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HomeMy WebLinkAboutItem 1a: Approve Statement of Objectives for Use of Community Block Grant Funds & MOU with County CDC O,f ARC Gs,11PORN,q.9,d v~ ir o Ji 11 t ::- t -yr Y�torpr�ud AoY�t,S.199) .„,„,cY of ix. STAFF REPORT Development Services Department DATE: January 17, 2012 TO: Mayor and City Council FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director 7 - By: Jim Kasama, Community Development Administrat9r Prepared by: Amber Abeyta, Administrative Assistant SUBJECT: STATEMENT OF OBJECTIVES AND PROJECTS FOR USE OF COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS FOR FISCAL YEAR 2012-2013; AUTHORIZE THE CITY MANAGER TO MODIFY THE PROJECT ALLOCATIONS SHOULD AMENDMENTS BECOME NECESSARY, AND EXECUTE A MEMORANDUM OF UNDERSTANDING WITH THE LOS ANGELES COUNTY COMMUNITY DEVELOPMENT COMMISSION. Recommended Action: Approve SUMMARY The Los Angeles County Community Development Commission (CDC) has advised that the City of Arcadia will receive approximately $284,034 in Community Development Block Grant (CDBG) funds for Fiscal Year (FY) 2012-13, which is a 20% reduction from FY 11-12. Additionally, the administrative allocation of 10% of the total CDBG funding is no longer an allowable cost. Proposed costs and project summaries must be submitted to the County by February 1, 2012. Staff recommends that the City Council approve the projects as set forth in this report for FY 2012-13. The primary objective of the CDBG program is to provide assistance to low and moderate-income families by enabling them to participate in various community activities, and improve their property and environs. CDBG aims to also improve accessibility for the disabled and eliminate blight or substandard conditions within the City. DISCUSSION The City has been a participant in the Community Development Block Grant (CDBG) program since 1974. CDBG funds come from the U.S. Department of Housing and Urban Development (HUD) and are administered by the Los Angeles County Community Development Commission (CDC) for many cities in the County, including Arcadia. Use of funds is restricted in order to meet the objectives of assisting low and moderate-income families and improving accessibility. Federal regulations allow a maximum of 15% of a grantee's aggregate funds ($42,605 for FY 12-13) to be used for Public Service programs and a minimum of 70% ($198,824) of the total funds must be used for projects that support and benefit low and moderate-income families. In the past, 10% of the total CDBG funds could be allocated for administrative cost; however due to the significant reduction of FY 12-13 funding, the CDC determined that it can no longer continue to allow that administrative allocation to the cities participating in the Los Angeles Urban County CDBG program. However, the CDC will continue to allow direct project administration costs to be allocated to each respective projects funding. The substantial reduction of FY 12-13 CDBG funding is the result of a combination of factors: new 2010 Census data; a new CDBG formula; and an increase in number of grantees eligible for CDBG funding. The CDBG program uses two different formulas to calculate allocation amounts for entitlement grantees: One formula measures population, poverty, and overcrowded housing; the other formula measures poverty, pre-1940 housing stock, and growth lag. HUD then computes the allocation amount of every grantee using both formulas with grantees receiving their funding based on the higher of the two formula amounts (after a pro-rata reduction to make the sum of all allocations equal the appropriation level for the entire program). Lastly, the number of entitlement grantees has increased by 17 for this funding period. Therefore, not only is there less money for FY 12-13, it must be divided up among more grantees. The following table is a summary of the funding for the current projects (FY 2011-12) and for the projects recommended for next year (FY 2012-13): Current Funding Recommendations Projects FY 2011-2012 for FY 2012-2013 Housing Rehabilitation $181,562 (51.8%) $241,429 (85.0%) Handicap Ramp/Sidewalk Imps. $90,000 (25.6%) $0 (0%) Public Service Projects (max. 15%): Congregate Meals $18,187 (5.2%) $18,187 (6.4%) Sr. Citizen Social Services $21,597 (6.2%) $24,418 (8.6%) Youth Program $12,776 (3.6%) $0 (0%) Administration $26,280 (7.4%) $0 (0%) Total $350,402 (100%) $284,034 (100%) 2012-13 CDBG Projects January 17, 2012 Page 2 of 5 The following are descriptions of the projects: Housing Rehabilitation The current funding (FY 2011-12) for Housing Rehabilitation is $181,562 and the recommended funding for FY 2012-13 is $241,429. Of these funds, 20% ($48,285 for FY 12-13) is allowed to be used for administration of this project and will cover the portion of staffs time that was previously charged under the 10% administration allocation. The Housing Rehabilitation