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HomeMy WebLinkAbout5B OCRCity Council Staff Report DATE: February 11, 2021 NEW BUSINESS SUBJECT: COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) 2021-2022 ANNUAL ACTION PLAN AND BUDGET DISCUSSION FROM: David H. Ready, City Manager BY: Community & Economic Development Department SUMMARY The CDBG Annual Action Plan (AAP) is prepared by the City every year pursuant to requirements set forth by the Department of Housing and Urban Development (HUD), which mandate that units of government receiving federal housing and community development assistance must prepare an AAP as part of the implementation of the Five-Year Consolidated Plan (ConPlan) which serves as the blueprint for community development activity in the City. At this time, Staff is seeking input from the City Council regarding the Annual Action Plan and CDBG Budget for the 2021-2022 fiscal year. RECOMMENDATION: Provide staff with recommendations for the CDBG Annual Action Plan and Budget for the 2021 -2022 Fiscal Year. BACKGROUND HUD provides five models to identify and select sub-recipients for CDBG funds. These are: Model 1: Model 2: Model 3 Model 4: Model 5: Formal application or request for application process. Simplified or limited application. Grantee survey of qualified organizations with direct solicitation. Response to unsolicited applications. Review of existing sub-recipient's performance before renewing their participation. Last year, the City Council directed staff to utilize Model 3. Model 3 allows the City to directly select the sub-recipients, which may include only City Departments for funding of City programs, services, or capital projects. In addition, the City Council approved the 2020-2024 ConPlan with the following goals: .. 2 City Council Staff Report February 11, 2021 -Page 2 CDBG 2021 -2022 Annual Action Plan Housing Goals Goal 1: Remove constraints that hinder the production and conservation of affordable housing units and assist in the development of housing opportunities and accessibility for all economic levels in the city. Goal 2: Provide support services for the City's residents to ensure that all housing programs are available without discrimination on the basis of race, color, religion, sex, national origin, ancestry, marital status, age, household composition, income, size, disability or any other arbitrary factor. Homeless Goals Goal 1: Support or provide funding for programs that offer services and/or supportive housing to assist homeless individuals and/or families. Non-Housing Goals Goal 1 : Establish new and/or expanded collaborations with local service providers on projects and programs that reduce the effects of poverty and serves seniors, at-risk youth, severely disabled adults, and special needs populations. Non-Housing Community Development Goals Goal 1: Provide public facility improvements through design, energy-efficiency, rehabilitation and new construction. Economic Development Goal 1: Promote, maintain and/or expand the City's economic base through economic and employment opportunities to existing local businesses and prospective businesses. STAFF ANALYSIS: Palm Springs is an "entitlement city", meaning that it is a direct recipient of CDBG funds from the federal government. The CDBG Program was adopted by Congress forty-seven (47) years ago to provide a flexible funding source for local governments to meet the community development needs of their low and moderate-income (Low/Mod) residents and was the first federal block grant. This direct grant from HUD enables entitlement units of governments to fund three National Objectives: benefiting Low/Mod persons; preventing or eliminating slums or blight; and meeting urgent need. At this time, it is estimated that the City will receive a CDBG allocation of $450,000 which is the same amount of CDBG funds received last year. This amount will be updated accordingly once HUD releases the FY21/22 CDBG entitlement allocations. In addition, Staff has identified $115,300 of unexpended CDBG funds from prior years that 3 City Council Staff Report February 11, 2021 -Page 3 CDBG 2021 -2022 Annual Action Plan may be re-programmed for use in FY21/22. These funds were previously allocated to administrative expenses and projects, which when actually completed cost less than original estimates. Therefore, the total amount of funds to be allocated for FY21/22 is approximately $565,300. It should be noted that last year the City received $848,774 of additional CDBG funding specifically to address the impacts on the community as a result of the Coronavirus (CDBG-CV). The majority of the CDBG-CV funds were approved for a rental assistance program for Palm Springs residents ($510,000), $235,000 was provided to local non- profit organizations, and the balance of $103,000 was allocated for administrative costs. These allocations were only possible because CDBG-CV funds allowed for a waiver from the 15% Public Services limit. This waiver does not apply to CDBG funds. Furthermore, it is not yet known if any additional CDBG-CV funds will be provided to the City and therefore CDBG-CV funds are not included with this discussion. Of the total amount of CDBG funds to be allocated for FY21/22 ($565,300), the Federal statute requires that at least 70% of the expenditures benefit Low/Mod persons. As an entitlement grantee, the City has and will continue to utilize these funds for neighborhood revitalization, preserving affordable housing, expanding economic opportunities, and/or improving community facilities and services, principally to benefit Low/Mod persons. A map showing the City's Low/Mod areas is provided in ATTACHMENT 1. There are also statutory limitations on the percentage of CDBG funds that may be utilized for administrative purposes at no more than 20% of the entitlement, and Public Services at no more than 15% of the entitlement. The remaining funds are to be utilized for Public Facilities and Capital Improvements, and Housing Rehabilitation. The total funds recommended for 2021-2022 by eligibility category is as follows: Public Facilities and Capital Improvements Public Services (includes Fair Housing) Rehabilitation TOTAL PROGRAMMATIC FUNDS (80%) ADMINISTRATION (20%) TOTAL CDBG 2020-2021 FUNDING 2021-2022 ANNUAL ACTION PLAN RECOMMENDATIONS $397,240 $ 45,000 $ 10,000 $452,240 $113,060 $565,300 In evaluating the capital projects to be undertaken by the City in furtherance of the ConPlan Goals, Staff is recommending that the City Council consider allocating the full amount budgeted for Public Facilities and Improvements ($397,240) for the Demuth Park Community Center Air Conditioning Project and Demuth Park Restroom Project as detailed below. In addition, recommendations for Public Services and Rehabilitation programs are also provided. 