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HomeMy Public PortalAbout10) 8A Community Development Block Grant Funds for FY 2019-20AGENDA ITEM 8 .A. COMMUNITY DEVELOPMENT DEPARTMENT DATE: TO: FROM : MEMORANDUM January 15 , 2019 The Honorable City Council Bryan Cook , City Manager Via : Michael D. Forbes , Commun ity Development Director Scott Reimers , Planning Manager By : Adam Gul ick , Associate Planner SUBJECT: COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS FOR FISCAL YEAR 2019-20 RECOMMENDATION: The City Counci l is requested to : 1. Hold a public hearing rega rding the proposed allocation of Community Development Block Grant (CDBG) funds for Fiscal Year (FY) 201 9-20 ; 2 . Authorize the City Manager to amend CDBG-funded program allocations up to 50 pe rcent of the approved allocation as ne cessary throughout the FY ; and 3 . Adopt Resolution 1 9-5379 establish ing the CDBG-funded programs and allocations below for FY 2019-20 (Attachment "A "). The total CDBG Budget for FY 2019-20 includes the estimated allocation of $190 ,000 , unallocated prior years ' funds of $77,429 , and up to $285 ,080 of carryover from FY 2018-19 : i. Housing Rehab ilitation Loan and Handyworker Grant Program : ii. Asbestos Testi ng and Removal Program : ii i. Youth Scholarship Program : Total FY 2019-20 CDBG Budget: BACKGROUND: $425 ,000 $ 99 ,009 $ 28 ,500 $552,509 1 . In 1974 , the CDBG Program was enacted through the Hous ing and Commun ity Development Act of 197 4 . The City has been receiving CDBG funds fr om the Los Angeles County Community Development Commission (LACDC ) since 1974 . City Counci l January 15 , 2019 Page 2 of 5 2 . On June 4 , 2018 , the City was informed of the 2018 income guidelines through a CDBG Bulletin (Attachment "B"). At this time , the 2019 income guidelines have not been released . The City is required to follow the 2018 income gu idelines until further notice . 3. On December 24 , 2018 , a public notice was published in the Temple City Tribune stating the intended CDBG-funded programs and allocations for FY 2019-20 (Attachment "C"). ANALYSIS: The CDBG Program was established with the primary object ive of develop ing v iable communities by creating suitable living environments , maintaining and creating decent housing , and creating and maintaining job opportunities for low-and moderate-income persons . Every city receives an annual CDBG allocation based upon population . Cities in Los Angeles County with a population under 50 ,000 , such as Temple City, rece ive funds through the LAC DC and is referred to as a non-entitlement jurisdiction . CDBG funds can only be used to accomplish certain pre -designated nationa l objectives set forth by this federal program . Specifically , funds need to address slum and blighted conditions , to assist or benefit low-and moderate-income famil ies , to ass ist with emergency conditions (e .g . natural disasters) threatening public health and safety , or to meet the needs of special population groups , such as the disabled or senior citizens . In the past , the City has been able to use CDBG funds for the Hous ing Rehab ili tation Loan Program , the Handyworker Assistance Program , the Youth Scholarsh i p Program , the installation of Americans with Disabilities Act (ADA) approved surfacing for the playgrounds at Temple City Park and Live Oak Park , the installation of ADA ramps at various intersections throughout the City , and ADA imp rovements to publ ic parki ng lots along Las Tunas Drive and Temple City Boulevard . The City is required to allocate $267,429 of CDBG funds for FY 2019-20 . Th is includes the City 's estimated annual allocation of $190 ,000 and $77,429 of unallocated funds carry i ng over from the previous fiscal year and /or prior home improvement loans paid back to the City . In the rare event the City does not expend all of its FY 2018-19 CDBG funds ; the City could have up to an additional $285 ,080 of CDBG funds to use on FY 2019-20 programs . This would result in a total of $552 ,509 of CDBG funds ava ilab le for FY 2019-20 ; however, a more conservative esti mate of CDBG funds ava il able for FY 2019-20 would be $267,429 . Since the actual allocation or carry over funds may be different from the estimates , staff is recommending that the City Counci l authorize the City Manager to adjust the program allocations as needed to reflect the ava i