program is the largest of the City's CDBG programs, and has been an ongoing project for many years. The program provides a maximum grant of $15,000 to benefit low/moderate-income homeowners by providing needed home improvements and repairs such as painting, roofing, electrical upgrades, handicap accessibility, removal of overgrown landscaping, energy-efficiency improvements, and correction of code deficiencies. It is anticipated that the City will assist a total of 13 homeowners during the current FY (2011-12), 9 from the funding for FY 2011-12, and 4 from funds carried over from FY 2010-11. At least 11 homeowners can be assisted with the recommended funding of $241,429 for FY 2012-13. Handicap Ramps/Sidewalk Improvements Due to the relative economic health of this community, Arcadia does not have any neighborhoods that meet the low and moderate-income standards to qualify for many CDBG funded projects, such as street improvements. Disabled access improvements, however; are eligible, such as the current Colorado Street Sidewalk Accessibility project. Given the amount of project administration required to complete the extensive reporting required by the CDC for these types of projects, and given the elimination of the 10% general administrative allocation, staff does not find that a disabled access improvement project would be cost efficient, and is not proposing a project for FY 12-13. Congregate Meals for Senior Citizens— (Public Service Project) The current FY funding is $18,187 (5.2%) and the recommended funding for FY 2012- 13 is the same. This program is one of three (3) public service projects funded for the current FY (2011- 12) which cumulatively cannot exceed a total of 15% ($42,605). It is an ongoing program that provides senior citizens with a nutrition program that features hot noon- time meals, Monday through Friday at the Community Center. For the current fiscal year, it is anticipated that almost 13,000 meals will be provided, and the goal is to maintain this level of service for the next fiscal year. 2012-13 CDBG Projects January 17, 2012 Page 3 of 5 Senior Citizen Social Services Information and Referrals — (Public Service Project) The current funding (FY 2011-12) is $21,597 (6.2%) and the recommended funding for FY 2012-13 is $24,418. This program provides senior citizens with information that is essential for them to maintain independent and healthy lifestyles. Services include assistance with government benefits (e.g., Medicare/Medi-Cal and Social Security) housing assistance, transportation, legal assistance, in-home services, health services, and educational opportunities. For the current fiscal year, 391 senior citizens have been assisted as of the end of December 2011, and the goal is to maintain a similar level of service for the next fiscal year. Youth Services Program — (Public Service Project) The current FY 2011-12 funding is $12,776 (3.6%) and this program serves approximately 55 children during the summer months for various recreation camps, activities and programs. Given the significant reduction of FY 12-13 CDBG funding, staff does not recommend funding this project for FY 12-13. These services are not viewed as essential functions like some of the other services currently being provided with our other CDBG Senior funding. In addition, similar programs are being offered to the community by the Arcadia Coordinating Council. We hope that in the future funding will become available to cover this potential loss of service, but the limit of 15% to Public Service projects severely limits our funding opportunities. Unfortunately, this option is not a simple one. There would be the potential loss of one part-time staff member that oversees the disbursement of funds for these programs. FISCAL IMPACT The overall decrease in CDBG funding and the loss of Administration Funds could have an impact on the General Fund. Approximately $25,151 projected as general administration expenditures now must be either reallocated to other CDBG administration accounts or the General Fund. This is comprised of portions of the Community Development Administrator and Administrative Assistant positions within the Development Services Department. It is reasonable that the Community Development Administrator could be funded by the Home Improvement Program portion of CDBG funds since this accounts for all this position's oversight within the program. It is possible that the remaining $10,906 attributable to the Administrative Assistant position could also be allotted to the Home Improvement Program or other programs, but staff is still exploring this possibility. Thus a total of $10,906 could potentially need to be funded through the General Fund. In addition, if the Council chose to fund the Youth Services program through the General Fund, this would account for another $12,776 in the 2012- 2013 budget. 2012-13 CDBG Projects January 17, 2012 Page 4 of 5