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Home My WebLink AboutD-3 Staff Report - 2025-2026 CDBG Funding Public HearingSCHEDULED ITEM D-3 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: SERGIO GONZALEZ, CITY MANAGER FROM: JOSE JIMENEZ, DIRECTOR OF ECONOMIC AND COMMUNITY DEVELOPMENT DATE: JANUARY 21, 2025 SUBJECT: PUBLIC HEARING TO CONSIDER APPROVING THE COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROJECTS AND BUDGET FOR THE NEW CDBG PROGRAM YEAR BEGINNING JULY 1, 2025 THROUGH JUNE 30, 2026 AND FINDING THAT SUCH DECLARATION IS NOT A PROJECT SUBJECT TO ENVIRONMENTAL REVIEW UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT BACKGROUND: Each year, Community Development Block Grant (CDBG) funds are allocated to cities by the federal Housing and Urban Development Department (HUD) and administered through the Los Angeles County Development Authority (LACDA). Participating cities receive funding based upon the total number of cities participating in the County's program, census population counts, estimates of poverty, overcrowding and aged housing stock. The City of Azusa has participated in the Community Development Block Grant (CDBG) Program since its inception in 1974, utilizing federal CDBG funds for various housing and community development projects within the City. Annually, a public hearing is conducted to allow public comment on the City’s proposed use of CDBG funds. The City of Azusa anticipates receiving funding in the amount of $372,978 in new CDBG funds for the 2025-2026 Program Year (effective July 1, 2025 through June 30, 2026). Of that amount, CDBG guidelines limit public service projects to a 15% maximum cap of a city’s annual CDBG allocation. The City’s proposed CDBG allocation is a planning estimate only; LACDA will release final appropriations in spring 2025. The City's final CDBG allocation is generally within three to five percent (3%-5%) of the estimate provided. The City’s estimated 2025-2026 CDBG allocation is slightly higher (approximately 1%) than the amount of funding the City received in 2025-2026 Approved City Council January 21, 2025 CDBG Public Hearing January 21, 2025 Page 2 ($369,160). This is consistent with the annual fluctuations by the federal government’s appropriation for the CDBG Program. It is recommended that $372,978 in 2025-2026 CDBG funds support two housing-improvement related projects totaling $332,978, and two public service projects totaling $40,000. RECOMMENDATIONS: Staff recommends that the City Council take the following actions: 1)Open the public hearing, receive testimony and presentation of the proposed projects, and adopt the resolution approving the 2025-2026 Community Development Block Grant (CDBG) Program, and finding that such declaration is not a project subject to environmental review under the California Environmental Quality Act; 2)Authorize staff to release a Request for Proposal to seek qualified consulting firms for the provision of CDBG Program Administration and Labor Compliance Services beginning in Fiscal Year 2025-2026; and 3)Authorize the City Manager to execute all contracts and Agreements, in a form approved by the City Attorney, with the Los Angeles County Development Authority (LACDA), CDBG Program subrecipients, and CDBG Program consultants. ANALYSIS: The Azusa Department of Economic and Community Development recommends 2025-2026 CDBG funding for two housing and neighborhood improvement projects, and two public service projects. All proposed CDBG activities principally benefit low- and moderate-income Azusa residents. The following is the proposed list of 2025-2026 CDBG Program activities and funding recommendations: PROGRAM YEAR 2025-2026 CDBG ALLOCATION Estimated New Year Funds: $372,978 Project Recommended Amount 2025-2026 Housing and Neighborhood Improvement Projects Single Family Housing Rehabilitation $185,000 Code Enforcement Program* $147,978 *Includes CDBG Program management and administration costs Subtotal: $332,978 CDBG Public Hearing January 21, 2025 Page 3 Public Service Projects YWCA of San Gabriel Valley $20,000 Neighborhood Homework House $20,000 Subtotal: $40,000 Total $372,978 Housing and Neighborhood Improvement Projects Single Family Housing Rehabilitation Program: This owner-occupied single family housing rehabilitation grant program is ongoing. Grants are used to correct code, health, and safety violations in conjunction with the Code Enforcement/Community Improvement Program. Grants are provided based on income eligibility of each