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CC - Item 6A - CDBG and Home Programs Annual Action Plan for Fiscal Year 2012-13ROSEMEAD CITY COUNCIL STAFF REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: JEFF ALLRED, CITY MANAGER DATE: MARCH 27, 2012 SUBJECT: CDBG AND HOME PROGRAMS ANNUAL ACTION PLAN FOR FISCAL YEAR 2012 -13 SUMMARY Due to fiscal austerity actions taken by the federal government, the City of Rosemead will incur a 34.25% cut to its current $1,037,683 allocation of Community Development Block Grant (CDBG) funds and a 52.39% cut to its current $480,683 HOME Investment Partnerships (HOME) funds. This means the total funds available in the FY 2012 -13 for CDBG will be reduced to $682,256 and for HOME will be reduced to $228,955. The drastic funding reduction to the CDBG program will result in a $48,000 cut to the City's Senior Nutrition Lunch program currently operated at the Garvey Community Center and the Rosemead Community Recreation Center. Due to this funding reduction, the consolidation of the two (2) Senior Nutrition Lunch programs into a single location will be necessary. In addition, due to the CDBG funding reduction, allocations to social service agencies will be reduced or in some cases eliminated. Under federal regulations, no more than 15% of the FY 2012 -13 CDBG allocation (or $102,338) can be used for "social service' activities. This is $53,314 less than the current grant allocation. In addition to the Senior Nutrition Lunch program operated by the Parks and Recreation Department, written proposals were received from eight (8) other organizations that could qualify under the "social service" activity cap with requests totaling $205,355 (see Attachment "B "). Unfortunately, the drastic cut to the CDBG program will prohibit the funding of many of these activities while others will be severely reduced as shown in the following table. APPROVED FOR CITY COUNCIL AGENDA: City Council Report March 27, 2012 Paae 2 of 6 PROJECT Family Counseling Services Family Promises (Homeless Services) Merci Housin People for People Rosemead High School Rosemead School District Senior Nutrition Lunch Program The Whole Child (Homeless Services) YMCA of W. San Gabriel Valle TOTAL SOCIAL SERVICES BUDGET AND REQUESTS Approved 2011 -12 Budget $ 39,000 $ 10,000 $ 5,000 $ 27,345 $ 10,000 $ 7,000 $ 77,824 $ 5,000 $ 5,000 $ 171,169.00 2012 -13 Recommended Budget 2012 -13 Request $ 40,000 $ 10,000 $ 5,000 $ 27,345 $ 10,000 $ 7,000 $ 93,010 $ 8,000 $ 5,000 $ 205,355.00 2012 -13 Recommended Budget $ 6,000 $ 5,000 $ 7,328 $ 93,010* $ 111,338.00 ----------------------------------------- - - -- ----------- - - - - -- - - -- 15% Cap $ 155,649.00 $ 10202,,33 38.00 8.00 $ 102,338.00 Anticipated Program Income y $ 15,520.00 i $ 9,000.00 $ 9,000.00 - TOTAL SOCIAL SERVICE CAP ; $ _______ 171,169 00 $ 111,338 00 , ; $ 111,338.00 -- - - - - -- -- - -- - - -- - - - -- - - -' Difference $ 0.00 $ ( 94,017.00) $ 0.00 *Increased costs are due to payment of salaries related to the program that were previously paid by CDBG Planning and Administration funds. In addition, the General Fund will contribute $108,670 towards this program. The cut to CDBG funding will also have a negative affect on the amount allowable for Planning and Administrative services. No more than 20% or $136,451 of the FY 2012- 13 grant amount can be used for Planning and Administrative services, which is a reduction of $71,086 from the current FY grant. As a result, several personnel salaries and benefits once paid under the Planning and Administrative services cap must be reduced, moved into another CDBG activity, or eliminated. Staff Recommendation It is recommended that the City Council receive public input, review, and approve the CDBG and HOME funding recommendations for inclusion in the City's FY 2012 -2013 Annual Action Plan. Final City Council approval of the FY 2012 -13 Annual Action Plan will be scheduled for the April 24, 2012 City Council meeting. BACKGROUND The City of Rosemead is a federal entitlement grant recipient of Community Development Block Grant and HOME Investment Partnership funds from