lable funding . The City is requ i red to conduct a public heari ng to solicit input f ro m the community and to ensure that the proposed CDBG Projects meet commun ity needs and HUD guidelines . The City publ ished a notice in the newspaper (Attachment "B") notifying City Council January 15, 2019 Page 3 of 5 the public of the City's intended CDBG programs and allocations for FY 2019-20 . Staff recommends that the programs and relative funding levels for FY 2019-20 , as follows . • Housing Rehabilitation Loan and Handyworker Grant Program: This Housing Rehabilitation Loan Program has been popu l ar in the commun ity since it was established in the mid-1990 's . In FY 2016-17 , the loan and grant program were combined into one program to help streamline projects and reduce administrative work . The Housing Rehabilitation Loan Program provides deferred loans (maximum $35 ,000) to below moderate-income homeowners to make necessary major home repairs and/or correct Building and Zoning Code violations . Since FY 2014-15 , the City has assisted 11 below moderate-income households . A lien recorded on the property requires that the owners pay back their loan if the house is sold , is changed to a rental , or the property is ref inanced . When the loan is paid back , the money is recycled back into the City's CDBG Programs . Due to a significant level of interest in the community , the City brought back the Handyworker Grant Program in FY 2015 -16 . This program a lso assists income- eligible households with necessary and essential home repa irs (max imum $1 0 ,000). The program is geared towards smaller repairs to help improve the qua lity of life , such as : roof repairs or replacement , window rep lacement, painting , stucco , electrical , and plumbing repa irs or replacement. Since FY 2015-16 , the City has issued grants to 14 below moderate-income households . At the time of this report , there are approximately 20 res idents on the waiting list for this program . Staff recommends allocating $425 ,000 or approxi mately 77 percen t of the CDBG funds in FY 2019-20 , which includes $340 ,000 t o assist below moderate- income households with needed repairs and up to $85,000 of program administration costs to cover the City's consultant. • Asbestos/Lead-Based Paint Testing and Removal Program: This ongoing program offers grants to home improvement loan and handyworker grant participants whose homes have tested positive for asbestos and/or lead -based paint. The grant is used to mitigate or abate hazardous cond itions in con j unction with the loan and grant programs ; such abatement is required si nce federa l funds are being utilized . The funds vary based on the number of projects requiring asbestos and/or lead-based paint testing , and required abatement work . Depending on the scope of work, the asbestos and/or lead-based testing can range from $200 to $1 ,000 per residence . If the proposed area of construction tests pos it ive for asbestos and/or lead -based paint, abatement work is required and can cost up to $8 ,000 or more depending on the amount of area being disturbed . Staff recommends that the allocation be $99 ,009 or 18 percent of the CDBG funds for FY 2019-20. This amount would provide for testing and abatement work , if needed , for the households that are assisted through the Housing Rehabilitat ion City Council January 15, 2019 Page 4 of 5 Loan Program and Handyworker Grant Program . The $99 ,009 allocation includes up to $19 ,802 of program administration costs to cover the City's consultant. As with all of the CDBG funded programs , any funds left remaining at the end of the program 's fiscal year would be carried over to the following fiscal year. • Youth Scholarship Program: The Youth Scholarship Program qual ifies as a "publ ic service" program . Under the HUD CDBG guidelines , a max imum of 15 percent of the annual CDBG allocation can be used for public serv ice programs . This is an ongoing program enabling Temple City youth under the age of 18 to participate in various City -sponsored recreation activities . The scholarship amount covers a portion of the recreation activity fee for members of eligible households . For youths from extremely low-and low-income households , the scholarship would cover 75 percent of the fee . This is the most utilized CDBG program in the City , which typically expends all of the program