HomeMy Public PortalAbout09) 10A Potential Use of CDBG FundAGENDA
ITEM 10.A.
COMMUNITY DEVELOPMENT DEPARTMENT
DATE:
TO:
FROM:
MEMORANDUM
October 17, 2017
The Honorable City Council
Bryan Cook, City Manager
Via: M ichael D. Forbes, Community Development Director
Scott Reimers , Planning Manager
By: Adam Gulick , Associate Planner
SUBJECT: POTENTIAL USE OF COMMUNITY DEVELOPMENT BLOCK GRANT
(CDBG) FUNDS FOR ECONOMIC DEVELOPMENT
RECOMMENDATION:
The City Council is requested to receive and file this report. If the City Council wishes to
make any changes to the City's allocation of Community Development Block Grant
(CDBG) funds , the City Council is requested to provide direction as appropriate .
BACKGROUND:
On September 5, 2017 , the City Council directed staff to research West Covina 's
economic development programs to see if Temple City could utilize CDBG funds to
create a similar program.
ANALYSIS:
Temple City 's CDBG Program
Temple City has allocated its CDBG funds to its Housing Rehabilitation Program since
1996 and the Youth Scholarship Program since 1997. The Housing Rehabilitation
Program has been popular in the community and has improved the qua lity of life for
low-income property owners that are unable to pay for needed repairs and
improvements to their home . The Youth Scholarship Program assists low-income
households by paying for a portion of the class registration fees for recreational
programs offered by the City.
City Council
October 17, 2017
Page 2 of 3
The City has also used CDBG funds on various capital improvement projects that
include: 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 doors
at the County Library, 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. However, due to continued reductions in the City's CDBG
allocation and changes to the CDBG Program, the City has been unable to fund new
capital improvement projects without significantly reducing or eliminating the Housing
Rehabilitation and Youth Scholarship Programs. The City's annual allocation has been
reduced by approximately 42 percent since 2006, from $301,841 to $176,000.
The City's housing rehabilitation program is specifically identified in the 2014-2021
Housing Element as a program to conserve affordable housing (Attachment "A"). If
CDBG funds were reallocated to other programs, the City would be required to find
other funding sources to continue the program or establish a comparable program,
since elimination of the program would be inconsistent with the Housing Element as
approved by the State Department of Housing and Community Development.
West Covina's CDBG Economic Development Program
West Covina recently used a portion of its CDBG funds to assist with attracting a
popular regional bakery. In October 2015, West Covina developed an Economic
Development Job Creation Program (Business Assistance Loan Program) that utilizes a
portion of their CDBG allocation. Below is information about West Covina's Business
Assistance Loan Program and what would be required to administer a similar program:
• West Covina's CDBG allocation for Fiscal Year (FY) 2017-18 is $732,715;
• West Covina has allocated $325,000 of CDBG funds programed for the
Business Assistance Program for FY 2017 -18;
• The Business Assistance Program requires a minimum of $80,000 per loan with
a requirement of creating a minimum of four full-time jobs designated for low-
income individuals (documented creation of jobs for low-income individuals is a
CDBG program requirement);
• The Joan is forgiven after five years if a business retains the four full-time jobs
designated for low-income individuals or a portion (prorated) of the loan is repaid
if the business fails to retain the full-time jobs; and
• Additional levels of compliance require resources to ensure proper
implementation and adherence to regulations as this type of compliance is highly
specialized.
City Council
October 17, 2017
Page 3 of 3
An economic development program like West Covina's would be an eligible use of
Temple City's CDBG funds. However, Temple City would face significant challenges in
implementing such a program. Temple City's total annual CDBG funding allocation is
about half of the amount West Covina allocates just to their economic development
program. Implementing a similar program would require defunding the City's existing
programs. Use of CDBG funds for economic development also requires ongoing
verification and documentation that the businesses receiving the loans employ the
required number of low-income individuals. Successful administration of the program
would require additional resources for compliance and monitoring; as this type of
compliance is highly specialized.
CITY STRATEGIC GOALS:
Economic Development is one of the City's Strategic Goals, while the Housing
Rehabilitation Program relates to the Strategic Goals of Quality of Life and Public
Health and Safety.
FISCAL IMPACT:
Pursuing an Economic Development Program utilizing CDBG funds would have an
impact on the Fiscal Year 2017-18 City Budget. Allocating funds to such a program
would require allocation of alternative funds for the Housing Rehabilitation Program, or
elimination of the program.
ATTACHMENT:
A. Program Category #4 from the 2014-2021 Housing Element
ATTACHMENT A
Section 2 Housing Program
2014-2021 Objective: Continue to advertise the procedure and application requirements for
reasonable accommodation on the City's website and at the Community Development
Department counter at City Hall.
Timeframe:
Responsible Agency:
Funding Sources:
Ongoing
Community Development Department
General Fund for Department staff work
Program 13. Water and Sewer Service Providers
In accordance with Government Code Section 65589.7, immediately following City Council adoption,
the City must deliver to all public agencies or private entities that provide water or sewer services to
properties within Temple City a copy of the 2014-2021 Housing Element.
2014-2021 Objective: Immediately following adoption, deliver the 2014-2021 Temple City
Housing Element to all providers of sewer and water service within Temple City.
Timeframe:
Responsible Agency:
Funding Sources:
Ongoing
Community Development Department
General Fund for Department staff work
PROGRAM CATEGORY #4:
CONSERVE AND IMPROVE THE CONDITION OF THE EXISTING STOCK OF AFFORDABLE
HOUSING
Government Code Section 65583(c)(4) states that a housing program shall describe actions to:
"Conserve and improve the condition of the existing affordable housing stock, which may include
addressing ways to mitigate the loss of dwelling units demolished by public and private actions."