the U.S. Department of Housing and Urban Development (HUD). As part of the process to receive funding, the City must undertake development of a Consolidated Plan and Annual Action Plan. It is called a Consolidated Plan because it consolidates the application process for HUD's four (4) entitlement grants into one consolidated plan and application. The four grants are: CDBG, HOME, Housing Opportunities for Persons with AIDS (HOPWA), and Emergency Shelter Grant (ESG). All four grants are driven City Council Report March 27, 2012 Page 3 of 6 by an entitlement formula process set by the federal government. The City is eligible to participate in two (2) of these programs: CDBG and HOME. In order to receive the FY 2012 -13 allocations, the City must comply with the following requirements of the Consolidated Plan final rule regarding pre- submission requirements: ➢ Fulfill citizen participation requirements by conducting a public hearing to receive citizen input regarding annual funding needs; ➢ Publish a draft Plan and Annual Action Plan for a 30 -day comment period in order to receive citizen input regarding the final document; and ➢ Conduct a public hearing adopting the final Plan and the Annual Action Plan. The Annual Action Plan is a part of the Consolidated Plan, which takes all HUD requirements regarding planning, needs analysis, reporting, budgeting, citizen participation and certifications and incorporates them into one process. The full Consolidated Plan must be completed once every five (5) years and the Annual Action Plan must be completed annually. ANALYSIS CDBG Program The City has been notified by HUD that Rosemead will be receiving only $682,256 in CDBG funds for FY 2012 -13, which is a 34.25% cut to its $1,037,683 allocation received in FY 2011 -12. When combined with FY 2012 -13 anticipated program income of $11,250 from the Senior Nutrition Lunch Program and onetime projected carryover funds of $248,793 from FY 2011 -12, the City anticipates having a total of approximately $942,299 of CDBG funds available for the 2012 -13 year. Unfortunately, the overall drastic decrease in these funds will severely reduce or, in some cases, will eliminate activities that are now being funded in this current FY. There were nine (9) funding requests submitted to the City. Eight (8) of these requests qualify under the social service activity cap (Family Counseling Services, Family Promises, Merci, People for People, Rosemead High School, Rosemead School District, The Whole Child, and YMCA of West San Gabriel Valley) and one (1) request qualifies under the Planning and Administrative services cap (Southern California Housing Rights Center). Out of these requests, Family Promises and Merci were first time requests. While these are all worthwhile organizations, the severe decrease in CDBG funding makes it necessary to reduce funding for some programs, eliminate funding for others, and supports the consolidation of the two (2) Senior Nutrition Lunch programs into one (1). Currently, the total cost to operate two (2) Senior Nutrition Lunch programs is $272,750. Of this, the CDBG program pays $144,800 (which is broken down as $67,000 under the Planning and Administrative services cap and $77,800 under the Social Services activity cap) and the City's General fund pays $127,950. In FY 2012 -13, it is projected City Council Report March 27, 2012 Page 4 of 6 that the total cost for operating two (2) Senior Nutrition Lunch programs would be increased to $281,670. Due to the funding cut to the FY 2012 -13 CDBG program, the $144,800 currently being paid by CDBG funds will be reduced to $97,710 (which will be broken down as $4,700 under the Planning and Administrative services cap and $93,010 under the Social Services activity cap) and the City's General Fund would need to be increased to $183,960 (which is a $56,010 General fund increase). However, the consolidation of the two (2) programs into one (1) program will instead reduce the City's General fund contribution to $108,670 for FY 2012 -13 (which would be a $75,290 savings), see the chart below. For this reason, it is recommended that the