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Home My Public Portal About16) 9C CDBG Fund Allocation FY 2013-14City Council April 1, 2014 Page 2 of 5 2. During FY 2011-12, the City worked with the Los Angeles Community Development Commission (LACDC) to address housing rehabilitation program issues identified during an annual review of the City's CDBG Programs. As a result, the City had to delay some of its CDBG Programs resulting in an accumulation of funds. 3. During FY 2011-12 and FY 2012-13, there were several factors that have resulted in delays to the City's Home Improvement Program, which typically accounts for 85% of the City's annual CDBG allocation. The following were contributing factors: the City completely overhauled the procedures manual for the Home Improvement Program to comply with applicable state and federal standards; a high priority was made to spend all of the City's Energy Efficiency Community Block Grant (EECBG) funds before their expiration; and the City's Housing Consultant was requested to conduct follow-up inspections of past housing rehabilitation projects for alleged substandard work. Due to these issues, the City accumulated a backlog of 112 applicants for the City's home improvement program. 4. On January 15, 2013, the City Council conducted a public hearing and approved the following allocation of CDBG funding to programs for FY 2013-14: A. B. C. D. Housing Rehabilitation Loan Program: Asbestos Testing and Removal Program: Youth Scholarship Program: American with Disabilities Act (ADA) Barrier Removal Program: $100,000 $ 25,000 $ 26,862 $ 75,000 5. On January 7, 2014, the City Council conducted a public hearing and approved the following allocations of CDBG funding to programs for FY 2014-15: A. B. C. D. Housing Rehabilitation Loan Program: Asbestos Testing and Removal Program: Youth Scholarship Program: American with Disabilities Act (ADA) Barrier Removal Program: $235,000 $ 45,000 $ 26,403 $200,000 6. On January 16, 2014, City staff and LACDC staff met to discuss the City's FY 2013-14 CDBG Programs, the City's FY 2014-15 CDBG Programs and the status of construction projects, which would assist in reducing the City's CDBG accumulated excess funds. 7. On February 27, 2014, a public notice regarding the proposed increase of CDBG funds for the Housing Rehabilitation Loan Program and the Asbestos Testing and Abatement Program was published in the Temple City Tribune (Attachment "A"). City Council April 1, 2014 Page 3 of 5 8. On March 11, 2014, the LAC DC sent a Notice of Intent to Recapture Excess CDBG Funds letter (Attachment "B") to staff notifying the City that the City will be in jeopardy of losing funds if the City does not expend $401,367 by March 31, 2014 and the LAC DC could recapture some of the City's CDBG funds. ANALYSIS: Since 1974, the City has received CDBG funds from the LACDC as a sub-recipient. Due to low poverty rates, high household incomes levels and no qualifying census tracts in the community, the City has primarily used CDBG funds on housing rehabilitation loans, asbestos and lead-based paint testing and abatement grants, youth scholarships, and various American with Disabilities Act (ADA) improvements to public facilities. Every January, the City receives a bulletin from the LACDC notifying participating cities whether or not additional funds need to be expended by the end of March in order to comply with the drawdown requirement, which is 150% of its annual allocation; for FY 2013-14 the City's annual allocation is $185,285 and the drawdown requirement is $277,928. As of February 26, 2014, the City has $679,295 of total unexpended CDBG funds and is required to expend $401 ,367 by the end of March. If the City fails to expend the excess funds by the end of March, the City will be required to go through an appeal process and develop a Workout Plan illustrating how the City intends to expend excess funds. City staff prepared a draft Workout Plan for LACDC staff to review; the draft Workout Plan illustrates estimated monthly expenditures for each program through May 31, 2014. The LACDC staff suggested that the City explore creating a new "shovel ready" project or expanding existing programs where funds can be spent quickly. City staff has devised a plan for the City Council to consider increasing CDBG funds for FY 2013-14 Housing Rehabilitation Loan Program, and Asbestos Testing and Abatement Program; and at a future meeting consider increasing funds and modifying the scope of work for the ADA Barrier Removal Program that was approved for FY 2013-14. Since City staff is requesting the City Council to consider increasing funds that are more than 150% of the original approved amount, the request needs to be conducted at a noticed public hearing. Any substantial change to a CDBG program, either increase or decrease, requires a 30-day public hearing notice and approval from the City Council. Housing Rehabilitation Loan Program On January 15, 2013, the City Council allocated $100,000 for the City's Housing Rehabilitation Loan Program for FY 2013-14. As of February 2014, the City's Housing Consultant has successfully expended the $100,000 assisting four households with rehabilitation loans. The City's Housing Consultant informed City staff that there were four additional projects ready to proceed with housing rehabilitation work. City Council April 1, 2014 Page 4 of 5 The recommended budget amendment of $150,000 would allow for the City's Housing Consultant to process up to five additional rehabilitation loans (up to $125,000) for FY 