HomeMy Public PortalAbout8B Community Development Block Grant CDBG For FY 2015-2016DATE:
TO:
FROM:
AGENDA
ITEM 8.8.
COMMUNITY DEVELOPMENT DEPARTMENT
MEMORANDUM
January 20 , 2015
The Honorable City Council
Bryan Cook, City Manager
Via : Michae l Forbes , AICP, Community Development Director ~
Scott Reimers , Planning Manager
By : Adam L. Gulick , Associate Planner
SUBJECT: COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS FOR
FISCAL YEAR (FY) 2015-2016
RECOMMENDATION:
The City Council is requested to :
a) Hold a public hearing rega rd ing the proposed allocation of CDBG funds for FY
2015-2016;
b) Authorize the City Manager to amend CDBG-funded program allocations up to 50
percent of the approved allocation ;
c) Authorize staff to modify the Home Improvement Program Guidelines to eliminate
the interest for the Rehab ilitation Loan Program ; and
d) Consider adopting the staff recommended CDBG-funded programs and
allocations for FY 2015-2016; the total CDBG funds include the estimated
allocation of $176,000 for FY 2015-2016 , plus $65,400 of unallocated funds
carried over from FY 2014-2015:
I.
ii .
Ill.
IV .
Housing Rehab ilitation Loan Program :
Asbestos Testing and Removal Program:
Youth Scholarship Program :
Handyworker Grant Program :
Total FY 2015-2016 CDBG Budget:
$140 ,000
$ 45 ,000
$ 26 ,400
$ 30 ,000
$241,400
City Council
January 20 , 2015
Page 2 of 6
BACKGROUND:
1. In 1974 , the CDBG Program was enacted through the Housing and Commun ity
Development Act of 1974 . According to City records , the City has been re ceiving
CDBG funds from the Los Angeles County Community Deve lopment
Commission (LACDC) since 1974.
2 . On August 20 , 2014 , the City was informed of the 2014 income guidel i nes
through a CDBG Bulletin (Attachment "A"). Since the 2015 income guidelines
have not been released , the City is required to follow the 2014 income guidelines
until further notice .
3. On December 11 , 2014 , City staff was notified at a CDBG quarterly meeting that
the City 's anticipated allocation for FY 2015-2016 would be approximate ly
$176 ,000 .
4 . On December 22 , 2014 , a public notice was published in the Temple City
Tribune stating the intended CDBG-funded programs and allocations for FY
2015-2016 (Attachment "B").
ANALYSIS:
The CDBG Program was established with the primary objective of deve loping viable
communities by creating suitable living environments , mainta ining and creating decent
housing , and creating and maintaining job opportunities for low-and moderate-income
persons . Every city receives an annual CDBG allo cation based upon population . Cities
in Los Angeles County with a population under 50 ,000, such as Temple City , receive
funds through the LACDC .
CDBG funds can only be used to accomplish certain pre -designated national objectives
set forth by this federal program . Specifically , funds need to address slum and bl ighted
conditions , to assist or benefit low-and moderate-income families , to assist with
emergency conditions (natural disaster) threatening public health and safety, or to meet
the needs of special population groups , such as the disabled or senior citizens .
Due to the high average household income levels in the community, Temple City has
been challenged in developing eligible programs . In the past, the City has used CDBG
funds for the Housing Rehabilitation Loan Program , th e Handyworker Assistance
Program , the Youth Scholarship Program , the installation of American with Disab ili ties 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
improvements to public parking lots along Las Tunas Drive and Temple City Boulevard .
City Council
January 20, 2015
Page 3 of 6
The City is required to allocate $241 ,400 of CDBG funds for FY 2015-2016 . This
includes the City's estimated annual allocation of $176,000 for FY 2015-2016 and
$65,400 of unallocated funds that have carried over from the previous fiscal year and
program income (i.e ., interest received from loans paid back from the Housing
Rehabilitation Loan Program). This figure may be adjusted by the LACDC based upon
the eventual United States Department of Housing and Urban Development (HUD)
allocation of CDBG funds distributed to the LACDC . If the allocation is more or less ,
staff will add or subtract funds from the Housing Rehabilitation Loan Program and/or
the associated Asbestos Testing and Abatement Program .
The City is required to conduct a public hearing to solicit input from the community and
to ensure that the proposed CDBG Projects meet community needs and HUD
guidelines. The City published a 30-day notice in the newspaper (Attachment "B")
notifying the public of the City's intended CDBG programs and allocations . For FY
2015-2016 , it is staff's assessment that the following CDBG-funded programs continue
at the funding levels recommended below for the community's benefit and in a manner
consistent w ith the program constraints outlined above . Alternatively , the City Council
has the option to modify the proposed allocations and/or direct City staff to explore
alternative programs.