funds by April or May of the program 's fiscal year. The program issues approximately 75 to 1 00 scholarships each fiscal year. Staff recommends that the allocation be $28 ,500 or 5 percent of the CDBG funds for FY 2019-20 ; however, this program is limited to 15 percent of the C ity's annual allocation. • One-Time Program or Project: The City Council pre viously expressed intere st in e stablishing an economic development program ut il izing CDBG funds . Such programs typically involve loans to new or expanding small businesses , w ith such businesses required to create new jobs for low-income employees . The prog rams must operate within the strict guidelines set by HUD , including ongoing city monitoring of job positions and hiring practices . Since Temple City is a non -entitlement city , any program would also have to be approved by LAC DC and comply w ith LACDC 's own requ i rements . Given these challenges , only a few non-entitlement cities in Los Angeles County have used CDBG funds for economic development, with varying leve ls of success . Out of the 47 cities participating in the Los Angeles Urban County Consolidated Plan , Claremont is currently the only city with a CDBG -funded economic development program . Claremont's program provides forg ivable loans to new or expanding bus inesses . Businesses must create one new permanent, full -time equivalent position for every $25 ,000 in funding, which must be filled by an employee from a low-income household . The City of Covina previously offered a small business loan program but found that most of the bus ines se s funded through the program c losed within a few years, and that interest in the program had declined . As such, the Covina City Council decided to use CDBG funds for other programs beginning in FY 2016-17 . The City of West Covina uses CDBG funds for a business loan program , but has additional flexibility to administer the program as an entitlement city. City Council January 15 , 2019 Page 5 of 5 Temple City 's current CDBG programs help to preserve existing affordable hous ing by repair i ng and ma i ntaining housing units owned and occupied by households below the moderate-income level. This is one of the goals of the City's 2014-2021 General Plan Housing Element, with the aim to rehabilitate at least 24 single-family properties during the eight-year term of the Housing Element. If the City re duces funds available for the home improvement program , an alternative funding source would be needed to keep the program operating to meet this goal. Further, the ongoing success of the housing rehabilitation programs has allowed the City to meet its annual funding drawdown requirement to avoid having funds recaptured by LACDC . Shifting this funding to an economic development program where the level of interest and program success is unknown could result in the City being unab le to meet drawdown requirements in future years . If the Cit y Council wishes to move forward w ith an economic development program , it would need to be brought back at a future City Counci l meetin g . The City could create an out-of-cycle program that does not coincide with the fiscal year. Any such program would have to be developed and adm inistered in a manner consistent with all LACDC and HUD prog ram requirements . CITY STRATEGIC GOALS : Approval of the CDBG Allocations for FY 2019-20 will further the City's Strategic Goals of Publi c Health and Safety, Quality of Life, and Eco nomic Development. FISCAL IMPACT: This action will impact the FY 2019-20 City Budget by designating an estimated $552,509 worth of CDBG funds as follows : Housing Rehabilitation Loan and Handyworker Grant Program : Asbestos Testing and Removal Program : Youth Scholarship Program : Total $425 ,000 $ 99 ,009 $ 28,500 $552 ,509 The programs are funded entirely with CDBG funds , so there 1s no impact on the General Fund . ATTACHMENTS: A. Resolution 19-5379 B. CDBG Bulletin 18-0008-2018 CDBG Incom e Guidelines C. CDBG FY 2019-20 Public Hearing Notice , Temple City Tribune , December 20 , 2018 ATTACHMENT A RESOLUTION NO. 19-5379 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMPLE CITY, CAUFORNIA, APPROVING THE CITY 'S PRC>POSED COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAMS FOR FISCAL YEAR 2019-2020 WHEREAS, in 1974, the President of the United States signed into law the Housing and Community Development