HomeMy Public PortalAbout13) 9B Establish New CDBG Programs Resulting from Funds Resulting From Corononavirus Aid.AGENDA
ITEM 9.B.
COMMUNITY DEVELOPMENT DEPARTMENT
MEMORANDUM
DATE: May 19, 2020
TO: The Honorable City Council
FROM: Bryan Cook, City Manager
Via: Scott Reimers, Interim Community Development Director
By: Adam Gulick, Associate Planner
SUBJECT: ESTABLISH NEW COMMUNITY DEVELOPMENT BLOCK GRANT
PROGRAMS RESULTING FROM FUNDS RESULTING FROM THE
CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT AND
REALLOCATING CDBG FUNDS DESIGNATED FOR FY 2020-2021
RECOMMENDATION:
The City Council is requested to:
1.Direct city staff on which program options should be used to establish the Temporary
Rental Assistance Program and, or the Small Business Assistance Program;
2.Give the City Manager direction on which programs to fund and how much funds to
allocate to each program and issue a corresponding public notice allocating the
$123,206 of Community Development Block Grant (CDBG) funds, received from the
Coronavirus Aid, Relief, and Economic Security (CARES) Act;
3.Give the City Manager direction on which programs to fund and how much of the
$346,594 of the fiscal year (FY) 2020-2021 CDBG funds to allocate to each
program, allocate $31,000 of the FY 2020-2021 CDBG funds for the Youth
Scholarship Program, and issue a corresponding public notice;
4.Authorize the City Manager to amend CDBG-funded program allocations up to 50
percent of the approved allocation as necessary throughout the FY; and
5.Direct staff to return with a recommendation on further modifying the new CDBG
programs by appropriating unused funds from FY 2019-2020 CDBG programs, and
any housing rehabilitation loans paid back so as to provide additional relief related to
the COVID-19 pandemic.
City Council
May 19, 2020
Page 2 of 6
BACKGROUND:
1. On January 21, 2020, the City Council held a public hearing regarding the proposed
CDBG programs and allocations for FY 2020-2021 (Attachment “A”).
2. On March 4, 2020, Governor Newsom declared a State of Emergency in response to
the COVID-19 pandemic.
3. On March 13, 2020, the President of the United States declared a national state of
emergency due to the COVID-19 outbreak. On this same day, the City Council
adopted Resolution No. 20-5457, declaring a local state of emergency.
4. On March 27, 2020, President Trump signed into law the CARES Act, which
includes $5 billion in additional CDBG funding to prevent, prepare for, and respond
to the COVID-19 pandemic. The Los Angeles Urban County has been allocated
$13,668,315, which is based on the existing formula used to distribute CDBG funds
for FY 2020-2021.
5. On April 7, 2020, the Los Angeles County Development Authority (LACDA) issued a
Grants Management Unit Bulletin (Attachment “B”) informing participating cities that
they will receive additional CDBG funds as a result of the COVID-19 pandemic;
Temple City will receive $123,206. The bulletin also provides guidance on enhancing
existing common CDBG programs and potential new programs to assist the
community relating to the COVID-19 pandemic.
6. On April 14, 2020, the LACDA announced a public-private partnership bringing $28
million to LA County for a COVID-19 Relief Fund. The purpose of the COVID-19
Relief Fund is to assist hundreds of small businesses (under 25 employees) and
non-profits with critical funding in Los Angeles County.
7. On May 5, 2020, the City Council discussed potential options that the new CDBG
funds resulting from the CARES Act could be used on. The City Council directed
staff to provide additional information related to the Temporary Rental Assistance
program and Emergency Small Business Assistance program.
ANALYSIS:
The following are options for the City Council to consider in establishing the new programs
that would assist low-income residents renting in Temple City and business owners with
employees that are low-income:
City Council
May 19, 2020
Page 3 of 6
Temporary Residential Rental Assistance Program:
The goal of the CDBG program is to develop viable urban communities by providing
decent housing and a suitable living environment, and by expanding economic
opportunities, for low- and moderate-income persons. Therefore, programs funded
by CDBG funds must be limited to assisting households that are below the
moderate-income limits established by HUD. This program will specifically target
households that have been laid off – temporarily or permanently - due to COVID-19.
