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HomeMy Public PortalAbout07_10A_CC Staff Report CDBG COVID-19 Programs Updates 07.20.2021_v4COMMUNITY DEVELOPMENT DEPARTMENT MEMORANDUM D ATE: July 20, 2021 TO: The Honorable City Council FROM: Bryan Cook, City Manager Via: Scott Reimers, Community Development Director By: Adam Gulick, Associate Planner SUBJECT: COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM UPDATE REGARDING THE COVID-19 RELIEF PROGRAMS RECOMMENDATION: The City Council is requested to: 1.Receive an update regarding the Community Development Block Grant (CDBG) and Covid-19 Relief Programs (CARES Act); 2.Direct staff to issue a public notice for September 7, 2021, amending the allocations for the Fiscal Year (FY) 2021-22 CDBG programs as shown in Table 2; and 3. Direct staff to return on November 2, 2021, to discuss FY 2022-23 CDBG Programs. BACKGROUND: 1.On June 16, 2020, the City Council established the Temporary Rental Assistance Program and the Small Business Grant Program for FY 2020-21 utilizing CDBG funds and Coronavirus Aid, Relief, and Economic Security (CARES) Act funds. 2.As of July 1, 2021, the City was successful in administering 71 Temporary Residential Rental Assistance Grants and 40 Small Business Grants as directed by City Council. ANALYSIS: FISCAL YEAR 2020-21 TEMPORARY RENTAL ASSISTANCE PROGRAM UPDATE: The City Council approved a Temporary Emergency Rental Assistance Program consisting of both CARES Act funds and CDBG funds to provide 71 grants to low-income households financially effected by the Coronavirus pandemic. There were 305 interest AGENDA ITEM 10.A. City Council July 20, 2021 Page 2 of 4 forms submitted for the program. City staff approved 71 households for the program and issued payments to the property owner or management company to help with rent payment(s). Renters were supported with payments up to $1,000 for three months. There is a balance of approximately $15,000 in the program budget, which at the beginning of FY 2021-22 the Los Angeles County Development Authority (LACDA) moved to the City’s unallocated CDBG balance. City staff referred residents on the waiting list and anyone asking for rental and, or utility assistance, to California’s COVID-19 rent relief program, Housing is Key (HousingIsKey.com). FISCAL YEAR 2020-21 SMALL BUSINESS GRANT PROGRAM UPDATE: The City Council approved a revised budget of $419,536 for the Small Business Grant Program, however, the budget for this program was decreased to $404,923 due to LACDA reducing the City’s CDBG allocation. The program was established to assist approximately 40 businesses with grants up to $10,000. The budget for the Small Business Grant Program also included $16,118 available for City staff to use for technical assistance administering the program since the City was establishing a new CDBG program. City staff utilized approximately half of the consulting budget for the program, which resulted in a balance of $7,748. The City received 156 interest forms by the deadline. Staff determined that 131 of the interest forms submitted were eligible to apply. City staff contacted the eligible businesses through various methods. Fifty-three businesses submitted an application and the required paperwork. The following is a breakdown of grants issued based on the tier system that the City Council established for the program: Table 1 – Small Business Grants Submitted and Approved Tier System Applications Submitted Grants Approved Round 1 Round 2* Total Tier 1 – Food and drink establishments 18 1 12 13 (32.5%) Tier 2 – Ground floor retail 9 1 5 6 (15%) Tier 3 – Ground floor commercial 11 4 6 10 (25%) Tier 4 – All other commercial businesses 15 1 10 11 (27.5%) Total 53 7 33 40 * = includes a City Council revision to the Program Guidelines making businesses eligible that received some other form of COVID-19 relief financial assistance from another government agency such as COVID-19 Economic Injury Disaster Loan (EIDL), Payroll Protection Program (PPP), U.S. Small Business Administration loan, etc. City staff reviewed all the applications. Some of the businesses were denied because they did not meet the program requirements and other businesses withdrew for other reasons. Overall, the City issued $372,151.24 worth of grants to 40 businesses; City Council July 20, 2021 Page 3 of 4 $63,164.95 worth of grants to 7 businesses during the first round and $308,986.29 worth of grants to 33 businesses during the second round. The program resulted in the retention of 58 jobs, or 42 full-time equivalent positions. The balance for the Small Business Grant program, including the balance from the consulting costs, is approximately $16,000, which at the beginning of the fiscal year was carried over to the City’s unallocated CDBG balance. UNALLOCATED CDBG FUNDS: Any CDBG funds that are not used during Fiscal Year (FY) 2020-21 are placed in the City’s Unallocated CDBG balance. The City’s Unallocated CDBG balance also includes any housing rehabilitation loans that are paid back. The City’s current Unallocated CDBG balance is approximately $170,000. This includes $129,000 of previous housing rehabilitation loans paid back to the City, $10,000 of Youth Scholarship Program funds, $15,000 of remaining Temporary Emergency Rental Assistance Program funds, and approximately $16,000 of Small Business Grant Program funds. The City’s Unallocated CDBG funds can be used on the FY 2021-22 programs the City Council already established, or can be used to create a new CDBG program. Under the City Manager’s present authority, which allows him to adjust programs up to 50 percent, the City Manager could assign $62,500 of unallocated funds into existing FY 2021-22 programs. Any amendment larger than 50 percent is considered a substantial amendment, which requires action by the City Council at a public hearing and a 30-day review and comment period. CHANGES TO FY 2021-22 CDBG PROGRAMS AND ALLOCATIONS: The Council approved the following CDBG programs and allocations for FY 2021-22: Housing Rehabilitation Program: $ 80,000 Asbestos and Lead Program: $ 20,000 Youth Scholarship Program: $ 25,000 Total $125,000 To ensure maximum utilization of the unallocated funds, city staff recommends returning with a public hearing on September 7, 2021, to move money from the unallocated fund to the existing programs based on Table 2, below. City Council July 20, 2021 Page 4 of 4 Table 2 – Proposed Changes to CDBG Program for FY 21-22 Housing Rehabilitation Program Original Budget $ 80,000 + Additional Funds $ 135,000 Sub-Total $ 215,000 Asbestos and Lead Program Original Budget $ 20,000 + Additional Funds $ 30,000 Sub-Total $ 50,000 Youth Scholarship Program Original Budget $ 25,000 + Additional Funds $ 5,000 Sub-Total $ 30,000 Total Original Budget $ 125,000 + Additional Funds $ 170,000 Grand Total $ 295,000 CITY’S STRATEGIC GOALS: City Council’s direction for the City’s Unallocated CDBG funds promotes the City’s Strategic Goals of Quality of Life and Economic Development. FISCAL IMPACT: There will be no fiscal impact associated with the requested Council action, as City staff is asking the City Council to set a public hearing to discuss changes to the CDBG program. The public hearing staff report will provide additional analysis on the fiscal impact of the recommended action.