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101-Staff Report.pdf
COMMUNITY DEVELOPMENT DEPARTMENT CITY HALL 1010300TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408)777-3308www.cupertino.org CITYCOUNCILSTAFFREPORT Meeting:April 5, 2011 Subject CommunityDevelopmentBlockGrant(CDBG)funds,HumanServicegrants,andFY2011Annual ActionPlan RecommendedAction ConductpublichearingandcontinuefinalapprovalofthefundingallocationsandFY2011Annual ActionPlanto May 3 tocompletethe 30-dayreview period. Description Thisisthefirstoftworequiredpublichearingsregardinguseof2011-12CDBGfunds,HumanService grants,andtheFY 2011 AnnualActionPlan. Discussion CDBGProgram TheCityofCupertinoisexpectingtoreceiveaCDBGentitlementofapproximately$422,719forfiscal year2011-12,plusareallocationof$10,300inprojectedprogramincomefromrehabilitationloanpayoffs foratotalof$433,019.Sincethefederalbudgethasnotbeenapproved,thisentitlementmaybereduced priortotheJulyallocationsinwhichcasetheCity’sAffordableHousingFund(fundedbyBMRfees)will beusedtomaketheconstructionprojectswhole.Adetaileddiscussionisprovidedlaterinthisreport. However,thepublicserviceagenciescouldseeareductioninfundingbecauseofthe15%caponpublic serviceagencyfunding pertheDepartment ofHousingandUrbanDevelopment(HUD)regulations. ThisisCupertino’sninthyearasanentitlementjurisdictionreceivingtheCDBGgrantdirectlyfromHUD andthesecondyearofatwo-yearpublicservicefundingcycle.HUDregulationsrequirethatprojects selectedforfundingbenefitverylowandlow-incomehouseholds,eliminateablightedarea,oraddressan urgent(emergency)communityneed.Inaddition, onlycertaintypes ofactivities qualify undertheCDBG regulations. Examples ofeligibleactivitiesare: ·Removal of barrierstothe handicapped·Propertyacquisitionforaffordable housing ·Publicimprovements ·Rehabilitation ofaffordable units ·Public serviceactivities ·Affordable housing developments Ofthe$433,019(entitlementplusprogramincome),only20%,or$86,604,maybeusedfor administrationoftheprogramandfairhousingservicesand15%,or$64,952,maybeusedtofund publicserviceactivities.Publicserviceactivitiesmustbenefitverylowandlow-incomehouseholds andincludeactivities suchaschildcare, placement services, seniorlegal services,etc. Theremainderofthegrant($281,463)canonlybeusedforactivitiessuchasthepurchaseoflandfor affordablehousing,rehabilitationofqualifyingunits,constructionofaffordableunitsandpublic April5,2011Page2of4 CommunityDevelopmentBlockGrant(CDBG)funds,Human Servicegrants,and FY2011AnnualActionPlan improvementsinlowandvery-lowincomeneighborhoods.AttachmentBprovidesasummaryofthe fundingallocations. Asmentionedearlier,thisisthe secondyear ofthetwo-year public servicefundingcycle.InFebruary 2008,theCityCouncilvotedtomovetoatwo-yearfundingcycletoreducethelengthofpublic hearingsandreducetheamountoftimenon-profitagenciesspendpreparingapplicationsforfunding. AlthoughtheCityCouncilmaderecommendationsforfundingpublicserviceagenciesandhuman servicegrantfundinglastyear,annualpublichearingsarerequiredbyHUDtoreviewtheAnnual Planandfinalizetheallocations.Publicserviceandhumanserviceagencieswerenotrequiredto completeafundingapplicationormakepresentationsathearingsthisyear.Also,insteadofstaff preparinganewagreementfornextyear’sfunding,aone-pageamendmenttolastyear’sagreement willbepresentedtoeachagencywiththeamendeddatesanddollaramounts.Thisprocesssaves significant stafftimefor boththeCityandeach non-profitagency. RequestforProposals: ThisisCupertino’ssecondyearutilizinganon-lineRequestforProposal(RFP)andapplication process.Staffplacedapublicnoticeinthelocalpapernotifyingpotentialapplicantsofthefunding availabilityanddirectingtheagenciestotheCitywebsitewheretheyreceivedinstructionsonhowto accessthewww.citydataservices.comwebsite. CupertinoHousingCommission: OnMay18,2010,theCityCouncilapprovedarevisedCitizenParticipationPlanaspartofits2010- 2015ConsolidatedPlan.PriortoexpendingCDBGdollars,theCityisrequiredtohaveaCitizen ParticipationPlan,ConsolidatedPlanandanAnnualPlaninplace.AspartoftherevisedCitizen ParticipationPlan,theCitydeclaredthattheCupertinoHousingCommissionwouldserveasthe advisorybodyonCDBGmatters.TheHousingCommission’sresponsibilityistomake recommendationsonpolicy,evaluateproposalsreceivedandmakefundingrecommendationstothe CityCouncil. OnMarch10,2011,theHousingCommissionmetandconductedapublic hearing on theFY 2011-12 CDBGandHumanServicefundingallocations. TherecommendationsfromtheHousingCommission arelisted below: §CDBG Public ServiceGrants: ThepublicserviceportionoftheCDBGentitlementislimitedto15%oftheentireentitlement plusprojectedprogramincome.Asmentionedearlier,thisisthesecondyearofatwoyear fundingcycle.Allpublicserviceandhumanservicegrantswillberenewedforthesameamount