Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Raymond Hodges, Director, Department of Housing
Subject: Adjusting federal funding sources
RECOMMENDATION:
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Adopt a resolution:
A) Approving the use of $1,002,195.84 in HOME Investment Partnership Program (“HOME”) funding instead of $1,002,195.84 in Community Development Block Grant (“CDBG”) funding for the HumanGood Affordable Housing and Rotary Plaza, Inc.’s Rotary Gardens Affordable Housing Fund 12 (“AHF 12”) approved project, thereby modifying the use of funds for the project set forth in the FY 2024-25 Annual Action Plan; and
B) Approving the use of $609,941 in CDBG funding instead of $609,941 in HOME funding for Coastside Associates’ Moonridge I project, thereby modifying the use of funds for the project set forth in the FY 2022-23 Annual Action Plan; and
C) Approving the use of $613,780 in CDBG funding instead of $613,780 in HOME funding for the Moonridge Associates’ Moonridge II project, thereby modifying the use of funds for the project set forth in the FY 2022-23 Annual Action Plan; and
D) Authorizing the Director of the Department of Housing or designee, to take all necessary actions in connection with the submission of any amendments to the FY 2022-23 and FY 2024-25 Annual Action Plans, including providing additional information that the federal government may require and to reallocate funding across approved projects as may be necessary and advisable within the fiscal limits specified in these Annual Action Plans, and to negotiate and execute contracts, acting in consultation with the County Attorney to give effect to the Annual Action Plans.
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BACKGROUND:
The County receives funding allocations from the United States Department of Housing and Urban Development (“HUD”) under three entitlement programs: Community Development Block Grant (“CDBG”), Home Investments Partnership Program (“HOME”), and the Emergency Solutions Grant program (“ESG”). The CDBG Program supports community development activities to build stronger and more resilient communities. The HOME Program provides formula grants to states and localities to fund a wide range of activities including building affordable housing for rent or homeownership. The ESG Program is designed to assist people with quickly regaining stability in permanent housing after experiencing a housing crisis and/or homelessness.
To receive these funds, the County is required to submit an Annual Action Plan each year that delineates allocations of the HUD funding to specific local projects, and reports outcomes attributable to these expenditures. This required document serves both as an application for funds and a local policy statement. Any material changes to the Annual Action Plan require appropriate public notice and a written amendment to the Plan.
In fulfillment of these requirements, on May 3, 2022 (Resolution No. 078855) and April 23, 2024 (Resolution No. 080286), respectively, this Board approved the Annual Action Plans for FY 2022-23 and FY 2024-25 to allocate funding from the federal entitlement programs to specified projects. Because some federal funding was recaptured by the County, federal funds were included in the AHF 12 Notice of Funding Availability (NOFA) and the HumanGood Affordable Housing and Rotary Plaza, Inc.’s Rotary Gardens project was approved by the Board on June 11, 2024 (Resolution No. 080386) for a portion of this federal funding.
DISCUSSION:
Due to recapture of certain federal funds, the County Department of Housing (“DOH”) desires to reallocate the sources of funding for specified projects this Board has approved in the Annual Action Plans, without changing the overall amount of funding allocated to the projects.
Specifically, in June 2024, the County recaptured $609,941 in 2022-2023 HOME funds from Coastside Associates LP’s Moonridge I project and $613,780 in 2022-2023 HOME funds from Moonridge Associates LP’s Moonridge II project (both of which projects were approved by this Board in the FY 22-23 Action Plan). DOH now plans to fund those two projects, for the same amounts, using CDBG funds instead of HOME funds. Of the $1,223,721 recaptured HOME funds for these two projects, $1,002,197 will be allocated to HumanGood Affordable Housing and Rotary Plaza, Inc.’s Rotary Gardens project, which this Board approved on June 11 (Resolution No. 080386). The HOME funding that is now available is more flexible for new construction projects like Rotary Gardens than the initially approved CDBG funding. The balance of the recaptured HOME funding, $221,524, will be used to fund projects via the over-the-counter and/or Winter FY 2025-26 Notice of Funding Availability process.
In view of the foregoing, staff recommends that this Board approve the reallocations of funding set forth in the proposed resolution. Staff further recommends that the Board authorize the Director of DOH or designee, to take all necessary actions in connection with the submission of and any amendments to the Annual Action Plans, including providing additional information that the federal government may require, and to negotiate and execute contracts and to reallocate funding across programs and projects as may be necessary and advisable within the fiscal limits specified in the Annual Action Plans, as approved by the County Executive, acting in consultation with the County Attorney.
The County Attorney has reviewed and approved the resolution as to form.
EQUITY IMPACT:
These three projects will positively impact low-income individuals in our community with a focus on older adults, farmworkers, and/or persons experiencing homelessness. Staff invest federal funds in non-profit housing organizations that actively engage groups traditionally excluded from housing opportunities through feedback from clients and/or community meetings. DOH Staff are working on mitigating negative impacts in our County that are hindering equitable outcomes for identified groups by investing federal funding to support projects to build equity.
FISCAL IMPACT:
Federal CDBG and HOME funds for these three projects were included in the Department of Housing FY 2024-25 Recommended Budget. There is no net County cost associated with expenditures under the federal entitlement programs.