Housing Need Summary
Continued maintenance and preservation of the existing housing stock in Temple City is vital to
conserving the overall quality of housing in the community. Housing activities that help achieve this
goal include neighborhood preservation through code enforcement and housing rehabilitation
programs aimed at improving neighborhood stability and pride.
Goals, Policies and Quantified Objectives
Goals
Achieve a housing stock free of substandard conditions.
2-23 Temple City Housing Element
Housing Program Section 2
Policies
Continue to implement the City's Housing Code Enforcement Program.
Continue to implement the Home Improvement Deferred Loan Program and Brush with Kindness
Program. ·
Quantified Objectives
Housing code enforcement at an average level of 75 new cases per year for all income
levels.
Rehabilitation of 48 housing units through the Brush with Kindness Program.
Rehabilitation of 24 housing units through the Home Improvement Deferred Loan
Program.
Housing Programs
Program 14. Housing Code Enforcement Program
The City's Housing Code Enforcement Program involves the enforcement of all municipal codes and
ordinances, various State and local laws and health and safety regulations as they relate to conditions
or activity within the City. The primary method that the City uses to obtain code compliance is
voluntary compliance. If this method does not attain compliance, then other legal actions are taken to
eliminate substandard conditions.
The City continuously conducts housing code enforcement through two approaches. The first
approach is drive-by inspections focusing on fire hazards, nuisances, and other violations of the
housing and building codes. The second approach is complaint driven and often results in stop orders
on illegal building practices (construction without appropriate permits).
A primary objective of the program is to achieve code compliance through rehabilitation. As a result,
code enforcement personnel are knowledgeable on the City's housing rehabilitation efforts, and refer
homeowners to the rehabilitation specialist for information on how the loan and grant programs can
help them to correct the code violations.
2014-2021 Objective: Implement housing code enforcement at an average level of 75 new cases
per year for all income levels average.
Timeframe:
Responsible Agency:
Funding Sources:
Temple City Housing Element
Ongoing
Community Development Department
General Fund for Department staff work
2-24
Section 2 Housing Program
Program 15. Brush with Kindness Program
Temple City partners with the San Gabriel Valley Habitat for Humanity to provide no interest loans for
housing rehabilitation through the Brush with Kindness Program. The program is available to lower-
income households (those who earn no more than 80 percent of the Area Median Income) for exterior
home repair. This typically includes painting, minor exterior repairs, landscaping, weatherization, and
exterior clean-up. The San Gabriel Valley Habitat for Humanity (SGVHH) manages the loan
applications and coordinates volunteers to assist in the restoration efforts. In addition to the funds
allocated by the City for the Brush with Kindness Program, SGVHH is also able to use funds acquired
through grant programs and corporate donations to supplement the City's program efforts.
The City's objective under the program for the 2014-2021 period is to assist 6 lower-Income
households/units per year.
2014-2021 Objective: Provide assistance through the Brush with Kindness Program to 48
households. Seek additional funding sources, as needed, to maintain this program.
Timeframe:
Responsible Agency:
Funding Sources:
Ongoing
Community Development Department; San Gabriel Valley
Habitat for Humanity
General Fund, grants and donations
Program 16. Home Improvement Deferred Loan Program
This program offers assistance to owner-occupied households to make repairs or replace obsolete or
non-functioning heating, plumbing, electrical, or structural components of the residence. The
program features include:
• Deferred loans up to a $25,000 maximum
• 3% per annum simple interest
• Interest accrues for 20 years
• Principal and interest are not due and payable until sale or change in title
• No prepayment penalty
Examples of eligible repairs include:
•
•
•
•
•
•
•
•
•
•
2-25
Bedroom additions to relieve overcrowding
Roof repair/replacement
Structural repair
Plumbing/electrical repair
Furnace repair/replacement
Painting/stucco
Yard clean-up
Termite repair
Insulation for energy/conservation
Other repairs as needed
Temple City Housing Element
Housing Program Section 2
The Deferred Loan Program has been expanded to include--as eligible expenditures of CDBG funds--
modifications and retrofits to homes occupied by one or more disabled persons. The eligible
modifications and retrofits include, but are not limited, to:
• Installation of grab bars
• Wheelchair ramps
• Lifts
• Expanded/modified doorways
• Railings
• Modifications of steps
Outreach for the Deferred Loan Program involves the following:
• Program announcements on the City's Website
• Availability of program flyers at the Community Development Department
• Availability of program flyers at the Live Oak Park Community Center
• Display ads in the local newspaper
• Announcements in the City's quarterly newsletter
• Periodic workshops
The City's objectives under the program for the 2014-2021 period are as follows:
Extremely Low Income
Very Low Income
Low Income
8 households/units
8 households/units
8 households/units
2014-2021 Objective: Provide assistance through the Home Improvement Deferred Loan
Program to 24 households.
Timeframe:
Responsible Agency:
Funding Sources:
PROGRAM CATEGORY #5
Ongoing
Community Development Department
CDBG
PROMOTE HOUSING OPPORTUNITIES FOR ALL PERSONS
Section 65583(c)(S) requires that the housing program:
"Promote housing opportunities for all persons regardless of race, religion, sex, marital
status, ancestry, national origin, color, familial status, or disability."
Housing Need Summary
To fully meet the community's housing needs, the City must ensure that housing is accessible to all
residents regardless of race, religion, family status, age, or physical disability. The City, through a
partnership with Los Angeles County Community Development Commission, refers residents with fair
housing concerns to the Housing Rights Center.
Temple City Housing Element 2-26