The County of Los Angeles initially announced that their rental assistance program
would provide rental assistance of $1,000 for three months, but it now appears that
the amount will be determined by program staff. Staff has provided Attachment “B”,
which is the 2020 household income guidelines established by HUD. After studying
HUD guidance and programs in other jurisdictions, staff has provided a few options
on below for City Council to consider relating to eligibility and amount of rental
assistance.
Proposed Household Eligibility Requirements:
1. Tenants must live within the city limits.
2. Annual household income cannot exceed the Low-Income limits established by
HUD. The eligibility is determined by the number of persons residing in the
household and the total annual household income, including persons over 18
years old.
3. Annual household income cannot exceed the Moderate-Income limits established
by HUD. The eligibility is determined by the number of persons residing in the
household and the total annual household income, including persons over 18
years old.
4. Tenants must demonstrate that they have been impacted during the COVID-19
pandemic period beginning March 20, 2020 to present.
5. Tenants must be able to provide current lease agreement with the landlord.
6. Household cannot receive any other forms of rental subsidies.
7. Complete W -9 form provided by a bona fide landlord, property management agent
or company.
8. A program participation-payment acceptance form from a bona fide landlord,
property management agent or company.
Amount of Rental Assistance:
Below are some options the City Council could consider if all the CDBG funds were
spent on this program. The number of businesses assisted in the table below is
based on $469,800 of available funds, $123,206 from the CARES Act and $346,594
currently programed for FY 2020-2021.
City Council
May 19, 2020
Page 4 of 6
Option
Amount of Assistance
per Month for 3 months Income Limit Number Assisted
A* $1,000 Low 156
B* $500 Low 313
C* $1,000 Low 78
$500 Moderate 156
D
Accept applications until a certain date. The amount of rental
assistance would be based on the number of qualified applicants,
either using one of the amounts above or equally dividing the number
of qualified applications by the programmed budget.
* Establish a lottery system if the number of applicants exceed the number of parties that
can be assisted.
The City has the option to use a portion of the program budget to pay for City staff
(salaries and benefits) working on the program. The CDBG program allows a city to
use up to 20 percent of the program’s budget for administrative costs. This could
pay up to $93,960 towards staff or consultant costs, leaving $375,840 for rental
assistance.
Small Businesses Assistance Program:
The goal of the CDBG program is to develop viable urban communities by providing
decent housing and a suitable living e nvironment, and by expanding economic
opportunities, for low- and moderate-income persons. Therefore, programs funded
by CDBG funds must be limited to assisting households that are below the
moderate-income limits established by HUD. This program will specifically target
small (25 employees or less) and micro (five employees or less) commercial
businesses that have had to shut down or have reduced their employee’s hours due
to COVID-19. After studying HUD guidance and programs in other jurisdictions, staff
has provided a few options below for City Council to consider relating to eligibility
and amount of assistance.
Proposed Business Eligibility:
1. Business must be a small or micro business located in the city limits.
2. Business must have an active business license prior to the declaration of a local
emergency.
3. Business must have a physical location in a non-residential zone.
4. Must be structured as a sole proprietorship, partnership, corporation, S corporation
(S subchapter) or limited liability company (LLC). Individuals who are self-
employed are also eligible to apply.
City Council
May 19, 2020
Page 5 of 6
5. Payday loan businesses, liquor and tobacco stores, pawn shops, firearm or other
weapons dealers, adult entertainment, passive real estate investments, or home -
based businesses are not eligible.
6. Grant funds may only be used by awardees for working capital expenses that
include (but not necessarily limited to): employee salaries, general operating
expenses (rent or utilities), inventory, and advertising/marketing expenses.