two (2) Senior Nutrition Lunch programs be merged into a single location. FY 2012 -13 FY 2012 -13 FY 2012 -13 Cost Savings to Two Pro rams One Pro ram Operate One Program FY 2011 -12 $ 4,700.00 Two Pro rams CDBG Funds $ 93,010.00 (Charged under 20% Planning & Administration Ca $ 67,000.00 CDBG Funds $ (Charged under 15% Social $ 281,670.00 Service Ca $ 77,800.00 General Funds $ 127.950.00 FY 2012 -13 FY 2012 -13 FY 2012 -13 Cost Savings to Two Pro rams One Pro ram Operate One Program $ 4,700.00 $ 4,700.00 $ $ 93,010.00 $ 93,010.00 $ 183,960.00 $ 108,670.00 $ 75,290.00 $ 281,670.00 $ 206,380.00 $ 75,290.00 After much deliberation and thought, it is proposed that the below activities be funded under the CDBG program and be included in the City's Annual Action Plan for the FY 2012 -13. In reviewing these recommendations it would be appropriate for the City Council to remember four (4) general CDBG- regulations: (1) a project must either provide benefits to low or moderate - income persons, eliminate slum or blighted conditions, or satisfy an urgent need; (2) no more than 15% of the FY 2012 -13 annual grant amount plus anticipated program income can be used for social services, which would be $111,338 ($102,338 FY 2012 -13 CDBG grant and $9,000 projected program income); (3) no more than 20% of the FY 2012 -13 grant amount plus anticipated program income can be used for Planning and Administrative services, which would be $138,701 ($136,451 FY 2012 -13 CDBG grant and $2,000 projected program income); and, (4) at least 70% of all funds must be used for low -to- moderate income activities. It should be noted that all the proposed projects meet the CDBG eligibility requirements. City Council Report March 27, 2012 Paae 5 of 6 **For Fiscal Y ea Grants $100,000 Rebates $ 15,000 Lead /Asbestos Testing $ 15,000 Lead /Asbestos Remediation $ 57,441 Subtotal $445,854 RoC:ii3`af a ...e .: r._.n -: Code Enforcement $246,406 Su btotal $246,406 S ©c1aTervices. Family Counseling Services $ 6,000 Family Promises $ 5,000 People for People $ 7,328 Senior Nutrition Services $ 84,010 Senior Nutrition Services $ 9,000 Projected Program Income Subtotal $111,338 Total CDBG Allocation $942,299 ** r 2012 -13, the City anticipates having $942,299 to spend. This includes a FY 2012- 13 grant award of $682,256, FY 2012 -13 anticipated program income of $11,250 from the Senior Nutrition Lunch Program, and onetime projected carryover funds of $248,793 from FY 2011 -12. HOME Program The City has been notified by HUD that Rosemead will be receiving $228,955 in HOME funds, which is a 52.39% cut to it current $480,683 allocation.. When combined with onetime projected carryover funds of $379,438 from the current FY, the City anticipates having a total of approximately $608,393 in HOME funds available for the 2012 -13 year. After careful review, it is being proposed that the below activities be funded under the HOME program and be included in the City's Annual Action Plan for the FY 2012 -13. In reviewing these recommendations it would be appropriate for the City Council to remember that the HOME funds received, no more than 10% ($22,895) can be used for administrative and program delivery activities. At least 15% ($34,343) must be set aside for Community Housing Development Organizations (CHDO), as constituted under the regulations. In addition, up to 5% ($11,447) can be used by a CHDO for operating expenses. The balance of funds must be used for housing activities. It should be noted that all the proposed projects meet the HOME eligibility requirements. General r 2012 -13, the City anticipates having $942,299 to spend. This includes a FY 2012- 13 grant award of $682,256, FY 2012 -13 anticipated program income of $11,250 from the Senior Nutrition Lunch Program, and onetime projected carryover funds of $248,793 from FY 2011 -12. HOME Program The City has been notified by HUD that Rosemead will be receiving $228,955 in HOME funds, which is a 52.39% cut to it current $480,683 allocation.. When combined with onetime projected carryover funds of $379,438 from the current FY, the City anticipates having a total of