Act of 1974 (Act); and WHEREAS, the primarily goals of Title I of Act are to develop a viable urban communities by providing decent housing and suitable living environment, and expanding economic opportunities for persons of low and moderate income; and WHEREAS, the City of Temple City has participated in the Community Deve lopment Block Grant (CDBG) with the County of Los Angeles for severa l years; and WHEREAS, the City of Temp l e City desires to partic i pate with the Lo s Angeles Urban County CDBG Program for Fiscal Year 2019-2020; and WHEREAS, the City of Temple City has been notified of the availabi lity of an estimated $267,429 of CDBG funds for Fiscal Year 2019 -2020, an al l ocation of $190,000 and $77,429 of una llocated funds. The City of Temp le City could have up to an additiona l $285,080 depending on the final expenditures for Fiscal Year 2018 -2019, for a total of $552 ,509; and WHEREAS, on December 24, 2018, a publ ic notice was published in the Temple City Tribu ne statin g the intended CDBG -funded programs for FY 2019-2020; and WHEREAS, on January 15, 2019, the City Counci l of the City of Temple City conducted a public hearing to so lic it comments and suggestions form the community for the utilization of these funds . NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF TEMPLE CITY, CAUFORNIA AS FOLLOWS: SECTION 1 . The City Council finds that al l the facts set forth in the Rec ita ls of th i s Resolution are true and correct. SECTION 2. That the Mayor, City Manager or their designee are authorized and directed to submit the City's fina l Planning Summary for Fiscal Year 2019 -2020 to the County of Los Ange les , reflecting the funding allocations set forth herein. Shou l d the City's final allocation be less or more Reso lution No. 19-5 379 Page 2 of 3 than the, the City Manager i s authorized to mod ify each program up to 150 percen t of the figures li sted below: Progra m Name HUD Activity Propose Use of Funds Proposed Allocat ion Hous i ng Lo w/Moderate Provides deferred loans ($35 ,000) and $425,000 Rehabilitation Hou sing grants ($10,000) to income qualified Loan and sing l e-fam i ly household s to correct cod e Handywor ker vio lations and /or to provide decent, safe , Grant Program and sanitary housing in Te mpl e City. Asbestos Testing Lo w/Moderate Provides grants to qualified low-an d $ 99,009 and Removal Housing moderate-i ncome households Prog ram participating i n the home improvement program to test an d abate asbestos and/or l ead -base d pa int. Youth Scholarship Pr ovid es scholarships to ch ild ren ages 17 $ 28,500 Program ye ars old and younge r in bel ow moderate-i ncome families allowing them to participate in vari ous recrea tion cla sses/activi ti es offered b y t he City's Pa rks an d Recreation Department. SECTION 1 . The Cit y Cler k sha l l cert ify to th e passage and adoption of th i s resolution . PASSED , APPROVED , AND ADOPTED t his 151h day of January, 2019. Wi lli am Man, M ayor ATTEST : APPROVED AS TO FORM : Peggy Kuo , City Clerk Eric S. Vail, City Attorney Resolution No. 19-5379 Page 3 of 3 I, Peggy Kuo, City Clerk of the City of Temple City, hereby certify that the foregoing Resolution No. 19-5379 was adopted by said Council at the regu lar meeting held on the 15 1h day of Janua ry 2019, by the fol lowing vo te : AYES: NOES : ABSENT: ABSTAIN : Council member - Councilmember- Council member - Councilmember- Pegg y Kuo, City Clerk ATTACHMENT B LOS ANGELES COUNTY 6. @ GMU BULLETIN COMMUNITY DEVELOPMENT COMMISSION /HOUSING AUTHORITY • 700 W. Main Street • Alhambra • California 9180 1 NUMBER : CDBG18-0008 FRHS18-0001 BFH18-0001 SUBJECT : 2018 INCOME GUIDELINES DATE : June 4, 2018 IMMEDIATELY EFFECTIVE DATE: TO: PARTICIPATING CITIES COMMUNITY-BASED ORGANIZATIONS OTHER PUBLIC AGENCIES COUNTY DEPARTMENTS CDC DIVISIONS 1 2 PAGE OF The 2018 income guidelines (effective June 1, 2018) for use in Community Development Block Grant (CDBG), Bringing Fa mili es Home (BFH), and Fam i ly Reunification Housing Subsidy (FRHS) programs are listed below. These guidelines should be used to determine comp liance w ith each program's objective of providing benefit t o income-eligibl e persons. They are also used in determ ining eligibility for the Public Housing and Section 8 Programs and are effective until a new sched ul e is issued . The CDBG Program defines ann ual income acc ord ing to the Section 8 Housing Assistance Payments Program , thus we are subject to the def inition of "Ext re mely Low-Income," per the 2014 Consolidated Appropriations Act. Sin ce the 30 % Average Median Income (AMI ) limits are not the same as the "Extremely Low-Income" limits, th e CDBG Program must use the incom e guidelines, as outl ined below . 