has been approximately $80,000 per year. CDBG administration costs (i.e., City staff and consultant time to administer the grant) also have a mandated spending limitation of 20% of the entitlement amount plus 20% of the estimated current year program income. Note that the maximum percentage of dedicated funding for Public Services (15%) and Administrative Costs (20%) are HUD regulated formulas and cannot be adjusted.
CDBG Programs
The following is a summary of currently funded activities under the CDBG program. At its discretion, City Council may adopt or modify the Subcommittee’s preliminary funding recommendations.
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. The City received 18 new applications, including two new proposals. All minor home repair program providers applied for the FY 22-23 grant cycle. Please refer to Attachment 2 for the recommended funding and programs.
Public Services (Non-profits)
CDBG FY22-23 Entitlement Funds ($72,000)
Attachment 2, lines 2-6 show the five non-profit organizations selected to receive CDBG funding. These organizations include Health Mobile, Peninsula Family Service, Friends for Youth, Rape Trauma Services Center, and Ombudsman Services of San Mateo County of which all provide public services to the community.
CDBG-CV Funds ($65,000)
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 services, and facilities upgrade. Two of the 18 applicants for public services received CDBG-CV grant funding, Peninsula Volunteers and Renaissance Entrepreneurship Center. Staff recommend that these organizations be funded through CDBG-CV. Please refer to Attachment 2, lines 18-22.
Housing Trust Fund (Fund 205) ($101,050)
The CDBG Subcommittee and staff recommend funding six additional grantees - CORA, HIP Housing, Samaritan House, Life Moves, Legal Aid, and StarVista through the City’s Housing Fund (Fund 205) instead of CDBG. Together, these non-profits provide housing production and housing programs, such as shelters, transitional housing, legal assistance, and housing referrals to lower income South San Francisco residents, which are eligible for funding through the City’s Housing Fund. This will allow the City to provide funding to non-profits providing critical resources to the community, without impacting the City’s General Fund. Please refer to Attachment 2, lines 9-15.
HOME Funds ($12,000)
In the past, the City has allocated the HOME Administrative Funds it receives from the County for fair housing activities. CDBG regulations require that the City use HOME funding to affirmatively further fair housing and, these activities can only be funded from administration or public service funds. The City has not yet received notification from HUD or the County regarding the entitlement amount but has estimated the FY 22-23 allocation to be $12,000. The City had only one applicant for this funding, Project Sentinel. Please refer to Attachment 2, line 34.
Minor Home Repair Programs ($108,000)
The CDBG Subcommittee recommends funding the three non-profits (CID-Housing Accessibility Modification Program, El Concilio, and Rebuilding Together) that implement a total of four programs. All four of these programs have received CDBG funding in previous years. Please refer to Attached 2, lines 25-28.
City Sponsored Activities ($77,000)
The City-Sponsored Activities for housing include the debris box vouchers, emergency home repairs and the housing rehabilitation loan program. The CDBG Subcommittee recommends retaining a small budget for the Housing Rehab Loan Program, as well as continuing to fund Debris Box Vouchers and Emergency Home Repairs. Attachment 1, lines 23-27 provide details on funding for the City-Sponsored Activities.
Housing Rehabilitation Program
The housing rehabilitation loan program is currently being evaluated to help streamline the administration of loans and the construction process. Staff has been evaluating and pursuing a collaborative effort with other members of the CDBG San Mateo County Cohort to help minimize staff time and provide a cost-effective approach to the administrative requirements for the rehabilitation loan programs. Please refer to Attachment 1, line 24.
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. Please refer to Attachment 1, line 25.
Emergency Home Repair Vouchers
Emergency Home Repair Vouchers are provided as grants of up to $5,500 for qualifying homeowners. These vouchers apply to emergency 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. Please refer to Attachment 1, line 26.
Public Improvement Programs ($130,000)
For FY 22-23, CDBG funds are proposed to be used to make public improvements. Such projects include updating and improving lighting to address safety concerns in the public right of way, improving public pathways, or ADA access improvements. Please refer to Attachment 1, line 21.
FISCAL IMPACT
If approved by resolution, the CDBG budget and the City’s housing funds will be fiscally impacted as described above.
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); and
• Partner with non-profits that provide information to residents and help strengthen community relationship (Priority Area 6 Community Connections).
CONCLUSION
The CDBG Subcommittee and staff recommend that the City Council hear public testimony on the City’s FY 22-23 Annual Action Plan and adopt a resolution:
• Approving the FY 22-23 Action Plan;
• Authorizing submittal of the FY 22-23 Action Plan and all other required documents to the U.S. Department of Housing and Urban Development (HUD);
• Accepting funds from all sources and approving appropriation of CDBG and HOME Administrative fund expenditures as detailed in Attachment 1 for the FY 22-23 CDBG operating budget;
• Authorizing the City Manager to execute all documents and certifications necessary to secure and award CDBG and Home Administrative Funds (HOME) for the City; and
• Approving appropriation of $101,050 from the Housing Trust Fund for the FY 22-23 operating budget to support non-profit organizations that provide homeless prevention programs for South San Francisco residents.
Attachments:
1. FY 22-23 Budget
2. FY 22-23 Funding Recommendations
3. Presentation