applicant, i.e., those households earning 80% or less of median income. Since 1991, this program has assisted approximately 1,000 households with more than $7.0 million in improvements. Staff recommends continuing this project for 2025- 2026 at its current funding level of $185,000. Approximately ten housing rehabilitation projects are anticipated to be completed with a maximum grant amount of $15,000 per eligible household. Housing Rehabilitation Program administration costs of $35,000 are included in the total Housing Rehabilitation Program budget of $185,000. The City contracts with FRJ Associates to perform Housing Rehabilitation administration services. The approved Agreement with FRJ Associates is for a three-year period and will expire on June 30, 2027. Code Enforcement Program/CDBG: This project will continue to fund the salary and benefits of one full-time community improvement inspector to provide additional code enforcement activities concentrated in the eligible low-to-moderate income areas of the City. The continued funding of the Code Enforcement staff position will allow for approximately 500 properties to be inspected, benefiting 1,500 households. This program works in conjunction with the Single-Family Housing Rehabilitation Program. Staff recommends funding this program at $147,978. Public Service Projects (Subject to the 15% Public Service Maximum Funding Limit) Two public service projects are recommended for 2025-2026 CDBG funding. The total amount of the two public service projects combined does not exceed the maximum funding limit of 15%. Los Angeles County Development Authority (LACDA) imposed a $10,000 minimum for any CDBG public service project funded. The strict and demanding CDBG financial and programmatic regulatory requirements imposed on public service organizations requires agency capacity and capability. CDBG requirements often limit most non-profit organizations from even qualifying to receive CDBG funding. Staff recommends that, in 2025-2026, CDBG funds continue to support our existing public service providers to maintain the quality programs that serve Azusa residents and ensure continuity of programming. The following public service projects are recommended for 2025-2026 CDBG funding: CDBG Public Hearing January 21, 2025 Page 4 Neighborhood Homework House ($20,000): This Azusa-based project was initially approved by the City Council in 2000. Annually, this program assists approximately 200 youth from kindergarten through 12th grade providing tutoring and academic enrichment programs. Trained staff provides individualized instruction. Neighborhood Homework House also offers English as a Second Language (ESL) classes for parents and a computer lab for children. Staff recommends funding this continuing project at $20,000. Senior Case Management ($20,000): The YWCA San Gabriel Valley will begin its sixth year of offering Azusa senior adults’ comprehensive information, referral and case management services. The YWCA San Gabriel Valley maintains a qualified level of staffing, service and capacity. Additionally, the YWCA provides an expanded level of services to Azusa senior adults that include bio-psychosocial assessments and comprehensive case management. The YWCA San Gabriel Valley typically assigns Case Managers to the Azusa Senior Center for a minimum of eight (8) hours weekly. Home case management and assessment visits offered to Azusa homebound senior adults occur on an as-needed basis. Housing, nutrition, social security, disability and health concerns of the 55+ population of Azusa residents are addressed. Approximately 75-100 Azusa seniors receive direct services annually and more than 300 contacts are made to Azusa’s seniors. Staff recommends funding this continuing project at $20,000. CDBG Program Administration Participating cities in the LACDA’s Urban County CDBG Program may charge up to 20% administrative costs on a per project basis in order to annually implement the CDBG Program. Administrative costs provide reimbursement for the time spent administering the overall CDBG program, including reporting requirements, preparation of Memoranda of Understanding, subrecipient agreements, LACDA contracts, reviews of federal required documentation, CDBG program monitoring, and general CDBG project management. For 2025-2026, a portion of the Code Enforcement project budget will be allocated to general CDBG Administration. This allocation lowers the General Fund cost associated with CDBG program oversight. The City