7. Currently employ and retain at least one person that does not exceed the
moderate-income limit. Or in case of staff turnover, have identified that the
position will be filled by a moderate-income or below person and demonstrate
without the assistance from the City the job would be lost.
8. Have or register for a Data Universal Number System (DUNS) number, with a
unique nine-character number used by the federal government to identify an
organization.
Amount of Business Assistance:
Below are some options the City Council could consider if all the CDBG funds were
spent on this one program. The number of businesses assisted in the table below is
based on $469,800 of available funds, $123,206 from the CARES Act and $346,594
currently programed for FY 2020-2021.
Option Grant Amount Limited to at Least
One Employee
Number of Businesses
Assisted
A* $10,000 Below moderate-
income level 46
B* $7,500 Below moderate-
income level 62
C* $5,000 Below moderate-
income level 93
D Divided by number of
qualified applicants
Below moderate-
income level
Depends on number of
qualified applicants
*Develop a lottery system to award grants to qualified businesses if the number of applications
exceed the number of businesses that can be assisted.
The City has the option to use a portion of the program budget to pay for City staff
(salaries and benefits) working on the program. The CDBG program allows a city to
use up to 20 percent of the program’s budget administrative costs. This could pay
up to $93,960 towards staff or consultant costs, leaving $375,840 for assisting
businesses.
City Council
May 19, 2020
Page 6 of 6
CITY STRATEGIC GOALS:
Approval of the CDBG programs will further the City’s Strategic Goals of Qualify of Life
and Economic Development.
FISCAL IMPACT:
This action will require an amendment to add $123,206 to the CDBG revenue and
expenditure budget for FY 2019-2020 to establish the Temporary Rental Assistance
Program. The new COVID-19 CDBG funds resulting from the CARES Act will be
entirely funded using CDBG funds.
Additionally, an amendment to move $346,594 of FY 2020-2021 CDBG funds to the
CDBG revenue and expenditure budget for FY 2019 -2020 to establish the Small
Business Assistance Program and, or the Temporary Rental Assistance Program.
There will be no impact to the General Fund for both amendments, as CDBG funds are
reimbursed from LACDA.
ATTACHMENTS:
A. City Council Staff Report dated May 5, 2020, CDBG funds from the CARES Act
B. LACDA Bulletin 2000-08, 2020 Income Guidelines
COMMUNITY DEVELOPMENT DEPARTMENT
MEMORANDUM
DATE: May 5, 2020
TO: The Honorable City Council
FROM: Bryan Cook, City Manager
Via: Scott Reimers, Interim Community Development Director
By: Adam Gulick, Associate Planner
SUBJECT: ADDITIONAL COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS
RESULTING FROM THE CORONAVIRUS AID, RELIEF, AND
ECONOMIC SECURITY ACT
RECOMMENDATION:
The City Council is requested to:
1. Direct the City Manager to issue a public notice and allocate $123,206 of Community
Development Block Grant (CDBG) funds that the City will receive as part of the
Coronavirus Aid, Relief, and Economic Security (CARES) Act.
2. Direct staff to return before the end of fiscal year (FY) 2019-2020 with a
recommendation on modifying the CDBG programs for FY 2020-2021 to provide relief
related to the COVID-19 pandemic.
BACKGROUND:
1. On January 21, 2020, the City Council held a public hearing regarding the propos ed
CDBG programs and allocations for FY 2020-2021 (Attachment “A”).
2. On March 4, 2020, Governor Newsom declared a State of Emergency in response to
the COVID-19 pandemic.
3. On March 13, 2020, the President of the United States declared a national state of
emergency due to the COVID-19 outbreak. On this same day, the City Council
adopted Resolution No. 20-5457, declaring a local state of emergency.
4. On March 27, 2020, President Trump signed into law the CARES Act, which includes
$5 billion in additional CDBG funding to prevent, prepare for, and respond to the
City Council
May 5, 2020
Page 2 of 6
COVID-19 pandemic. The Los Angeles Urban County has been allocated
$13,668,315, which is based on the existing formula used to distribute CDBG funds
for FY 2020-2021.
