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HomeMy WebLinkAboutItem 09a - Community Development Block Grant Funds for FY 2021-22 DATE: January 19, 2021 TO: Honorable Mayor and City Council FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director By: Tim Schwehr, Senior Economic Development Analyst SUBJECT: STATEMENT OF OBJECTIVES AND PROJECTS FOR USE OF COMMUNITY DEVELOPMENT BLOCK GRANT (“CDBG”) FUNDS FOR FISCAL YEAR 2021-22 Recommendation: Approve SUMMARY The overall goal of the Community Development Block Grant (“CDBG”) program is to provide assistance to low- and moderate-income families and individuals by enabling them to participate in various local community activities and to eliminate blighted or substandard housing conditions. The Los Angeles County Development Authority (“LACDA”) has advised that the City of Arcadia will receive an estimated amount of $303,072 in CDBG funds for Fiscal Year 2021-22. Following City Council approval, the proposed project summaries and budgets must be submitted to the LACDA. It is recommended that the City Council approve the projects set forth in this report for FY 2021-22, which include the Home Improvement Program, Congregate Meals for Seniors Program, and the Information and Referral Services for Seniors Program. BACKGROUND Since 1974, the City has been a participant in the Los Angeles Urban County’s Community Development Block Grant Program. The CDBG funds come from the U.S. Department of Housing and Urban Development (“HUD”) and are administered by the Los Angeles County Development Authority (“LACDA”) for participating cities in the County, including Arcadia. Use of these funds is restricted in order to meet the objectives of assisting low- and moderate-income families and improving disabled accessibility. Federal regulations allow for a 20% maximum of a grantee’s anticipated annual allocation to be used for Public Service programs. The balance of the annual funds must be directed towards projects that support and benefit low- and moderate-income families and individuals or the homeless. Community Development Block Grant (“CDBG”) Funds January 19, 2021 Page 2 of 4 DISCUSSION The City’s estimated CDBG allocation for FY 2021-22 is $303,072. Although there is uncertainty regarding when the two public service programs will resume in full, it is recommended that the City continue to fund these programs at the same level as previous years by allocating 20% of the FY 2021-22 disbursement to these programs. The Home Improvement Program has continued to operate during the COVID-19 pandemic, and it is recommended to continue funding this program at the same level as prior years by allocating 80% of the FY 2021-22 disbursement to this program. Beginning in FY 2017-18, the City has annually allocated $20,000 of CDBG funding to the Shelter Partnership; a non-profit organization that accepts and distributes new, non- perishable goods to service providers that assist homeless populations throughout Los Angeles County. Given the number of new programs and funding sources that have come online since the 2017-18 Fiscal Year to address the issue of homelessness, including a number of grants received by the City, it is recommended that starting in FY 2021-22 the City no longer allocate a portion of its CDBG funding to the Shelter Partnership homeless initiative. Instead, it is recommended to use these funds to supplement the City’s Congregate Meals for Seniors Program and Home Improvement Program. The following table is a summary of the funding approved for the current FY 2020-21 projects, and the recommended projects and funding for FY 2021-22: Projects Current FY 2020-21 Proposed FY2021-22 Home Improvement Program $235,505 $242,457 Shelter Partnership (Homeless Initiative) $20,000 $0 Public Service Projects Congregate Meals for Seniors $38,768 $40,067 Info. & Referral Services for Seniors $20,548 $20,548 Totals $314,821 $303,072 The proposed FY 2021-22 CDBG budget will fund the following program activities: Home Improvement Program Since 1974, the Home Improvement Program (“HIP”) has been comparatively the largest of the City’s CDBG programs; having provided assistance to more than 500 low- and moderate-income homeowners. Currently, the HIP provides a maximum grant of $20,000 for single-family homes and $15,000 for condominiums to benefit income-qualified homeowners by providing needed home improvements and repairs such as painting, roofing, specific modifications for property owners with special needs, and energy- efficiency improvements. The HIP has proven to be a positive and successful program in improving and maintaining aging building stock throughout the City. Community Development Block Grant (“CDBG”) Funds January 19, 2021 Page 3 of 4 On average, approximately 10 income-qualified homeowners in Arcadia receive grants each year through this program. For the current fiscal year, the City is on pace to issue a total of 9-to-11 home improvement grants consisting of grants of 7-to-8 single-family homes and 2-to-3 owner-occupied condominiums. The recommended level of funding for the Home Improvement Program for FY 2021-22 is $242,457. Of these funds, 20% ($48,491) is allowed to be used for administration of this program and will cover the cost of a consultant and staff time. It is anticipated that this funding will allow the City to assist approximately 10 income-qualified homeowners during the next fiscal year. Congregate Meals for Senior Citizens – (Public Service Project) This Program is one of two public service projects funded for the current Fiscal Year, which cumulatively cannot exceed a total of 20% of the total annual CDBG allocation. This is an ongoing program that provides senior citizens with a nutrition program featuring mid-day hot meals, Monday through Friday, at the Community Center. It is anticipated that approximately 20,500 meals will be served during the next Fiscal Year. In the event this program remains suspended due to continued COVID-19 health restrictions, any unspent funds will be carried-over for use in FY 2022-23. Information and Referral Services for Senior Citizens – (Public Service Project) The Information and Referral Services program provides senior citizens with information that is essential for maintaining 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. With a proposed budget of $20,548 the current level of service can be maintained, which will serve approximately 700 clients during FY 2021- 22. In the event this program remains suspended due to continued COVID-19 health restrictions, any unspent funds will be carried-over for use in FY 2022-23. In addition to the City’s annual allocation of CDBG funds, in May of 2020 the City received an additional disbursement of CDBG funding (CDBG-CV funds) in the amount of $180,088 as part of the Federal CARES Act legislation. The City utilized the CDBG-CV funds and $64,912 in previously unallocated CDBG funding for a $245,000 COVID-19 Emergency Small Business Grant program. Grants of $5,000 were issued to 49 Arcadia small businesses selected by lottery. The City is currently exploring issuance of a second round of small business grants in the coming months using unspent CDBG funds from the two temporarily suspended public service programs and carry-over funds from FY 2019-20. Taken together, these funds total approximately $110,000. Per HUD’s COVID- 19 CDBG guidelines, funds are permitted to be reallocated by the City to other programs during FY 2019-20 as an administrative action in lieu of the standard 30-day public notice and public hearing requirement. Clearly, if another disbursement of funds is made available, we would attempt to utilize these funds for our small businesses in concert with the carryover funding mentioned above. Community Development Block Grant (“CDBG”) Funds January 19, 2021 Page 4 of 4 ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the environment. Thus, this matter is exempt under CEQA per Section 15061 of the CEQA Guidelines. FISCAL IMPACT All CDBG funding comes from HUD. However, CDBG project appropriations are included in the operating budget, and are subject to City Council approval prior to the expenditures. The funding amount is similar to prior years and will maintain existing service levels for each of the City’s three on-going CDBG funded programs. RECOMMENDATION It is recommended the City Council determine that this action does not constitute a project and is therefore exempt under the California Environmental Quality Act (“CEQA”); approve the Statement of Objectives and Projects for use of Community Development Block Grant (“CDBG”) Funds for Fiscal Year 2021-22; and authorize and direct the City Manager to modify the project allocations should amendments become necessary, and execute a Memorandum of Understanding with the Los Angeles County Development Authority (“LACDA”).