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CC - Item 3B - Public Hearing on Substantial Amendments to teh 2015-2020 Consolidated Plan and The 2019-2020 Annual Action Plan Ast M f '9 ROSEMEAD CITY COUNCIL STAFF REPORT \ ...,.... ` CIVIC PRIDE ,NCORpORATED 19'69 TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: GLORIA MOLLEDA, CITY MANAGER jf. ILA , DATE: JANUARY 28, 2020 SUBJECT: PUBLIC HEARING ON SUBSTANTIAL AMENDMENTS TO THE 2015- 2020 CONSOLIDATED PLAN AND THE 2019-2020 ANNUAL ACTION PLAN SUMMARY In accordance with the U. S. Department of Housing and Urban Development (HUD), and the City of Rosemead's Citizen Participation Plan, the City of Rosemead is required to amend its 2015-2020 Consolidated Plan and the 2019-2020 Annual Action Plan. The reason for the "Substantial Amendment" is to reallocate funds to the CDBG program for new activities in land acquisition for affordable housing. STAFF RECOMMENDATION That the City Council: 1. Conduct a public hearing and receive public testimony; and 2. Approve the Substantial Amendment to the 2015-2020 Consolidated Plan and the 2019- 2020 Annual Action Plan. -- DISCUSSION HUD requires every state and local government that receives CDBG and HOME funding to prepare a five-year comprehensive plan which brings community needs and resources together to achieve statutory goals, and thereby address decent housing, create a suitable living environment and expand economic opportunities for city's residents; particularly for low- and moderate- income persons. As an Entitlement Community, the City of Rosemead is required to prepare and submit a five-year Consolidated Plan that serves as the federal planning document for receiving CDBG and HOME Program funds. AGENDA ITEM 3.B City Council Meeting January 28,2020 Page 2 of 4 The City is also required to prepare and submit an Annual Action Plan to HUD which serves to update and delineate efforts in the program year ahead toward meeting the priorities established by the City in its Consolidated Plan. The Annual Action Plan operates on a single program year established by the City (i.e., July 1, 2019 through June 30, 2020), whereas the Consolidated Plan covers a five-year planning period (July 1, 2015 through June 30, 2020). The City shall amend the approved Consolidated Plan and Annual Action Plans when: • A substantial change (e.g., 50% or more) in its allocation priorities or a substantial change in the method of distribution of funds takes place; or • Carries out an activity, using funds from any program covered by the Consolidated Plan (including program income), not previously described in the Action Plan; or • Substantially change the purpose, scope, location, or beneficiaries of an activity. The substantial change criteria utilized by the City of Rosemead is determined by a change in an activity which had been originally initiated through the HUD Program and in which the change would exceed: • 25% of the original allocations or when beneficiaries are impacted by the change; and/or • The description of the activity is modified to the extent whereby the general public would consider it to be a new activity for that particular program year. For this amendment, the City is reallocating CDBG funds to assist with the acquisition of land which will provide the opportunity to create affordable housing for veterans within the City. In addition, the Substantial Amendment will reallocate the CDBG funds to better reflect the performance history of the City's Commercial Façade Improvement program, as well as an updated budget based on the actual fiscal year 2018-2019 closing cycle. Public hearing for the 2019-2020 Annual Action Plan was approved by the City Council at its meeting on May 14, 2019. Subsequently, the approved Action Plan was submitted to HUD on May 15, 2019, and the Action Plan Grant Agreements (CDBG and HOME) were executed and sent to HUD on September 6, 2019. For Fiscal Year 2019-2020 the City received from HUD CDBG amount of $746,663 and HOME Program amount of $351,721; for a total amount of $1,098,384. The following tables display the approved 2019-2020 Annual Action Plan CDBG and HOME Program allocations and the proposed reallocation: City Council Meeting January 28,2020 Page 3 of 4 PROPOSED 2019-2020 SUBSTANTIAL AMENDMENT CDBG PROGRAM REPORT Previous Funding Proposed Funding - --- -- - - --- - ------ -- ------ - CDBG Program Administration Cost(PAC) Administration(20%max.) $ 139,333 $ 139,333 Housing Rights Center(Fair Housing) $ 10,000 $ 10,000 Subtotal $ 149,333 $ 149,333 Rehabilitation _ _ _ _ Program Administration-Activity Delivery Costs(ADC) $ - $ - Emergency Grants $ 2,000 $ 2,000 Owner Occupied Rehabilitation(OOR)Grants/Handyman $ 100,000 $ 100,000 Rebates $ 5,000 $ 5,000 Lead/Asbestos Testing $ 4,000 $ 4,000 Lead/Asbestos Remediation $ 15,000 $ 15,000 Commercial Façade Improvements N A ^ Subtotal 'Affordable Housing Development** ------------ ---- -- ------ --- - Acquisition of Lands ,,'9' ^ Subtotal , _ ,Social Services(15%max.) Family Promise of San Gabriel Valley $ 5,000 $ 5,000 Senior Nutrition Services $ 65,000 $ 65,000 Summer Youth Employment $ 25,000 $ 25,000 Subtotal $ 95,000 $ 95,000 `Public Works Improvement Garvey Park Gym HVAC $ 257,000 $ 257,000 Alleyway lmprovmeents $ 128,300 $ 128,300 Subtotal $ 385,300 $ 385,300 TOTAL HOME ALLOCATION $ 1,005,633 $ 1,407,592 •Includes$401,959 Unallocated Funds from IDIS "Total CDBG&HOME affordable housing development funds of$1,754,952 PROPOSED 2019-2020 SUBSTANTIAL AMENDMENT HOME PROGRAM REPORT Previous Funding Proposed Funding HOME - --- -- - - -- -- - - -- --- - - - ;Program Administration Cost(PAC) Administration(10%max.) $ 