5. On April 7, 2020, the Los Angeles County Development Authority (LACDA) issued a
Grants Management Unit Bulletin (Attachment “B”) informing participating cities that
they will receive additional CDBG funds as a result of the COVID-19 pandemic;
Temple City will receive $123,206. The bulletin also provides guidance on enhancing
existing common CDBG programs and potential new programs to assist the
community relating to the COVID-19 pandemic.
6. On April 14, 2020, the LACDA announced a public-private partnership bringing $28
million to LA County for a COVID-19 Relief Fund. The purpose of the COVID-19 Relief
Fund is to assist hundreds of small businesses (under 25 employees) and non-profits
with critical funding in Los Angeles County.
ANALYSIS:
The City can spend an additional $123,206 of CDBG funds on expenses related to COVID-
19. The following provides information and some analysis on different options on the use of
these funds. As a non-entitlement City, Temple City is required to follow the guidelines and
programs set forth by the LACDA for use of CDBG funds. As described in the bulletin, the
first three programs outlined would be new CDBG programs and the last three options would
make use of the City’s existing CDBG programs. The details of any new program would still
have to be developed and are presented to give the City Council options to consider in using
this specific allocation of funds.
Temporary Rental Assistance Program (new program):
LACDA’s bulletin mentions establishing a housing subsidy program to assist low-
income households that have been laid off – temporarily or permanently - due to
COVID-19. The County of Los Angeles is offering a related program which offers
$1,000 per month for three months to renters who have lost income due to COVID -
19. The target population would be individuals working in the non-essential industries,
such as gyms, nail salons, barbers, retail stores, hotel/lodging, or entertainment
businesses. Recipients would need to demonstrate their income is within certain
household income limits.
Establishing a temporary housing subsidy program would assist low-income residents
that face unemployment, food insecurity and housing instability as a result of COVID-
19 closures. There is some assistance and protections already in place. Stimulus
checks are in the process of being issued by the federal government. City Council
approved an urgency ordinance prohibiting evictions and allowing tenants up to six
City Council
May 5, 2020
Page 3 of 6
months to pay delinquent rent. This does not forgive unpaid rent, only defers payment.
The number of households that would need assistance is unknown until if approved a
City would advertise the program.
COVID-19 Drive-Up Mobile Testing (new program):
LACDA’s bulletin includes the creation of various programs relating to health care
training and activities, which includes providing testing at a fixed or mobile location.
The City of Baldwin Park is using a portion of their COVID-19 CDBG funds to partner
with Baldwin Park Unified School District and a third -party contractor to operate a
drive-up COVID-19 mobile testing site. An appointment is required for the COVID-19
test and priority is given to residents and employees of Baldwin Park businesses who
are showing symptoms, who are 65 years of age and older, who are low income, and
who do not have health insurance. The City of Alhambra will also be using a portion
of their COVID-19 CDBG funds on a drive-up COVID-19 mobile testing site with the
same third-party contractor. The proposed contractor reports the following costs: test
kits are $135 each; a minimum of two medical staff at a site, each costing $1,320 per
day; and a medical director for overseeing the testing facility for the three to four week
period is $5,600. The company requires a minimum of three weeks for the operation,
which would range from $45,200 to $84,800 depending on the number of medical
staff. Alhambra will have capacity to provide 1,600 COVID-19 tests, with the tests
alone costing $216,000. It appears that the minimum operating costs for the drive-up
mobile testing site for both cities will be $261,200 and could go as high as $300,800.
City staff has reached out to the third-party contractor about operating a drive-up
COVID-19 testing site in Temple City but have not heard back from them at the time
of writing this report. If the contractor would allow reducing the minimum number of
COVID-19 tests to 800, given the contractor’s quote to other cities, the minimum start-
up cost to establish a mobile testing site would be an estimated $153,200. This
exceeds the CDBG funds allocated to Temple City through the CARES Act.