approximately $608,393 in HOME funds available for the 2012 -13 year. After careful review, it is being proposed that the below activities be funded under the HOME program and be included in the City's Annual Action Plan for the FY 2012 -13. In reviewing these recommendations it would be appropriate for the City Council to remember that the HOME funds received, no more than 10% ($22,895) can be used for administrative and program delivery activities. At least 15% ($34,343) must be set aside for Community Housing Development Organizations (CHDO), as constituted under the regulations. In addition, up to 5% ($11,447) can be used by a CHDO for operating expenses. The balance of funds must be used for housing activities. It should be noted that all the proposed projects meet the HOME eligibility requirements. General City Council Report March 27, 2012 Page 6 of 6 Rio Hondo Community Development Corp. (Operating) "For Fiscal Year 2012 -13, the City will have approximately $608,393 to spend. This includes a FY 2012 -13 grant award of $228,955 and onetime projected carryover funds of $379,438 from FY 2011- 12. PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. Prepared by: Michelle G. Ramirez Acting Community Development Director Attachment A— CDBG & HOME Funding FY 2011 -12 Approved Budget vs. FY 2012 -13 Proposed Budget Attachment B — Social Service Funding FY 2011 -12 Approved Budget vs. FY 2012 -13 Proposed Budget MOOOo 0 0 0 o v moo��t� N O N Vi M Eli Vi fR f9 0 0 O O O W O O O V O O O O O N O O O N O O OI�O r o V' W C O M O 0 C O O' O 0 M I-- W O r (n W O O � W W m O W O W En M 9 N V N 1 r 0 0 a) N 9 m > N 7 '' a N_ M-0 C U_ Z O = 1 N N o a�i y E C O N N E E W m `ocn 0 0 0 0 E ¢ o¢ ('� 0 0= o 5 5-0 N E C m o o E L o O r IL c C ca N a) O v V a m mnL c. 2U) o w v co C- N N N a) 0 0 0 O . p . p � � E d fA Vi f M Eli f E m f9 Ei) v Eli a 7 W C O "O 'O C C..1 "- c a) 0 Z O a. f»» EH E» — ER EH E9 Ell MOOOo 0 0 0 o v moo��t� N O N Vi M Eli Vi fR f9 W 0 0 0 0 0 W 0 0 0 0 0 W 0 0 0 O � fR E9 f9 f9 fA 00 000'0000 O F O O O O O R O O O N O W r o 6 O M O 0 C W O' 0 M I-- W O r r W O � W W w m m O m M t 7 r � 0 0 a) � W m > N 7 '' a N_ M-0 C U_ Z O = 1 N N y E C O N w E W m `ocn 0 0 0 0 IL ¢ o¢ ('� 0 0= o 5 5-0 N E C m o o E L o O r IL c C ca N a) IL v V a m mnL c. 2U) o w co C- N N N a) 0 0 0 O . p . p � � E fA Vi f M Eli f E m f9 Ei) v Eli a W 0 0 0 0 0 W 0 0 0 0 0 W 0 0 0 O � fR E9 f9 f9 fA 0 O fA O) N N W u O O M Ol M N r w I EA O m E U C E m m 0 a v m a U C a1 M N O N } LL N N co co EH O 'O (a m C\i C � O M N LL N E O 0 N .- M LL 0) a) t0 N � � N U O C_ V7 N � L j F � C O d N `p p U 0 a) N N O V O d fA N D E m m E o X c a �a a E a) m > m m o to 3 s ) w C U J a) C LL Z `o (V N N O O LL w w O w IL 0 0 a) m > '' a N_ M-0 C U_ Z O = 1 N N y E C O N E W m `ocn 0 0 0 0 ¢ o¢ ('� 0 0= o 5 5-0 N E C m o o E L o O r IL c C ca N a) v V a m mnL c. 2U) o w co C- N N N a) 0 0 0 O . p . p � � E W.0 rnN �¢¢�w o 0-p m m Ea 7 W C O "O 'O C C..1 "- c a) 0 Z O a. c M d)) E `� a a a� Fn LLI a) — o¢ —a��i 2' W (� LL' J J a aEi O O M a) O o O a) 2 W N (L LL S U LL LL K Of ll� U) } LL F 0 O fA O) N N W u O O M Ol M N r w I EA O m E U C E m m 0 a v m a U C a1 M N O N } LL N N co co EH O 'O (a m C\i C � O M N LL N E O 0 N .- M LL 0) a) t0 N � � N U O C_ V7 N � L j F � C O d N `p p U 0 a) N N O V O d fA N D E m m E o X c a �a a E a) m > m m o to 3 s ) w C U J a) C LL Z `o (V N N O O LL O O M m C6 0 m 0 0 co m W O O 01 L 0 d co L 3 m y Y LL m N O N N i 0 LL o 0 0 0 0 Z d 00000 0 0 0 OI m 1- O O M a 0ce) N 0 M v 0 O [000 c m c\irovv [O O V N O M M It N Cl) m 0 a 2 c a� m c a E m m 'O E N O 0 � Q U 0 0 m w ei vs va en O N E N E K O O M m C6 0 m 0 0 co m W O O 01 L 0 d co L 3 m y Y LL m N O N N i 0 LL 0 0 0 0 0 F o 0 0 0 0 W 00 NO V N a W N O V m 0 O [000 c W [O O V N m n N N r O 0 2 a� O c a m m m 'O a N O a � Q ~ 0 0 W w ei vs va en O O M m C6 0 m 0 0 co m W O O 01 L 0 d co L 3 m y Y LL m N O N N i 0 LL a 'o a` c 0 0 2 a� c a m m 'O N O � Q ~ 0 0 W C C O N E N E K a 0 0 C m > > J N � N ❑ o E C 0 A J °- E E ° E E m a o o N .W wou E aL � U C O O a d m aa Q. 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