CC 05-02-2023 Item No. 5. FY 2023-24 CDBG, BMR AHF, and General Fund HSG funding agreements_Supplemental Report1
CITY COUNCIL STAFF REPORT
SUPPLEMENTAL 1
Meeting: May 2, 2023
Agenda Item #5
Subject
Fiscal Year (FY) 2023‐24 recommended funding allocations for the Community
Development Block Grant (CDBG) Program, the Below Market Rate (BMR) Affordable
Housing Fund (AHF), and the General Fund Human Services Grant (HSG).
Recommended Action
Recommends that City Council authorizes the City Manager to execute FY 2023‐24 CDBG,
BMR AHF, and General Fund HSG funding agreements.
Background:
Staff’s responses to questions received from Councilmember are shown in italics.
Q1: Please provide the Staff Report page 1 referenced “2020‐2025 Consolidated Plan”
(Councilmember Moore)
The Staff Report for the 2020‐2025 Consolidated Plan is attached.
Q2: What was the result of the multi‐year HUD Audit being worked on in 2022? How
much funding had to be returned? (Councilmember Moore)
The HUD audit is not a part of the agenda for this meeting.
Q3: What is the current fund balance of the following Special Revenue Funds
(Councilmember Moore):
a. 260 CDBG
i. This would be funding 4 a, b, and c below, is that correct?
ii. February 28, 2023, report to Council shows $1,131,803 ending balance
b. 261 HCD Loan Rehab
i. This is for CDBG rehabilitation loans, where are the expenditures
showing for this fund? There are currently no expenditures budgeted for this
program.
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ii. February 28, 2023, report to Council shows $222,300
c. 265 BMR Housing
i. This would be funding 4 e below, is that correct?
ii. February 28, 2023, report to Council shows $5,497,720
The current estimated year‐end fund balance will be presented in the FY 2023‐24 Proposed
Budget, which will be printed by May 5, 2023.
Q4: Please break down the items in the Staff Report following the Budget Units in the
Adopted Budget in the future for clarity (Councilmember Moore):
a. 260‐72‐707 CDBG General Admin
b. 260‐72‐709 CDBG Capital/Housing Projects
c. 260‐72‐710 CDBG Public Service Grants
d. 261 HCD Loan Rehab/CDBG rehabilitation loans
e. 265‐72‐711 BMR Affordable Housing Fund
f. 100‐72‐712 Human Service Grants (This is coming out of the General Fund 100)
The Staff Report has been updated to show the Budget Units in the description for each item,
and the changes are redlined.
Q5: Please connect the CDBG 3 Budget Unit funding in the Staff Report to the $1,131,803
February 28, 2023, fund balance along with the addition of the anticipated $358,910
expected to be received from HUD. There appears to be more unexpended funds than
the Staff Report is showing. (Councilmember Moore)
The FY 23‐24 CDBG Budget table on p. 2 of the Staff Report shows $588,886.28, the amount
of CDBG funding that is available to allocate this year.
The monthly treasurer’s reports present year‐to‐date actuals at a point in time (February 28,
2023). It only includes revenues received and expenditures spent at that point in time.
Q6: The FY 2022‐2023 Adopted Budget shows $155,589 expected expenditures for CDBG
General Admin Budget Unit 260‐72‐707, the estimated Admin cost on page 3 of the
Staff Report is only $73,370.80, what accounts for the decrease? (Councilmember
Moore)
For FY 2022‐2023, $155,589 was the total anticipated expenditure attributed to administering
the CDBG program and covers a portion of staff salaries and benefits. Of that amount, $79,280
was covered by CDBG, and the remaining amount was covered by the General Fund.
HUD regulations establish the maximum percentages that may be allocated to CDBG
administration and public services. Of the total estimated funding, a maximum of 20% may be
used for administrative costs to cover salary and benefits of staff who operate the CDBG
program. For FY 2023‐24, this calculates to $73,370.80. Any remaining costs for CDBG
Administration will come from the General Fund.
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Q7: Can the Homeless Jobs program be funded from CDBG Fund 260 as opposed to the
General Fund under Budget Unit 100‐70‐700? (Councilmember Moore)
The Homeless Jobs program would be classified as a public service activity under CDBG
regulations, and the City is only allowed to spend 15% of its annual CDBG allocation on public
services. For FY 2023‐24, this calculates to $55,028.10. If CDBG funding is moved to the
Homeless Jobs program, then proposed funding amounts for the other organizations will have
to be reduced so that the total amount of public service funding does not exceed the cap.
Q8: The FY 2022‐2023 Adopted Budget shows $8,002,202 in Taxes. Is this correct? The
February 28, 2023, report shows the 265 BMR Housing Fund at $5,497,720 which is
greater than the $4.9 M estimate on page 5 of the Staff Report. If there is an additional
$8M in taxes going to this fund, that brings the total to over $13 M. Can the Staff Report
be updated to better correlate with the fund balance and budget? (Councilmember
Moore)
The FY 23‐24 NOFA was released with the current BMR AHF balance of $5.9 million. A $1
million amount is typically reserved for operational expenses. Thus, $4.9 million is reflected
in the staff report. The BMR AHF is funded primarily by BMR impact fees from
developments. The $8 million additional amount is an estimate from various development
projects once building permits have been submitted.
Attachments Provided with Original Staff Report:
Staff Report
A – FY 2023‐24 NOFA RFP
B – Housing Commission Resolution 17‐02 (CDBG Contingency Plan)
C – FY 2023‐24 CDBG, BMR AHF, HSG Funding Application Summary
Attachment Provided with Supplemental Staff Report:
D. Updated Staff Report
E. 2020‐2025 Consolidated Plan Staff Report 1