CC - Item 5B - CDBG and HOME Programs FY 2016-17 Annual Action PlanROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY � l COU NCIL
FROM: JEFF ALLRED, CITY MANAGER 41
DATE: MARCH 22, 2016
SUBJECT: CDBG AND HOME PROGRAMS FY 2016 -17 ANNUAL ACTION PLAN
SUMMARY
On February 23, 2016, the City Council conducted a public hearing to receive input on
the development of the City's Annual Action Plan for the period of July 1, 2016 - June
30, 2017. Under federal regulations, no more than 15% of the Community Development
Block Grant (CDBG) allocation can be used for social service activities. In addition,
under the HOME Investment Partnership (HOME) program, at least 15% must be set
aside for a Community Housing Development Organization (CHDO). Two (2)
organizations (Family Promise of San Gabriel Valley and Santa Anita Family Service)
that are current recipients of CDBG funds made presentations at the public hearing as
well as the one (1) CHDO (Rio Hondo Community Development Corporation) funded
under the HOME program.
The City has been notified by HUD that Rosemead will be receiving $631,009 in CDBG
funds for FY 2016 -17, which is a 2.528% cut from its FY 2015 -16 allocation, and
$217,225 in HOME funds, which is a 7.99% increase from its FY 2015 -16 allocation.
When combined with projected carryover funds and anticipated program income, the
City anticipates having a total of $681,742 of CDBG funds available and $752,244 in
HOME funds available for the 2016 -17 year.
Staff Recommendation
It is recommended that the City Council review and finalize the CDBG and HOME
funding recommendations under the City's FY 2016 -17 Annual Action Plan.
BACKGROUND
The City of Rosemead is a Federal entitlement grant recipient of CDBG and HOME
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 (4) grants are
driven 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.
ITEM NO. 5.13
City Council Report
March 22, 2016
Page 2 of 4
As part of the requirements of the federal Consolidated Plan process, the City is
required to hold a public hearing regarding the projected use of funds prior to adoption
of its Consolidated Plan and Annual Action Plan. In order to receive the FY 2016 -17
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
After much deliberation and thought, it is being proposed that the following activities be
funded under the CDBG and HOME programs and included in the City's Annual Action
Plan for the FY 2016 -17. In reviewing the CDBG recommendations it would be
appropriate for the City Council to remember that only three broad funding categories
are considered eligible under CDBG - regulations. A project must either provide benefits
to low or moderate - income persons, eliminate slum or blighted conditions, or satisfies
an urgent need. In addition, of the CDBG funds received, no more than 15% ($94,651)
of the annual grant amount plus anticipated program income can be used for social
service activities, no more than 20% ($126,202) of the grant amount plus anticipated
program income can be used for Planning and Administrative services, and, at least,
70% of all funds must be used for low -to- moderate income activities.
There were no new public service funding requests submitted for the FY 2016 -17. Out
of the two (2) existing social service organizations already receiving funding, all have
requested the same level of funding as approved in the current fiscal year. It would be
appropriate to continue to support all three social service organizations at their current
level of funding. In addition, there was also one (1) request that qualifies under the
Planning and Administrative services cap (Southern California Housing Rights Center).
This organization requested the same level of funding as approved in the current fiscal
year.
A detailed list of funding recommendations under the CDBG program is provided below.
City Council Report
March 22, 2016
Page 3 of 4
FY 2016 -17
CDBG Allocation
City Administration
General Administration
$ 82,050
General Administration — Program Income
$ 4,687
Fair Housing Contract
$ 10,000
Subtotal
$ 96,737
Rehabilitation
Administration
$160,855
Emergency Grants
$ 10,000
Grants
$100,000
Rebates
$ 15,000
Lead/Asbestos Testing
$ 11,000
Lead /Asbestos Remediation
$ 20,000
Subtotal
$316,855
Public Safet
Code Enforcement
$157,350
Subtotal
$157,350
Social Services
Family Counseling Services
$ 5,000
Family Promise
$ 5,000
Senior Nutrition Services
$ 82,050
Senior Nutrition Services — Program Income
$ 18,750
Subtotal
$110,800
Total CDBG Allocation
$681,742
In reviewing the HOME funds recommendations, it would be appropriate for the City
Council to remember that no more than 10% ($21,722) can be used for administrative
and program delivery activities. At least 15% ($32,584) must be set aside for a CHDO,
as constituted under the regulations. In addition, up to 5% ($10,861) can be used by a
CHDO for operating expenses. The balance of funds can only be used for housing
activities. A detailed list of funding recommendations under the HOME program is
provided below.
FY 2016 -17
HOME Allocation
City Administration
General Administration
$ 21,722
Subtotal
$ 21,722
Rehabilitation
Owner - Occupied Rehabilitation Loans
$ 160,919
City Council Report
March 22, 2016
Page 4 of 4
Owner-Occupied Rehabilitation Loans - Carryover
$
225,000
Down Payment Assistance Program - Carryover
$
140,000
Subtotal
$
525,919
Community Housing Development Organization (CHDO
Rio Hondo CDC (Operating)
$
2,000
Rio Hondo CDC (Affordable Housing Program)
$
32,584
Rio Hondo CDC (Affordable Housing Program) - Carryover
$
170,019
Subtotal
$
204,603
Total HOME Allocation
$
752,244
It should be noted that all the proposed projects meet the CDBG and HOME eligibility
requirements.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Prepared by:
Michelle G. Ramirez
Community Development Director