4 City Council Staff Report February 11, 2021 -Page 4 CDBG 2021 -2022 Annual Action Plan Public Facilities & Capital Improvements: 1. City of Palm Springs Public Works & Engineering -Demuth Park Community Center Air Conditioning Project. Last year this project received an allocation of CDBG funds in the amount of $130,000. The total cost for this project is estimated to be $400,000. To fully fund this project, $270,000 more is needed. 2,704 Census Tract; 2 ,127 UM; 2,704 PS Residents. Recommended: $270,000 2. City of Palm Springs Public Works & Engineering -Demuth Park Restroom Project. Demuth Park is in need of new restrooms. Last year $175,000 in CDBG funds was allocated for new restrooms at Demuth Park. The total cost for new restrooms is estimated to be $400,000, thus $225,000 is still required to fully fund this restroom project. This project will provide for the construction of a new facility to the east of the existing building and accessible from the adjacent parking lot. This will bring the new restrooms closer to the majority of park users and move it further away from the east Mesquite Avenue frontage. An existing two-stall restroom will be demolished. It is recommended the remaining $127,240 in CDBG funds for Public Facilities and Capital Improvements be allocated towards the new restrooms at Demuth Park. 2,704 Census Tract; 2,127 UM; 2,704 PS Residents. Recommended: $127,240 Public Services: 1. Fair Housing Council of Riverside County -Fair Housing Program: Under CDBG guidelines, the City is required to provide its residents a fair housing program. Staff recommends working with the Fair Housing Council to provide comprehensive services which affirmatively address and promote fair housing (anti-discrimination) rights and landlord/tenant services to the City of Palm Springs. 2,000 City-wide; 1,800 UM; 2,000 PS Residents. Recommended: $45,000 Rehabilitation: 1. City of Palm Springs Community & Economic Development -Home Repair Program: For the past 35 years, the City has operated a Home Repair Program. This program assists very low-income homeowners with minor routine maintenance, emergency repairs and accessibility modifications at nominal costs, including other related health and safety code work. First-year participants receive standard disaster preparedness items (i.e., hot water heater strapping). The individual limit for these grants is $1,500. 20 City-wide; 20 UM; 20 PS Households. Recommended $10,000 As the recommended allocation of funds for Public Services is for a mandatory program (Fair Housing), and funding recommended for Rehabilitation provides critical home 5 City Council Staff Report February 11, 2021 -Page 5 CDBG 2021 -2022 Annual Action Plan repair services for very low-income homeowners at a relatively low level of funding, Staff is recommending these not be changed. Should the City Council wish to consider other potential Public Facilities and Capital Improvement projects, the Public Works and Engineering Department is working on another project in a qualified Low/Mod area as described below: 1. City of Palm Springs Public Works & Engineering -Playground Resurfacing. Playgrounds at three City parks require resurfacing: James 0. Jessie, Demuth, and Victoria. The cost for each is approximately $200,000, for a total of $600,000. Measure J Funds in the amount of $275,000 have been allocated for these projects, thus $325,000 is still required to fully fund resurfacing at all three parks. CDBG funds could be used to cover costs in the amount of $200,000 to resurface the playground at Demuth Park. 2,704 Census Tract; 2,127 UM; 2,704 PS Residents. Requested: $200,000 After providing Staff with direction, the anticipated next steps for moving forward would be as follows: • March 11 -Public Hearing #1 to solicit public input on the Fiscal Year 2021-2022 Annual Action Plan and Budget • March 20 to April 20 -30-day public review of Fiscal Year 2021-2022 Annual Action Plan and Budget • April 22 -Public Hearing #2, Council approval of Fiscal Year 2021-2022 Annual Action Plan and Budget • April 26 -Submittal of Fiscal Year 2021-2022 Annual Action Plan and Budget to HUD for review and approval • July 1 -CDBG funds available for use (reimbursement basis). ENVIRONMENTAL IMPACT: The recommended action does not result in a "Project" as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a Project means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment. 6 City Council Staff Report February 11, 2021 -Page 6 CDBG 2021 -2022 Annual Action Plan FISCAL IMPACT: This action is a prerequisite to ensuring the City can receive its anticipated $450,000 CDBG entitlement and reprogram $115,300 of unexpended CDBG funds, for a total CDBG budget of $565,300. Jay ·rat , Director Comm ity & Economic Development David H. Ready, Esq., City Manager ATTACHMENTS: 1. Low/Moderate Income Census Block Map Marcus L. Fuller Assistant City Manager 7 Attachment 1 Low/ Moderate Income Census Block Map 8 ✓ I .. ' \ ' ,. -- Legend -Right-of-Way -City Owned Property within LMI Low and Moderate Income Area• -Census block groups 'Nhere over 51% of population is LMI . Facilitv Name A Sunrise Park/Stadium B Skate Park C PS Senior Affordable Aoartments D Police Station Comolex E Visitors Center F Baristo Park G Fire Station #4 H Waste Water Treatment Plant I Demuth Park Communitv Center j I ..,":," -:;,._ " . .. ·~; .. } :::.e. ~ l -tZ: i , ·-,ll •t l ';;::L ..... i i .......