It is also unknown what the interest would be in the community if the City were to
establish a drive-up COVID-19 mobile testing site. COVID-19 tests are available with
some primary care givers, at medical clinics and hospitals. Additionally, the County
of Los Angeles has recently established free, drive-up testing sites to anyone
throughout the county. There are five drive-up testing locations within 10 miles of the
central part of Temple City:
El Monte Airport, 4233 Santa Anita Avenue, El Monte, 91731
Beverly Hospital, 309 W. Beverly Boulevard, Montebello, 90640
East Los Angeles Community College, 1304 Avenida Cesar Chavez, Monterey
Park, 91754
City Council
May 5, 2020
Page 4 of 6
AltaMed Medical and Dental Group, 1300 S. Sunset Avenue, West Covina,
91790
Pasadena Rose Bowl, 1001 Rose Bowl Drive, Pasadena, 91003
Assisting Small and Micro Businesses Program (new program):
The LACDA bulletin also describes some examples of potential new programs
combating the COVID-19 pandemic. One program is to assist small and micro
businesses through loans and grants. It is also uncertain how many would be eligible
if the program were limited to businesses with low-income employees. Recently, there
has been movement on expanding the first wave of small business loans. The LACDA
announced the COVID-19 Relief Fund a few weeks ago to assist small businesses in
Los Angeles County with low interest loans. On April 24, the President signed a $484-
billion coronavirus relief package into law that injected an additional $320 billion into
the paycheck protection program, which allows small businesses to continue paying
employees.
Housing Rehabilitation Loan and Handyworker Grant Program (existing
program):
In FY 2020-2021, the City Council approved up to $340,795 of CDBG funds for home
improvement loans and grants that also includes housing consultant costs. The
LACDA bulletin mentions an eligible COVID-19 enhancement to an existing housing
rehabilitation program could include staff distributing program outreach marketing
materials through a CDBG-funded senior meal delivery (public service) program. The
City’s senior meal program is not funded with CDBG funds so this activity would not
be eligible. Additionally, the City has consistently had anywhere from 15 to 30
residents on the waiting list over the past few years; additional outreach is not needed
at this time.
The LACDA bulletin also suggests offering a grant for the installation of broadband
(high-speed) infrastructure wiring or a high-speed internet service subsidy to income-
eligible households. Assisting with the installation or subsidy of high-speed internet
would allow for low-income households to connect with family, friends, teachers, and
receive other important services during the COVID-19 pandemic. Spectrum
announced in March that they will offer free installation and internet for 60 days for
households that do not already have service with them; they also mentioned that they
would allow free public use of their Wi-Fi hotspots that are located throughout the
community. Additionally, Spectrum offers an Internet Assistance program for eligible
low-income households that is less than $20 per month.
City Council
May 5, 2020
Page 5 of 6
Asbestos/Lead-Based Paint Testing and Removal Program (existing program):
No program enhancements were mentioned in the LACDA bulletin.
Youth Scholarship Program (existing program):
The City Council allocated $37,500 for the Youth Scholarship Program for FY 2020-
2021. The LACDA bulletin suggests offering online tutoring and virtual classes , “grab
and go” activity packets, and/or re-program funds to purchase equipment and
supplies. City staff could explore paid online programs for youth programs, the city is
currently utilizing free online programing for the youth programs. The County of Los
Angeles Library is also offering extensive programming options for children including
free online homework help. Given the existing programs, it is unlikely there is a strong
need for this assistance.
Additional CDBG Funds to Address COVID-19:
In addition to the funds provided through the CARES Act, the City receives an annual
allocation of CDBG funds. It is likely that there will be approximately $20,000 of CDBG
funds unspent from this fiscal year due to the cancelling of youth recreation programs.