2013-14 and pay for administration costs (up to $25,000). This would also save the City's Housing Consultant time from having to re-qualify the participants, as the City is required to have current paper work (less than 90 days) for participants when they receive assistance. If there are excess funds carried over from the recommended budget amendment, they will go back into the City's unallocated CDBG funds, which would be eligible for reallocation back to the Housing Rehabilitation Program for FY 2014-15. Asbestos Testing and Abatement Program On January 15, 2013, the City Council allocated $25,000 for the City's Asbestos Testing and Abatement Program for FY 2013-14. The City's Asbestos Testing and Abatement Program is an associated Housing Rehabilitation Loan Program that offers grants to homeowners for required asbestos and lead-based paint testing and abatement work. Since the City uses CDBG funds for the Housing Rehabilitation Loan Program, the City is required to test and abate hazardous materials that are being disturbed by such home rehabilitation work. As of February 2014, the City's Housing Consultant has successfully expended the $25,000 allocated for the City's Asbestos Testing and Abatement Program. Since City staff is recommending additional funds for up to five rehabilitation loans, subsequently, additional funds are required for asbestos and lead-based paint testing and abatement work. The actual cost for testing and abatement work varies on each project and is based on the home rehabilitation work, however based on previous abatement projects, the average cost is $8,000. City staff is recommending that $50,000 of additional CDBG funds are allocated for the City's Asbestos Testing and Abatement Program to allow for five additional grants ($40,000) and administration costs ($1 0,000). The transfer of funds will essentially allocate CDBG funds programmed for next fiscal year (FY 2014-15) to the current fiscal year (FY 2013-14) allowing five people to receive housing rehabilitation assistance now, instead of having them wait until July 1, 2014. Furthermore, the increased CDBG funds for the Housing Rehabilitation Loan and Asbestos Testing and Abatement Programs for FY 2013-14 would help the City reduce its excess CDBG funds. CONCLUSION: The City Council is recommended to approve the increased allocations for the Housing Rehabilitation Loan and Asbestos Testing and Abatement Programs for FY 2013-14. Any CDBG funds not used during FY 2013-14 will go back into the City's unallocated CDBG fund balance and would be eligible for reallocation back into the Housing Rehabilitation Loan and Asbestos Testing and Abatement Programs for FY 2014-15. City Council April1, 2014 Page 5 of 5 FISCAL IMPACT: The increased allocations would utilize a portion of the City's unallocated CDBG balance, which is $348,199. This action will appropriate an additional $200,000 of unallocated CDBG funds for FY 2013-14, leaving an unallocated balance of $148,199, as follows: Housing Rehabilitation Loan Program: Asbestos Testing and Abatement Program: ATTACHMENTS: $150,000 $ 50,000 A. Public hearing notice for increasing CDBG funds for FY 2013-14 B. Letter from LACDC dated March 11, 2014 CITY OF TEMPLE CITY PUBLIC HEARING NOTICE ATTACHMENT A COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS Notice is hereby given that the City Council of the City of Temple City will consider increasing the allocations for Fiscal Year (FY) 2013-2014 Community Development Block Grant (CDBG) programs, adding $150,000 to the Housing Rehabilitation Loan Program and $50,000 to the Asbestos Testing and Abatement Program. The City Council will consider the amendments at their meeting of April 1, 2014, at 7:30 p.m. in the City Council Chambers of the City Hall, located at 5938 Kauffman Avenue, Temple City. 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, emergency purposes, or to meet the needs of special population groups, such as the disabled. Additionally, the Community Development Commission has advised Temple City that it may utilize CDBG Funds to address "spot blight". The City has expended a majority of its allocations for the Housing Rehabilitation Loan Program and Asbestos Testing and Abatement Program. Rather than having participants wait until the FY 2014-2015, staff is recommending that approximately half of CDBG funds budgeted for next fiscal year (FY 2014-2015) be reprogrammed to the current fiscal year (FY 2013-2014). The proposed amendments would provide housing rehabilitation assistance for up to four additional properties. Any interested persons wishing to provide input on the proposed amendments to FY 2013-2014 CDBG Programs (Housing Rehabilitation Loan and Asbestos Testing and Abatement Program) may contact the Community Development Department 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 Drive, Temple City, CA 91780. Comments will be received through April1, 2014. Published: Temple City Tribune Date: February 27, 2014 Peggy Kuo City Clerk Tracey Hause, Acting City Manager March 11, 2014 Page 2 The final Performance Policy Bulletin prior to the March 31, 2014 deadline will be issued by March 17, 2014. If you have a question about the drawdown process, please have your staff contact Raymond White, Analyst, at (626) 586-1756 or Raymond.White@lacdc.org. SCOTT STEVENSON, Director Community Development Division SS:LJ:HR:RDW:rb K:\CDBG COMMON\GPA\Recapture\13-14\Temple City_1st Notice.docx c: . .Jarrod DeGonia, Field Deputy, 5th District JGeoffrey Starns, Planning Manager Adam Gulick, Associate Planner