• Housing Rehabilitation Loan Program:
This ongoing program provides deferred payment loans to extremely low-, low-
and moderate-income homeowners to make ne cessa ry home repairs and/or
co rre ct Building and Zoning Code v iola tion s. This has been a popular program in
th e community since it was established in the mid -1990's . Last year , the City
Council increased the loan amount from $25 ,000 to $35 ,000 . The higher loan
amount was recommended last year so participants are able to do more
comprehensive improvements. However , even with increasing the loan amount
from $25 ,000 to $35 ,000 this fiscal year, the City experienced decreased
participation in th e program . Many potential participants have declined to
participate after discovering that the deferred loan has an interest rate of three
percent.
Since th e interest on the deferred loan has recently become a deterre nt fo r people
participating in the City's Home Improvement Loan Program , City staff
re com mends eliminating the interest. Most cities do not charge interest on home
improvement loans ; it is ultimately up to the jurisdiction as to whether or not they
want to charge interest on the loan . There is a benefit to charging interest on the
home improvement loan s. When these loans are paid back to the City , the money
(loan and interest earned) is recycled back into the City's future CDBG programs .
However, the recent lack of participation in the loan program could result in the
City accumulating excess funds that LACDC could then recapture . City staff
believes that eliminating the interest will re s ult in more participants helping the City
City Council
January 20 , 2015
Page 4 of 6
spend its CDBG funds in a timely manner and allow the program to benefit more
homeowners.
Staff suggests allocatin g $140 ,000 in FY 2015-2016, of which includes $112 ,000
(i .e ., equivalent to three $35 ,000 loans) to assist three below moderate-income
households with needed repairs and $28 ,000 to cover the City 's consultant
services .
• Handyworker Grant Program:
In 2005, the City established a grant program to assist income-e ligible
homeowners to complete necessary and essential home repairs . The program
was geared towards smaller repairs to help improve the quality of life , such as :
roof repairs or replacement , window replacement, painting , stucco , electrical and
plumb ing repairs or replacement. Since th e City 's Handyworker Grant Program
also utilized Community Redevelopment Agency (CRA) Low/Moderate Income 20
percent Set-Aside Funds , staff recommended that the City Council fund other
CDBG programs starting in FY 2011-2012. However, the state leg isl ature
dissolved local CRAs and the Handyworker Grant Program was subsequently
eliminated due to lack of funding.
There has been a significant level of interest in the community in a small grant
program from applicants on the Home Improvement Program waiting list. Due to
the lack of interest from people on the waiting list for the Home Improvement
Program and to expend CDBG funds in a timely manner to meet the City 's
drawdown requirement , City staff is recommending that the Handyworker Grant
Program be reinstated for FY 2015-2016 . City staff recommends that $30 ,000 be
allocated for the Handyworker Grant Program , of which includes $24 ,000 to fund
approximately three grants with a maximum amount of $10 ,000 . The program
al location would also fund up to $6 ,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 participants whose
homes have tested positive for asbestos and/or lead-based paint. The grant is
used to mitigate or abate hazardous conditions in conjunction with the Housing
Rehabilitation Loan Program and the Handyworker Grant Program , as testing and
abatement work is required since the project utilizes federal funds. The amount of
funds required for abatement vary on the number of loans processed requ ir ing
asbestos and/or lead -based paint testing , and required abatement work.
Depending on the scope of work , the asbestos and/or lead -based paint testing can
range from $500 to $2,000 per residence . If the proposed area of construction
City Council
January 20 , 2015
Page 5 of 6
tests positive for asbestos and/or lead-based paint , abatement work is required
and can cost up to $8 ,000 . Therefore , staff recommends that the FY 2015-2016
allocation be $45 ,000 . This amount would provide for abatement work , if needed ,
fo r the households that are assisted through the Housing Rehabilitation Loan
Program and the Handyworker Grant Program. The $45 ,000 allocation also
includes up to a maximum of $9,000 for administration costs for the City 's
consultant services . 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 qualifies as a "public service" program , and under
the HUD CDBG guidelines , a City can only allocate a maximum of 15 percent of its
annual allocation towards public service programs . This is an ongoing program
that covers a portion of the recreation activity fee for members of extremely low-
and low-income households . For youth under the age of 18 , the scholarship would
cover 75 percent of the registration fee . This is the most utilized CDBG program in
the City . This program runs out of scholarships a few months before the end of
the fiscal year.
Staff recommends that the FY 2015-2016 allocation be $26,400 , which is
approximately 15 percent of the City's annual allocation .
In summary , staff is recommending that th e FY 2015-2016 CDBG funds be allocated to
the City's on -going Housing Rehabilitation Loan Program, Asbestos Testing and
Abatement Program, and Youth Scholarship Program. It is also recommended that the
Handyworker Grant Program be reinstated utilizing CDBG funds to meet the needs of
the community.