The City will not lose these funds, but they will be made available to the City in the next
fiscal year. In January, the City Council approved a plan to spend the City’s CDBG funds
on programs related to youth scholarships for recreation programs and home
rehabilitation grants and loans. The final CDBG budget for FY 2020-2021 will be
$377,594, which includes the City’s annual allocation of $209,440 and $168,154 of funds
carried over from the previous fiscal year and previous housing rehabilitation loans paid
back to the City. The final FY 2020-2021 CDBG budget is less than the amounts
approved by City Council in January because the annual allocation and the funds carried
over were estimated. Given the change in circumstances, staff’s recommendation
includes direction to return at the end of the fiscal year to consider changing the FY 20 20-
2021 program to further support COVID-19 relief.
CITY STRATEGIC GOALS:
Approval of the CDBG funds received from the CARES Act will further the City’s Strategic
Goals of Public Health and Safety, Quality of Life, and Economic Development.
FISCAL IMPACT:
This action will require an amendment to add $123,206 to the CDBG revenue and
expenditure budget for FY 2019-2020. The new COVID-19 CDBG funds resulting from
the CARES Act will be entirely funded using CDBG funds. There will be no impact to the
General Fund, as CDBG funds are reimbursed from LACDA
City Council
May 5, 2020
Page 6 of 6
ATTACHMENTS:
A. City Council Staff Report dated January 21, 2020, CDBG Allocations for FY 2020 -
2021
B. LACDA Bulletin 20-0006 – Using CDBG Grant to Respond to the COVID-19
Pandemic
II a HOUSING
COMMUNITY
ECONOMIC
LACDA
Los Angeles County Development Authority
GMU BULLETIN
700 West Main Street, Alhambra, CA 91801
NUMBER: CDBG 20-0008
FRHS 20-0001
BFH 20-0001
DATE:
APRIL 27, 2020
SUBJECT:
2020 INCOME GUIDELINES
EFFECTIVE DATE: IMMEDIATELY
PAGE 1 OF 2
TO: PARTICIPATING CITIES
COMMUNITY -BASED ORGANIZATIONS
OTHER PUBLIC AGENCIES
COUNTY DEPARTMENTS
LACDA DIVISIONS
The 2020 income guidelines (effective April 1, 2020) for use in Community Development Block Grant
(CDBG), Bringing Families Home (BFH), and Family Reunification Housing Subsidy (FRHS) programs
are listed below. These guidelines should be used to determine compliance with each program's
objective of providing benefit to income -eligible persons. They are also used in determining eligibility
for the Public Housing and Section 8 Programs and are effective until a new schedule is issued.
The CDBG Program defines annual income according to the Section 8 Housing Assistance Payments
Program, thus we are subject to the definition of "Extremely Low -Income," per the 2014 Consolidated
Appropriations Act. Since the 30% Average Median Income (AMI) limits are not the same as the
"Extremely Low -Income" limits, the CDBG Program must use the income guidelines, as outlined below.
2020 INCOME LIMITS
Number of Persons
Extremely Low -Income
Low -Income
Moderate -Income
1
$23,700
$39,450
$63,100
2
$27,050
$45,050
$72,100
3
$30,450
$50,700
$81,100
4
$33,800
$56,300
$90,100
5
$36,550
$60,850
$97,350
6
$39,250
$65,350
$104,550
7
$41,950
$69,850
$111,750
8
$44,650
$74,350
$118,950
*Please note that the 2020 median family income for Los Angeles County is $77,300.
Community Development Division —Grants Management Unit (CDD-GMU)
These guidelines refer to the terms 113t rKrnAi1?itAcimffiViWor the above -mentioned programs.
Participating Agencies
April 27, 2020
Page Two
In order to clarify any misunderstanding from the differences in terms between the Public 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
Low -Income
Extremely
Low -Income
Extremely
Low -Income
Equal to or
less than 30%
Low -Income
Low -Income
Very
Low -Income
31 % to 50%
Not Eligible
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 guidelines 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 Contract Manager.
Sincerely,
DAVON BARBOUR, Director
Community & Economic Development Division
DB:DV:EQ:AC:ab
K:1GMU COMMONIBULLETINS (Working File - WORD Version)1CDBG1202012020 Income Guidelines.docx