asallocatedlastyear.Thisincludesageneralfundallocationof$40,300.Ifthefederalentitlement should decrease,all public serviceagencygrantswillexperiencea prorata decreaseinfunding. §CDBGConstruction/Acquisition/Rehabilitation: Unlikethefundingforpublicserviceandadministrativeactivities,thepercentageoffundingused forcapitalimprovements,construction,acquisitionandrehabilitationisnotlimitedtoaspecific percentageofthetotalfunding.ItencompassesthelargestpercentageoftheCDBGentitlement. Thisyear,staffreceivedtwofundingproposalsforthisfundingsource.TheCommissionheard April5,2011Page3of4 CommunityDevelopmentBlockGrant(CDBG)funds,Human Servicegrants,and FY2011AnnualActionPlan presentationsfromtwoapplicantsandrecommendedthattheCityCouncilfullyfundboth agencies. RebuildingTogetherSiliconValleysubmittedarequestfor$60,000tocontinueitsprogramof makingminorhomerepairsforlowandverylowincomeCupertinohomeowners.Theallocation wouldallowtheagencyto serve 5-8eligibleCupertino households. SeniorHousingSolutionsisrequesting$196,195forthefinalphaseofthePriceAvenue congregateseniorhome.Allexteriorworkonthehomeandfiftypercentoftheinteriorworkhas beencompleted.Theadditionalfundingwouldpayforcabinets,countertops,finishedwalls, appliancesandflooringinthe home. §General Fund AllocationforHuman ServiceGrants: EveryyeartheCityCouncilallocatesapproximately$40,000fromtheGeneralFundtohuman serviceagencies.Formalagreementsandmonitoringarerequiredforthisprogram,butthe requirementsarelessstringentthanforfederalfunding.TheHousingCommissionreviewsthe allocationsatthesametimeastheCDBGallocationsandmakesrecommendationstotheCity Council.TheHumanServiceGrantallocationsareonatwo-yearfundingcyclesimilartothe CDBGpublicservicegrantcycle.AswiththeCDBGpublicservicegrantstheagencieswill receivethesameamountasapprovedlastfiscalyear.Iffundsdecreaseduringthesecondyear citybudgetcycle,eachagencywouldbeaffectedproportionately.Theseagencieswillalso receivea one-pageamendmenttolastyear’sagreement. §AffordableHousing Fund: Staffalsoproposesa$75,000allocationtoWestValleyCommunityServicesfromtheAffordable HousingFundforadministrationandmonitoring oftheBelow MarketRate(BMR)Program units. TheAffordableHousingFundreceivesitsrevenuefromthepaymentofhousingmitigationfees from office,commercialandindustrial developments. FY 2011-12AnnualActionPlan: FederalregulationsrequirethateachentitlementjurisdictionprepareanAnnualActionPlanand th submittheplantotheregionalHUDofficenolaterthanMay15ofeachyear.TheAnnualAction Planisaone-yearplanwhichdescribestheeligibleprograms,projectsandactivitiestobeundertaken withfundsexpectedduringtheprogramyear(FiscalYear2011-2012)anditsrelationshiptothe priorityhousing,homelessandcommunitydevelopmentneedsoutlinedintheapprovedConsolidated Plan.Furthermore,Federalregulationsrequiretheplanbemadeavailablefor30daysforpublic reviewandcomment.TheFY2011-2012AnnualActionPlan(AttachmentA)wasreleasedfor publicreviewonMarch11,2011forthe30-dayreviewperiod.Anoticewasplacedinthelocal paperinformingthepublicofitsavailability.OnMay3,2011,theCityCouncilwillholdafinal public hearingtoapprovetheAnnualActionPlanfor submittaltoHUD. Fiscal Impact CDBG Funds TheCity ofCupertinoisexpectingtoreceive $422,719 forfiscalyear 2011-12, plusareallocation of $10,300in projected programincomefromrehabilitationloan payoffsforatotal of $433,019.Since April5,2011Page4of4 CommunityDevelopmentBlockGrant(CDBG)funds,Human Servicegrants,and FY2011AnnualActionPlan Congress has notapprovedthe 2011 Federal budget,any decreaseintheCity’sentitlementwill be reflectedina proportional decreasetoall public serviceagencies.SinceRebuilding TogetherSilicon ValleyandSeniorHousingSolutionswill qualifyforAffordableHousingFunds, staff proposesto make up any decreaseinCDBGfundingthroughthesefunds. AffordableHousing Funds TheAffordableHousingFundreceivesrevenuefromanyBMRfees paid by developers ofresidential, office,commercial, or hotel. Thesefeesareaccumulatedand usedforthecreation of newaffordable housing unitseitherthrough newconstruction or substantialrehabilitation.Currently,thefund has approximately $600,000 availableforallocation.Ofthe $600,000, atotal of $75,000 has been set- asideforWVCSadministration oftheBMR programforFY 2011-12leavinga balance of $525,000. General Funds TheFY2011-12allocationfor public serviceand human servicegrantsis proposedat $40,300. This amountwasapproved bytheCouncilin 2010 as part ofthetwo-yearfundingcycle. _____________________________________ Prepared by:VeraGil,SeniorPlanner Reviewed by:AartiShrivastava,Director ofCommunityDevelopment ApprovedforSubmission by:DavidW.Knapp,City Manager Attachments: AttachmentA:FiscalYear 2010-11AnnualActionPlan AttachmentB:Summary ofFundingAllocations AttachmentC: 2010-11CDBGFundingApplications