CONCLUSION:
The City Council is requested to review and approve the above-mentioned CDBG
programs and allocations for FY 2015-2016 or direct staff to revise the proposed CDBG
programs and allocations , or explore alternative programs relating to eligible ADA
Improvements or Housing Programs. Once the program and allocations are approved
by the City Council, they will be forwarded to the LACDC for their review and approval.
Additionally , staff recommends revising the Home Improvement Program Guidelines to
eliminate the three percent interest rate for the rehabilitation loans .
City Council
January 20 , 2015
Page 6 of 6
FISCAL IMPACT:
This action will impact the FY 2015-2016 City Budget by designating the exp e nditure of
CDBG funds as follows:
Housing Rehabilitation Loan Program :
Handyworker Grant Program:
Asbestos Testing and Removal Program :
Youth Scholarship Program :
ATTACHMENTS:
$140 ,000
$ 30 ,000
$ 45,000
$ 26,400
A. CDBG Bulletin 14-0018 -2014 CDBG Income Guidelines
B . CDBG FY 2015-2 016 Publi c Hearing Notice, Temple City Tribune , December 22,
2014
NUMB ER:
DATE
LOS ANGELES COUNTY
ATTACHMENT A
e~
COMMUNITY DEVELOPMENT COMMISSION • 700 W. Main Street • Alhambra • California 91801
14-0018 SUBJECT: REVISED 20141NCOME GUIDELINES
August 20, 2014 IMMEDIATELY 1 2
EFFE CTIVE DATE PAG E O F
TO: CDC DIVISIONS
COMMUNITY-BASED ORGANIZATIONS
PARTICIPATING CITIES
COUNTY DEPARTMENTS
OTHER PUBLIC AGENCIES
The 2014 income guidelines for use in th e Community Development Block Grant (CDBG)
and First Five LA (F5) Programs have been revised , and are listed below. These gu idelines
shou ld be used to determine compliance with each program 's objective of providing benefit
to el igible persons. They are also used in determining eligibil ity for the Public Housing and
Section 8 Programs, and are eHective unt il a new schedule is issued .
Number of Persons Extremely low-Income Moderate-Income Low-Income
1 $17,150 $28,550 $46 ,650
2 $19,600 $32,600 $52,200
3 $22,050 $36,700 $58 .700
4 $24,450 $40 ,750 $65 ,200
5 $27,910 $44,050 $70,450
6 $31,970 $47,300 $75,650
7 $36,030 $50,550 $80,850
8 $40 ,090 $53,800 $86,100
Please note that the 2014 median family income for Los Angeles County is $60,600.
These guidelines refer to the terms in determining income levels for the above -mentioned
programs . In order to clarify any misunderstand ing resulting from the diHerences in terms
between the Public Housing , Section 8, CDBG, and FS Programs , the following is prov ided for
your information:
COMPARISON OF TERMS IN DETERMINING INCOME LEVELS
FS 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 Eligible Moderate-Income Low-Income 51 % to 80 %
Community Development Division-Grants Management Unit (CDD-GMU)
Putting Dollars Into Action
Participating Agencies
August20,2014
Page Two
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 FS Program).
Should you have any questions, please contact your Program Manager.
Sincerely,
SCOTI STEVENSON, Director
Community Development Division
SS :W :HR:RDW:rb
K:\GMU COMMON\GPPA\GPA\PAT Bulletins\lncoma GuldeHnes Re vised.docx
ATTACHMENT B
CITY OF TEMPLE CITY
PUBLIC HEARING NOTICE
COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS
Notice is hereby given that the City Council of the City of Temple City will consider the
use of Community Developmen t Block Grant Funds for fiscal year 2015-2016 at their meeting
of January 20 , 2015 , at 7 :30 p .m. in the City Counci l Chambers of the City Hall , located at
5938 Kauffman Avenue , Temple City.
Commun ity 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 .
During the ne xt fiscal year, July 1, 2015 through June 30 , 2016 , it is anticipated that the
programs and the amounts to be expended , will be as follows : Hous i ng Rehab ilitation Loan
Program ($140 ,000 ); Handyworker Grant Program ($30 ,000); Lead and Asbestos Testing and
Removal Program ($45 ,000 ); and Youth Scho larship Program ($26,400 ). The above -
enumerated amounts are based upon preliminary estimates of HUD funds available through
the Los Angeles County Commun ity Development Comm ission . The actual amounts to be
expended may be modified as part of the City 's budg et process to reflect the availabil ity of
funds .
Any interested persons wishing to provide input on housing and commun ity development
as it relates to the use of the 2015 -2016 CDBG funds may contact the Community Development
Department at City Hall by phone (626) 285-217 1. Written comments may also be subm itted to:
City of Temple City Community Development Department , 9701 Las Tunas Drive , Temple City,
CA 91780 . Comments will be rece iv ed through January 20 , 2015 .
Published : Temple City Tribune
Date : December 22 , 2014
Peggy Kuo
City Cle rk