CC - Item 7A - Fiscal Year 2017-18 Annual Action Plan for Federally Funded ProgramsCity Council Meeting
March 28, 2017
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2. Increase the maximum funding amount under the Grant program from $10,000 to
$15,000 per household.
3. Increase the maximum funding amount under the First Time Homebuyer program
from $70,000 to $95,000 per household.
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.
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 2017-18 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
2017-18. 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% ($93,173) of the annual grant amount plus projected program
income to be received in FY 2016-17, can be used for social service activities, no more than 20%
($123,312) of the grant amount plus anticipated program income to be received in FY 2017-18
City Council Meeting
March 28, 2017
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can be used for Planning and Administrative services, and, at least, 70% of all funds must be
used for low -to -moderate income activities.
The Owner -Occupied Rehabilitation Programs account for the overall largest share of the CDBG
budget. Through these programs, funds are available to assist low and moderate -income (0 to
80% of MFI) homeowners, who own and occupy their property, in malting needed rehabilitation
improvements and upgrades to their single-family residence. Funds for these programs are
limited and allocated on a first-come, first-served basis. Due to inflation and increased
construction costs, it has come to staff's attention that the maximum funding amount of $10,000
per household under the Grant program is no longer sufficient and needs to be increased to a
maximum funding amount of $15,000 per household. The Grant program is only available to
senior citizens (62 years or older) and disabled citizens for repairs related to interior and exterior
code deficiencies and general home improvements. Those that apply for the grant do not have the
money to cover any expenses over the current limit of $10,000. By raising the limit to $15,000 it
will allow homeowner's to cover the full extent of needed repairs. Owner occupants are eligible
for this program once every 5 years with a maximum of three (3) grants.
There were no new public service funding requests submitted for the FY 2017-18. Out of the two
(2) existing social service organizations already receiving funding, one organization, Family
Promise of San Gabriel Valley has requested a $500 increase to their allocation while Santa
Anita Family Service has requested the same level of funding as approved in the current fiscal
year. It would be appropriate to continue to support of both social service organizations at their
current level of funding. In addition, there was 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.
FY'2017-18
CDBG Allocation
City Administration
General Administration
$ 91,853
General Administration — Program Income
$ 3,400
Fair Housing Contract
$ 10,000
Subtotal
$105,253
Owner -Occupied Rehabilitation
Administration
$160,855
Emergency Grants
$ 20,000
Grants
$150,000
Rebates
$ 15,000
Lead/Asbestos Testing
$ 11,000
Lead/Asbestos Remediation
$ 20,000
Subtotal
$376,855
City Council Meeting
March 28, 2017
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Public Safety
Code Enforcement
$166,350
Subtotal
$166,350
SocialServices
$
Family Counseling Services
$ 5,000
Family Promise
$ 5,000
Senior Nutrition Services
$ 62,400
Senior Nutrition Services — Program Income
$ 13,700
Subtotal
$ 86,100
Owner -Occupied Rehabilitation Loans
$
Total CDBG Allocation
$734,558
In reviewing the HOME funds recommendations, it would be appropriate for the City Council to
remember that no more than 10% ($21,180) can be used for administrative and program delivery
activities. At least 15% ($31,770) must be set aside for a CHDO, as constituted under the
regulations. In addition, up to 5% ($10,590) can be used by a CHDO for operating expenses.
The balance of funds can only be used for housing activities.
Similar to the Grant program, the funding amount for the First Time Homebuyer program is no
longer sufficient and needs to be increased. Under the First Time Homebuyer program, funding
is available to assist those in need with the purchase of their first home. The assistance is in the
form of a silent second loan and is available to low and moderate -income (0 to 80% of MFI)
families who have not owned a home within the previous three years. The goal is to assist the
homebuyer in achieving a 20% down payment, which the current amount of $70,000 no longer
achieves. With the average purchase price of $475,000, a 20% down payment is $95,000. For
this reason, staff is requesting to raise the down payment amount from $70,000 to $95,000.
A detailed list of funding recommendations under the HOME program is provided below.
FY 2017-18
HOME Allocation
City Administration
General Administration
$
21,180
General Administration - Carryover
$
11,100
Subtotal
$
32,280
Rehabilitation
Owner -Occupied Rehabilitation Loans
$
156,850
Owner -Occupied Rehabilitation Loans - Carryover
$
351,800
Down Payment Assistance Program - Carryover
$
190,000
Subtotal
$
698,650
Community Housing Development Organization CHDO
Rio Hondo CDC (Operating)
$
2,000
Rio Hondo CDC (Affordable Housing Program)
$
31,770
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March 28, 2017
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Rio Hondo CDC (Affordable Housing Program) - Carr over
$ 96,301
Subtotal
$ 130,071
Total HOME Allocation $ 861,001
It should be noted that all the proposed projects meet the CDBG and HOME eligibility
requirements.
FISCAL IMPACT - None
STRATEGIC PLAN IMPACT —None
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Prepared by:
LCL 4 s
Michelle G. Ramirez, Co ity Development Director