2018 INCOME LIMITS Number of Persons Extremely Low-Income Low-In come Moderate-Income 1 $20,350 $33 ,950 $54 ,250 2 $23,250 $38,800 $62 ,000 3 $26,150 $43,650 $69 ,750 4 $29,050 $48,450 $77,500 5 $31,400 $52 ,350 $83 ,700 6 $33 ,740 $56 ,250 $89,900 7 $38,060 $60 ,100 $96,100 8 $42,380 $64,000 $102,300 Please note that the 2018 median family income for Los Angeles County is $69 ,300. Comm u nity Development Division-Grants Management Unit (CDD-GMU} Putting Do lla r s In to Action Participating Agencies June 4, 2018 Page Two These guidelines refer to the terms in determin ing income levels for the above-mentioned programs. In order to clar ify any misunderstanding from the differences in terms between the Pub lic Housing, Section 8 , CDBG , BFH, and FRHS Programs , the following is provided for your information : COMPARISON OF TERMS IN DETERMINING INCOME LEVELS BFH & FRHS CDBG SECTION 8 % OF MEDIAN Extremely Extremely Extremely Equal to or Low-Income Low-Income Low-Income less than 30% Not Eligible Low-Income Very 31% to 50% Low-Income Not Eli ible Moderate-Income Low-Income 51 % to 80% For all agencies utilizing CDBG -approved Public Service Self-Certification Forms , please be sure to incorporate these revised income gu idelines into your forms immediately (the Public Service Self-Certification Form does not apply to the BFH and FRHS Programs). Should you have any questions, please contact your Program Manager. SCOTT STEVENSON, Director Commun ity Development Division SS :OV:BT·JSB:rb K:IGMU COMMON\BULLETINS (Work ing File· WORD Verslo n)ICDBG\2018\20181ncome Guidc lines.docx ATTACHMENT C CITY OF TEMPLE CITY PUBLIC HEARING NOTICE COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS FOR FISCAL YEAR 2019-2020 Notice is hereby given that the City Council of the City of Temple City will consider the use of Community Development Block Grant Funds for Fiscal Year (FY) 2019-2020 at their meet ing of January 15 , 2019 , at 7 :30 p .m . in the C ity Council Chambers of the C ity Hall , located at 5938 Kauffman Avenue , Temple City . Community Development Block Grant (CDBG) Funds must be used to achieve the stated national objectives of this Department of Housing and Urban Development (HUD) program . Specifically, these available Federal-Government funds must be used to eliminate slum and blight conditions , assist low and moderate-income households, address "spot blight", emergency purposes , or to meet the needs of special population groups , such as the disabled . The City of Temple City is anticipated to have an allocation of $190 ,000 and an additional $7 7 ,429 of unallocated prior years ' funds available for FY 2019-2020 , for a total of $267,429 . If all of the FY 2018-2019 CDBG funds are not expended by June 30 , 2019, the City could have up to an add itional $285 ,080 of CDBG funds available for FY 2019-2020 . That would result in a total of $552 ,509 of CDBG funds available for FY 2019 -2020 . The recommended CDBG programs may include but are not lim ited to -Housing Rehabilitation Program ; Lead and Asbestos Testing and Removal Program ; Youth Scholarship Program ; Park Construction Project; and Tree Planting Project. The above-enumerated amounts are based upon preliminary estimates from HUD and actual amounts to be expended may be modified as part of the City 's budget process to reflect the availability of funds . The approved CDBG projects and accompanyi ng budget will be submitted to the County of Los Angeles Community Deve lopme nt Commission for inclusion in its application to HUD . Any interested persons wishing to provide input on housing and community development as it relates to the use of the 2019-2020 CDBG funds may contact the Community Development Departm e nt at City Hall by phone (626) 285-2171 . Written comments may also be submitted to : City of Temple City Community Development Department , 9701 Las Tunas D rive , Temple City , CA 91780. Comments will be received through January 15 , 2019 . Published : Temple City Tribune Date : December 24 , 2018 Peggy Kuo City Clerk