contracted with LDM Associates, Inc., in 2022-2023 to perform CDBG administration and federal labor compliance services for a three-year period. The approved Agreement with LDM Associates, Inc., will expire June 30, 2025. Staff is requesting that the City Council approve the release of a Request for Proposal in spring 2025 to solicit proposals from qualified firms to provide CDBG administration, management, and, federal labor compliance services. FISCAL IMPACT: Approved CDBG projects will be reflected in the 2025-2026 annual City budget adoption process tentatively scheduled for Council review and approval in June of 2025. Recommended amount is based on preliminary planning figures. Staff will adjust through a budget amendment to match the actual final grant allocation amount awarded to the City once it is available. CDBG programs not only allow the City to respond to community needs with little impact to the General Fund but decreases General Fund subsidies on many programs. CDBG Public Hearing January 21, 2025 Page 5 Prepared by: Reviewed by: Tina Gall Jose Jimenez Consultant Director of Economic and Community Development Reviewed and Approved by: Sergio Gonzalez City Manager Attachment: 1) Resolution approving the 2025-2026 CDBG Program 1 RESOLUTION NO. 2025-C02 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA ADOPTING THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM FOR YEAR 2025-2026 WHEREAS, the City of Azusa participates under the County of Los Angeles Community Development Block Grant (CDBG) Program; and WHEREAS, City staff considered and evaluated projects and programs fulfilling important community needs; and WHEREAS, the City Council provided the opportunity for public input regarding the City's Community Development Block Grant Program for the 2025-2026 Program Year. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Azusa does hereby take the following actions: SECTION 1. Select and approve the Projected Use of CDBG Funds for Program Year 2025- 2026, attached hereto as Exhibit A, and submit the approved projects to the Los Angeles County Development Authority. SECTION 2. Approve inclusion of said projects in the City of Azusa Fiscal Year 2025-2026 budget. SECTION 3. Authorize the Mayor or authorized designee to execute all necessary contracts, agreements, and amendments with the Los Angeles County Development Authority and with each approved recipient/subrecipient, including professional consulting firms contracted to administer and implement CDBG activities and programs, together with any changes therein which may be approved by the City Manager and, as necessary, the City Attorney. SECTION 4. Authorize staff to adjust the FY 2025-2026 CDBG Program and budget, as necessary, to take into account the final CDBG allocation from the U.S. Department of Housing and Urban Development, any amounts remaining unspent at the close of the preceding fiscal year, and programmatic changes necessary to fulfill the requirements of the CDBG Program. SECTION 5. Authorize staff to release a Request for Proposal to seek qualified consulting firms for the provision of CDBG Administration and Labor Compliance Services for Fiscal Year 2025- 2026. SECTION 6. Affirm that approval of the CDBG funds allocation is exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guideline 15301(d). SECTION 7. The City Clerk shall certify the adoption of this resolution. 2 PASSED, APPROVED AND ADOPTED this 21st day of January, 2025. ____________________________________ Robert Gonzales Mayor ATTEST: ____________________________________ Jeffrey Lawrence Cornejo, Jr. City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution No. 2025-C02 was duly adopted by the City Council of the City of Azusa, at a regular meeting of said City Council held on the 21st day of January 2025, by the following vote of the Council: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ___________________________________ Jeffrey Lawrence Cornejo, Jr. City Clerk APPROVED AS TO FORM: ___________________________________ Best Best & Krieger, LLP City Attorney 3 PROGRAM YEAR 2025-2026 CDBG ALLOCATION Estimated New Year Funds: $372,978 Project Recommended Amount 2025-2026 Housing and Neighborhood Improvement Projects Single Family Housing Rehabilitation $185,000 Code Enforcement Program* $147,978 *Includes CDBG Program management and administration costs Subtotal: $332,978 Public Service Projects YWCA of San Gabriel Valley $20,000 Neighborhood Homework House $20,000 Subtotal: $40,000 Total $372,978