35,172 $ 35,172 Subtotal $ 35,172 $ 35,172 Rehabilitation Owner Occupied Rehabilitation(OOR)Loans $ 150,000 $ 150,000 Down Payment Assistance Program $ 100,000 $ 100,000 $ 250,000 $ 250,000 Community Housing Development Organization(CHDO) - - -- - - ---- - --- --- -- -- - - --- - --- - --Rio Hondo CDC-Operating(5%max.) $ 2,000 $ 2,000 Subtotal $ 2,000 $ 2,000 ,Affordable Housing Development** Afford able Housing-Veteran's/Senior $ 1,203,003 $ 1,203,003 Subtotal $ 1,203,003 $ 1,203,003 TOTAL HOME ALLOCATION $ 1,490,175 $ 1,490,175 City Council Meeting January 28,2020 Page 4 of 4 A draft Substantial Amendment was made available for public comment between December 26, 2019 and January 27, 2020. FISCAL IMPACT — On May 14, 2019, the Annual Action Plan was approved with a total CDBG fund balance of $1,005,663 and HOME fund balance of $1,490,175. The Substantial Amendment reallocates funding amounts to better reflect the anticipated expenditures for ongoing programs and increase funding to assist with the acquisition of land for affordable housing. STRATEGIC PLAN IMPACT — The Substantial Amendment to the Annual Action Plan implements the "Key Organizational Goals" of ensuring the City's continued financial viability by actively pursuing quality economic development; enhance public safety and quality of life; and beautify residential neighborhoods and commercial corridors. PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process,which includes a public hearing notice published in the Rosemead Reader on December 26, 2019 and posting of the notice at the six (6)public locations. Prepared by: 4,, Ben Ki ssistant City Manager Attachment A: Substantial Amendment to the Consolidated Plan 2015-2020 and Annual Action Plan 2019-2020 S E M F CIVIC PRIDE _44 '49CORPORATEOl�9 Attachment A Substantial Amendment to the Consolidated Plan 2015-2020 and Annual Action Plan 2019-2020 CITY OF ROSEMEAD CONSOLIDATED PLAN 2015 — 2020 2019 — 2020 ANNUAL ACTION PLAN SUBSTANTIAL AMENDMENT Introduction Each year the US Department of Housing and Urban Development (HUD) provides funding for housing and community development programs to the City of Rosemead, specifically Community Development Block Grant (CDBG) and Home Investment Partnerships (HOME) Program funds. To receive these funds, the City must complete a report every five year called the Consolidated Plan. The purpose of the Consolidated Plan is to identify Rosemead's housing and community development needs, priorities, goals, and strategies and to stipulate how funds will be allocated to housing and community development activities over the period of the Consolidated Plan, which in this case is every five years. The City shall amend the approved Consolidated Plan and Annual Action Plans when: • A substantial change (e.g., 50% or more) in its allocation priorities or a substantial change in the method of distribution of funds takes place; or • Carries out an activity, using funds from any program covered by the Consolidated Plan (including program income), not previously described in the Action Plan; or • Substantially change the purpose, scope, location, or beneficiaries of an activity. The substantial change criteria utilized by the City of Rosemead is determined by a change in an activity which had been originally initiated through the HUD Program and in which the change would exceed: 1. 25% of the original allocations or when beneficiaries are impacted by the change; and/or 2. The description of the activity is modified to the extent' whereby the public would consider it to be a new activity for that particular program year. Proposed Amendment to the 2015 —2020 Consolidated Plan During the five-year plan period, the City expects to receive approximately $700,000 annually in CDBG funds and $350,000 annually in HOME funding. Over a five-year period, this equates to$3.5M in CDBG and a five-year total of$1,750,000 in HOME funds. The City has an opportunity to purchase a property to construct affordable housing for veterans. This proposed Substantial Amendment will reallocate funds to the CDBG program to assist with the acquisition only. Proposed Amendment to the 2019 — 2020 Action Plan As mentioned above, the City has decided to reallocate some of its available CDBG dollars, to assist with the acquisition of the land for affordable housing. Below is a list of CDBG Programs that we wish to amend and reallocate funds. The current and proposed amounts are included: CDBG Proposed Revisions are listed in the table below: ROSEMEAD PROPOSED FY 2019-2020 SUBSTANTIAL AMENDMENT CDBG BUDGET Previous Funding Proposed Funding Rehabilitation Commercial Façade Improvements $250,000 $100,000 Subtotal $250,000 $100,000 Unallocated Funds Funds from IDIS $401,959 $0 Acquisition Acquisition of land $0 $551,959 TOTAL $651,959 $651,959 A description of the new activities being added to the fiscal year are as follows: - Acquisition of Land The acquisition of land will provide the opportunity to create affordable housing for veterans within the City. The reallocation of CDBG funds will assist with the acquisition and development of affordable units that will be made available to low income households. The above activities and funding amounts will be revised in the Annual Action Plan. HUD requires that entitlement communities provide the public with a 30-day comment period to provide residents and other interested parties an opportunity to provide input on the proposed Amendment. This public comment period will run from December 26, 2019 to January 27, 2020. Public Comments The City will incorporate any comments received during the public comment period.